10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

  For the Fiscal Year Ended December 31, 2006

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File No. 1-7170

Aleris International, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

75-2008280

(I.R.S. Employer Identification No.)

25825 Science Park Drive, Suite 400

Beachwood, Ohio 44122-7392

(Address of principal executive offices) (Zip code)

(216) 910-3400

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨    No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes x    No ¨

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ¨    Accelerated filer ¨    Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨    No x

The aggregate market value of the registrant’s voting and non-voting common stock held by non-affiliates is zero. The registrant is a privately held corporation.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of March 1, 2007.

Common Stock, $0.01 par value:    900 shares

DOCUMENTS INCORPORATED BY REFERENCE: None

ITEM		PAGE
PART I
Item 1.	Business	3
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	24
Item 2.	Properties	25
Item 3.	Legal Proceedings	26
Item 4.	Submission of Matters to a Vote of Security Holders	26
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	27
Item 6.	Selected Financial Data	27
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	58
Item 8.	Financial Statements and Supplementary Data	62
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	62
Item 9A.	Controls and Procedures	62
Item 9B.	Other Information	64
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	65
Item 11.	Executive Compensation	69
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	82
Item 13.	Certain Relationships and Related Transactions, and Director Independence	83
Item 14.	Principal Accountant Fees and Services	85
PART IV
Item 15.	Exhibits and Financial Statement Schedules	86
	Signatures

PART I

ITEM 1.    BUSINESS.

Introductory Note: This annual report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements should be read in conjunction with the cautionary statements and other important factors included in this annual report under Item 1A—“Risk Factors” and Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” which include descriptions of important factors which could cause actual results to differ materially from those contained in the forward-looking statements. Our expectations, beliefs and projections are expressed in good faith, and we believe we have a reasonable basis to make these statements through our management’s estimation of historical operating trends, data contained in our records and other data available from third parties, but there can be no assurance that our management’s expectations, beliefs or projections will result or be achieved. The discussions of our financial condition and results of our operations may include various forward-looking statements about future costs and prices of commodities, production volumes, market trends, demand for our products and services and projected results of operations. Statements contained in this annual report that are not historical in nature are considered to be forward-looking statements. They include, but are not limited to, statements regarding our expectations, hopes, beliefs, estimates, plans, objectives, goals, strategies, future events or performance, and intentions regarding the future. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “will,” “plan,” “predict,” “project,” “look forward to,” and similar expressions are intended to identify forward-looking statements.

The financial statements contained in this annual report on Form 10-K include the accounts of Aleris International, Inc. and all of its majority owned subsidiaries.

As used in this annual report on Form 10-K, unless the context indicates otherwise:

• the terms “Aleris,” “we,” “our,” “us” and the “Company” refer to Aleris International, Inc. and its consolidated subsidiaries;

• the term “Acquisition” means the merger of Merger Sub with and into Aleris through which we became a wholly owned subsidiary of Holdings;

• references to “Holdings” are to Aurora Acquisition Holdings, Inc., a company formed by TPG for the purposes of acquiring us;

• references to “Merger Sub” are to Aurora Acquisition Merger Sub, Inc., a company formed by TPG for the purposes of acquiring us;

• references to “Corus Aluminum” are to Corus Aluminium Rolled Products BV, Corus Aluminium NV, Corus Aluminium GmbH, Corus Aluminium Corp., Corus Hylite BV and Hoogovens Aluminium Europe Inc. and certain of their subsidiaries, Corus LP, Corus Aluminum Inc. and a 61% shareholding in Corus Aluminium Extrusions Tianjin Company Limited, which comprised the downstream aluminum business of Corus;

• references to “Corus” are to Corus Group plc and its subsidiaries;

• references to “Notes” means the $600.0 million of senior notes (“Senior Notes”) and the $400.0 million of senior subordinated notes (“Senior Subordinated Notes”);

• references to “TPG” are to Texas Pacific Group;

• the term “2005 Acquisitions” refers to the acquisition of (i) ALSCO Holdings, Inc. (“ALSCO”) on October 3, 2005 (a manufacturer and fabricator of aluminum sheet products for the building and construction industry), (ii) Alumitech, Inc. (“Alumitech”) on December 12, 2005 (an aluminum recycler and salt cake processor), (iii) Tomra Latasa Reciclagem (“Tomra Latasa”) on August 23, 2005 (a Brazilian aluminum recycler) and (iv) certain assets of Ormet Corporation (“Ormet”) on December 20, 2005 (including rolling mill assets, a recycling operation and an aluminum blanking operation); and

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• references to “2006 Credit Facilities” mean the $750.0 million amended and restated revolving credit facility (the “Revolving Credit Facility”) and the amended and restated term loan facility with maximum borrowings to $825.0 million and €303.0 million (the “Term Loan Facility”).

The financial statements contained in this annual report include the accounts of Aleris and all of its majority-owned subsidiaries. On December 19, 2006 we were acquired by affiliates of TPG. On December 9, 2004, we acquired Commonwealth Industries, Inc., (“Commonwealth”) when it merged with one of our wholly-owned subsidiaries, and changed our name from IMCO Recycling Inc. to Aleris International, Inc. This acquisition resulted in the inclusion of the financial condition and results of operations of Commonwealth with ours effective December 9, 2004.

In this annual report, when we refer to 2004 shipment or financial information presented on a “pro forma” basis, we are giving pro forma effect to the acquisition of Commonwealth and the financing transactions related thereto as if they had occurred on January 1, 2004, and are including the results of operations of Commonwealth (excluding that of its Alflex subsidiary, which was sold in July 2004) with ours for all of 2004.

When we refer to 2006 shipment or financial information presented on a “pro forma” basis, we are giving pro forma effect to the acquisition of Corus Aluminum as if it had occurred on January 1, 2006 and are including the results of Corus Aluminum with ours for all of 2006.

Information in this annual report concerning processing volumes, production capacity, rankings and other industry information, including our general expectations concerning the rolled aluminum products and aluminum and zinc recycling industries, are based on estimates prepared by us using certain assumptions and our knowledge of these industries as well as data from third party sources. This data includes, but is not limited to, data from The Aluminum Association and U.S. Geological Surveys. Such sources generally state that the information contained therein is believed to be reliable, but there can be no assurance as to the accuracy or completeness of included information. We have not independently verified any of the data from third party sources, nor have we ascertained the underlying economic assumptions relied upon therein.

Company Overview

We are a global leader in aluminum rolled and extruded products, aluminum recycling and specification alloy production. We are also a recycler of zinc and a leading U.S. manufacturer of zinc metal and value-added zinc products that include zinc oxide and zinc dust. We generate substantially all of our revenues from the manufacture and sale of these products. We operate 49 production facilities in North America, Europe, South America and Asia. We possess a combination of low-cost, flexible and technically advanced manufacturing operations supported by an industry-leading research and development platform. Our facilities are strategically located and well positioned to service our customers, which include a number of the world’s largest companies in the aerospace, building and construction, containers and packaging, metal distribution and transportation industries. On a pro forma basis, we generated revenues of $6.0 billion in the year ended December 31, 2006, of which approximately 58% were derived from North America and the remaining 42% were derived from the rest of the world.

Since the end of 2004, we have increased revenues and profitability through a combination of internal growth and productivity initiatives for our existing operations and strategic acquisitions. We have grown significantly through the successful completion of five strategic acquisitions targeted at broadening product offerings and geographic presence, diversifying our end-use customer base and increasing our scale and scope. We focus on acquisitions that are accretive to earnings and from which we expect to be able to realize significant operational efficiencies within 12 to 24 months through the integration process. While we have already achieved substantial savings from our acquisition activity, we believe additional significant synergies remain to be realized, including synergies from our recent acquisition of Corus Aluminum completed on August 1, 2006.

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We operate our business in the following global segments and began reporting on that basis in the third quarter of 2006: global rolled and extruded products; global recycling; and global zinc. See “Business Segments” below.

Global Rolled and Extruded Products

We are a producer of rolled aluminum products with leading positions in technically sophisticated applications, including aerospace plate and sheet, brazing sheet and demanding automotive sheet end-uses as well as high-volume applications used in building and construction and general distribution. We produce aluminum sheet, plate and fabricated products using direct-chill and continuous-cast processes. We believe that many of our facilities are state-of-the-art and provide us with proprietary manufacturing processes and a competitive advantage in servicing high-margin, growing end-uses, such as aerospace and heat transfer applications. We compete successfully in these highly technical applications based on our industry-leading research and development capabilities, which have developed over 130 process and alloy patent families. We have 19 production facilities that provide rolled and extruded aluminum products to the major aluminum consuming regions worldwide.

Substantially all of our rolled aluminum products are produced in response to specific customer orders. Our more technically advanced products require the use of primary-based alloys for which we have secured long-term supply agreements for approximately 42% of our expected needs through 2010. Our continuous-cast and common alloy sheet production can utilize primary or scrap aluminum, which allows us to optimize input costs and maximize margins. In addition, to further mitigate the impact of metal prices on our profitability, aluminum costs are passed through to customers for approximately 81% of our rolled product sales, and we strive to manage the remaining key commodity risks through our hedging programs.

We are also a leading producer of soft and hard alloy extruded aluminum profiles targeted at end-uses such as the building and construction, electrical, mechanical engineering and transportation sectors. We have four separate product categories which reflect our customers’ needs, including industrial extrusions, building systems, hard alloys and rail and transport projects. We currently operate one of the largest extrusion presses in the world, which provides us with the capability to produce high-end, value-added products such as larger profiles in addition to the production of hard alloy extrusions for transportation applications. We operate five extrusion product facilities in Europe and China.

Pro forma for the year ended December 31, 2006, shipments of aluminum rolled and extruded products totaled 2.3 billion pounds, establishing us as the number four producer globally based on volume, which accounted for approximately $4.0 billion of revenues.

Global Recycling

We are a leading recycler of aluminum and manufacturer of specification alloys serving customers in North America, Europe and South America. Our global recycling operations primarily convert aluminum scrap, dross (a by-product of the melting process) and other alloying agents as needed and deliver the recycled metal and specification alloys in molten or ingot form to our customers. Our recycling operations typically service other aluminum producers and manufacturers, generally under tolling arrangements, where we convert customer-owned scrap and dross and return the recycled metal to our customers for a fee. Our specification alloy operations principally service customers in the automotive industry. For the year ended December 31, 2006, approximately 71% of the total pounds shipped by our recycling and specification alloy operations were under tolling arrangements. Tolling arrangements eliminate our metal commodity exposure and reduce our overall working capital requirements. As we only charge our customers a fee for processing the metal, revenues generated from shipments of tolled material are less than for shipments of owned material. Our global recycling network operates 24 strategically located production plants, with 17 in the United States, two in Brazil, three in Germany, and one in each of Mexico and the United Kingdom.

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Pro forma for the year ended December 31, 2006, we shipped 2.9 billion pounds of recycled metal and specification alloys, which accounted for approximately $1.5 billion of our revenues.

Global Zinc

We process and recycle zinc metal for use in the manufacture of galvanized steel and produce value-added zinc products, primarily zinc oxide and zinc dust, which are used in the vulcanization of rubber products, the production of corrosion-resistant paint and in other specialty chemical applications. We operate six zinc facilities in the United States and are in the process of constructing a zinc recycling facility outside of Shanghai, China.

Pro forma for the year ended December 31, 2006, we shipped 384.1 million pounds of zinc products, which accounted for approximately $553.2 million of our revenues.

The Acquisition of Aleris by TPG

On August 7, 2006, we entered into an Agreement and Plan of Merger with Merger Sub and its parent company, Holdings, pursuant to which each share of our common stock (other than shares held in treasury or owned by Holdings, Merger Sub or any direct or indirect subsidiary of us or Holdings, and other than shares held by stockholders who properly demanded appraisal rights) was converted into the right to receive $52.50 in cash, without interest and less any required withholding taxes. As a result of the merger, all of the issued and outstanding capital stock of Holdings is owned, directly or indirectly, by the Investors (as defined below). The merger was structured as a reverse subsidiary merger, under which Merger Sub was merged with and into us at the closing on December 19, 2006, and we are the surviving corporation. As the surviving corporation in the merger, we assumed by operation of law all of the rights and obligations of Merger Sub. We refer to the merger of Merger Sub with and into Aleris through which we became a wholly owned subsidiary of Holdings as the “Acquisition.”

The amount of equity contributions made as part of the Acquisition funding was $848.8 million, consisting of amounts contributed by (i) investment funds associated with TPG (collectively, the “Sponsor Funds”) and (ii) certain of our executive officers and members of our senior management (the “Management Participants”). We refer to the Sponsor Funds and the Management Participants collectively as the “Investors.”

TPG financed the purchase of Aleris through application of the proceeds from the Senior Notes and the Senior Subordinated Notes, initial borrowings under the 2006 Credit Facilities, the equity investments described above and our cash on hand. The closing of the Acquisition occurred simultaneously with the closing of the offering of the Senior Notes and the Senior Subordinated Notes, the closing of the 2006 Credit Facilities, and the equity investments described above.

As a result of the Acquisition, we are a wholly-owned subsidiary of Holdings and the Investors directly or indirectly own all of our equity interests. Holdings is an entity that was formed in connection with the Transactions and has no assets or liabilities other than the shares of Aleris.

We refer to these transactions, including the Acquisition and our payment of the costs related to these transactions, collectively as the “Transactions.” In connection with the Transactions, we incurred significant indebtedness and became highly leveraged. See Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Review of 2006 and Future Outlook” and “—Liquidity and Capital Resources—December 2006 Refinancing” and Note B and Note K of our audited consolidated financial statements included elsewhere in this annual report for a description of the Acquisition, the 2006 Credit Facilities, the Senior Notes and the Senior Subordinated Notes.

The Acquisition of Corus Aluminum by Aleris

On August 1, 2006, we consummated the acquisition of Corus Aluminum, which included Corus’s aluminum rolling and extrusion businesses but not Corus’s primary aluminum smelters. Aggregate net cash

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consideration for the acquisition was €695.5 million (approximately $885.7 million), subject to adjustment based on the finalization of the working capital delivered and net debt assumed. We currently estimate that the purchase price adjustment will be approximately $65.0 million (approximately €49.2 million) and have included this amount in our determination of the preliminary purchase price allocation and as a current accrued liability in our audited consolidated balance sheet included elsewhere in this annual report. Corus Aluminum generated revenues of $1,850.0 million in 2005.

The acquisition of Corus Aluminum expanded our product offering, increased our participation in high-growth industry segments and strengthened our technology platform. Corus Aluminum’s aircraft plate and sheet and heat exchanger materials introduced new, higher-margin products to our product mix while Corus Aluminum’s automotive body sheet and brazing sheet product offering complemented our existing rolled products capabilities. Additionally, we gained the capability to produce high-quality specialized hard alloy extruded products used in the automotive and aerospace sectors, as well as soft alloy extrusions. While the acquisition of Corus Aluminum strengthened our cross-selling opportunities within our existing automotive, building and construction and packaging end-use applications, it also diversified our business into the heavy transportation, aerospace and engineering industries, which are sectors that have demonstrated strong growth characteristics. The acquisition of Corus Aluminum also increased our participation in important international industry segments. For example, we expanded our presence in existing European sectors, such as the German automotive sector, and gained access to the high-growth economy of China.

Global Aluminum Industry Overview

We participate in select segments of the aluminum industry, including rolled and extruded products, and recycling. The aluminum industry is highly cyclical and is affected by global economic conditions, industry competition, product development and commercialization. Compared to several substitute metals, aluminum is lightweight, has a high strength-to-weight ratio and is resistant to corrosion. Aluminum’s greatest advantage, however, is that it can be recycled again and again without any material decline in performance or quality.

Aluminum prices are determined by worldwide market forces of supply and demand, and, as a result, prices are volatile. The overall aluminum industry consists of primary aluminum producers, aluminum casters, extruders and sheet producers and aluminum recyclers. Primary aluminum is a commodity traded and priced daily on the London Metals Exchange (“LME”). Most primary aluminum producers are engaged in the mining of bauxite ore and refining of the ore into alumina. Alumina is then smelted to form aluminum ingots and billets. Aluminum recyclers produce aluminum in molten or ingot form. Ingots and billets are further processed by aluminum sheet manufacturers and extruders to form plate, sheet and foil and extrusions profiles, or they are sold to aluminum traders or to the commodity markets.

We do not mine bauxite, refine alumina, or smelt primary aluminum as part of our business.

Business Segments

Our operating structure includes three reportable global segments: global rolled and extruded products; global recycling; and global zinc. See Note Q of our audited consolidated financial statements included elsewhere in this annual report for financial information about these segments. In connection with the integration of Corus Aluminum, we transitioned from four reportable segments to three reportable segments in the third quarter of 2006. The global rolled and extruded products segment consists of Aleris’s historical rolled products segment and Corus’s rolled products and extruded products businesses. The global recycling segment consists of Aleris’s historical aluminum recycling and international segments. The global zinc segment remained the same.

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The percentages of total revenues by segment for the last three fiscal years were as follows. Pro forma 2006 percentages reflect the acquisition of Corus Aluminum as if it had occurred on January 1, 2006:

	For the year ended December 31
Segment	Actual 2006		Pro forma 2006		Actual 2005		Actual 2004
Global rolled and extruded products	57	%	66	%	51	%	8	%
Global recycling	31		25		39		76
Global zinc	12		9		10		16
Total	100	%	100	%	100	%	100	%

The following is a list of each segment’s principal products and services, end-uses, major customers and competitors:

Segment	Principal products and services	Principal end-use/ product category	Major customers	Competitors
Global rolled and extruded products	Rolled aluminum products ranging from thickness (gauge) of 0.00026 to 23.0 inches in widths of up to 138 inches	Building and construction (roofing, rain ware, siding)	Ply Gem Industries, Norandex/ Reynolds	Quanex Corporation, Jupiter Industries, JW Aluminum
		Metal distribution	Ryerson Inc., Reliance Steel & Aluminum Co., Thyssen-Krupp	Alcoa, Novelis
		Transportation equipment (truck trailers and bodies)	Great Dane, Wabash National Corporation	Alcoa, Quanex Corporation
		Consumer durables	Brunswick Corporation, Kroy Building Products, Inc.	Alcoa, Novelis, Jupiter Industries
		Aircraft plate and sheet	Boeing, Airbus, Embraer and Bombardier	Alcoa, Alcan
		Commercial plate and sheet (tooling, molding, road transport, shipbuilding, LNG transport and silos), brazing coil and sheet (heat exchanger materials)	Thyssen-Krupp, Amari, Behr, DaimlerChrysler, Delphi, Denso, Ford, Valeo and Volkswagen	Alcan, Alcoa, SAPA, Hydro
		Automotive body sheet (inner, outer and structural parts)	Audi, General Motors, DaimlerChrysler, Renault, PSA and Volvo	Novelis, Alcan

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Segment	Principal products and services	Principal end-use/ product category	Major customers	Competitors
		Specialty coil and sheet (cookware, fuel tanks, ventilation, cooling and lamp bases)	Gillette, SAG	Alcan, Alcoa, Hydro Aluminium, Novelis
		Customized applications (foil stock)	Clondalkin, Comital, Euramax, Hunter Douglas and Alcoa	Alcan, Hydro, Novelis
		Converter foil, fins and tray materials	Sonaca, IGI	Noranda, Novelis, JW
		Coated coil (building and transport sectors)	Residential	Alcoa, Nichols, Jupiter
	Extruded aluminum products ranging from 0.2 to 120.0 kgm	Industrial extrusions (construction, transport and engineering sectors)	BMW, Siemens, Bosch, Bahrat	Hydro, Alcan, Alcoa, SAPA
		BUG building systems		HGW
		(windowsills, water bars, roofing products, window systems and balconies)
		Project business extrusions (urban transport systems, high speed trains, mobile bridges for defense purposes and shipbuilding)	Alstom, Bombardier, Breda and Siemens	Alcan, SAPA
		Rods and hard alloy extrusions (automotive parts, aircraft, hydraulic and pneumatic systems and leisure)	Conti Teves, Bosch, TRW	Eural, Alcan, Alcoa, Impol, Fuchs
Global recycling	Recycles aluminum scrap and dross into recycled metal in molten or ingot form	Common alloy sheet (building and construction)	Aleris Rolled Products, Alcoa, Alcan	Scepter, Tennessee Aluminum Processors, Inc.

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Segment	Principal products and services	Principal end-use/ product category	Major customers	Competitors
		Aluminum can sheet (containers and packaging)	Alcoa, Logan Aluminum, Novelis, Hydro	Scepter, Tennessee Aluminum Processors, Inc., Smelter Service Corporation, Trimet
	Specification alloys	Automotive	BMW, General Motors, Ford Motor Company, DaimlerChrysler, Contech, a unit of SPX Corporation	Wabash Alloys L.L.C., Remetal Konzelmann/BUS, Bruch
Global zinc	Zinc oxide	Chemical additive in rubber	All major tire and rubber companies	Horsehead Corporation, Zochem, a division of Hudson Bay Mining and Smelting Co. Limited, Purity Zinc Metals, LLC
	Zinc metal	Galvanizing	Most major steel and after-fabrication hot dip galvanizing companies	Horsehead Corporation, individual zinc smelters
	Zinc dust	Chemical additive in paint and coatings	Most major paint companies	Purity Zinc Metals, LLC, Umicore

Global Rolled and Extruded Products

In North America, we produce rolled aluminum products using the continuous casting process at our facility located in Uhrichsville, Ohio, the continuous pelletizing process at our facility in Richmond, Virginia, and the conventional, direct-chill rolling ingot casting process at our multi-purpose aluminum rolling mill at Lewisport, Kentucky, one of the largest in North America, and Cap-de-la-Madeleine, Canada. We closed our Carson, California rolling mill in 2006 due to its higher cost structure and processing limitations. In addition, we operate coating lines at the Lewisport mill and at our facilities in Bedford, Ohio, Roxboro, North Carolina, Ashville, Ohio and Toronto, Canada. Except for depot sales, which are for standard size products, substantially all of our rolled aluminum products are produced in response to specific customer orders.

In Europe, our rolled aluminum products business remelts ingots, internal scrap, purchased scrap and master alloys to produce rolled aluminum sheet and plate for use in the transportation, construction, distribution, engineering and packaging industry segments. These operations include rolling mill operations in Germany and

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Belgium. The rolling mill in Koblenz, Germany is one of the largest specialized rolling mills in Europe concentrated on aircraft plate and heat exchanger sheet. Additionally, the mill in Duffel, Belgium is the third largest coil and sheet mill in Europe and a top European supplier of automotive body sheet.

We have continued to improve our products and our ability to supply high-quality, innovative materials, most notably to the aerospace sector. We have also developed specialties such as heat-treated, ultra thick aluminum plate and extra wide sheet to meet the requirements of special market sectors such as the aerospace and automotive sectors.

Our extruded products business is a leading producer of soft and hard alloy extruded aluminum profiles targeted at high demand end-uses such as the building and construction, electrical, mechanical engineering and transportation sectors. We operate four separate product categories each of which reflects its customers’ needs, including industrial extrusions, building systems, hard alloys and rail and transport projects. The extruded products business is a leading supplier in its selected product combinations and is focused on sectors with strong customer demand growth such as transport and engineering. The extruded products business includes five extrusion facilities located in Germany, Belgium and China (a joint venture in which we own a 61% participation interest). Industrial extrusions are made in all locations and the production of extrusion systems, including building systems, is concentrated in Vogt, Germany. Large extrusions and the project business are concentrated in Bonn, Germany and the joint venture in Tianjin, China, with rods and hard alloys produced in Duffel, Belgium. The extrusion plant in Bonn operates one of the largest extrusion presses in the world, which is mainly used for long and wide sections for railway, shipbuilding and other applications.

Global Recycling

We offer customers a wide range of metals recycling services and specification alloy products through our aluminum production facilities. Many of our plants in this segment are located near our major customers’ facilities. The close proximity of these plants to our customers’ facilities allows us to provide deliveries of molten aluminum by customized trucks with hot metal crucibles. The molten aluminum is then poured from the crucible into a customer’s furnace, saving the customer the time and expense of remelting ingots. This delivery method lowers our customers’ energy and capital expenses as well as metal melt loss, thereby increasing their productivity. In addition, for the year ended December 31, 2006, 71% of the pounds shipped by our aluminum recycling segment were under “tolling” arrangements, where we convert customer-owned scrap and dross and return the recycled metal to our customers for a fee.

Our German operation supplies specification alloys to the European automobile industry and serves other European aluminum industries from three plants that together have an annual aluminum processing capacity in excess of 900 million pounds. We also recycle magnesium scrap and deliver product to several large automotive companies. Our Swansea, Wales, facility supplies aluminum to a variety of customers. Our facilities in Pindamonhangaba, Brazil supply Brazil’s only can sheet rolling mill and recycle used beverage cans and production scrap for a facility owned by Brazil’s largest manufacturer of aluminum cans. These facilities have a combined annual processing capacity of 200 million pounds. Our facility in Monterrey, Mexico recycles aluminum dross and scrap for several large diecasters. Monterrey has an annual processing capacity of approximately 100 million pounds.

Global Zinc

We process and recycle zinc metal for use in the manufacture of galvanized steel and produce value-added zinc products, primarily zinc oxide and zinc dust, which are used in the vulcanization of rubber products, the production of corrosion-resistant paint, and in other specialty chemical applications. Our zinc recycling facilities have an annual processing capacity of approximately 290 million pounds.

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Sales and Marketing

Global Rolled and Extruded Products

Our rolled and extruded products manufactured by this segment are sold to end-users, as well as to distributors, principally for use in building and construction, transportation, aircraft, consumer durables, electrical, and machinery and equipment industries. Backlog for our global rolled and extruded products as of December 31, 2006 and 2005 was approximately $733.1 million and $120.0 million, respectively. The main customers for our extrusions products are the building and construction, transport (automotive, rail and shipbuilding), electrical and mechanical engineering segments.

Sales of rolled and extruded products are made through the segment’s own sales force, which is strategically located to provide North American coverage, and through a broad network of sales offices and agents in major European countries, the Americas, the Far East and Australia. The majority of our customer sales agreements in this segment are for a term of one year or less.

Global Recycling

Principal customers of this segment’s operations use recycled aluminum to produce can sheet, building and construction, automotive and other aluminum products. Sales of our products and services are made by our dedicated U.S. and international sales force. Customarily, agreements with customers in the aluminum recycling industry are short-term. These agreements usually result from a bidding process in which aluminum producers and metal traders offer to sell materials or to have materials tolled. Consequently, we have historically maintained no significant backlog of orders in this segment.

However, we have long-term contractual arrangements for our recycling services with a number of our largest customers in these segments, including agreements where we have constructed a recycling facility adjacent to a customer’s plant. The remaining terms of these arrangements as of December 31, 2006 range up to six years, although many of these arrangements provide for extensions.

Global Zinc

We sell most of our zinc products directly to end-users. Most of our agreements with zinc customers are for a term of one year or less. We historically have maintained no significant backlog of orders for zinc products.

See Note Q of our audited consolidated financial statements included elsewhere in this annual report for certain financial information by geographic area.

Competition

The worldwide aluminum and zinc industries are highly competitive. Aluminum and zinc also compete with other materials such as steel, plastic and glass for various applications.

Global Rolled and Extruded Products

Our rolled and extruded products business competes in the production and sale of rolled aluminum sheet and extrusion products. In the sectors in which we compete, the industry leaders include Alcoa, Alcan, Novelis, Quanex, Norsk Hydro and Jupiter. In addition, we compete with imported products. We compete with other rolled and extruded products suppliers on the basis of quality, price, timeliness of delivery and customer service. This segment spent $8.7 million for research and development during the year ended December 31, 2006.

Global Recycling

The principal factors of competition in our global recycling segment are price, metal recovery rates, proximity to customers, molten metal delivery capability, environmental and safety regulatory compliance and

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other types of services. Freight costs also limit the geographic areas in which we can compete effectively. Our largest aluminum competitor in the United States is Wabash Alloys, a secondary aluminum processor, followed by several smaller competitors. The international recycling business is highly fragmented and very competitive. Our major international competitors are Trimet for recycling, and Remetel and Konzelmann/BUS for specification alloys.

Global Zinc

The principal factors of competition in the global zinc segment are price, customer service and product quality. Competition is regionally focused due to high freight costs. Competitors in the zinc recycling industry include Horsehead Corporation, Zochem, Purity Zinc Metals and Umicore as well as a large number of regional and local competitors. For zinc metal, we consider both primary and secondary zinc producers to be competitors.

Raw Materials and Supplies

Global Rolled and Extruded Products

A significant portion of the aluminum metal used by the North American operations is purchased aluminum scrap that is acquired from aluminum scrap dealers or brokers. A significant portion of the aluminum metal used by our European operations is supplied by the primary aluminum business of Corus with the remaining supply coming from a variety of third party primary aluminum suppliers and purchased aluminum scrap acquired from or through aluminum scrap dealers or brokers. We believe that this segment is one of the largest users of aluminum scrap (other than beverage can scrap) in North America, and that the volume of its purchases assists it in obtaining scrap at competitive prices. The remaining requirements of this segment are met with purchased primary metal, including metal produced in the United States and internationally.

Global Recycling and Global Zinc

Aluminum and zinc scrap and dross represent the largest component of cost of sales for these segments. The availability and price of scrap and dross depend on a number of factors outside of our control, including general economic conditions, international demand for these materials and internal recycling activities by primary aluminum producers. Changes in U.S. and worldwide supply and demand for aluminum and zinc scrap have had and will continue to have an effect on the prices we pay for these raw materials.

The primary sources of aluminum scrap and dross for the global recycling segment include automotive component manufacturers, can stock producers, used beverage cans and aluminum smelters. Many of our aluminum suppliers are also our customers. We also buy aluminum scrap from metal scrap dealers and traders on the open market.

A significant portion of our zinc products are produced from zinc dross and other secondary materials provided by the galvanizing industry. In addition, we purchase primary zinc to produce high-grade zinc and for metals distribution purposes. We purchase our zinc raw materials from numerous suppliers. Many zinc galvanizers that supply us with zinc raw materials are also our customers. The availability of zinc dross is dependent upon the demand for galvanized steel, which has historically paralleled fluctuations in customer demand in the automotive, appliance and construction industries.

Energy Supplies

Our operations are fueled by natural gas and electricity, which represent the third largest component of our cost of sales, after metal and labor costs. We purchase the majority of our natural gas on a spot-market basis. However, in an effort to acquire the most favorable natural gas costs, we have secured some of our natural gas at fixed price commitments. We use forward contracts and options, as well as contractual price escalators, to reduce the risks associated with our natural gas requirements.

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Research and Development

In connection with our acquisition of Corus Aluminum, we entered into a five-year research and development agreement with Corus pursuant to which Corus assists us in research and development projects on a fee-for-service basis. Research and development expenses were $8.7 million in the period from January 1, 2006 to December 19, 2006 and were not material for any other period presented in this annual report. Prior to our acquisition of Corus Aluminum, we did not have a research and development program.

Seasonality

Many of our rolled and extruded products, recycling and specification alloy end-uses are seasonal. Demand in the rolled and extruded products business is generally stronger in the spring and summer seasons due to higher demand in the building and construction industry. Our recycling business experiences greater demand in the spring season due to stronger automotive and can sheet demand. Such factors typically result in higher operating income in the first half of the year.

Employees

As of December 31, 2006, we had a total of approximately 8,500 employees, consisting of approximately 2,400 employees engaged in administrative and supervisory activities and approximately 6,100 employees engaged in manufacturing, production and maintenance functions. Collectively, approximately 45% of our U.S. employees and substantially all of our non-U.S. employees are covered by collective bargaining agreements. Labor relations with employees have been satisfactory.

Environmental

Our operations are subject to environmental laws and regulations, which govern, among other things, air emissions, wastewater discharges, the handling, storage, and disposal of hazardous substances and wastes, the remediation of contaminated sites, and employee health and safety. Future environmental regulations could impose stricter compliance requirements on the industries in which we operate. Additional equipment or process changes at some of our facilities may be needed to meet future requirements.

We have been named as a potentially responsible party in certain proceedings initiated pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (Superfund) and similar state statutes and may be named a potentially responsible party in other similar proceedings in the future. It is not anticipated that the costs incurred in connection with the presently pending proceedings will, individually or in the aggregate, have a material adverse effect on our financial condition or results of operations. Currently and from time to time, we are a party to notices of violation brought by environmental agencies concerning the laws governing air emissions. In connection with certain pending proceedings, we are in discussions with government authorities for the purpose of resolving similar issues that have arisen at a number of our facilities in different states. At present, discussions are not sufficiently advanced to determine the scope of relief or the amount of penalties. However, with respect to these pending proceedings, we do not anticipate that the amount of penalties would have a material adverse effect on our financial position or results of operations.

We are performing operations and maintenance at two Superfund sites for matters arising out of past waste disposal activity associated with closed facilities. We are also under orders by agencies in four states for environmental remediation at five sites, two of which are located at our operating facilities.

Our aggregate accrual for environmental matters was $15.0 million and $12.6 million at December 31, 2006 and 2005, respectively. Although the outcome of any such matters, to the extent they exceed any applicable accrual, could have a material adverse effect on our consolidated results of operations or cash flows for the applicable period, we currently believe that any such outcome would not have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

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The processing of scrap generates solid waste in the form of salt cake and baghouse dust. This material is disposed of at off-site landfills or at permitted landfills at our Sapulpa, Oklahoma and Morgantown, Kentucky facilities. If salt cake were ever classified as a hazardous waste in the United States, the costs to manage and dispose of it would increase, which could result in significant increased expenditures.

Our two landfill sites have finite lives and we incur costs related to retiring them. The amounts recognized for landfill asset retirement obligations, as of December 31, 2006, were $8.6 million for our Morgantown, Kentucky landfill and $1.0 million for our Sapulpa, Oklahoma landfill. The related asset retirement costs for each facility was capitalized as a long-lived asset (asset retirement cost), and is being amortized over the remaining useful lives of the landfills. See Note J of our audited consolidated financial statements included elsewhere in this annual report.

Our expected total expenditures for capital improvements regarding environmental control facilities for 2007 are currently expected to be approximately $10.0 million.

ITEM 1A.    RISK FACTORS

Risks Related to Our Business

The operations of Aleris, Corus Aluminum and the 2005 Acquisitions may not be integrated successfully.

The integration of the operations of Corus Aluminum involves consolidating products, operations and administrative functions of two companies that previously operated separately. Achieving the anticipated benefits of the combination of Aleris and Corus Aluminum will depend in part upon our ability to integrate the two businesses in an efficient and effective manner. The integration of two businesses that have previously operated separately faces significant challenges, and we may be unable to accomplish the integration successfully. In addition, we will need to continue integrating the 2005 Acquisitions.

In particular, the need to coordinate geographically dispersed organizations and address possible differences in corporate cultures and management philosophies may increase the difficulties of the integration of Corus Aluminum. Additionally, we may incur substantial expense in our efforts to integrate the information technology systems of Aleris, Corus Aluminum and the 2005 Acquisitions, and these efforts may not prove successful. The integration of Aleris, Corus Aluminum and the 2005 Acquisitions may take longer than planned and may be subject to unanticipated difficulties and expenses. The integration of these acquisitions will require the dedication of significant management resources and may temporarily distract management’s attention from the day-to-day businesses of our Company. Employee uncertainty and lack of focus during the integration process may also disrupt our businesses. We may lose key personnel from the acquired organizations and employees in the acquired organizations may be resistant to change and may not adapt well to our corporate structure. The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of our businesses and the loss of key personnel.

Any inability of management to successfully integrate the operations of Corus Aluminum and the 2005 Acquisitions with Aleris could result in our not achieving the projected efficiencies, cost savings and synergies of these transactions and could adversely affect our businesses and financial condition.

We continue to consider strategic alternatives on an ongoing basis, including having discussions concerning potential acquisitions, which may be material.

If we fail to implement our business strategy, our financial condition and results of operations could be adversely affected.

Our future financial performance and success depend in large part on our ability to successfully implement our business strategy. We cannot assure you that we will be able to successfully implement our business strategy or be able to continue improving our operating results. In particular, we cannot assure you that we will be able to

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achieve all of the operating synergies targeted through focused integration of acquisitions, focused productivity improvements and capacity optimization, further enhancements of our business and product mix, expansion in selected international regions, opportunistic pursuit of strategic acquisitions and management of key commodity exposures.

Furthermore, we cannot assure you that we will be successful in our growth efforts or that we will be able to effectively manage expanded or acquired operations. Our ability to achieve our expansion and acquisition objectives and to effectively manage our growth depends on a number of factors, including:

• our ability to introduce new products and end-use applications;

• our ability to identify appropriate acquisition targets and to negotiate acceptable terms for their acquisition;

• our ability to integrate new businesses into our operations; and

• the availability of capital on acceptable terms.

Implementation of our business strategy could be affected by a number of factors beyond our control, such as increased competition, legal and regulatory developments, general economic conditions, or the increase of operating costs. Any failure to successfully implement our business strategy could adversely affect our financial condition and results of operations. We may, in addition, decide to alter or discontinue certain aspects of our business strategy at any time.

The cyclical nature of the metals industry, our end-use segments and our customers’ industries could limit our operating flexibility, which could negatively impact our financial condition and results of operations.

The metals industry in general is cyclical in nature. It tends to reflect and be amplified by changes in general and local economic conditions. These conditions include the level of economic growth, financing availability, the availability of affordable energy sources, employment levels, interest rates, consumer confidence and housing demand. Historically, in periods of recession or periods of minimal economic growth, metals companies have often tended to underperform other sectors. We are particularly sensitive to trends in the transportation and construction industries, which are both seasonal and highly cyclical in nature, and dependent on general economic conditions. For example, during recessions or periods of low growth, the transportation and construction industries typically experience major cutbacks in production, resulting in decreased demand for aluminum and zinc. This leads to significant fluctuations in demand and pricing for our products and services. Because we generally have high fixed costs, our profitability is significantly affected by decreased processing volume. Accordingly, reduced demand and pricing pressures may significantly reduce our profitability and adversely affect our financial condition and results of operations. Economic downturns in regional and global economies or a prolonged recession in our principal industry segments have had a negative impact on our operations in the past, and could have a negative impact on our future financial condition or results of operations. In addition, in recent years global economic and commodity trends have been increasingly correlated. Although we continue to seek to diversify our business on a geographic and industry end-use basis, we cannot assure you that diversification will significantly mitigate the effect of cyclical downturns.

Changes in the market price of aluminum and zinc impact the selling prices of our products. Market prices of aluminum and zinc are dependent upon supply and demand and a variety of factors over which we have minimal or no control, including:

• regional and global economic conditions;

• availability and relative pricing of metal substitutes;

• labor costs;

• energy prices;

• environmental and conservation regulations;

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• seasonal factors and weather; and

• import and export restrictions.

The loss of certain members of our management may have an adverse effect on our operating results.

Our success will depend, in part, on the efforts of our senior management and other key employees. These individuals possess sales, marketing, engineering, manufacturing, financial and administrative skills that are critical to the operation of our business. If we lose or suffer an extended interruption in the services of one or more of our senior officers, our financial condition and results of operations may be negatively affected. Moreover, the market for qualified individuals may be highly competitive and we may not be able to attract and retain qualified personnel to replace or succeed members of our senior management or other key employees, should the need arise.

We had substantial historical net losses prior to 2005, and any continuation of net losses in the future may reduce our ability to raise needed capital.

We reported net losses for the years ended December 31, 2002, 2003 and 2004. Our ability to continue operations may become increasingly constrained if we incur net losses in the future.

If we sustain net losses in future periods, our ability to raise needed financing, or to do so on favorable terms, may be limited if losses are taken into account by the organizations that issue investment ratings on our indebtedness. Our debt ratings would continue to remain below the “investment grade” category, which results in higher borrowing costs as well as a reduced pool of potential purchasers of our debt as some investors would not purchase debt securities that are not rated in an investment grade rating category. Also, any rating assigned may not remain in effect for any given period of time and could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant. A lowering or withdrawal of a rating could further increase our borrowing costs. See “Risks Related to Our Debt,” below.

We may encounter issues under the Sarbanes-Oxley Act that require our management to provide a management report containing an assessment that our internal controls over financial reporting are ineffective.

We are required to comply with Section 404(a) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the related Securities and Exchange Commission (the “SEC”) rules, which require our management to assess the effectiveness of our internal control over financial reporting on an annual basis and to include in our annual report on Form 10-K management’s report on that assessment, together with an attestation by our independent registered public accounting firm. If there are any “material weaknesses” in internal control over financial reporting that are identified, then our management is not permitted to conclude in its report that our company’s internal control over financial reporting is effective. As defined in the Public Company Accounting Oversight Board’s Auditing Standard No. 2, a material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

Although no material weaknesses in internal control over financial reporting were noted as of December 31, 2006, we may experience future material weaknesses, in particular with respect to acquired businesses. The occurrence of one or more material weaknesses could have an adverse effect on our business, results of operations, financial condition and liquidity.

We may encounter increases in the cost of raw materials and energy, which could cause our cost of goods sold to increase thereby reducing operating results and limiting our operating flexibility.

We require substantial amounts of raw materials and energy in our business, consisting principally of primary-based aluminum, aluminum and zinc scrap, zinc metals and natural gas. Any substantial increases in raw

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materials or energy costs could cause our operating costs to increase and negatively affect our financial condition and results of operations.

Aluminum scrap and primary aluminum metal prices are subject to significant cyclical price fluctuations. London Metal Exchange, or LME, primary aluminum prices declined by approximately 47% between 1988 and 2002 and rose approximately 112% from December 2002 to December 2006. Metallics (primary aluminum metal, aluminum and zinc scrap and aluminum dross) represent the largest component of our costs of sales. We purchase scrap primarily from aluminum and zinc scrap dealers. We meet our remaining requirements with purchased primary-based aluminum and zinc. We have limited control over the price or availability of these supplies in the future.

The availability and price of aluminum scrap depend on a number of factors outside our control, including general economic conditions, international demand for metallics and internal recycling activities by primary aluminum producers. Increased regional and global demand for aluminum scrap can have the effect of increasing the prices that we pay for these raw materials thereby increasing our cost of sales. We often cannot adjust the selling prices for our products to recover the increases in scrap prices. If scrap and dross prices were to increase significantly without a commensurate increase in the market value of the primary metals, our future financial condition and results of operations could be affected by higher costs and lower profitability. In addition, a significant decrease in the pricing spread between aluminum scrap and primary aluminum could make recycling less attractive compared to primary production, and thereby reduce customer demand for our recycling business.

After raw material and labor costs, natural gas costs represent the third largest component of our cost of sales. The price of natural gas, and therefore the costs, can be particularly volatile. As a result, our natural gas costs may fluctuate dramatically, and we may not be able to mitigate the effect of higher natural gas costs on our cost of sales. If natural gas costs remain at current levels or increase further, our financial condition and results of operations may be adversely affected. Although we attempt to mitigate volatility in natural gas costs through the use of hedging and the inclusion of price escalators in certain of our long-term supply contracts, we may not be able to eliminate the effects of such cost volatility. Therefore, in an effort to offset the effect of increasing costs, we may have also limited our potential benefit from declining costs.

We may be unable to manage effectively our exposure to commodity price fluctuations, and our hedging activities may affect profitability in a changing metals price environment and subject our earnings to greater volatility from period-to-period.

Significant increases in the price of primary aluminum or aluminum scrap would cause our cost of goods sold to significantly increase and, if not offset by product price increases, would negatively impact our future financial condition and results of operations. Similarly, as we maintain large quantities of base inventory, significant decreases in the price of primary aluminum would reduce the realizable value of our inventory, negatively impacting our future financial condition and results of operations.

We purchase LME forwards, futures and options contracts to reduce our exposure to changes in metal prices. Despite the use of LME forwards and futures contracts, we remain exposed to the variability in prices of scrap metal. While scrap metal is priced in relation to prevailing LME prices, it is also priced at a premium or discount to LME metal (depending on the quality of the material supplied). This premium or discount is referred to in the industry as the “scrap spread” and fluctuates depending on market conditions. Furthermore, our global rolled and extruded products segment is exposed to variability in the market price of a premium differential (referred to as “Midwest Premium” in the United States and “Duty Paid/Unpaid Rotterdam” in Europe) charged by industry participants to deliver metal from the smelter to the manufacturing facility. This premium differential also fluctuates in relation to market and other conditions. Our global rolled and extruded products segment follows a pattern of increasing or decreasing its selling prices to customers in response to changes in the Midwest Premium and the Duty Paid/Unpaid Rotterdam.

We do not account for our aluminum LME forwards, futures and options contracts as hedges of the underlying risks. As a result, unrealized gains and losses on our aluminum derivative financial instruments must

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be reported in our consolidated results of operations. The inclusion of such unrealized gains and losses in earnings may produce significant period-to-period earnings volatility that is not necessarily reflective of our underlying operating performance. See Item 7A—“Quantitative and Qualitative Disclosures about Market Risk.”

If we were to lose order volumes from any of our largest customers, our sales volumes and revenues could be reduced and our cash flows lessened.

Our business is exposed to risks related to customer concentration. In 2006, our ten largest customers were responsible for 23% of our consolidated revenues. No one customer accounted for more than 4% of our revenues in 2006. A loss of order volumes from, or a loss of industry share by, any major customer could negatively affect our financial condition and results of operations by lowering sales volumes, increasing costs and lowering profitability. In addition, our strategy of having dedicated facilities and dedicated arrangements with customers where appropriate carries the inherent risk of increased dependence on a single or a few customers with respect to a particular facility of ours. In such cases, the loss of such a customer, or the reduction of that customer’s business at one or more of our facilities, could negatively affect our financial condition and results of operations, and any timely replacement of volumes could prove difficult. In addition, several of our customers have become involved in bankruptcy or insolvency proceedings and have defaulted on their obligations to us in recent years. We currently provide no significant reserves for sales to our U.S. automotive customers as we believe amounts currently included in our consolidated balance sheet to be collectible. However, should the recent poor financial performance and economic conditions experienced by the U.S. automotive industry continue, we may be required to record significant additional reserves which may have a material impact on our financial condition, results of operations and cash flows. At December 31, 2006, we estimate that $65.0 million of our accounts receivable were payable by U.S. automobile manufacturers or their direct suppliers.

We do not have long-term contractual arrangements with a substantial number of our customers, and our sales volumes and revenues could be reduced if our customers switch their suppliers.

Approximately 76% of our revenues for the year ended December 31, 2006, were generated from customers who do not have long-term contractual arrangements with us. These customers purchase products and services from us on a purchase order basis and may choose not to continue to purchase our products and services. The loss of these customers or a significant reduction in their purchase orders could have a material negative impact on our sales volume and business.

We may not be able to generate sufficient cash flows to fund our capital expenditure requirements or to meet our debt service obligations.

In recent periods prior to 2006, we did not generate sufficient cash flows from operations to fund our capital expenditure requirements. Our operations may not be able to generate sufficient cash flows to service our indebtedness, fund our capital expenditures or provide the ability to raise needed financing on terms favorable to us. If we are not able to reduce our high leverage through the generation of cash flows from our business, we would have to do one or more of the following:

• raise additional capital through debt or equity issuances or both;

• cancel or scale back current and future business initiatives; or

• sell businesses or properties.

We may be unable to raise additional capital on favorable terms or at all. In addition, any failure to pursue business initiatives could adversely affect our ability to compete effectively. Further, any of the actions above could provide only temporary assistance with the cash flows of the business.

Our business requires substantial capital investments that we may be unable to fulfill.

Our operations are capital intensive. Our total capital expenditures were approximately $123.9 million, $62.1 million and $44.8 million for 2006, 2005 and 2004, respectively.

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We may not generate sufficient operating cash flows and our external financing sources may not be available in an amount sufficient to enable us to make anticipated capital expenditures, service or refinance our indebtedness or fund other liquidity needs. If we are unable to make upgrades or purchase new plant and equipment, our financial condition and results of operations could be affected by higher maintenance costs, lower sales volumes due to the impact of reduced product quality, and other competitive influences.

We may not be able to compete successfully in the industry segments we serve and aluminum may become less competitive with alternative materials, which could reduce our share of industry sales, lower our selling prices and reduce our sales volumes.

Aluminum competes with other materials such as steel, plastic and composite materials and glass for various applications. Higher aluminum prices tend to make aluminum products less competitive with these alternative materials.

We compete in the production and sale of rolled aluminum products with a number of other aluminum rolling mills, including large, single-purpose sheet mills, continuous casters and other multipurpose mills, some of which are larger and have greater financial and technical resources than we do. We compete with other rolled products suppliers, principally multi-purpose mills, on the basis of quality, price, and timeliness of delivery, technological innovation and customer service.

We also compete with other aluminum recyclers in segments that are highly fragmented and characterized by smaller, regional operators. The principal factors of competition in our aluminum and zinc recycling business include price, metal recovery rates, proximity to customers, customer service, molten metal delivery capability, environmental and safety regulatory compliance, and types of services offered.

Additional competition could result in a reduced share of industry sales or reduced prices for our products and services, which could decrease revenues or reduce volumes, either of which could have a negative effect on our financial condition and results of operations.

As a result of the acquisition of Corus Aluminum, a growing portion of our sales is expected to be derived from our international operations, which exposes us to certain risks inherent in doing business abroad.

We have aluminum recycling operations in Germany, the United Kingdom, Mexico and Brazil and magnesium recycling operations in Germany. As a result of the acquisition of Corus Aluminum, we also have rolled products and extrusions operations in Germany, Belgium, Canada and China. In addition, we are in the process of constructing a zinc recycling facility in China. We plan to continue to explore opportunities to expand our international operations. Our international operations generally are subject to risks, including:

• changes in U.S. and international governmental regulations, trade restrictions and laws, including tax laws and regulations;

• currency exchange rate fluctuations;

• tariffs and other trade barriers;

• the potential for nationalization of enterprises;

• interest rate fluctuations;

• high rates of inflation;

• currency restrictions and limitations on repatriation of profits;

• divergent environmental laws and regulations; and

• political, economic and social instability.

The occurrence of any of these events could cause our costs to rise, limit growth opportunities or have a negative effect on our operations and our ability to plan for future periods, and subject us to risks not generally prevalent in the United States.

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The financial condition and results of operations of some of our operating entities are reported in various currencies and then translated into U.S. dollars at the applicable exchange rate for inclusion in our consolidated financial statements. As a result, generally speaking, appreciation of the U.S. dollar against these currencies will have a negative impact on reported revenues and operating profit while depreciation of the U.S. dollar against these currencies will have a positive effect on reported revenues and operating profit.

Current environmental liabilities, as well as the cost of compliance with and liabilities under health and safety laws, could increase our operating costs, negatively impacting our financial condition and results of operations.

Our operations are subject to environmental laws and regulations, which govern, among other things, air emissions, wastewater discharges, the handling, storage, and disposal of hazardous substances and wastes, the remediation of contaminated sites, and employee health and safety. Future environmental regulations could impose stricter compliance requirements on the industries in which we operate. Additional equipment or process changes at some of our facilities may be needed to meet future requirements.

Processing and manufacturing activities at current and formerly owned and operated properties and adjacent areas have resulted in environmental impacts requiring remediation. We are subject to indemnification obligations to third parties for certain of these properties. Financial responsibility for the remediation of contaminated property or for the amelioration of damage to natural resources can be imposed on us where current or prior operations have had an environmental impact. Such liability can include the cost of investigating and cleaning up contaminated soil or ground water, fines and penalties sought by environmental authorities, and damages arising out of personal injury, contaminated property, and other toxic tort claims, as well as lost or impaired natural resources. In addition Corus has agreed to indemnify us for certain known environmental liabilities relating to the facilities of Corus. However, if Corus becomes unable to, or otherwise does not, comply with its indemnity obligations in the future, we could become subject to significant liabilities. Certain environmental laws impose strict, and in certain circumstances joint and several, liability for some of these matters, meaning that a person can be held liable without regard to fault for all costs even though others were also involved in causing them. These costs have not been material to net income (loss) for any accounting period since January 1, 2002. However, future remedial requirements at current and formerly owned or operated properties or adjacent areas, or identification of previously unknown conditions, could result in liabilities significantly in excess of this amount.

Currently and from time to time, we are a party to notices of violation brought by environmental agencies concerning the laws governing air emissions. In connection with certain pending proceedings, we are in discussions with government authorities for the purpose of resolving similar issues that have arisen at a number of our facilities in different states. At present, discussions are not sufficiently advanced to determine the scope of relief or the amount of penalties. However, with respect to these pending proceedings, we do not anticipate that the amount of penalties would have a material adverse effect on our financial position or results of operations.

Changes in environmental requirements or changes in their enforcement could materially increase our costs. For example, if salt cake, a by-product from some of our recycling operations, were to become classified as a hazardous waste in the United States, the costs to manage and dispose of it would increase and could result in significant increased expenditures.

We could experience labor disputes that could disrupt our business.

Approximately 45% of our U.S. employees and substantially all of our non-U.S. employees, located primarily in Europe where union membership is common, are represented by unions or equivalent bodies and are covered by collective bargaining or similar agreements which are subject to periodic renegotiation. Although we believe that we will successfully negotiate new collective bargaining agreements when the current agreements expire, these negotiations:

• may not prove successful;

• may result in a significant increase in the cost of labor; or

• may break down and result in the disruption of our operations.

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Labor negotiations may not conclude successfully and, in that case, work stoppages or labor disturbances may occur. Any such stoppages or disturbances may have a negative impact on our financial condition and results of operations by limiting plant production, sales volumes and profitability.

We may have to take further charges to earnings if our goodwill or asset values are impaired.

We perform an annual goodwill impairment review to estimate the fair value of our reporting units. This valuation entails a discounted cash flow model using internal projections and budgets to determine a unit’s fair value. In the event that we are not able to achieve expected cash flow levels, or other factors indicate that goodwill is impaired, we may need to write off all or part of our goodwill. The amount of the impairment would be charged as an expense in the period in which the impairment occurred. Any such goodwill or other asset impairment charges in the future would reduce our net income and could be a factor in causing future net losses.

In addition, our landfill assets are subject to charges for asset retirement obligations, which are adjusted over time to recognize the current fair market value of the obligations. We are also subject to charges for impairment or disposal of certain of our long-lived assets and facilities. For instance, over the past three years, we have closed two aluminum recycling facilities, one zinc recycling facility and one rolled products facility and reduced the number of furnaces we operate at other U.S. facilities. Underutilization of our facilities could result in additional write-downs and impairment charges. In addition, the carrying value of certain of our properties could be reduced in the future if the fair value of these assets were to decline in the future, resulting in additional asset impairment charges at that time.

Risks Related to Our Debt

Our substantial leverage and debt service obligations could adversely affect our financial condition and restrict our operating flexibility.

We have substantial debt and, as a result, significant debt service obligations. As of December 31, 2006, our total indebtedness was $2.6 billion. We also had approximately $370.9 million of unused commitments, net of outstanding letters of credit, under our 2006 Credit Facilities. Our substantial level of debt and debt service obligations could have important consequences including the following:

• making it more difficult for us to satisfy our obligations with respect to our indebtedness, including the Notes, which could result in an event of default under the indentures governing the Notes and the agreements governing our other indebtedness;

• limiting our ability to obtain additional financing on satisfactory terms to fund our working capital requirements, capital expenditures, acquisitions, investments, debt service requirements and other general corporate requirements;

• increasing our vulnerability to general economic downturns, competition and industry conditions, which could place us at a competitive disadvantage compared to our competitors that are less leveraged and therefore we may be unable to take advantage of opportunities that our leverage prevents us from exploiting;

• exposing our cash flows to changes in floating rates of interest such that a 1% increase in floating rates will negatively impact our cash flows by approximately $15.6 million;

• imposing additional restrictions on the manner in which we conduct our business under financing documents, including restrictions on our ability to pay dividends, make investments, incur additional debt and sell assets; and

• reducing the availability of our cash flows to fund our working capital requirements, capital expenditures, acquisitions, investments, other debt obligations and other general corporate requirements, because we will be required to use a substantial portion of our cash flows to service debt obligations.

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The occurrence of any one of these events could have an adverse effect on our business, financial condition, results of operations, prospects and ability to satisfy our obligations under our indebtedness.

In the future we may incur additional indebtedness which could exacerbate the impact of the foregoing.

Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage.

We and our subsidiaries may be able to incur substantial additional indebtedness, including secured indebtedness, in the future. Although the indentures governing our Notes and the 2006 Credit Facilities contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and any indebtedness incurred in compliance with these restrictions could be substantial. For example, we have the right under our Revolving Credit Facility to request up to $100.0 million of additional commitments, although the lenders will not be under any obligation to provide any such additional commitments. Any increase in commitments will be subject to the absence of a default, and our ability to borrow under our Revolving Credit Facility remains limited by the amount of the borrowing base. In addition, our 2006 Credit Facilities and the Notes allow us to incur a significant amount of indebtedness in connection with acquisitions and a significant amount of purchase money debt. If new debt is added to our and our subsidiaries’ current debt levels, the related risks that we and they face would be increased.

Covenant restrictions under our indebtedness may limit our ability to operate our business and, in such event, we may not have sufficient assets to pay amounts due under the Notes.

The terms of our 2006 Credit Facilities and the Notes restrict us and our subsidiaries from taking various actions such as incurring additional debt under certain circumstances, paying dividends, making investments, entering into transactions with affiliates, merging or consolidating with other entities and selling all or substantially all of our assets. In addition, under certain circumstances, our Revolving Credit Facility requires us to comply with a minimum fixed charge coverage ratio and may require us to reduce our debt or take other actions in order to comply with this ratio. These restrictions could limit our ability to obtain future financings, make needed capital expenditures, withstand future downturns in our business or the economy in general or otherwise conduct necessary corporate activities. We may also be prevented from taking advantage of business opportunities that arise because of limitations imposed on us by the restrictive covenants under our 2006 Credit Facilities and the Notes. A breach of any of these provisions could result in a default under our 2006 Credit Facilities or the Notes, as the case may be, that would allow lenders or noteholders to declare our outstanding debt immediately due and payable. If we are unable to pay those amounts because we do not have sufficient cash on hand or are unable to obtain alternative financing on acceptable terms, the lenders or noteholders could initiate a bankruptcy proceeding or, in the case of the 2006 Credit Facilities, proceed against any assets that serve as collateral to secure such debt.

To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control, and any failure to meet our debt service obligations could harm our business, financial condition and results of operations.

Our ratio of earnings to fixed charges was 2.3x for the period from January 1, 2006 to December 19, 2006 (calculated as described under Item 6—“Selected Financial Data”). Our ability to pay interest on and principal of the Notes and to satisfy our other debt obligations will primarily depend upon our future operating performance. As a result, prevailing economic conditions and financial, business and other factors, many of which are beyond our control, will affect our ability to make these payments.

If we do not generate sufficient cash flow from operations to satisfy our debt service obligations, including payments on the Notes, we may have to undertake alternative financing plans, such as refinancing or restructuring our indebtedness, selling assets, reducing or delaying capital investments or seeking to raise additional capital. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and

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may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments and the indentures governing the Notes may restrict us from adopting some of these alternatives, which in turn could exacerbate the effects of any failure to generate sufficient cash flow to satisfy our debt service obligations. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness on acceptable terms.

Our inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance our obligations at all or on commercially reasonable terms, would have an adverse effect, which could be material, on our business, financial condition and results of operations, as well as on our ability to satisfy our obligations in respect of the Notes.

The terms of our 2006 Credit Facilities and the indentures governing the Notes may restrict our current and future operations, particularly our ability to respond to changes in our business or to take certain actions.

The credit agreements governing our 2006 Credit Facilities and the indentures governing the Notes contain, and the terms of any future indebtedness of ours would likely contain, a number of restrictive covenants that impose significant operating and financial restrictions, including restrictions on our ability to engage in acts that may be in our best long-term interests. The indentures governing the Notes and the credit agreements governing our 2006 Credit Facilities include covenants that, among other things, restrict our and our subsidiaries’ ability to:

• incur additional indebtedness;

• pay dividends on our capital stock and make other restricted payments;

• make investments and acquisitions;

• engage in transactions with our affiliates;

• sell assets;

• merge; and

• create liens.

In addition, our ability to borrow under our Revolving Credit Facility is limited by a borrowing base. Moreover, our Revolving Credit Facility provides discretion to the agent bank acting on behalf of the lenders to impose additional availability and other reserves, which could materially impair the amount of borrowings that would otherwise be available to us. There can be no assurance that the agent bank will not impose such reserves or, were it to do so, that the resulting impact of this action would not materially and adversely impair our liquidity.

A breach of any of the restrictive covenants in the 2006 Credit Facilities would result in a default under those facilities. If any such default occurs, the lenders under the 2006 Credit Facilities may elect to declare all outstanding borrowings under such facilities, together with accrued interest and other fees, to be immediately due and payable, or enforce their security interest, any of which could result in an event of default under the Notes. The lenders will also have the right in these circumstances to terminate any commitments they have to provide further borrowings.

The operating and financial restrictions and covenants in these debt agreements and any future financing agreements may adversely affect our ability to finance future operations or capital needs or to engage in other business activities.

ITEM 1B.    UNRESOLVED STAFF COMMENTS.

Not Applicable

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ITEM 2.    PROPERTIES.

Our production and manufacturing facilities are listed below by segment:

Segment	Location	Owned/Leased
Global rolled and extruded products	Lewisport, Kentucky	Owned
	Uhrichsville, Ohio *	Owned
	Bedford, Ohio	Leased
	Roxboro, North Carolina *	Owned/Leased
	Ashville, Ohio	Owned
	Richmond, Virginia	Owned
	Beloit, Wisconsin	Leased
	Terre Haute, Indiana	Owned
	Koblenz, Germany	Owned
	Duffel, Belgium *	Owned
	Toronto, Canada	Owned
	Cap-de-la-Madeleine, Canada	Owned
	Vogt, Germany	Owned
	Bonn, Germany	Owned
	Bitterfeld, Germany	Owned
	Tianjin, China	Owned
Global recycling	Coldwater, Michigan *	Owned
	Morgantown, Kentucky	Owned
	Post Falls, Idaho	Owned
	Shelbyville, Tennessee	Owned
	Sapulpa, Oklahoma	Owned
	Saginaw, Michigan	Owned
	Loudon, Tennessee	Owned
	Chicago Heights, Illinois	Owned
	Goodyear, Arizona	Leased
	Elyria, Ohio	Owned
	Rock Creek, Ohio	Owned
	Cleveland, Ohio	Owned
	Wabash, Indiana	Owned
	Friendly, West Virginia *	Owned
	Macedonia, Ohio	Owned
	Töging, Germany	Owned
	Grevenbroich, Germany	Owned
	Deizisau, Germany	Owned
	Monterrey, Mexico	Owned
	Swansea, Wales	Leased
	Pindamonhangaba, Brazil *	Owned
Global zinc	Houston, Texas *	Owned
	Clarksville, Tennessee	Owned
	Millington, Tennessee	Owned
	Coldwater, Michigan	Owned
	Spokane, Washington	Leased

* Two facilities in this location.

Substantially all of our real property, fixtures and equipment at all of our aluminum recycling and zinc facilities are mortgaged to secure indebtedness under the 2006 Credit Facilities.

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The average operating rates for our global rolled and extruded products segment’s facilities for 2006 and 2005 was 93% and 86%, respectively, of stated capacity. The average operating rates for our global recycling segment’s facilities in 2006, 2005 and 2004 were 88%, 84% and 85%, respectively, of stated capacity. The average operating rates for our global zinc segment’s facilities in 2006, 2005 and 2004 were 84%, 77% and 84%, respectively, of stated capacity. We permanently closed our Rockwood, Tennessee recycling plant in December 2004 and our rolled products facility located in Carson, California in March 2006.

General Motors has a right to acquire our Saginaw, Michigan facility under its long-term supply agreement with us. This right is exercisable under certain conditions beginning in 2011. If the supply agreement with GM were terminated, GM would then have a right to acquire ownership of the Saginaw facility.

In December 2004, we relocated our principal executive corporate offices to Beachwood, Ohio and have over the years expanded our leased space to approximately 43,000 square feet for those purposes. Our global recycling segment offices are also based at that location. We also lease approximately 8,200 square feet of office space in Irving, Texas. That location provides information technology support for our consolidated operations.

In Louisville, Kentucky, we currently lease approximately 10,000 square feet for our global rolled and extruded products segment offices. In Raleigh, North Carolina, our global rolled and extruded products segment leases approximately 11,000 square feet for financial, accounting and administrative support functions. In Houston, Texas, our global zinc segment owns approximately 30,000 square feet of office space for financial and management functions for our zinc operations. We also have leased a zinc distribution office in Pittsburgh, Pennsylvania.

In late 2006, we located our principal European corporate offices near Zurich, Switzerland and currently lease approximately 12,000 square feet for those purposes. We believe that our facilities are suitable and adequate for our operations.

ITEM 3.    LEGAL PROCEEDINGS.

Legal Proceedings

We are a party from time to time to what we believe are routine litigation and proceedings considered part of the ordinary course of our business. We believe that the outcome of such existing proceedings would not have a material adverse effect on our financial position or results of operation.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On December 14, 2006, the Company held a Special Meeting of Stockholders to consider, approve and adopt the merger agreement. The votes cast at the meeting were as follows:

Proposal	For	Against	Abstain
Approve and Adopt Agreement and Plan of Merger by and among Holdings, Merger Sub and the Company	23,734,717	313,407	12,177
Approve adjournment or postponement of the Special Meeting of Stockholders, if necessary to solicit additional proxies	21,618,170	2,431,112	11,019

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is privately held, and there is no public trading market for our common stock. As of the date of this filing, Holdings is the sole holder of record of our common stock.

The terms of our 2006 Credit Facilities and the indentures governing our Notes restrict our ability to pay dividends. We do not intend to pay dividends in the foreseeable future. Our future dividend policy will be determined by the Board of Directors on the basis of various factors, including our results of operations, financial condition, capital requirements and investment opportunities. See Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—December 2006 Refinancing” for a more detailed description of the restrictions on our ability to pay dividends.

ITEM 6.    SELECTED FINANCIAL DATA.

	(Successor)			(Predecessor)
	For the period from December 20, 2006 to December 31, 2006			For the period from January 1, 2006 to December 19, 2006			For the year ended December 31,
							2005			2004			2003			2002
				(in millions, except ratios)
Statement of Operations Data:
Revenues	$	111.8		$	4,637.0		$	2,429.0		$	1,226.6		$	892.0		$	687.2
Operating income		2.4			234.9			118.7			12.7			13.8			19.9
(Loss) income before cumulative effect of accounting change		(3.4	)		73.7			74.3			(23.6	)		(0.8	)		6.9
Cumulative effect of accounting change, net of tax benefit (a)		—			—			—			—			—			(58.7	)
Net (loss) income	$	(3.4	)	$	73.7		$	74.3		$	(23.6	)	$	(0.8	)	$	(51.9	)
Balance Sheet Data (at end of period):
Cash and cash equivalents	$	126.1					$	6.8		$	17.8		$	14.8		$	6.9
Total assets		4,808.4						1,554.1			1,081.2			550.7			351.4
Total debt		2,588.0						651.8			412.4			256.2			108.6
Total stockholder’s equity		845.4						393.8			282.7			121.8			116.9
Other Financial Data:
Net cash provided by (used in):
Operating activities	$	(147.1	)	$	338.0		$	102.3		$	2.1		$	(8.3	)	$	38.4
Investing activities		(1,736.1	)		(902.5	)		(373.9	)		(38.9	)		(5.2	)		(16.3	)
Financing activities		1,880.5			699.9			261.3			38.7			20.7			(18.4	)
Depreciation and amortization		5.4			103.7			55.0			30.6			29.7			23.7
Capital expenditures		10.7			113.2			62.1			44.8			20.8			19.3
Ratio of earnings to fixed charges (b)		—			2.3	x		2.6	x		—			—			2.0	x

(a) On January 1, 2002, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” and recorded an impairment charge of $58.7 million net of tax benefits, as a cumulative effect of an accounting change. Subsequent to the adoption of SFAS No. 142, goodwill is no longer amortized.

(b) For purposes of computing the ratio of earnings to fixed charges, “earnings” consists of income (loss) before income tax expense (benefit) and minority interest, plus cash dividends received from equity interests less the equity income recorded. Fixed charges consist of interest expense, including amortization of debt issuance costs and capitalized interest and the interest portion of rental expense. For the period from December 20, 2006 to December 31, 2006 and for the years ended December 31, 2004 and 2003, earnings were insufficient to cover fixed charges by approximately $4.1 million, $16.3 million and $2.3 million, respectively.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following Management’s Discussion and Analysis of our Financial Condition and Results of Operations (“MD&A”) is intended to help you understand our operations as well as the industry in which we operate. This discussion should be read in conjunction with our audited financial statements and notes and other financial information appearing elsewhere in this annual report. Our discussions of our financial condition and results of operations also include various forward-looking statements about our industry, the demand for our products and services, and our projected results. These statements are based on certain assumptions that we consider reasonable. For information about these assumptions and other risks relating to our businesses and our company, you should refer to Item 1A—“Risk Factors.”

Overview

This overview summarizes the MD&A, which includes the following sections:

• Our Business—a general description of our operations and business segments, the aluminum industry and the critical measures of financial performance.

• Review of 2006 and Future Outlook—a discussion of TPG’s acquisition of us, our acquisition of Corus Aluminum, the significant factors that impacted our business in 2006 as well as material trends and uncertainties that may impact our operations.

• Operations Review—an analysis of our consolidated and segment results of operations and production for the years presented in our consolidated financial statements as well as pro forma results for the year ended December 31, 2004 reflecting the December 9, 2004 acquisition of Commonwealth as if it had occurred on January 1, 2004.

• Liquidity and Capital Resources—a discussion of our December 2006 and August 2006 refinancings as well as an analysis of cash flows, EBITDA, exchange rates and contractual and environmental obligations.

• Critical Accounting Estimates—a discussion of accounting policies that require management to make estimates and judgments.

• Recently Issued Accounting Standards—a discussion of the impact of recently issued accounting standards that are expected to have an impact on our consolidated financial position, results of operations and cash flows.

Our Business

We are a global leader in aluminum rolled products and extrusions, aluminum recycling and specification alloy production. We are also a recycler of zinc and a leading U.S. manufacturer of zinc metal and value-added zinc products that include zinc oxide and zinc dust. We generate substantially all of our revenues from the manufacture and sale of these products. We operate 49 production facilities in North America, Europe, South America and Asia. We possess a combination of low-cost, flexible and technically advanced manufacturing operations supported by an industry-leading research and development platform. Our facilities are strategically located and well positioned to service our customers, which include a number of the world’s largest companies in the aerospace, building and construction, containers and packaging, metal distribution and transportation industries.

The acquisition of Corus Aluminum increased the size and scope of our international operations substantially, and, as a result, management has re-aligned our reporting structure into global business units. Our new reportable segments consist of global rolled and extruded products, global recycling and global zinc.

Global rolled and extruded products. Our global rolled and extruded products operations utilize both scrap and primary aluminum to produce rolled aluminum sheet, plate and extruded profiles for use in the aerospace,

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building and construction, distribution and transportation industry segments. We generally have not competed in the aluminum can sheet, foil, and certain other industry segments where more exacting tolerances are required, although the acquisition of Corus Aluminum has expanded our product offerings into the aerospace industry segment where exacting tolerances are also required. In 2006, approximately 57% of our consolidated revenues and approximately 55% of our consolidated segment income were generated by this segment of our business.

Global recycling. Our global recycling segment consists of our U.S. and international recycling operations. This segment melts either company-owned or customer-owned aluminum scrap for use in the automotive, can sheet and other industries. In 2006, the global recycling segment generated approximately 31% of our consolidated revenues and approximately 25% of our consolidated segment income.

Global zinc. Our global zinc segment processes zinc scrap as well as primary zinc into various value-added zinc products, including zinc oxide used by tire and other rubber-based manufacturers, zinc dust used by specialty chemicals and paint companies as a corrosion deterrent, and zinc metal used by steel companies in the galvanizing process. We also supply our customers with unprocessed primary zinc for use in their operations. In 2006, approximately 12% of our consolidated revenues and approximately 20% of our consolidated segment income were generated by this segment of our business.

The Aluminum Industry

We participate in select segments of the aluminum industry, including rolled and extruded products and recycling. The aluminum industry is highly cyclical and is affected by global economic conditions, industry competition, product development and commercialization. Compared to several substitute metals, aluminum is light weight, has a high strength-to-weight ratio and is resistant to corrosion. Aluminum’s greatest advantage, however, is that it can be recycled again and again without any material decline in performance or quality.

Aluminum prices are determined by worldwide market forces of supply and demand, and, as a result, prices are volatile. The overall aluminum industry consists of primary aluminum producers, aluminum casters, extruders and sheet producers and aluminum recyclers. Primary aluminum is a commodity traded and priced daily on the LME. Most primary aluminum producers are engaged in the mining of bauxite ore and refining of the ore into alumina. Alumina is then smelted to form aluminum ingots and billets. Aluminum recyclers produce aluminum in molten or ingot form. Ingots and billets are further processed by aluminum sheet manufacturers and extruders to form plate, sheet and foil and extrusions profiles, or they are sold to aluminum traders or to the commodity markets.

We do not mine bauxite, refine alumina, or smelt primary aluminum as part of our business.

Critical Measures of Our Financial Performance

In addition to analyzing our consolidated operating performance based upon revenues, net income and earnings before interest, taxes, depreciation and amortization (“EBITDA”) we measure the performance of our operating segments utilizing segment income. Segment income includes gross profits, segment specific realized gains and losses on derivative financial instruments, other expense (income) and selling, general and administrative expense. Corporate other expense (income), corporate general and administrative expenses, unrealized gains and losses on derivative financial instruments, restructuring and other charges, management fees to affiliates of TPG, interest expense, interest income, losses on the early extinguishment of debt, amortization of capitalized debt issuance costs and provisions for income taxes are not allocated to individual segments. Segment income of each segment is the result of several factors, the most critical of which are as follows:

Global rolled and extruded products. The critical measures of the performance of our global rolled and extruded products segment include the following:

• pounds shipped;

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• rolling margin;

• FIFO effect;

• scrap spreads;

• material margin; and

• cash conversion costs.

The profitability of our global rolled and extruded products segment is primarily determined by the difference between the per pound selling price and per pound metal cost (including any coating). We refer to this as “material margin.” The majority of our rolled and extruded products are priced using a conversion fee-based model, where we charge customers the prevailing market price for the metal content of their order plus a fee to convert the metal, called the “rolling margin.” The remaining products are priced under long-term arrangements using fixed prices for the metal content.

Although our conversion fee-based pricing model is designed to mitigate our exposure to changing primary aluminum prices, we remain susceptible to primary aluminum price changes in our fixed price sales contracts and other customer agreements where price is agreed upon prior to the physical purchase of the metal. In addition, our operations require that a significant amount of inventory be kept on hand to meet future production requirements. This base level of inventory is also susceptible to changing primary metal prices to the extent it is not committed to fixed price sales orders. In order to reduce these exposures, we focus on reducing working capital and seek to offset our purchase and sales price risk on a global basis. We also utilize various derivative financial instruments designed to reduce the impact of changing primary aluminum prices on future sales for which aluminum has not yet been purchased and on our base inventory level. Our risk management practices reduce but do not eliminate our exposure to changing primary aluminum prices. While we have limited our exposure to unfavorable primary aluminum price changes, we have also limited our ability to benefit from favorable price changes.

The results of our global rolled and extruded products operations are also impacted by the time difference between when we purchase metal to fill customer orders and when that metal impacts our operating results. In general, our conversion fee-based model allows us to pass along changes in the price of primary aluminum to our customers. We, in turn, will pay higher or lower prices for the physical metal we purchase. However, as we value our inventories under the first-in, first-out method, the inventory typically impacts our cost of sales in periods subsequent to when the sales price impacts our revenues. This lag will, generally, increase our earnings in times of rising primary aluminum prices and decrease our earnings in times of decreasing primary aluminum prices; however, our use of derivative financial instruments as discussed above reduces this impact. We refer to this as the “FIFO effect” and others in our industry refer to this as “metal price lag.”

Also included in our material margin is the impact of differences between changes in the prices of primary and scrap aluminum. As we price our product using the prevailing price of primary aluminum but purchase large amounts of scrap aluminum to produce our products, primarily in our North American operations, we benefit when primary aluminum price increases exceed scrap price increases. Conversely, when scrap price increases exceed primary aluminum price increases, our material margin will be negatively impacted. The difference between the price of primary aluminum and scrap prices is referred to as the “scrap spread” and is impacted by the effectiveness of our scrap purchasing activities, our furnace recovery of aluminum from scrap and by the supply of scrap available.

The capital intensive nature of our operations as well as the significant amount of energy (primarily natural gas) required to re-heat and roll aluminum slabs into rolled sheet results in a significant amount of fixed and variable overhead costs. We measure the effectiveness of our rolling operations by determining the per pound cash conversion costs.

Global recycling. The profitability of our global recycling segment is largely dependent on the level of demand for our recycling services. Increased production will result in lower per unit costs and increased profitability. In

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addition, recoveries are a key financial measure which we track for this segment. As in the global rolled and extruded products segment, energy costs are a significant expenditure and have a significant impact on this segment’s profitability. Revenues and margin percentages in this segment are subject to fluctuations based upon the percentage of customer-owned pounds processed. Historically, increased processing under such tolling agreements has resulted in lower revenues while not affecting segment income and generally has also resulted in higher percentages of gross profit and segment income. Tolling agreements subject us to less risk of changing metal prices and reduce our working capital requirements. Although tolling agreements are beneficial to us in these ways, the percentage of our pounds able to be processed under these agreements is limited by the amount of metal our customers own and their willingness to enter into such arrangements. Segment profitability may also be impacted by changes in the price of primary aluminum, although the impact of changes in primary aluminum prices is mitigated due to the higher percentage of tolling and short time period from order entry to order fulfillment that characterize this segment. However, changing scrap spreads can significantly impact segment performance.

Global zinc. Our zinc products are priced primarily as a percentage of or at a premium over the LME price of zinc. However, as with aluminum scrap prices, zinc scrap price movements do not necessarily match those of the primary market. Therefore, as the LME price increases in excess of the purchase price of zinc scrap, segment income will also increase. Thus, both the level of the LME and scrap spreads are key drivers of segment performance.

Review of 2006 and Future Outlook

We continued to make improvements in our manufacturing and procurement processes through the execution of our Six Sigma-based initiatives. These initiatives and our continuous focus on identifying and executing synergistic benefits associated with the acquisitions of Corus Aluminum, Commonwealth and the 2005 Acquisitions generated estimated savings of $100.0 million in the year ended December 31, 2006. We also continued to experience rapid growth with the acquisition of Corus Aluminum on August 1, 2006 and the inclusion of the 2005 Acquisitions in our consolidated operating results for the entire year. In addition to the growth resulting from acquisitions, our core businesses also experienced significant increases in profitability in 2006 as the rising prices of primary metals such as aluminum and zinc favorably impacted our selling prices and segment income.

The following discusses the significant highlights, events and factors that impacted our business in 2006. Additional discussion of these items is included throughout MD&A and the audited consolidated financial statements.

• On July 14, 2006, TPG formed Holdings and Merger Sub for purposes of acquiring us. On August 7, 2006, we entered into an Agreement and Plan of Merger with Holdings, pursuant to which each share of our common stock (other than shares held in treasury or owned by Holdings) would be converted into the right to receive $52.50 in cash. The Acquisition was completed on December 19, 2006 at which time TPG and certain members of our management made a cash contribution of $844.9 million and a non-cash contribution of $3.9 million to Holdings in exchange for 8,520,000 shares of common stock of Holdings. The non-cash contribution consisted of shares of common stock held by management. Holdings contributed this amount to Merger Sub in exchange for Merger Sub issuing 900 shares of its common stock to Holdings. The cash contribution, along with the additional indebtedness jointly entered into by us and Merger Sub, was used to acquire all of our then outstanding common stock, including non-vested restricted stock, pay the holders of all outstanding stock options, refinance substantially all of our indebtedness and pay fees and expenses associated with the Acquisition. The Acquisition is more fully described in Note B of the audited consolidated financial statements while the refinancing is more fully described in “Liquidity and Capital Resources” and in Note K of the audited consolidated financial statements.

Immediately upon consummation of the Acquisition, the Merger Sub was merged with and into the Company. As the surviving corporation in the merger, we assumed, by operation of law, all of the rights and obligations of Merger Sub. Subsequent to the Acquisition, our common shares were delisted from

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the New York Stock Exchange. We continue to report with the SEC as a voluntary filer because the terms of the indentures governing our Notes require us to file all current, quarterly and annual filings with the SEC.

• Our focus on synergy benefits and productivity improvements led to the realization of approximately $100.0 million of cost reductions in 2006.

• We continued to execute our strategy of growth through strategic acquisitions and completed the acquisition of Corus Aluminum on August 1, 2006. We believe that the Corus Aluminum acquisition transformed us as it has expanded our product offering, increased our participation in high-growth industry segments and strengthened our technology platform. Aggregate net cash consideration for the acquisition was €695.5 million (approximately $885.7 million), subject to adjustment based on the finalization of the net debt assumed and the working capital delivered. Based on preliminary information, we recorded an adjustment to increase the purchase price by $65.0 million. Final determination of this adjustment is expected to occur in 2007.

Corus Aluminum contributed revenues of $949.4 million during the five months in which its operating results were included in our consolidated operating results. However, these operations incurred a segment loss of $27.1 million as purchase accounting rules prevented us from reflecting the majority of the normal profit associated with the sale of acquired inventories and from reflecting the full economic benefits associated with the settlement of acquired aluminum and currency derivatives in our consolidated operating results.

• Excluding the impact of the Corus Aluminum acquisition, our global rolled and extruded products segment reported an increase in segment income of $47.1 million in 2006 as a result of the 2005 Acquisitions, the closure of our Carson, California rolling mill, the FIFO benefit of rising primary aluminum prices, improving scrap spreads, and productivity and acquisition synergies. These factors more than offset lower volumes, exclusive of the impact of the acquired businesses, slightly lower rolling margins and higher energy and incentive compensation expenses.

• Our global zinc segment benefited from a 242% increase in the average LME price of zinc from 2005 to 2006. The rising price of zinc contributed to a $44.0 million increase in segment income in 2006.

• Our global recycling segment benefited from a 35% increase in the average LME price of aluminum from 2005 to 2006 as well as from continued productivity initiatives. Global recycling’s segment income increased $43.0 million in 2006.

• During 2006, we implemented a program of hedging a portion of our base inventory levels within the global rolled and extruded products segment.

We also face many challenges in our business and industry, the following of which are the most significant:

• We incurred significant indebtedness in connection with the Acquisition and are highly leveraged. While substantially all of our indebtedness matures in 2011 or later, we will incur and pay significantly more interest expense under our new capital structure than we paid in 2006. We estimate that our interest payments, excluding interest on our revolving credit facility, will be approximately $178.1 million in the year ending December 31, 2007. Our ability to continue to meet these obligations will depend on our continued profitability.

• The Acquisition has also required that all of our assets and liabilities be adjusted to fair value through purchase accounting. These adjustments have impacted and will continue to impact the amount of goodwill recorded in our consolidated balance sheet as purchase accounting adjustments related to appraisals of long-lived tangible and intangible assets, deferred income taxes and certain other assets and liabilities are finalized in 2007. In addition, we recorded preliminary purchase accounting adjustments to write-up our inventories by $61.3 million. This increased inventory value will be charged to cost of sales primarily in the first quarter of 2007 and will significantly reduce our reported gross margin and pre-tax income in that period. Further, the application of purchase accounting rules will prohibit us from reflecting the economic benefits associated with the settlement of derivative financial instruments in place as of the Acquisition date in our future operating results.

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• We remain susceptible to changing primary metal and natural gas prices as well as changing currency and interest rates. We continually evaluate our risk management and hedging activities in an attempt to reduce the impact of these changes on our operating results and cash flows. As mentioned previously, we now utilize derivative financial instruments to fix the selling prices of a portion of the global rolled and extruded products base inventory levels. In 2007, we entered into derivative financial instruments to hedge forecasted sales of our zinc products. Although we have reduced our exposure to unfavorable changes in primary aluminum and zinc prices, we have also reduced our ability to benefit from favorable price changes.

• The majority of our derivative financial instruments are not treated as hedges for accounting purposes. As a result, changes in the fair values of these derivatives are recorded immediately in the statement of operations rather than at the time of the settlement of the derivative instrument. This has led to earnings volatility in the past and we expect further earnings volatility in future periods. We record the changes in the fair value of derivatives not accounted for as hedges, including both unrealized gains and losses associated with open contracts and realized gains and losses associated with settled contracts, within “(Gains) losses on derivative financial instruments” in the consolidated statement of operations. Our definition of segment income includes only the impact of derivative financial instruments that have been settled for cash in the period.

• LME zinc prices had been at or near record levels throughout 2006 but as of February 28, 2007, these prices had dropped by 21% compared to December 31, 2006. This has negatively impacted our zinc business through the first two months of 2007. As noted above, we have implemented a risk management strategy to mitigate future price declines.

• The North American housing industry has declined significantly in 2006 and in the beginning of 2007. Single family home construction has decreased more than 10% year over year resulting in slower demand for building and construction end-uses in North America.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2006 COMPARED TO THE YEAR ENDED DECEMBER 31, 2005 AND FOR THE YEAR ENDED DECEMBER 31, 2005 COMPARED TO THE YEAR ENDED DECEMBER 31, 2004

Basis of Presentation

We have prepared our discussion of the results of operations for the year ended December 31, 2006 by comparing the results of operations for the year ended December 31, 2005 to the combined amounts obtained by adding the earnings and cash flows for the period from January 1, 2006 to December 19, 2006 (the “Predecessor Period”) and the period from December 20, 2006 to December 31, 2006 (the “Successor Period”). We refer to the sum of these two periods as the “Combined Period.” We have included this presentation as we believe that it provides a meaningful method of comparison. In addition, we present a separate discussion of the operating results for the Successor Period.

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Historical and Pro Forma Operating Results

The following provides combined financial and operating data for the year ended December 31, 2006, historical financial and operating data for the years ended December 31, 2005 and pro forma and historical financial and operating data for the year ended December 31, 2004. The acquisition of Commonwealth Industries, Inc. in December 2004 had a dramatic impact on our operating performance and limited the comparability of our historical operating results. As a result, we have provided pro forma financial information for the year ended December 31, 2004. The unaudited pro forma information for 2004 has been prepared assuming that Aleris and Commonwealth had been operating together on a consolidated basis since January 1, 2004, and gives effect to the financing transactions related to the acquisition of Commonwealth as if they had occurred at that time.

														Unaudited Pro Forma Information
										Percent Change				2004			Percent Change 2005 vs. 2004
For the year ended December 31,	2006			2005			2004			Combined 2006 vs. 2005		2005 vs. 2004
	(Combined)			(Predecessor)			(Predecessor)
	(in millions, except percentages)
Revenues	$	4,748.8		$	2,429.0		$	1,226.6		96	%	98	%	$	2,244.7		8	%
Cost of sales		4,333.0			2,181.3			1,153.1		99		89			2,096.1		4
Gross profit		415.8			247.7			73.5		68		237			148.6		74
Gross profit as a percentage of revenues		9	%		10	%		6	%						7	%
Selling, general and administrative expense		167.4			91.1			54.5		84		67			92.2		(1	)
Restructuring and other charges		41.9			29.9			14.9		40		101			37.9		(21	)
(Gains) losses on derivative financial instruments		(30.8	)		8.0			(8.6	)		*		*		(9.4	)		*
Operating income		237.3			118.7			12.7		100		835			27.9		325
Interest expense		90.6			41.9			28.8		116		45			44.4		(6	)
Equity in net loss of affiliates		—			1.6			0.2			*		*		0.3		433
Interest and other income, net		(21.7	)		—			(0.2	)		*		*		(1.9	)		*
Loss on early extinguishment of debt		54.4			—			—			*		*		—			*
Income (loss) before income taxes and minority interests		114.0			75.2			(16.1	)	52			*		(14.9	)		*
Provision for income taxes		43.6			0.4			7.5			*	(95	)		7.5		(95	)
Income (loss) before minority interests		70.4			74.8			(23.6	)	(6	)		*		(22.4	)		*
Minority interests, net of provision for income taxes		0.1			0.5			0.2		(80	)	150			0.3		67
Net income (loss)	$	70.3		$	74.3		$	(23.8	)	(5	)%		*	$	(22.7	)		*
Total Segment Income	$	330.5		$	223.4		$	55.0
Corporate general and administrative expenses		(72.8	)		(58.2	)		(32.2	)
Restructuring and other charges		(41.9	)		(29.9	)		(14.9	)
Interest expense		(90.6	)		(41.9	)		(28.8	)
Unrealized gains (losses) from derivative financial instruments		28.3			(18.6	)		4.2
Unallocated interest and other income, net		14.9			0.4			0.6
Loss on early extinguishment of debt		(54.4	)		—			—
Income (loss) before income taxes and minority interests	$	114.0		$	75.2		$	(16.1	)

* Result is not meaningful.

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Revenues and Shipments

The following table shows revenues and shipment data by segment and the percentage changes from the prior period:

For the year ended December 31	2006			2005			2004			Combined 2006 over 2005 % change		2005 over 2004 % change
	(Combined)			(Predecessor)			(Predecessor)
	(in millions, except percentages)
Revenues:
Global rolled and extruded products	$	2,726.2		$	1,246.7		$	95.1		119	%		*
Global recycling		1,489.0			967.9			926.5		54		4	%
Global zinc		553.2			244.1			206.9		127		18
Intersegment revenues		(19.6	)		(29.7	)		(1.9	)	(34	)		*
Consolidated revenues	$	4,748.8		$	2,429.0		$	1,226.6		96	%	98	%
Pounds shipped:
Global rolled and extruded products		1,640.9			922.3			76.8		78	%		*
Global recycling		2,889.5			2,804.9			2,710.0		3		4	%
Global zinc		384.1			392.4			423.1		(2	)	7	%

* Result is not meaningful.

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005

Our revenues for the year ended December 31, 2006 increased $2.3 billion compared to the year ended December 31, 2005. The acquired operations of Corus Aluminum, ALSCO, Tomra Latasa, Alumitech and the acquired assets of Ormet accounted for an estimated $1.6 billion of this increase. Excluding the impact of the acquired businesses, global rolled and extruded products segment revenues increased $111.5 million as lower shipment levels and slightly lower rolling margins were more than offset by the impact of the rising price of primary aluminum. Excluding the impact of the acquired businesses, global recycling segment revenues increased by $334.6 million as a result of improved volumes and higher selling prices resulting from the rising price of primary aluminum and higher tolling fees. Global zinc revenues increased $309.1 million as average LME zinc prices were approximately 242% higher during the year ended December 31, 2006 compared to the year ended December 31, 2005.

The following table presents the estimated impact of key factors that resulted in the 96% increase in our consolidated revenues from 2005 to 2006:

	Global rolled and extruded products		Global recycling		Global zinc		Consolidated
Price	18	%	30	%	129	%	34	%
Volume/mix	(10	)	5		(2	)	(3	)
Acquisitions *	111		19		—		65
Total percentage increase	119	%	54	%	127	%	96	%

* Represents the operations acquired as a result of the Corus Aluminum acquisition as well as the year-over-year changes in revenues resulting from our 2005 acquisitions.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

Revenue increased 98% in the year ended December 31, 2005 compared to the year ended December 31, 2004 primarily due to the 2005 Acquisitions and the acquisition of Commonwealth in December 2004. In

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addition, increasing primary aluminum and zinc prices resulted in higher selling prices for our aluminum recycling and zinc products during the year ended December 31, 2005.

On a pro forma basis, our consolidated revenues would have increased by 8% from 2004. The following table presents, on a percentage basis, the estimated impact of key factors that resulted in the 8% increase in our consolidated revenues from pro forma 2004 to 2005:

	Global rolled and extruded products		Global recycling		Global zinc		Consolidated
Price	17	%	3	%	30	%	13	%
Volume/mix	(14	)	(2	)	(13	)	(10	)
Acquisitions *	6		3		—		4
Currency and other	(1	)	—		1		1
Total percentage increase	8	%	4	%	18	%	8	%

* Represents the following operations acquired as a result of the acquisitions of 2005: ALSCO in October 2005, certain assets of Ormet in December 2005, Alumitech in December 2005, and Tomra Latasa in August 2005.

Global Rolled and Extruded Products Revenues

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005. Segment revenues increased by $1.5 billion in the year ended December 31, 2006 compared to the year ended December 31, 2005. The increase in revenues was due to the following:

• Corus Aluminum, which generated revenues of $949.4 million since its acquisition on August 1, 2006;

• The fourth quarter 2005 acquisitions of ALSCO and certain of the assets acquired from Ormet, which contributed incremental revenues of $418.7 million in the year ended December 31, 2006;

• A 32% increase in the average price of primary aluminum included in our invoiced prices for the year ended December 31, 2006 compared to the year ended December 31, 2005, excluding the impact of the acquired businesses, which increased revenues by an estimated $245.6 million;

• A 5% reduction in shipment levels in the year ended December 31, 2006 compared to the year ended December 31, 2005, excluding the impact of the acquired businesses, which reduced revenues by approximately $118.5 million. This decrease was a result of lower demand in North America; and

• Rolling margins in the year ended December 31, 2006, excluding the impact of the acquired businesses, which decreased compared to the rolling margins realized in the year ended December 31, 2005.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004. Segment revenues for global rolled and extruded products in 2004 include only the revenue generated from the date of the acquisition of Commonwealth on December 9, 2004 to December 31, 2004. As 2005 includes the Commonwealth operations for the entire year and comparisons of 2005 and 2004 on a reported basis are not meaningful, we use pro forma financial information for the year ended December 31, 2004 as a basis for comparison. Revenues from our global rolled and extruded products segment increased $94.1 million, or approximately 8%, in 2005 as compared to pro forma 2004. The increase resulted from the following:

• Increased selling prices per pound, which resulted in a 17% increase in revenues. This increase was due to a 30% increase in rolling margins charged to customers as a result of new customer agreements which began in January 2005 as well as a 12% increase in primary aluminum prices which was passed on to our customers through our metal plus conversion fee pricing model;

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• A 12% decrease in volumes, excluding the impact of the 2005 Acquisitions. The decline in volume reduced revenues by 14% and was the result of customer destocking that occurred during much of the third and fourth quarters of 2005. This destocking was the result of high inventory levels built-up by our distribution and building and construction customers over the prior six months; and

• The acquired operations of ALSCO which contributed $64.9 million of revenues to the segment in 2005.

Global Recycling Revenues

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005. Global recycling revenues increased $521.1 million in the year ended December 31, 2006 compared to the year ended December 31, 2005 partially as a result of the acquisitions of Alumitech, Tomra Latasa and certain assets of Ormet, which generated incremental revenues of $186.5 million in the year ended December 31, 2006. Excluding the impact of the acquired businesses, the segment benefited from the 35% increase in the average LME price of aluminum in the year ended December 31, 2006. The higher LME prices contributed to higher selling prices per pound, increasing revenues by approximately $293.2 million. Pounds shipped decreased as a result of shifting certain recycling facilities to the global rolled and extruded products segment in 2006. Management estimates that global recycling segment revenues would have been lower by approximately $22.8 million in the year ended December 31, 2005 as a result of this change. Segment results have not been restated to reflect this change. Exclusive of this change and the impact of the acquisitions, pounds shipped increased by 5% in the year ended December 31, 2006 compared to the year ended December 31, 2005, resulting in a $51.8 million increase in revenue in 2006.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004. Revenues from our global recycling segment increased 4% from 2004 to 2005 primarily as a result of the acquisition of Tomra Latasa in August 2005 which increased segment revenues by approximately 3%. Higher volumes in Germany as a result of the completion of a magnesium recycling facility also contributed to the increase in segment revenues. In the United States, reduced volumes from the automotive industry as well as a slight shift from product sales to toll sales and the resultant lower gross revenue were offset by the higher underlying aluminum value of product sales caused by the increased price of primary aluminum. The shift to toll agreements, as well as a reduction in total product sales, was a deliberate response to the reduced availability of scrap in certain geographic areas and reduced demand from the U.S. automotive industry. The reduced availability of scrap resulted in higher scrap prices during the first half of 2005. In order to limit our exposure to the rising price of scrap aluminum, we shifted a higher percentage of our business to toll sales.

Global Zinc Revenues

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005. Revenues from our global zinc segment increased $309.1 million in the year ended December 31, 2006 compared to the year ended December 31, 2005, driven by an approximate 131% increase in the average selling prices of our zinc products, which more than offset a 2% decrease in pounds shipped. The increase in selling prices was the result of a 242% increase in the average LME price of zinc.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004. Revenues from our global zinc segment increased 18% in 2005 as compared to 2004, driven by a 30% increase in selling prices, which more than offset a 13% decrease in revenues due to lower shipment levels. The increase in selling price was the result of a 32% increase in the LME price of zinc. The 7% reduction in pounds shipped was due, in part, to reduced automotive demand during the first half of 2005 as well as the closure of our Hillsboro, Illinois facility and management’s decision to forego lower margin business.

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Segment Income and Gross Profit

The following table shows the total income for our segments, the percentage change from the prior period and a reconciliation of segment income to our consolidated gross profit:

For the year ended December 31,	2006			2005			2004			Combined 2006 over 2005 % change		2005 over 2004 % change
	(Combined)			(Predecessor)			(Predecessor)
	(in millions, except percentages)
Segment income (loss):
Global rolled and extruded products	$	180.7		$	160.6		$	(3.1	)	13	%		*
Global recycling		84.8			41.8			46.1		103		(9	)%
Global zinc		65.0			21.0			12.0		210		75
Total segment income	$	330.5		$	223.4		$	55.0		48	%	306	%
Items not included in gross profit:
Segment selling, general and administrative expense	$	94.6		$	32.9		$	22.3		188	%	48	%
Realized losses (gains) on derivative financial instruments		4.5			(10.6	)		(4.4	)		*	141
Equity in loss of affiliates		—			1.6			0.2			*		*
Other (income) expense		(13.8	)		0.4			0.4			*		*
Gross profit	$	415.8		$	247.7		$	73.5		68	%	237	%

* Result is not meaningful.

Global Rolled and Extruded Products Segment Income

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005. Global rolled and extruded products segment income for the year ended December 31, 2006 increased $20.1 million compared to the year ended December 31, 2005. The net increase was due to the following:

• The acquisition of ALSCO and the impact of certain of the assets acquired from Ormet, which increased segment income by an estimated $44.6 million in the year ended December 31, 2006 compared to the year ended December 31, 2005.

• Synergies from the Commonwealth acquisition and productivity benefits, which improved segment income by an estimated $30.7 million in the year ended December 31, 2006 compared to the year ended December 31, 2005.

• A $13.8 million gain on the sale of the buildings and land at the Carson, California facility in the year ended December 31, 2006.

• The closure of the Carson, California rolling mill in March 2006 and the shifting of that facility’s production to our lower cost rolling mills in Richmond, Virginia and Uhrichsville, Ohio, which increased segment income by an estimated $10.4 million in the year ended December 31, 2006.

• Material margins, which improved as a result of the impact of the FIFO effect of rising aluminum prices and improved scrap spreads, more than offset lower rolling margins.

• The acquired operations of Corus Aluminum, which incurred segment losses of $27.1 million since August 1, 2006. Reported segment income for these operations was negatively impacted by purchase accounting rules under generally accepted accounting principles in the United States of America (“U.S. GAAP”) which effectively eliminate the profit associated with acquired work-in-process and finished goods inventories by requiring those inventories to be adjusted to fair value through the purchase price allocation. This requirement resulted in $5.4 million of additional costs of sales recorded in the year

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ended December 31, 2006. In addition, the purchase accounting rules also prevented the recognition of $34.8 million of the economic benefits of acquired aluminum and currency derivatives that settled during the period.

• Lower shipment levels, excluding the acquired businesses, which resulted in a decrease in segment income of approximately $39.0 million.

• Higher freight, energy and personnel costs, which reduced segment income by $29.4 million.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004. Segment income for the year ended December 31, 2004 includes the operating results of Commonwealth from December 9, 2004 to December 31, 2004. As a result, comparisons to 2005 segment performance are not meaningful. On a pro forma basis, segment income from global rolled and extruded products was $63.1 million in 2004. The $97.5 million, or 155%, increase in segment income from pro forma 2004 to 2005 was due primarily to the following:

• Material margins increased 41% in the year ended December 31, 2005, which increased segment income by an estimated $145.0 million. The material margin increase was driven by improved rolling margins as a result of new customer agreements as well as widening scrap spreads.

• Productivity improvements and synergistic benefits from the acquisition of Commonwealth, which further improved segment operating results by an estimated $12.0 million in the year ended December 31, 2005. These improvements and benefits related to reduced procurement, insurance and employee costs.

• Shipment levels decreased 12% in the year ended December 31, 2005 compared to the pro forma year ended December 31, 2004, which resulted in a $48.2 million reduction in segment income.

• Higher natural gas and freight costs in the year ended December 31, 2005, which reduced segment income by $8.4 million.

• The requirement to write-up acquired inventories to fair value through purchase accounting for the Commonwealth and ALSCO acquisitions, which reduced segment income by approximately $6.2 million in 2005 and $5.4 million in 2004.

Global Recycling Segment Income

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005. Global recycling segment income for the year ended December 31, 2006 increased by $43.0 million partly due to the acquisitions of Alumitech, Tomra Latasa and certain assets of Ormet, which contributed incremental segment income of $20.8 million in 2006. In addition, productivity initiatives to reduce metal procurement costs increased segment income by $20.3 million in 2006 while increased volumes and widening scrap spreads resulting from higher average LME prices increased segment income by $27.5 million. Higher personnel and other manufacturing costs reduced segment income by $15.6 million in 2006 as compared to 2005. Segment income for the year ended December 31, 2005, which has not been restated, included $2.1 million related to the global recycling facilities which are now accounted for as part of the global rolled and extruded products segment.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004. The $4.3 million decrease in global recycling segment income in the year ended December 31, 2005 compared to the year ended December 31, 2004 was primarily the result of the increasing cost of scrap aluminum in Germany which decreased segment income by an estimated $10.4 million, rising natural gas costs in the U.S. which reduced segment income by approximately $5.8 million and a $1.2 million write-down of a recycling joint venture investment. These items more than offset the $1.2 million of segment income contributed by the acquisition of Tomra Latasa since its acquisition, the impact of a customer bankruptcy that reduced segment income by $3.2 million in 2004 and productivity improvements and merger related synergies relating to improved gas usage, operational efficiencies and cost savings related to insurance and workers compensation.

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Global Zinc Segment Income

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005. Global zinc segment income increased $44.0 million in the year ended December 31, 2006 compared to the year ended December 31, 2005 due to the rising LME price of zinc in 2006. Our global zinc segment prices its product at a premium to the prevailing LME price and, as LME prices rise, our zinc operations benefit. Zinc segment income for the year ended December 31, 2006 was negatively impacted by purchase accounting adjustments which resulted in higher cost of sales of $1.6 million.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004. Our global zinc segment reported significantly higher profitability in 2005 compared to 2004 as a result of the increase in the LME price of zinc. The higher zinc prices increased segment income by an estimated $14.1 million in 2005 as compared to 2004 and more than offset lower production volumes. Productivity and recovery improvements further improved segment operating results in 2005.

Selling, General and Administrative Expense

Consolidated selling, general and administrative expenses (“SG&A”) increased $76.3 million in the year ended December 31, 2006 compared to the year ended December 31, 2005. Corporate SG&A expenses increased $14.6 million primarily as a result of higher incentive compensation and stock-based compensation expense while segment SG&A expenses increased by $61.7 million primarily due to the acquisition of Corus Aluminum and the 2005 Acquisitions. As a percentage of revenues, SG&A decreased from 3.8% in 2005 to 3.5% in 2006 due partly to the increasing selling prices resulting from the rising LME prices of aluminum and zinc.

As a percentage of revenues, SG&A expense decreased from 4.4% in 2004 to 3.8% in 2005 due, in part, to $3.7 million of compensation expense related to 2004 executive severance and the elimination of duplicative general and administrative positions as part of our restructuring and integration plans. Partially offsetting these items were higher accruals related to compliance with the Sarbanes-Oxley Act and incentive compensation accruals under our management and employee incentive plans. On a pro forma basis, SG&A expenses in 2005 were comparable to 2004 with higher incentive compensation accruals and Sarbanes-Oxley Act costs offset by the elimination of redundant positions.

Restructuring and Other Charges

During the year ended December 31, 2006, we recorded restructuring and other charges of $41.9 million. The charges resulted from the following activities:

• As discussed in Note D of the audited consolidated financial statements included in this annual report, we modified the vesting provisions of certain share units in connection with the Acquisition and recorded $0.5 million of additional compensation expense associated with the modifications within “Restructuring and other charges.” In addition, as the outstanding stock options and non-vested restricted shares were, by the terms of those agreements, immediately vested upon the change in control that resulted from the Acquisition, we accelerated the expensing of these awards as well as the original fair value of the share units. The accelerated vesting resulted in $10.3 million of compensation expense being recorded within “Restructuring and other charges.” In addition to these charges, we incurred $20.5 million of expenses associated with the proxy solicitation to our former stockholders and $5.5 million of bridge loan commitment fees associated with the refinancing which have been included within “Restructuring and other charges” of the Successor Period.

• During the fourth quarter, we recorded asset impairment charges of $5.0 million associated with certain assets within our global recycling segment. We based the determination of the impairment of the machinery and equipment on the discounted cash flows expected to be realized from the affected assets.

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In addition, we recorded $0.8 million of employee severance and benefit costs associated primarily with the realignment of our operating segments as a result of our acquisition of Corus Aluminum. All affected employees have left their positions as of December 31, 2006.

• We reversed approximately $3.2 million of the employee severance and environmental accruals established in 2005 and recorded additional asset impairments of $0.9 million and other exit costs of $1.6 million primarily associated with various contractual obligations at the Carson facility.

The restructuring charges of $29.9 million recorded in 2005 relate primarily to the closure of our rolled products facility in Carson, California. The closure relates to our acquisition of ALSCO and resulted from our determination that the rolling operations at ALSCO’s Richmond, Virginia facility are more efficient and cost effective. The impairment charge totaled $24.3 million and consisted of non-cash asset impairment charges of $16.3 million, severance and other employee related benefit costs of $5.5 million and other exit costs of $2.5 million. We based the determination of the impairment of the machinery and equipment on the discounted cash flows expected to be realized from the assets to be scrapped. No impairment charge was recorded for assets that will be moved to our other facilities as the expected undiscounted cash flows of those assets is sufficient to recover their carrying value.

We recorded the following additional restructuring and impairment charges in 2005:

• A non-cash asset impairment charge of $0.8 million to write down previously idled assets at our closed Wendover, Utah recycling facility to their estimated fair value. The charge was the result of management’s determination that the assets would not be relocated and utilized at our other operations;

• Severance and other termination benefits totaling $2.8 million related to the acquisition of Commonwealth. As part of the acquisition, we eliminated certain administrative positions at both the former Commonwealth headquarters and at our headquarters. As of September 30, 2006, all of the Aleris employees to be severed had left their positions; and

• Lease termination costs of $1.2 million and non-cash asset impairment charges of $0.4 million related to the closure of our former headquarters in Irving, Texas.

During 2004, we recorded $14.9 million of charges primarily related to our initial plans to integrate Commonwealth. The charges consisted of employee severance and benefit costs, and accelerated vesting of non-vested shares and share units. In addition, we recorded asset impairment charges totaling $4.2 million related to certain of our recycling facilities.

We evaluate the performance of our reportable segments exclusive of restructuring and other charges. As a result, the amounts discussed above have not been included in segment income but have been recorded at the corporate level. See Note D of our audited consolidated financial statements included elsewhere in this annual report.

(Gains) Losses on Derivative Financial Instruments

Amounts recorded within “(Gains) losses on derivative financial instruments” include the changes in fair value of those derivative financial instruments that we do not account for as hedges. During the year ended December 31, 2006, we recorded a $9.8 million gain from currency option contracts used to hedge a portion of the purchase price paid to acquire Corus Aluminum. We also recorded net realized and unrealized gains of $20.8 million on our aluminum derivative financial instruments as a result of the rising price of primary aluminum during the year.

During the year ended December 31, 2005, we recorded net losses on our derivative financial instruments as primary aluminum prices were lower at December 31, 2005 compared to December 31, 2004.

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Interest Expense

Interest expense increased in 2006 compared to 2005 as a result of increased debt levels in connection with the Acquisition and the acquisition of Corus Aluminum. Our average debt outstanding increased from $421.1 million in 2005 to $1.0 billion in 2006.

Interest expense increased in 2005 compared to 2004 primarily due to higher levels of debt resulting from the acquisition of Commonwealth and the 2005 Acquisitions. Our average debt outstanding increased from $267.8 million in 2004 to $421.1 million in 2005.

Loss on Early Extinguishment of Debt

In connection with the acquisition of Corus Aluminum, we refinanced substantially all of our indebtedness as of August 1, 2006. As a result of this refinancing, we incurred charges of $54.4 million related to the prepayment premiums associated with the 9% senior notes due 2014 (the “9% Notes”) and the 10 ³/8% senior secured notes due 2010 (the “10 ³/8% Notes”) and the write-off of existing deferred financing costs and debt discounts. See “Liquidity and Capital Resources—August 2006 Refinancing” and Note K of the audited consolidated financial statements included in this annual report.

Other (Income) Expense

As discussed previously, during 2006 we sold the land and buildings at our Carson, California rolling mill and recorded a gain of $13.8 million on the sale.

Provision for (Benefit from) Income Taxes

Income tax expense was $43.6 million in 2006 compared to $0.4 million in 2005. The 2006 income tax expense consisted of a provision of $3.6 million from non-U.S. tax jurisdictions and $40.0 million from the U.S. In 2006, management released the remaining federal valuation allowance of $0.9 million based upon positive evidence that it was more likely than not that our future taxable income, including reversals of taxable temporary differences, would be substantial enough to realize our net U.S. deferred tax assets.

At December 31, 2006 we had a valuation allowance of $93.7 million to reduce certain deferred tax assets to amounts that are more likely than not to be realized. Of the total 2006 valuation allowance, $67.3 million relates to net operating losses and future tax deductions for depreciation in non-U.S. tax jurisdictions and $26.4 million relates primarily to Kentucky state recycling credits and other state net operating losses. A significant amount of the non-U.S. valuation allowance relates to entities purchased as part of the acquisition of Corus Aluminum. We provided a valuation allowance of $52.0 million on deferred tax assets set up in the opening balance sheet of the non-U.S. Corus Aluminum entities. We believe that sufficient evidence currently exists that it is more likely than not that we will not recognize these deferred tax assets.

The 2005 income tax expense of $0.4 million consisted of a provision of $0.1 million from international jurisdictions and $0.3 million in the U.S. A significant portion of the federal valuation allowance was reversed in 2005 as federal net operating losses were utilized to offset taxable income. Management released the majority of the remaining federal valuation allowance at the end of 2005 based upon positive evidence that it was more likely than not that our future taxable income, including reversals of taxable temporary differences, would be substantial enough to realize our net U.S. deferred tax assets. This positive evidence included a change from an overall U.S. net deferred tax asset position to an overall net deferred tax liability position at the end of 2005.

Results of Operations for the Period from December 20, 2006 to December 31, 2006

We generated revenues of $111.8 million and gross profit of $2.9 million in the period from December 20, 2006 to December 31, 2006. Gross profit was negatively impacted by purchase accounting rules that required

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acquired inventories to be adjusted to fair value. This resulted in a $2.9 million increase to cost of sales in the period. SG&A costs totaled $6.1 million and represent corporate and segment expenses. Restructuring and other costs reflect a $5.5 million bridge loan commitment fee resulting from our December 2006 refinancing. Gains on derivative financial instruments totaled $11.1 million during the period and resulted from a favorable movement in the LME price of aluminum. Interest expense of $6.9 million reflects our new capital structure.

Liquidity and Capital Resources

We expect to finance our operations and capital expenditures from internally generated cash and amounts available under our 2006 Credit Facilities. We have traditionally financed our acquisitions and capacity expansions from a combination of cash on hand, funds from long-term borrowings and equity issuances. The Acquisition has significantly increased our level of indebtedness. Our ability to pay principal and interest on our debt, fund working capital and make anticipated capital expenditures depends on our future performance, which is subject to general economic conditions and other factors, some of which are beyond our control. We believe that based on current and anticipated levels of operations and conditions in our industry and markets, a combination of cash on hand, internally generated funds and borrowings available to us will be adequate to fund our current level of operational needs and to make required payments of principal and interest on our debt for the foreseeable future.

December 2006 Refinancing

On December 19, 2006, in conjunction with the Acquisition, we entered into the $750.0 million Revolving Credit Facility, the $1,225.0 million Term Loan Facility, as amended on March 16, 2007, and issued $600.0 million of Senior Notes and $400.0 million of Senior Subordinated Notes. The Revolving Credit Facility amended and restated the revolving credit facility entered into on August 1, 2006 in connection with the acquisition of Corus Aluminum to, in part, increase the maximum borrowings by $100.0 million, subject to lender approval. In addition, the Term Loan Facility amended and restated the term loan facility entered into on August 1, 2006 in connection with the acquisition of Corus Aluminum to increase the maximum borrowings to $825.0 million and €303.0 million. We used proceeds from these facilities to refinance substantially all of our existing indebtedness and to fund a portion of the purchase price of the Acquisition. We incurred $85.3 million of fees and expenses associated with the refinancing which have been capitalized as debt issuance costs.

Revolving Credit Facility

Our Revolving Credit Facility provides senior secured financing of up to $750.0 million. We and certain of our U.S. and international subsidiaries are borrowers under this Revolving Credit Facility. The availability of funds to the borrowers located in each jurisdiction is subject to a borrowing base for that jurisdiction, calculated on the basis of a predetermined percentage of the value of selected accounts receivable and U.S. and Canadian inventory, less certain ineligible amounts. Non-U.S. borrowers also have the ability to borrow under this Revolving Credit Facility based on excess availability under the borrowing base applicable to U.S. borrowers, subject to certain sublimits. The Revolving Credit Facility provides for the issuance of up to $50.0 million of letters of credit as well as borrowings on same-day notice, referred to as swingline loans, and will be available in U.S. dollars, Canadian dollars, euros and certain other currencies. As of December 31, 2006, we estimate that our borrowing base would have supported borrowings of $722.6 million. After giving effect to the $328.6 million of outstanding borrowings as well as outstanding letters of credit of $23.1 million, we had $370.9 million available for borrowing as of December 31, 2006.

The Revolving Credit Facility provides that we have the right at any time to request up to $100.0 million of additional commitments. The lenders do not have any obligation to provide any such additional commitments, and any increase in commitments will be subject to the absence of a default. If we request, and the lenders agree to provide, any such additional commitments, the Revolving Credit Facility size could be increased to up to $850.0 million, but our ability to borrow would still be limited by the applicable borrowing bases.

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Borrowings under the Revolving Credit Facility bear interest at a rate equal to, at our option:

• in the case of borrowings in U.S. dollars, either (a) a base rate determined by reference to the higher of (1) Deutsche Bank’s prime lending rate and (2) the overnight federal funds rate plus 0.5%, plus an applicable margin or (b) a Eurodollar rate (adjusted for maximum reserves) determined by Deutsche Bank, plus an applicable margin;

• in the case of borrowings in euros, a euro LIBOR rate determined by Deutsche Bank, plus an applicable margin;

• in the case of borrowings in Canadian dollars, a Canadian prime rate, plus an applicable margin; or

• in the case of borrowings in other available currencies, a EURIBOR rate, plus an applicable margin.

The weighted average interest rate under the Revolving Credit Facility as of December 31, 2006 was 7.2%.

In addition to paying interest on outstanding principal under the Revolving Credit Facility, we are required to pay a commitment fee in respect of unutilized commitments of 0.25%, if the average utilization is 50% or more for any applicable period, or 0.375%, if the average utilization is less than 50% for the applicable period. We must also pay customary letter of credit fees and agency fees.

The Revolving Credit Facility is subject to mandatory prepayment with (i) 100% of the net cash proceeds of certain asset sales, subject to certain reinvestment rights; (ii) 100% of the net cash proceeds from issuances of debt, other than debt permitted under the Revolving Credit Facility; and (iii) 100% of the net cash proceeds from certain insurance and condemnation payments, subject to certain reinvestment rights. Mandatory prepayments with such proceeds are only required to the extent necessary to achieve a defined threshold liquidity level.

In addition, if at any time outstanding loans, unreimbursed letter of credit drawings and undrawn letters of credit under the Revolving Credit Facility exceed the applicable borrowing base in effect at such time, we are required to repay outstanding loans or cash collateralize letters of credit in an aggregate amount equal to such excess, with no reduction of the commitment amount. If the amount available under the Revolving Credit Facility is less than the greater of (x) $65.0 million and (y) 10% of the total commitments under the Revolving Credit Facility or an event of default is continuing, we are required to repay outstanding loans with the cash we are required to deposit in collection accounts maintained with the agent under the Revolving Credit Facility.

We may voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans at any time without premium or penalty other than customary “breakage” costs with respect to Eurodollar, euro LIBOR and EURIBOR loans.

There is no scheduled amortization under the Revolving Credit Facility. The principal amount outstanding will be due and payable in full at maturity, on December 19, 2011.

The Revolving Credit Facility is secured, subject to certain exceptions (including appropriate limitations in light of U.S. federal income tax considerations on guaranties and pledges of assets by foreign subsidiaries, and certain pledges of such foreign subsidiaries’ stock, in each case to support loans to us or our domestic subsidiaries), by (i) a first-priority security interest in substantially all of our current assets and related intangible assets located in the United States, substantially all of the current assets and related intangible assets of substantially all of our wholly-owned domestic subsidiaries located in the United States, substantially all of our assets located in Canada as well as the assets of Aleris Switzerland GmbH (other than its inventory and equipment), (ii) a second-priority security interest in substantially all our fixed assets located in the United States and substantially all of the fixed assets of substantially all of our wholly-owned domestic subsidiaries located in the United States, and (iii) the equity interests of certain of our foreign and domestic direct and indirect subsidiaries (including Aleris Deutschland Holding GmbH and Aleris Switzerland GmbH). The borrowers’ obligations under the Revolving Credit Facility will be guaranteed by certain of our existing and future direct and indirect subsidiaries. In addition, we will guarantee the obligations of the other borrowers under the Revolving Credit Facility.

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The Revolving Credit Facility contains a number of covenants that, among other things and subject to certain exceptions, restrict our ability and the ability of our subsidiaries to:

• incur additional indebtedness;

• pay dividends on our capital stock and make other restricted payments;

• make investments and acquisitions;

• engage in transactions with our affiliates;

• sell assets;

• merge; and

• create liens.

Although the credit agreement governing the Revolving Credit Facility generally does not require us to comply with any financial ratio maintenance covenants, if the amount available under the Revolving Credit Facility is less than the greater of (x) $65.0 million and (y) 10% of the total commitments under the Revolving Credit Facility at any time, a minimum fixed charge coverage ratio (as defined in the credit agreement) of at least 1.0 to 1.0 will apply. The credit agreement also contains certain customary affirmative covenants and events of default. We were in compliance with all of the covenants associated with the credit agreement as of December 31, 2006.

Term Loan Facility

Our Term Loan Facility is a seven-year credit facility maturing on December 19, 2013. The Term Loan Facility permits $825.0 million in U.S. dollar borrowings and €303.0 million in euro borrowings. We have borrowed the maximum amount under Term Loan Facility, totaling approximately $1.2 billion, as of December 31, 2006.

Borrowings under our Term Loan Facility bear interest, at our option, at:

• in the case of borrowing in U.S. dollars, either (a) a base rate determined by reference to the higher of (1) Deutsche Bank’s prime lending rate and (2) the overnight federal funds rate plus 0.5%, plus an applicable margin or (b) a Eurodollar rate (adjusted for maximum reserves) determined by Deutsche Bank, plus an applicable margin; or

• in the case of borrowings in euros, a euro LIBOR rate determined by Deutsche Bank, plus an applicable margin.

The applicable margin for borrowings by us in U.S. dollars under our Term Loan Facility is 1.38% with respect to base rate borrowings and 2.38% with respect to Eurodollar borrowings. The applicable margin for loans made to Aleris Deutschland Holding GmbH in euros is 2.50%. At December 31, 2006, the weighted average interest rate for borrowings under the Term Loan Facility was 7.2%.

The Term Loan Facility is subject to mandatory prepayment with (i) 100% of the net cash proceeds of certain asset sales, subject to certain reinvestment rights; (ii) 100% of the net cash proceeds from issuances of debt, other than debt permitted under the Term Loan Facility; (iii) 100% of the net cash proceeds from certain insurance and condemnation payments, subject to certain reinvestment rights; and (iv) up to 50% (subject to certain reductions) of annual excess cash flow (as defined in the credit agreement for the Term Loan Facility).

We may voluntarily repay outstanding loans at any time without premium or penalty other than customary “breakage” costs with respect to Eurodollar and euro LIBOR loans.

The Term Loan Facility amortizes in equal quarterly installments in an aggregate annual amount equal to 1.0% of the original principal amount during the first 6 ³/4 years thereof, with the balance payable on the maturity date.

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The Term Loan Facility is secured, subject to certain exceptions (including appropriate limitations in light of U.S. federal income tax considerations on guaranties and pledges of assets by foreign subsidiaries, and certain pledges of such foreign subsidiaries’ stock, in each case to support loans to us), by (i) a first-priority security interest in substantially all our fixed assets located in the United States, substantially all of the fixed assets of substantially all of our wholly-owned domestic subsidiaries located in the United States and substantially all of the assets of Aleris Deutschland Holding GmbH and certain of its subsidiaries, (ii) a second priority security interest in all collateral pledged by us and substantially all of our wholly-owned domestic subsidiaries on a first-priority basis to lenders under the Revolving Credit Facility located in the United States and (iii) the equity interests of certain of our foreign and domestic direct and indirect subsidiaries (including Aleris Deutschland Holding GmbH and Aleris Switzerland GmbH). The borrowers’ obligations under the Term Loan Facility are guaranteed by certain of our existing and future direct and indirect subsidiaries. In addition, we guarantee the obligations of Aleris Deutschland Holding GmbH under the Term Loan Facility.

The credit agreement governing the Term Loan Facility contains a number of negative covenants that are substantially similar to those governing the Senior Notes and certain other customary covenants and events of default. However, we are not required to comply with any financial ratio covenants, including the minimum fixed charge coverage ratio applicable to our Revolving Credit Facility.

Senior Notes

On December 19, 2006, Merger Sub issued $600.0 million aggregate original principal amount of 9.0% / 9.75% Senior Notes under a senior indenture (the “Senior Indenture”) with LaSalle Bank National Association, as trustee. At the closing of the Transactions, as the surviving corporation in the Acquisition, we assumed all the obligations of Merger Sub under the Senior Indenture. The Senior Notes mature on December 15, 2014.

For any interest payment period through December 15, 2010, we may, at our option, elect to pay interest on the Senior Notes entirely in cash (“Cash Interest”), entirely by increasing the principal amount of the outstanding Senior Notes or by issuing additional Senior Notes (“PIK Interest”) or by paying 50% of the interest on the Senior Notes in Cash Interest and the remaining portion of such interest in PIK Interest. Cash Interest on the Senior Notes accrues at the rate of 9% per annum. PIK Interest on the Senior Notes accrues at the rate of 9.75% per annum. After December 15, 2010, we will make all interest payments on the Senior Notes entirely in cash. All Senior Notes mature on December 15, 2014 and have the same rights and benefits as the senior notes issued on December 19, 2006. Interest on the Senior Notes is payable semi-annually in arrears on each June 15 and December 15, commencing on June 15, 2007.

The Senior Notes are fully and unconditionally guaranteed on a joint and several unsecured, senior basis, by each of our restricted subsidiaries that are domestic subsidiaries and that guarantee our obligations under the 2006 Credit Facilities. The Senior Notes and the guarantees thereof are our and the guarantors’ unsecured, senior obligations and rank (i) equal in the right of payment with all of our and the guarantors’ existing and future senior indebtedness and other obligations, including any borrowings under our 2006 Credit Facilities and the guarantees thereof, that are not by their terms expressly subordinated in right of payment to the Senior Notes and the guarantors’ guarantee of the Senior Notes; and (ii) senior in right of payment to all of our and the guarantors’ existing and future subordinated indebtedness, including the Senior Subordinated Notes and the guarantees thereof. The Senior Notes also are effectively junior in priority to our and the guarantors’ obligations under all secured indebtedness, including our 2006 Credit Facilities, and any other secured obligations of ours, in each case, to the extent of the value of the assets securing such obligations. In addition, the Senior Notes are structurally subordinated to all existing and future liabilities, including trade payables, of our subsidiaries that are not providing guarantees.

We are not required to make any mandatory redemption or sinking fund payments with respect to the Senior Notes other than as set forth in the Senior Indenture relating to certain tax matters, but under certain circumstances, we may be required to offer to purchase Senior Notes as described below. We may from time to

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time acquire Senior Notes by means other than a redemption, whether by tender offer, in open market purchases, through negotiated transactions or otherwise, in accordance with applicable securities laws.

Except as described below, the Senior Notes are not redeemable at our option prior to December 15, 2010. From and after December 15, 2010, we may redeem the Senior Notes, in whole or in part, at a redemption price equal to 104.5% of principal amount, declining annually to 100% of the principal amount on December 15, 2012, plus accrued and unpaid interest, and Additional Interest (as defined in the Senior Indenture), if any, thereon to the applicable redemption date.

Prior to December 15, 2009, we may, at our option, subject to certain conditions, redeem up to 35% of the aggregate principal amount of Senior Notes at a redemption price equal to 109% of the aggregate principal amount thereof, plus accrued and unpaid interest, and Additional Interest, if any, thereon to the redemption date, with the net cash proceeds of one or more equity offerings of ours or any direct or indirect parent of ours to the extent such net proceeds are contributed to us. At any time prior to December 15, 2010, we also may redeem all or a part of the Senior Notes at a redemption price equal to 100% of the principal amount of Senior Notes redeemed plus an applicable premium, as provided in the Senior Indenture, as of, and accrued and unpaid interest and Additional Interest, if any, to the redemption date.

Upon the occurrence of a change of control (as defined in the Senior Indenture), each holder of the Senior Notes has the right to require us to repurchase some or all of such holder’s Senior Notes at a price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, and Additional Interest, if any, to the date of purchase.

The indenture governing the Senior Notes contains covenants that limit our ability and certain of our subsidiaries’ ability to:

• incur additional indebtedness;

• pay dividends on our capital stock or redeem, repurchase or retire our capital stock or subordinated indebtedness;

• make investments;

• create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries that are not guarantors of the Senior Notes;

• engage in transactions with our affiliates;

• sell assets, including capital stock of our subsidiaries;

• consolidate or merge;

• create liens; and

• enter into sale and lease back transactions.

The Senior Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all outstanding Senior Notes to be due and payable immediately.

Senior Subordinated Notes

On December 19, 2006, Merger Sub issued $400.0 million aggregate original principal amount of 10.0% Senior Subordinated Notes under a senior subordinated indenture (the “Senior Subordinated Indenture”) with LaSalle Bank National Association, as trustee. At the closing of the Transactions, as the surviving corporation in the Acquisition, we assumed all the obligations of Merger Sub under the Senior Subordinated Indenture. The

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Senior Subordinated Notes mature on December 15, 2016. Interest on the Senior Subordinated Notes is payable in cash semi-annually in arrears on each June 15 and December 15, commencing June 15, 2007.

The Senior Subordinated Notes are fully and unconditionally guaranteed, on a joint and several unsecured, senior subordinated basis, by each of our restricted subsidiaries that are domestic subsidiaries and that guarantee our obligations under the 2006 Credit Facilities. The Senior Subordinated Notes and the guarantees thereof are our and the guarantors’ unsecured, senior subordinated obligations and rank (i) junior to all of our and the guarantors’ existing and future senior indebtedness, including the Senior Notes and any borrowings under our 2006 Credit Facilities, and the guarantees thereof; (ii) equally with any of our and the guarantors’ future senior subordinated indebtedness; and (iii) senior to any of our and the guarantors’ future subordinated indebtedness. In addition, the Senior Subordinated Notes are structurally subordinated to all existing and future liabilities, including trade payables, of our subsidiaries that are not providing guarantees.

We are not required to make any mandatory redemption or sinking fund payments with respect to the Senior Subordinated Notes, but, under certain circumstances, we may be required to offer to purchase Senior Subordinated Notes as described below. We may from time to time acquire Senior Subordinated Notes by means other than a redemption, whether by tender offer, in open market purchases, through negotiated transactions or otherwise, in accordance with applicable securities laws.

Except as described below, the Senior Subordinated Notes are not redeemable at our option prior to December 15, 2011. From and after December 15, 2011, we may redeem the Senior Subordinated Notes, in whole or in part, at a redemption price equal to 105.0% of principal amount, declining annually to 100% of principal amount on December 15, 2014, plus accrued and unpaid interest, and Additional Interest (as defined in the Senior Subordinated Indenture), if any, thereon to the applicable redemption date.

Prior to December 15, 2009, we may, at our option, subject to certain conditions, redeem up to 35% of the aggregate principal amount of Senior Subordinated Notes at a redemption price equal to 110.0% of the aggregate principal amount thereof, plus accrued and unpaid interest, and Additional Interest, if any, thereon to the redemption date, with the net cash proceeds of one or more equity offerings of ours or any direct or indirect parent of ours to the extent such net proceeds are contributed to us. At any time prior to December 15, 2011, we also may redeem all or a part of the Senior Subordinated Notes at a redemption price equal to 100% of the principal amount of Senior Subordinated Notes redeemed plus an applicable premium, as provided in the Senior Subordinated Indenture, as of, and accrued and unpaid interest and Additional Interest, if any, to the redemption date.

Upon the occurrence of a change of control (as defined in the Senior Subordinated Indenture), we will make an offer to purchase all of the Senior Subordinated Notes at a price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, and Additional Interest, if any, to the date of purchase.

The indenture governing the Senior Subordinated Notes contains covenants substantially similar to those applicable to our Senior Notes described above. The Senior Subordinated Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all outstanding Senior Notes to be due and payable immediately, subject to certain exceptions.

August 2006 Refinancing

In connection with the acquisition of Corus Aluminum, we entered into the Revolving Credit Facility, the Term Loan Facility, and a temporary senior unsecured facility funded in U.S. dollars and euros. In addition to funding the purchase price paid to acquire Corus Aluminum, we used the proceeds from these facilities to refinance substantially all of our then-existing indebtedness and to pay costs associated with the acquisition and new facilities. Amounts outstanding under our former credit facility were repaid and that agreement was

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terminated on August 1, 2006. We completed a cash tender offer and consent solicitation for the 9% Notes on August 1, 2006 and effected a legal defeasance on August 2, 2006 that resulted in the discharge of our obligations under the 9% Notes and the indenture governing the 9% Notes. We also completed a cash tender offer and consent solicitation for the 10 ³/8% Notes on August 1, 2006, effected a covenant defeasance on August 2, 2006 that terminated our obligations with respect to substantially all of the remaining restrictive covenants on the 10 ³/8% Notes and effected the satisfaction and discharge of the indenture governing the 10 ³/8% Notes on October 20, 2006, including the release of all liens on the collateral securing the 10 ³/8% Notes. In addition, we repaid all of the amounts outstanding under the VAW-IMCO credit facilities and $59.0 million of Corus Aluminum’s outstanding debt. As a result of these financing activities, we incurred prepayment penalties totaling $38.0 million and wrote off $16.4 million of unamortized debt issuance costs. The total charge of $54.4 million has been recorded within “Loss on early extinguishment of debt” in the consolidated statement of operations. In addition, we incurred fees and expenses associated with the refinancing totaling $29.8 million. These costs were capitalized as debt issuance costs, amortized to interest expense through the date of the Acquisition and then eliminated in purchase accounting as a result of the refinancing of debt related to the Acquisition.

Cash Flows from Operations

Cash flows generated from our operating activities were $190.9 million in the year ended December 31, 2006 and $102.3 million in the year ended December 31, 2005. Operating cash flows primarily reflect our strong operating performance in the year ended December 31, 2006. Negatively impacting operating cash flows were higher accounts receivable balances primarily due to a $79.6 million increase in revenues during the month of December 2006, excluding Corus Aluminum, as compared to December 2005. Our consolidated days sales outstanding have decreased from 43 days at December 31, 2005 to 38 days at December 31, 2006. The rising price of primary metals contributed to the $123.8 million increase in accounts payable and accrued expenses at December 31, 2006. Inventories increased by $20.6 million primarily as a result of the rising prices of primary metals, the impact of which was reduced by lower inventory levels at December 31, 2006 as compared to December 31, 2005, excluding the impact of Corus Aluminum.

Cash generated from operating activities increased significantly in 2005 compared to 2004 as a result of our improved operating results. The positive impact of our improved operations was partially offset by significant payments for restructuring liabilities which totaled approximately $9.7 million in 2005 and the rising LME prices of zinc and aluminum, which increased inventories and receivables. In anticipation of the closure of the Carson rolling mill, our global rolled and extruded products segment increased production during the fourth quarter of 2005, resulting in higher inventory levels as of December 31, 2005. As with the increase in inventories and receivables, accounts payable increased primarily due to the higher prices of raw materials purchased in December 2005.

One of our key internal performance indicators is the number of our days sales outstanding as it provides an indication of the overall quality of our receivables portfolio as well as the effectiveness of our collection efforts. The following table shows the days sales outstanding:

	December 31,
	2006	2005	2004
Days sales outstanding	38	43	41

Cash Flows from Investing Activities

Cash flows from investing activities primarily reflect the $1.7 billion of cash paid to redeem our outstanding common stock, stock options and non-vested shares pursuant to the Acquisition. In addition, cash flows from investing activities for the year ended December 31, 2006 includes the cash purchase price of $826.4 million, net of cash acquired, paid to acquire Corus Aluminum as well as capital expenditures. During the year ended December 31, 2006, cash used for capital expenditures totaled $123.9 million compared to $62.1 million in the

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comparable period of 2005. Capital expenditures in 2006 relate primarily to expansions at our rolling mills in Lewisport, Kentucky and Uhrichsville, Ohio as well as expenditures related to the acquired operations of Corus Aluminum.

During the year ended December 31, 2005, net cash used in investing activities was $373.9 million compared to a use of cash of $38.9 million in 2004. The increase in cash used was primarily due to the 2005 Acquisitions. In addition, capital spending increased in 2005 compared to 2004 due to the inclusion of a full year of capital spending for our global rolled and extruded products segment as well as the completion of our third German recycling facility in Deizisau, Germany. Capital spending for the global rolled and extruded products segment was $11.1 million compared to less than $2.0 million for one month of 2004 and spending on our German recycling facility totaled $26.6 million in 2005. The majority of our spending in 2004 was in our global recycling segment as we began construction on the Deizisau recycling facility and constructed a magnesium recycling facility in Töging, Germany. In addition, we neared completion of our Saginaw expansion and began an addition to our Morgantown landfill.

Capital expenditures for 2007 are anticipated to be approximately $178.0 million and will primarily be financed through available cash and amounts available under our Revolving Credit Facility.

Cash Flows from Financing Activities

Cash flows from financing activities generally reflect changes in our borrowings and debt obligations, including our debt refinancing in both December 2006 and August 2006. We borrowed an incremental $1.1 billion of long-term debt and received a cash equity contribution of $844.9 million from Holdings to fund the Acquisition and pay for fees and expenses associated with the Acquisition and refinancing. Net cash provided by our financing activities was $2.6 billion for the year ended December 31, 2006, compared to $261.3 million of cash used by financing activities for the year ended December 31, 2005. Cash of $1.4 million was received during the year ended December 31, 2006 from the exercise of 148,220 employee stock options.

During 2005, we repaid the amounts outstanding as of January 1, 2005 under our former credit facility and, in the fourth quarter, we used funds from that facility to partially pay for the acquisition of ALSCO, fully fund the acquisition of Alumitech and certain of the assets of Ormet as well to fund our increasing working capital.

Due to the significant increase in our share price, as well as the fact that many former employees of Aleris and Commonwealth were required to exercise their options within six months of the termination of their employment, 1,257,635 options were exercised during 2005, resulting in cash proceeds to us of $13.6 million.

In 2004, we issued $125.0 million of 9% Notes and amended our revolving credit agreement to increase the borrowing capacity from $325.0 million to $425.0 million in connection with the acquisition of Commonwealth. We used these funds to purchase properties from Commonwealth, which, in turn, used the funds to redeem or purchase its existing $125.0 million 10 ³/4% subordinated notes and to purchase receivables previously sold under the terms of Commonwealth’s receivables financing agreement.

We are in compliance with the terms and conditions of all of our debt obligations.

EBITDA

We report our financial results in accordance with U.S. GAAP. However, our management believes that certain non-U.S. GAAP performance measures, which we use in managing the business, may provide investors with additional meaningful comparisons between current results and results in prior periods. EBITDA is an example of a non-U.S. GAAP financial measure that we believe provides investors and other users of our financial information with useful information. Management uses EBITDA as a performance metric and believes this measure provides additional information commonly used by our stockholders, noteholders and lenders with

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respect to the performance of our fundamental business activities, as well as our ability to meet our future debt service, capital expenditures and working capital needs.

Our EBITDA calculations represent net income, before interest income and expense, provision for income taxes, depreciation and amortization and minority interests, net of provision for income taxes. EBITDA is also used for internal analysis purposes and is a component of the fixed charge coverage financial covenants under our 2006 Credit Facilities and our Notes. EBITDA should not be construed as an alternative to net income as an indicator of our performance, or cash flows from our operating activities, investing activities or financing activities as a measure of liquidity, in each case as such measure is determined in accordance with U.S. GAAP. EBITDA as we use it may not be comparable to similarly titled measures used by other entities. Historical EBITDA as presented below is likely to differ from EBITDA as defined under the indentures for the Notes and the credit agreements for our 2006 Credit Facilities.

Our reconciliation of EBITDA to net income (loss) and cash provided by operating activities is as follows:

	For the year ended December 31,
	2006			2005			2004
	(Combined)			(Predecessor)			(Predecessor)
	(in millions)
EBITDA	$	308.7		$	170.5		$	42.6
Interest expense		(90.6	)		(41.9	)		(28.8	)
Interest income		5.0			1.6			0.7
Provision for income taxes		(43.6	)		(0.4	)		(7.5	)
Depreciation and amortization		(109.1	)		(55.0	)		(30.6	)
Minority interest, net of provision for income taxes		(0.1	)		(0.5	)		(0.2	)
Net income (loss)	$	70.3		$	74.3		$	(23.8	)
Depreciation and amortization		109.1			55.0			30.6
Provision for (benefit from) deferred income taxes		11.8			(5.7	)		0.2
Excess income tax benefits from exercise of stock options		(3.6	)		—			—
Restructuring and other charges:
Charges		41.9			29.9			14.9
Payments		(30.0	)		(5.9	)		(5.1	)
Non-cash loss on early extinguishment of debt		16.4			—			—
Stock-based compensation expense		10.7			3.5			2.2
Proceeds from settlements of currency derivative financial instruments		(9.8	)		—			—
Equity in earnings of affiliates		—			1.6			0.2
Unrealized (gains) losses on derivative financial instruments		(28.3	)		18.6			(4.2	)
(Gain) loss on sale of property, plant and equipment		(14.7	)		0.4			0.5
Other non-cash charges		6.1			4.1			8.3
Net change in working capital		11.0			(73.5	)		(21.7	)
Cash provided by operating activities	$	190.9		$	102.3		$	2.1

Exchange Rates

During 2006, the overall weakening of the U.S. dollar against other currencies resulted in unrealized currency translation gains that increased our equity by $17.2 million. Currency translation adjustments are the result of the process of translating an international entity’s financial statements from the entity’s functional currency to U.S. dollars. Currency translation adjustments accumulate in consolidated equity until the disposition or liquidation of the international entities. We eliminated all of the translation adjustments previously included within consolidated equity as a result of the Acquisition.

During 2006, the currency most responsible for currency translation gains was the euro, which increased in value against the U.S. dollar by approximately 12%.

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The euro is the functional currency of our European-based operations other than in the U.K. In the future, our results of operations will be impacted to a greater degree by the exchange rate between the U.S. dollar and the euro. In addition, we have other operations where the functional currency is not our reporting currency, the U.S. dollar, and our results of operations are impacted by currency fluctuations between the U.S. dollar and such other currencies. The pound sterling is the functional currency of our Wales facility. The Brazilian real is the functional currency of our Brazil facility, and the Mexican peso is the functional currency of our Mexican facility.

Contractual Obligations

We are obligated to make future payments under various contracts such as debt agreements, lease agreements and unconditional purchase obligations. The following table summarizes our estimated significant contractual cash obligations and other commercial commitments at December 31, 2006:

	Cash payments due by period
	Total		2007		2008-2009		2010-2011		After 2011
	(in millions)
Long-term debt obligations	$	2,588.0	$	20.5	$	31.0	$	353.2	$	2,183.3
Interest on long-term debt obligations		1,435.2		182.7		364.0		359.1		529.4
Estimated post-retirement benefit payments		49.6		4.5		9.3		9.9		25.9
Estimated pension funding		74.2		24.4		9.9		10.6		29.3
Operating lease obligations		27.0		9.8		11.4		4.2		1.6
Estimated payments for asset retirement obligations		14.4		3.1		2.1		2.4		6.8
Raw material purchase obligations		6,272.0		2,668.1		2,435.7		691.3		476.9
Natural gas purchase obligations		65.6		65.6		—		—		—
Total	$	10,526.0	$	2,978.7	$	2,863.4	$	1,430.7	$	3,253.2

Our estimated funding for our funded pension plans and other post-retirement benefit plans is based on actuarial estimates using benefit assumptions for discount rates, expected long-term rates of return on assets, rates of compensation increases, and health care cost trend rates. For our funded pension plans, estimating funding beyond 2007 will depend upon the performance of the plans’ investments, among other things. As a result, estimating pension funding beyond 2007 is not practicable. Payments for unfunded pension plan benefits and other post-retirement benefit payments are estimated through 2016.

Operating lease obligations are payment obligations under leases classified as operating. Most leases are for a period of less than one year, but some extend for up to five years, and are primarily for items used in our manufacturing processes.

Our estimated payments for asset retirement obligations are based on management’s estimates of the timing and extent of payments to be made to fulfill legal or contractual obligations associated with the retirement of certain long-lived assets. Amounts presented represent the future value of expected payments.

Our purchase obligations are agreements to purchase goods or services that are enforceable and legally binding on us that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations include the pricing of anticipated metal purchases using contractual metal prices or, where pricing is dependent upon the prevailing LME metal prices at the time of delivery, market metals prices as of December 31, 2006, as well as natural gas purchases using contractual prices. As a result of the variability in the pricing of many of our metals purchasing obligations, actual amounts paid may vary substantially from the amounts shown above.

Interest includes only the expected cash payments for interest under our Senior Notes and Senior Subordinated Notes and the Term Loan Facility and assumes an interest rate of 7.8% for the Term Loan Facility.

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Our other debt instruments, including our Revolving Credit Facility, will carry variable interest rates and some will contain variable outstanding amounts for which estimating future interest payments is not practicable.

Environmental Contingencies

Our operations, like those of other basic industries, are subject to federal, state, local and international laws, regulations and ordinances. These laws and regulations (1) govern activities or operations that may have adverse environmental effects, such as discharges to air and water, as well as waste handling and disposal practices and (2) impose liability for costs of cleaning up, and certain damages resulting from, spills, disposals or other releases of regulated materials. It can be anticipated that more rigorous environmental laws will be enacted that could require us to make substantial expenditures in addition to those described in this annual report. See Item 1—“Business—Environmental.”

From time to time, our operations have resulted, or may result, in certain non-compliance with applicable requirements under such environmental laws. To date, any such non-compliance with such environmental laws have not had a material adverse effect on our financial position or results of operations. See Note P of our audited consolidated financial statements included elsewhere in this annual report.

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to the valuation of inventory, property and equipment and goodwill, the effectiveness of our derivative instruments under SFAS No. 133, allowances related to doubtful accounts, workers’ compensation liabilities, income taxes, pensions and other post-retirement benefits and environmental liabilities. Our management bases its estimates on historical experience, actuarial valuations and other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. Our accounting policies are more fully described in Note A of our audited consolidated financial statements included elsewhere in this annual report. There have been no significant changes to our critical accounting policies or estimates during the year ended December 31, 2006.

The following critical accounting estimates are used to prepare our consolidated financial statements.

Inventories

Our inventories are stated at the lower of cost or market. Cost is determined using either an average cost or specific identification method and includes an allocation of manufacturing labor and overhead costs to work-in-process and finished goods. We review our inventory values on a regular basis to ensure that their carrying values can be realized. In assessing the ultimate realization of inventories, we are required to make judgments as to future demand requirements and compare that with the current or committed inventory levels. As the ultimate realizable value of most of inventories is based upon the LME price of aluminum and zinc, future changes in those prices may lead to the determination that the cost of some or all of our inventory will not be realized and we would then be required to record the appropriate adjustment to inventory values.

As a result of the Acquisition, all of our inventories were adjusted from their historical costs to fair value in accordance with SFAS No. 141, “Business Combinations.” This resulted in a preliminary increase of approximately $61.3 million, substantially all of which is expected to be recognized as additional “Cost of sales” primarily in the first quarter of 2007.

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Impairment of Long-Lived Assets and Amortizable Intangible Assets

We review the carrying value of property and equipment to be held and used as well as amortizable intangible assets when events or circumstances indicate that their carrying value may not be recoverable. Factors that we consider important that could trigger an impairment include current period operating or cash flow losses combined with a history of operating or cash flow losses, a projection or forecast that demonstrates continuing losses, significant adverse changes in the business climate within a particular business or current expectations that a long-lived asset will be sold or otherwise disposed of significantly before the end of its estimated useful life. To test for impairment, we compare the estimated undiscounted cash flows expected to be generated from the use and disposal of the asset or asset group to its carrying value. If these undiscounted cash flows are less than their respective carrying values, an impairment charge would be recognized to the extent that the carrying values exceed estimated fair values. Although third-party estimates of fair value are utilized when available, the estimation of undiscounted cash flows and fair value requires us to make assumptions regarding future operating results, as well as appropriate discount rates, where necessary. The results of our impairment testing are dependent on these estimates, which may be affected by the occurrence of certain events, including changes in economic and competitive conditions.

Goodwill

In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” we are required to perform impairment tests of our goodwill annually and more frequently in certain circumstances. The goodwill impairment test is a two-step process, which requires us to make judgments in determining what assumptions to use in the calculation. The first step of the process consists of estimating the fair value of each reporting unit based on a discounted cash flow model using revenue and profit forecasts and comparing those estimated fair values with the carrying values, which include allocated goodwill. These projections include assumptions about aluminum and zinc prices, material margins, as well as natural gas and other operating costs. Due to the inherent volatility of commodity prices, actual results may vary from these projections, and could require an adjustment to be recorded. Other key assumptions used to determine the fair value of our reporting units include estimated cash flow periods, terminal values based on our anticipated growth rate and the discount rate used, which is based on our current cost of capital, adjusted for the risks associated with our operations.

If the determined fair value is less than the carrying value, a second step is performed to compute the amount of the impairment by determining an “implied fair value” of goodwill, which requires us to allocate the estimated fair value of the reporting unit to the assets and liabilities of the reporting unit. Any unallocated fair value represents the “implied fair value” of goodwill, which is compared to the corresponding carrying value.

In prior years, we performed our annual impairment test as of the last day of our fourth quarter. For 2006, we have changed the measurement date to October 1, the first day of our fourth quarter, in order to provide additional time to quantify the fair value of our reporting units and to evaluate the results of the impairment testing. This change did not have an effect on our financial performance or results of operations, nor was there any impact on prior period financial statements under the requirements of SFAS No. 154, “Accounting Changes and Error Corrections.” Retrospective application, as required under SFAS No. 154, was not necessary as no impairment charges had been recorded in any previous financial statements (with the exception of a charge recorded in 2002 upon the initial adoption of SFAS No. 142) nor did the change in measurement date cause any impairments.

Based on our calculations, none of our recorded goodwill was determined to be impaired at October 1, 2006. However, we cannot predict the occurrence of certain future events that might adversely affect the reported value of goodwill. Such events include, but are not limited to, strategic decisions made in response to economic and competitive conditions, the impact of the overall economic environment on our customer base, and a material negative change in our relationships with significant customers. In addition to the overall assumptions used to determine each reporting unit’s cash flows, the estimates of terminal year growth rates and the discount rate can

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have a dramatic impact on the determination of the discounted cash flows of each reporting unit. Our determination of these rates represents management’s best estimate but they are subject to change over time.

Credit Risk

We recognize our allowance for doubtful accounts based on our historical experience of customer write-offs as well as specific provisions for customer receivable balances. In establishing the specific provisions for uncollectible accounts, we make assumptions with respect to the future collectibility of amounts currently owed to us. These assumptions are based upon such factors as each customer’s ability to meet and sustain its financial commitments, its current and projected financial condition and the occurrence of changes in its general business, economic or market conditions that could affect its ability to make required payments to us in the future. In addition, we provide reserves for customer rebates, claims, allowances, returns and discounts based on, in the case of rebates, contractual relationships with customers, and, in the case of claims, allowances, returns and discounts, our historical loss experience and the lag time between the recognition of the sale and the granting of the credit to the customer. Our level of reserves for our customer accounts receivable fluctuates depending upon all of these factors. Significant changes in required reserves may occur in the future if our evaluation of a customer’s ability to pay and assumptions regarding the relevance of historical data prove incorrect. We currently provide no significant reserves for sales to our U.S. automotive customers as we believe amounts currently included in our consolidated balance sheet to be collectible. However, should the recent poor financial performance and economic conditions experienced by the U.S. automotive industry continue, we may be required to record significant additional reserves which may have a material impact on our financial condition, results of operations and cash flows. At December 31, 2006, we estimate that $65.0 million of our consolidated accounts receivable were payable by U.S. automobile manufacturers or their direct suppliers.

Environmental Liabilities

Our environmental engineers and consultants review and monitor environmental issues at our existing operating sites. This process includes investigation and remedial action selection and implementation, as well as negotiations with other potentially responsible parties and governmental agencies. Based on the results of this process, we provide reserves for environmental liabilities when and if environmental assessment and/or remediation cost are probable and can be reasonably estimated. We often cannot predict with certainty the total costs or the timing of the ultimate disposition of these matters. Due to these uncertainties, the precision of the estimated liabilities may be subject to significant changes.

Deferred Income Taxes

We record deferred income taxes to reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets are regularly reviewed for recoverability. A valuation allowance is provided to reduce certain deferred tax assets to amounts that, in our estimate, are more likely than not to be realized.

In determining the adequacy of recorded valuation allowances, management assesses our profitability by taking into account the present and anticipated amounts of earnings or losses as well as the anticipated taxable income as a result of the reversal of future taxable temporary differences. We maintain recorded valuation allowances until sufficient positive evidence (for example, cumulative positive earnings and future taxable income) exists to support their reversal. In the event that our future income is more or less than estimated, our future tax expense could increase or decrease to reflect the change in these estimated valuation allowances.

Market Risk Management Using Financial Instruments

The procurement and processing of aluminum and zinc in our industry involves many risks. Some of these risks include changes in metal and fuel prices, changes in currency rates, and changes in interest rates. We

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attempt to manage these risks by the use of derivative financial instruments and long-term contracts. While these derivative financial instruments reduce, they do not eliminate these risks.

Our deferred gains and losses related to cash flow hedges that are considered effective under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” accumulate in our balance sheet (in “Accumulated other comprehensive income”) until the maturity of our respective hedging agreements. Gains and losses on the ineffective portion of our hedges are marked to market and recorded in the consolidated statement of operations in the current period. We do not account for derivative financial instruments involving aluminum as hedges. As a result, all of the related gains and losses on these derivative instruments are reflected in current period earnings.

In order to manage our price exposure for natural gas purchases, we have fixed the future price of a portion of our natural gas requirements by entering into financial hedge agreements. Under these agreements, payments are made or received based on the differential between the monthly closing price on the New York Mercantile Exchange (the “NYMEX”) and the actual hedge price. These forward contracts are accounted for as cash flow hedges, with all gains and losses recognized in cost of sales when the gas is consumed. In addition, we have cost escalators included in some of our long-term supply contracts with our customers, which limit our exposure to natural gas price risk.

We are also exposed to movements in currency rates to the extent that our purchases and sales are denominated in currencies other than the functional currencies. We manage this exposure by entering into currency forward and futures contracts that are designed to fix the cash we receive or pay for these items. We do not account for these derivative financial instruments as hedges and, as a result, all of the related gains and losses on these hedges are reflected in current period earnings.

The counterparties to the financial hedge agreements and futures contracts discussed above expose us to losses in the event of non-performance; however, our management currently does not anticipate any non-performance by existing counterparties. The counterparties are evaluated for creditworthiness and risk assessment prior to initiating trading activities. Typically, we do not require collateral to support counterparty transactions.

We use what we believe are reasonable assumptions and, where applicable, established valuation techniques, in making our determination of the effectiveness of those derivative instruments that we account for as hedges for financial reporting purposes. However, such determinations are subject to change as movements in the hedged items may not correspond with the movements in the hedge instruments with enough precision to allow us to continue to defer gains and losses on these derivative instruments.

Pension and Post-retirement Benefits

Our pension and post-retirement benefit costs are accrued based on annual analyses performed by our actuaries. These analyses are based on assumptions such as an assumed discount rate and an expected rate of return on plan assets. Both the discount rate and expected rate of return on plan assets require estimates and projections by management and can fluctuate from period to period. Our expected rate of return on plan assets is a long-term assumption based upon our target asset mix. Our objective in selecting a discount rate is to select the best estimate of the rate at which the benefit obligations could be effectively settled. In making this estimate, we look to use one of two methods depending on the size of the plan and the bond market in the resident country. For larger plans in countries with well-developed bond markets, including the U.S., projected cash flows are developed. These cash flows are matched with a yield curve based on an appropriate universe of high-quality corporate bonds. For other plans, discount rates are selected based on AA-rated bonds. Benchmark rates are adjusted based on the underlying duration of the plan’s liabilities and the resulting yields serve as the basis for determining our best estimate of the effective settlement rate. A decrease or increase in the discount rate or the rate of return on plan assets by 0.5% would not have resulted in a material change in our reported net periodic benefit costs.

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Unrecognized actuarial gains and losses relating to changes in our assumptions and actual experiences differing from them will be recognized over the expected remaining service life of the employee group under the provisions of SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R).”

The actuarial assumptions used to determine pension and other post-retirement benefits may differ from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of participants. We do not believe differences in actual experience or changes in assumptions will materially affect our financial position or results of operations.

Off-Balance Sheet Transactions

We had no off-balance sheet arrangements at December 31, 2006.

Recently Issued Accounting Standards

On January 1, 2006, we adopted SFAS No. 123(R), “Share-Based Payment” issued by the FASB in December 2004. Prior to January 1, 2006, we applied the intrinsic value provisions of Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” as permitted by SFAS No. 123 “Accounting for Stock-Based Compensation.” The provisions of SFAS No. 123(R) are similar to those of SFAS No. 123; however, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements as compensation cost based on their fair value on the date of grant. The fair value of share-based awards will be determined using option pricing models (e.g., Black-Scholes or binomial models) and assumptions that appropriately reflect the specific circumstances of the awards. Compensation cost will be recognized over the vesting period based on the fair value of awards that actually vest.

We elected to adopt the modified prospective transition method of SFAS No. 123(R). Under this method, stock-based compensation expense beginning as of January 1, 2006 includes compensation expense for all stock-based compensation awards granted prior to, but not yet vested as of, December 31, 2005 based on the grant date fair value estimated under the provisions of SFAS No. 123 and previously used to value the awards for the pro forma footnote disclosures required by SFAS Nos. 123 and 148. Compensation expense also includes the grant-date fair value for all stock-based compensation awards granted subsequent to December 31, 2005 estimated in accordance with SFAS No. 123(R). In addition, all remaining unamortized stock-based compensation expense previously included as a separate component of stockholder’s equity was reversed against “Additional paid-in-capital” on January 1, 2006.

As a result of adopting SFAS No. 123(R), income before income taxes and minority interests decreased by $5.3 million and net income decreased by $3.3 million for the period from January 1, 2006 to December 19, 2006. Total stock-based compensation expense for the period from January 1, 2006 to December 19, 2006, including amounts within “Restructuring and other charges” in the consolidated statement of operations, was $21.5 million. In accordance with SFAS No. 123(R), the consolidated statement of cash flows reports the excess tax benefits from the stock-based compensation as cash flows from financing activities. Total stock-based compensation expense for the years ended December 31, 2005 and 2004 was $3.5 million and $5.8 million, respectively. For the period from January 1, 2006 to December 19, 2006, $3.6 million of excess tax benefits were reported as cash flows from financing activities.

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R),” which requires employers to recognize the funded status of defined benefit pension and other postretirement benefit plans as the difference between plan assets at fair value and the projected benefit obligation. Unrecognized gains or losses and prior service costs, as well as the transition asset or obligation remaining from the initial applications of SFAS Nos. 87 and 106 will be recognized in the consolidated balance sheet, net of tax, as a

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component of Accumulated other comprehensive income and will be subsequently recognized as components of net periodic benefit cost pursuant to the recognition and amortization provisions of those Statements. In addition, SFAS No. 158 requires additional disclosures about the future effects on net periodic benefit cost that arise from the delayed recognition of gains or losses, prior service costs or credits, and transition asset or obligation. SFAS No. 158 also requires that defined benefit plan assets and obligations be measured as of the date of the employer’s fiscal year-end balance sheet. The recognition and disclosure provisions of SFAS No 158 are effective for fiscal years ending after December 15, 2006. The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end balance sheet is effective for fiscal years ending after December 15, 2008.

The Company adopted SFAS No. 158 as of December 31, 2006, however, as a result of the Acquisition, the adoption had no effect on our consolidated financial position, results of operations, or cash flows. Under the provisions of SFAS No. 141, we valued our pension and other postretirement benefit plans at fair value. The definition of fair value as used in SFAS No. 141 is consistent with the measurement principles of SFAS No. 158 and, as a result, no adjustment upon the adoption of SFAS No. 158 was necessary. Further, all unrecognized actuarial gains and losses previously included in Accumulated other comprehensive income were eliminated as a result of the Acquisition.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the U.S., and expands disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We are currently evaluating the impact that the adoption of SFAS No. 157 will have on our financial position, results of operations and cash flows.

In September 2006, the SEC issued SAB No. 108, “Considering the Effects of Prior Year Misstatement in Current Year Financial Statements.” SAB No. 108 provides guidance on quantifying financial statement misstatements, including the effects of prior year errors on current year financial statements. SAB No. 108 is effective for fiscal years ending after November 15, 2006. We adopted SAB No. 108 as of December 31, 2006 with no impact to our consolidated financial position, results of operations or cash flows.

In July 2006, the FASB issued FASB Interpretation (FIN) No. 48, “Accounting for Uncertainty in Income Taxes-an Interpretation of FASB Statement No. 109.” FIN No. 48 clarifies the recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. In addition, FIN No. 48 requires that the cumulative effect of adoption be recorded as an adjustment to the opening balance of retained earnings. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. We will adopt this interpretation as required and are currently in the process of documenting and quantifying the financial impact of FIN No. 48 but have not yet completed the analysis of the potential impact that FIN No. 48 will have on our consolidated financial position, results of operations, or cash flows.

In November 2004, the FASB issued SFAS No. 151, “Inventory Costs, an amendment of ARB No. 43, Chapter 4.” The amendments made by SFAS No. 151 clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted materials should be recognized as current-period charges and require the allocation of fixed production overhead to inventory to be based on the normal capacity of the underlying production facilities. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. We adopted the provisions of this statement effective January 1, 2006, the effect of which do not have an impact on our consolidated financial position, results of operations, or cash flows.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

In the ordinary course of our business, we are exposed to earnings and cash flow volatility resulting from changes in the prices of aluminum, zinc and natural gas as well as changes in currency and interest rates. We use

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derivative instruments, such as forwards, futures, options, collars, swaps and interest rate swaps to manage the effect of such changes. These derivative financial instruments reduce the impact of both favorable and unfavorable fluctuations in aluminum and zinc prices as well as fluctuations in currency and interest rates.

Derivative contracts are used primarily to reduce uncertainty and volatility and cover underlying exposures and are held for purposes other than trading. Our commodity and derivative activities are subject to the management, direction and control of our Risk Oversight Committee, which is composed of our chief financial officer and other officers and employees that the chief executive officer designates. The Risk Oversight Committee reports to our Board of Directors, which has supervisory authority over all of its activities.

We are exposed to losses in the event of non-performance by the counterparties to the derivative contracts discussed below. Although non-performance by counterparties is possible, we do not currently anticipate any nonperformance by any of these parties. Counterparties are evaluated for creditworthiness and risk assessment prior to our initiating contract activities. The counterparties’ creditworthiness is then monitored on an ongoing basis, and credit levels are reviewed to ensure that there is not an inappropriate concentration of credit outstanding to any particular counterparty.

Commodity Price Risk

Aluminum and zinc ingots are internationally produced, priced and traded commodities, with their principal trading market being the LME. As part of our efforts to preserve margins, we enter into forwards, futures and options contracts. For accounting purposes, we do not consider our aluminum derivative instruments as hedges and, as a result, changes in the fair value of these derivatives are recorded immediately in our consolidated operating results. Our zinc derivative instruments have historically been accounted for as hedges, and as a result, unrealized gains and losses related to the effective portions of these hedges were recorded in “Other comprehensive (loss) income” within our consolidated balance sheet until the underlying transaction impacted earnings. Subsequent to the Acquisition, we no longer account for our zinc derivatives as hedges and all future changes in fair value will be recorded immediately in our consolidated statement of operations.

Aluminum Hedging

The global rolled and extruded products segment enters into a substantial number of derivative financial instruments in an effort to eliminate the impact of movements in the price of aluminum from the time of order entry and acceptance through product shipment as well as the impact of these price movements on a portion of base inventory levels. As we do not account for these derivatives as hedges, the changes in their fair values are included within “Gains (losses) on derivative financial instruments” in our consolidated statement of operations. However, our measurement of segment profitability only includes the gain or loss associated with those derivatives that settled during the period.

Global rolled and extruded products segment income included realized gains of $0.5 million, $9.3 million and $2.2 million in the years ended December 31, 2006, 2005 and 2004, respectively, related to settled metal hedging contracts. However, as a result of application of purchase accounting rules, we did not recognize additional cash gains of $24.9 million on the acquired derivatives of Corus Aluminum. These rules will continue to impact our reported “(Gains) and losses on derivative financial instruments” and segment income in future periods.

From time-to-time, the global recycling segment enters into LME high-grade and alloy aluminum forward sales and purchase contracts to mitigate the risk associated with changing metal prices. These forward contracts are settled in the month of pricing of shipments.

For the year ended December 31, 2006, our global recycling segment income included realized losses of $5.0 million for settled metal derivative financial instruments. For the year ended December 31, 2005, our global recycling segment income was not impacted by settled metal derivative financial instruments. For the year ended December 31, 2004, our global recycling segment included realized gains of $2.6 million for settled metal derivative financial instruments.

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Zinc Hedging

In the normal course of business, the global zinc segment enters into fixed-price sales and purchase contracts with a number of its customers and suppliers. In order to hedge the risk of changing LME zinc prices, we enter into LME forward sale and future purchase contracts. The effective portions of these hedges are included within “Other comprehensive (loss) income” in the consolidated balance sheet while the ineffective portions are included within “(Gains) losses on derivative financial instruments” in the consolidated statement of operations. These contracts are settled in the month of the corresponding production or shipment.

In 2006, 2005 and 2004, our zinc segment’s income included realized gains (losses) of $1.0 million, $(0.4) million and $0.7 million, respectively, due to settled zinc metal hedging contracts.

In January 2007, we entered into price collars designed to protect a portion of our forecasted zinc sales from changes in the LME price of zinc. These derivatives will not be accounted for as hedges and, as a result, changes in their fair value will be recorded immediately in our consolidated statement of operations. These derivative financial instruments, while reducing the risk associated with declining zinc prices, will limit our ability to benefit if zinc prices were to increase.

Natural Gas Hedging

Natural gas is the principal fuel used in the production of our rolled aluminum products as well as in the processing of aluminum and zinc. Natural gas prices are volatile, and we attempt to manage this volatility through the use of derivative commodity instruments. Our natural gas financial derivatives are traded in months forward, and settlement dates are scheduled to coincide with gas purchases during those future periods. These contracts reference physical natural gas prices or appropriate NYMEX futures contract prices. These contracts are accounted for as cash flow hedges, with gains and losses recognized in “Cost of sales” in the same period as the underlying gas purchases. Gains on the settlement of these contracts totaled $2.3 million, $22.1 million and $3.7 million for years ended December 31, 2006, 2005 and 2004, respectively.

Financial Risk

Currency

The acquisition of Corus Aluminum has increased our exposure to fluctuations in currencies as certain of the purchases and sales entered into by our European rolled and extruded products operations are denominated in currencies other than their functional currencies. We have assumed and entered into foreign currency forward contracts to mitigate the impact of currency fluctuations associated with these transactions. As with the acquired aluminum derivatives, the currency forward contracts are not accounted for as hedges and, as a result, the changes in their fair value are recorded immediately in the consolidated statement of operations. However, as with the aluminum derivatives, our measurement of segment performance only includes gains and losses associated with settled currency derivatives.

We recorded realized gains of $7.0 million in the year ended December 31, 2006, of which a loss of $2.8 million has been included in segment income. The remaining gain of $9.8 million related to the settlement of option contracts used to hedge a portion of the purchase price paid for Corus Aluminum and has not been included in segment income.

As with our aluminum derivatives, the application of purchase accounting prohibited us from recording $9.9 million of cash flow gains on settled currency hedges during the year ended December 31, 2006. These rules will continue to impact our reported “(Gains) losses on derivative financial instruments” and segment income in future periods.

Interest Rates

We have historically funded, and intend to continue to fund, our operations from our credit facilities. A substantial amount of our indebtedness bears interest at variable rates. There were no interest rate swaps or

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similar derivative financial instruments outstanding as of December 31, 2006. However, in February 2007 we reduced our exposure to interest rate fluctuations by entering into interest rate swaps that fix the interest we will pay on a portion of our variable rate debt.

Fair Values and Sensitivity Analysis

The following table shows the fair values of outstanding derivative contracts at December 31, 2006 and the effect on the fair value of a hypothetical adverse change in the market prices that existed at December 31, 2006:

Derivative	Amounts hedged	Maturity dates	Fair value			Deferred gain (loss), net		Impact of 10% adverse price change
	(dollars in millions)
Aluminum net purchase contracts	50,308 MT	2007-2011	$	89.7		$	—	$	(8.0	)
Zinc net sales contracts	4,222 MT	2007		0.4			—		(1.8	)
Natural gas	2.7 BCF	2007		(1.0	)		—		(1.7	)
Currency	$403.7	2007-2010	$	11.2			—		(33.7	)

The disclosures above do not take into account the underlying commitments or anticipated transactions. If the underlying items were included in the analysis, the gains or losses on our derivative instruments would be offset by gains and losses realized on the purchase of the physical commodities. Actual results will be determined by a number of factors outside of our control and could vary significantly from the amounts disclosed. For additional information on derivative financial instruments, see Note A and Note R of our audited consolidated financial statements included elsewhere in this annual report.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The following consolidated financial statements of the Company and supplementary data are included as pages F-1 through F-     at the end of this annual report:

Index	Page Number
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheet at December 31, 2006 (Successor) and 2005 (Predecessor)	F-3
Consolidated Statements of Operations for the periods from December 20, 2006 to December 31, 2006 (Successor), January 1, 2006 to December 19, 2006 (Predecessor), and for the years ended December 31, 2005 and 2004 (Predecessor)	F-4
Consolidated Statements of Cash Flows for the periods from December 20, 2006 to December 31, 2006 (Successor), January 1, 2006 to December 19, 2006 (Predecessor), and for the years ended December 31, 2005 and 2004 (Predecessor)	F-5
Consolidated Statements of Stockholder’s Equity for the periods from December 20, 2006 to December 31, 2006 (Successor), January 1, 2006 to December 19, 2006 (Predecessor), and for the years ended December 31 2005 and 2004 (Predecessor)	F-6
Notes to Consolidated Financial Statements	F-7

All schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are inapplicable and therefore have been omitted.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A.    CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We have established and we maintain disclosure controls and procedures designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in rules and forms promulgated by the SEC. As of December 31, 2006, an evaluation was carried out, under the supervision and with the participation of our management, including our chairman of the board and chief executive officer, and our executive vice president and chief financial officer, of the effectiveness of our disclosure controls and procedures as of December 31, 2006 and based on that evaluation of our disclosure controls and procedures, our management, including the chief executive officer and chief financial officer, concluded that, as of the end of the period covered by this annual report on Form 10-K, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Management’s Report on Internal Control Over Financial Reporting

The management of Aleris is responsible for establishing and maintaining adequate internal control over financial reporting for the company. Aleris’ internal control system was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness as to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

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Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an assessment of the Company’s internal control over financial reporting as of December 31, 2006, using the framework specified in Internal Control—Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include an assessment of certain elements of the internal control over financial reporting of Corus Aluminum, which was acquired on August 1, 2006, and which is included in the 2006 consolidated financial statements of the Company. We did not assess the effectiveness of internal control over financial reporting at this entity because we did not believe we had adequate time to conduct an assessment of the internal control over financial reporting in the period between the consummation date of the acquisition and the date of management’s assessment. The excluded entity constituted $1.8 billion of total assets as of December 31, 2006 and approximately $909.8 million and $0.6 million of revenues and income before income taxes, respectively, for the period from January 1, 2006 to December 19, 2006 (Predecessor) and $39.6 million and $5.6 million of revenues and income before income taxes, respectively, for the period from December 20, 2006 to December 31, 2006 (Successor). Based on such assessment, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2006.

Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is presented below.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the quarterly period ended December 31, 2006 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholder of Aleris International, Inc.

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting that Aleris International, Inc. maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Aleris International, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance

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with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include an assessment of the effectiveness of the internal controls over financial reporting of Corus Aluminum, which was acquired on August 1, 2006. Corus Aluminum is included in the 2006 consolidated financial statements of Aleris International, Inc. since August 1, 2006 and constituted $1.8 billion of total assets, as of December 31, 2006 and approximately $909.8 million and $0.6 million of revenues and income before income taxes, respectively, for the period from January 1, 2006 to December 19, 2006 (Predecessor) and $39.6 million and $5.6 million of revenues and income before income taxes, respectively, for the period from December 20, 2006 to December 31, 2006 (Successor). Our audit of internal control over financial reporting of Aleris International, Inc. also did not include an evaluation of the internal control over financial reporting of Corus Aluminum.

In our opinion, management’s assessment that Aleris International, Inc. maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, Aleris International, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Aleris International, Inc. as of December 31, 2006 (Successor Company) and 2005 (Predecessor Company) and the related consolidated statements of operations, stockholder’s equity, and cash flows for the period from December 20, 2006 through December 31, 2006 (Successor Company), the period from January 1, 2006 through December 19, 2006 (Predecessor Company) and for each of the two years in the period ended December 31, 2005 (Predecessor Company) and our report dated March 28, 2007 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Cleveland, Ohio

March 28, 2007

ITEM 9B.    OTHER INFORMATION.

None.

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PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Name	Age	Position
Steven J. Demetriou	48	Chairman of the Board and Chief Executive Officer
Kelvin Davis	43	Director
Michael MacDougall	36	Director
Jonathan Garfinkel	31	Director
Dale V. Kesler	68	Director
Paul E. Lego	76	Director
Michael D. Friday	55	Executive Vice President and Chief Financial Officer
John J. Wasz	46	Executive Vice President and President, Aleris Rolled Products—North America
Sean M. Stack	40	Executive Vice President and President, Europe
Christopher R. Clegg	49	Executive Vice President, General Counsel and Secretary
Robert R. Holian	54	Senior Vice President and Controller
Alfred Haszler	61	Senior Vice President and President, Aleris Rolled and Extruded Products—Europe
Scott McKinley	45	Senior Vice President and Treasurer
K. Alan Dick	43	Senior Vice President, Global Metals Procurement

Kevin Burns was elected as a director on December 19, 2006 by our sole stockholder. On March 30, 2007, Mr. Burns notified the Company that effective March 30, 2007, he would no longer serve as a director of the Company.

The following biographies describe the business experience during at least the past five years of the directors and executive officers listed in the table above.

Steven J. Demetriou—Steven J. Demetriou became Chairman of the Board and Chief Executive Officer of Aleris following the acquisition of Commonwealth. Mr. Demetriou served as President and Chief Executive Officer of Commonwealth from June 2004 and served as a director of Commonwealth from 2002 until the acquisition of Commonwealth acquisition. Mr. Demetriou was President and Chief Executive Officer of Noveon, Inc., a global producer of advanced specialty chemicals from 2001 until June 2004. Prior to that, from 1999 to 2001, he was Executive Vice President of IMC Global Inc., a producer of crop nutrients and animal feed ingredients. Mr. Demetriou also served in a number of leadership positions with Cytec Industries Inc., a specialty chemicals and materials company, from 1997 to 1999. From 1981 to 1997, he held various positions with Exxon Corporation. Mr. Demetriou is a Director of ElkCorp and OMG Group, Inc. He is a member of the audit committee, compensation committee and corporate governance committee of each of these companies. Additionally, Mr. Demetriou is a Director of Kraton Polymers LLC and a Director of Kraton’s direct parent company, Polymer Holdings LLC.

Kelvin Davis—Mr. Davis is a Senior Partner of TPG and Head of the firm’s North American Buyouts Group, incorporating investments in all non-technology industry sectors. Prior to joining TPG in 2000, Mr. Davis was President and Chief Operating Officer of Colony Capital, Inc., a private international real estate-related investment firm in Los Angeles, which he co-founded in 1991. Prior to the formation of Colony, Mr. Davis was a principal of RMB Realty, Inc., the real estate investment vehicle of Robert M. Bass. Prior to his affiliation with RMB Realty, he worked at Goldman, Sachs & Co. in New York City and with Trammell Crow Company in Dallas and Los Angeles. Mr. Davis is the Chairman of the Board of Kraton Polymers LLC, and a Director of Metro-Goldwyn Mayer Inc. and Altivity Packaging, LLC. He is also a Director of Los Angeles Team Mentoring, Inc. (a charitable mentoring organization), and is on the Board of Overseers of the Huntington Library, Art Collections, and Botanical Gardens.

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Michael MacDougall—Mr. MacDougall is a Partner of TPG. Prior to joining TPG in 2002, Mr. MacDougall was a vice president in the Principal Investment Area of the Merchant Banking Division of Goldman, Sachs & Co., where he focused on private equity and mezzanine investments. Prior to attending business school, Mr. MacDougall was an assistant brand manager in the Paper Division of Procter & Gamble. Mr. MacDougall serves on the Board of Directors of Altivity Packaging LLC, Kraton Polymers LLC and the New York Opportunity Network.

Jonathan Garfinkel—Mr. Garfinkel is a Vice President at TPG. Prior to joining TPG in 2000, Mr. Garfinkel worked as a financial analyst at Newbridge Latin America, where he focused on private equity transactions in Argentina, Brazil, Columbia and Mexico. Prior to joining Newbridge, Mr. Garfinkel was a financial analyst in the Global Power group at Lehman Brothers.

Dale V. Kesler—Mr. Kesler was elected as a Director in February 2007. Mr. Kesler had formerly served as a Director of Aleris since 2002 and up to the Acquisition in December 2006. Mr. Kesler retired in 1995 as a partner of the professional accounting firm Arthur Andersen LLP. He served as that firm’s Dallas office accounting and audit division head from 1973 through 1982 and as the managing partner of the Dallas office from 1983 through 1994. Mr. Kesler also serves as a director of ElkCorp, Triad Hospitals, Inc. and CellStar Corp.; he is a member of the Audit Committee of each of these companies. He is also a member of the Compensation Committee and Corporate Governance Committee of ElkCorp. He is also a member of the Compliance Committee of Triad Hospitals.

Paul E. Lego—Mr. Lego was recently elected as a Director in February 2007. Mr. Lego previously served as Director of Aleris since Aleris’s acquisition of Commonwealth and up to the Acquisition in December 2006. He was previously the Non-Executive Chairman of the Board of Directors of Commonwealth from 1995 until completion of Aleris’s acquisition of Commonwealth. He is currently President of Intelligent Enterprises, a private consulting firm. From 1990 until his retirement in 1993, Mr. Lego was Chairman of the Board of Directors and Chief Executive Officer of Westinghouse Electric Corporation. Mr. Lego is an Emeritus Trustee of the University of Pittsburgh and a member of the American Society of Corporate Executives.

Michael D. Friday—Michael D. Friday has served as Executive Vice President and Chief Financial Officer of Aleris since the Commonwealth acquisition. Prior to that time, Mr. Friday served as Executive Vice President and Chief Financial Officer of Commonwealth. Prior to joining Commonwealth in June 2004, Mr. Friday served as Executive Vice President and Chief Financial Officer of Noveon, Inc. from 2001 to 2004. From 1997 to 2001, Mr. Friday served as Vice President—Finance, Business Development and Information Technology at BFGoodrich Performance Materials. From 1994 to 1997, Mr. Friday was Vice President of Finance for The Little Tikes Company, a unit of Rubbermaid, Inc. Mr. Friday began his career with the General Electric Company in 1974, where he served in a variety of increasingly responsible financial management capacities.

John J. Wasz—John J. Wasz has served as Executive Vice President and as President—Aleris Rolled Products since the Commonwealth acquisition. Prior to that time, from 2000, he served as Executive Vice President and President of Alflex (a former subsidiary of Commonwealth), and prior to that Mr. Wasz held the position of Vice President of Alflex Operations. Additionally, Mr. Wasz served in several other capacities within Commonwealth, including Vice President of Materials; Vice President of Marketing and Sales; Distribution Marketing Manager; and Regional Manager.

Sean M. Stack—Sean M. Stack has served as Executive Vice President and President, Europe since the acquisition of Corus Aluminum. Prior to that time, Mr. Stack was Senior Vice President, Treasurer and Corporate Development of Aleris since Aleris’s acquisition of Commonwealth, and prior to that, he was Vice President and

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Treasurer of Commonwealth. Prior to joining Commonwealth in June 2004, he had served as Vice President and Treasurer of Noveon, Inc., beginning in March 2001. Prior to joining Noveon, Mr. Stack served as Vice President and Treasurer for Specialty Foods Corporation from May 1996 to December 2000. Mr. Stack joined Specialty Foods as Assistant Treasurer in 1996. Prior to that, he was a Vice President at ABN AMRO Bank in commercial and investment banking.

Christopher R. Clegg—Christopher R. Clegg was promoted to Executive Vice President, General Counsel and Secretary in January 2007. Prior to that Mr. Clegg served as Senior Vice President, General Counsel and Secretary of Aleris since the Commonwealth acquisition. Prior to that time, Mr. Clegg was Vice President, General Counsel and Secretary of Commonwealth. Before joining Commonwealth in June 2004, he had served as Senior Vice President, General Counsel and Secretary of Noveon, Inc. since March 2001. Mr. Clegg had served as Vice President-Legal for the Performance Materials Segment of BF Goodrich Company since 1999. Before assuming that position, Mr. Clegg served as Senior Corporate Counsel for Goodrich Aerospace since May 1991. Prior to joining Goodrich, Mr. Clegg was a corporate lawyer in private practice with the law firms of Squire, Sanders & Dempsey in Cleveland, Ohio and Perkins Coie in Seattle, Washington.

Robert R. Holian—Robert R. Holian has served as Senior Vice President and Controller of Aleris since 1999. He joined the Company in May 1990 as director of financial analysis and planning. He was named Controller in 1992, and became a Vice President in 1994. Prior to joining Aleris, Mr. Holian held various financial positions at Maxus Energy Corp. and Diamond Shamrock Corporation.

Alfred Haszler—Alfred Haszler has served as our Senior Vice President and President of Aleris Rolled Products Europe since the acquisition of Corus Aluminum. Prior to that time, he was the Managing Director of the Corus Aluminum Rolled Products business, and prior to that, he served as Director of the Koblenz Plant operations of Corus Aluminum Rolled Products business. He first began working with the Koblenz plant operations in 1970 and has held a variety of management positions with increasing responsibility.

Scott McKinley—Scott McKinley has served as Senior Vice President and Treasurer since September 2006. From June 2004 till then, Mr. McKinley served as Vice President and Chief Financial Officer for Lubrizol Corporation’s Specialty Chemicals Segment. Prior to that, he was the Vice President and Controller of Noveon, Inc. Mr. McKinley also previously held the position of Director, Financial Planning and Analysis for BFGoodrich Performance Materials and spent the first 15 years of his career at the General Electric Company.

K. Alan Dick—Alan Dick has served as Senior Vice President, Global Metals Procurement since January 2007. Previously he had been Vice President, Metals Sourcing since 2004. Prior to 2004, Mr. Dick had been Director, Raw Material Purchasing for Commonwealth Industries, Inc. and had held a number of positions in the Commonwealth supply chain function since 1998. Prior to joining Commonwealth, Alan was Vice President and General Manager—Pacific Region for Ideal Metals. He began his career with Pechiney SA in Canada where he held several positions including Vice President.

Prior to the Acquisition, Section 16(a) of the Exchange Act required our officers, directors and persons who owned more than 10% of our common stock to file initial reports of ownership and reports of changes in ownership with the SEC. These persons were required by SEC regulations to furnish us with copies of all Section 16(a) forms filed by them, including Forms 3, 4 and 5. We believe that all filing requirements applicable to our executive officers, directors and 10% stockholders were complied with during 2006.

The Company maintained and enforced a Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer, Controller, and Treasurer (the “Senior Officers Code”). The Senior Officers Code was designed to be read and applied in conjunction with the Company’s Code of Business Conduct and Ethics (the “Code of Business Conduct”) applicable to all employees. In instances where the Code of Business Conduct is silent or its terms are inconsistent with or conflict with any of the terms of the Senior Officers Code, then the provisions of the Senior Officers Code control and govern in all respects. Both the Senior Officers Code and the Code of Business Conduct are available at our website (http://www.aleris.com) by clicking on “Corporate

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Governance.” Any future changes or amendments to our the Senior Officers Code and the Code of Business Conduct, and any waiver of our the Senior Officers Code or the Code of Business Conduct that applies to our Chief Executive Officer, Chief Financial Officer or Principal Accounting Officer will be posted to our website at this location. A copy of both the Senior Officers Code and the Code of Business Conduct may also be obtained upon request from the Company’s Secretary.

Board Committees

Our Board of Directors has established Compensation, Audit and Executive Committees. TPG has the right to have at least one of its directors sit on each committee of the Board of Directors, to the extent permitted by applicable laws and regulations.

Messrs. Garfinkel, Kesler (Chair), and MacDougall are the members of the Audit Committee. Mr. Kesler has been identified as an “audit committee financial expert” as that term is defined in the rules and regulations of the SEC. The Audit Committee is appointed by the Board to assist the Board in fulfilling its oversight responsibilities by:

• overseeing the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company;

• monitoring the integrity of financial information that will be provided to the shareholders and others and the Company’s compliance with legal and regulatory requirements;

• reviewing areas of potential significant financial risk to the Company including evaluation of the system of internal controls and procedures for financial reporting which management and the Board of Directors has established;

• monitoring the qualifications and independence of the Company’s external auditors;

• monitoring the performance of the Company’s external auditors and internal auditing function;

• reporting on all such matters to the Board of Directors; and

• preparing the report required by the rules of the SEC to be included in the Company’s annual report on Form 10-K.

In addition, the Audit Committee has the authority to retain and, if necessary, terminate our independent registered public accounting firm (subject, if applicable, to ratification by the Company’s stockholder).

Messrs. Davis (Chair), Lego, and MacDougall are the members of the Compensation Committee. The purpose of the Compensation Committee is to discharge the responsibilities of the Board of Directors relating to compensation of the Company’s executive and senior management. In this respect, the Committee has overall responsibility for approving and evaluating executive and senior management compensation plans, policies and programs of the Company and awards thereunder. A copy of the Compensation Committee Charter is available on our website at http://www.aleris.com.

Messrs Davis, Demetriou (Chair), and MacDougall are the members of the Executive Committee. The executive committee manages the affairs of the Company as necessary between meetings of our Board of Directors and acts on matters that must be dealt with prior to the next scheduled Board meeting.

Board Composition

Our Board of Directors consists of six directors all of whom were elected by TPG which owns indirectly approximately 97.74% of our outstanding equity. Our by-laws provide that our directors will be elected at the annual meeting of the stockholders and each director will be elected to serve until his successor is elected.

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ITEM 11.    EXECUTIVE COMPENSATION.

Compensation Discussion and Analysis

Introduction

As a result of the Acquisition, many of the Company’s compensation policies and arrangements that had been in place during the 2006 fiscal year were discontinued as of December 19, 2006 and, with certain exceptions described below, any outstanding equity awards pursuant to those plans or arrangements were cancelled, and the holders of these awards, (including the named executive officers) received a cash payment of $52.50 per share for each share of common stock underlying their equity holdings, whether or not the awards would have been vested or exercisable at the time of the Acquisition. The information provided below describes the Company’s compensation program before the Acquisition, as it relates to the compensation of its named executive officers up until December 19, 2006, summarizes the payments received by the named executive officers that occurred as part of the Acquisition, and briefly describes the compensation packages for the named executive officers that have been put in place since the Acquisition.

2006 Compensation Program Prior to the Acquisition

Aleris’s 2006 compensation philosophy centered on the belief that executive compensation should be directly linked to improvement in corporate performance and the creation of long-term stockholder value. Prior to the Acquisition, the Company had a Compensation Committee (the “2006 Committee”) charged with making determinations of compensation policy and decisions. Following the Acquisition in February 2007, the Board of Directors of the Company (the “2007 Board”) established a Compensation Committee (the “2007 Committee”).

The 2006 Committee had three main objectives that served as guidelines for compensation decisions:

• provide a competitive total executive compensation package that enables Aleris to attract and retain key executives;

• ensure that all pay programs are aligned with Aleris’s annual and long-term business objectives and strategy; and

• provide variable compensation opportunities that are directly linked with the performance of Aleris.

In 2006, Aleris’s executive compensation program consisted of five components: (1) base salary; (2) an annual incentive award based on overall Company performance, business unit performance, and achievement of individual objectives; (3) long-term performance incentive awards that were intended to support the achievement of superior results over time and to align executive officer and stockholder interests; (4) a base level of pension benefits through both tax-qualified and nonqualified pension arrangements; and (5) a limited number of perquisites and other benefits traditionally awarded to executive officers.

These elements worked together to provide a compensation package that would achieve the main objectives the 2006 Committee had identified and offered an appropriate mix of current and long-term compensation to provide the executive with a competitive salary and also certain incentives in the form of potential future gains. Generally for 2006 compensation, the level of each element including base salary, annual incentive, long-term incentive and pension benefits would be comparable to the median of these types of compensation paid by entities with whom the Company competes as well as fall within a range of appropriate compensation for the named executive officer’s position and internal pay equity considerations.

The 2006 Committee, as in prior years, engaged an independent compensation consultant to assist in determining 2006 compensation. The independent compensation consultant compiled comparable salary and incentive compensation information for a number of representative companies and in the general market. In addition to reviewing the information and data provided by the compensation consultant regarding salary levels for persons in those positions in the entities with whom Aleris competes, the 2006 Committee reviewed the

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performance of each named executive officer, taking into account Aleris’s operating and financial results for the prior year, the contribution of each named executive officer to those results, and the achievement of goals established for each executive officer at the beginning of the prior year. Following its evaluation process and after consultation with Mr. Demetriou, the 2006 Committee made recommendations for salary adjustments and incentive awards to the Board of Directors serving at that time (the “2006 Board”).

Base Salary and 2006 Cash Bonus Awards

As in the past, the 2006 Committee considered base salary together with the 2006 cash bonus awards as part of a cash compensation package, and with respect to 2006 compensation, it set this cash compensation amount for the named executive officers in order to align the position’s responsibilities with its remuneration and also in comparison to the 50^th percentile of this type of compensation paid in the competitive market in which Aleris competes for comparable executive ability and experience.

The 2006 cash bonus amounts were awarded pursuant to the Amended and Restated Aleris International, Inc. 2004 Annual Incentive Plan under a program we refer to as the Management Incentive Plan or “MIP”. These cash bonus awards represent variable compensation linked to organizational performance, which was a significant component of the Company’s total 2006 compensation package for key employees, including the named executive officers, and was designed to reward the employee’s participation in the Company’s achievement of critical financial performance and growth objectives.

With respect to 2006, the MIP awards linked employee pay to improvements in adjusted EBITDA and working capital as a percentage of sales, and the achievement of individual objectives. Adjusted EBITDA is a non-U.S. GAAP financial measure and, for this purpose, is defined as net income before interest income and expense, taxes, depreciation and amortization and minority interests and excluding restructuring and other charges, losses on the early extinguishment of debt, one-time realized gains on the settlement of derivative financial instruments that hedged a portion of the purchase price to acquire Corus Aluminum and the sale of our facility in Carson, California, mark-to-market SFAS 133 unrealized gains and losses on derivative financial instruments, and the non-cash cost of sales impact of the write-up of inventory and other items through purchase accounting. The 2006 Committee used adjusted EBITDA as a performance metric and believed that this measure was commonly used by our stockholders, noteholders and lenders with respect to the performance of fundamental business objectives, as well as our ability to meet future debt service, capital expenditures and working capital needs.

The incentive targets set for 2006 for the named executive officers, other than Mr. Wasz, were weighted as follows for these goals: (i) Aleris adjusted EBITDA, 60%; (ii) company working capital as percentage of sales, 20%; and (iii) individual objectives, 20%. The incentive targets set for 2006 for Mr. Wasz, as an executive officer with primary responsibility for a business unit, were weighted as follows for these goals: (i) Aleris adjusted EBITDA, 10%; (ii) Rolled Products, North America adjusted EBITDA, 50%, (iii) Rolled Products, North America working capital as percentage of sales, 20%; and (iv) Individual Objectives, 20%. In each case, the Individual Objectives targets allowed each individual to be assessed based on performance relative to 2-3 goals and objectives that were linked to the performance of the overall organization. For Mr. Demetriou, the Board of Directors set his individual MIP goals and objectives after consulting with him. For the remaining named executive officers, following consultation with Mr. Demetriou, the 2006 Committee set individual MIP goals and objectives for each officer. The 2007 Committee evaluated whether these goals were achieved.

Potential payouts for adjusted EBITDA and working capital targets ranged from 0% to 250% of the weighted target, and Individual Objective targets ranged from 0% to 150% of the weighted target. Generally, target performance for a financial objective at 100% corresponded to the achievement of the 2006 Aleris business plan, and the Company expected that this target would be met at this level. The payout for 250% of target was achievable for performance significantly higher than the 2006 Aleris business plan, and the Company believed that these targets were very aggressive but attainable. Similarly, target performance for an Individual Objective at 100% corresponded to achievements related to the 2006 Aleris business plan, that the Company expected could

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be met. The payout for 150% of an Individual Objective was achievable for achievements related to the 2006 Aleris business plan that were aggressive but attainable. Based on 2006 performance, the 2007 Committee deemed the Aleris adjusted EBITDA, Aleris working capital, and Rolled Products, North America working capital targets to have been met at 250% and the Rolled Products, North America adjusted EBITDA target to have been met at 244%. Subject to attainment of Individual Objectives, MIP awards were paid accordingly.

Name	2006 Base Salary (1)		2006 Target Bonus (% of Base Salary)		2006 Bonus
Steven J. Demetriou	$	850,000	100	%	$	1,912,500
Michael D. Friday		395,000	75			681,375
John J. Wasz		385,000	75			644,346
Sean M. Stack (2)		325,000	70			511,875
Christopher R. Clegg		290,000	60			391,500

(1) In connection with the Acquisition, each of the named executive officers entered into new employment agreements. With the exception of Mr. Stack, who received a salary increase in August 2006, each named executive officer has had an increase to his base salary under these agreements. See below, under “Other Matters.”

(2) In August 2006, Mr. Stack was promoted to Executive Vice President and President—Europe. His annual base salary was increased from $250,000 to $325,000. His 2006 target bonus was increased from 60% to 70% of his increased annual base salary.

Long-Term Incentives

As part of its compensation program, long-term incentives, including both stock-based and cash-based incentives, had been used by the Company as another compensation strategy through which to align the interests of Aleris’s named executive officers and other key management personnel responsible for the growth of Aleris with the interests of Aleris’s stockholders. While long-term incentives were awarded to the named executive officers in December 2005, no new long-term incentive awards were granted to the named executive officers in 2006.

Retirement and Post-Employment Benefits

The Company offers its executive offices the same retirement benefits as Aleris employees. It also provides a program through which the named executive officers are restored to the base level of retirement contributions after Company and Internal Revenue Service (the “IRS”) limits have been met. We believe these benefits are not competitive with similar executive retirement benefits paid by companies with which Aleris competes.

Each of the named executive officers participated in the Commonwealth Industries, Inc. 401(k) plan (the “Commonwealth 401(k) Plan”) during 2006. Pursuant to the Commonwealth 401(k) Plan, the Company made a matching contribution of 100% of the first 3% of deferred income to the account of the named executive officer.

Each of the named executive officers also participated in the Commonwealth Industries, Inc. Cash Balance Plan (the “Cash Balance Plan”) during 2006, which provided retirement benefits for former employees of Commonwealth Industries Inc. Under the Cash Balance Plan, each participant has an account, for recordkeeping purposes only, to which credits are allocated annually based upon a percentage (determined based on the age and service) of the participant’s base salary plus bonus paid in the prior year. All balances in the account earn a fixed annual rate of interest, which is credited quarterly. The rate of interest is the lesser of the prior year’s average of the three-year U.S. Treasury securities or the rate on the thirty-year U.S. Treasury securities on November 1. In 2006, the interest rate was 3.83%. At retirement or other termination of employment, an amount equal to the vested balance then credited to the account is payable to the participant in the form of an immediate or deferred lump sum or as an annuity.

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Effective January 1, 2007, the Cash Balance Plan was frozen and no further contributions by the Company are being made. The Company has a new retirement plan that replaces the Commonwealth 401(k) Plan and the Cash Balance Plan.

The named executive officers also participate in two nonqualified, unfunded, deferred compensation plans that are open to a select group of management employees. The Benefit Restoration Plan is an unfunded, unsecured retirement plan for a select group of management employees, including the named executive officers. The plan is designed to work in conjunction with the Commonwealth Industries, Inc. 401(k) Plan and the Commonwealth Industries, Inc. Cash Balance Plan (plans that are intended to be qualified under section 401(a) of the Internal Revenue Code) (the “Code”). Once the IRS contribution limits and Company match limits under the respective retirement plan is attained each year, then a participant’s elected percentage of pre-tax and Company matching contributions are deposited into the Benefit Restoration Plan.

The Company matching contributions include a “match” amount portion which is a maximum of 4% of the participant’s elected pre-tax contribution less the amount of employer matching contributions contributed to the participant’s account under the Commonwealth Industries, Inc. 401(k) Plan less, as applicable, any benefit credit under the Commonwealth Cash Balance Plan. Under the terms of the Benefit Restoration Plan, all accounts were distributed to participants following the Acquisition.

The Company also has an unfunded deferred compensation plan for a select group of management employees, including the named executive officers. The Deferred Compensation Plan permits participants to defer receipt of 10% to 50% of base salary and MIP bonus. The Company does not contribute to this plan. A hypothetical account is established for each participant who elects to defer, and the participant selects investment funds from a broad range of options, which generally are the same funds available to 401(k) Plan participants. Earnings and losses on each account are determined based on the performance of the investment funds selected by the participant. The normal form of payment is a lump sum, payable by election of the participant either at a specified date within two years of the deferral or at retirement or termination of employment. Installment distributions may be elected provided the participant complies with the election and timing rules of Section 409A. Under the terms of the Deferred Compensation Plan all accounts were distributed to participants following the Acquisition.

Perquisites

The Company intentionally provides limited perquisites to the named executive officers, including providing payment for financial advisory services and an annual medical examination, as well as a tax-gross up for the additional income tax liability as a result of receiving these benefits. Mr. Demetriou additionally receives a club membership for business use, a tax-gross up payment for this benefit, and supplemental life insurance policies. He reimburses the Company for any personal use of the club. The Company also makes indoor parking spaces available to certain executives at the Beachwood headquarters, including Messrs. Demetriou, Friday, Stack, and Clegg. These perquisites are less than typical both for entities which whom Aleris competes and in the general market for executives of industrial companies, especially in the case of the chief executive officer.

Compensation Payments as Part of Acquisition

The aggregate amount of compensatory payments and benefits that the named executive officers received as a result of the Acquisition and the underlying Company plans with respect to the cancellation of their outstanding equity awards was $47,289,005.

Treatment of Stock Options

Immediately prior to the Acquisition, there were 882,371 shares of our common stock subject to stock options granted under certain of our equity incentive plans to the named executive officers. Each outstanding stock option that was unexercised prior to the Acquisition, whether or not the option was vested or exercisable,

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was canceled (to the extent permitted under the governing stock plan documents and related award agreements or otherwise effectuated by us), and the holder of each such stock option received a cash payment equal to the product of:

• the number of shares of our common stock subject to the option as of the effective time of the Acquisition; and

• the excess of $52.50 over the exercise price per share of common stock subject to such option.

The table below summarizes the vested and unvested options held by our named executive officers prior to the Acquisition, as well as the consideration that each of them received pursuant to the Acquisition in connection with the cancellation of their options.

Name	# Shares Underlying Options	Weighted Average Ex. Price		Actual Consideration Received (1)
Steven J. Demetriou	441,800	$	13.80	$	17,097,760
Michael D. Friday	123,625		13.13		4,866,685
John J. Wasz	173,196		12.21		6,978,385
Christopher R. Clegg	79,850		13.73		3,095,484
Sean M. Stack	63,900		13.06		2,520,128

(1) The amounts set forth in this “Actual Consideration Received” column are calculated based on the actual exercise prices underlying the related options, as opposed to the weighted average exercise price per share.

Treatment of Restricted Stock and Stock Units

Immediately prior to the Acquisition, there were 168,135 shares of our common stock represented by restricted stock awards held by its named executive officers under certain of our equity incentive plans. Pursuant to the award agreements and as a result of the change in control resulting from the Acquisition, all such restricted stock awards became immediately vested and free of restrictions effective as of December 19, 2006. The holder of each such award received a cash payment of $52.50 per share of restricted stock in exchange for the cancellation of such restricted shares in accordance with the treatment of other stockholders participating in the Acquisition.

The table below summarizes the restricted stocks and restricted stock unit awards held by our named executive officers as of immediately prior to the Acquisition, and the consideration that each of them received pursuant to the Acquisition Agreement in connection with the cancellation of such awards.

Name	# Restricted Shares	Actual Consideration Received
Steven J. Demetriou	91,083	$	4,781,858
Michael D. Friday	24,292		1,275,330
John J. Wasz	22,152		1,162,980
Christopher R. Clegg	16,733		878,483
Sean M. Stack	13,875		728,438

Treatment of Performance Units

Certain executive officers and other employees of the Company, including each of the named executive officers, were granted performance units in 2005 and 2006 under the Company’s 2004 Equity Incentive Plan. These performance units, payable in shares of Aleris common stock, would vest based on the attainment of certain performance goals. One-half of the performance unit award would vest upon the attainment of return on capital employed targets (the “ROCE-Vested Units”) and the other half would vest only upon attainment of certain merger synergy targets prior to December 31, 2008 related to the merger of IMCO Recycling Inc. and Commonwealth Industries, Inc. (the “Synergy-Vested Units”). Certain executive officers and other employees, including each of the named executive officers, were also granted awards consisting of a cash amount and performance units as part of the 2005 Acquisition Incentive Awards (the “Acquisition Units”), which would be payable upon the attainment of specified goals at the end of 2006 and 2007.

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Under the terms of the Acquisition Agreement, the Synergy-Vested Units remained outstanding and the Company would determine if it would make payments based on the attainment of the applicable performance measures in accordance with the original agreements. However, any amount that would have been payable in shares under the original terms of the performance award, would instead be payable in cash in an amount equal to $52.50 multiplied by the number of shares underlying the Synergy-Vested Unit.

Also, under the terms of the Acquisition Agreement, the ROCE-Vested Units and the Acquisition Units were accelerated and vested as if all performance goals had been met. The ROCE-Vested Units and the Acquisition Units were cancelled and paid on January 15, 2007 and each holder of such units received in consideration for such cancellation an amount in cash equal to $52.50 multiplied by the number of shares underlying the ROCE-Vested Units and the Acquisition Units plus the cash portion of the Acquisition Unit award, if any.

The table below summarizes the ROCE-Vested Units and the Acquisition Units held by our named executive officers at the time of the Acquisition, the consideration that each of them received in January 2007 for the cancellation of the performance units in connection with the Acquisition and the cash payment portion of the Acquisition Units that also was paid upon the cancellation of the Acquisition Units.

Name	# Shares Underlying ROCE-Vested Units	# Shares Underlying Acquisition Units	Acquisition Units Cash Portion		Total Actual Consideration for Units, Including Cash Portion
Steven J. Demetriou	25,000	10,535	$	301,500	$	2,167,088
Michael D. Friday	5,000	3,292		94,219		529,549
John J. Wasz	5,000	3,161		90,450		518,903
Christopher R. Clegg	3,500	1,975		56,532		343,970
Sean M. Stack	3,500	1,975		56,532		343,970

Treatment of Nonqualified Deferred Compensation Plans

All accounts under the Benefit Restoration Plan and the Deferred Compensation Plan were distributed to participants following the Acquisition.

Other Matters

Prior to the Acquisition, each of the named executive officers was a party to a severance agreement with the Company that had been executed in August 2005 (each a “2005 Severance Agreement”) and provided for severance benefits in the event the officer was terminated in connection with a change in control, as well as a tax gross-up related to any excise tax that may be assessed as a result of payments the officer would receive as part of a change in control. The Acquisition constituted a change in control pursuant to these agreements. While none of the named executive officers terminated their employment in connection with the Acquisition, payments for their various equity awards were made, as described above. In the case of Mr. Demetriou, these payments constituted “excess parachute payments” under Section 280G of the Code, resulting in a tax liability of $658,202 under Section 4999 of the Code for Mr. Demetriou. Pursuant to his 2005 Severance Agreement, the Company reimbursed Mr. Demetriou for the excise tax plus a tax gross-up in the amount of $538,702.

Executive Compensation Program after the Acquisition

Following the Acquisition, the compensation philosophy of Aleris aligns the interests of the executives with the interest of our primary stockholder, an affiliate of TPG, under the supervision of the 2007 Committee. Going forward there will be greater emphasis on long-term equity growth as opposed to near term cash compensation, and the 2007 Committee has provided significant equity investment opportunities tied to operational objectives through a one-time front loaded grant of options to purchase shares of our parent. While before the Acquisition, the 2006 Committee awarded long-term incentive awards at approximately the 50^th percentile level of long-term incentive awards in the industry, long-term incentive awards going forward will be designed to target the 75^th percentile of awards for similar compensation for manufacturing companies generally in our industry. The target levels of each of the other compensation elements, including base salary, annual incentive awards, and post-employment benefits will continue to correspond approximately to the 50^th percentile of awards for similar compensation for manufacturing companies generally in our industry.

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As previously discussed, the named executive officers entered into employment agreements on December 19, 2006. The employment agreements contain non-competition and non-solicitation provisions that extend for two years (Mr. Demetriou) and 18 months (for Messrs. Friday, Wasz, Stack and Clegg) after any termination of employment. The MIP has been continued with performance goals based on adjusted EBITDA, free cash flow and individual annual objectives. Free cash flow is a non-U.S. GAAP measure that is defined as adjusted EBITDA less capital expenditures and plus or minus the change in working capital. The 2007 Committee believes that adjusted EBITDA and free cash flow are commonly used by our primary stockholder, noteholders and lenders with respect to the performance of fundamental business objectives, as well as measures our ability to meet future debt service, capital expenditures and working capital needs.

The following table sets forth the 2007 base salary and target bonuses for the named executive officers:

Name	2007 Base Salary		2007 Target Bonus (% of Base Salary)		2007 Maximum Bonus (% of Base Salary)
Steven J. Demetriou	$	1,000,000	100	%	200	%
Michael D. Friday		425,000	75		150
John J. Wasz		400,000	75		150
Sean M. Stack		325,000	70		150
Christopher R. Clegg		315,000	60		120

A new stock option plan was adopted in February 2007 pursuant to which certain executives and other key employees, including the named executive officers, received a one-time front loaded grant of options to purchase shares of Holdings. No options were granted prior to adoption of the plan.

On March 27, 2007, the 2007 Committee met and determined that the performance goals were achieved. Payments of $52.50 per share underlying each performance unit were paid accordingly to the Synergy-Vested Units holders including the named executive officers.

The following table sets forth the payments to the named executive officers for the Synergy- Vested Units:

Name	# Shares underlying Synergy-Vested Units	Actual Consideration Received
Steven J. Demetriou	25,000	$	1,312,500
Michael D. Friday	5,000		262,500
John J. Wasz	5,000		262,500
Christopher R. Clegg	3,500		183,750
Sean M. Stack	3,500		183,750

Consideration of Sections 162(m) and 409A of the Code

Section 162(m) of the Internal Revenue Code disallows, in the case of a publicly held corporation, the corporation’s tax deduction for compensation paid to its chief executive officer and its named executive officers in excess of $1,000,000 per person. Performance-based compensation and certain other compensation are not subject to this deduction limitation. Before the Acquisition, Aleris reviewed its compensation plans to minimize potential adverse effects of this tax rule. When appropriate, steps were taken to qualify either annual or long-term incentive compensation as performance-based. The 2006 Committee reserved the authority to award non-deductible compensation at its discretion and did not adopt a policy that all compensation had to be deductible. Following the Acquisition, because the Company no longer has publicly-held equity, the restrictions of Section 162(m) no longer apply. However, since achieving increased enterprise value creation remains an Aleris goal, the 2007 Committee has emphasized performance-based compensation as an important part of the named executive officers’ total compensation package. The Company is making a good faith effort to achieve compliance with Section 409A of the Code.

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Summary Compensation Table

Name and Principal Position	Year	Salary ($)		Bonus ($) (1)		Stock Awards ($) (2)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($) (3)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (4)		All Other Compensation ($) (5) (6)			Total ($)
Steven J. Demetriou Chairman and Chief Executive Officer	2006	$	850,000	$	400,000	$	146,059	$	—	$	1,912,500	$	9,707	$	23,129,712	(7)	$	26,447,978
Michael D. Friday Executive Vice President and Chief Financial Officer	2006		395,000		200,000		73,030		—		681,375		13,550		6,165,211	(8)		7,528,166
John J. Wasz Executive Vice President and President, Aleris Rolled Products-North America	2006		385,000		50,000		65,330		—		644, 346		9,725		8,157,085	(9)		9,311,486
Sean M. Stack Executive Vice President and President, Europe	2006		281,250		200,000		43,818		—		511,875		7,147		3,434,932	(10)		4,479,022
Christopher R. Clegg Executive Vice President, General Counsel and Secretary	2006		290,000		200,000		58,424		—		391,500		9,728		3,996,983	(11)		4,946,635

(1) Represents special cash bonus approved and paid in February 2007 by the 2007 Committee in connection with the refinancing and recapitalization of the Company, including entering into the 2006 Credit Facilities and the Secured Hedging Agreements, as well as issuing the Senior Notes and the Senior Subordinated Notes.

(2) Represents compensation cost recorded under SFAS No. 123(R) in connection with the release of amounts actually paid in 2006. See “Option Exercises and Stock Vesting during 2006” below.

(3) MIP Bonus for 2006. See “Compensation Discussion and Analysis—Base Salary and 2006 Cash Bonus Awards” above.

(4) Represents entire change in value for Cash Benefit Plan. See “Pension Benefits” below.

(5) Includes the cancellation and payment of all outstanding restricted stock awards and stock option awards (less option purchase price) pursuant to Acquisition. Does not include cancellation and payment of Performance Units. See “Compensation Discussion and Analysis—Treatment of Stock Options” and “Compensation Discussion and Analysis—Treatment of Restricted Stock and Stock Units,” above.

Officer	Consideration for Cancelled Options		Consideration for Restricted Stock
Steven J. Demetriou	$	17,097,760	$	4,781,858
Michael D. Friday		4,866,685		1,275,330
John J. Wasz		6,978,385		1,162,980
Christopher R. Clegg		3,095,484		878,483
Sean M. Stack		2,520,128		728,438

(6) The Company provides limited perquisites to its executives. See “Compensation Discussion and Analysis – Perquisites” above. The following table sets forth certain perquisites for the named executive officers:

Officer	Annual Physical		Financial Planning		Supplemental Insurance		Parking		Club Membership
Steven J. Demetriou	$	2,949	$	9,577	$	11,791	$	900	$	7,322
Michael D. Friday		—		9,190		—		900		—
John J. Wasz		861		4,257		—		—		—
Christopher R. Clegg		—		9,085		—		900		—
Sean M. Stack		—		9,049		—		710		—

Amounts set forth in the above table represent actual costs, other than for parking. A specified number of parking spaces are allocated to the Company in the lease for the Company’s Beachwood location. The table sets forth the costs that would have been paid by the named

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executive officer for the parking spaces. Tax gross-up payments are made to the named executive officers for club membership, annual physicals and financial planning services.

(7) Includes for Mr. Demetriou, $14,051 tax gross up payments for perquisites identified in Note (4) to the Summary Compensation Table, $538,702 tax gross up payment for reimbursement of excise tax, $658,202 reimbursement of excise tax, and $6,600 Company match to the 401(k).

(8) Includes for Mr. Friday, $6,506 tax gross up payments for perquisites identified in Note (4) to the Summary Compensation Table and $6,600 Company match to the 401(k).

(9) Includes for Mr. Wasz, $4,005 tax gross up payments for perquisites identified in Note (4) to the Summary Compensation Table and $6,600 Company match to the 401(k).

(10) Includes for Mr. Stack, $7,653 tax gross up payments for perquisites identified in Note (4) to the Summary Compensation Table and $6,600 Company match to the 401(k). Mr. Stack is currently on an expatriate assignment at the Company’s European Headquarters outside of Zurich, Switzerland. Pursuant to the Company’s expatriate program, Mr. Stack received $162,354 in benefits, including a one-time relocation allowance payment of $35,000, expatriate perquisites, including payment of $18,590 security deposit for his residence in Switzerland, $18,581 lease payments for his residence in Switzerland, $15,469 school registration and tuition fees for his children, and $34,248 aggregate travel expenses for his wife and children to find a residence and relocate to Switzerland.

(11) Includes for Mr. Clegg, $6,431 tax gross up payments for perquisites identified in Note (4) to the Summary Compensation Table and $6,600 Company match to the 401(k).

Outstanding Equity Awards at 2006 Fiscal Year-End

The following table provides information concerning outstanding equity awards at the end of the most recently completed fiscal year for each of the named executive officers. As a result of the Acquisition, these awards became payable in cash in an amount equal to $52.50 multiplied by the number of shares underlying the award.

Name	Stock Awards Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
Steven J. Demetriou	25,000	(1)	$	1,312,500
	10,535	(2)		553,088
	25,000	(3)		1,312,500
Michael D. Friday	5,000	(1)		262,500
	3,292	(2)		172,830
	5,000	(3)		262,500
John J. Wasz	5,000	(1)		262,500
	3,161	(2)		165,953
	5,000	(3)		262,500
Sean M. Stack	3,500	(1)		183,750
	1,975	(2)		103,688
	3,500	(3)		183,750
Christopher R. Clegg	3,500	(1)		183,750
	1,975	(2)		103,688
	3,500	(3)		183,750

(1) Represents ROCE-Vested Units that were accelerated and vested as if all performance goals had been met on December 19, 2006. The ROCE-Vested Units were cancelled and paid in cash on January 15, 2007.

(2) Represents common stock portion of Acquisition Units that were accelerated and vested as if all performance goals had been met on December 19, 2006. The Acquisition Units were cancelled and paid in cash on January 15, 2007.

(3) Represents Synergy-Vested Units that were paid in cash on April 2, 2007. See “—Executive Compensation Program after the Acquisition.”

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Option Exercises and Stock Vested during 2006

The following table provides information concerning exercises of stock options and similar instruments, and vesting of stock, including restricted stock and similar instruments, during the most recently completed fiscal year for each of the named executive officers on an aggregated basis. The table reports the aggregate number of shares of restricted stock vested during 2006, which for each individual consisted of shares vested based upon both the lapse of time and the achievement of performance metrics, and the aggregate dollar value realized upon the vesting of stock. We computed the aggregate dollar amount realized upon vesting by multiplying the number of shares of stock by the market value of the underlying shares on the vesting date. The table does not include any payments made in connection with the Acquisition. The Value Realized on Vesting for Stock Awards has been included in the Summary Compensation Table.

	Option Awards		Stock Awards
Name	Number of Shares Acquired on Exercise	$ Value Realized on Exercise	Number of Shares Acquired on Vesting	Value Realized on Vesting
Steven J. Demetriou	—	—	54,334	$	2,476,064
Michael D. Friday	—	—	27,167		1,231,580
John J. Wasz	—	—	18,606		900,114
Sean M. Stack	—	—	16,300		738,940
Christopher R. Clegg	—	—	21,734		1,007,640

Estimated Possible Payouts Under Non-Equity Incentive Plan Awards

The following table provides information concerning outstanding non-equity incentive plan awards at the end of the most recently completed fiscal year for each of the named executive officers. Our non-equity incentive plan is the MIP. Actual payments under the MIP are discussed above under “—Base Salary and 2006 Cash Bonus Awards” above and included in the Summary Compensation Table

Name	Estimated Possible Payouts Under Non-Equity Incentive Plan Awards
	Threshold		Target		Maximum
Steven J. Demetriou	$	0	$	850,000	$	1,955,000
Michael D. Friday		0		296,250		681,375
John J. Wasz		0		288,750		664,125
Sean M. Stack		0		227,500		523,250
Christopher R. Clegg		0		174,000		400,200

Pension Benefits

The following table provides information with respect to each pension plan that provides for payments or other benefits at, following, or in connection with retirement. This includes tax-qualified defined benefit plans and supplemental executive retirement plans, but does not include defined contribution plans (whether tax qualified or not). The Cash Balance Plan is discussed above under “—Retirement and Post-Employment Benefits.”

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Values reflect the actuarial present value of the named executive officer’s accumulated benefit under the Plan, computed as of December 31, 2006. In making such calculation, we assumed that the retirement age will be the normal retirement age as defined in the Plan, or if not so defined, the earliest time at which a participant may retire under the Plan without any benefit reduction due to age. See Note L to our audited consolidated financial statements for assumptions used in calculating these benefits.

Name	Plan Name	Number of Years Credited Service	Present Value of Accumulated Benefit
Steven J. Demetriou	Cash Balance Plan	2.6	$	28,633
Michael D. Friday	Cash Balance Plan	2.6		38,784
John J. Wasz	Cash Balance Plan	21.5		171,309
Sean M. Stack	Cash Balance Plan	2.6		19,039
Christopher R. Clegg	Cash Balance Plan	2.5		25,827

Nonqualified Deferred Compensation

The following table provides information with respect to the Benefit Restoration Plan (the “BRP”) and the Deferred Compensation Plan (the “DCP”). The amounts shown include compensation earned and deferred in prior years, and earnings on, or distributions of, such amounts. Executive contributions are included in the Summary Compensation Table.

Name	Executive $ Contributions in Last FY (1)		Registrant $ Contributions in Last FY			Aggregate Earnings in Last FY		Aggregate Withdrawals/ Distributions			Aggregate $ Balance at Last FYE
Steven J. Demetriou
BRP	$	97,731	$	177,063	(2)	$	27,779	$	335,572	(3)	—
DCP		408,000		—			45,771		453,771	(3)	—
Michael D. Friday
BRP		31,834		50,594	(2)		8,402		104,944	(3)	—
DCP		239,063		—			6,686		245,749	(3)	—
John J. Wasz
BRP		30,396		68,326	(2)		3,626		116,644	(3)	—
Sean M. Stack
BRP		11,949		17,686	(2)		1,056		40,023	(3)	—
Christopher R. Clegg
BRP		16,918		26,386	(2)		1,652		56,381	(3)	—

(1) Employee deferrals deposited in 2006. Does not include employee deferral for December 31, 2006, which was deposited in January 2007.

(2) Includes the 2006 Company Match and the 2005 Company True-Up Contribution deposited in 2006.

(3) Account distributed in December 2006 as required plan documents as a result of change in control on December 19, 2006.

Potential Payments Upon Termination or Change in Control

As previously discussed, each of the named executive officers is a party to an employment agreement executed on or about December 19, 2006. Under the terms of the employment agreements, the executive officers’ employment may be terminated at any time by either party, subject to certain notice provisions and severance obligations in the event of termination under certain circumstances. The employment agreements also provide that until December 19, 2008, the applicable severance obligations are determined under the terms of the named executive officer’s 2005 Severance Agreements. The 2005 Severance Agreements are currently in effect and will

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continue to be in effect until terminated by their terms on December 18, 2008. After December 19, 2008, the named executive officers will be entitled severance compensation under their employment agreements. These terms are not fully described here because the provisions are not currently in effect; however they generally provide in the case of termination by the Company without cause or by the named executive officer for good reason, for a lump-sum payment equal to one and one-half times the named executive officer’s (two times, in the case of Mr. Demetriou) base and bonus amount.

The 2005 Severance Agreements provide, in relevant part, for severance payments as described below if the officer’s employment is terminated by Aleris during a two-year period following a change in control event for any reason other than for cause, death, disability or certain retirement events, or if the officer resigns for good reason (as defined in the Severance Agreements). As noted, the Severance Agreements provide for a “double trigger” in the event of a change in control such that payments are not made automatically when a change in control occurs but rather only in the event of a certain types of termination within the two-year window after the change in control event, which ties most of the severance payments to circumstances where an executive is involuntarily removed (either directly or indirectly as a result of changes to his job) from his position in connection with the change in control. Since the Acquisition was a transaction that constituted a change in control under the Severance Agreements, the severance payments tied to a termination in connection with a change in control are those that would be paid if one of the named executive officers would be terminated on or before December 18, 2008.

Under the Severance Agreements, since a change in control occurred on December 19, 2006, in the case a named executive officer is terminated for any reason other than for cause, death, disability or certain retirement events, or if the named executive officer resigns for good reason on or before December 18, 2008, he will be entitled to severance compensation as follows:

• A lump sum payment in an amount equal to three times (for Mr. Demetriou) or two times (for Messrs. Friday, Wasz, Clegg and Stack) the sum of his base salary (at the highest rate in effect for any period within the past twelve months prior to his termination date) plus the highest of: (1) the target bonus for the 2006 fiscal year (the year in which the change in control occurred), (2) the target bonus for the fiscal year in which the termination occurs, or (3) the highest bonus earned by him in fiscal years 2003, 2004, or 2005 (the three fiscal years prior to the change in control);

• A lump sum payment of a pro-rata portion of the annual bonus pay (based on the greater of (1) the target bonus for 2006 fiscal year (the fiscal year in which a change in control occurred) and (2) the target bonus for the fiscal year in which the termination occurs) and any compensation previously deferred by the officer under any nonqualified plan;

• Continued welfare benefits for three years (for Mr. Demetriou) or two years (for Messrs. Friday, Wasz, Clegg and Stack) following his termination date; and

• Reimbursement for any excise tax liability imposed by Section 4999 of the Internal Revenue Code, or any interest or penalties incurred with respect to such excise tax in an amount such that after payment by the respective officer of all taxes, that officer retains an amount equal to the amount of the excise tax.

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The following table quantifies the potential payments as described above, assuming a termination date of December 31, 2006.

	Payments after CIC in event of “Nonqualifying Terminations”			Payments after CIC for reason other than “Nonqualifiying Termination”
Named Executive Officer	By the Company for Cause	By Executive for reason other than Good Reason	Death, Disability, Retirement	Base and Bonus with Multiplier		Target Bonus		Assumed Annual Value of Continued Benefits with Multiplier		Reimbursement of Tax (1)		Total Potential Payment
Steven J. Demetriou	—	—	—	$	6,630,000	$	850,000	$	243,777	$	6,681,622	$	14,405,399
Michael D. Friday	—	—	—		1,746,250		296,250		41,532		1,516,389		3,600,421
John J. Wasz	—	—	—		1,688,000		288,750		30,900		1,316,660		3,324,310
Christopher R. Clegg	—	—	—		1,141,000		174,000		40,800		934,738		2,290,538
Sean M. Stack	—	—	—		1,105,000		227,500		30,600		935,480		2,298,580

(1) Reimbursement of Tax takes into account that payments with respect to accelerated equity awards that were made December 19, 2006 and payments as a result of hypothetical termination on December 19, 2006 are both considered contingent on the December 19, 2006 change in control under Regulations to Section 280G of the Code; therefore, the reimbursement of tax amount represents the gross-up payment that would be due based on the total of the value of the equity acceleration that occurred and the severance payments. No equity in new entity has been taken into account.

As a result of the Acquisition, the table does not include the value of any equity award payments that were triggered by the change in control, since these payments were actually made and described in the Compensation Discussion & Analysis and disclosed in the Summary Compensation Table. However, as described in the footnote to the table above, the value of these equity award cash-out payments was considered for the purpose of calculating the potential tax gross-up payment that would be due to the executive in the event a termination had occurred on December 31, 2006.

Director Compensation (1)

Name	Fees Earned or Paid in Cash		Stock Awards		All Other Compensation (4)		Total
Kevin Burns (2)(3)	$	—	$	—	$	—	$	—
Kelvin Davis (2)		—		—		—		—
Michael MacDougall (2)		—		—		—		—
Jonathan Garfinkel (2)		—		—		—		—
Dale V. Kesler (4)		61,645		56,775		882,347		1,000,767
Paul E. Lego (4)		54,281		50,846		166,818		271,945
John E. Balkcom (5)		78,562		43,349		1,371,651		1,493,562
C. Frederick Fetterolf (5)		74,562		50,846		166,816		292,224
John E. Grimes (5)		54,625		56,775		1,042,587		1,153,987
Larry E. Kittelberger (5)		44,125		56,775		166,827		267,727
John E. Merow (5)		74,062		48,349		1,292,208		1,414,619
Hugh G. Robinson (5)		60,062		48,349		539,591		648,002

(1) Mr. Demetriou, Chairman and Chief Executive Officer, does not receive compensation as a Director of the Company.

(2) Elected Director on December 19, 2006 by sole stockholder.

(3) Resigned as a Director on March 30, 2007.

(4) Acted as Director of the Company prior to the Acquisition, resigned as a Director on December 19, 2006. Subsequently elected to 2007 Board on February 22, 2007. The fees reflected above are for services as a Director prior to the Acquisition.

(5) Acted as Director of the Company prior to the Acquisition, resigned as a Director on December 19, 2006.

(6) Includes release and payment of restricted stock, and cancellation and payment of all outstanding stock option awards equal to the product of the number of shares of our common stock subject to the option as of the effective time of the Acquisition and the excess of $52.50 over the exercise price per share of common stock subject to such option.

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Compensation Committee Report for the Year Ended December 31, 2006

The Compensation Committee oversees the Company’s compensation program on behalf of the Company’s Board of Directors. In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis set forth in this annual report.

In reliance on the review and discussion referred to above, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this annual report which will be filed with the SEC.

Compensation Committee

Kelvin Davis

Paul E. Lego

Michael MacDougall

The information contained in the report above shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference in such filing.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Holdings owns 100% of our common stock. The following table sets forth information with respect to the ownership of Holdings as of March 30, 2007 for:

• each person who owns beneficially more than a 5% equity interest in Holdings;

• each member of our board of directors;

• each of our named executive officers; and

• all of our executive officers and directors as a group.

	Holdings (1)
Name and Address of Owner (2)	Number of Shares Beneficially Owned	Percentage Owned
Aurora Acquisition Holdings, LLC	8,327,500	97.74	%
Affiliates of TPG (3)	8,327,500	97.74	%
Kelvin Davis (4)	8,327,500	97.74	%
Michael MacDougall (4)	8,327,500	97.74	%
Jonathan Garfinkel (4)	—	*
Paul E. Lego	5,000	*
Dale V. Kesler	2,500	*
Steven J. Demetriou (5)	40,000	*
Michael D. Friday	18,000	*
John J. Wasz	18,000	*
Sean M. Stack	12,000	*
Christopher R. Clegg	12,000	*
Robert R. Holian	—	*
Alfred Haszler	500	*
K. Alan Dick	3,000	*
Scott McKinley	2,500	*
All executive officers and directors as a group (14 persons)(6)	113,500	1.33	%

* Less than 1%

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(1) Percentage of class beneficially owned is based on 8,520,000 shares of common stock outstanding as of March 30, 2007, together with the applicable options to purchase shares of common stock for each stockholder exercisable on March 30, 2007 or within 60 days thereafter. Shares of common stock issuable upon the exercise of options currently exercisable or exercisable 60 days after March 30, 2007 are deemed outstanding for computing the percentage ownership of the person holding the options, but are not deemed outstanding for computing the percentage of any other person. The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person may be deemed to be a beneficial owner of such securities as to which such person has voting or investment power.

(2) Unless otherwise indicated, the address of each person listed is c/o Aleris International, Inc., 25825 Science Park Drive, Suite 400, Beachwood, Ohio 44122-7392.

(3) Includes the 8,327,500 shares of common stock owned by Aurora Acquisition Holdings, LLC over which TPG Partners IV, Inc. and TPG Partners V, Inc. (the “TPG Entities”) may be deemed, as a result of their ownership of approximately 98.89% of Aurora Acquisition Holdings, LLC’s total outstanding units and certain provisions under the Aurora Acquisition Holdings, LLC operating agreement, to have shared voting or dispositive power. By virtue of their position in relation to the TPG Entities, Messrs. Davis and MacDougall may be deemed to have investment powers and beneficial ownership with respect to the securities described herein. Each of Messrs. Davis and MacDougall disclaims beneficial ownership of such shares of common stock. Mr. Garfinkel has no voting or dispositive power over any of the shares of common stock that may be deemed beneficially owned by TPG. The address of Messrs. Davis, MacDougall and Garfinkel and TPG Partners IV, Inc. and TPG Partners V, Inc. is c/o Texas Pacific Group, 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102.

(4) Mr. Davis, as a Senior Partner of TPG, and Mr. MacDougall, as a Partner of TPG each may be deemed to beneficially own all of the shares of common stock owned by the TPG Entities. Each of Messrs. Davis and MacDougall disclaims beneficial ownership of these shares of common stock. Mr. Garfinkel has no voting or dispositive power over any of the shares of common stock that may be deemed beneficially owned by TPG.

(5) Mr. Demetriou owns approximately 1.11% of Aurora Acquisition Holdings, LLC’s total outstanding units but has no voting rights with respect to such units.

(6) Excludes shares of common stock that may be deemed beneficially owned by Messrs. Davis and MacDougall.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Aurora Acquisition Holdings, LLC Limited Liability Company Operating Agreement

Following the Acquisition, affiliates of TPG entered into a limited liability company operating agreement (the “LLC Agreement”) in respect of our indirect parent company, Holdings, which contains provisions, among others, with respect to certain corporate governance matters. The LLC Agreement provides that material corporate actions of Holdings and the Company require, in addition to any direct or delegated approval of the board of directors required under applicable law, approval by affiliates of TPG (or a majority of the directors appointed by affiliates of TPG).

Management Services Agreement

Following the Acquisition, the Company entered into a management services agreement (the “Management Services Agreement”) with affiliates of TPG pursuant to which affiliates of TPG received a transaction fee of $42.5 million in cash in connection with the Acquisition. In addition, pursuant to the Management Services Agreement, and in exchange for consulting and management advisory services that will be provided to the Company by TPG and its affiliates, affiliates of TPG will receive an aggregate management fee equal to $9.0

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million per annum; provided that in the event TPG or any of its affiliates increases its equity contribution to the Company, the management fee will be increased proportionately to reflect such increased equity commitment. The Management Services Agreement also provides that affiliates of TPG will receive a success fee equal to up to four times the management fee in effect at such time in connection with certain sales or an initial public offering as well as fees in connection with certain financing, acquisition or disposition transactions. An affiliate of TPG will advise the Company in connection with financing, acquisition, disposition and change of control transactions involving the Company or any of its direct or indirect subsidiaries, and the Company will pay to the affiliate of TPG an aggregate fee in connection with any such transaction equal to customary fees charged by internationally-recognized investment banks for serving as a financial advisor in similar transactions, such fee to be due and payable for the foregoing services at the closing of any such transaction. Affiliates of TPG will also receive reimbursement for out-of-pocket expenses incurred by them or their affiliates in connection with providing services pursuant to the Management Services Agreement.

Registration Rights Agreement

The Sponsor Funds and the Management Participants entered into a registration rights agreement with us in connection with the Acquisition. Pursuant to this agreement, the Sponsor Funds can cause us to register their interests in Aleris under the Securities Act and to maintain a shelf registration statement effective with respect to such interests. The Sponsor Funds and the Management Participants will also be entitled to participate on a pro rata basis in any registration of our equity interests under the Securities Act that we may undertake.

Certain Charter and Bylaws Provisions

Our amended certificate of incorporation and our amended bylaws, as in effect after the completion of the Acquisition, contain provisions limiting directors’ obligations in respect of corporate opportunities. In addition, our amended certificate of incorporation provides that Section 203 of the Delaware General Corporation Law will not apply to the Company. Section 203 restricts “business combinations” between a corporation and “interested stockholders,” generally defined as stockholders owning 15% or more of the voting stock of a corporation.

Director Independence

The Company is a privately held corporation. Although our board has not made a formal determination on the matter, under current New York Stock Exchange listing standards (which we are not currently subject to) and taking into account any applicable committee standards, we believe that Messrs. Kesler and Lego would each be considered an independent director, including as a member of our Audit Committee. Under current New York Stock Exchange listing standards, Mr. Demetriou would not be considered independent under any general listing standards or those applicable to any particular committee due to his employment relationship with us, and Messrs. Davis, MacDougall and Garfinkel may not be considered independent under any general listing standards or those applicable to any particular committee, due to their relationship with TPG, our largest indirect stockholder. As TPG owns indirectly approximately 97.74% of our outstanding equity, under New York Stock Exchange listing standards, we would qualify as a “controlled company” and, accordingly, be exempt from its requirements to have a majority of independent directors and a corporate governance and compensation committee composed of a majority of independent directors.

Other Relationships

Mr. Demetriou, our Chief Executive Officer, currently serves on the board of directors of Kraton Polymers LLC and on the board of directors of Kraton’s direct parent company, Polymer Holdings LLC. Mr. Demetriou receives customary compensation for serving as a director of Kraton. Kraton is a portfolio company of TPG and investment funds affiliated with TPG.

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Related-Party Transactions

Transactions with our directors, executive officers, principal stockholders or affiliates must be at terms that are no less than favorable to us than those available from third parties and must be approved in advance by a majority of disinterested members of the Board of Directors.

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Ernst & Young LLP has billed us aggregate fees of approximately $5.3 million for professional services rendered for the year ended December 31, 2006. Fees for services by Ernst & Young LLP billed in the year ended December 31, 2005 were approximately $2.8 million.

In addition to retaining Ernst & Young LLP to audit our consolidated financial statements for 2006, Aleris retained Ernst & Young LLP to provide certain other auditing and advisory services in 2006. We understand the need for Ernst & Young LLP to maintain objectivity and independence in its audit of our financial statements. To minimize relationships that could appear to impair the objectivity of Ernst & Young LLP, our Audit Committee has restricted the non-audit services that Ernst & Young LLP may provide to us primarily for tax services and merger and acquisition-related due diligence and audit services, and has determined that we would obtain these non-audit services from Ernst & Young LLP only when the services offered by Ernst & Young LLP are more effective or economical than services available from other service providers.

The Audit Committee has adopted policies and procedures for pre-approving all non-audit work performed by Ernst & Young LLP. Specifically, the Audit Committee has pre-approved the use of Ernst & Young LLP for detailed, specific types of services within the following categories of non-audit services: merger and acquisition and financing transactions due diligence and audit services; tax services; employee benefit plan audits; and reviews and procedures that the Company requests Ernst & Young LLP to undertake to provide assurances of accuracy on matters not required by laws or regulations. In each case, the Audit Committee has required management to report the specific engagements to the Committee on a quarterly basis.

The aggregate fees billed for professional services by Ernst & Young LLP in 2006 and 2005 for these various services were:

Type of Fees	2006		2005
	($ in thousands)
Audit Fees	$	5,152	$	2,391
Audit-Related Fees		133		94
Tax Fees		36		360
All Other Fees		—		—
Total	$	5,321	$	2,845

In the above table, in accordance with the SEC’s definitions and rules, “audit fees” are fees the Company paid Ernst & Young LLP for professional services for the audit of Aleris’s consolidated financial statements included in its annual report, the audit of our internal control over financial reporting and the review of our quarterly financial statements included in our Form 10-Qs, as well as for services that are normally provided by the accounting firm in connection with statutory and regulatory filings or engagements, including foreign statutory audits and procedures related to the Company’s 2006 debt offering. “Audit-related fees” are fees for assurance and related services that are reasonably related to the performance of the audit or review of Aleris’s financial statements and include the audits of the Company’s various benefit plans; “tax fees” are fees for tax compliance, tax advice and tax planning; and “all other fees” are fees for any services not included in the first three categories.

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PART IV

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)(1) Financial Statements

See ITEM 8—“Financial Statements and Supplementary Data.”

(a)(2) Financial Statement Schedules

None.

(a)(3) Exhibits

The Exhibits that are incorporated by reference in this annual report, or are filed with this annual report, are listed in the EXHIBIT INDEX following the signature page of this Report.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: April 2, 2007

Aleris International, Inc.
By:	/s/    Robert R. Holian
	Robert R. Holian Senior Vice President and Controller

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/    Steven J. Demetriou         Steven J. Demetriou	Chairman of the Board, Chief Executive Officer and Director (Principal Executive Officer)	April 2, 2007
/s/    Michael D. Friday         Michael D. Friday	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	April 2, 2007
/s/    Robert R. Holian         Robert R. Holian	Senior Vice President and Controller	April 2, 2007
Kelvin Davis	Director
Michael MacDougall	Director
/s/    Jonathan Garfinkel         Jonathan Garfinkel	Director	April 2, 2007
/s/    Paul E. Lego         Paul E. Lego	Director	April 2, 2007
/s/    Dale V. Kesler         Dale V. Kesler	Director	April 2, 2007

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EXHIBIT INDEX

Exhibit Number	Description
2.1*	Agreement and Plan of Merger, dated as of June 16, 2004, by and among the Company (formerly IMCO Recycling Inc.), Silver Fox Acquisition Company and Commonwealth Industries, Inc., filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K dated June 18, 2004 and incorporated herein by reference.
2.2*	Agreement and Plan of Merger, dated as of September 7, 2005, by and among the Company and ALSCO Holdings, Inc., Sun ALSCO, LLC and ALSCO Acquisition Corp. filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated September 7, 2005 and incorporated herein by reference.
2.3*	Asset Purchase Agreement, dated November 7, 2005, by and among the Company and Ormet Corporation, Ormet Aluminum Mill Products Corporation and Specialty Blanks, Inc., filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated November 7, 2005 and incorporated herein by reference.
2.4*	Share Purchase Agreement, dated May 23, 2006, between the Company and Corus Group plc to purchase all of the share capital of Hylite BV, Corus Aluminum Rolled Products BV, Corus Aluminum NV, Corus Aluminum GmbH, Corus Aluminum Corporation and Hoogovens Aluminum Europe Inc., and their respective subsidiaries, filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated May 24, 2006 and incorporated herein by reference.
2.5*	Securities Purchase Agreement, dated May 23, 2006, by and among the Company, Corus Group plc and Societe generale de financement du Quebec to purchase the limited partnership interests in Corus LP from Corus Group plc and Societe generale de financement du Quebec and the shares which they respectively hold in Corus Aluminium Inc., Corus LP’s general partner, filed as Exhibit 99.2 to the Company’s Current Report on Form 8-K dated May 24, 2006 and incorporated herein by reference.
2.6*	Agreement and Plan of Merger, dated as of August 7, 2006, by and among Aurora Acquisition Holdings, Inc., Aurora Acquisition Merger Sub, Inc and the Company, filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K dated August 7, 2006 and incorporated herein by reference.
3.1*	Amended and Restated Certificate of Incorporation of the Company, filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated December 22, 2006 and incorporated herein by reference.
3.2*	Amended and Restated By-laws of the Company, filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K dated December 22, 2006, and subsequently amended as reported in the Company’s Current Report on Form 8-K dated February 27, 2007, each incorporated herein by reference.
4.1	Senior Indenture, dated as of December 19, 2006, by and among Aurora Acquisition Merger Sub, Inc. to be merged with and into the Company, the subsidiary guarantors named therein, and LaSalle Bank National Association, as trustee.
4.2	Senior Subordinated Indenture, dated as of December 19, 2006, by and among Aurora Acquisition Merger Sub, Inc. to be merged with and into the Company, the subsidiary guarantors named therein, and LaSalle Bank National Association, as trustee.
4.3	Form of 9%/9 3/4% Senior Notes due 2014 (included in Exhibit 4.1).
4.4	Form of 10% Senior Subordinated Notes due 2016 (included in Exhibit 4.2).

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Exhibit Number	Description
4.5	Registration Rights Agreement, dated as of December 19, 2006, by and among Aurora Acquisition Merger Sub, Inc., the Company, the subsidiary guarantors named therein, and Deutsche Bank Securities Inc., Goldman, Sachs & Co., KeyBanc Capital Markets, a Division of McDonald Investments Inc. and PNC Capital Markets LLC, as Initial Purchasers.
10.1	Amended and Restated Credit Agreement, dated as of August 1, 2006 and amended and restated as of December 19, 2006, by and among the Company and certain of its subsidiaries, the lenders party thereto from time to time, Deutsche Bank AG New York Branch, as administrative agent, Deutsche Bank AG, Canada Branch, as Canadian administrative agent, Goldman Sachs Credit Partners L.P., as syndication agent, and PNC Bank, National Association, National City Business Credit, Inc. and Key Bank National Association, as co-documentation agents.
10.2	Amended and Restated Term Loan Agreement, dated as of August 1, 2006 and amended and restated as of December 19, 2006, by and among the Company and certain of its subsidiaries, the lenders party thereto from time to time, Deutsche Bank AG New York Branch, as administrative agent, Goldman Sachs Credit Partners L.P., as syndication agent, and PNC Bank, National Association, National City Business Credit, Inc. and Key Bank National Association, as co-documentation agents.
10.3	First Amendment to the Amended and Restated Term Loan Agreement, dated as of March 16, 2007, by and among the Company and certain of its subsidiaries, the lenders party thereto from time to time, Deutsche Bank AG New York Branch, as administrative agent, Goldman Sachs Credit Partners L.P., as syndication agent, and PNC Bank, National Association, National City Business Credit, Inc. and Key Bank National Association, as co-documentation agents.
10.4	Amended and Restated U.S. Security Agreement, dated as of August 1, 2006 and amended and restated as of December 19, 2006, among Aleris International, Inc., certain of its subsidiaries, and Deutsche Bank AG New York Branch, as collateral agent, relating to the Amended and Restated Credit Agreement.
10.5	Amended and Restated U.S. Pledge Agreement, dated as of August 1, 2006 and amended and restated as of December 19, 2006, among Aleris International, Inc. and certain of its subsidiaries, each as pledgors, and Deutsche Bank AG New York Branch, as collateral agent, relating to the Amended and Restated Credit Agreement.
10.6	Amended and Restated U.S. Subsidiaries Guaranty, dated as of August 1, 2006 and amended and restated as of December 19, 2006, among certain subsidiaries of Aleris International, Inc., as guarantors, and Deutsche Bank AG New York Branch, as administrative agent, relating to the Amended and Restated Credit Agreement.
10.7	Amended and Restated U.S. Security Agreement, dated as of August 1, 2006 and amended and restated as of December 19, 2006, among Aleris International, Inc., certain of its subsidiaries, and Deutsche Bank AG New York Branch, as collateral agent, relating to the Amended and Restated Term Loan Agreement.
10.8	Amended and Restated U.S. Pledge Agreement, dated as of August 1, 2006 and amended and restated as of December 19, 2006, among Aleris International, Inc. and certain of its subsidiaries, each as pledgors, and Deutsche Bank AG New York Branch, as collateral agent, relating to the Amended and Restated Term Loan Agreement.
10.9	Amended and Restated U.S. Subsidiaries Guaranty, dated as of August 1, 2006 and amended and restated as of December 19, 2006, among certain subsidiaries of Aleris International, Inc., as guarantors, and Deutsche Bank AG New York Branch, as administrative agent, relating to the Amended and Restated Term Loan Agreement.

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Exhibit Number	Description
10.10*†	Amended and Restated Aleris International, Inc. 2004 Equity Incentive Plan, adopted by the Company’s stockholders on May 18, 2006, filed as Annex B to the Company’s Definitive Proxy Statement on Schedule 14A dated April 13, 2006 and incorporated herein by reference.
10.11*†	Aleris International, Inc. 2004 Annual Incentive Compensation Plan dated November 4, 2004, filed as Annex G to the Prospectus contained in the Company’s Registration Statement on form S-4/A dated November 4, 2004 and incorporated herein by reference.
10.12*	Commonwealth Aluminum Lewisport, LLC Hourly 401(k) Plan, as amended and restated, effective as of January 1, 1997, filed as Exhibit 4.4 to the Company’s Registration Statement on Form S-8 dated December 9, 2004 and incorporated herein by reference.
10.13*†	Commonwealth Industries, Inc. Cash Balance Plan as amended and restated, effective as of January 1, 1997, filed as Exhibit 10.3 to Commonwealth Industries, Inc. Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002 and incorporated herein by reference.
10.14*†	Aleris International, Inc. Retirement Benefit Restoration Plan effective as of January 1, 2005, filed as Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2006 and incorporated herein by reference.
10.15*†	Aleris International, Inc. Deferred Compensation Plan effective as of June 15, 2005, filed as Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2005 and incorporated herein by reference.
10.16*†	Management Services Agreement between Corus Aluminum Walzprodukte GmbH and Mr. Alfred Haszler, filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2006 and incorporated herein by reference.
10.17*†	Prolongation Letter for Mr. Alfred Haszler dated June 9, 2006, filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2006 and incorporated herein by reference.
10.18	Management Services Agreement, dated as of December 18, 2006, by and among Aurora Acquisition Merger Sub, Inc., Aurora Acquisition Holdings, Inc., and TPG GenPar IV, L.P. and TPG GenPar V, L.P.
10.19	Management Stockholders Agreement, dated as of December 19, 2006, by and among the Company, Aurora Acquisition Holdings, Inc. and the other parties signatory thereto.
10.20*†	Form of Severance Agreement between the Company and entered into on August 30, 2005 by each of Steven J. Demetriou, Michael D. Friday, John J. Wasz, Christopher R. Clegg, Sean M. Stack and Robert R. Holian, said form filed as Exhibit 99.2 to the company’s Current Report on Form 8-K dated August 30, 2005 and incorporated herein by reference.
10.21†	Employment Agreement, dated as of December 19, 2006, between the Company and Steven J. Demetriou.
10.22†	Employment Agreement, dated as of December 19, 2006, between the Company and Michael D. Friday.
10.23†	Employment Agreement, dated as of December 19, 2006, between the Company and John J. Wasz.
10.24†	Employment Agreement, dated as of December 19, 2006, between the Company and Sean M. Stack.
10.25†	Employment Agreement, dated as of December 19, 2006, between the Company and Christopher R. Clegg.
10.26†	Rollover Agreement, dated as of December 15, 2006, between Aurora Acquisition Holdings, Inc. and Steven J. Demetriou.

90

Exhibit Number	Description
10.27†	Rollover Agreement, dated as of December 15, 2006, between Aurora Acquisition Holdings, Inc. and Michael D. Friday.
10.28†	Rollover Agreement, dated as of December 15, 2006, between Aurora Acquisition Holdings, Inc. and John J. Wasz.
10.29†	Rollover Agreement, dated as of December 15, 2006, between Aurora Acquisition Holdings, Inc. and Sean M. Stack.
10.30†	Rollover Agreement, dated as of December 15, 2006, between Aurora Acquisition Holdings, Inc. and Christopher R. Clegg.
12.1	Statement of Computation of Ratio of Earnings to Fixed Charges.
18.1*	Letter Regarding Change in Accounting Principle, filed as Exhibit 18.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2006 and incorporated herein by reference.
21.1	Subsidiaries of Aleris International, Inc. as of April 2, 2007.
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)
31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)
32.1	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. §1350.

* Previously filed.

† Management contract or compensatory plan or arrangement.

91

Index to Consolidated Financial Statements

Index	Page Number
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheet at December 31, 2006 (Successor) and 2005 (Predecessor)	F-3
Consolidated Statements of Operations for the periods from December 20, 2006 to December 31, 2006 (Successor), January 1, 2006 to December 19, 2006 (Predecessor), and for the years ended December 31, 2005 and 2004 (Predecessor)	F-4
Consolidated Statements of Cash Flows for the periods from December 20, 2006 to December 31, 2006 (Successor), January 1, 2006 to December 19, 2006 (Predecessor), and for the years ended December 31, 2005 and 2004 (Predecessor)	F-5
Consolidated Statements of Stockholder’s Equity for the periods from December 20, 2006 to December 31, 2006 (Successor), January 1, 2006 to December 19, 2006 (Predecessor), and for the years ended December 31 2005 and 2004 (Predecessor)	F-6
Notes to Consolidated Financial Statements	F-7

F-1

ALERIS INTERNATIONAL, INC.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholder of Aleris International, Inc.

We have audited the accompanying consolidated balance sheets of Aleris International, Inc. as of December 31, 2006 (Successor Company) and 2005 (Predecessor Company), and the related consolidated statements of operations, stockholder’s equity, and cash flows for the period from December 20, 2006 through December 31, 2006 (Successor Company), the period from January 1, 2006 through December 19, 2006 (Predecessor Company) and each of the two years in the period ended December 31, 2005 (Predecessor Company). These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Aleris International, Inc. at December 31, 2006 (Successor Company) and 2005 (Predecessor Company), and the consolidated results of their operations and their cash flows for the period from December 20, 2006 through December 31, 2006 (Successor Company), the period from January 1, 2006 through December 19, 2006 (Predecessor Company) and each of the two years in the period ended December 31, 2005 (Predecessor Company), in conformity with U.S. generally accepted accounting principles.

As discussed in Note A to the consolidated financial statements, effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (Revised 2004), Share Based Payment. Also, as discussed in Notes A and L to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pensions and Other Postretirement Plans effective December 31, 2006.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Aleris International, Inc.’s internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 28, 2007, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Cleveland, Ohio

March 28, 2007

F-2

ALERIS INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEET

(in millions, except share and per share data)

	(Successor)			(Predecessor)
	December 31, 2006			December 31, 2005
ASSETS
Current Assets
Cash and cash equivalents	$	126.1		$	6.8
Accounts receivable (net of allowances of $9.9 and $5.8 at December 31, 2006 and 2005, respectively)		692.5			325.1
Inventories		1,023.6			404.8
Deferred income taxes		34.6			35.2
Prepaid expenses		20.6			8.7
Derivative financial instruments		77.5			28.0
Other current assets		18.3			2.2
Total Current Assets		1,993.2			810.8
Property, plant and equipment, net		1,223.1			537.8
Goodwill		1,362.4			152.8
Intangible assets, net		84.1			22.9
Derivative financial instruments		48.5			5.3
Deferred income taxes		8.1			—
Other assets		89.0			24.5
	$	4,808.4		$	1,554.1
LIABILITIES AND STOCKHOLDER’S EQUITY
Current Liabilities
Accounts payable	$	554.3		$	200.8
Accrued liabilities		338.7			135.4
Deferred income taxes		37.7			—
Current maturities of long-term debt		20.5			20.8
Total Current Liabilities		951.2			357.0
Long-term debt		2,567.5			631.0
Deferred income taxes		141.2			51.8
Accrued pension benefits		179.2			41.7
Accrued postretirement benefits		57.5			48.6
Other long-term liabilities		66.4			30.2
Stockholder’s Equity
Predecessor:
Preferred stock; par value $.10; 8,000,000 shares authorized; none issued		—			—
Common stock; par value $.10; 80,000,000 shares authorized, 31,237,685 issued at December 31, 2005		—			3.1
Treasury stock, at cost; 13,007 shares at December 31, 2005		—			(0.3	)
Successor:
Preferred stock; par value $.01; 100 shares authorized; none issued at December 31, 2006		—			—
Common stock; par value $.01; 900 shares authorized and issued at December 31, 2006		—			—
Additional paid-in capital		848.8			295.7
Deferred stock compensation		—			(5.9	)
Retained (deficit) earnings		(3.4	)		95.9
Accumulated other comprehensive income		—			5.3
Total Stockholder’s Equity		845.4			393.8
	$	4,808.4		$	1,554.1

See Notes to Consolidated Financial Statements.

F-3

ALERIS INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(in millions)

	(Successor)			(Predecessor)
	For the period from December 20, 2006 to December 31, 2006			For the period from January 1, 2006 to December 19, 2006			For the year ended December 31
							2005			2004
Revenues	$	111.8		$	4,637.0		$	2,429.0		$	1,226.6
Cost of sales		108.9			4,224.1			2,181.3			1,153.1
Gross profit		2.9			412.9			247.7			73.5
Selling, general and administrative expense		6.1			161.3			91.1			54.5
Restructuring and other charges		5.5			36.4			29.9			14.9
(Gains) losses on derivative financial instruments		(11.1	)		(19.7	)		8.0			(8.6	)
Operating income		2.4			234.9			118.7			12.7
Interest expense		6.9			83.7			41.9			28.8
Interest income		—			(5.0	)		(1.6	)		(0.7	)
Loss on early extinguishment of debt		—			54.4			—			—
Other (income) expense, net		(0.4	)		(16.3	)		1.6			0.5
Equity in net loss of affiliates		—			—			1.6			0.2
(Loss) income before provision for income taxes and minority interests		(4.1	)		118.1			75.2			(16.1	)
(Benefit from) provision for income taxes		(0.7	)		44.3			0.4			7.5
(Loss) income before minority interests		(3.4	)		73.8			74.8			(23.6	)
Minority interests, net of provision for income taxes		—			0.1			0.5			0.2
Net (loss) income	$	(3.4	)	$	73.7		$	74.3		$	(23.8	)

See Notes to Consolidated Financial Statements.

F-4

ALERIS INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

	(Successor)			(Predecessor)
	For the period from December 20, 2006 to December 31, 2006			For the period from January 1, 2006 to December 19, 2006			For the year ended December 31
							2005			2004
Operating activities
Net (loss) income	$	(3.4	)	$	73.7		$	74.3		$	(23.8	)
Depreciation and amortization		5.4			103.7			55.0			30.6
Provision for (benefit from) deferred income taxes		8.2			3.6			(5.7	)		0.2
Excess income tax benefits from exercise of stock options		—			(3.6	)		—			—
Restructuring and other charges:
Charges		5.5			36.4			29.9			14.9
Payments		(23.1	)		(6.9	)		(5.9	)		(5.1	)
Non-cash loss on early extinguishment of debt		—			16.4			—			—
Stock-based compensation expense		—			10.7			3.5			2.2
Proceeds from settlement of currency derivative financial instruments		—			(9.8	)		—			—
Equity in loss of affiliates		—			—			1.6			0.2
Unrealized (gains) losses on derivative financial instruments		(11.1	)		(17.2	)		18.6			(4.2	)
(Gain) loss on sale of property, plant and equipment		—			(14.7	)		0.4			0.5
Other non-cash charges		—			6.1			4.1			8.3
Change in operating assets and liabilities		(128.6	)		139.6			(73.5	)		(21.7	)
Net cash (used) provided by operating activities		(147.1	)		338.0			102.3			2.1
Investing activities
Acquisition of Aleris International, Inc.		(1,725.4	)		—			—			—
Purchase of businesses, net of cash acquired		—			(828.6	)		(317.7	)		6.0
Payments for property, plant and equipment		(10.7	)		(113.2	)		(62.1	)		(44.8	)
Proceeds from sale of property, plant and equipment		—			30.6			5.4			0.1
Proceeds from settlement of currency derivative financial instruments		—			9.8			—			—
Other		—			(1.1	)		0.5			(0.2	)
Net cash used by investing activities		(1,736.1	)		(902.5	)		(373.9	)		(38.9	)
Financing activities
Cash equity contribution		844.9			—			—			—
Net proceeds from (payments on) long-term revolving credit facilities		63.6			(97.2	)		212.4			17.8
Proceeds from issuance of long-term debt		1,567.8			1,151.0			29.1			137.4
Payments on long-term debt		(510.5	)		(328.8	)		(1.2	)		(125.0	)
Debt issuance costs		(85.3	)		(29.8	)		(1.8	)		(10.4	)
Decrease in restricted cash		—			3.6			9.8			13.0
Proceeds from exercise of stock options		—			1.4			13.6			6.1
Excess income tax benefits from exercise of stock options		—			3.6			—			—
Minority interests		—			(1.3	)		(0.7	)		(0.4	)
Other		—			(2.6	)		0.1			0.2
Net cash provided by financing activities		1,880.5			699.9			261.3			38.7
Effect of exchange rate differences on cash and cash equivalents		—			(13.4	)		(0.7	)		1.1
Net (decrease) increase in cash and cash equivalents		(2.7	)		122.0			(11.0	)		3.0
Cash and cash equivalents at beginning of period		128.8			6.8			17.8			14.8
Cash and cash equivalents at end of period	$	126.1		$	128.8		$	6.8		$	17.8

See Notes to Consolidated Financial Statements.

F-5

ALERIS INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY

(in millions)

	Common stock		Additional paid-in capital			Deferred compensation			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock			Total stockholder’s equity
Predecessor
Balance at January 1, 2004	$	1.7	$	103.3		$	(4.2	)	$	45.4		$	(4.8	)	$	(19.7	)	$	121.7
Comprehensive loss:
Net loss		—		—			—			(23.8	)		—			—			(23.8	)
Other comprehensive income (loss):
Deferred hedging loss, net of tax of $0.8		—		—			—			—			(4.1	)		—			(4.1	)
Minimum pension liability adjustment, net of tax of $1.0		—		—			—			—			(1.5	)		—			(1.5	)
Currency translation adjustments		—		—			—			—			6.2			—			6.2
Comprehensive loss																			(23.2	)
Issuance of common stock for services		—		0.1			—			—			—			—			0.1
Exercise of stock options		—		(1.3	)		—			—			—			7.4			6.1
Issuance of common stock for vested stock units		—		0.4			—			—			—			1.8			2.2
Forfeiture of non-vested stock		—		0.8			0.8			—			—			(1.6	)		—
Deferred compensation expense		—		—			3.5			—			—			—			3.5
Stock issued in connection with ESPP		—		(0.1	)		—			—			—			0.3			0.2
Acquisition of Commonwealth Industries, Inc.		1.4		174.6			(3.9	)		—			—			—			172.1
Balance at December 31, 2004	$	3.1	$	277.8		$	(3.8	)	$	21.6		$	(4.2	)	$	(11.8	)	$	282.7
Comprehensive loss:
Net income		—		—			—			74.3			—			—			74.3
Other comprehensive income (loss):
Deferred hedging gain, net of tax of $9.2		—		—			—			—			17.7			—			17.7
Minimum pension liability adjustment, net of tax of $0.8		—		—			—			—			(1.6	)		—			(1.6	)
Currency translation adjustments		—		—			—			—			(6.6	)		—			(6.6	)
Comprehensive income																			83.8
Issuance of common stock for services		—		0.2			—			—			—			—			0.2
Exercise of stock options, including tax benefits of $9.6		—		14.2			—			—			—			9.0			23.2
Deferred compensation expense		—		—			3.5			—			—						3.5
Stock issued in connection with ESPP		—		0.1			—			—			—			0.1			0.2
Unearned compensation related to issuance of non-vested common stock		—		3.4			(5.6	)		—			—			2.2			—
Purchase of common stock for treasury		—		—			—			—			—			(0.3	)		(0.3	)
Other		—		—			—			—			—			0.5			0.5
Balance at December 31, 2005	$	3.1	$	295.7		$	(5.9	)	$	95.9		$	5.3		$	(0.3	)	$	393.8
Comprehensive loss:
Net income		—		—			—			73.7			—			—			73.7
Other comprehensive income (loss):
Deferred hedging loss, net of tax of $10.0		—		—			—			—			(16.5	)		—			(16.5	)
Currency translation adjustments		—		—			—			—			17.2			—			17.2
Comprehensive income																			74.4
Impact of adoption of SFAS No. 123(R)		—		(5.9	)		5.9			—			—			—			—
Issuance of common stock for services		—		0.6			—			—			—			—			0.6
Exercise of stock options, including tax benefits of $3.6		—		4.6			—			—			—			0.4			5.0
Stock-based compensation expense		—		21.5			—			—			—			—			21.5
Purchase of common stock for treasury		—		—			—			—			—			(2.7	)		(2.7	)
Other		—		—			—			—			—			(0.5	)		(0.5	)
Balance at December 19, 2006	$	3.1	$	316.5		$	—		$	169.6		$	6.0		$	(3.1	)	$	492.1
Successor
Equity contribution from Holdings	$	—	$	848.8		$	—		$	—		$	—		$	—		$	848.8
Net loss		—		—			—			(3.4	)		—			—			(3.4	)
Balance at December 31, 2006	$	—	$	848.8		$	—		$	(3.4	)	$	—		$	—		$	845.4

See Notes to Consolidated Financial Statements.

F-6

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share data)

A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

On July 14, 2006, Texas Pacific Group (“TPG”) formed Aurora Acquisition Holdings, Inc. (“Holdings”) and Aurora Acquisition Merger Sub, Inc. (“Merger Sub”), for purposes of acquiring Aleris International, Inc. (“we,” “our” or the “Company”). On August 7, 2006, we entered into an Agreement and Plan of Merger with Holdings, pursuant to which each share of our common stock (other than shares held in treasury or owned by Holdings) would be converted into the right to receive $52.50 in cash, subject to stockholder approval. The acquisition of the Company (the “Acquisition”) was completed on December 19, 2006 at which time TPG and certain members of our management made a cash contribution of $844.9 and a non-cash contribution of $3.9 to Holdings in exchange for 8,520,000 shares of Holdings stock. The non-cash contribution consisted of shares of common stock held by management. Holdings contributed this amount to Merger Sub in exchange for the Merger Sub issuing 900 shares of its common stock to Holdings. The cash contribution, along with the additional indebtedness jointly entered into by us and Merger Sub, was used to acquire and retire all of our then outstanding common stock, redeem all stock options and non-vested stock, refinance substantially all of our indebtedness and to pay fees and expenses associated with the Acquisition. The Acquisition is more fully described in Note B while the refinancing is more fully described in Note K. Immediately upon consummation of the Acquisition, the Merger Sub was merged with and into the Company. As the surviving corporation in the merger, we assumed, by operation of law, all of the rights and obligations of Merger Sub.

The Acquisition has been recorded as of December 19, 2006. The accompanying consolidated financial statements for the period from December 20, 2006 to December 31, 2006 (the “Successor” period) include the preliminary application of purchase accounting and the establishment of a new basis of accounting necessitated by the Acquisition. Certain of the notes to the consolidated financial statements also present information for the year ended December 31, 2006 on a combined basis as the separate disclosure of the Successor period is not material and would not be meaningful.

Nature of Operations

The principal business of the Company involves the production of rolled and extruded aluminum products as well as the recycling of aluminum and production of specification alloys. We are also involved in the recycling of zinc and the manufacture of zinc oxide and zinc dust. Our aluminum sheet products are sold to distributors and customers serving the transportation, construction, and consumer durables end-use industry segments. Our aluminum and zinc recycling operations consist primarily of purchasing scrap metal on the open market, recycling the metal and selling it in molten or ingot form. In addition, these operations recycle customer-owned aluminum scrap for a fee (tolling). Our recycling customers are some of the world’s largest aluminum, steel and automotive companies.

Use of Accounting Estimates

The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our most significant estimates relate to the valuation of property, plant and equipment, definite-lived intangible assets and goodwill, the assumptions and methodology used to assess hedge effectiveness regarding aluminum, zinc and natural gas futures contracts, forward contracts and options,

F-7

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

and the assumptions used to compute pension and postretirement benefit obligations, workers’ compensation liabilities, medical and environmental liabilities, deferred tax valuation allowances, and allowances for uncollectible accounts receivable.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Aleris and our majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. Investments in affiliated companies, owned 50% or less, are accounted for using the equity method.

Reclassifications

In 2006, we changed the presentation of the realized gains and losses associated with the settlement of derivative financial instruments which we do not treat as hedges under the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 133, “Accounting for Derivative Financial Instruments.” These amounts are included within “(Gains) losses on derivative financial instruments” in the consolidated statement of operations. Prior periods, which had included these realized gains and losses within “Cost of sales,” have been adjusted to conform to this presentation.

Certain other reclassifications have been made to prior years’ amounts to conform to the current year’s presentation.

Business Combinations

All business combinations are accounted for using the purchase method as proscribed by SFAS No. 141, “Business Combinations.” The purchase price paid, including direct expenses, is allocated to the assets acquired and liabilities assumed based on their estimated fair market values. Any excess purchase price over the fair value of the net assets acquired is recorded as goodwill while any deficiency of the purchase price, or negative goodwill, is first applied to reduce the fair values of acquired long-lived tangible and intangible assets and then as a credit in the consolidated statement of operations.

Revenue Recognition and Shipping and Handling Costs

Revenues are recognized when title transfers and risk of loss passes to the customer in accordance with the provisions of the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition.” In the case of rolled aluminum product and certain zinc sales, title and risk of loss do not pass until the product reaches the customer. For material that is tolled, revenue is recognized upon the performance of the tolling services for customers. Shipping and handling costs are included within Cost of sales in the consolidated statement of operations.

Cash Equivalents

All highly liquid investments with a maturity of three months or less when purchased are considered cash equivalents. The carrying amount of cash equivalents approximates fair value because of the short maturity of those instruments.

Restricted Cash

Cash we have that is not free and clear of encumbrances is classified as restricted cash. The proceeds from our 2004 variable rate Morgantown, Kentucky Solid Waste Disposal Facilities Revenue Bonds are restricted as to

F-8

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

use and must be expended for capital improvements at our Morgantown recycling facility. At December 31, 2006 and 2005, $2.1 and $2.0, respectively, of these proceeds had not been expended and remain classified as restricted cash. We also have $0.4 and $4.1 of restricted cash at December 31, 2006 and 2005, respectively, associated with our workers’ compensation programs. Our restricted cash balances are included within “Other assets” in the consolidated balance sheet.

Accounts Receivable Allowances and Credit Risk

We extend credit to our customers based on an evaluation of their financial condition; generally, collateral is not required. Substantially all of the accounts receivable associated with our European operations are insured against loss by third party credit insurers. We maintain an allowance against our accounts receivable for the estimated probable losses on uncollectible accounts and sales returns and allowances. The valuation reserve is based upon our historical loss experience, current economic conditions within the industries we serve as well as our determination of the specific risk related to certain customers. Accounts receivable are charged off against the reserve when, in management’s estimation, further collection efforts would not result in a reasonable likelihood of receipt. The movement of the accounts receivable allowances is as follows (there was no movement during the period of December 20, 2006 to December 31, 2006):

	(Predecessor)
	For the period from January 1, 2006 to December 19, 2006			For the year ended December 31
For the year ended December 31				2005			2004
Balance at beginning of the period	$	5.8		$	3.2		$	1.2
Expenses for uncollectible accounts		0.6			0.2			1.0
Expenses for sales returns and allowances		5.1			9.8			0.8
Receivables written off against the valuation reserve, net of recoveries		(7.9	)		(10.2	)		(0.9	)
Acquisitions		6.3			2.8			1.1
Balance at end of period	$	9.9		$	5.8		$	3.2

Concentration of credit risk with respect to trade accounts receivable is limited due to the large number of customers in various industry segments comprising our customer base. No single customer accounted for more than 10% of consolidated revenues in 2006, 2005 or 2004. Our global aluminum recycling and global zinc segments sell product to and provide tolling services for customers in the U.S. automotive industry. In 2006, sales to these customers comprised approximately 8% of our consolidated revenues and, at December 31, 2006, we estimate that approximately $65.0 of our trade accounts receivable was due from U.S. automotive producers or their direct suppliers. Although management currently believes that substantially all of the receivables due from these customers remain collectible, there can be no assurances that future results of operations and cash flows will not be negatively impacted if the current economic conditions facing the U.S. automotive industry do not improve.

Inventories

Our inventories are stated at the lower of cost or net realizable value. Cost is determined primarily on the average cost or specific identification method and includes material, labor and overhead related to the manufacturing process. The cost of inventories acquired in business combinations are recorded at fair value in accordance with SFAS No. 141. As a result of the Acquisition, all of our inventories were adjusted from their historical costs to fair value. This resulted in a preliminary increase of approximately $61.3 which is expected to be recognized as additional cost of sales primarily in the first quarter of 2007.

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Property, Plant and Equipment

Property, plant and equipment is stated at cost, net of asset impairments. The cost of property, plant and equipment of acquired businesses is typically determined by third party valuations and represents the fair value of the acquired assets at the time of acquisition. As a result of the Acquisition, all of our property, plant and equipment will be adjusted to fair value as valuations are finalized in 2007. Any changes from the historical values reflected as of December 31, 2006 will be recorded as an adjustment to goodwill.

The fair value of asset retirement obligations is capitalized to the related long-lived asset at the time the obligation is incurred and is depreciated over the remaining useful life of the related asset. Major renewals and improvements that extend an asset’s useful life are capitalized to property, plant and equipment. Major repair and maintenance projects, including the relining of our furnaces and reconditioning of our rolling mills, are expensed over periods not exceeding 24 months while normal maintenance and repairs are expensed as incurred. Depreciation is primarily computed using the straight-line method over the estimated useful lives of the related assets, as follows:

Buildings and improvements	5-39 years
Production equipment and machinery	2-20 years
Office furniture, equipment and other	3-10 years

The construction costs of landfills used to store by-products of the recycling process are depreciated as space in the landfills is used based on the unit of production method. Additionally, used space in the landfill is determined periodically either by aerial photography or engineering estimates.

Interest is capitalized in connection with the major construction projects. Capitalized interest costs are as follows:

	(Predecessor)
	For the period from January 1, 2006 to December 19, 2006		For the year ended December 31,
			2005		2004
Capitalized interest	$	2.5	$	1.3	$	0.4

Intangible Assets

Intangible assets are primarily related to trade names and customer relationships associated with our acquired businesses. Acquired intangible assets are recorded at their estimated fair value in the allocation of the purchase price paid and are amortized over their estimated useful lives, ranging from 5 to 30 years. As a result of the Acquisition, third party valuations of the acquired intangible assets will be performed in 2007. Any changes from the values of intangible assets currently included in our balance sheet will be recorded as an adjustment to goodwill. See Note H for additional information.

Impairment of Long-Lived Assets

We review our long-lived assets, including amortizable intangible assets, for impairment when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when the carrying amount of the assets exceeds the future undiscounted cash flows expected from the asset. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset and are included in “Restructuring and other charges” in the consolidated statement of operations. Fair value estimates of land and buildings are primarily made based on third party

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valuation assessments or quoted market prices while fair value estimates of machinery and equipment are based on the expected discounted cash flows of the impacted assets. See Note D for additional information.

Deferred Financing Costs

The costs related to the issuance of debt are capitalized and amortized over the lives of the related debt as interest expense using the effective interest method.

Research and Development

Research and development expenses primarily relate to expenses incurred under the terms of a five-year research and development agreement with Corus Group plc (“Corus”) pursuant to which Corus assists us in research and development projects on a fee-for-service basis. Research and development expenses were $8.7 in the period from January 1, 2006 to December 19, 2006 and were not material for any other period presented.

Goodwill

Goodwill is tested for impairment as of October 1 of each year and may be tested more frequently if changes in circumstances or the occurrence of events indicates that a potential impairment exists. We evaluate goodwill based upon our reporting units. Reporting units are defined as operating segments or, in certain situations, one level below the operating segment. The goodwill impairment test is a two-step process. The first step consists of estimating the fair value of each reporting unit based on a discounted cash flow model and comparing those estimated fair values with the carrying values, which includes allocated goodwill. If the determined fair value is less than the carrying value, a second step is performed to compute the amount of the impairment by determining an “implied fair value” of goodwill, which requires us to allocate the estimated fair value of the reporting unit to the assets and liabilities of the reporting unit. Any unallocated fair value represents the “implied fair value” of goodwill, which is compared to the corresponding carrying value. If the carrying value of goodwill exceeds its implied fair value, an impairment loss is recognized. Discounted cash flow models are used to determine the current fair value of the reporting units. The development of these models requires management to make significant assumptions and estimates to forecast future operating cash flows. Future actual operating results could differ from the estimates currently used and may result in the impairment of goodwill in future periods. See Note H for additional information.

In prior years, we performed our annual impairment test as of December 31. In 2006, we changed the measurement date for our annual goodwill impairment test to October 1 in order to provide additional time to quantify the fair value of our reporting units and to evaluate the results of the impairment testing. This change did not have an effect on our financial performance or results of operations, nor was there any impact on prior period financial statements under the requirements of SFAS No. 154, “Accounting Changes and Error Corrections.” Retrospective application, as required under SFAS No. 154, was not necessary as no impairment charges had been recorded in any previous financial statements (with the exception of a charge recorded in 2002 upon the initial adoption of SFAS No. 142, “Goodwill and Other Intangible Assets”) nor did the change in measurement date cause any impairments.

Stock-Based Compensation

On January 1, 2006, we adopted SFAS No. 123(R), “Share-Based Payment,” issued by the FASB in December 2004. Prior to January 1, 2006, we applied the intrinsic value provisions of Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” as permitted by SFAS No. 123 “Accounting for Stock-Based Compensation.” The provisions of SFAS No. 123(R) are similar to those of SFAS No. 123; however, SFAS No. 123(R) requires all share-based payments to employees, including grants of

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employee stock options, to be recognized in the financial statements as compensation cost based on their fair value on the date of grant. The fair value of share-based awards will be determined using option pricing models (e.g., Black-Scholes or binomial models) and assumptions that appropriately reflect the specific circumstances of the awards. Compensation cost will be recognized over the vesting period based on the fair value of awards that actually vest.

We elected to adopt the modified prospective transition method of SFAS No. 123(R). Under this method, stock-based compensation expense beginning as of January 1, 2006 includes compensation expense for all stock-based compensation awards granted prior to, but not yet vested as of, December 31, 2005 based on the grant date fair value estimated under the provisions of SFAS No. 123 and previously used to value the awards for the pro forma footnote disclosures required by SFAS Nos. 123 and 148. Compensation expense also includes the grant-date fair value for all stock-based compensation awards granted subsequent to December 31, 2005 estimated in accordance with SFAS No. 123(R). In addition, all remaining unamortized stock-based compensation expense previously included as a separate component of stockholder’s equity was reversed against “Additional paid-in-capital” on January 1, 2006.

As a result of adopting SFAS No. 123(R), income before income taxes and minority interests decreased by $5.3 and net income decreased by $3.3 for the period from January 1, 2006 to December 19, 2006. Total stock-based compensation expense for the period from January 1, 2006 and December 19, 2006, including amounts included within “Restructuring and other charges” in the consolidated statement of operations, was $21.5. In accordance with SFAS No. 123(R), the consolidated statement of cash flows reports the excess tax benefits from the stock-based compensation as cash flows from financing activities. Total stock-based compensation expense for the years ended December 31, 2005 and 2004 was $3.5 and $5.8, respectively. For the period from January 1, 2006 to December 19, 2006, $3.6 of excess tax benefits were reported as cash flows from financing activities.

Pursuant to the Acquisition, substantially all stock-based compensation awards were redeemed on December 19, 2006. Certain awards remained outstanding as of December 31, 2006, and the related compensation expense was fully accrued. These awards will be paid in 2007.

The following table sets forth the pro forma disclosure of net income for the years ended December 31, 2005 and 2004 as if compensation expense had been recognized for the fair value of stock-based compensation awards granted prior January 1, 2006.

	(Predecessor)
For the year ended December 31	2005			2004
Net income (loss), as reported	$	74.3		$	(23.8	)
Add: stock-based compensation expense included in reported net income (loss), net of tax		3.5			5.8
Less: compensation cost determined under the fair value method, net of tax		(6.9	)		(6.9	)
Pro forma net income (loss)	$	70.9		$	(24.9	)

Derivatives and Hedging

We are engaged in activities that expose us to various market risks, including changes in the prices of natural gas, primary aluminum, aluminum alloys, scrap aluminum, and zinc, as well as changes in currency and interest rates. These financial exposures are managed as an integral part of our risk management program, which seeks to reduce the potentially adverse effects that the volatility of the markets may have on operating results. We do not hold or issue financial instruments for trading purposes. We maintain a natural gas pricing strategy to minimize significant fluctuations in earnings caused by the volatility of gas prices. We also maintain a metal

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pricing strategy to minimize significant, unanticipated fluctuations in earnings caused by the volatility of aluminum and zinc prices and a currency hedging strategy to reduce the impact of fluctuations in currency rates related to purchases and sales of aluminum to be made in currencies other than our functional currencies. From time to time we will enter into interest rate swap or similar agreements to manage exposure to fluctuations in interest rates on our long-term debt. During 2006, we had designated a portion of our euro-denominated debt as a hedge of our net investment in certain European subsidiaries acquired from Corus. This debt was repaid as part of the refinancing associated with the Acquisition.

The fair values of our derivative financial instruments are recognized as assets or liabilities at the balance sheet date. For those derivative financial instruments that are accounted for as hedges, we measure the effectiveness of the hedging relationship by formally assessing, at least quarterly, the historical and probable future high correlation of changes in the expected cash flows of the hedges and the hedged items. The effective portions of the changes in the fair value of derivative instruments accounted for as cash flow hedges and net investment hedges are recorded on the consolidated balance sheet in “Accumulated other comprehensive income” and are reclassified to the statement of operations at the time the underlying transaction impacts income while the ineffective portions of the changes in fair value are recorded on the statement of operations within “(Gains) losses on derivative financial instruments.” The changes in fair value of derivative financial instruments accounted for as fair value hedges are recorded in “(Gains) losses on derivative financial instruments” along with the changes in the effective portions of underlying hedged item. The changes in fair value of derivative financial instruments that are not accounted for as hedges and the associated gains and losses realized upon settlement are recorded in “(Gains) losses on derivative financial instruments.” All realized gains and losses are included within “Cash flows provided by (used in) operating activities” in the consolidated statement of cash flows with the exception of the $9.8 realized gain from currency derivative financial instruments used to hedge a portion of the euro-denominated purchase price paid for Corus Aluminum. These gains are included in “Cash flows used in investing activities.” See Note R for additional information.

We are exposed to losses in the event of non-performance by counterparties to derivative contracts. Although non-performance by counterparties is possible, we do not currently anticipate any non-performance by any of these parties. Counterparties are evaluated for creditworthiness and risk assessment prior to our initiating contract activities. The counterparties’ creditworthiness is then monitored on an ongoing basis, and credit levels are reviewed to ensure that there is not an inappropriate concentration of credit outstanding to any particular counterparty.

Currency Translation

Our international subsidiaries use the local currency as their functional currency. Adjustments resulting from the translation of the assets and liabilities of our international operations into U.S. dollars at the balance sheet date exchange rates are reflected as a separate component of stockholders’ equity, except for current intercompany accounts and transactional gains and losses associated with receivables and payables denominated in currencies other than the functional currency, which are reflected in the consolidated statement of operations. Currency translation adjustments accumulate in consolidated equity until the disposition or liquidation of the international entities. The translation of current intercompany accounts and receivables and payables denominated in currencies other than the functional currencies did not have an material impact on our consolidated operating results for any period presented.

Self Insurance

We are substantially self-insured for losses related to workers’ compensation and health care claims. Provisions for losses are determined using estimates of the aggregate liability for claims incurred based on our loss experience and actuarial assumptions.

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Income Taxes

We account for income taxes using the liability method, whereby deferred income taxes reflect the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In valuing deferred tax assets, we use judgment in determining if it is more likely than not that some portion or all of a deferred tax asset will not be realized and the amount of the required valuation allowance.

Environmental and Asset Retirement Obligations

Environmental obligations that are not legal or contractual asset retirement obligations and that relate to existing conditions caused by past operations with no benefit to future operations are expensed while expenditures that extend the life, increase the capacity or improve the safety of an asset or that mitigate or prevent future environmental contamination are capitalized in property, plant and equipment. Obligations are recorded when their incurrence is probable and the associated costs can be reasonably estimated in accordance with the American Institute of Certified Public Accountants (AICPA) Statement of Position 96-1, “Environmental Remediation Liabilities.” While our accruals are based on management’s current best estimate of the future costs of remedial action, these liabilities can change substantially due to factors such as the nature and extent of contamination, changes in the required remedial actions and technological advancements. Our existing environmental liabilities are not discounted to their present values as the amount and timing of the expenditures are not fixed or reliably determinable.

In contrast to environmental remediation liabilities, which result from the improper operation of a long-lived asset (for example, ground water contamination or pollution arising from a past act), asset retirement obligations represent legal obligations associated with the retirement of tangible long-lived assets. Our asset retirement obligations relate primarily to the requirement to cap our two landfills as well as costs to remove underground storage tanks. The costs associated with such legal obligations are accounted for under the provisions of SFAS No. 143, “Accounting for Asset Retirement Obligations,” which requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred and capitalized as part of the carrying amount of the long-lived asset. The fair value of such obligations is based upon the present value of the future cash flows expected to be incurred to satisfy the obligation. Estimates of future cash flows are obtained primarily from independent engineering consulting firms. The present value of the obligations is accreted over time while the capitalized cost is depreciated over the useful life of the related asset.

Retirement, Early Retirement and Postemployment Benefits

As of December 31, 2006, our defined benefit pension and other post-retirement benefit plans are accounted for in accordance with SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R),” which was issued by the FASB in September 2006. The impact of the adoption of SFAS No. 158 is discussed under the New Accounting Pronouncements section of Note A.

Pension and post-retirement benefit obligations are actuarially calculated using management’s best estimates of assumptions which include the expected return on plan assets, the rate at which plan liabilities may be effectively settled (discount rate), health care cost trend rates and rates of compensation increases.

Benefits provided to certain of our European employees under early retirement plans are accounted for under Emerging Issues Task Force (EITF) No. 05-5, “Accounting for Early Retirement or Postemployment Programs with Specific Features (Such As Terms Specified in Altersteilzeit Early Retirement Arrangements).” Under EITF No. 05-5, liabilities to be paid after retirement are recorded over the remaining active service period upon enrollment in the plan.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Benefits provided to employees after employment but prior to retirement are accounted for under SFAS No. 112, “Employers’ Accounting for Postemployment Benefits.” Such postemployment benefits include severance and medical continuation benefits that are offered pursuant to an ongoing benefit arrangement and do not represent a one-time benefit termination arrangement. Under SFAS No. 112, liabilities for postemployment benefits are recorded at the time the obligations are probable of being incurred and can be reasonably estimated. This is typically at the time a triggering event occurs, such as the decision by management to close a facility. Benefits related to the relocation of employees and certain other termination benefits are accounted for under SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” and are expensed as incurred.

General Guarantees and Indemnifications

It is common in long-term processing agreements for us to agree to indemnify customers for tort liabilities that arise out of, or relate to, the processing of their material. Additionally, we typically indemnify such parties for certain environmental liabilities that arise out of or relate to the processing of their material.

In our equipment financing agreements, we typically indemnify the financing parties, trustees acting on their behalf and other related parties against liabilities that arise from the manufacture, design, ownership, financing, use, operation and maintenance of the equipment and for tort liability, whether or not these liabilities arise out of or relate to the negligence of these indemnified parties, except for their gross negligence or willful misconduct.

We expect that we would be covered by insurance (subject to deductibles) for most tort liabilities and related indemnities described above with respect to equipment we lease and material we process.

In financing transactions that include loans from banks in which the interest rate is based on LIBOR, we typically agree to reimburse the lenders for certain increased costs that they incur in carrying these loans as a result of any change in law and for any reduced returns with respect to these loans due to any change in capital requirements. We had $1,558.6 of floating rate debt outstanding at December 31, 2006.

Although we cannot estimate the potential amount of future payments under the foregoing indemnities and agreements, we are not aware of any events or actions that will require payment.

New Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 158, which requires employers to recognize the funded status of defined benefit pension and other postretirement benefit plans as the difference between plan assets at fair value and the projected benefit obligation. Unrecognized gains or losses and prior service costs, as well as the transition asset or obligation remaining from the initial applications of SFAS Nos. 87 and 106 will be recognized in the consolidated balance sheet, net of tax, as a component of Accumulated other comprehensive income and will be subsequently recognized as components of net periodic benefit cost pursuant to the recognition and amortization provisions of those Statements. In addition, SFAS No. 158 requires additional disclosures about the future effects on net periodic benefit cost that arise from the delayed recognition of gains or losses, prior service costs or credits, and transition asset or obligation. SFAS No. 158 also requires that defined benefit plan assets and obligations be measured as of the date of the employer’s fiscal year-end balance sheet. The recognition and disclosure provisions of SFAS No 158 are effective for fiscal years ending after December 15, 2006. The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end balance sheet is effective for fiscal years ending after December 15, 2008.

The Company adopted SFAS No. 158 as of December 31, 2006, however, as a result of the Acquisition, the adoption had no effect on our consolidated financial position, results of operations, or cash flows. Under the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

provisions of SFAS No. 141, we valued the obligations under our pension and other postretirement benefit plans at fair value as of December 19, 2006. The definition of fair value as used in SFAS No. 141 is consistent with the measurement principles of SFAS No. 158 and, as a result, no adjustment upon the adoption of SFAS No. 158 was necessary. Further, all unrecognized actuarial gains and losses previously included in “Accumulated other comprehensive income” were eliminated as a result of the Acquisition.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the U.S., and expands disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We are currently evaluating the impact that the adoption of SFAS No. 157 will have on our financial position, results of operations and cash flows.

In September 2006, the SEC issued SAB No. 108, “Considering the Effects of Prior Year Misstatement in Current Year Financial Statements.” SAB No. 108 provides guidance on quantifying financial statement misstatements, including the effects of prior year errors on current year financial statements. SAB No. 108 is effective for fiscal years ending after November 15, 2006. We adopted SAB No. 108 as of December 31, 2006 with no impact to our consolidated financial position, results of operations or cash flows.

In July 2006, the FASB issued FASB Interpretation (FIN) No. 48, “Accounting for Uncertainty in Income Taxes-an Interpretation of FASB Statement No. 109.” FIN No. 48 clarifies the recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. In addition, FIN No. 48 requires that the cumulative effect of adoption be recorded as an adjustment to the opening balance of retained earnings. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. We will adopt this interpretation as required and are currently in the process of documenting and quantifying the financial impact of FIN No. 48 but have not yet completed the analysis of the potential impact that FIN No. 48 will have on our consolidated financial position, results of operations, or cash flows.

In November 2004, the FASB issued SFAS No. 151, “Inventory Costs, an amendment of ARB No. 43, Chapter 4.” The amendments made by SFAS No. 151 clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted materials should be recognized as current-period charges and require the allocation of fixed production overhead to inventory to be based on the normal capacity of the underlying production facilities. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. We adopted the provisions of this statement effective January 1, 2006, the effect of which do not have an impact on our consolidated financial position, results of operations, or cash flows.

B. ACQUISITION OF THE COMPANY

As discussed in Note A, on December 19, 2006, Holdings acquired all outstanding common stock, non-vested shares and stock options for a cash purchase price of approximately $1,725.4, including acquisition related expenses of $25.7. In addition, 185,017 share units outstanding as of the Acquisition date will be paid in 2007 at a per share price of $52.50.

The purchase price paid, including acquisition related expenses, was funded through the $842.0 cash equity contribution made by TPG as well as the proceeds from the refinancing of substantially all of our outstanding indebtedness. See Note K for additional information.

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The purchase price has been allocated based on the estimated fair values of the assets acquired and liabilities assumed. The purchase price allocation is preliminary and a final determination of required purchase accounting adjustments will be made upon the completion of an independent appraisal of the fair value of related long-lived tangible and intangible assets, the determination of the fair value of certain other acquired assets and liabilities, the completion of our integration plans, the finalization of the purchase price paid to acquire the downstream aluminum business of Corus Group plc (see Note C for additional information) and the final determination of the related deferred tax assets and liabilities. The resulting goodwill will not be deductible for tax purposes. The pro forma effects of the Acquisition are included in the pro forma financial information presented in Note C.

The following presents the preliminary allocation of the purchase price:

Net current assets	$	932.3
Property, plant and equipment		1,217.3
Goodwill		1,362.4
Other assets		125.3
Long-term debt		(1,467.1	)
Accrued pension and post-retirement benefits		(236.7	)
Other long-term liabilities		(208.1	)
Cash paid	$	1,725.4

C. ACQUISITIONS

2006 Acquisition

On August 1, 2006, we acquired Corus’s downstream aluminum business (“Corus Aluminum”) for a cash purchase price of €695.5 (approximately $885.7), subject to adjustment based on the finalization of working capital delivered and net debt assumed. We currently estimate that the purchase price adjustment will be approximately $65.0 (approximately €49.2) and have included this amount in our determination of the preliminary purchase price allocation presented below and as a current accrued liability in our consolidated balance sheet. We also paid acquisition related costs of $14.5. The acquisition included Corus’s aluminum rolling and extrusions business but did not include Corus’s primary aluminum smelters. Corus Aluminum generated revenues of approximately $1,850.0 in 2005. The acquisition of Corus Aluminum, which is included within our global rolled and extruded products segment, significantly expands our operational and geographic scale and scope, diversifies our customer mix and product breadth and provides us with industry-leading and proprietary manufacturing capabilities.

The consolidated financial statements include the results of Corus Aluminum from the date of acquisition. The purchase price has been allocated based on the estimated fair values of the assets acquired and liabilities assumed. The purchase price allocation is preliminary and a final determination of required purchase accounting adjustments will be made upon the finalization of the purchase price, the determination of the fair value of certain other acquired assets and liabilities, the completion of our integration plans and the final determination of the related deferred tax assets and liabilities. The resulting goodwill is not deductible for tax purposes. Pro forma financial information giving effect to the Corus Aluminum acquisition has been provided below.

The following table presents the preliminary allocation of the purchase price. Based on this preliminary allocation, the purchase price, including the $65.0 estimated purchase price adjustment, was $4.1 less than the fair value of the net assets acquired. As a result, long-lived tangible and intangible assets were reduced by the amount of the deficiency, or negative goodwill. However, these assets were subsequently adjusted to their full

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

fair value through the purchase price allocation described in Note B as the purchase price paid to acquire the Company exceeded the fair value of the net assets acquired.

Current assets	$	1,074.6
Property, plant and equipment		660.5
Intangible assets:
Customer contracts		33.4
Customer relationships		14.2
Technology		9.2
Other assets		52.9
Current liabilities		(530.0	)
Long-term debt		(67.4	)
Accrued pension and post-retirement benefits		(146.8	)
Other long-term liabilities		(135.4	)
Cash paid, including estimated purchase price adjustment	$	965.2
Less: cash acquired		(73.8	)
Cash paid, including estimated purchase price adjustment, net of cash acquired	$	891.4

The acquired customer relationships and contracts were being amortized over a weighted-average life of 6.4 years, representing the period of time economic benefits from these relationships and contracts are presumed to be realized. The acquired technology-related intangible assets were being amortized over a weighted-average life of 8.9 years.

2005 Acquisitions

On October 3, 2005, we acquired all of the issued and outstanding stock of ALSCO Holdings, Inc. (“ALSCO”), the parent company of ALSCO Metals Corporation. ALSCO Metals Corporation is headquartered in Raleigh, North Carolina and is one of North America’s largest suppliers of aluminum building products with an aluminum rolling facility in Richmond, Virginia and coating and fabrication facilities located in Roxboro, North Carolina, Ashville, Ohio and Beloit, Wisconsin. The acquisition of the ALSCO facilities, which have been included in the global rolled and extruded products segment, broadens the spectrum of products offered by that segment. As part of the integration of the ALSCO facilities, we closed the Carson, California rolled products facility. See Note D for additional information.

The aggregate purchase price was approximately $144.0, which consisted of $100.0 of additional borrowings under our senior credit facility and $44.0 of cash on hand.

The consolidated financial statements include the results of ALSCO from the date of acquisition. The purchase price has been allocated based on the estimated fair values of the assets acquired and liabilities assumed. The resulting goodwill is not deductible for tax purposes. Pro forma financial information for the acquisition of ALSCO has been provided below.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the final allocation of the purchase price:

Current assets	$	87.8
Property and equipment		47.3
Intangible assets		23.3
Goodwill		56.0
Current liabilities		(32.2	)
Long-term debt		(1.3	)
Accrued pension and post-retirement benefits		(12.7	)
Other long-term liabilities		(24.2	)
Cash paid	$	144.0
Less: Cash acquired		1.3
Cash paid, net of cash acquired	$	142.7

On August 23, 2005, we acquired Tomra Latasa Reciclagem (“Tomra Latasa”), an aluminum recycler located in Sao Paulo, Brazil. The acquisition has provided us with greater access to aluminum scrap, complementary manufacturing operations and stronger customer relationships. The purchase price paid, net of acquired cash, totaled $17.4. The purchase price allocation resulted in goodwill of $8.2. This goodwill was attributed to our global recycling reportable segment and is not deductible for tax purposes.

On December 12, 2005, we acquired Alumitech, Inc. (“Alumitech”), an aluminum recycler and processor of salt cake, a by-product of the recycling process which contains additional aluminum concentrates. The acquisition of Alumitech provides us access to additional recycling capacity for the processing of the saltcake generated by our recycling and rolled products operations as well as additional aluminum recycling capacity. The purchase price paid, net of acquired cash, totaled $29.4. The purchase price allocation resulted in goodwill of $4.3. This goodwill was attributed to our global recycling reportable segment and is not deductible for tax purposes.

On December 20, 2005, we acquired certain assets of Ormet Corporation. The acquired assets included the inventory, accounts receivable and certain long-lived assets of Ormet’s closed aluminum rolling operations in Hannibal, Ohio, an aluminum blanking operation in Terre Haute, Indiana and an aluminum recycling facility in Friendly, West Virginia. The purchase price totaled $126.8. The purchase price allocation resulted in goodwill of $47.5 which has been recorded in the global rolled and extruded products operating segment and is deductible for tax purposes.

Unaudited Pro Forma Information

The following unaudited pro forma financial information for the years ended December 31, 2006 and 2005 presents our combined results of operations as if the Acquisition and related refinancing as well as the acquisitions of Corus Aluminum, ALSCO, Tomra Latasa, and Alumitech, Inc. had occurred on January 1, 2005. The unaudited pro forma information is not necessarily indicative of the consolidated results of operations that would have occurred had the acquisitions been made at the beginning of the period presented or the future results of combined operations.

	Year ended December 31,
	2006		2005
Revenues	$	6,027.7	$	4,561.7
Gross profit		532.5		431.3
Net income (loss)		9.3		(30.3	)

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

D. RESTRUCTURING AND OTHER CHARGES

2006 Restructuring Activities and Other Charges

We modified the vesting provisions of certain share units in connection with the Acquisition and recorded $0.5 of additional compensation expense associated with the modifications within “Restructuring and other charges.” In addition, as the outstanding stock options and non-vested shares were, by the terms of those agreements, immediately vested upon the change in control, we accelerated the expensing of these awards as well as the original fair value of the share units. The accelerated vesting resulted in $10.3 of compensation expense being recorded within “Restructuring and other charges.” In addition to these charges, we incurred $20.5 of expenses associated with the proxy solicitation to our former stockholders and $5.5 of bridge loan commitment fees associated with the refinancing which have been included within “Restructuring and other charges.” The bridge loan commitment fees were expensed and paid during the Successor period.

During the fourth quarter, we recorded asset impairment charges of $5.0 associated with certain assets within our global recycling segment. We based the determination of the impairment of the machinery and equipment on the discounted cash flows expected to be realized from the effected assets. In addition, we recorded $0.8 of employee severance and benefit costs associated primarily with the realignment of our operating segments as a result of our acquisition of Corus Aluminum. All affected employees have left their positions as of December 31, 2006.

The following table presents the activity and reserve balances for the 2006 restructuring programs for the year ended December 31, 2006:

For the year ended December 31, 2006 (Combined)	Employee severance and benefit costs		Asset impairments			Fees and expenses associated with the Acquisition			Modification and acceleration of stock-based compensation expense			Total
Initial Provision	$	0.8	$	5.0		$	26.0		$	10.8		$	42.6
Cash payments		—		—			(24.0	)		—			(24.0	)
Non-cash charges		—		(5.0	)		—			(10.8	)		(15.8	)
Balance at December 31, 2006	$	0.8	$	—		$	2.0		$	—		$	2.8

2005 Restructuring Activities and other changes

During the fourth quarter of 2005, we announced the closure of our rolled products facility located in Carson, California as the first phase of our plan to integrate ALSCO. We recorded charges of $24.3 related to the closure in the year ended December 31, 2005 consisting of the following: $16.3 for impairments of machinery and equipment; $5.5 for employee severance, health care continuation and outplacement costs associated with approximately 157 hourly and salaried employees; and $2.5 for exit costs related to environmental remediation. All employees have left their positions as of December 31, 2006. We based the determination of the impairment of the machinery and equipment on the discounted cash flows expected to be realized from the assets to be scrapped. No impairment charge was recorded for assets that were moved to other Aleris facilities as the expected undiscounted cash flows of those assets are sufficient to recover their carrying value.

During the period from January 1, 2006 to December 19, 2006, we reversed approximately $3.2 of the employee severance and environmental accruals established in 2005 and recorded additional asset impairments of $0.9 and other exit costs of $1.6 primarily associated with various contractual obligations at the Carson

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

facility. We sold the Carson facility in the fourth quarter of 2006 and recorded a $13.8 gain within “Other (income) expense” in the consolidated statement of operations.

In the first quarter of 2005, management determined that certain idled assets at our Wendover, Utah recycling facility would not be relocated and utilized at one of our other recycling facilities. As a result, we determined that the book value of these assets was not supportable by the estimated future cash flows and recorded a $0.8 non-cash impairment charge to reduce the assets to their estimated fair values.

As a result of the acquisition of Tomra Latasa, we incurred restructuring charges of $0.4 related to employee severance costs. All affected employees had left their positions as of December 31, 2005.

The following tables present the activity and reserve balances for the 2005 restructuring programs for the years ended December 31, 2006 and 2005:

For the year ended December 31, 2005 (Predecessor)	Employee severance and benefit costs			Asset impairments			Exit costs			Total
Initial Provision	$	5.9		$	17.1		$	2.5		$	25.5
Cash payments		(0.3	)		—			—			(0.3	)
Non-cash charges		—			(17.1	)		—			(17.1	)
Balance at December 31, 2005	$	5.6		$	—		$	2.5		$	8.1
For the year ended December 31, 2006 (Combined)	Employee severance and benefit costs			Asset impairments			Exit costs			Total
Balance at December 31, 2005	$	5.6		$	—		$	2.5		$	8.1
Cash payments		(4.2	)		—			(0.7	)		(4.9	)
(Credits) charges recorded in the statement of operations		(1.4	)		0.9			(0.2	)		(0.7	)
Non-cash charges		—			(0.9	)		—			(0.9	)
Balance at December 31, 2006	$	—		$	—		$	1.6		$	1.6

2004 Restructuring Activities

As a result of the acquisition of Commonwealth Industries, Inc. (“Commonwealth”), we relocated our corporate headquarters from Irving, Texas to Beachwood, Ohio in 2004 to restructure and consolidate certain duplicative administrative functions. The charges related to these restructuring initiatives, including the termination of certain executives of Aleris concurrent with the acquisition, totaled $10.8 in 2004 for severance and medical continuation benefits as well as the acceleration of the vesting of outstanding non-vested shares and share units. The charges covered the reduction of 47 corporate personnel, including our former interim chief executive officer and former chief financial officer. All effected employees have left their positions as of December 31, 2006. In 2005, we incurred additional charges related to the resignation of the former president of our aluminum recycling business, the relocation of certain Aleris personnel incidental to the acquisition and severance costs which were not accruable at December 31, 2004. During the third quarter of 2005, we terminated the operating lease agreement at our former Irving, Texas headquarters and incurred lease termination and asset impairment charges totaling $1.6.

Due to the continuing operating losses experienced by our Shelbyville, Tennessee facility, we performed an impairment evaluation of the related assets in the fourth quarter of 2004. As a result, we recorded a $3.7 impairment charge to write down the assets to their estimated fair values at December 31, 2004. We based fair

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

value on appraisals of the land and buildings and a discounted cash flow analysis of the machinery and equipment. Also during the fourth quarter of 2004, we decided to permanently close our Rockwood, Tennessee facility, which had been idled since August 2003. We recorded a $0.4 impairment charge to write down the affected assets to their estimated fair values.

The following tables present the activity and reserve balances for the 2004 restructuring programs, including those established in the allocation of the purchase price of Commonwealth, for the years ended December 31, 2004, 2005 and 2006:

Year ended December 31, 2004 (Predecessor)	Employee severance and benefit costs			Accelerated stock-based compensation expense			Asset impairments			Lease termination costs			Total
Charges recorded in the statement of operations	$	7.2		$	3.5		$	4.2		$	—		$	14.9
Charges recorded in the allocation of the Commonwealth purchase price		7.8			—			—			—			7.8
Cash payments		(9.2	)		—			—			—			(9.2	)
Non-cash charges		—			(3.5	)		(4.2	)		—			(7.7	)
Balance at December 31, 2004	$	5.8		$	—		$	—		$	—		$	5.8
Year ended December 31, 2005 (Predecessor)	Employee severance and benefit costs			Accelerated vesting of non- vested shares and units			Asset impairments			Lease termination costs			Total
Balance at December 31, 2004	$	5.8		$	—		$	—		$	—		$	5.8
Charges recorded in the statement of operations		2.8			—			0.4			1.2			4.4
Charges recorded in the allocation of the Commonwealth purchase price		1.0			—			—			—			1.0
Cash payments		(8.2	)		—			—			(1.2	)		(9.4	)
Non-cash charges		—			—			(0.4	)		—			(0.4	)
Balance at December 31, 2005	$	1.4		$	—		$	—		$	—		$	1.4
Year ended December 31, 2006 (Combined)	Employee severance and benefit costs			Accelerated vesting of non- vested shares and units			Asset impairments			Lease termination costs			Total
Balance at December 31, 2005	$	1.4		$	—		$	—		$	—		$	1.4
Cash payments		(1.1	)		—			—			—			(1.1	)
Balance at December 31, 2006	$	0.3		$	—		$	—		$	—		$	0.3

E. SPONSOR MANAGEMENT FEE

In connection with the Acquisition, we entered into a management services agreement with affiliates of TPG pursuant to which we paid TPG $22.6 in cash in connection with the refinancing, which has been capitalized as deferred financing costs, and $22.6 associated with the Acquisition, which has been included within the direct costs of the Acquisition. In addition, pursuant to the agreement, and in exchange for consulting and management advisory services that will be provided to us by TPG and its affiliates, affiliates of TPG will receive an aggregate

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

management fee equal to $9.0 per annum; provided that in the event TPG or any of its affiliates increases its equity contribution to Aleris, the management fee will be increased proportionately to reflect such increased equity commitment. The management services agreement also will provide that affiliates of TPG will receive a success fee equal to up to four times the management fee in effect at such time in connection with certain sales or an initial public offering as well as fees in connection with certain financing, acquisition or disposition transactions. An affiliate of TPG will advise us in connection with financing, acquisition, disposition and change of control transactions involving us or any of our direct or indirect subsidiaries, and we will pay to the affiliate of TPG an aggregate fee in connection with any such transaction equal to customary fees charged by internationally-recognized investment banks for serving as a financial advisor in similar transactions, such fee to be due and payable for the foregoing services at the closing of any such transaction. Affiliates of TPG will also receive reimbursement for out-of-pocket expenses incurred by them or their affiliates in connection with providing services pursuant to the management services agreement.

F. INVENTORIES

As discussed in Note A, as a result of the Acquisition, we revalued our inventories to their estimated fair values and increased our inventory balances by $61.3. The components of our consolidated “Inventories” are:

	(Successor)		(Predecessor)
December 31	2006		2005
Finished goods	$	344.4	$	126.7
Raw materials		369.3		145.6
Work in process		270.7		113.8
Supplies		39.2		18.7
	$	1,023.6	$	404.8

G. PROPERTY, PLANT AND EQUIPMENT

As discussed in Note A, as a result of the Acquisition all of our property, plant and equipment will be revalued to fair value in 2007. This revaluation is subject to the completion of independent appraisals. While a significant amount of our property, plant and equipment has recently been revalued to appraised values through the purchase price allocations discussed in Note C, the values included within our consolidated balance sheet as of December 31, 2006 and our future depreciation expense may change materially as a result of the Acquisition. The components of our consolidated “Property, plant and equipment” are:

	(Successor)			(Predecessor)
December 31	2006			2005
Land	$	121.1		$	74.3
Buildings and improvements		254.4			171.1
Production equipment and machinery		819.4			541.8
Office furniture, equipment and other		33.1			31.2
	$	1,228.0		$	818.4
Accumulated depreciation		(4.9	)		(280.6	)
	$	1,223.1		$	537.8

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Our depreciation, including amortization of capital leases, and repair and maintenance expense was as follows:

	(Successor)		(Predecessor)
	For the period from December 20, 2006 to December 31, 2006		For the period from January 1, 2006 to December 19, 2006		For the year ended December 31,
					2005		2004
Depreciation expense	$	4.9	$	97.7	$	54.6	$	30.6
Repair and maintenance expense		3.3		86.3		56.1		34.8

H. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table details the changes in the carrying amount of goodwill for the year ended December 31, 2006. Due to the proximity of the Acquisition to December 31, 2006, the allocation of goodwill to our reporting units has not yet been determined. As a result, no goodwill is presented within our reportable segments as of December 31, 2006. We expect the allocation of goodwill to our reportable segments to be completed during 2007.

	Global rolled and extruded products			Global recycling			Global zinc			Unallocated goodwill		Total
Balance at January 1, 2005 (Predecessor)	$	—		$	42.0		$	21.9		$	—	$	63.9
Acquisitions		67.3			21.8			—			—		89.1
Translation and other adjustments		—			(0.2	)		—			—		(0.2	)
Balance at December 31, 2005 (Predecessor)	$	67.3		$	63.6		$	21.9			—	$	152.8
Translation and other adjustments		36.3			(6.1	)		—			—		30.2
Acquisition by Holdings		(103.6	)		(57.5	)		(21.9	)		1,362.4		1,179.4
Balance at December 31, 2006 (Successor)	$	—		$	—		$	—		$	1,362.4	$	1,362.4

The intangible assets included within our consolidated balance sheet as of December 31, 2006 reflect the intangible assets acquired through the acquisitions described in Note C but do not reflect any intangible assets resulting from the Acquisition. Appraisals of the acquired intangible assets associated with the Acquisition are expected to be completed in 2007 and may significantly increase our intangible assets and future amortization expense.

The following table details our other intangible assets as of December 31, 2006 and 2005:

	(Successor)								(Predecessor)
December 31	2006								2005
	Gross carrying amount		Accumulated amortization			Net Amount		Average life	Gross carrying amount		Accumulated amortization			Net Amount
Trade name and trademarks	$	7.8	$	—		$	7.8	30 years	$	7.9	$	(0.1	)	$	7.8
Technology		12.8		(0.1	)		12.7	12 years		0.4		—			0.4
Customer contracts		32.9		(0.2	)		32.7	5 years		1.6		(0.1	)		1.5
Customer relationships		31.1		(0.2	)		30.9	12 years		13.4		(0.2	)		13.2
	$	84.6	$	(0.5	)	$	84.1		$	23.3	$	(0.4	)	$	22.9

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents amortization expense, which has been classified within “Selling, general and administrative expense” in the consolidated statement of operations:

	(Successor)		(Predecessor)
	For the period from December 20, 2006 to December 31, 2006		For the period from January 1, 2006 to December 19, 2006		For the year ended December 31,
					2005		2004
Amortization expense	$	0.5	$	6.0	$	0.4	$	—

Amortization expense related to the intangible assets recorded as of December 31, 2006 for the next five years will total approximately $13.3 per year. However, as discussed above, actual amortization expense in those periods may increase substantially as a result of the Acquisition.

I. ACCRUED LIABILITIES

Accrued liabilities at December 31, 2006 and 2005 consisted of the following:

	(Successor)		(Predecessor)
December 31	2006		2005
Employee related costs	$	105.6	$	38.8
Estimated additional purchase price associated with Corus Aluminum acquisition		65.0		—
Current portion of accrued pension benefits		4.9		14.9
Current portion of accrued post-retirement benefits		4.0		4.0
Derivative financial instruments		23.7		11.3
Accrued taxes		26.8		8.7
Accrued interest		8.0		7.2
Other liabilities		100.7		50.5
	$	338.7	$	135.4

J. ASSET RETIREMENT OBLIGATIONS

Our asset retirement obligations consist of legal obligations associated with the closure of our active landfills and also include costs to remove underground storage tanks and other legal or contractual obligations associated with the ultimate closure of our manufacturing facilities. During 2006 and 2005, we revised the estimated costs to close our landfills and increased the liability for these obligations by $1.2 and $4.6, respectively. In addition, liabilities totaling $1.7 associated with the Carson, California rolling mill were included within the gain on the sale of that facility in December 2006. In 2005, we recorded liabilities of $1.7 for asset retirement obligations related to businesses acquired.

The changes in the carrying amount of asset retirement obligations for the years ended December 31, 2006, 2005 and 2004 are as follows:

	(Combined)			(Predecessor)
For the year ended December 31	2006			2005			2004
Balance at beginning of year	$	12.8		$	5.7		$	5.3
Revisions and liabilities incurred or sold		(0.5	)		7.4			—
Accretion expense		0.9			0.6			0.5
Payments		(1.2	)		(0.9	)		(0.1	)
Balance at end of year	$	12.0		$	12.8		$	5.7

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

K. LONG-TERM DEBT

Our long-term debt as of December 31, 2006 and 2005 is summarized as follows:

	(Successor)		(Predecessor)
December 31	2006		2005
Revolving Credit Facility	$	328.6	$	—
Term Loan Facility		1,225.0		—
9% Senior Notes, due December 15, 2014		600.0		—
10% Senior Subordinated Notes, due December 15, 2016		400.0		—
Amended and restated senior secured credit facility		—		263.3
Tendered 9% Senior Notes		—		125.0
Tendered 10 3/8% Senior Secured Notes		—		207.9
VAW-IMCO credit facilities		—		34.8
7.65% Morgantown, Kentucky Solid Waste Disposal Facilities Revenue Bonds—1996 Series, due May 1, 2016		5.7		5.7
7.45% Morgantown, Kentucky Solid Waste Disposal Facilities Revenue Bonds—1997 Series, due May 1, 2022		4.6		4.6
6% Morgantown, Kentucky Solid Waste Disposal Facilities Revenue Bonds—1998 Series, due May 1, 2023		4.1		4.1
Morgantown, Kentucky Solid Waste Disposal Facilities Revenue Bonds—2004 Series, due October 1, 2027 bearing interest at 3.75% at December 31, 2006		5.0		5.0
Other		15.0		1.4
Subtotal	$	2,588.0	$	651.8
Less current maturities		20.5		20.8
Total	$	2,567.5	$	631.0

December 2006 Refinancing

On December 19, 2006, in conjunction with the Acquisition, we amended and restated the $750.0 revolving credit facility entered into on August 1, 2006 in connection with the acquisition of Corus Aluminum (the “Revolving Credit Facility”) to, in part, increase the maximum borrowings by $100.0, subject to lender approval. In addition, we amended and restated the term loan facility entered into on August 1, 2006 in connection with the acquisition of Corus Aluminum to increase the maximum borrowings to $825.0 million and €303.0 (the “Term Loan Facility” and, together with the Revolving Credit Facility, the “2006 Credit Facilities”). We also issued $600.0 of senior notes (the “Senior Notes”) and $400.0 of senior subordinated notes (the “Senior Subordinated Notes”). We used proceeds from these facilities to refinance substantially all of our existing indebtedness and to fund a portion of the purchase price of the Acquisition. We incurred $85.3 of fees and expenses associated with the refinancing which have been capitalized as debt issuance costs.

Revolving Credit Facility. Our Revolving Credit Facility provides senior secured financing of up to $750.0. We and certain of our U.S. and international subsidiaries are borrowers under this Revolving Credit Facility. The availability of funds to the borrowers located in each jurisdiction is subject to a borrowing base for that jurisdiction, calculated on the basis of a predetermined percentage of the value of selected accounts receivable and U.S. and Canadian inventory, less certain ineligible amounts. Non-U.S. borrowers will also have the ability to borrow under this Revolving Credit Facility based on excess availability under the borrowing base applicable to U.S. borrowers, subject to certain sublimits. The Revolving Credit Facility provides for the issuance of up to

F-26

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

$50.0 of letters of credit as well as borrowings on same-day notice, referred to as swingline loans, and will be available in U.S. dollars, Canadian dollars, euros and certain other currencies. As of December 31, 2006, we estimate that our borrowing base would have supported borrowings of $722.6. After giving effect to the $328.6 of outstanding borrowings as well as outstanding letters of credit of $23.1, we had $370.9 available for borrowing as of December 31, 2006.

The Revolving Credit Facility provides that we have the right at any time to request up to $100.0 of additional commitments. The lenders do not have any obligation to provide any such additional commitments, and any increase in commitments will be subject to the absence of a default. If we request, and the lenders agree to provide, any such additional commitments, the Revolving Credit Facility size could be increased to up to $850.0, but our ability to borrow would still be limited by the applicable borrowing bases.

Borrowings under the Revolving Credit Facility bear interest at a rate equal to, at our option:

• in the case of borrowings in U.S. dollars, either (a) a base rate determined by reference to the higher of (1) Deutsche Bank’s prime lending rate and (2) the overnight federal funds rate plus 0.5%, plus an applicable margin or (b) a Eurodollar rate (adjusted for maximum reserves) determined by Deutsche Bank, plus an applicable margin;

• in the case of borrowings in euros, a euro LIBOR rate determined by Deutsche Bank, plus an applicable margin;

• in the case of borrowings in Canadian dollars, a Canadian prime rate, plus an applicable margin; or

• in the case of borrowings in other available currencies, a EURIBOR rate, plus an applicable margin.

The weighted average interest rate under the Revolving Credit Facility as of December 31, 2006 was 7.2%.

In addition to paying interest on outstanding principal under the Revolving Credit Facility, we are required to pay a commitment fee in respect of unutilized commitments of 0.25%, if the average utilization is 50% or more for any applicable period, or 0.375%, if the average utilization is less than 50% for the applicable period. We must also pay customary letter of credit fees and agency fees.

The Revolving Credit Facility is subject to mandatory prepayment with (i) 100% of the net cash proceeds of certain asset sales, subject to certain reinvestment rights; (ii) 100% of the net cash proceeds from issuances of debt, other than debt permitted under the Revolving Credit Facility; and (iii) 100% of the net cash proceeds from certain insurance and condemnation payments, subject to certain reinvestment rights. Mandatory prepayments with such proceeds are only required to the extent necessary to achieve a defined threshold liquidity level.

In addition, if at any time outstanding loans, unreimbursed letter of credit drawings and undrawn letters of credit under the Revolving Credit Facility exceed the applicable borrowing base in effect at such time, we are required to repay outstanding loans or cash collateralize letters of credit in an aggregate amount equal to such excess, with no reduction of the commitment amount. If the amount available under the Revolving Credit Facility is less than the greater of (x) $65.0 and (y) 10% of the total commitments under the Revolving Credit Facility or an event of default is continuing, we are required to repay outstanding loans with the cash we are required to deposit in collection accounts maintained with the agent under the Revolving Credit Facility.

We may voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans at any time without premium or penalty other than customary “breakage” costs with respect to Eurodollar, euro LIBOR and EURIBOR loans.

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

There is no scheduled amortization under the Revolving Credit Facility. The principal amount outstanding will be due and payable in full at maturity, on December 19, 2011.

The Revolving Credit Facility is secured, subject to certain exceptions (including appropriate limitations in light of U.S. federal income tax considerations on guaranties and pledges of assets by foreign subsidiaries, and certain pledges of such foreign subsidiaries’ stock, in each case to support loans to us or our domestic subsidiaries), by (i) a first-priority security interest in substantially all of our current assets and related intangible assets located in the U.S., substantially all of the current assets and related intangible assets of substantially all of our wholly-owned domestic subsidiaries located in the U.S., substantially all of our assets located in Canada as well as the assets of Aleris Switzerland GmbH (other than its inventory and equipment), (ii) a second-priority security interest in substantially all our fixed assets located in the U.S. and substantially all of the fixed assets of substantially all of our wholly-owned domestic subsidiaries located in the U. S., and (iii) the equity interests of certain of our foreign and domestic direct and indirect subsidiaries (including Aleris Deutschland Holding GmbH and Aleris Switzerland GmbH). The borrowers’ obligations under the Revolving Credit Facility will be guaranteed by certain of our existing and future direct and indirect subsidiaries. In addition, we will guarantee the obligations of the other borrowers under the Revolving Credit Facility.

The Revolving Credit Facility contains a number of covenants that, among other things and subject to certain exceptions, restrict our ability and the ability of our subsidiaries to:

• incur additional indebtedness;

• pay dividends on our capital stock and make other restricted payments;

• make investments and acquisitions;

• engage in transactions with our affiliates;

• sell assets;

• merge; and

• create liens.

Although the credit agreement governing the Revolving Credit Facility generally does not require us to comply with any financial ratio maintenance covenants, if the amount available under the Revolving Credit Facility is less than the greater of (x) $65.0 and (y) 10% of the total commitments under the Revolving Credit Facility at any time, a minimum fixed charge coverage ratio (as defined in the credit agreement) of at least 1.0 to 1.0 will apply. The credit agreement also contains certain customary affirmative covenants and events of default. We were in compliance with all of the covenants associated with the credit agreement as of December 31, 2006.

Term Loan Facility. Our Term Loan Facility is a seven-year credit facility maturing on December 19, 2013. The Term Loan Facility permits $825.0 in U.S. dollar borrowings and €303.0 in euro borrowings. We have borrowed the maximum amount under this Term Loan Facility, totaling approximately $1,225.0, as of December 31, 2006.

Borrowings under our Term Loan Facility bear interest, at our option, at:

• in the case of borrowing in U.S. dollars, either (a) a base rate determined by reference to the higher of (1) Deutsche Bank’s prime lending rate and (2) the overnight federal funds rate plus 0.5%, plus an applicable margin or (b) a Eurodollar rate (adjusted for maximum reserves) determined by Deutsche Bank, plus an applicable margin; or

• in the case of borrowings in euros, a euro LIBOR rate determined by Deutsche Bank, plus an applicable margin.

The applicable margin for borrowings by us in U.S. dollars under our Term Loan Facility is 1.38% with respect to base rate borrowings and 2.38% with respect to Eurodollar borrowings. The applicable margin for loans made

F-28

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

to Aleris Deutschland Holding GmbH in euros is 2.50%. At December 31, 2006, the weighted average interest rate for borrowings under the Term Loan Facility was 7.2%.

The Term Loan Facility is subject to mandatory prepayment with (i) 100% of the net cash proceeds of certain asset sales, subject to certain reinvestment rights; (ii) 100% of the net cash proceeds from issuances of debt, other than debt permitted under the Term Loan Facility; (iii) 100% of the net cash proceeds from certain insurance and condemnation payments, subject to certain reinvestment rights; and (iv) up to 50% (subject to certain reductions) of annual excess cash flow (as defined in the credit agreement for the Term Loan Facility).

We may voluntarily repay outstanding loans at any time without premium or penalty other than customary “breakage” costs with respect to Eurodollar and euro LIBOR loans.

The Term Loan Facility amortizes in equal quarterly installments in an aggregate annual amount equal to 1.0% of the original principal amount during the first 6 ³/4 years thereof, with the balance payable on the maturity date.

The Term Loan Facility is secured, subject to certain exceptions (including appropriate limitations in light of U.S. federal income tax considerations on guaranties and pledges of assets by foreign subsidiaries, and certain pledges of such foreign subsidiaries’ stock, in each case to support loans to us), by (i) a first-priority security interest in substantially all our fixed assets located in the U.S., substantially all of the fixed assets of substantially all of our wholly-owned domestic subsidiaries located in the U.S. and substantially all of the assets of Aleris Deutschland Holding GmbH and certain of its subsidiaries, (ii) a second priority security interest in all collateral pledged by us and substantially all of our wholly-owned domestic subsidiaries on a first-priority basis to lenders under the Revolving Credit Facility located in the U.S. and (iii) the equity interests of certain of our foreign and domestic direct and indirect subsidiaries (including Aleris Deutschland Holding GmbH and Aleris Switzerland GmbH). The borrowers’ obligations under the Term Loan Facility will be guaranteed by certain of our existing and future direct and indirect subsidiaries. In addition, we guarantee the obligations of Aleris Deutschland Holding GmbH under the Term Loan Facility.

The credit agreement governing the Term Loan Facility contains a number of negative covenants that are substantially similar to those governing the Senior Notes and certain other customary covenants and events of default. However, we are not required to comply with any financial ratio covenants, including the minimum fixed charge coverage ratio applicable to our Revolving Credit Facility.

Senior Notes. On December 19, 2006, Merger Sub, Inc. issued $600.0 aggregate original principal amount of 9.0% / 9.75% Senior Notes under a senior indenture (the “Senior Indenture”) with LaSalle Bank National Association, as trustee. As the surviving corporation in the Acquisition, we assumed all the obligations of Merger Sub under the Senior Indenture. The Senior Notes mature on December 15, 2014.

For any interest payment period through December 15, 2010, we may, at our option, elect to pay interest on the Senior Notes entirely in cash (“Cash Interest”), entirely by increasing the principal amount of the outstanding Senior Notes or by issuing additional Senior Notes (“PIK Interest”) or by paying 50% of the interest on the Senior Notes in Cash Interest and the remaining portion of such interest in PIK Interest . Cash Interest on the Senior Notes accrues at the rate of 9% per annum. PIK Interest on the Senior Notes accrues at the rate of 9.75% per annum. After December 15, 2010, we will make all interest payments on the Senior Notes entirely in cash. All Senior Notes mature on December 15, 2014 and have the same rights and benefits as the Senior Notes issued on December 19, 2006. Interest on the Senior Notes is payable semi-annually in arrears on each June 15 and December 15, commencing on June 15, 2007.

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Senior Notes are fully and unconditionally guaranteed on a joint and several unsecured, senior basis, by each of our restricted subsidiaries that are domestic subsidiaries and that guarantee our obligations under the 2006 Credit Facilities. The Senior Notes and the guarantees thereof are our and the guarantors’ unsecured, senior obligations and rank (i) equal in the right of payment with all of our and the guarantors’ existing and future senior indebtedness and other obligations, including any borrowings under our 2006 Credit Facilities and the guarantees thereof, that are not by their terms expressly subordinated in right of payment to the Senior Notes and the guarantors’ guarantee of the Senior Notes; and (ii) senior in right of payment to all of our and the guarantors’ existing and future subordinated indebtedness, including the Senior Subordinated Notes and the guarantees thereof . The Senior Notes also are effectively junior in priority to our and the guarantors’ obligations under all secured indebtedness, including our 2006 Credit Facilities, and any other secured obligations of ours, in each case, to the extent of the value of the assets securing such obligations. In addition, the Senior Notes are structurally subordinated to all existing and future liabilities, including trade payables, of our subsidiaries that are not providing guarantees.

We are not required to make any mandatory redemption or sinking fund payments with respect to the Senior Notes other than as set forth in the Senior Indenture relating to certain tax matters, but under certain circumstances, we may be required to offer to purchase Senior Notes as described below. We may from time to time acquire Senior Notes by means other than a redemption, whether by tender offer, in open market purchases, through negotiated transactions or otherwise, in accordance with applicable securities laws.

Except as described below, the Senior Notes are not redeemable at our option prior to December 15, 2010. From and after December 15, 2010, we may redeem the Senior Notes, in whole or in part, at a redemption price equal to 104.5% of principal amount, declining annually to 100% of the principal amount on December 15, 2012, plus accrued and unpaid interest, and Additional Interest (as defined in the Senior Indenture), if any, thereon to the applicable redemption date.

Prior to December 15, 2009, we may, at our option, subject to certain conditions, redeem up to 35% of the aggregate principal amount of Senior Notes at a redemption price equal to 109% of the aggregate principal amount thereof, plus accrued and unpaid interest, and Additional Interest, if any, thereon to the redemption date, with the net cash proceeds of one or more equity offerings of ours or any direct or indirect parent of ours to the extent such net proceeds are contributed to us. At any time prior to December 15, 2010, we also may redeem all or a part of the Senior Notes at a redemption price equal to 100% of the principal amount of Senior Notes redeemed plus an applicable premium, as provided in the Senior Indenture, as of, and accrued and unpaid interest and Additional Interest, if any, to the redemption date.

Upon the occurrence of a change of control (as defined in the Senior Indenture), each holder of the Senior Notes has the right to require us to repurchase some or all of such holder’s Senior Notes at a price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, and Additional Interest, if any, to the date of purchase.

The indenture governing the Senior Notes contains covenants that limit our ability and certain of our subsidiaries’ ability to:

• incur additional indebtedness;

• pay dividends on our capital stock or redeem, repurchase or retire our capital stock or subordinated indebtedness;

• make investments;

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

• create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries that are not guarantors of the Senior Notes;

• engage in transactions with our affiliates;

• sell assets, including capital stock of our subsidiaries;

• consolidate or merge;

• create liens; and

• enter into sale and lease back transactions.

The Senior Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all outstanding Senior Notes to be due and payable immediately.

Senior Subordinated Notes. On December 19, 2006, Merger Sub issued $400.0 aggregate original principal amount of 10.0% Senior Subordinated Notes under a senior subordinated indenture (the “Senior Subordinated Indenture”) with LaSalle Bank National Association, as trustee. As the surviving corporation in the Acquisition, we assumed all the obligations of Merger Sub under the Senior Subordinated Indenture. The Senior Subordinated Notes mature on December 15, 2016. Interest on the Senior Subordinated Notes is payable in cash semi-annually in arrears on each June 15 and December 15, commencing June 15, 2007.

The Senior Subordinated Notes are fully and unconditionally guaranteed, on a joint and several unsecured, senior subordinated basis, by each of our restricted subsidiaries that are domestic subsidiaries and that guarantee our obligations under the 2006 Credit Facilities. The Senior Subordinated Notes and the guarantees thereof are our and the guarantors’ unsecured, senior subordinated obligations and rank (i) junior to all of our and the guarantors’ existing and future senior indebtedness, including the Senior Notes and any borrowings under our 2006 Credit Facilities, and the guarantees thereof ; (ii) equally with any of our and the guarantors’ future senior subordinated indebtedness; and (iii) senior to any of our and the guarantors’ future subordinated indebtedness. In addition, the Senior Subordinated Notes are structurally subordinated to all existing and future liabilities, including trade payables, of our subsidiaries that are not providing guarantees.

We are not required to make any mandatory redemption or sinking fund payments with respect to the Senior Subordinated Notes, but, under certain circumstances, we may be required to offer to purchase Senior Subordinated Notes as described below. We may from time to time acquire Senior Subordinated Notes by means other than a redemption, whether by tender offer, in open market purchases, through negotiated transactions or otherwise, in accordance with applicable securities laws.

Except as described below, the Senior Subordinated Notes are not redeemable at our option prior to December 15, 2011. From and after December 15, 2011, we may redeem the Senior Subordinated Notes, in whole or in part, at a redemption price equal to 105.0% of principal amount, declining annually to 100% of principal amount on December 15, 2014, plus accrued and unpaid interest, and Additional Interest (as defined in the Senior Subordinated Indenture), if any, thereon to the applicable redemption date.

Prior to December 15, 2009, we may, at our option, subject to certain conditions, redeem up to 35% of the aggregate principal amount of Senior Subordinated Notes at a redemption price equal to 110.0% of the aggregate principal amount thereof, plus accrued and unpaid interest, and Additional Interest, if any, thereon to the redemption date, with the net cash proceeds of one or more equity offerings of ours or any direct or indirect parent of ours to the extent such net proceeds are contributed to us. At any time prior to December 15, 2011, we

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

also may redeem all or a part of the Senior Subordinated Notes at a redemption price equal to 100% of the principal amount of Senior Subordinated Notes redeemed plus an applicable premium, as provided in the Senior Subordinated Indenture, as of, and accrued and unpaid interest and Additional Interest, if any, to the redemption date.

Upon the occurrence of a change of control (as defined in the Senior Subordinated Indenture), we will make an offer to purchase all of the Senior Subordinated Notes at a price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, and Additional Interest, if any, to the date of purchase.

The indenture governing the Senior Subordinated Notes contains covenants substantially similar to those applicable to our Senior Notes described above. The Senior Subordinated Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all outstanding Senior Notes to be due and payable immediately, subject to certain exceptions.

August 2006 Refinancing

In connection with the acquisition of Corus Aluminum, we entered into the Revolving Credit Facility, the Term Loan Facility, and a temporary senior unsecured facility. In addition to funding the purchase price paid to acquire Corus Aluminum, we used the proceeds from these facilities to refinance substantially all of our then-existing indebtedness and to pay costs associated with the acquisition and new facilities. Amounts outstanding under our former facility were repaid and that agreement was terminated on August 1, 2006. We completed a cash tender offer and consent solicitation for the 9% senior notes due 2014 (the “9% Notes”) on August 1, 2006 and effected a legal defeasance on August 2, 2006 that resulted in the discharge of our obligations under the 9% Notes and the indenture governing the 9% Notes. We also completed a cash tender offer and consent solicitation for the 10 ³/8% senior secured notes due 2010 (the “10 ³/8% Notes”) on August 1, 2006, effected a covenant defeasance on August 2, 2006 that terminated our obligations with respect to substantially all of the remaining restrictive covenants on the 10 ³/8% Notes and effected the satisfaction and discharge of the indenture governing the 10 ³/8% Notes on October 20, 2006, including the release of all liens on the collateral securing the 10 ³/8% Notes. In addition, we repaid all of the amounts outstanding under the VAW-IMCO credit facilities and $59.0 of Corus Aluminum’s outstanding debt. As a result of these financing activities, we incurred prepayment penalties totaling $38.0 and wrote off $16.4 of unamortized debt issuance costs. The total charge of $54.4 has been recorded as “Loss on early extinguishment of debt” in the consolidated statement of operations. In addition, we incurred fees and expenses associated with the refinancing totaling $29.8. These costs were capitalized as debt issuance costs, amortized to interest expense through the date of the Acquisition and then eliminated in purchase accounting as a result of the refinancing of debt related to the Acquisition.

Maturities of Long-Term Debt

Scheduled maturities of our long-term debt subsequent to December 31, 2006 are as follows:

2007	$	20.5
2008		18.7
2009		12.3
2010		12.3
2011		340.9
After 2011		2,183.3
Total	$	2,588.0

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

L. EMPLOYEE BENEFIT PLANS

Defined Contribution Pension Plans

During 2006, we sponsored a profit-sharing retirement plan covering most of our employees in the global aluminum recycling and global zinc segments as well as certain corporate employees who met defined service requirements. Contributions were determined annually by the Board of Directors. Our profit sharing contributions for the period from January 1, 2006 to December 19, 2006 and for the years ended December 31, 2005 and 2004 were as follows:

	(Predecessor)
	For the period from January 1, 2006 to December 19, 2006		For the year ended December 31,
			2005		2004
Company profit sharing contributions	$	1.8	$	2.2	$	1.9

Subject to certain dollar limits, our employees were permitted to contribute a percentage of their salaries to this plan, and we would match a portion of the employees’ contributions. In addition, as part of the acquisitions of Commonwealth, ALSCO and Alumitech, we sponsor defined contribution plans covering certain employees of the global rolled and extruded products and global aluminum recycling segments as well as certain corporate employees. Our match of employees’ contributions under our defined contribution plans for the period from January 1, 2006 to December 19, 2006 and for the years ended December 31, 2005 and 2004 were as follows:

	(Predecessor)
For the year ended December 31	For the period from January 1, 2006 to December 19, 2006		For the year ended December 31,
			2005		2004
Company match of employee contributions	$	1.5	$	1.4	$	1.6

During the fourth quarter of 2006 and as part of our efforts to consolidate and standardize our benefit plan offerings to those employees not covered under collective bargaining agreements, the Compensation Committee of the Board of Directors approved a new defined contribution plan that covers substantially all U.S. employees not covered under such agreements. The new plan became effective on January 1, 2007 with the majority of the previous defined contribution plans merging into this new plan. The new plan provides both profit sharing and employee matching contributions as well as an age and salary based contribution. In conjunction with the introduction of this plan, we curtailed the Commonwealth Industries, Inc. Cash Balance Plan, a defined benefit pension plan which provides benefits to certain non-bargained for employees of Commonwealth hired prior to our acquisition of Commonwealth. Benefits will no longer accumulate under the Cash Balance Plan as a result of the curtailment. A gain totaling $1.6 was recorded in the period from January 1, 2006 to December 19, 2006 as a result of the curtailment of this plan. We do not expect that these changes in employee benefit plan offerings will materially change our total expense or cash payments as compared to historical levels.

Defined Benefit Pension Plans

Our U.S. and Canadian non-contributory defined benefit pension plans cover certain salaried and non-salaried employees at our corporate headquarters and global rolled and extruded products segment. The plan benefits are based on age, years of service and employees’ eligible compensation during employment for all employees not covered under a collective bargaining agreement and on stated amounts based on job grade and

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

years of service prior to retirement for non-salaried employees covered under a collective bargaining agreement. As discussed above, one of these plans was curtailed during 2006 and effectively replaced by an enhanced defined contribution plan.

Our German subsidiaries sponsor various defined benefit pension plans for their employees. These plans are based on final pay and service, but some senior officers are entitled to receive enhanced pension benefits. Benefit payments are financed, in part, by contributions to a relief fund which establishes a life insurance contract to secure future pension payments; however, the plans are substantially unfunded plans under German law. The unfunded accrued pension costs are covered under a pension insurance association under German law if we are unable to fulfill our obligations.

As a result of the Acquisition, all of our obligations under defined benefit pension plans were revalued to fair value in accordance with SFAS No. 141 and the unrecognized actuarial gains and losses previously included within “Accumulated other comprehensive income” in the consolidated balance sheet were eliminated. The requirement to value all of our obligations under defined benefit plans at fair value also resulted in the adoption of SFAS No. 158 having no effect on our obligations as of December 31, 2006.

The components of the net periodic benefit expense for the period from January 1, 2006 to December 19, 2006 and for the years ended December 31, 2005 and 2004 were as follows:

	(Predecessor)									(Predecessor)
	U.S. pension benefits									European and Canadian pension benefits
	For the period from January 1, 2006 to December 19, 2006			For the year ended December 31,						For the period from January 1, 2006 to December 19, 2006			For the year ended December 31,
				2005			2004						2005		2004
Service cost	$	3.4		$	3.0		$	0.2		$	2.4		$	0.6	$	0.5
Interest cost		7.1			6.8			0.6			5.7			0.9		0.9
Amortization of net (gain) loss		—			—			—			0.4			0.2		0.1
Expected return on plan assets		(7.8	)		(7.2	)		(0.6	)		(2.7	)		—		—
Curtailment gain recognized		(1.6	)		—			—			—			—		—
Net periodic benefit cost	$	1.1		$	2.6		$	0.2		$	5.8		$	1.7	$	1.5

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The changes in projected benefit obligations and plan assets during the years ended December 31, 2006 and 2005, using a year end measurement date, are as follows.

	U.S. pension benefits						European and Canadian pension benefits
	2006			2005			2006			2005
Change in projected benefit obligations
Projected benefit obligations at beginning of year	$	131.3		$	125.7		$	21.3		$	20.2
Acquisitions of ALSCO and Corus Aluminum		—			3.7			221.8			—
Plan curtailments		(3.2	)		—			—			—
Service cost		3.4			3.0			2.4			0.6
Interest cost		7.1			6.8			5.7			0.9
Actuarial loss		1.7			1.9			11.5			2.7
Benefits paid		(8.2	)		(9.8	)		(5.5	)		(0.4	)
Employee contributions		—			—			0.4			—
Translation and other		—			—			2.3			(2.7	)
Projected benefit obligations at end of year	$	132.1		$	131.3		$	259.9		$	21.3
Change in plan assets
Fair value of plan assets at beginning of year	$	90.5		$	89.6		$	0.5		$	0.2
Acquisitions of ALSCO and Corus Aluminum		—			2.1			97.4			—
Employer contributions		13.2			3.1			5.5			0.7
Actual return on plan assets		8.8			5.5			8.4			—
Employee contributions		—			—			0.4			—
Benefits paid		(8.2	)		(9.8	)		(5.5	)		(0.4	)
Translation and other		—			—			(3.1	)		—
Fair value of plan assets at end of year	$	104.3		$	90.5		$	103.6		$	0.5
Funded status
Fair value of plan assets less than projected benefit obligations	$	(27.8	)	$	(40.8	)	$	(156.3	)	$	(20.8	)
Unrecognized net actuarial loss		—			2.7			—			7.2
Net amount recognized	$	(27.8	)	$	(38.1	)	$	(156.3	)	$	(13.6	)
Amounts recognized in the consolidated balance sheet consist of:
Accrued benefit liability	$	(27.8	)	$	(39.0	)	$	(156.3	)	$	(17.6	)
Accumulated other comprehensive loss		—			0.6			—			2.6
Deferred income tax asset		—			0.3			—			1.4
Net amount recognized	$	(27.8	)	$	(38.1	)	$	(156.3	)	$	(13.6	)

The following table provides the amounts recognized in the consolidated balance sheet as of December 31, 2006 after the adoption of the recognition provisions of SFAS No. 158:

December 31, 2006	U.S. pension plans			European and Canadian pension plans
Current liabilities	$	—		$	(4.9	)
Non-current liabilities		(27.8	)		(151.4	)
Net amount recognized	$	(27.8	)	$	(156.3	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The accumulated benefit obligation of the U.S. and European and Canadian pension plans was $132.0 and $247.7, respectively, at December 31, 2006 and $128.6 and $17.6, respectively, at December 31, 2005.

Plan Assumptions. We are required to make assumptions regarding such variables as the expected long-term rate of return on plan assets and the discount rate applied to determine service cost and interest cost. Our objective in selecting a discount rate is to select the best estimate of the rate at which the benefit obligations could be effectively settled. In making this estimate, we use one of two methods depending on the size of the plan and the bond market in the resident country. For larger plans in countries with well-developed bond markets, including the U.S., projected cash flows are developed. These cash flows are matched with a yield curve based on an appropriate universe of high-quality corporate bonds. For other plans, discount rates are selected based on AA-rated bonds. Benchmark rates are adjusted based on the underlying duration of the plan’s liabilities and the resulting yields serve as the basis for determining our best estimate of the effective settlement rate.

Assumptions for long-term rate of return on plan assets are based upon historical returns, future expectations for returns for each asset class and the effect of periodic target asset allocation rebalancing. The results are adjusted for the payment of reasonable expenses of the plan from plan assets. The historical long-term return on the plans’ assets exceeded the selected rates and we believe these assumptions are appropriate based upon the mix of the investments and the long-term nature of the plans’ investments.

The weighted average assumptions used to determine benefit obligations are as follows:

	U.S. pension benefits				European and Canadian pension benefits
December 31	2006		2005		2006		2005
Discount rate	5.75	%	5.50	%	4.73	%	4.50	%
Rate of compensation increase, if applicable	4.49		3.75		3.14		3.00

The weighted average assumptions used to determine the net periodic benefit cost for the period from January 1, 2006 to December 19, 2006 and for the years ended December 31, 2005 and 2004 are as follows:

	U.S. pension benefits						European and Canadian pension benefits
	For the period from January 1, 2006 to December 19, 2006		For the year ended December 31,				For the period from January 1, 2006 to December 31, 2006		For the year ended December 31,
			2005		2004				2005		2004
Discount rate	5.50	%	5.49	%	5.50	%	4.75	%	5.00	%	5.00	%
Expected return on plan assets	8.23		8.23		8.50		6.48		3.50		3.50
Rate of compensation increase	3.77		3.75		3.75		3.00		3.00		3.00

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Plan Assets. The U.S. and Canadian pension plans’ assets consist primarily of equity securities guaranteed investment contracts and fixed income pooled accounts. The weighted average plan asset allocations at December 31, 2006 and 2005 and the target allocations are as follows:

	Percentage of plan assets
	2006		2005		Target Allocation
Asset Category:
Equity securities	58	%	57	%	59	%
Debt securities	31		43		31
Real Estate	6		—		5
Other	5		—		5
Total	100	%	100	%	100	%

Plan Contributions. Our funding policy for funded pensions is to make annual contributions based on advice from our actuaries and the evaluation of our cash position, but not less than minimum statutory requirements. Contributions for unfunded plans are equal to benefit payments. We expect to make $24.4 of contributions to our pension plans during the year ending December 31, 2007.

Expected Future Benefit Payments. The following benefit payments for our pension plans, which reflect expected future service, as appropriate, are expected to be paid for the periods indicated:

2007	$	18.6
2008		20.2
2009		20.4
2010		22.4
2011		22.4
2012-2016		127.6

Other Postretirement Benefit Plans

We maintain health care and life insurance benefit plans covering certain corporate and global rolled and extruded products employees hired prior to the acquisition of Commonwealth as well as certain employees of our Canadian operations. We accrue the cost of postretirement benefits within the covered employees’ active service periods. As with the defined benefit pension plans and as a result of the Acquisition, all of our obligations under other postretirement benefit plans were revalued to fair value in accordance with SFAS No. 141 and the unrecognized actuarial gains and losses previously included within “Accumulated other comprehensive income” in the consolidated balance sheet were eliminated.

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The financial status of the plans at December 31, 2006 and 2005, using a year end measurement date, is as follows:

December 31	2006			2005
Change in benefit obligations
Benefit obligations at beginning of year	$	53.5		$	42.1
Acquisitions of ALSCO and Corus Aluminum		8.6			11.2
Service cost		0.8			0.5
Interest cost		3.1			2.4
Benefits paid		(4.0	)		(3.5	)
Actuarial (gain) loss		(0.2	)		0.8
Translation and other		(0.3	)		—
Benefit obligations at end of year	$	61.5		$	53.5
Change in plan assets
Fair value of plan assets at beginning of year	$	—		$	—
Employer contribution		4.0			3.5
Benefits paid		(4.0	)		(3.5	)
Fair value of plan assets, end of year	$	—		$	—
Funded status	$	(61.5	)	$	(53.5	)
Unrecognized net actuarial loss		—			0.9
Net amount recognized	$	(61.5	)	$	(52.6	)

The following table provides the amounts recognized in the consolidated balance sheet as of December 31, 2006 after the adoption of the recognition provisions of SFAS No. 158:

	December 31, 2006
Current liabilities	$	(4.0	)
Non-current liabilities		(57.5	)
Net amount recognized	$	(61.5	)

The components of net postretirement benefit expense for the period from January 1, 2006 to December 19, 2006 and for the years ended December 31, 2005 and 2004 are as follows:

	(Predecessor)
	For the period from January 1, 2006 to December 19, 2006		For the year ended December 31
			2005		2004
Service Cost	$	0.8	$	0.5	$	0.1
Interest cost		3.1		2.4		0.1
Net postretirement benefit expense	$	3.9	$	2.9	$	0.2

Plan Assumptions. We are required to make an assumption regarding the discount rate applied to determine service cost and interest cost. Our objective in selecting a discount rate is to select the best estimate of the rate at

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

which the benefit obligations could be effectively settled. In making this estimate, we use one of two methods depending on the size of the plan and the bond market in the resident country. For larger plans in countries with well-developed bond markets, including the U.S., projected cash flows are developed. These cash flows are matched with a yield curve based on an appropriate universe of high-quality corporate bonds. For other plans, discount rates are selected based on AA-rated bonds. Benchmark rates are adjusted based on the underlying duration of the plan’s liabilities and the resulting yields serve as the basis for determining our best estimate of the effective settlement rate.

The weighted average assumptions used to determine net postretirement benefit expense and benefit obligations are as follows:

	2006		2005
Discount rate used to determine expense	5.50	%	5.50	%
Discount rate used to determine December 31 benefit obligations	5.66		5.50
Health care cost trend rate assumed for next year:
Retirees under age 65	9.00-10.20	%	8.00-8.50	%
Retirees 65 and older	9.00-10.40		9.50-10.00	%
Ultimate trend rate	5.57		5.00
Year rate reaches ultimate trend rate:
Retirees under age 65	2011-2016		2008-2011
Retirees 65 and older	2011-2015		2010-2014

For measurement purposes, there is an employer cap on the amount paid for retiree medical benefits for our U.S. plans. At December 31, 2006, the employer cap had not yet been reached for salary employees but had been reached for hourly employees.

Assumed health care cost trend rates have an effect on the amounts reported for postretirement benefit plans. A one-percentage change in assumed health care cost trend rates would have the following effects:

	1% increase		1% decrease
Effect on total service and interest components	$	0.2	$	(0.1	)
Effect on postretirement benefit obligations		2.0		(1.7	)

Plan Contributions. Our policy for the plan is to make contributions equal to the benefits paid during the year. Expected contributions for the succeeding twelve months have been included in other current liabilities in the consolidated balance sheet.

Expected Future Benefit Payments. The following benefit payments are expected to be paid for the periods indicated:

	Gross benefit payment		Net of Medicare Part D subsidy
2007	$	4.7	$	4.5
2008		4.8		4.6
2009		4.9		4.7
2010		5.0		4.8
2011		5.3		5.1
2012-2016		27.1		25.9

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Early Retirement Plans

Our Belgian and German subsidiaries sponsor various unfunded early retirement benefit plans. The obligations under these plans at December 31, 2006 total $20.5, of which $5.4, the estimated payments under these plans for the year ending December 31, 2007, has been classified as a current liability.

Employee Stock Purchase Plan

Prior to the Acquisition, we had a qualified, non-compensatory employee stock purchase plan, which allowed employees to acquire shares of common stock through payroll deductions over a six-month period. The purchase price was equal to 85% of the fair market value of the common stock on either the first or last day of the offering period, whichever was lower. Purchases under the plan were limited to 15% of an employee’s eligible compensation. A total of 800,000 shares were available for purchase under the plan. We issued 16,826 and 20,431 shares under the plan in 2005 and 2004, respectively. The plan was suspended effective January 1, 2006 and was terminated upon the Acquisition.

M. STOCKHOLDER’S EQUITY

Successor

In connection with the Acquisition, all of our previously outstanding common stock was purchased by Merger Sub and retired. Immediately upon consummation of the Acquisition and our merger with Merger Sub, we amended and restated our Articles of Incorporation to authorize the issuance of 900 shares of common stock and 100 shares of preferred stock. The Board of Directors will approve the voting rights, dividend rates and other pertinent rights of the preferred stock upon the issuance, if any, of those shares.

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Predecessor

The following table shows changes in the number of outstanding shares and treasury shares prior to the Acquisition:

	Common stock share activity
	Outstanding Shares		Treasury Shares
Balance at January 1, 2004	17,155,211		(1,843,403	)
Issuance of common stock for services	5,938		—
Exercise of stock options	—		693,349
Issuance of common stock for vested stock units	—		169,000
Forfeiture of non-vested stock	—		(150,000	)
Stock issued in connection with ESPP	—		20,431
Acquisition of Commonwealth Industries, Inc.	13,608,274		—
Balance at December 31, 2004	30,769,423		(1,110,623	)
Issuance of common stock for services	5,924		12,315
Exercise of stock options	410,880		846,755
Stock issued in connection with ESPP	5,000		11,826
Issuance of non-vested stock	78,650		204,736
Purchase of common stock for treasury	—		(13,007	)
Other	(32,192	)	34,991
Balance at December 31, 2005	31,237,685		(13,007	)
Exercise of stock options	139,336		8,884
Issuance of common stock for services	1,740		652
Issuance of non-vested stock	34,039		—
Purchase of common stock for treasury	—		(72,073	)
Other	(719	)	—
Balance at December 19, 2006	31,412,081		(75,544	)

N. STOCK-BASED COMPENSATION

Predecessor Stock-Based Compensation Plans

In December 2004, our stockholders approved the 2004 Equity Incentive Plan, as amended (“2004 Plan”). The 2004 Plan provided for the grant of stock options, non-vested shares and share units as well as other stock awards to eligible employees, officers, consultants and non-employee directors. These awards were to vest upon the attainment of stated service periods or performance targets established by the Compensation Committee of the Board of Directors. On May 18, 2006, our stockholders approved an amendment to the 2004 Plan that increased the number of shares of common stock reserved for issuance from 1,100,000 to 2,200,000. All options granted under this plan, once vested, were exercisable for a period of up to 10 years from the date of grant, although options may have expired earlier because of termination of employee service. The 2004 Plan was terminated as of the Acquisition date and all stock options and non-vested shares issued under the 2004 Plan and all predecessor plans were redeemed on December 19, 2006. Certain share unit awards were modified to provide for vesting upon the consummation of the Acquisition while other share unit awards were not modified and remained not vested as of December 19 and December 31, 2006. The awards which vested upon the Acquistion were redeemed for cash of $52.50 per share in January 2007 and the remaining awards are expected to be redeemed for cash of $52.20 per share in the second quarter of 2007.

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Predecessor Stock Option Summary

A summary of stock option activity for service-based options during the period from January 1, 2006 to December 19, 2006 is as follows:

Service-based options	Shares		Weighted- average exercise price per share		Weighted- average remaining contractual term (in years)	Aggregate intrinsic value
Outstanding December 31, 2005	1,715,764		$	13.07		$	32.9
Exercised	(148,220	)		9.73
Canceled	(39,795	)		13.67
Outstanding at December 19, 2006	1,527,749		$	13.38	7.33	$	59.8

In conjunction with the Acquisition, all outstanding stock options were canceled and all option holders received $52.50 per share less the applicable exercise price.

The weighted-average grant date fair value per option of all stock option awards granted in 2005 and 2004 was $12.56 and $6.48, respectively. The intrinsic value of stock options exercised during the period from January 1, 2006 to December 19, 2006 and the years ended December 31, 2005 and 2004 was $5.2, $17.5 and $3.5, respectively.

The fair value of the stock options granted in 2005 and 2004 was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions:

	2005		2004
Expected option life in years	6.0		4.8
Risk-free interest rate	4.2	%	3.4	%
Volatility factor	0.585		0.459
Dividend yield	0.0	%	0.0	%

Predecessor Non-Vested Shares and Share Units Summary

A summary of the non-vested shares and share units for service-based awards during period from January 1, 2006 to December 31, 2006 is as follows:

Service-based awards	Shares/units		Weighted- average grant date fair value per share/unit
Awarded and not vested at December 31, 2005	387,088		$	18.38
Granted	34,039			43.09
Vested	(35,352	)		15.80
Canceled	(11,300	)		25.92
Awarded and not vested at December 19, 2006	374,475		$	20.64

Per the terms of the award agreements, all non-vested shares became vested upon the change in control that resulted from the Acquisition and all holders received cash of $52.50 per share.

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A summary of the non-vested shares and share units for performance-based awards during the period from January 1, 2006 to December 19, 2006 is as follows:

Performance-based awards	Shares/units		Weighted- average grant date fair value per share/unit
Awarded and not vested at December 31, 2005	251,472		$	26.59
Granted	42,250			43.92
Vested	(106,050	)		15.80
Canceled	(2,655	)		38.56
Awarded and not vested at December 19, 2006	185,017		$	36.56

107,092 of the non-vested share units for performance-based awards were modified by the Company prior to the Acquisition to allow for the vesting of these share units upon the Acquisition. Holders of these share units received $52.50 per share unit in January 2007. The remaining share units were fully expensed in 2006 as all performance targets were attained. Vesting of these share units was subject to approval of the Compensation Committee which approved the vesting of the share units in March 2007. Holders of these share units will receive $52.50 per share unit in April 2007.

The weighted-average grant date fair value per share of all non-vested shares and share unit awards granted during the period January 1, 2006 to December 19, 2006, and the years ended December 31, 2005 and 2004 was $43.54, $30.89 and $14.51, respectively.

O. INCOME TAXES

The income (loss) before income taxes and minority interests was as follows:

	(Successor)			(Predecessor)
	For the period from December 20, 2006 to December 31, 2006			For the period from January 1, 2006 to December 19, 2006		For the year ended December 31,
						2005			2004
U.S.	$	(7.2	)	$	96.8	$	75.4		$	(38.3	)
International		3.1			21.3		(0.2	)		22.2
Total	$	(4.1	)	$	118.1	$	75.2		$	(16.1	)

F-43

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The provision for (benefit from) income taxes, including income taxes on minority interests, was as follows:

	(Successor)			(Predecessor)
	For the period from December 20, 2006 to December 31, 2006			For the period from January 1, 2006 to December 19, 2006			For the year ended December 31, 2005			For the year ended December 31, 2004
Current:
Federal	$	(8.8	)	$	38.5		$	1.9		$	(0.6	)
State		0.3			5.2			2.4			0.2
International		(0.4	)		(3.0	)		1.8			7.7
	$	(8.9	)	$	40.7		$	6.1		$	7.3
Deferred:
Federal	$	6.8		$	0.9		$	(3.7	)	$	(3.8	)
State		0.5			(3.4	)		(0.3	)		3.3
International		0.9			6.1			(1.7	)		0.7
	$	8.2		$	3.6		$	(5.7	)	$	0.2
(Benefit from) provision for income taxes	$	(0.7	)	$	44.3		$	0.4		$	7.5

The income tax expense, computed by applying the federal statutory tax rate to earnings before income taxes, differed from the provision for (benefit from) income taxes as follows:

	Successor			(Predecessor)
	For the period from December 20, 2006 to December 31, 2006			For the period from January 1, 2006 to December 19, 2006			For the year ended December 31
							2005			2004
Income tax expense (benefit) at the federal statutory rate	$	(1.4	)	$	41.3		$	26.3		$	(5.6	)
Foreign income tax rate differences		(0.6	)		(4.4	)		0.1			0.7
State income taxes, net		0.6			1.1			1.4			(2.8	)
Tax on foreign repatriation, net of foreign tax credits		—			5.5			0.7			(1.1	)
Other, net		0.7			1.7			(0.2	)		(0.1	)
Change in valuation allowance		—			(0.9	)		(27.9	)		16.4
(Benefit from) provision for income taxes	$	(0.7	)	$	44.3		$	0.4		$	7.5

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

F-44

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Significant components of our deferred tax liabilities and assets are as follows:

	(Successor)			(Predecessor)
December 31	2006			2005
Deferred Tax Liabilities:
Accelerated depreciation and amortization	$	215.1		$	84.1
State income taxes		2.0			4.5
Deferred hedging gain		43.5			9.5
Total deferred tax liabilities	$	260.6		$	98.1
Deferred Tax Assets:
Net operating loss carryforwards	$	93.3		$	24.1
Tax credit carryforwards		27.4			32.4
Expenses not currently deductible		27.2			19.1
Accrued pension		36.0			13.9
Accrued post retirement		20.1			15.6
Other		14.1			7.1
	$	218.1		$	112.2
Valuation allowance		(93.7	)		(30.7	)
Total deferred tax assets	$	124.4		$	81.5
Net deferred tax liabilities	$	136.2		$	16.6

At December 31, 2006 and 2005 we had valuation allowances of $93.7 and $30.7, respectively, to reduce certain deferred tax assets to amounts that are more likely than not to be realized. Of the total 2006 valuation allowance, $67.3 relates to net operating losses and future tax deductions for depreciation in non-U.S. tax jurisdictions and $26.4 relates primarily to Kentucky state recycling credits and other state net operating losses. A significant amount of the non-U.S. valuation allowance relates to entities purchased as part of the acquisition of Corus Aluminum. We provided a valuation allowance of $52.0 on deferred tax assets set up in the opening balance sheets of the non-U.S. Corus Aluminum entities. We believe that sufficient evidence currently exists that it is more likely than not that we will not recognize deferred tax assets. The federal valuation allowance of $0.9 that existed at the beginning of 2006 has been reversed based upon management’s determination that it is more likely than not that future taxable income will be sufficient to realize the related federal deferred tax asset. The 2005 valuation allowance of $30.7 was primarily provided to offset state tax credits and foreign (Brazil) and state net operating losses.

At December 31, 2006, we had approximately $255.0 of unused net operating loss carryforwards associated with non-U.S. tax jurisdictions, $193.0 of which relates to entities purchased in the acquisition of Corus Aluminum. Of the $255.0 non-U.S. net operating loss carryforwards, $239.5 can be carried forward indefinitely, $8.0 will expire if unused by 2013 and $7.5 will expire over a 5 year period, starting in 2007. At December 31, 2006, the U.S. federal net operating loss carryforwards were $8.9, of which $3.2 is limited as to its use in any given year under U.S. income tax regulations regarding change in ownership. The state net operating loss carryforwards at December 31, 2006 were $6.3, part of which has been offset with a valuation allowance for entities that have a history of cumulative losses.

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At December 31, 2006, we had $3.7 of unused U.S. federal tax credit carry forwards of which $2.6 are subject to a limitation as to use in any given year under U.S. income tax regulations regarding change in ownership. We also had $36.4 of unused state tax credit carry forwards, for substantially all of which a full valuation allowance has been provided.

Substantially all of the $48.7 of undistributed earnings of our non-U.S. investments is considered permanently reinvested and, accordingly, no additional U.S. income taxes or non-U.S. withholding taxes have been provided. It is not practicable to calculate the deferred taxes associated with the remittance of these earnings.

P. COMMITMENTS AND CONTINGENCIES

Operating leases

We lease various types of equipment and property, primarily the equipment utilized in our operations at our various plant locations and at our headquarters facility. The future minimum lease payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2006, are as follows:

	Operating Leases
2007	$	9.8
2008		7.2
2009		4.2
2010		2.8
2011		1.4
Thereafter		1.6
	$	27.0

Rental expense under cancelable and non-cancelable operating leases for the period from December 20, 2006 to December 31, 2006, the period from January 1, 2006 to December 19, 2006 and the years ended December 31, 2005 and 2004 was $0.9, $14.9, $9.1 and $7.3, respectively.

Purchase Obligations

Our non-cancelable purchase obligations are principally for natural gas and materials, such as metals and fluxes used in our manufacturing operations. As of December 31, 2006, amounts due under short-term and long-term non-cancelable purchase obligations are as follows:

	Cash payments due by period
	Total		2007		2008-2009		2010-2011		After 2011
Purchase obligations	$	6,337.6	$	2,733.7	$	2,435.7	$	691.3	$	476.9

Amounts purchased under long-term purchase obligations during the years ended December 31, 2006, 2005 and 2004 related to these purchase obligations totaled $711.8, $226.3 and $65.7, respectively.

Environmental Proceedings

Our operations are subject to environmental laws and regulations governing air emissions, wastewater discharges, the handling, disposal and remediation of hazardous substances and wastes and employee health and

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

safety. These laws can impose joint and several liabilities for releases or threatened releases of hazardous substances upon statutorily defined parties, including us, regardless of fault or the lawfulness of the original activity or disposal. Given the changing nature of environmental legal requirements, we may be required, from time to time, to take environmental control measures at some of our facilities to meet future requirements.

Currently and from time to time, we are a party to notices of violation brought by environmental agencies concerning the laws governing air emissions. In connection with certain pending proceedings, we are in discussions with government authorities for the purpose of resolving similar issues that have arisen at a number of our facilities in different states. At present, discussions are not sufficiently advanced to determine the scope of relief or the amount of penalties. However, with respect to these pending proceedings, we do not anticipate that the amount of penalties would have a material adverse effect on our financial position or results of operations.

We have been named as a potentially responsible party in certain proceedings initiated pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act and similar stated statutes and may be named a potentially responsible party in other similar proceedings in the future. It is not anticipated that the costs incurred in connection with the presently pending proceedings will, individually or in the aggregate, have a material adverse effect on our financial position or results of operations.

We are performing operations and maintenance at two Superfund sites for matters arising out of past waste disposal activity associated with closed facilities. We are also under orders by agencies in four states for environmental remediation at five sites, two of which are located at our operating facilities.

Our reserves for environmental remediation liabilities totaled $15.0 and $12.6 at December 31, 2006 and 2005, respectively, and have been classified as other long-term liabilities in the consolidated balance sheet. These amounts are in addition to our asset retirement obligations discussed in Note J and represent the most probable costs of remedial actions. We estimate the costs related to currently identified remedial actions will be paid out primarily over the next ten years.

The changes in our accruals for environmental liabilities are as follows (there was no change in our environmental liabilities from the period from December 20, 2006 to December 31, 2006):

	(Predecessor)
	For the period from January 1, 2006 to December 19, 2006			For the year ended December 31
				2005			2004
Balance at beginning of year	$	12.6		$	6.4		$	1.0
Revisions and liabilities incurred		1.0			2.8			0.5
Payments		(0.9	)		(0.9	)		(0.3	)
Environmental liabilities of acquired businesses		2.3			4.3			5.2
Balance at end of year	$	15.0		$	12.6		$	6.4

Legal Proceedings

We are a party from time to time to what we believe are routine litigation and proceedings considered part of the ordinary course of our business. We believe that the outcome of such existing proceedings would not have a material adverse effect on our financial position or results of operations.

F-47

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Q. SEGMENT INFORMATION

The Corus Aluminum acquisition increased the size and scope of our international operations substantially and, as a result, we re-aligned our reporting structure into global business units that offer different types of metal products and services. Our new operating segments consist of global rolled and extruded products, global recycling, global specification alloy, and global zinc. As a result, the former international segment is now included within the global recycling and global specification alloy segments. All periods have been restated to reflect this change.

Our global rolled and extruded products segment produces aluminum sheet, plate and extruded and fabricated products for distributors and customers serving the aerospace, building and construction, transportation and consumer durables industry segments. For financial reporting purposes, the global recycling and global specification alloy operating segments have been aggregated into the global recycling reportable segment. The global recycling segment represents all of our aluminum melting, processing, alloying and salt cake recycling activities. We have aggregated these businesses because the products produced are identical (except for minor differences in chemical composition), are delivered in the same manner (either molten or in bars), the raw materials used are very similar, the production processes and equipment used are identical and the long-term gross margins have been and are expected to remain similar. Our global zinc segment represents all of our zinc melting, processing and trading activities.

Measurement of Segment Profit or Loss and Segment Assets

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Our measure of the profitability of our operating segments is referred to as segment income. Segment income excludes provisions for income taxes, restructuring and other charges, interest, unrealized losses (gains) on derivative financial instruments, corporate general and administrative costs, including depreciation of corporate assets and amortization of capitalized debt issuance costs. Intersegment sales and transfers are recorded at market value. Consolidated cash, long-term debt, net capitalized debt costs, deferred tax assets and assets located at our headquarters office are not allocated to the reportable segments.

Beginning in 2006, certain recycling facilities were shifted to the global rolled and extruded products segment and these facilities are now included within that segment. Management estimates that the global recycling segment’s revenues and segment income would have been lower by $22.8 and $2.1, respectively, in the year ended December 31, 2005. Global rolled and extruded products segment income would have been higher by $2.1 in the year ended December 31, 2005. In addition, intersegment revenues would have been lower by $22.8 in the year ended December 31, 2005, as a result of this change. The prior periods have not been restated for the change.

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ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Reportable Segment Information

Selected reportable segment disclosures for the three years ended December 31, 2006, 2005 and 2004 are as follows:

	Global rolled and extruded products			Global recycling			Global zinc		Intersegment revenues			Totals
2006 (Combined)
Revenues	$	2,726.2		$	1,489.0		$	553.2	$	(19.6	)	$	4,748.8
Segment income		180.7			84.8			65.0					330.5
Depreciation and amortization expense		75.3			29.5			2.3					107.1
Segment assets		2,480.7			597.8			184.4					3,262.9
Payments for plant and equipment		86.7			24.1			4.5					115.3
2005 (Predecessor)
Revenues	$	1,246.7		$	967.9		$	244.1	$	(29.7	)	$	2,429.0
Segment income		160.6			41.8			21.0					223.4
Depreciation and amortization expense		28.3			22.5			2.5					53.3
Equity in losses of affiliates		—			(1.6	)		—					(1.6	)
Segment assets		819.0			575.2			124.5					1,518.7
Equity investments in joint ventures		—			(1.0	)		—					(1.0	)
Payments for plant and equipment		11.1			44.7			1.8					57.6
2004 (Predecessor)
Revenues	$	95.1		$	926.5		$	206.9	$	(1.9	)	$	1,226.6
Segment income (loss)		(3.1	)		46.1			12.0					55.0
Depreciation and amortization expense		2.2			22.4			3.6					28.2
Equity in losses of affiliates		—			(0.2	)		—					(0.2	)
Segment assets		490.9			463.2			108.9					1,063.0
Equity investments in joint ventures		—			0.6			—					0.6
Payments for plant and equipment		1.9			40.5			2.0					44.4

F-49

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Reconciliations of total reportable segment disclosures to our consolidated financial statements are as follows:

	2006			2005			2004
	(Combined)			(Predecessor)			(Predecessor)
Profits
Segment income	$	330.5		$	223.4		$	55.0
Unallocated amounts:
General and administrative expenses		(72.8	)		(58.2	)		(32.2	)
Restructuring and other charges		(41.9	)		(29.9	)		(14.9	)
Interest expense		(90.6	)		(41.9	)		(28.8	)
Unrealized gains (losses) on derivative financial instruments		28.3			(18.6	)		4.2
Interest and other income		14.9			0.4			0.6
Loss on early extinguishment of debt		(54.4	)		—			—
Income (loss) before provision for income taxes and minority interests	$	114.0		$	75.2		$	(16.1	)
Depreciation and amortization expense
Total depreciation and amortization expense for reportable segments	$	107.1		$	53.3		$	28.2
Unallocated depreciation and amortization expense		2.0			1.7			2.4
Total consolidated depreciation and amortization expense	$	109.1		$	55.0		$	30.6
Assets
Total assets for reportable segments	$	3,262.9		$	1,518.7		$	1,063.0
Unallocated assets		1,545.5			35.4			18.1
Total consolidated assets	$	4,808.4		$	1,554.1		$	1,081.1
Payments for property and equipment
Total payments for property and equipment for reportable segments	$	115.3		$	57.6		$	44.4
Other payments for property and equipment		8.6			4.5			0.4
Total consolidated payments for property and equipment	$	123.9		$	62.1		$	44.8

F-50

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Geographic Information

The following table sets forth the geographic breakout of our revenues (based on customer location) and long-lived assets (net of accumulated depreciation and amortization):

	(Combined)		(Predecessor)
	2006		2005		2004
Revenues
United States	$	2,975.6	$	1,878.6	$	793.0
International:
Asia		83.3		13.8		6.8
Europe		1,277.6		359.8		353.5
South America		161.5		39.9		37.8
North America		241.6		136.7		33.5
Other		9.2		0.2		2.0
Total international revenues	$	1,773.2	$	550.4	$	433.6
Consolidated total	$	4,748.8	$	2,429.0	$	1,226.6
Long-lived assets, including intangible assets
United States, net	$	1,793.6	$	580.4	$	391.9
International, net:
Germany		765.3		89.5		76.9
Canada		50.4		—		—
Brazil		16.0		21.0		6.6
United Kingdom		15.8		8.2		9.9
Mexico		14.8		11.6		11.4
Other		13.7		2.8		—
Total international long-lived assets, net	$	876.0	$	133.1	$	104.8
Consolidated total	$	2,669.6	$	713.5	$	496.7

R. DERIVATIVE AND OTHER FINANCIAL INSTRUMENTS

We enter into derivatives to hedge the cost of energy, the sale and purchase prices of certain aluminum and zinc products as well as certain alloys used in our production processes, and certain currency exposures. The fair value gains (losses) of outstanding derivative contracts are included in the consolidated balance sheet as “Derivative financial instruments” and “Other current liabilities.” The fair value of our derivative financial instruments and amounts deferred in “Accumulated other comprehensive income” as of December 31, 2006 and 2005 were as follows:

	(Successor)					(Predecessor)
December 31	2006					2005
	Fair Value			Deferred gains (losses), net of tax		Fair Value			Deferred gains (losses), net of tax
Natural gas	$	(1.0	)	$	—	$	28.1		$	15.3
Aluminum		89.7			—		(6.5	)		—
Zinc		0.4			—		0.4			0.2
Currency		11.2			—		—			—

F-51

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

During the years ended December 31, 2006, 2005 and 2004, our natural gas, zinc and certain of our aluminum derivative financial instruments were accounted for as hedges and met SFAS No. 133’s requirements for hedge accounting treatment. As such, the changes in the fair value of certain of these cash flow hedges accumulated on our consolidated balance sheet (in “Accumulated other comprehensive income”) until the underlying hedged item impacted earnings. In conjunction with the preliminary purchase price allocation related to the Acquisition, all amounts previously included within “Accumulated other comprehensive income” were eliminated as required by SFAS No. 141. Subsequent to the Acquisition, we have elected not to treat our aluminum, zinc and currency derivative financial instruments as hedges for accounting purposes and, as a result, all future changes in the fair value of these derivatives will be included within our results of operations.

Both realized and unrealized gains and losses on those derivative financial instruments that are not accounted for as hedges are included within “(Gains) losses on derivative financial instruments” in the consolidated statement of operations while realized gains and (losses) on those derivative financial instruments that are accounted for as hedges are included within “Cost of sales.”

Realized gains and (losses) on derivative financial instruments included in “Cost of sales” and “Gains (losses) on derivative financial instruments” totaled the following during the years ended December 31, 2006, 2005 and 2004:

	(Combined)					(Predecessor)
Year ended December 31	2006					2005					2004
	Cost of sales		Gains (losses) on derivative financial instruments			Cost of sales			Gains (losses) on derivative financial instruments		Cost of sales		Gains (losses) on derivative financial instruments
Natural gas	$	2.3	$	—		$	22.1		$	—	$	3.7	$	—
Aluminum		—		(4.5	)		(1.5	)		10.8		0.4		4.4
Zinc		1.0		—			(0.4	)		—		0.7		—
Currency		—		7.0			—			—		—		—

Natural Gas Hedging

In order to manage our price exposure for natural gas purchases, we have fixed the future price of a portion of our natural gas requirements by entering into financial hedge agreements. Under these agreements, payments are made or received based on the differential between the monthly closing price on the New York Mercantile Exchange (“NYMEX”) and the contractual hedge price. These contracts are accounted for as cash flow hedges, with all gains and losses recognized in “Cost of sales” when the gas is consumed. In addition, we have cost escalators included in some of our long-term supply contracts with customers, which limit our exposure to natural gas price risk.

Aluminum Hedging

The selling prices of the majority of the global rolled and extruded products segment’s customer orders are established at the time of order entry or, for certain customers, under long-term contracts. As the related raw materials used to produce these orders are purchased several months or years after the selling prices are fixed, the global rolled and extruded products segment is subject to the risk of changes in the purchase price of the raw materials it purchases. In order to manage this exposure, London Metal Exchange (“LME”) future or forward purchase contracts are entered into at the time the selling prices are fixed. In addition, the global rolled and extruded products segment enters into future sales contracts to protect the fair value of a portion of its aluminum inventory against a potential decline in aluminum selling prices. We do not treat these derivative financial

F-52

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

instruments as hedges for accounting purposes. Accordingly, the changes in the fair value of the contracts are recorded in earnings as “(Gains) losses on derivative financial instruments” rather than being deferred in “Accumulated other comprehensive income.”

The global recycling segment also enters into LME high-grade aluminum forward sales and purchase contracts to mitigate the risk associated with changes in metal prices. The contracts outstanding at December 31, 2006 are not accounted for as hedges for accounting purposes and, as a result, the changes in fair value of the contracts are recorded in earnings as “(Gains) losses on derivative financial instruments” rather than being deferred in “Accumulated other comprehensive income.”

Zinc Hedging

In the normal course of business, the global zinc segment enters into fixed-price sales and purchase contracts with a number of its customers and suppliers. In order to hedge the risk of changing LME zinc prices, we enter into LME forward sale and future purchase contracts. The effective portions of these hedges are included within “Other comprehensive income (loss)” while the ineffective portions are included within “(Gains) losses on derivative financial instruments.”

Subsequent to the Acquisition, we are no longer treating our zinc derivative financial instruments as hedges for accounting purposes. As a result, all future changes in the fair value of these contracts will be recorded in earnings as “(Gains) losses on derivative financial instruments.”

Credit Risk

We are exposed to losses in the event of non-performance by the counterparties to the derivative financial instruments discussed above; however, we do not anticipate any non-performance by the counterparties. The counterparties are evaluated for creditworthiness and risk assessment prior to initiating trading activities with the brokers. We do not require collateral to support broker transactions.

Other Financial Instruments

The carrying amount and fair value of our other financial instruments at December 31, 2006 and 2005 are as follows:

	(Successor)				(Predecessor)
	2006				2005
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	126.1	$	126.1	$	6.8	$	6.8
Long-term debt:
Senior Notes		600.0		603.0		—		—
Senior Subordinated Notes		400.0		401.0		—		—
Tendered 9% Senior Notes		—		—		125.0		128.8
Tendered 10 3/8% Senior Secured Notes		—		—		207.9		229.4
VAW-IMCO credit facilities		—		—		34.8		34.8

The fair value of our outstanding indebtedness under the Revolving Credit Facility and the Term Loan Facility approximates carrying value due to the floating rates of interest rates associated with these obligations. The current fair value of our Senior Notes and Senior Subordinated Notes were based on market quotations, discounted cash flows and incremental borrowing rates. The fair value of our accounts receivable, accounts payable and accrued liabilities approximate carrying value.

F-53

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

S. OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the components of “Accumulated other comprehensive income,” which are items that change equity during the reporting period, but are not included in earnings. As discussed previously, all amounts included within “Accumulated other comprehensive income” were eliminated as part of the preliminary purchase price allocation associated with the Acquisition. There was an insignificant impact to “Accumulated other comprehensive income” in the period from December 20, 2006 to December 31, 2006. This was due to substantially all of our derivative financial instruments not being accounted for as hedges after the Acquisition and an immaterial change in currency rates between December 20, 2006 and December 31, 2006.

	Total			Unrealized gain (loss) on derivative financial instruments			Currency translation, unrealized gain (loss)			Minimum pension adjustment
Predecessor
Balance at December 31, 2003	$	(4.8	)	$	2.0		$	(6.8	)	$	—
Current year net change		6.2			—			6.2			—
Minimum pension liability adjustment		(2.5	)		—			—			(2.5	)
Deferred tax on minimum pension liability adjustment		1.0			—			—			1.0
Change in fair value of derivative financial instruments		(0.1	)		(0.1	)		—			—
Reclassification of derivative financial instruments into earnings		(4.8	)		(4.8	)		—			—
Income tax effect		0.8			0.8			—			—
Balance at December 31, 2004	$	(4.2	)	$	(2.1	)	$	(0.6	)	$	(1.5	)
Current year net change		(9.0	)		—			(6.6	)		(2.4	)
Change in fair value of derivative financial instruments		46.7			46.7			—			—
Deferred tax on minimum pension liability adjustment		0.8			—			—			0.8
Reclassification of derivative financial instruments into earnings		(19.8	)		(19.8	)		—			—
Income tax effect		(9.2	)		(9.2	)		—			—
Balance at December 31, 2005	$	5.3		$	15.6		$	(7.2	)	$	(3.1	)
Current year net change		17.2			—			17.2			—
Change in fair value of derivative financial instruments		(29.8	)		(29.8	)		—			—
Reclassification of derivative financial instruments into earnings		3.3			3.3			—			—
Income tax effect		10.0			10.0			—			—
Balance at December 19, 2006	$	6.0		$	(0.9	)	$	10.0		$	(3.1	)

F-54

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

T. SUPPLEMENTAL CASH FLOW INFORMATION

The changes in operating assets and liabilities included in the consolidated statement of cash flows and supplemental cash flow information for the years ended December 31, 2006, 2005 and 2004 are as follows:

	(Combined)			(Predecessor)
	2006			2005			2004
Changes in operating assets and liabilities:
Accounts receivable	$	(48.4	)	$	(23.4	)	$	(2.9	)
Inventories		(60.5	)		(56.9	)		(23.3	)
Other assets		(3.9	)		9.6			(3.2	)
Accounts payable and accrued liabilities		123.8			(2.8	)		7.7
	$	11.0		$	(73.5	)	$	(21.7	)
Supplementary information:
Non-cash equity contribution	$	3.9		$	—		$	—
Cash payments for:
Interest	$	89.8		$	38.4		$	25.1
Income taxes		15.1			10.7			9.6

F-55

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

U. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Certain of our subsidiaries (the “Guarantor Subsidiaries”) are guarantors of the indebtedness under our Senior Notes and Senior Subordinated Notes. For purposes of complying with the reporting requirements of the Guarantor Subsidiaries, presented below are condensed consolidating financial statements of Aleris International, Inc., the Guarantor Subsidiaries, and those subsidiaries of Aleris International, Inc. that are not guaranteeing the indebtedness under the Senior Notes or the Senior Subordinated Notes (the “Non-Guarantor Subsidiaries”). The condensed consolidating balance sheets are presented as of December 31, 2006 and 2005, and the condensed consolidating statements of operations and cash flows are presented for the years ended December 31, 2006, 2005 and 2004.

	As of December 31, 2006 (Successor)
	Aleris International, Inc.		Combined guarantor subsidiaries		Combined non-guarantor subsidiaries		Eliminations			Consolidated
ASSETS
Current Assets
Cash and cash equivalents	$	3.4	$	9.8	$	112.9	$	—		$	126.1
Accounts receivable, net		11.3		324.2		357.0		—			692.5
Inventories		8.0		433.7		581.9		—			1,023.6
Deferred income taxes		33.8		—		0.8		—			34.6
Prepaid expenses		1.0		11.1		8.5		—			20.6
Derivative financial instruments		1.9		5.6		70.0		—			77.5
Other current assets		4.6		4.5		9.2		—			18.3
Total Current Assets		64.0		788.9		1,140.3		—			1,993.2
Property, plant and equipment, net		43.4		339.3		840.4		—			1,223.1
Goodwill		1,362.4		—		—		—			1,362.4
Intangible assets, net		—		29.3		54.8		—			84.1
Deferred income taxes		—		—		8.1		—			8.1
Other assets		87.7		0.6		49.2		—			137.5
Investments in subsidiaries/intercompany receivable (payable), net		1,400.6		46.9		157.1		(1,604.6	)		—
	$	2,958.1	$	1,205.0	$	2,249.9	$	(1,604.6	)	$	4,808.4
LIABILITIES AND STOCKHOLDER’S EQUITY
Current Liabilities
Accounts payable	$	53.9	$	210.8	$	289.6	$	—		$	554.3
Accrued liabilities		11.2		169.7		157.8		—			338.7
Deferred income taxes		—		—		37.7		—			37.7
Current maturities of long-term debt		8.3		0.7		11.5		—			20.5
Total Current Liabilities		73.4		381.2		496.6		—			951.2
Long-term debt		2,001.7		2.3		563.5		—			2,567.5
Deferred income taxes		28.6		—		112.6		—			141.2
Accrued pension benefits		—		27.8		151.4		—			179.2
Accrued post-retirement benefits		—		50.3		7.2		—			57.5
Other long-term liabilities		9.1		13.0		44.3		—			66.4
Stockholder’s Equity		845.3		730.4		874.3		(1,604.6	)		845.4
	$	2,958.1	$	1,205.0	$	2,249.9	$	(1,604.6	)	$	4,808.4

F-56

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	As of December 31, 2005 (Predecessor)
	Aleris International, Inc.		Combined guarantor subsidiaries			Combined non-guarantor subsidiaries		Eliminations			Consolidated
ASSETS
Current Assets
Cash and cash equivalents	$	0.4	$	(0.3	)	$	6.7	$	—		$	6.8
Accounts receivable, net		7.9		262.1			56.2		(1.1	)		325.1
Inventories		3.7		340.5			60.6		—			404.8
Deferred income taxes		2.3		31.6			1.3		—			35.2
Prepaid expenses		0.7		6.3			1.7		—			8.7
Derivative financial instruments		7.8		18.4			1.8		—			28.0
Other current assets		1.2		0.7			0.3		—			2.2
Total Current Assets		24.0		659.3			128.6		(1.1	)		810.8
Property, plant and equipment, net		44.1		379.3			116.3		(1.9	)		537.8
Goodwill		4.1		130.1			18.6		—			152.8
Intangible assets, net		—		22.9			—		—			22.9
Other assets		20.0		9.9			0.8		—			30.7
Investments in subsidiaries/intercompany receivable (payable), net		963.9		(347.1	)		35.5		(653.2	)		(0.9	)
	$	1,056.1	$	854.4		$	299.8	$	(656.2	)	$	1,554.1
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	20.6	$	134.1		$	47.3	$	(1.2	)	$	200.8
Accrued liabilities		10.0		87.4			34.5		3.5			135.4
Current maturities of long-term debt		—		0.1			20.7		—			20.8
Total Current Liabilities		30.6		221.6			102.5		2.3			357.0
Long-term debt		615.5		1.4			14.1		—			631.0
Deferred income taxes		6.3		40.8			4.7		—			51.8
Accrued pension benefits		—		24.1			17.6		—			41.7
Accrued post-retirement benefits		—		48.6			—		—			48.6
Other long-term liabilities		9.9		19.6			4.2		(3.5	)		30.2
Stockholders’ Equity		393.8		498.3			156.7		(655.0	)		393.8
	$	1,056.1	$	854.4		$	299.8	$	(656.2	)	$	1,554.1

F-57

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Year ended December 31, 2006 (Combined)
	Aleris International, Inc.			Combined guarantor subsidiaries			Combined non-guarantor subsidiaries			Eliminations			Consolidated
Revenues	$	155.8		$	3,031.3		$	1,739.5		$	(177.8	)	$	4,748.8
Cost of sales		135.8			2,691.3			1,683.7			(177.8	)		4,333.0
Gross profit		20.0			340.0			55.8			—			415.8
Selling, general and administrative expense		1.9			106.4			59.1			—			167.4
Restructuring and other charges		—			36.1			5.8			—			41.9
(Gains) losses on derivative financial instruments		(10.6	)		9.2			(29.4	)		—			(30.8	)
Operating income		28.7			188.3			20.3			—			237.3
Interest expense		(29.8	)		123.2			13.0			(15.8	)		90.6
Other (income) expense, net		(44.3	)		25.1			(18.3	)		15.8			(21.7	)
Loss on early extinguishment of debt		54.4			—			—			—			54.4
Equity in net (earnings) loss of affiliates		(46.2	)		(20.4	)		—			66.6			—
Income before income taxes		94.6			60.4			25.6			(66.6	)		114.0
Provision for income taxes		24.3			15.3			4.0			—			43.6
Income (loss) before minority interest		70.3			45.1			21.6			(66.6	)		70.4
Minority interests, net of provision for income taxes		—			—			0.1			—			0.1
Net income (loss)	$	70.3		$	45.1		$	21.5		$	(66.6	)	$	70.3

F-58

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Year ended December 31, 2005 (Predecessor)
	Aleris International, Inc.			Combined guarantor subsidiaries			Combined non-guarantor subsidiaries		Eliminations			Consolidated
Revenues	$	117.9		$	1,936.1		$	438.4	$	(63.4	)	$	2,429.0
Cost of sales		109.6			1,723.0			412.1		(63.4	)		2,181.3
Gross profit		8.3			213.1			26.3		—			247.7
Selling, general and administrative expense		7.5			71.8			11.8		—			91.1
Restructuring and other charges		0.1			29.4			0.4		—			29.9
(Gains) losses on derivative financial instruments		—			(2.3	)		10.3		—			8.0
Operating income		0.7			114.2			3.8		—			118.7
Interest expense		41.0			0.4			0.6		(0.1	)		41.9
Other (income) expense, net		(2.3	)		1.5			0.7		0.1			—
Equity in net (earnings) loss of affiliates		(112.3	)		1.6			—		112.3			1.6
Income (loss) before income taxes and minority interests		74.3			110.7			2.5		(112.3	)		75.2
Provision for (benefit from) income taxes		—			0.1			0.3		—			0.4
Income (loss) before minority interests		74.3			110.6			2.2		(112.3	)		74.8
Minority interests, net of provision for income taxes		—			—			0.5		—			0.5
Net income (loss)	$	74.3		$	110.6		$	1.7	$	(112.3	)	$	74.3

F-59

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Year ended December 31, 2004 (Predecessor)
	Aleris International, Inc.			Combined guarantor subsidiaries			Combined non-guarantor subsidiaries			Eliminations			Consolidated
Revenues	$	100.0		$	781.7		$	391.2		$	(46.3	)	$	1,226.6
Cost of sales		91.0			748.8			359.6			(46.3	)		1,153.1
Gross profit		9.0			35.0			31.6			—			73.5
Selling, general and administrative expense		2.3			39.5			12.7			—			54.5
Restructuring and other charges		1.1			13.8			—			—			14.9
Gains on derivative financial instruments		—			(4.2	)		(4.4	)		—			(8.6	)
Operating income (loss)		5.6			(16.2	)		23.3			—			12.7
Interest expense		28.4			26.7			0.3			(26.6	)		28.8
Other (income) expense, net		(11.8	)		(14.6	)		(0.3	)		26.5			(0.2	)
Equity in net (earnings) loss of affiliates		15.3			0.2			—			(15.3	)		0.2
Income (loss) before income taxes and minority interests		(26.3	)		(28.5	)		23.3			15.4			(16.1	)
Provision for (benefit from) income taxes		(2.5	)		1.5			8.5			—			7.5
Income (loss) before minority interests		(23.8	)		(30.0	)		14.8			15.4			(23.6	)
Minority interests, net of provision for income taxes		—			—			0.2			—			0.2
Net (loss) income	$	(23.8	)	$	(30.0	)	$	14.6		$	15.4		$	(23.8	)

F-60

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Year ended December 31, 2006 (Combined)
	Aleris International, Inc.			Combined guarantor subsidiaries			Combined non-guarantor subsidiaries			Eliminations		Consolidated
Net cash provided by operating activities	$	76.5		$	63.7		$	50.7		$	—	$	190.9
Investing activities
Acquisition of Aleris International, Inc		(1,725.4	)		—			—			—		(1,725.4	)
Purchase of businesses, net of cash acquired		(599.8	)		6.1			(234.9	)		—		(828.6	)
Payments for property, plant and equipment		(6.5	)		(49.4	)		(68.0	)		—		(123.9	)
Proceeds from sale of property, plant and equipment		—			30.6			—			—		30.6
Proceeds from settlement of currency derivative financial instruments		9.8			—			—			—		9.8
Other		—			(1.4	)		0.3			—		(1.1	)
Net cash used by investing activities		(2,321.9	)		(14.1	)		(302.6	)		—		(2,638.6	)
Financing activities
Cash equity contribution		844.9			—			—			—		844.9
Net proceeds from (payments on) long-term revolving credit facilities		(97.7	)		—			64.1			—		(33.6	)
Proceeds from issuance of long-term debt		2,329.9			0.4			388.5			—		2,718.8
Payments on long-term debt		(838.5	)		(0.2	)		(0.6	)		—		(839.3	)
Debt issuance costs		(115.1	)		—			—			—		(115.1	)
Decrease in restricted cash		(0.1	)		3.7			—			—		3.6
Proceeds from exercise of stock options		1.4			—			—			—		1.4
Excess income tax benefits from exercise of stock options		3.6			—			—			—		3.6
Minority interests		1.7			—			(3.0	)		—		(1.3	)
Other		(2.6	)		—			—			—		(2.6	)
Net transfers with subsidiaries		120.9			(43.4	)		(77.5	)		—		—
Net cash provided (used) by financing activities		2,248.4			(39.5	)		371.5			—		2,580.4
Effect of exchange rate differences on cash and cash equivalents		—			—			(13.4	)		—		(13.4	)
Net (decrease) increase in cash and cash equivalents		3.0			10.1			106.2			—		119.3
Cash and cash equivalents at beginning of period		0.4			(0.3	)		6.7			—		6.8
Cash and cash equivalents at end of period	$	3.4		$	9.8		$	112.9		$	—	$	126.1

F-61

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Year ended December 31, 2005 (Predecessor)
	Aleris International, Inc.			Combined guarantor subsidiaries			Combined non-guarantor subsidiaries			Eliminations		Consolidated
Net cash (used) provided by operating activities	$	(7.9	)	$	112.7		$	(2.5	)	$	—	$	102.3
Investing activities:
Payments for property and equipment		(9.4	)		(21.9	)		(30.8	)		—		(62.1	)
Proceeds from sale of property and equipment		—			5.4			—			—		5.4
Purchase of business, net of cash acquired		—			(300.3	)		(17.4	)		—		(317.7	)
Net investment in subsidiaries		(318.1	)		300.6			17.5			—		—
Other		0.4			—			0.1			—		0.5
Net cash used by investing activities		(327.1	)		(16.2	)		(30.6	)		—		(373.9	)
Financing activities:
Net proceeds from long-term revolving credit facility		212.4			—			—			—		212.4
Proceeds from issuance of long-term debt		—			—			29.1			—		29.1
Payments of long-term debt		(1.2	)		—			—			—		(1.2	)
Change in restricted cash		9.8			—			—			—		9.8
Minority interests		—			—			(0.7	)		—		(0.7	)
Debt issuance costs		(1.8	)		—			—			—		(1.8	)
Proceeds from exercise of stock options		13.6			—			—			—		13.6
Net transfers with subsidiaries		120.5			(116.9	)		(3.6	)		—		—
Other		(20.0	)		20.1			—			—		0.1
Net cash provided by (used) financing activities		333.3			(96.8	)		24.8			—		261.3
Effect of exchange rate changes on cash		—			—			(0.7	)		—		(0.7	)
Net decrease in cash and cash equivalents		(1.7	)		(0.3	)		(9.0	)		—		(11.0	)
Cash and cash equivalents at beginning of period		2.1			—			15.7			—		17.8
Cash and cash equivalents at end of period	$	0.4		$	(0.3	)	$	6.7		$	—	$	6.8

F-62

ALERIS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Year ended December 31, 2005 (Predecessor)
	Aleris International, Inc.			Combined guarantor subsidiaries			Combined non-guarantor subsidiaries			Eliminations			Consolidated
Net cash provided (used) by operating activities	$	11.9		$	(34.8	)	$	(35.3	)	$	60.3		$	2.1
Investing activities:
Payments for property and equipment		(6.2	)		(14.3	)		(24.3	)		—			(44.8	)
Proceeds from sale of property and equipment		—			0.1			—			—			0.1
Purchase of business, net of cash acquired		—			6.0			—			—			6.0
Net investment in subsidiaries		(161.8	)		161.8			—			—			—
Other		(0.6	)		0.3			0.1			—			(0.2	)
Net cash (used) provided by investing activities		(168.6	)		(153.9	)		(24.2	)		—			(38.9	)
Financing activities:
Net proceeds from long-term revolving credit facility		17.8			—			—			—			17.8
Proceeds from issuance of long-term debt		130.0			—			7.4			—			137.4
Payments of long-term debt		—			(125.0	)		—			—			(125.0	)
Change in restricted cash		(11.9	)		—			24.9			—			13.0
Settlement of VAW-IMCO redemption liability		24.8			—			(24.8	)		—			—
Minority interests		—			(0.4	)		—			—			(0.4	)
Debt issuance costs		(10.9	)		0.5			—			—			(10.4	)
Proceeds from exercise of stock options		6.1			—			—			—			6.1
Net transfers with subsidiaries		2.1			4.2			54.0			(60.3	)		—
Other		0.3			1.4			(1.5	)		—			0.2
Net cash provided (used) by financing activities		158.3			(119.3	)		60.0			(60.3	)		38.7
Effect of exchange rate changes on cash		—			—			1.1			—			1.1
Net increase (decrease) in cash and cash equivalents		1.6			0.2			1.6			—			3.0
Cash and cash equivalents at beginning of period		0.5			0.2			14.1			—			14.8
Cash and cash equivalents at end of period	$	2.1		$	—		$	15.7		$	—		$	17.8

F-63

EX-4.1

Exhibit 4.1

AURORA ACQUISITION MERGER SUB, INC.

to be merged with and into

ALERIS INTERNATIONAL, INC.

the SUBSIDIARY GUARANTORS named in Schedule I hereto

and

LASALLE BANK NATIONAL ASSOCIATION, as Trustee

SENIOR INDENTURE

Dated as of December 19, 2006

$600,000,000

9%/9 ³/4% Senior Notes Due 2014

Reconciliation and tie between Trust Indenture Act

of 1939 and Indenture, dated as of December 19, 2006*

Trust Indenture Act Section		Indenture Section
§ 310	(a)(1)	608
	(a)(2)	608
	(a)(3)	N.A.
	(a)(4)	N.A.
	(b)	608, 609
	(c)	N.A.
§ 311	(a)	605
	(b)	605
	(c)	N.A.
§ 312	(a)	701
	(b)	702
	(c)	702
§ 313	(a)	703
	(a)(4)	703
	(b)(1)	N.A.
	(b)(2)	N.A.
	(c)(1)	703
	(c)(2)	703
	(d)	703
§ 314	(a)	1009
	(b)	N.A.
	(c)(1)	103
	(c)(2)	103
	(c)(3)	N.A.
	(d)	N.A.
	(e)	103
	(f)	N.A.
§ 315	(a)	601
	(b)	602
	(c)	601
	(d)	601
	(e)	515
§ 316	(a) (last sentence)	102 (“Outstanding”)
	(a)(1)(A)	502, 512
	(a)(1)(B)	513
	(a)(2)	N.A.
	(b)	508
	(c)	105
§ 317	(a)(1)	503
	(a)(2)	504
	(b)	1003
§ 318	(a)	115
N.A. means Not Applicable.

* This reconciliation and tie shall not, for any purpose, be deemed to be a part of this Indenture.

TABLE OF CONTENTS¹

		Page
ARTICLE ONE
	DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101.	Rules of Construction and Incorporation by Reference of Trust Indenture Act	1
SECTION 102.	Definitions	2
SECTION 103.	Compliance Certificates and Opinions	28
SECTION 104.	Form of Documents Delivered to Trustee	29
SECTION 105.	Acts of Holders	29
SECTION 106.	Notices, Etc., to Trustee, Company, Any Subsidiary Guarantor and Agent	30
SECTION 107.	Notice to Holders; Waiver	30
SECTION 108.	Effect of Headings and Table of Contents	31
SECTION 109.	Successors and Assigns	31
SECTION 110.	Separability Clause	31
SECTION 111.	Benefits of Indenture	31
SECTION 112.	Governing Law	31
SECTION 113.	Legal Holidays	31
SECTION 114.	No Personal Liability of Directors, Officers, Employees and Stockholders	31
SECTION 115.	Trust Indenture Act Controls	31
SECTION 116.	Counterparts	32
ARTICLE TWO
NOTE FORMS
SECTION 201.	Form and Dating	32
SECTION 202.	Execution, Authentication, Delivery and Dating	32
ARTICLE THREE
THE NOTES
SECTION 301.	Title and Terms	33
SECTION 302.	Denominations	34
SECTION 303.	Temporary Notes	34
SECTION 304.	Note Registrar; Paying Agent; Registration of Transfer and Exchange	35
SECTION 305.	Mutilated, Destroyed, Lost and Stolen Notes	36
SECTION 306.	Payment of Interest; Interest Rights Preserved	36
SECTION 307.	Persons Deemed Owners	37
SECTION 308.	Cancellation	37
SECTION 309.	Computation of Interest	37
SECTION 310.	Transfer and Exchange	37
SECTION 311.	CUSIP Numbers	38
SECTION 312.	Issuance of Additional Notes	38

¹ This table of contents shall not, for any purpose, be deemed to be a part of this Indenture.

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		Page
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401.	Satisfaction and Discharge of Indenture	38
SECTION 402.	Application of Trust Money	39
ARTICLE FIVE
REMEDIES
SECTION 501.	Events of Default	40
SECTION 502.	Acceleration of Maturity; Rescission and Annulment	41
SECTION 503.	Collection of Indebtedness and Suits for Enforcement by Trustee	42
SECTION 504.	Trustee May File Proofs of Claim	42
SECTION 505.	Trustee May Enforce Claims Without Possession of Notes	43
SECTION 506.	Application of Money Collected	43
SECTION 507.	Limitation on Suits	43
SECTION 508.	Unconditional Right of Holders to Receive Principal, Premium and Interest and the Special Mandatory Redemption	44
SECTION 509.	Restoration of Rights and Remedies	44
SECTION 510.	Rights and Remedies Cumulative	44
SECTION 511.	Delay or Omission Not Waiver	44
SECTION 512.	Control by Holders	45
SECTION 513.	Waiver of Default	45
SECTION 514.	Waiver of Stay or Extension Laws	45
SECTION 515.	Undertaking for Costs	45
ARTICLE SIX
THE TRUSTEE
SECTION 601.	Duties of the Trustee	45
SECTION 602.	Notice of Defaults	46
SECTION 603.	Certain Rights of Trustee	46
SECTION 604.	Trustee Not Responsible for Recitals or Issuance of Notes	47
SECTION 605.	May Hold Notes	47
SECTION 606.	Money Held in Trust	48
SECTION 607.	Compensation and Reimbursement	48
SECTION 608.	Corporate Trustee Required; Eligibility	48
SECTION 609.	Resignation and Removal; Appointment of Successor	49
SECTION 610.	Acceptance of Appointment by Successor	49
SECTION 611.	Merger, Conversion, Consolidation or Succession to Business	50
SECTION 612.	Appointment of Authenticating Agent	50
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701.	Holder Lists	51
SECTION 702.	Disclosure of Names and Addresses of Holders	51
SECTION 703.	Reports by Trustee	51

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		Page
ARTICLE EIGHT
MERGER, CONSOLIDATION OR SALE OF ALL OR SUBSTANTIALLY ALL ASSETS
SECTION 801.	Company May Consolidate, Etc., Only on Certain Terms	51
SECTION 802.	Subsidiary Guarantors May Consolidate, Etc., Only on Certain Terms	52
SECTION 803.	Reserved	53
SECTION 804.	Successor Substituted	53
SECTION 805.	The Merger Permitted	53
SECTION 806.	Assets of Subsidiary Apply to Company	53
ARTICLE NINE
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 901.	Amendments or Supplements Without Consent of Holders	53
SECTION 902.	Amendments or Supplements with Consent of Holders	54
SECTION 903.	Execution of Amendments, Supplements or Waivers	55
SECTION 904.	Effect of Amendments, Supplements or Waivers	55
SECTION 905.	Compliance with Trust Indenture Act	55
SECTION 906.	Reference in Notes to Supplemental Indentures	55
SECTION 907.	Notice of Supplemental Indentures	56
ARTICLE TEN
COVENANTS
SECTION 1001.	Payment of Principal, Premium, if Any, and Interest	56
SECTION 1002.	Maintenance of Office or Agency	56
SECTION 1003.	Paying Agent to Hold Money in Trust	56
SECTION 1004.	Corporate Existence	57
SECTION 1005.	Payment of Taxes and Other Claims	57
SECTION 1006.	Reserved	57
SECTION 1007.	Reserved	57
SECTION 1008.	Statement by Officers as to Default	57
SECTION 1009.	Reports and Other Information	58
SECTION 1010.	Limitation on Restricted Payments	59
SECTION 1011.	Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock	64
SECTION 1012.	Liens	69
SECTION 1013.	Limitations on Transactions with Affiliates	70
SECTION 1014.	Limitations on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries	71
SECTION 1015.	Limitation on Guarantees of Indebtedness by Restricted Subsidiaries	73
SECTION 1016.	Limitation on Sale and Lease-Back Transactions	73
SECTION 1017.	Change of Control	73
SECTION 1018.	Asset Sales	75
SECTION 1019.	No Amendment to Subordination Provisions	77
SECTION 1020.	Designation of “Designated Senior Indebtedness”	77
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101.	Right of Redemption	78

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		Page
SECTION 1102.	Mandatory Redemption	78
SECTION 1103.	Applicability of Article	79
SECTION 1104.	Election to Redeem; Notice to Trustee	79
SECTION 1105.	Selection by Trustee of Notes to Be Redeemed	79
SECTION 1106.	Notice of Redemption	79
SECTION 1107.	Effect of Notice of Redemption	80
SECTION 1108.	Deposit of Redemption Price	80
SECTION 1109.	Notes Payable on Redemption Date	80
SECTION 1110.	Notes Redeemed in Part	81
ARTICLE TWELVE
GUARANTEES
SECTION 1201.	Guarantees	81
SECTION 1202.	Severability	82
SECTION 1203.	Reserved	82
SECTION 1204.	Limitation of Subsidiary Guarantors’ Liability	82
SECTION 1205.	Contribution	82
SECTION 1206.	Subrogation	82
SECTION 1207.	Reinstatement	83
SECTION 1208.	Release of a Subsidiary Guarantor	83
SECTION 1209.	Benefits Acknowledged	83
ARTICLE THIRTEEN
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301.	Company’s Option to Effect Legal Defeasance or Covenant Defeasance	83
SECTION 1302.	Legal Defeasance and Discharge	84
SECTION 1303.	Covenant Defeasance	84
SECTION 1304.	Conditions to Legal Defeasance or Covenant Defeasance	84
SECTION 1305.	Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions	85
SECTION 1306.	Reinstatement	86
SECTION 1307.	Repayment to Company	86
APPENDIX & EXHIBITS
Rule 144A / Regulation S Appendix
EXHIBIT 1 to Rule 144A / Regulation S Appendix — Form of Initial Note
EXHIBIT 2 to Rule 144A / Regulation S Appendix — Form of Transferee Letter of Representation
EXHIBIT 3 to Rule 144A/Regulation S Appendix — Form of Non-U.S. Beneficial Ownership Certification by Euroclear or Clearstream Luxembourg
EXHIBIT A — Form of Exchange Security or Private Exchange Security
EXHIBIT B — Form of Supplemental Indenture

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SENIOR INDENTURE dated as of December 19, 2006 (this “Indenture”), among AURORA ACQUISITION MERGER SUB, INC., a Delaware corporation that shall be merged with and into ALERIS INTERNATIONAL, INC., a Delaware corporation, with Aleris International, Inc. continuing as the surviving corporation (the “Company”), and certain of Aleris International, Inc.’s direct and indirect Domestic Subsidiaries (as defined below), each named in Schedule I hereto (each, a “Subsidiary Guarantor” and collectively, the “Subsidiary Guarantors”), and LASALLE BANK NATIONAL ASSOCIATION, as Trustee (the “Trustee”).

RECITALS

The Company has duly authorized the creation of an issue of (i) 9%/9 ³/4% Senior Notes Due 2014 issued on the date hereof (the “Initial Notes”) and (ii) if and when issued as required by the Registration Rights Agreement dated the date hereof, among Aurora Acquisition Merger Sub, Inc., the Company, the Subsidiary Guarantors and the Initial Purchasers (as defined therein) (the “Registration Rights Agreement”), 9%/9 ³/4% Senior Exchange Notes Due 2014 issued in an Exchange Offer in exchange for any Initial Notes and any increase in the aggregate amount of the Initial Notes as a result of a PIK Payment (as defined below) (the “Exchange Notes” and, collectively with the Initial Notes, the “Notes”), of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company and the Subsidiary Guarantors have duly authorized the execution and delivery of this Indenture. On the date hereof, Aurora Acquisition Merger Sub, Inc. shall be merged with and into Aleris International, Inc., with Aleris International, Inc. continuing as the surviving corporation and assuming all of the obligations of Aurora Acquisition Merger Sub, Inc. under this Indenture.

The Subsidiary Guarantors have each duly authorized their Subsidiary Guarantee of the Initial Notes and, if and when issued, the Exchange Notes, and to provide therefor the Subsidiary Guarantors have each duly authorized the execution and delivery of this Indenture.

All things necessary have been done to make the Notes, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid and legally binding obligations of the Company and to make this Indenture a valid and legally binding agreement of the Company, in accordance with their and its terms.

All things necessary have been done to make the Subsidiary Guarantees, upon execution and delivery of this Indenture, the valid obligations of each Subsidiary Guarantor and to make this Indenture a valid and legally binding agreement of each Subsidiary Guarantor, in accordance with their and its terms.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and ratable benefit of all Holders, as follows:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Rules of Construction and Incorporation by Reference of Trust Indenture Act. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(1) the terms defined in this Article One have the meanings assigned to them in this Article One, and words in the singular include the plural and words in the plural include the singular;

(2) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP (as herein defined); provided that for clarity purposes, determination of whether an action is for speculative purposes is not an accounting term;

(3) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

(4) all references to Articles, Sections, Exhibits and Appendices shall be construed to refer to Articles and Sections of, and Exhibits and Appendices to, this Indenture;

(5) “including” means including without limitation;

(6) all references to the date the Notes were originally issued shall refer to the Issue Date; and

(7) all references, in any context, to any interest or other amount payable on or with respect to the Notes shall be deemed to include any Additional Interest (as herein defined) pursuant to the Registration Rights Agreement.

This Indenture is subject to the mandatory provisions of the TIA (as herein defined) which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings:

(1) “Commission” means the SEC;

(2) “indenture securities” means the Notes and the Subsidiary Guarantees;

(3) “indenture security holder” means a Holder;

(4) “indenture to be qualified” means this Indenture;

(5) “indenture trustee” or “institutional trustee” means the Trustee; and

(6) “obligor” on the Notes means the Company, each Subsidiary Guarantor and any successor obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

SECTION 102. Definitions.

“ABL Credit Agreement” means the amended and restated credit agreement dated as of August 1, 2006 and amended and restated as of December 19, 2006, among the Company, Corus S.E.C./Corus L.P., Aleris Switzerland GmbH, each other Subsidiary of the Company set forth on the signature pages thereto, the lenders party thereto from time to time and Deutsche Bank AG New York Branch, as Administrative Agent, together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, including one or more credit facilities, credit agreements, loan agreements, indentures, commercial paper facilities or similar agreements extending the maturity of, refinancing, refunding, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder or adding Restricted Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether by the same or any other agent, lender or group of lenders, or other investors and whether involving the same or different group of the Company and Restricted Subsidiaries as principal obligors or guarantors.

“Acquired Indebtedness” means, with respect to any specified Person,

(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of such specified Person; and

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(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Act”, when used with respect to any Holder, has the meaning specified in Section 105 of this Indenture.

“Additional Interest” means all liquidated damages then owing pursuant to the Registration Rights Agreement.

“Additional Notes” means any Notes issued by the Company pursuant to Section 312.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

“Affiliate Transaction” has the meaning specified in Section 1013(a) of this Indenture.

“Applicable Premium” means, with respect to a Note at any Redemption Date, the greater of (i) 1.0% of the principal amount of such Note and (ii) the excess of (A) the present value at such Redemption Date of (1) the Redemption Price of such Note on December 15, 2010 (such Redemption Price being that described in the table set forth in Section 1101(b)) plus (2) all required remaining scheduled interest payments (calculated based on the cash interest rate payable on the Notes) due on such Note through such date (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (B) the principal amount of such Note on such Redemption Date, as calculated by the Company or on behalf of the Company by such Person as the Company shall designate; provided that such calculation shall not be a duty or obligation of the applicable Trustee.

“Asset Sale” means

(1) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of the Company or any Restricted Subsidiary (each referred to in this definition as a “disposition”); and

(2) the issuance or sale of Equity Interests of any Restricted Subsidiary, whether in a single transaction or a series of related transactions,

in each case, other than:

(a) a disposition of cash, Cash Equivalents or Investment Grade Securities or excess, damaged, obsolete or worn out assets in the ordinary course of business or any disposition of inventory or goods held for sale in the ordinary course of business;

(b) the disposition of all or substantially all of the assets of the Company in a manner permitted pursuant to the provisions described under Section 801 of this Indenture or any disposition that constitutes a Change of Control pursuant to this Indenture;

(c) the making of any Permitted Investment or the making of any Restricted Payment that is not prohibited by Section 1010;

(d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of transactions with an aggregate fair market value of less than $25.0 million;

-3-

(e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;

(f) to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(g) the lease, assignment, license, sub-license or sub-lease of any real or personal property in the ordinary course of business;

(h) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(i) foreclosures on assets;

(j) sales of accounts receivable, or participations therein, in connection with any Receivables Facility; and

(k) the unwinding of any Hedging Obligations.

“Asset Sale Offer” has the meaning specified in Section 1018 of this Indenture.

“Attributable Debt” in respect of a Sale and Lease-Back Transaction means, as at the time of determination, the present value (discounted at the cash interest rate borne by the Notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Lease-Back Transaction (including any period for which such lease has been extended); provided, however, that if such Sale and Lease-Back Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby shall be determined in accordance with the definition of “Capitalized Lease Obligation.”

“Authenticating Agent” has the meaning specified in Section 612 of this Indenture.

“Bankruptcy Law” means Title 11, United States Bankruptcy Code of 1978, as amended, or any similar United States federal or state or foreign law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law.

“Board of Directors” means:

(1) with respect to a corporation, the board of directors of the corporation;

(2) with respect to a partnership, the board of directors of the general partner of the partnership; and

(3) with respect to any other Person, the board or committee of such Person serving a similar function.

“Board Resolution” means, with respect to the Company, a duly adopted resolution of the Board of Directors of the Company or any committee thereof.

“Business Day” means each day that is not a Legal Holiday.

“Capital Stock” means

(1) in the case of a corporation, corporate stock,

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock,

-4-

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited), and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of the issuing Person.

“Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

“Cash Equivalents” means, as to any Person,

(1) securities issued or directly and fully guaranteed or insured by the United States or any agency, instrumentality or sponsored corporation thereof and backed by the full faith and credit of the United States, and in each case having maturities of not more than 24 months from the date of acquisition;

(2) U.S. Dollar denominated time deposits, certificates of deposit, overnight bank deposits and bankers’ acceptances having maturities within one year from the date of acquisition thereof issued by any lender under the Senior Credit Facilities or any commercial bank of recognized standing, having capital and surplus in excess of $250,000,000;

(3) repurchase obligations for underlying securities of the types described in clauses (1) and (2) above and entered into with any commercial bank meeting the qualifications specified in clause (2) above;

(4) other investment instruments having maturities within 180 days from the date of acquisition thereof offered or sponsored by financial institutions having capital and surplus in excess of $500,000,000;

(5) readily marketable direct obligations issued by any state of the United States or any political subdivision thereof having maturities within 180 days from the date of acquisition thereof and having, at the time of acquisition thereof, one of the two highest rating categories obtainable from either Moody’s or S&P (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency);

(6) commercial paper rated, at the time of acquisition thereof, at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), in each case maturing within one year after the date of acquisition;

(7) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (1) through (6) above;

(8) in the case of any Foreign Subsidiary of the Company, (x) certificates of deposit or bankers’ acceptances of any bank organized under the laws of Canada, Japan or any country that is a member of the European economic and monetary union pursuant to the Treaty whose short term commercial paper, at the time of acquisition thereof, is rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), or, if no such commercial paper rating is available, a long-term debt rating, at the time of acquisition thereof, of at least A or the equivalent thereof by S&P or at least A-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), in each case maturing not more than one year from the date of acquisition by such Foreign Subsidiary, (y) overnight deposits and demand deposit accounts maintained with any bank that such Foreign Subsidiary regularly transacts business and (z) securities of the type and maturity described in clause (1) above but issued by the principal governmental authority in which

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such Foreign Subsidiary is organized so long as such security has the highest rating available from either S&P or Moody’s;

(9) Indebtedness or Preferred Stock issued by Persons with a rating of A or higher from S&P or A2 or higher from Moody’s with maturities of one year or less from the date of acquisition;

(10) U.S. Dollars; and

(11) Canadian dollars, Japanese yen, pounds sterling, Euros or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business.

“Cash Interest” shall have the meaning set forth in Section 301 of this Indenture.

“Change of Control” means the occurrence of any of the following:

(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any Person other than a Permitted Holder, or

(2) the Company becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act, or any successor provision), other than the Permitted Holders, in a single transaction or in a series of related transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more of the total voting power of the Voting Stock of the Company or any of its direct or indirect parent companies.

“Change of Control Offer” has the meaning specified in Section 1017 of this Indenture.

“Change of Control Payment” has the meaning specified in Section 1017 of this Indenture.

“Change of Control Payment Date” has the meaning specified in Section 1017 of this Indenture.

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

“Co-Investors” means Persons (and their Affiliates) who, on the Issue Date, are limited partners of TPG Partners IV, L.P. or TPG Partners V, L.P.

“Company” means the Person named as the “Company” in the first paragraph of this Indenture, until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter, “Company” shall mean such successor Person; provided that when used in the context of determining the fair market value of an asset or liability under this Indenture, “Company” shall, unless otherwise expressly stated, be deemed to mean the Board of Directors of the Company when the fair market value of such asset or liability is equal to or in excess of $100.0 million.

“Company Request” or “Company Order” means a written request or order signed in the name of the Company by two Officers or one Officer and either an Assistant Treasurer or an Assistant Secretary of the Company, and delivered to the Trustee.

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“consolidated” or “Consolidated” means, with respect to any Person, such Person consolidated with its Restricted Subsidiaries, and excludes from such consolidation any Unrestricted Subsidiary as if such unrestricted subsidiary were not an Affiliate of such Person.

“Consolidated Depreciation and Amortization Expense” means with respect to any Person for any period, the total amount of depreciation and amortization expense, including the amortization of deferred financing fees and other related noncash charges of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

“Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication, of:

(a) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including (a) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers’ acceptances, (c) noncash interest payments (but excluding any noncash interest expense attributable to the movement in the mark-to-market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations and (e) net payments, if any, pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (i) Additional Interest, (ii) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses, (iii) any expensing of bridge, commitment and other financing fees and (iv) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Facility); plus

(b) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; less

(c) interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided that, without duplication:

(1) any net after-tax extraordinary gains or losses or any non-recurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses (including, but not limited to, any expenses relating to severance, relocation, one-time compensation charges and the Transactions and any expenses directly attributable to the implementation of cost saving initiatives) shall be excluded;

(2) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period, whether effected through a cumulative effect adjustment or a retroactive application in each case in accordance with GAAP;

(3) any net after-tax income (loss) from disposed or discontinued operations and any net after-tax gains or losses on disposal of disposed or discontinued operations shall be excluded;

(4) any net after-tax gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions or the sale or other disposition of any Capital Stock of any Person other than in the ordinary course of business, as determined in good faith by the Company, shall be excluded;

(5) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided

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that Consolidated Net Income of such Person shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period (subject in the case of dividends, distributions or other payments made to a Restricted Subsidiary to the limitations contained in clause (6) below);

(6) solely for the purpose of determining the amount available for Restricted Payments under clause (C)(1) of Section 1010(a) of this Indenture, the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded if the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination wholly permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived; provided that Consolidated Net Income of the Company shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) to the Company or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein;

(7) any increase in amortization or depreciation or other noncash charges resulting from the application of purchase accounting in relation to the Corus Transaction, the Transactions or any acquisition that is consummated after the Issue Date, net of taxes, shall be excluded;

(8) any net after-tax income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments shall be excluded;

(9) any impairment charge or asset write-off, in each case pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded; and

(10) any noncash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights to officers, directors or employees shall be excluded.

Notwithstanding the foregoing, for the purpose of Section 1010(a) of this Indenture only (other than clause (C)(4) thereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Company and the Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Company and the Restricted Subsidiaries, any repayments to the Company or a Restricted Subsidiary of loans and advances that constitute Restricted Investments, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under Section 1010(a) of this Indenture pursuant to clause (C)(4).

“Consolidated Secured Debt Ratio” as of any date of determination means the ratio of (a) Consolidated Total Indebtedness of the Company and the Restricted Subsidiaries that is secured by Liens as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (b) the aggregate amount of EBITDA of the Company and the Restricted Subsidiaries for the period of the most recently ended consecutive four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio.”

“Consolidated Total Indebtedness” means, as at any date of determination, an amount equal to the sum of (1) the aggregate amount of all outstanding Indebtedness of the Company and the Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, Obligations in respect of Capitalized Lease Obligations, Attributable Debt in respect of Sale and Lease-Back Transactions and debt obligations evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (and excluding (x) any undrawn letters of credit and (y) all obligations relating to Receivables Facilities) and (2) the aggregate amount of all outstanding

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Disqualified Stock of the Company and all Disqualified Stock and Preferred Stock of the Restricted Subsidiaries (excluding items eliminated in consolidation), with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences and Maximum Fixed Repurchase Prices, in each case determined on a consolidated basis in accordance with GAAP.

For purposes hereof, the “Maximum Fixed Repurchase Price” of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock, such fair market value shall be determined reasonably and in good faith by the Company.

“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (the “primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent,

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,

(2) to advance or supply funds

(a) for the purchase or payment of any such primary obligation or

(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

“Corporate Trust Office” means the principal corporate trust office of the Trustee, at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Indenture is located at 135 S. LaSalle Street, Suite 1560, Chicago IL 60603; Attn: Corporate Trust Services Division, except that with respect to presentation of the Notes for payment or for registration of transfer or exchange, such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate agency business shall be conducted.

“Corus Acquisitions” means the acquisition consummated on August 1, 2006 by the Company and its Subsidiaries of (i) all of the limited partnership interests in Corus L.P., a limited partnership organized under the laws of Quebec, and all of the shares of Corus Aluminum Inc., a corporation organized under the laws of Quebec, and each of their respective Subsidiaries and (ii) all of the beneficial interest in the entire share capital of Corus Hylite BV, Corus Aluminium Rolled Products BV, Corus Aluminium NV, Corus Aluminium GmbH, Corus Aluminium Corp. and Hoogovens Aluminium Europe Inc. and each of their respective Subsidiaries.

“Corus Credit Documents” means collectively, (i) the Senior Bridge Loan Agreement dated as of August 1, 2006 among the Company and the lenders party thereto, (ii) the Term Loan Agreement dated as of August 1, 2006 among the Company, certain of its Subsidiaries and the agents and lenders party thereto and (iii) the Credit Agreement dated as of August 1, 2006 among the Company, certain of its Subsidiaries and the agents and lenders party thereto and, in each case, all other instruments, documents, agreements and certificates executed in connection with the foregoing.

“Corus Transaction” means collectively, (i) the entering into of the Corus Credit Documents and the incurrence of borrowings thereunder (including the issuance of letters of credit), (ii) the consummation of the Corus Acquisitions, (iii) the refinancing of Indebtedness consummated in connection with the transactions described in

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clauses (i) and (ii), (iv) all intercompany loans, equity contributions, repayments of intercompany loans, dividends, distributions and other intercompany Investments related to the foregoing and (v) the payment of all fees and expenses in connection with the foregoing.

“Covenant Defeasance” has the meaning specified in Section 1303 of this Indenture.

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“Defaulted Interest” has the meaning specified in Section 306(b) of this Indenture.

“Depository” means The Depository Trust Company, its nominees and their respective successors.

“Designated Noncash Consideration” means the fair market value of noncash consideration received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such valuation, executed by an executive vice president and the principal financial officer of the Company (or a parent company thereof), less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Noncash Consideration.

“Designated Preferred Stock” means Preferred Stock of the Company or any parent company thereof (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary) and is so designated as Designated Preferred Stock pursuant to an Officers’ Certificate executed by an executive vice president and the principal financial officer of the Company or the applicable parent company thereof, as the case may be, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (C) of Section 1010(a) of this Indenture.

“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable (other than solely for Capital Stock that is not Disqualified Stock), other than as a result of a change of control or asset sale, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, other than as a result of a change of control or asset sale, in whole or in part, in each case prior to the date that is 91 days after the earlier of the maturity date of the Notes and the date the Notes are no longer outstanding; provided that if such Capital Stock is issued to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

“Domestic Subsidiary” means, with respect to any Person, any Restricted Subsidiary of such Person other than (i) a Foreign Subsidiary or (ii) a Domestic Subsidiary of a Foreign Subsidiary, but, in each case, including any Subsidiary that guarantees or otherwise provides direct credit support for any indebtedness of the Company.

“EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period,

(1) increased by (without duplication):

(a) provision for taxes based on income or profits, plus franchise or similar taxes, of such Person for such period deducted in computing Consolidated Net Income; plus

(b) consolidated Fixed Charges of such Person for such period to the extent the same was deducted in computing Consolidated Net Income; plus

(c) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent deducted in computing Consolidated Net Income; plus

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(d) any expenses or charges related to any Equity Offering, Permitted Investment, acquisition, disposition, recapitalization or the incurrence of Indebtedness permitted to be incurred by this Indenture including a refinancing thereof (whether or not successful) and any amendment or modification to the terms of any such transactions, including such fees, expenses or charges related to the Corus Transaction and the Transactions, in each case, deducted in computing Consolidated Net Income; plus

(e) the amount of any restructuring charge or reserve deducted in such period in computing Consolidated Net Income, including any one-time costs incurred in connection with (x) acquisitions after the Issue Date or (y) the closing of any production or manufacturing facilities after the Issue Date; plus

(f) any write-offs, write-downs or other noncash charges reducing Consolidated Net Income for such period, excluding any such charge that represents an accrual or reserve for a cash expenditure for a future period; plus

(g) the amount of any minority interest expense deducted in computing Consolidated Net Income; plus

(h) the amount of management, monitoring, consulting and advisory fees and related expenses paid (or any accruals related to such fees or related expenses) during such period to the Sponsor and the Co-Investors to the extent permitted under Section 1013 of this Indenture; plus

(i) (A) the amount of cost savings projected by the Company in good faith to be realized as a result of actions taken or expected to be taken during such period (calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (x) such cost savings are reasonably identifiable and factually supportable, (y) such actions are taken within 36 months after the Issue Date and (z) the aggregate amount of cost savings added pursuant to this clause (i)(A) shall not exceed $40.0 million for any four consecutive quarter period (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definition of “Fixed Charge Coverage Ratio”) and (B) the amount of (i) cost savings or (ii) increases in EBITDA, in each case projected by the Company in good faith to be realized as the result of the replacement of or modification to contractual arrangements with unaffiliated third parties (calculated on a pro forma basis as though such cost savings or increases in EBITDA had been realized on the first day of such period) and, in the case of cost savings, net of the amount of actual benefits realized during such period from such action; provided that such contractual arrangements were entered into with a Person that was acquired by the Company or its Restricted Subsidiaries within 12 months of any such replacement or modification; plus

(j) any costs or expenses incurred by the Company or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or stockholders agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Company or net cash proceeds of issuance of Equity Interests of the Company (other than Disqualified Stock that is Preferred Stock) in each case, solely to the extent that such cash proceeds are excluded from the calculation set forth in clause (C) of Section 1010(a);

(2) decreased by (without duplication) noncash gains increasing Consolidated Net Income of such Person for such period, excluding any gains that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period (other than such cash charges that have been added back to Consolidated Net Income in computing EBITDA in accordance with this definition); and

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(3) increased or decreased, as applicable, by (without duplication):

(a) any net gain or loss resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards #133;

(b) any net gain or loss resulting in such period from currency translation gains or losses related to currency remeasurements of Indebtedness; and

(c) the amount of gain or loss resulting in such period from a sale of receivables and related assets to a Receivables Subsidiary in connection with a Receivables Facility.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.

“Equity Offering” means any public or private sale of common stock or Preferred Stock of the Company or any of its direct or indirect parent companies (excluding Disqualified Stock), other than

(a) public offerings with respect to the Company’s or any direct or indirect parent company’s common stock registered on Form S-4 or Form S-8;

(b) any such public or private sale that constitutes an Excluded Contribution; and

(c) an issuance to any Subsidiary of the Company.

“Event of Default” has the meaning specified in Section 501 of this Indenture.

“Excess Proceeds” has the meaning specified in Section 1018 of this Indenture.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Exchange Notes” has the meaning specified in the first recital of this Indenture. Unless the context otherwise requires, all references to the Exchange Notes shall include 9%/9 ³/4% Senior Exchange Notes Due 2014 issued in exchange for any PIK Notes, any increase in the aggregate principal amount of the Notes as a result of a PIK Payment and any Additional Notes.

“Exchange Offer” means the Exchange Offer as defined in the Registration Rights Agreement.

“Exchange Offer Registration Statement” means the Exchange Offer Registration Statement as defined in the Registration Rights Agreement.

“Excluded Contribution” means net cash proceeds, marketable securities or Qualified Proceeds received by the Company from:

(a) contributions to its common equity capital; and

(b) the sale (other than to a Subsidiary of the Company or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Company) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Company,

in each case designated as Excluded Contributions pursuant to an Officers’ Certificate executed by an executive vice president and the principal financial officer of the Company on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in clause (C) of Section 1010(a) of this Indenture.

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“Existing Indebtedness” means Indebtedness of the Company or the Restricted Subsidiaries in existence on the Issue Date, plus interest accruing thereon.

“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Company or any Restricted Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than Indebtedness incurred under any revolving credit facility that has been permanently repaid and has not been replaced) or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishing of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period (the “reference period”).

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, consolidations and disposed operations (as determined in accordance with GAAP) that have been made by the Company or any Restricted Subsidiary during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and disposed operations (and the change in any associated fixed charges and the change in EBITDA resulting therefrom) had occurred on the first day of the reference period. If since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made any Investment, acquisition, disposition, merger, consolidation or disposed operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or disposed operation had occurred at the beginning of the reference period.

For purposes of this definition, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.

“Fixed Charges” means, with respect to any Person for any period, the sum of

(a) Consolidated Interest Expense of such Person for such period,

(b) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock made during such period, and

(c) all cash dividend payments (excluding items eliminated in consolidation) on any series of Disqualified Stock made during such period.

“Foreign Subsidiary” means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States of America, any state thereof, the District of Columbia, or any territory thereof.

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“Foreign Subsidiary Total Assets” means the total amount of all assets of Foreign Subsidiaries of the Company and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP as shown on the most recent balance sheet of the Company.

“GAAP” means generally accepted accounting principles in the United States of America that are in effect on the Issue Date.

“Government Securities” means securities that are

(a) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or

(b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in either case, are not callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such Government Securities, or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.

“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations, and, when used as a verb, shall have a corresponding meaning.

“Hedging Obligations” means, with respect to any Person, the obligations of such Person under currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements and other agreements or arrangements, in each case designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

“Holder” means the Person in whose name a Note is registered on the books of the Note Registrar.

“incur” has the meaning specified in Section 1011 of this Indenture.

“incurrence” has the meaning specified in Section 1011 of this Indenture.

“Indebtedness” means, with respect to any Person:

(a) any indebtedness (including principal and premium) of such Person, whether or not contingent:

(1) in respect of borrowed money;

(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without double counting, reimbursement agreements in respect thereof);

(3) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except any such balance that constitutes a trade

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payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business; or

(4) representing any Hedging Obligations;

if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(b) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (a) of another Person (whether or not such items would appear upon the balance sheet of such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business;

(c) to the extent not otherwise included, the obligations of the type referred to in clause (a) of another Person secured by a Lien on any asset owned by such Person, whether or not such obligations are assumed by such Person and whether or not such obligations would appear upon the balance sheet of such Person; provided that the amount of such Indebtedness shall be the lesser of the fair market value of such asset at the date of determination and the amount of Indebtedness so secured; and

(d) Attributable Debt in respect of Sale and Lease-Back Transactions;

provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (A) Contingent Obligations incurred in the ordinary course of business and (B) Obligations under, or in respect of, Receivables Facilities.

“Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this Indenture and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be part of and govern this instrument and any such supplemental indenture, respectively.

“Indentures” means this Indenture and the Senior Subordinated Indenture.

“Independent Financial Advisor” means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged and that is independent of the Company and its Affiliates.

“Initial Notes” has the meaning stated in the first recital of this Indenture.

“Initial Purchasers” means Deutsche Bank Securities Inc., Goldman, Sachs & Co., KeyBanc Capital Markets, a division of McDonald Investments Inc., and PNC Capital Markets LLC.

“Interest Payment Date” means the Stated Maturity of an installment of interest on the Notes.

“Interest Period” means each period commencing on and including an Interest Payment Date (or, if there has not yet been an Interest Payment Date, December 19, 2006) and ending on and including the day immediately preceding the next succeeding Interest Payment Date.

“Investment Grade Securities” means:

(1) securities issued or directly and fully guaranteed or insured by the government of the United States of America or any agency or instrumentality thereof (other than Cash Equivalents);

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(2) debt securities or debt instruments with a rating of BBB- or higher by S&P or Baa3 or higher by Moody’s or the equivalent of such rating by such rating organization, or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any other nationally recognized securities rating agency, but excluding any debt securities or instruments constituting loans or advances among the Company and its Subsidiaries;

(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2), which fund may also hold immaterial amounts of cash pending investment or distribution; and

(4) corresponding instruments in countries other than the United States of America customarily utilized for high quality investments.

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (including by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others, but excluding accounts receivable, trade credit, advances to customers, commission, travel and similar advances to officers and employees, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 1010 of this Indenture:

(1) “Investments” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to:

(x) the Company’s “Investment” in such Subsidiary at the time of such redesignation; less

(y) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Company.

“Issue Date” means December 19, 2006.

“Legal Defeasance” has the meaning specified in Section 1302 of this Indenture.

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions are not required to be open in Chicago, Illinois or in the State of New York.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease be deemed to constitute a Lien.

“Management Services Agreement” means the Management Services Agreement as in effect on the Issue Date between the Company and the Sponsor.

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“Maturity”, when used with respect to any Note, means the date on which the principal of such Note or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, notice of redemption or otherwise.

“Merger” means the merger of Aurora Acquisition Merger Sub, Inc., a Delaware corporation, with and into Aleris International, Inc. pursuant to the Merger Agreement.

“Merger Agreement” means the Agreement and Plan of Merger among Aurora Acquisition Holdings, Inc., Aurora Acquisition Merger Sub, Inc. and Aleris International, Inc., dated as of August 7, 2006.

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

“Net Proceeds” means the aggregate cash proceeds received by the Company or any Restricted Subsidiary in respect of any Asset Sale, including any cash received upon the sale or other disposition of any Designated Noncash Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Noncash Consideration, including legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, other fees and expenses, including title and recordation expenses, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal, premium, if any, and interest on Indebtedness required (other than by Section 1018(b)(1)) to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Company or a Restricted Subsidiary as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Company or a Restricted Subsidiary after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

“New Notes” means the Senior Subordinated Notes and the Notes.

“Non-U.S. Person” means a Person who is not a U.S. Person.

“Note Register” and “Note Registrar” have the respective meanings specified in Section 304.

“Notes” has the meaning stated in the first recital of this Indenture and more particularly means any Notes authenticated and delivered under this Indenture. The Initial Notes, any PIK Notes and any Additional Notes (including, in each case, any increase in the principal amount thereof as a result of a PIK Payment) shall be treated as a single class for all purposes of this Indenture, including waivers, amendments, redemptions and offers to purchase, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes, any PIK Notes, any Additional Notes and the Exchange Notes issued in exchange for the Initial Notes, any PIK Notes and any Additional Notes (including, in each case, any increase in the principal amount thereof as a result of a PIK Payment). All references to “principal amount” of the Notes include any increase in principal amount of the outstanding Notes as a result of a PIK Payment.

“Obligations” means any principal (including reimbursement obligations with respect to letters of credit whether or not drawn), interest (including, to the extent legally permitted, all interest accrued thereon after the commencement of any insolvency or liquidation proceeding at the rate, including any applicable post-default rate, specified in the applicable agreement), premium (if any), guarantees of payment, fees, indemnifications, reimbursements, expenses, damages and other liabilities payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Notes shall not include fees or indemnification in favor of the Trustee and any other third parties other than the Holders.

“Offering Circular” means the Offering Circular dated December 13, 2006 relating to the Notes.

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“Officer” means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Company.

“Officers’ Certificate” means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements set forth in this Indenture.

“Opinion of Counsel” means a written opinion from legal counsel. The counsel may be an employee of or counsel to the Company. Opinions of Counsel required to be delivered under this Indenture may have qualifications customary for opinions of the type required and counsel delivering such Opinions of Counsel may rely on certificates of the Company or government or other officials customary for opinions of the type required, including certificates certifying as to matters of fact, including that various covenants have been complied with.

“Outstanding”, when used with respect to Notes, means, as of the date of determination, all Notes theretofore authenticated and delivered under this Indenture, except:

(1) Notes theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(2) Notes, or portions thereof, for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Notes; provided that, if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

(3) Notes, except to the extent provided in Sections 1302 and 1303, with respect to which the Company has effected Legal Defeasance or Covenant Defeasance as provided in Article Thirteen; and

(4) Notes which have been paid pursuant to Section 305 or in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, other than any such Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Notes are held by a Protected Purchaser in whose hands the Notes are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite principal amount of Outstanding Notes have given any request, demand, authorization, direction, consent, notice or waiver hereunder, and for the purpose of making the calculations required by TIA Section 316, Notes owned by the Company or any other obligor upon the Notes or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in making such calculation or in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded.

“Paying Agent” means any Person (including the Company acting as Paying Agent) authorized by the Company to pay the principal of (and premium, if any) or interest on any Notes on behalf of the Company.

“Permitted Asset Swap” means the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between the Company or any of its Restricted Subsidiaries and another Person that is not the Company or any of its Restricted Subsidiaries; provided that any cash or Cash Equivalents received must be applied in accordance with Section 1018 of this Indenture.

“Permitted Holders” means the Sponsor and members of management of the Company (or its direct parent) who are holders of Equity Interests of the Company (or any of its direct or indirect parent companies) on the Issue Date (the “Management Investors”) and any Co-Investors or Subsequent Co-Investors; provided, that the Sponsor, the Management Investors and the Co-Investors, collectively, have beneficial ownership of at least 50% of the total voting power of the Voting Stock of the Company or any of its direct or indirect parent companies. Any Person or

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group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture shall thereafter, together with its Affiliates, constitute an additional Permitted Holder.

“Permitted Investments” means:

(a) any Investment in the Company or any Restricted Subsidiary;

(b) any Investment in cash and Cash Equivalents or Investment Grade Securities;

(c) (i) any Investment by the Company or any Restricted Subsidiary of the Company in a Person that is engaged in a Similar Business if as a result of such Investment

(1) such Person becomes a Restricted Subsidiary of the Company or

(2) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company and

(ii) any Investment held by such Person;

(d) any Investment in securities or other assets not constituting cash, Cash Equivalents or Investment Grade Securities and received in connection with an Asset Sale made pursuant to the provisions of Section 1018 of this Indenture or any other disposition of assets not constituting an Asset Sale;

(e) any Investment existing on the Issue Date or made pursuant to legally binding written commitments in existence on the Issue Date;

(f) loans and advances to, and guarantees of Indebtedness of, employees of the Company (or any of its direct or indirect parent companies) or a Restricted Subsidiary not in excess of $8.0 million outstanding at any one time, in the aggregate;

(g) any Investment acquired by the Company or any Restricted Subsidiary

(1) (x) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the Person in which such other Investment is made or which is the obligor with respect to such accounts receivable or (y) in good faith settlement of delinquent obligations of, and other disputes with, customers, trade debtors, licensors, licensees and suppliers arising in the ordinary course; or

(2) as a result of a foreclosure by the Company or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(h) Hedging Obligations permitted under Section 1011(b)(12) of this Indenture;

(i) loans and advances to officers, directors and employees of the Company (or any of its direct or indirect parent companies) or a Restricted Subsidiary for business-related travel expenses, moving expenses and other similar expenses, in each case incurred in the ordinary course of business or consistent with past practice or to fund such Person’s purchase of Equity Interests of the Company or any direct or indirect parent company thereof under compensation plans approved by the Board of Directors of the Company in good faith;

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(j) Investments the payment for which consists of Equity Interests of the Company or any of its direct or indirect parent companies (exclusive of Disqualified Stock); provided that such Equity Interests shall not increase the amount available for Restricted Payments under clause (C) of Section 1010(a) of this Indenture;

(k) guarantees of Indebtedness permitted under Section 1011 and performance guarantees in the ordinary course of business;

(l) any transaction to the extent it constitutes an Investment that is permitted and made in accordance with Section 1013(b) (except transactions described in Sections 1013(b)(2), (6) and (11));

(m) Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment or the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(n) Investments in a Similar Business having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (n) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities), not to exceed the greater of (x) $100.0 million and (y) 3.0% of Total Assets at the time of each Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(o) Investments relating to a Receivables Facility; provided that in the case of Receivables Facilities established after the Issue Date, such Investments are necessary or advisable (in the good faith determination of the Company) to effect such Receivables Facility;

(p) additional Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (p) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities), not to exceed the greater of (x) $125.0 million and (y) 4.0% of Total Assets (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value); and

(q) Investments in joint ventures having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (q) that are at that time outstanding, not to exceed the greater of (x) $100.0 million and (y) 3.0% of Total Assets (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value).

“Permitted Liens” means, with respect to any Person:

(1) Liens to secure Indebtedness incurred under Sections 1011(b)(1) and (2) (and, in each case, any related Obligations);

(2) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits, prepayments or cash pledges to secure bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred in the ordinary course of business;

(3) Liens imposed by law, such as landlords’, carriers’, warehousemen’s and mechanics’ Liens and other similar Liens, in each case, for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other

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proceedings for review, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(4) Liens for taxes, assessments or other governmental charges or claims not yet overdue for a period of more than 30 days or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(5) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(6) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties, in each case, which were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(7) Liens existing on the Issue Date;

(8) Liens on property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided that such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, that such Liens may not extend to any other property owned by the Company or any Restricted Subsidiary;

(9) Liens on property at the time the Company or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition; provided, further, that the Liens may not extend to any other property owned by the Company or any Restricted Subsidiary;

(10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary permitted to be incurred in accordance with Section 1011 of this Indenture;

(11) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(12) leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Company or any of the Restricted Subsidiaries and do not secure any Indebtedness;

(13) Liens arising from financing statement filings under the Uniform Commercial Code or similar state laws regarding (i) operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business and (ii) goods consigned or entrusted to or bailed with a Person in connection with the processing, reprocessing, recycling or tolling of such goods;

(14) Liens in favor of the Company or any Subsidiary Guarantor;

(15) Liens on inventory or equipment of the Company or any Restricted Subsidiary granted in the ordinary course of business to the Company’s client at which such inventory or equipment is located;

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(16) Liens on accounts receivable and related assets incurred in connection with a Receivables Facility;

(17) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (1), (7), (8) and (9) and the following clauses (18) and (28); provided that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (1), (7), (8), (9) and the following clauses (18) and (28) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(18) Liens securing Indebtedness permitted to be incurred pursuant to Sections 1011(b)(6), (19), (20), (22)(i) and (23); provided that (A) Liens securing Indebtedness permitted to be incurred pursuant to clause (19) are solely on acquired property or the assets of the acquired entity, as the case may be and (B) Liens securing Indebtedness permitted to be incurred pursuant to clause (20) extend only to the assets of Foreign Subsidiaries;

(19) deposits in the ordinary course of business to secure liability to insurance carriers;

(20) Liens securing judgments for the payment of money not constituting an Event of Default under clause (5) under Section 501 of this Indenture, so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

(21) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation or exportation of goods in the ordinary course of business;

(22) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business and (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

(23) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Company or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Company and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(24) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

(25) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 1011 of this Indenture; provided that such Liens do not extend to any assets other than those assets that are the subject of such repurchase agreement;

(26) other Liens securing obligations incurred in the ordinary course of business which obligations do not exceed $50.0 million;

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(27) Liens securing Hedging Obligations; and

(28) Liens incurred to secure Obligations in respect of any Indebtedness permitted to be incurred pursuant to the covenant described under Section 1011; provided that, at the time of incurrence and after giving pro forma effect thereto, the Consolidated Secured Debt Ratio would be no greater than 3.00:1.0.

“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“PIK Interest” has the meaning specified in Section 301 of this Indenture.

“PIK Notes” has the meaning specified in Section 202 of this Indenture.

“PIK Payment” has the meaning specified in Section 202 of this Indenture.

“Predecessor Note” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 305 in exchange for a mutilated Note or in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note.

“Preferred Stock” means any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution or winding up.

“Protected Purchaser” has the meaning specified in Section 305 of this Indenture.

“Qualified Proceeds” means assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business; provided that the fair market value of any such assets or Capital Stock shall be determined by the Company in good faith.

“Qualifying Trustee” has the meaning specified in Section 1305 of this Indenture.

“Receivables Facility” means one or more receivables financing facilities, as amended, supplemented, modified, extended, renewed, restated, refunded, replaced or refinanced from time to time, the Indebtedness of which is non-recourse (except for standard representations, warranties, covenants and indemnities made in connection with such facilities) to the Company and its Restricted Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries sells its accounts receivable to either (a) a Person that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Facility.

“Receivables Subsidiary” means any Subsidiary formed solely for the purpose of engaging, and that engages only, in one or more Receivables Facilities.

“Redemption Date”, when used with respect to any Note to be redeemed, in whole or in part, means the date fixed for such redemption by or pursuant to this Indenture.

“Redemption Price”, when used with respect to any Note to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.

“Refinancing Indebtedness” has the meaning specified in Section 1011 of this Indenture.

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“Refunding Capital Stock” has the meaning specified in Section 1010 of this Indenture.

“Registration Rights Agreement” means the Registration Rights Agreement dated as of the Issue Date, among the Company, the Subsidiary Guarantors and the Initial Purchasers.

“Regular Record Date” has the meaning specified in Section 301 of this Indenture.

“Related Business Assets” means assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by the Company or a Restricted Subsidiary in exchange for assets transferred by the Company or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.

“Responsible Officer”, when used with respect to the Trustee, means any vice president, any assistant treasurer, any trust officer or assistant trust officer, or any other officer of the Trustee customarily performing functions similar to those performed by any of the above-designated officers, and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Payments” has the meaning specified in Section 1010 of this Indenture.

“Restricted Subsidiary” means, at any time, any direct or indirect Subsidiary of the Company (including any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided that upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary.”

“Retired Capital Stock” has the meaning specified in Section 1010 of this Indenture.

“S&P” means Standard and Poor’s, a division of the McGraw-Hill Companies, Inc., and any successor to its rating agency business.

“Sale and Lease-Back Transaction” means any arrangement with any Person providing for the leasing by the Company or any Restricted Subsidiary of any real or tangible personal property, which property has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person in contemplation of such leasing.

“SEC” means the Securities and Exchange Commission.

“Secured Indebtedness” means any Indebtedness secured by a Lien.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Senior Credit Facilities” means the ABL Credit Agreement and the Term Credit Agreement.

“Senior Indebtedness” means with respect to any Person:

(1) all Indebtedness of such Person, whether outstanding on the Issue Date or thereafter incurred; and

(2) all other Obligations of such Person (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to such Person whether or not post-filing interest is allowed in such proceeding) in respect of Indebtedness described in clause (1) above

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unless, in the case of clauses (1) and (2), the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness or other Obligations are subordinate in right of payment to the Notes or the Subsidiary Guarantee of such Person, as the case may be; provided that Senior Indebtedness shall not include:

(1) any obligation of such Person to the Company or any Subsidiary or to any joint venture in which the Company or any Restricted Subsidiary has an interest;

(2) any liability for Federal, state, local or other taxes owed or owing by such Person;

(3) any accounts payable or other liability to trade creditors in the ordinary course of business (including guarantees thereof as instruments evidencing such liabilities);

(4) any Indebtedness or other Obligation of such Person that is subordinate or junior in right of payment with respect to any other Indebtedness or other Obligation of such Person; or

(5) that portion of any Indebtedness that at the time of incurrence is incurred in violation of this Indenture.

“Senior Subordinated Indenture” means the Senior Subordinated Indenture dated as of the Issue Date, among the Company, as issuer, certain of its Subsidiaries, as guarantors and LaSalle Bank National Association, as trustee, pursuant to which the Senior Subordinated Notes are issued.

“Senior Subordinated Notes” means the $400,000,000 aggregate principal amount of 10% Senior Subordinated Notes due 2016 issued by the Company under the Senior Subordinated Indenture on the Issue Date.

“Shelf Registration Statement” means the shelf registration statement as defined in the Registration Rights Agreement.

“Significant Subsidiary” means any Restricted Subsidiary of the Company that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the date hereof.

“Similar Business” means any business conducted by the Company and its Restricted Subsidiaries on the Issue Date or any business that is similar, reasonably related, incidental or ancillary thereto.

“Special Mandatory Redemption” has the meaning specified in 1102(b) of this Indenture.

“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 306.

“Sponsor” means Texas Pacific Group and its Affiliates, but not including any portfolio companies thereof.

“Stated Maturity”, when used with respect to any Note or any installment of principal thereof or interest thereon, means the date specified in such Note as the fixed date on which the principal of such Note or such installment of principal or interest is due and payable.

“Subordinated Indebtedness” means

(a) with respect to the Company, any Indebtedness of the Company that is by its terms subordinated in right of payment to the Notes, and

(b) with respect to any Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor that is by its terms subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor.

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“Subsequent Co-Investors” means any Person (other than the Sponsor and the Co-Investors) and its Affiliates who, in connection with the acquisition of Equity Interests of the Company (or any of its direct or indirect parent companies) after the Issue Date, is part of a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) in which any of the Sponsor, the Co-Investors or Management Investors is a member.

“Subsidiary” means, with respect to any Person,

(1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof and

(2) any partnership, joint venture, limited liability company or similar entity of which

(x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and

(y) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

“Subsidiary Guarantee” means the guarantee by any Subsidiary Guarantor of the Company’s Obligations under this Indenture and the Notes.

“Subsidiary Guarantor” means each Restricted Subsidiary of the Company that executes this Indenture as a guarantor on the Issue Date and each other Restricted Subsidiary of the Company that thereafter guarantees the Notes pursuant to the terms of this Indenture.

“Successor Company” has the meaning specified in Section 801 of this Indenture.

“Successor Person” has the meaning specified in Section 802 of this Indenture.

“Term Credit Agreement” means the credit agreement dated as of December 19, 2006, among the Company, Aleris Deutschland Holding GmbH, the lenders party thereto from time to time and Deutsche Bank AG New York Branch, as Administrative Agent, together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, including one or more credit facilities, credit agreements, loan agreements, indentures, commercial paper facilities or similar agreements extending the maturity of, refinancing, refunding, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder or adding Restricted Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether by the same or any other agent, lender or group of lenders, or other investors and whether involving the same or a different group of the Company and Restricted Subsidiaries as principal obligors or guarantors.

“Total Assets” means the total amount of all assets of the Company and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP as shown on the most recent balance sheet of the Company.

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“Transactions” means the Merger, including the payment of the merger consideration in connection therewith, the investment by the Sponsor, the Co-Investors and members of management, the issuance of the New Notes and the execution of, and borrowings on the Issue Date under, the Senior Credit Facilities as in effect on the Issue Date, the pledge and security arrangements in connection with the foregoing, the refinancing of certain Indebtedness in connection with the foregoing and the related transactions described in the Offering Circular, in particular as described under the section thereof entitled “The Transactions.”

“Treasury Rate” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to December 15, 2010; provided, however that if the period from the Redemption Date to December 15, 2010, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939 as in force at the date as of which this Indenture was executed, except as provided in Section 905.

“Trustee” means LaSalle Bank National Association, until a successor replaces it and, thereafter, means the successor.

“Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to time.

“Unrestricted Subsidiary” means

(1) any Subsidiary of the Company that at the time of determination is an Unrestricted Subsidiary (as designated by the Company, as provided below) and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Company may designate any Subsidiary of the Company (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, the Company or any Subsidiary of the Company (other than any Subsidiary of the Subsidiary to be so designated); provided that

(a) any Unrestricted Subsidiary must be an entity of which shares of the Capital Stock or other Equity Interests (including partnership interests) entitled to cast at least a majority of the votes that may be cast by all shares of Capital Stock or Equity Interests having ordinary voting power for the election of directors or other governing body are owned, directly or indirectly, by the Company,

(b) such designation complies with Section 1010 of this Indenture and

(c) each of

(1) the Subsidiary to be so designated and

(2) its Subsidiaries

has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Company or any Restricted Subsidiary.

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The Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation, no Default shall have occurred and be continuing and either

(1) the Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described in Section 1011(a) of this Indenture; or

(2) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be greater than such ratio for the Company and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation.

Any such designation by the Company shall be notified by the Company to the Trustee by promptly filing with the Trustee a copy of any applicable Board Resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.

“Vice President”, when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing

(1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by

(2) the sum of all such payments.

“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person, 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

SECTION 103. Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture (including any covenant compliance with which constitutes a condition precedent) relating to the proposed action have been complied with and, other than in connection with the authentication and delivery of the Initial Notes, an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than pursuant to Section 1008(a) of this Indenture or Section 314(a)(4) of the TIA) shall include:

(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

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(3) a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

SECTION 104. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

SECTION 105. Acts of Holders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agents duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

The principal amount and serial numbers of Notes held by any Person, and the date of holding the same, shall be proved by the Note Register.

If the Company shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. Notwithstanding TIA Section 316(c), such record date shall be a date not earlier than the date 30 days prior to the first solicitation of Holders generally in connection therewith and not later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining

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whether Holders of the requisite proportion of Outstanding Notes have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Notes shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than eleven months after the record date. Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, the Company or any Subsidiary Guarantor in reliance thereon, whether or not notation of such action is made upon such Note.

Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

Without limiting the generality of the foregoing, a Holder, including the Depository that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and the Depository that is the Holder of a Global Note may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such depositary’s standing instructions and customary practices.

The Company may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by the Depository entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders.

SECTION 106. Notices, Etc., to Trustee, Company, Any Subsidiary Guarantor and Agent. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

(1) the Trustee by any Holder or by the Company or any Subsidiary Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (which may be via facsimile) to or with the Trustee at LaSalle Bank National Association, 135 S. LaSalle Street, Suite 1560, Chicago, IL 60603, Attn: Corporate Trust Services Division, or

(2) the Company or any Subsidiary Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or delivered in writing and mailed, first-class postage prepaid, or delivered by recognized overnight courier, to the Company or such Subsidiary Guarantor addressed to it at Aleris International, Inc., 25825 Science Park Drive, Beachwood, OH 44122, Attention: General Counsel, or at any other address previously furnished in writing to the Trustee by the Company or such Subsidiary Guarantor.

SECTION 107. Notice to Holders; Waiver. Where this Indenture provides for notice of any event to Holders by the Company or the Trustee, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Note Register, within the time prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Notices given by publication shall be deemed given on the first date on which publication is made and notices given by first-class mail, postage prepaid, shall be deemed given five calendar days after mailing.

In case by reason of the suspension of or irregularities in regular mail service or by reason of any other cause, it shall be impracticable to mail notice of any event to Holders when such notice is required to be given

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pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice for every purpose hereunder.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

SECTION 108. Effect of Headings and Table of Contents. The Article and Section headings herein, the Table of Contents and the reconciliation and tie between the TIA and this Indenture are for convenience of reference only, are not intended to be considered a part hereof and shall in no way affect the construction of, or modify or restrict, any of the terms or provisions hereof.

SECTION 109. Successors and Assigns. All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Subsidiary Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 1208 hereof.

SECTION 110. Separability Clause. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 111. Benefits of Indenture. Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto, any Paying Agent, any Note Registrar and their successors hereunder and the Holders any benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 112. Governing Law. This Indenture, the Notes and any Subsidiary Guarantee shall be governed by and construed in accordance with the laws of the State of New York. This Indenture is subject to the provisions of the Trust Indenture Act that are required to be part of this Indenture and shall, to the extent applicable, be governed by such provisions.

SECTION 113. Legal Holidays. In any case where any Interest Payment Date, Redemption Date or Stated Maturity or Maturity of any Note shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Notes) payment of principal (or premium, if any) or interest need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date, Redemption Date, or at the Stated Maturity or Maturity; provided that no interest shall accrue for purposes of such payment for the period from and after such Interest Payment Date, Redemption Date, Stated Maturity or Maturity, as the case may be.

SECTION 114. No Personal Liability of Directors, Officers, Employees and Stockholders. No director, officer, employee, incorporator or stockholder of the Company or any Subsidiary Guarantor (other than in the case of stockholders of any Subsidiary Guarantor, the Company or another Subsidiary Guarantor) or any of their parent companies shall have any liability for any obligations of the Company or the Subsidiary Guarantors under the Notes, the Subsidiary Guarantees and this Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Subsidiary Guarantees.

SECTION 115. Trust Indenture Act Controls. Upon qualification of this Indenture under the TIA, if any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the provision required by the TIA shall control. If any provision of this Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or excluded, as the case may be.

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SECTION 116. Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be original; but such counterparts shall together constitute but one and the same instrument. One signed copy is enough to prove this Indenture.

ARTICLE TWO

NOTE FORMS

SECTION 201. Form and Dating. Provisions relating to the Initial Notes, any PIK Notes, the Private Exchange Notes and the Exchange Notes are set forth in the Rule 144A / Regulation S Appendix attached hereto (the “Appendix”) which is hereby incorporated in, and expressly made part of, this Indenture. The Initial Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit 1 to the Appendix which is hereby incorporated in, and expressly made a part of, this Indenture. The Exchange Notes, the Private Exchange Notes, any PIK Notes issued with respect to Private Exchange Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form reasonably acceptable to the Company). Each Note shall be dated the date of its authentication. The terms of the Note set forth in the Appendix and Exhibit A are part of the terms of this Indenture.

SECTION 202. Execution, Authentication, Delivery and Dating. The Notes shall be executed on behalf of the Company by any Officer. The signature of an Officer on the Notes may be manual or facsimile signature of the present or any future such authorized officer and may be imprinted or otherwise reproduced on the Notes.

Notes bearing the manual or facsimile signature of an individual who was at any time a proper officer of the Company shall bind the Company, notwithstanding that such individual ceased to hold such office prior to the authentication and delivery of such Notes or did not hold such office at the date of such Notes.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance with such Company Order shall authenticate and deliver such Notes.

On the Issue Date, the Company shall deliver the Initial Notes in the aggregate principal amount of $600,000,000 executed by the Company to the Trustee for authentication, together with a Company Order directing the Trustee to authenticate the Notes and certifying that all conditions precedent to the issuance of Notes contained herein have been fully complied with, and the Trustee in accordance with such Company Order shall authenticate and deliver such Initial Notes. At any time and from time to time after the Issue Date, the Company may deliver Additional Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Additional Notes, directing the Trustee to authenticate the Additional Notes and certifying that the issuance of such Additional Notes is in compliance with Article Ten hereof and that all other conditions precedent to the issuance of Notes contained herein have been fully complied with, and the Trustee in accordance with such Company Order shall authenticate and deliver such Additional Notes. In addition, in connection with the payment of PIK Interest, the Company is entitled to, without the consent of the Holders, increase the outstanding principal amount of the Notes or issue additional Notes (the “PIK Notes”) under this Indenture on the same terms and conditions as the Notes offered hereby (in each case, the “PIK Payment”).

Upon receipt of a Company Order, the Trustee shall authenticate for original issue Exchange Notes in an aggregate principal amount not to exceed $600,000,000 plus any increase in the aggregate principal amount of the Notes as a result of a PIK Payment plus the aggregate principal amount of any PIK Notes or any Additional Notes issued; provided that such Exchange Notes shall be issuable only upon the valid surrender for cancellation of Initial Notes, any PIK Notes and any Additional Notes of a like aggregate principal amount in accordance with an Exchange Offer pursuant to the Registration Rights Agreement and a Company Order for the authentication and delivery of such Exchange Notes and certifying that all conditions precedent to the issuance of such Exchange Notes are complied with. In each case, the Trustee shall receive a Company Order and an Opinion of Counsel of the Company

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that it may reasonably require in connection with such authentication of Notes. Such Company Order shall specify the amount of Notes to be authenticated and the date on which the original issue of Notes is to be authenticated.

Each Note shall be dated the date of its authentication.

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for in Exhibit 1 to the Appendix, duly executed by the Trustee by manual signature of an authorized officer, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture.

In case the Company or any Subsidiary Guarantor, pursuant to Article Eight of this Indenture, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Company or such Subsidiary Guarantor shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed a supplemental indenture hereto with the Trustee pursuant to Article Eight of this Indenture, any of the Notes authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other Notes executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Notes surrendered for such exchange and of like principal amount; and the Trustee, upon Company Request of the successor Person, shall authenticate and deliver Notes as specified in such request for the purpose of such exchange. If Notes shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section in exchange or substitution for or upon registration of transfer of any Notes, such successor Person, at the option of the Holders but without expense to them, shall provide for the exchange of all Notes at the time outstanding for Notes authenticated and delivered in such new name.

ARTICLE THREE

THE NOTES

SECTION 301. Title and Terms. The aggregate principal amount of Notes which may be authenticated and issued under this Indenture is not limited; provided, however that any Additional Notes issued under this Indenture rank pari passu with the Initial Notes, are issued in accordance with Sections 202, 312 and 1011 hereof, form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes. Any Additional Notes shall be issued pursuant to a supplemental indenture to this Indenture.

The Notes shall be known and designated as the “9%/9 ³/4% Senior Notes Due 2014” of the Company. The Stated Maturity of the Notes shall be December 15, 2014, and the Notes shall bear interest at the rate set forth below from December 19, 2006, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable on June 15, 2007 and semi-annually thereafter on December 15 and June 15 in each year and at said Stated Maturity, until the principal thereof is paid or duly provided for and to the Person in whose name the Note (or any predecessor Note) is registered at the close of business on the December 1 and June 1 immediately preceding such Interest Payment Date (each, a “Regular Record Date”).

The Company shall pay interest with respect to the Interest Period that commences on the Issue Date entirely in cash. For any Interest Period thereafter through the Interest Period ending December 15, 2010, the Company may, at its option, elect to pay interest on the Notes:

(i) entirely in cash (“Cash Interest”),

(ii) entirely by increasing the principal amount of the Outstanding Notes or by issuing PIK Notes (“PIK Interest”), or

(iii) 50% Cash Interest and 50% PIK Interest.

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The Company must elect the form of interest payment with respect to each Interest Period by delivering a notice to the Trustee prior to the beginning of such Interest Period. The Trustee shall promptly deliver a corresponding notice to the Holders. In the absence of such an election, interest on the Notes shall be payable entirely in cash. From and after the Interest Period commencing December 15, 2010, the Company shall make all interest payments on the Notes entirely in cash.

Cash Interest on the Notes shall accrue at the rate of 9% per annum and be payable in cash. PIK Interest on the Notes shall accrue at the rate of 9 ³/4% per annum and be payable (x) with respect to Notes represented by one or more global notes registered in the name of, or held by, the Depository or its nominee on the relevant record date, by increasing the principal amount of the outstanding global Notes by an amount equal to the amount of PIK Interest for the applicable Interest Period (rounded up to the nearest $1,000) and (y) with respect to Notes represented by certificated notes, by issuing PIK Notes in certificated form in an aggregate principal amount equal to the amount of PIK Interest for the applicable Interest Period (rounded up to the nearest whole dollar) and the Trustee shall, upon receipt of a Company Order, authenticate and deliver such PIK Notes in certificated form for original issuance to the Holders on the relevant record date, as shown by the records of the Note Register. Following an increase in the principal amount of the outstanding global Notes as a result of a PIK Payment, the global Notes shall bear interest on such increased principal amount from and after the date of such PIK Payment. Any PIK Notes issued in certificated form shall be dated as of the applicable Interest Payment Date and shall bear interest from and after such date. All Notes issued pursuant to a PIK Payment shall mature on December 15, 2014 and shall be governed by, and subject to the terms, provisions and conditions of, this Indenture and shall have the same rights and benefits as the Notes issued on the Issue Date. Any certificated PIK Notes shall be issued with the description “PIK” on the face of such PIK Note.

The principal of (and premium, if any), Cash Interest and Additional Interest payable in cash, if any, on the Notes shall be payable at the office or agency of the Company maintained for such purpose in the City of Chicago or, at the option of the Company, payment of Cash Interest may be made by check mailed to the Holders of the Notes at their respective addresses set forth in the Note Register of Holders; provided that all payments of principal, premium, if any, and Cash Interest and Additional Interest payable in cash, if any, with respect to Notes represented by one or more permanent global notes registered in the name of or held by the Depository or its nominee shall be made by wire transfer of immediately available funds to the accounts specified by the Holder or Holders thereof.

Holders shall have the right to require the Company to purchase their Notes, in whole or in part, in the event of a Change of Control pursuant to Section 1017. The Notes shall be subject to repurchase pursuant to an Asset Sale Offer as provided in Section 1018.

The Notes shall be redeemable as provided in Article Eleven of this Indenture and Paragraph 5 of the Notes.

The due and punctual payment of principal of, premium, if any, and interest on the Notes payable by the Company is irrevocably unconditionally guaranteed, to the extent set forth herein, by each of the Subsidiary Guarantors.

SECTION 302. Denominations. The Notes shall be issuable only in registered form without coupons and only in denominations of $1,000 and any integral multiple of $1,000 in excess thereof, subject to the issuance of certificated PIK Notes as indicated above.

SECTION 303. Temporary Notes. Pending the preparation of definitive Notes, the Company may execute, and upon receipt of a Company Order the Trustee shall authenticate and deliver, temporary Notes which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Notes in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Notes may determine, as conclusively evidenced by their execution of such Notes.

If temporary Notes are issued, the Company shall cause definitive Notes to be prepared without unreasonable delay. After the preparation of definitive Notes, the temporary Notes shall be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the Company designated for such purpose pursuant

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to Section 1002, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Notes of authorized denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as definitive Notes.

SECTION 304. Note Registrar; Paying Agent; Registration of Transfer and Exchange. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 1002 being herein sometimes referred to as the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes. The Note Register shall be in written form or any other form capable of being converted into written form within a reasonable time. At all reasonable times, the Note Register shall be open to inspection by the Trustee. The Trustee is hereby initially appointed as note registrar (the “Note Registrar”) for the purpose of registering Notes and transfers of Notes as herein provided. The Trustee is hereby initially appointed to act as the Paying Agent and to act as Custodian with respect to the Global Notes.

Upon surrender for registration of transfer of any Note at the office or agency of the Company designated pursuant to Section 1002, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination or denominations of a like aggregate principal amount.

At the option of the Holder, Notes may be exchanged for other Notes of any authorized denomination and of a like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes which the Holder making the exchange is entitled to receive; provided that no exchange of Notes for Exchange Notes shall occur until an Exchange Offer Registration Statement shall have been declared effective by the SEC, the Trustee shall have received an Officers’ Certificate confirming that the Exchange Offer Registration Statement has been declared effective by the SEC and the Initial Notes to be exchanged for the Exchange Notes shall be cancelled by the Trustee.

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

Every Note presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Note Registrar) be duly endorsed, or be accompanied by written instruments of transfer, in form satisfactory to the Company and the Note Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange or redemption of Notes, but the Company may require payment of a sum sufficient to cover any taxes, fees or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Sections 202, 303, 906, 1017, 1018, or 1108 not involving any transfer.

In case the Company, pursuant to Article Eight, shall, in one or more related transactions, be consolidated or merged with or into any other Person or shall sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all the assets of the Company and its Restricted Subsidiaries taken as a whole to any Person, and the surviving Person resulting from such consolidation or surviving such merger, or into which the Company shall have been merged, or the surviving Person which shall have participated in the sale, assignment, transfer, conveyance or other disposition as aforesaid, shall have assumed all of the obligations of the Company under the Notes and this Indenture pursuant to agreements reasonably satisfactory to the Trustee pursuant to Article Eight, any of the Notes authenticated or delivered prior to such consolidation, merger, sale, assignment, transfer, conveyance or other disposition may, from time to time, at the request of the surviving Person, be exchanged for other Notes executed in the name of the surviving Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Notes surrendered for such exchange and of like principal amount; and the Trustee, upon the request of the surviving Person, shall authenticate and deliver Notes as specified in such request for the purpose of such exchange. If Notes shall at any time be authenticated and delivered in any new name of a surviving

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Person pursuant to this Section 304 in exchange or substitution for or upon registration of transfer of any Notes, such Successor Company, at the option of the Holders but without expense to them, shall provide for the exchange of all Notes at the time outstanding for Notes authenticated and delivered in such new name.

SECTION 305. Mutilated, Destroyed, Lost and Stolen Notes. If (1) any mutilated Note is surrendered to the Trustee, or (2) the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Note, and there is delivered to the Company and the Trustee such security or indemnity as may be required to protect the Company, the Trustee, any agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced, then, in the absence of notice to the Company or the Trustee that such Note has been acquired by a Protected Purchaser (as defined in Section 8-303 of the Uniform Commercial Code) (a “Protected Purchaser”), the Company shall execute and upon Company Order the Trustee shall authenticate and deliver, in exchange for any such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a new Note of like tenor and principal amount, bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Note, pay such Note.

Upon the issuance of any new Note under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) in replacing a Note.

Every new Note issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Company and each Subsidiary Guarantor, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

SECTION 306. Payment of Interest; Interest Rights Preserved.

(a) Interest on any Note which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest at the office or agency of the Company maintained for such purpose pursuant to Section 1002; provided, however, that, subject to Section 301 hereof, each installment of Cash Interest may at the Company’s option be paid by (1) mailing a check for such interest, payable to or upon the written order of the Person entitled thereto pursuant to Section 307, to the address of such Person as it appears in the Note Register or (2) transfer to an account located in the United States maintained by the payee.

(b) Any interest on any Note which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease to be payable to the Holder on the Regular Record Date by virtue of having been such Holder, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate borne by the Notes (such defaulted interest and interest thereon herein collectively called “Defaulted Interest”) may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10

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days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date, and in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given in the manner provided for in Section 107, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so given, such Defaulted Interest shall be paid to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2).

(2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

(c) Subject to the foregoing provisions of this Section, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

SECTION 307. Persons Deemed Owners. Prior to the due presentment of a Note for registration of transfer, the Company, any Subsidiary Guarantor, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Note is registered as the owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and (subject to Sections 304 and 306) interest on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Company, the Trustee or any agent of the Company or the Trustee shall be affected by notice to the contrary.

SECTION 308. Cancellation. All Notes surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold, and all Notes so delivered shall be promptly cancelled by the Trustee. If the Company shall so acquire any of the Notes, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Notes unless and until the same are surrendered to the Trustee for cancellation. No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Notes held by the Trustee shall be disposed of by the Trustee in accordance with its customary procedures (subject to the record retention requirements of the Exchange Act). Certification of the destruction of all cancelled Notes shall be delivered to the Company by the Trustee. The Trustee shall maintain a record of all cancelled Notes. The Trustee shall provide the Company a list of all Notes that have been cancelled from time to time as requested by the Company.

SECTION 309. Computation of Interest. Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.

SECTION 310. Transfer and Exchange. The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer. When a Note is presented to the Note Registrar or a co-registrar with a request to register a transfer, the Note Registrar shall register the transfer as requested if the requirements of this Indenture and Section 8-401(a) of the Uniform Commercial Code are met. When Notes are presented to the Note Registrar or a co-registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Note Registrar shall make the exchange as requested if the same requirements are met.

The Company shall not be required and without the prior written consent of the Company, the Note Registrar shall not be required to register the transfer of or exchange of any Note (i) during a period beginning at the opening of business 15 days before mailing of a notice of redemption of Notes and ending at the close of business on

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the day of such mailing, (ii) selected for redemption in whole or in part, (iii) that has been tendered in a Change of Control Offer and (iv) beginning at the opening of business on any record date and ending on the close of business on the related Interest Payment Date.

SECTION 311. CUSIP Numbers. The Company in issuing the Notes may use “CUSIP” numbers, ISINs and “Common Code” numbers (in each case, if then generally in use) in addition to serial numbers, and, if so, the Trustee shall use such “CUSIP” numbers, ISINs and “Common Code” numbers in addition to serial numbers in notices of redemption, repurchase or other notices to Holders as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such “CUSIP” numbers, ISINs and “Common Code” numbers either as printed on the Notes or as contained in any notice of a redemption or repurchase and that reliance may be placed only on the serial or other identification numbers printed on the Notes, and any such redemption or repurchase shall not be affected by any defect in or omission of such numbers. The Company shall promptly notify the Trustee in writing of any change in the “CUSIP” numbers, ISINs and “Common Code” numbers applicable to the Notes.

SECTION 312. Issuance of Additional Notes. The Company may, subject to Section 1011 of this Indenture, issue additional Notes having identical terms and conditions to the Initial Notes issued on the Issue Date, other than with respect to the date of issuance and issue price (the “Additional Notes”); provided, however, that no Additional Notes may be issued at a price that would cause such Additional Notes to have “original issue discount” within the meaning of Section 1273 of the Code. The Initial Notes issued on the Issue Date and any Additional Notes subsequently issued, along with any PIK Notes and any increase in the principal amount of Outstanding Notes as a result of a PIK Payment, shall be treated as a single class for all purposes under this Indenture. Exchange Notes issued in exchange for Initial Notes issued on the Issue Date and Exchange Notes issued for any Additional Notes subsequently issued, along with any PIK Notes and any increase in the principal amount of Outstanding Notes as a result of a PIK Payment, shall be treated as a single class for all purposes under this Indenture.

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture. This Indenture shall upon Company Request and at the Company’s expense cease to be of further effect as to all Notes issued hereunder and then outstanding (except as set forth in the last paragraph of this Section and as to surviving rights of registration of transfer or exchange of Notes expressly provided for herein or pursuant hereto) and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture when:

(1) either

(A) all Notes theretofore authenticated and delivered (other than (i) Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 305 and (ii) Notes for whose payment money has theretofore been deposited in trust with the Trustee or any Paying Agent or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or

(B) all such Notes not theretofore delivered to the Trustee for cancellation,

(i) have become due and payable by reason of the making of a notice of redemption pursuant to Section 1105 or otherwise, or

(ii) shall become due and payable at their Stated Maturity within one year, or

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(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,

and the Company or any Subsidiary Guarantor, in the case of (i), (ii) or (iii) of this clause (B), has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as shall be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption, as the case may be;

(2) no Default (other than that resulting from borrowing funds to be applied to make such deposit and the granting of Liens in connection therewith) with respect to this Indenture or the Notes issued hereunder shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit shall not result in a breach or violation of, or constitute a default under, the Senior Credit Facilities, the Senior Subordinated Indenture, the Senior Subordinated Notes or any other material agreement or instrument (other than this Indenture) to which the Company or any Subsidiary Guarantor is a party or by which the Company or any Subsidiary Guarantor is bound;

(3) the Company has paid or caused to be paid all sums payable by it under this Indenture;

(4) the Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of such Notes at Maturity or the Redemption Date, as the case may be; and

(5) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, if money or Government Securities shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive such satisfaction and discharge. In addition, nothing in this Section 401 shall be deemed to discharge the obligations of the Company to the Trustee under Section 607 and the obligations of the Company to any Authenticating Agent under Section 612 that, by their terms, survive the satisfaction and discharge of this Indenture.

SECTION 402. Application of Trust Money. Subject to the provisions of the last paragraph of Section 1003, all money or Government Securities deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium and Additional Interest, if any) and interest for whose payment such money or Government Securities has been deposited with the Trustee, but such money or Government Securities need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 401 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s and any Subsidiary Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 401 until such time as the Trustee or Paying Agent is permitted to apply all such money or Government Securities in accordance with Section 401; provided that if the Company has made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

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ARTICLE FIVE

REMEDIES

SECTION 501. Events of Default. “Event of Default,” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on the Notes issued under this Indenture;

(2) default for 30 days or more in the payment when due of interest on or with respect to the Notes issued under this Indenture;

(3) failure by the Company or any Subsidiary Guarantor for 60 days after receipt of written notice given by the Trustee or the Holders of at least 30% in principal amount of the then Outstanding Notes issued under this Indenture to comply with any of its other agreements contained in this Indenture or the Notes;

(4) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Company or any Restricted Subsidiary or the payment of which is guaranteed by the Company or any Restricted Subsidiary, other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is created after the issuance of the Notes, if both

(A) such default either

(i) results from the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods) or

(ii) relates to an obligation other than the obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated maturity and

(B) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at stated final maturity (after giving effect to any applicable grace periods), or the maturity of which has been so accelerated, aggregate $40.0 million or more at any one time outstanding;

(5) failure by the Company or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $40.0 million, which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, and in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed;

(6) any of the following events with respect to the Company or any Significant Subsidiary:

(A) the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law

(i) commences a voluntary case;

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(ii) consents to the entry of an order for relief against it in an involuntary case;

(iii) consents to the appointment of a custodian of it or for any substantial part of its property;

(iv) takes any comparable action under any foreign laws relating to insolvency; or

(B) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against the Company or any Significant Subsidiary in an involuntary case;

(ii) appoints a custodian of the Company or any Significant Subsidiary or for any substantial part of its property; or

(iii) orders the liquidation of the Company or any Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 days;

provided, that for the purposes of this clause (6), a Significant Subsidiary shall include any group of Subsidiaries that together would constitute a Significant Subsidiary; or

(7) the Subsidiary Guarantee of any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) shall for any reason cease to be in full force and effect or be declared null and void or any responsible officer of any Subsidiary Guarantor that is a Significant Subsidiary (or the responsible officers of any group of Subsidiaries that together would constitute a Significant Subsidiary), as the case may be, denies that it has any further liability under its Subsidiary Guarantee or gives notice to such effect, other than by reason of the termination of this Indenture or the release of any such Subsidiary Guarantee in accordance with this Indenture;

provided, that, notwithstanding the foregoing, the failure by the Company to make a Special Mandatory Redemption shall not constitute an Event of Default; provided, further, that neither the Trustee nor any Holder shall be prevented from exercising any other remedies in connection with such failure available to them at law, in equity, by contract or otherwise which remedies shall include, without limitation, the right to sue to collect payment of the Special Mandatory Redemption.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

(a) If any Event of Default (other than an Event of Default specified in Section 501(6) with respect to the Company) occurs and is continuing under this Indenture, the Trustee or the Holders of at least 30% in principal amount of the Outstanding Notes issued under this Indenture may declare the principal, premium, if any, interest and any other monetary Obligations on all the Outstanding Notes issued under this Indenture to be due and payable immediately by a notice in writing to the Company (and to the Trustee if given by the Holders).

(b) Upon the effectiveness of such declaration, such principal of and premium, if any, and interest on the Notes shall be due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in Section 501(6) with respect to the Company occurs and is continuing, then the principal amount of all Outstanding Notes shall ipso facto become and be immediately due and payable without any notice, declaration or other act on the part of the Trustee or any Holder.

(c) At any time after a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided in this Article Five, the Holders

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of a majority in aggregate principal amount of the Outstanding Notes, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if:

(1) the Company has paid or deposited with the Trustee a sum sufficient to pay:

(A) all overdue interest on all Outstanding Notes,

(B) all unpaid principal of (and premium, if any, on) any Outstanding Notes which has become due otherwise than by such declaration of acceleration, and interest on such unpaid principal at the rate borne by the Notes,

(C) to the extent that payment of such interest is lawful, interest on overdue interest at the rate borne by the Notes, and

(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(2) Events of Default, other than the non-payment of amounts of principal of (or premium, if any, on) or interest on Notes which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

(d) Notwithstanding the preceding paragraph, in the event of any Event of Default specified in Section 501(4) above, such Event of Default and all consequences thereof (excluding any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose,

(1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged, or

(2) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default, or

(3) the default that is the basis for such Event of Default has been cured.

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee. If an Event of Default specified in Section 501(1) or (2) occurs and is continuing, the Trustee, in its own name as trustee of an express trust, may institute a judicial proceeding for the collection of the sums due hereunder pursuant to this Article Five and unpaid, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. The Trustee may prosecute such proceeding to judgment or final decree and may enforce the same against the Company, any Subsidiary Guarantor or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company, any Subsidiary Guarantor or any other obligor upon the Notes, wherever situated.

If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders under this Indenture and the Subsidiary Guarantees by the judicial proceedings discussed above as the Trustee shall deem necessary to protect and enforce any such rights, including seeking recourse against any Subsidiary Guarantor.

SECTION 504. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor including any Subsidiary Guarantor, upon the Notes or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the

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Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal, premium, if any, or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,

(1) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and

(2) to collect, receive and distribute any moneys or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 505. Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered.

SECTION 506. Application of Money Collected. Any money or property collected by the Trustee pursuant to this Article Five shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Notes and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under Section 607;

SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest on the Notes in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Notes for principal (and premium, if any) and interest, respectively; and

THIRD: The balance, if any, to the Company or as a court of competent jurisdiction may direct in writing; provided that all sums due and owing to the Holders and the Trustee have been paid in full as required by this Indenture.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 506.

SECTION 507. Limitation on Suits. Subject to Section 508, no Holder of any Notes shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

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(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2) Holders of at least 30% in principal amount of the Outstanding Notes have requested the Trustee to pursue the remedy;

(3) such Holders have offered the Trustee reasonable security or indemnity reasonably satisfactory to it against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) Holders of a majority in principal amount of the Outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period,

it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture or the Subsidiary Guarantees to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture or the Subsidiary Guarantees, except in the manner herein provided and for the equal and ratable benefit of all the Holders (it being further understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders).

SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest and the Special Mandatory Redemption. Notwithstanding any other provision in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive (i) payment, as provided herein (including, if applicable, Article Eleven) and in such Note of the principal of (and premium, if any) and (subject to Section 306) interest on such Note on the respective Stated Maturities expressed in such Note (or, in the case of redemption, on the Redemption Date) and (ii) the Special Mandatory Redemption, and to institute suit for the enforcement of any such payment on or after such respective dates, and such rights shall not be impaired without the consent of such Holder.

SECTION 509. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture or the Subsidiary Guarantees and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, any Subsidiary Guarantor, any other obligor of the Notes, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

SECTION 510. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of Section 305, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

SECTION 511. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article Five or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

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SECTION 512. Control by Holders. The Holders of not less than a majority in principal amount of the Outstanding Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, provided that:

(1) such direction shall not be in conflict with any rule of law or with this Indenture,

(2) subject to Section 315 of the Trust Indenture Act, the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and

(3) the Trustee need not take any action which might involve it in personal liability or be unduly prejudicial to the Holders not consenting.

SECTION 513. Waiver of Default. Subject to Sections 508 and 902, the Holders of not less than a majority in principal amount of the Outstanding Notes may on behalf of the Holders of all such Notes waive any Default hereunder and its consequences, except a continuing Default or Event of Default (1) in respect of the payment of interest on, premium, if any, or the principal of any such Note held by a non-consenting Holder, or (2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Note affected.

Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

SECTION 514. Waiver of Stay or Extension Laws. Each of the Company, the Subsidiary Guarantors and any other obligor on the Notes covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force that would prohibit or forgive the Company or a Subsidiary Guarantor from paying any portion of the principal of, and premium, if any, and interest on the Notes.

SECTION 515. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 515 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 508 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

ARTICLE SIX

THE TRUSTEE

SECTION 601. Duties of the Trustee.

(a) Except during the continuance of an Event of Default,

(1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith or willful misconduct on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions specifically required by any provision hereof to be provided to it, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture, but not to verify the contents thereof.

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(b) If an Event of Default has occurred and is continuing or the Company has failed to make a payment in respect of the Special Mandatory Redemption of which, in each case, a Responsible Officer of the Trustee has actual knowledge or of which written notice of such Event of Default or failure to make such payment shall have been given to the Trustee by the Company, any other obligor of the Notes or by any Holder, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

(c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that

(1) this paragraph (c) shall not be construed to limit the effect of paragraph (a) of this Section;

(2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in aggregate principal amount of the Outstanding Notes relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; and

(4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

SECTION 602. Notice of Defaults. If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall transmit, in the manner and to the extent provided in TIA Section 313(c), notice of such Default or Event of Default within 90 days after it occurs unless such Default or Event of Default shall have been cured or waived. Except in the case of a Default or Event of Default in the payment of the principal of (or premium, if any, on) or interest on any Note, the Trustee shall be protected in withholding such notice if it determines that the withholding of such notice is in the interest of the Holders. In addition, the Trustee shall have no obligation to accelerate the Notes if in the best judgment of the Trustee acceleration is not in the best interest of the Holders of such Notes.

SECTION 603. Certain Rights of Trustee. Subject to the provisions of TIA Sections 315(a) through 315(d):

(1) the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document (whether in original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;

(2) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;

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(3) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’ Certificate and an Opinion of Counsel;

(4) the Trustee may consult with counsel of its own selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice or opinion of such counsel;

(5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses, losses and liabilities which might be incurred by it in compliance with such request or direction;

(6) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation;

(7) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

(8) the Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; provided, however, that the Trustee’s conduct does not constitute willful misconduct, bad faith or negligence;

(9) the rights, privileges, protections, immunities and benefits given to the Trustee pursuant to this Indenture, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder; and

(10) in no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

SECTION 604. Trustee Not Responsible for Recitals or Issuance of Notes. The recitals contained herein and in the Notes, except for the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Notes and perform its obligations hereunder and that the statements made by it in a Statement of Eligibility on Form T-1 supplied to the Company are true and accurate, subject to the qualifications set forth therein. The Trustee shall not be accountable for the use or application by the Company of Notes or the proceeds thereof.

SECTION 605. May Hold Notes. The Trustee, any Paying Agent, any Note Registrar or any other agent of the Company or of the Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and 311, may otherwise deal with the Company with the same rights it would have if it were not the Trustee, Paying Agent, Note Registrar or such other agent; provided, however, that, if

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it acquires any conflicting interest, it must eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign.

SECTION 606. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company.

SECTION 607. Compensation and Reimbursement. The Company and the Subsidiary Guarantors, jointly and severally, agree:

(1) to pay to the Trustee from time to time such compensation as shall be agreed in writing between the Company and the Trustee for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined to have been caused by its own negligence or willful misconduct; and

(3) to indemnify the Trustee and any predecessor Trustee for, and to hold it harmless against, any and all loss, liability, claim, damage or reasonable out-of-pocket expenses, including taxes (other than the taxes based on the income of the Trustee) incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim regardless of whether the claim is asserted by the Company, a Subsidiary Guarantor, a Holder or any other Person or liability in connection with the exercise or performance of any of its powers or duties hereunder.

The obligations of the Company under this Section to compensate the Trustee, to pay or reimburse the Trustee for reasonable out-of-pocket expenses, disbursements and advances and to indemnify and hold harmless the Trustee shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture and resignation or removal of the Trustee. As security for the performance of such obligations of the Company, the Trustee shall have a claim prior to the Notes upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (and premium, if any) or interest on particular Notes.

When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 501(6), the expenses (including the reasonable charges and expenses of its counsel) of and the compensation for such services are intended to constitute expenses of administration under any applicable Bankruptcy Law.

The provisions of this Section shall survive the termination of this Indenture and resignation or removal of the Trustee.

SECTION 608. Corporate Trustee Required; Eligibility. There shall be at all times a Trustee hereunder which shall be eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined capital and surplus of at least $50,000,000. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of Federal, State, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article Six.

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SECTION 609. Resignation and Removal; Appointment of Successor.

(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article Six shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 610.

(b) The Trustee may resign at any time by giving written notice thereof within 30 days of such resignation to the Company. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument executed by authority of the Board of Directors, a copy of which shall be delivered to the resigning Trustee and a copy to the successor Trustee. If the instrument of acceptance by a successor Trustee required by Section 610 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee.

(c) The Trustee may be removed at any time by Act of the Holders of not less than a majority in principal amount of the Outstanding Notes, delivered to the Trustee and to the Company. If the instrument of acceptance by a successor Trustee required by Section 610 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee.

(d) The Trustee shall comply with TIA Section 310(b); provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Notes delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Note for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

(f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to the Holders in the manner provided for in Section 107. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

SECTION 610. Acceptance of Appointment by Successor.

(a) Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

(b) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article Six.

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SECTION 611. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder; provided that such corporation shall be otherwise qualified and eligible under this Article Six, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Notes shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Notes. In case at that time any of the Notes shall not have been authenticated, any successor Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor Trustee. In all such cases such certificates shall have the full force and effect which this Indenture provides for the certificate of authentication of the Trustee; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Notes in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.

SECTION 612. Appointment of Authenticating Agent. At any time when any of the Notes remain Outstanding, the Trustee may appoint an authenticating agent or agents with respect to the Notes which shall be authorized to act on behalf of the Trustee to authenticate Notes (an “Authenticating Agent”) and the Trustee shall give written notice of such appointment to all Holders of Notes with respect to which such Authenticating Agent shall serve, in the manner provided for in Section 107. Notes so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Any such appointment shall be evidenced by an instrument in writing signed by a Responsible Officer of the Trustee, and a copy of such instrument shall be promptly furnished to the Company. Wherever reference is made in this Indenture to the authentication and delivery of Notes by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any state thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or state authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent; provided that such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give written notice of such appointment to all Holders of Notes, in the manner provided for in Section 107. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

The Company agrees to pay to each Authenticating Agent from time to time such compensation for its services under this Section as shall be agreed in writing between the Company and such Authenticating Agent.

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If an appointment is made pursuant to this Section, the Notes may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:

This is one of the Notes designated therein referred to in the within-mentioned Indenture.

LASALLE BANK NATIONAL ASSOCIATION as Trustee
By:
	as Authenticating Agent
By:
	as Authorized Officer

ARTICLE SEVEN

HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with Trust Indenture Act Section 312(a). If the Trustee is not the Note Registrar, the Company shall furnish to the Trustee at least two Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise comply with Trust Indenture Act Section 312(a).

SECTION 702. Disclosure of Names and Addresses of Holders. Every Holder, by receiving and holding Notes, agrees with the Company and the Trustee that none of the Company or the Trustee or any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with TIA Section 312, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under TIA Section 312(b).

SECTION 703. Reports by Trustee. Within 60 days after May 15 of each year commencing with the first May 15 after the Issue Date, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders (with a copy to the Company at the address specified in Section 106), in the manner and to the extent provided in TIA Section 313(c), a brief report dated as of such May 15 that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b). The Trustee shall also transmit by mail all reports as required by the TIA Section 313(c).

ARTICLE EIGHT

MERGER, CONSOLIDATION OR SALE OF ALL OR SUBSTANTIALLY ALL ASSETS

SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.

(a) The Company may not consolidate or merge with or into or wind up into (whether or not the Company is the surviving entity), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(1) the Company is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of

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the United States of America, any state thereof, the District of Columbia, or any territory thereof (the Company or such Person, as the case may be, being herein called the “Successor Company”);

(2) the Successor Company, if other than the Company, expressly assumes all the obligations of the Company under this Indenture and the Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(3) immediately after such transaction, no Default exists;

(4) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period,

(A) the Successor Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 1011(a) of this Indenture or

(B) the Fixed Charge Coverage Ratio for the Successor Company and the Restricted Subsidiaries on a consolidated basis would be greater than such ratio for the Company and the Restricted Subsidiaries immediately prior to such transaction;

(5) each Subsidiary Guarantor, unless it is the other party to the transactions described above, in which case Section 802(A)(2) shall apply, shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

(6) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with this Indenture.

(b) Notwithstanding clauses (a)(3) and (a)(4) above,

(1) any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to the Company and

(2) the Company may merge with an Affiliate of the Company incorporated solely for the purpose of reincorporating the Company in another State of the United States so long as the amount of Indebtedness of the Company and the Restricted Subsidiaries is not increased thereby.

SECTION 802. Subsidiary Guarantors May Consolidate, Etc., Only on Certain Terms. Subject to Section 1208, each Subsidiary Guarantor shall not, and the Company shall not permit any Subsidiary Guarantor to, consolidate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(A) (1) such Subsidiary Guarantor is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States of America, any state thereof, the District of Columbia, or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the “Successor Person”);

(2) the Successor Person, if other than such Subsidiary Guarantor, expressly assumes all the obligations of such Subsidiary Guarantor under this Indenture and such Subsidiary Guarantor’s Subsidiary Guarantee, pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

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(3) immediately after such transaction, no Default exists; and

(4) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with this Indenture; or

(B) the transaction is made in compliance with Section 1018 of this Indenture.

Notwithstanding the foregoing, any Subsidiary Guarantor may merge into or transfer all or part of its properties and assets to another Subsidiary Guarantor or the Company.

SECTION 803. Reserved.

SECTION 804. Successor Substituted. Subject to Section 1208 hereof (with respect to any Subsidiary Guarantor only), upon any consolidation or merger, or any sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the assets of the Company or any Subsidiary Guarantor in accordance with Sections 801 and 802 hereof, the successor Person formed by such consolidation or into which the Company or such Subsidiary Guarantor, as the case may be, is merged or the successor Person to which such sale, assignment, conveyance, transfer, lease or disposition is made, shall succeed to, and be substituted for, and may exercise every right and power of, the Company or such Subsidiary Guarantor, as the case may be, under this Indenture or the Subsidiary Guarantees, as the case may be, with the same effect as if such successor Person had been named as the Company or such Subsidiary Guarantor, as the case may be, under this Indenture or the Subsidiary Guarantees, as the case may be; provided that the predecessor Company or any Subsidiary Guarantor shall not be relieved from the obligation to pay the principal of and interest and Additional Interest, if any, on the Notes except in the case of a sale, assignment, transfer, conveyance or other disposition of all of the assets of the Company or such Subsidiary Guarantor, as the case may be, that meets the requirements of Sections 801 and 802 hereof, as applicable.

SECTION 805. The Merger Permitted. Notwithstanding the foregoing, the Merger shall be permitted without compliance with this Article Eight.

SECTION 806. Assets of Subsidiary Apply to Company. For purposes of this Article Eight, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Company, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company and its Subsidiaries on a consolidated basis shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

ARTICLE NINE

AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 901. Amendments or Supplements Without Consent of Holders. Notwithstanding Section 902 hereof, without the consent of any Holder, the Company, any Subsidiary Guarantor (with respect to a Subsidiary Guarantee or this Indenture to which it is a party), and the Trustee, at any time and from time to time, may amend or supplement this Indenture, any Subsidiary Guarantee or the Notes, in form satisfactory to the Trustee, for any of the following purposes:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

(3) to comply with Article Eight hereof and to provide for the assumption of the Company’s or such Subsidiary Guarantor’s obligations to Holders in connection therewith;

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(4) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights of any such Holder under this Indenture;

(5) to add covenants for the benefit of the Holders or to surrender any right or power conferred in this Indenture upon the Company or a Subsidiary Guarantor;

(6) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act;

(7) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee pursuant to the requirements of Sections 609 and 610 hereof;

(8) to provide for the issuance of Exchange Notes or private exchange notes, which are identical to Exchange Notes except that they are not freely transferable;

(9) to add a Subsidiary Guarantor or any other guarantor under this Indenture;

(10) to conform the text of this Indenture, Subsidiary Guarantees or the Notes to any provision of the “Description of Senior Notes” section of the Offering Circular to the extent that such provision in the “Description of Senior Notes” was intended to be a verbatim recitation of a provision of this Indenture, the Subsidiary Guarantees or the Notes; or

(11) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes; provided, however, that (A) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (B) such amendment does not materially and adversely affect the rights of Holders to transfer Notes.

Upon the request of the Company accompanied by a Board Resolution authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 603 hereof, the Trustee shall join with the Company and the Subsidiary Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Notwithstanding the foregoing, no Opinion of Counsel shall be required in connection with the addition of a Subsidiary Guarantor under this Indenture upon execution and delivery by such Subsidiary Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as Exhibit B hereto, and delivery of an Officer’s Certificate.

SECTION 902. Amendments or Supplements with Consent of Holders. With the written consent of the Holders of not less than a majority in principal amount of the Outstanding Notes, delivered to the Company and the Trustee, the Company, any Subsidiary Guarantor (with respect to any Subsidiary Guarantee or this Indenture to which it is a party) and the Trustee may (a) amend or supplement this Indenture, any Subsidiary Guarantee or the Notes (including consents obtained in connection with a purchase of, or tender offer or Exchange Offer for, the Notes) and (b) waive any existing Default or Event of Default or compliance with any provision of this Indenture or the Notes (including consents obtained in connection with a purchase of, or tender offer or Exchange Offer, for Notes). Notwithstanding the foregoing sentence, no such amendment, supplement or waiver shall, without the consent of each Holder of the Outstanding Notes affected thereby:

(1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver,

(2) reduce the principal of or change the Maturity of any such Note or alter or waive the provisions with respect to the redemption of the Notes (other than Sections 1017 and 1018),

(3) reduce the rate of or change the time for payment of interest on any Note,

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(4) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the Notes issued under this Indenture, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Outstanding Notes and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in this Indenture or any Subsidiary Guarantee that cannot be amended or modified without the consent of all Holders,

(5) make any Note payable in money other than that stated in the Notes,

(6) make any change in the provisions of Section 508 or Section 513 of this Indenture,

(7) make any change in the ranking of this Indenture and the Notes that would adversely affect the Holders,

(8) except as otherwise expressly permitted by this Indenture, modify the Subsidiary Guarantee of any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) in any manner adverse to the Holders,

(9) make any change in these amendment and waiver provisions, or

(10) impair the right of any Holder to receive payment of principal of, or interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes.

The consent of the Holders is not necessary under this Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

SECTION 903. Execution of Amendments, Supplements or Waivers. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article Nine if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment, supplement or waiver that requires consent of Holders until the Board of Directors approves it. In executing any amendment, supplement or waiver, the Trustee shall be entitled to receive and (subject to Section 601 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 103 hereof, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Company and any Subsidiary Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 905). Notwithstanding the foregoing, no Opinion of Counsel will be required for the Trustee to execute any amendment or supplement adding a new Subsidiary Guarantor under this Indenture.

SECTION 904. Effect of Amendments, Supplements or Waivers. Upon the execution of any supplemental indenture under this Article Nine, this Indenture shall be modified in accordance therewith, and such amendment, supplement or waiver shall form a part of this Indenture for all purposes; and every Holder of Notes theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

SECTION 905. Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the Trust Indenture Act as then in effect.

SECTION 906. Reference in Notes to Supplemental Indentures. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article Nine may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Notes so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Notes.

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SECTION 907. Notice of Supplemental Indentures. Promptly after the execution by the Company, any Subsidiary Guarantor and the Trustee of any supplemental indenture pursuant to the provisions of Section 902, the Company shall give notice thereof to the Holders, in the manner provided for in Section 107, setting forth in general terms the substance of such supplemental indenture.

ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium, if Any, and Interest. The Company shall pay or cause to be paid the principal of, premium, if any, Additional Interest, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, Additional Interest paid in cash, if any, and Cash Interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary, holds as of 12:00 p.m. (Eastern Time) on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, Cash Interest and Additional Interest to be paid in cash, if any, then due.

The Company shall pay interest on overdue principal at the rate equal to the then applicable interest rate on the Notes, and it shall pay interest on overdue installments of interest at the same rate, in any case to the extent lawful.

SECTION 1002. Maintenance of Office or Agency. The Company shall maintain an office or agency in the United States where Notes may be presented or surrendered for payment, where Notes may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Corporate Trust Office of the Trustee shall be such office or agency of the Company, unless the Company shall designate and maintain some other office or agency for one or more of such purposes. The Company shall give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation. The Company shall give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

SECTION 1003. Paying Agent to Hold Money in Trust. If the Company shall at any time act as its own Paying Agent, it shall, on or before each due date of the principal of (or premium, if any) or interest on any of the Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal of (or premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and shall promptly notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for the Notes, it shall, on or before each due date of the principal of (or premium, if any) or interest on any Notes, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee of such action or any failure so to act.

The Company shall cause each Paying Agent (other than the Trustee) to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent shall:

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(1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest on Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

(2) give the Trustee notice of any Default by the Company (or any other obligor upon the Notes) in the making of any payment of principal (and premium, if any) or interest; and

(3) at any time during the continuance of any such Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such sums.

Subject to applicable laws relating to abandoned property, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (or premium, if any) or interest on any Note and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as Trustee thereof, shall thereupon cease.

SECTION 1004. Corporate Existence. Subject to Article Eight, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect the corporate existence and that of each Restricted Subsidiary and the corporate rights (charter and statutory) and franchises of the Company and each Restricted Subsidiary; provided, however, that the Company shall not be required to preserve any such corporate existence, right or franchise if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries as a whole.

SECTION 1005. Payment of Taxes and Other Claims. The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment or charge whose amount, applicability or validity is being contested in good faith by appropriate proceedings and for which appropriate reserves, if necessary (in the good faith judgment of management of the Company) are being maintained in accordance with GAAP. Notwithstanding anything to the contrary contained in this Indenture, the Company and its Restricted Subsidiaries may, to the extent required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest payments under this Indenture.

SECTION 1006. Reserved.

SECTION 1007. Reserved.

SECTION 1008. Statement by Officers as to Default.

(a) The Company shall deliver to the Trustee within 120 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Company and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether it has kept, observed, performed and fulfilled, and has caused each of its Restricted Subsidiaries to keep, observe, perform and fulfill its obligations under this Indenture and further stating, as to each such Officer signing such certificate, that, to the best of his or her knowledge, the Company during such preceding fiscal year has kept, observed, performed and fulfilled, and has caused each of its Restricted Subsidiaries to keep, observe, perform and

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fulfill each and every such covenant contained in this Indenture and no Default occurred during such year and at the date of such certificate there is no Default which has occurred and is continuing or, if such signers do know of such Default that is continuing, the certificate shall specify such Default and that, to the best of his or her knowledge, no event has occurred and remains by reason of which payments on the account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event. The Officers’ Certificate shall also notify the Trustee should the Company elect to change the manner in which it fixes its fiscal year-end. For purposes of this Section 1008(a), such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture.

(b) (1) When any Default has occurred and is continuing under this Indenture, or (2) if the trustee for or the holder of any other evidence of Indebtedness of the Company or any Restricted Subsidiary gives any notice or takes any other action with respect to a claimed Default (other than with respect to Indebtedness in the principal amount of less than $40,000,000), the Company shall deliver to the Trustee by registered or certified mail or facsimile transmission an Officers’ Certificate specifying such event, notice or other action within five Business Days of its occurrence (with respect to clause (1)) or such notice or other action (with respect to clause (2)).

SECTION 1009. Reports and Other Information.

(a) Whether or not required by the SEC, so long as any Notes are outstanding, the Company shall furnish to the Holders, within the time periods specified in the SEC’s rules and regulations (as in effect on the Issue Date) for non-accelerated filers:

(1) all quarterly and annual financial information that would be required to be contained in a filing by a non-accelerated filer with the SEC on Forms 10-Q and 10-K (or any successor or comparable forms) if the Company were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Company’s certified independent accountants; and

(2) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

In addition, whether or not required by the SEC, the Company shall file a copy of all of the information and reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the SEC’s rules and regulations (unless the SEC shall not accept such a filing) and make such information available to securities analysts and prospective investors upon request. The Company will be deemed to have furnished the Holders the reports referred to in Section 1009(a)(1) and (2) if the Company has either (i) filed such reports with the SEC (and such reports are publicly available) or (ii) posted such reports on the Company Website and issued a press release in respect thereof. For purposes of this Section 1009, the term “Company Website” means the collection of web pages that may be accessed on the World Wide Web using the URL address http://www.aleris.com or such other address as the Company may from time to time designate in writing to the Trustee. In addition, the Company has agreed that, for so long as any Notes remain outstanding, it shall furnish to Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(b) In addition, if at any time any direct or indirect parent company of the Company becomes a guarantor of the Notes (there being no obligation of such parent to do so), the reports, information and other documents required to be filed and furnished to the Holders pursuant to this Section 1009 may, at the option of the Company, be filed by and be those of such parent rather than the Company; provided that the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Company and its Restricted Subsidiaries on a standalone basis, on the other hand.

(c) Notwithstanding the foregoing, the requirements of this Section 1009 shall be deemed satisfied prior to the commencement of the Exchange Offer or the effectiveness of the Shelf Registration Statement by the filing with the SEC of the Exchange Offer Registration Statement or Shelf Registration Statement, and any amendments thereto, with such financial information that satisfies Regulation S-X of the Securities Act.

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(d) Notwithstanding anything herein to the contrary, the Company shall not be deemed to have failed to comply with any of its obligations under this Section 1009 for the purposes of Section 501(3) until 120 days after the date any report hereunder is due.

SECTION 1010. Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly:

(1) declare or pay any dividend or make any distribution on account of the Company’s or any Restricted Subsidiary’s Equity Interests, including any dividend or distribution payable in connection with any merger or consolidation other than:

(A) dividends or distributions by the Company payable in Equity Interests (other than Disqualified Stock) of the Company or in options, warrants or other rights to purchase such Equity Interests (other than Disqualified Stock); or

(B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;

(2) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Company or any direct or indirect parent of the Company, including in connection with any merger or consolidation;

(3) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value in each case, prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness, other than:

(x) Indebtedness permitted under Sections 1011(b)(9) and (10) of this Indenture; or

(y) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or

(4) make any Restricted Investment

(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of such Restricted Payment:

(A) no Default shall have occurred and be continuing or would occur as a consequence thereof;

(B) immediately after giving effect to such transaction on a pro forma basis, the Company could incur $1.00 of additional Indebtedness under Section 1011(a) of this Indenture; and

(C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and the Restricted Subsidiaries after the Issue Date pursuant to this Section 1010(a) or clauses (1), (2) (with respect to the payment of dividends on Refunding Capital Stock pursuant to clause (b) thereof only), (6)(C), (8) and (12) of Section 1010(b) (and excluding, for the avoidance of doubt, all other Restricted Payments made pursuant to Section 1010(b)), is less than the sum, without duplication, of:

(1) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the first day of the fiscal quarter in which the Issue Date occurs to the

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end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit, plus

(2) 100% of the aggregate net cash proceeds and the fair market value, as determined in good faith by the Company, of marketable securities or other property received by the Company after the Issue Date (less the amount of such net cash proceeds to the extent such amount has been relied upon to permit the incurrence of Indebtedness, or issuance of Disqualified Stock or Preferred Stock pursuant to Section 1011(b)(22)(ii) of this Indenture from the issue or sale of:

(x) (i) Equity Interests of the Company, including Retired Capital Stock (as defined below), but excluding cash proceeds and the fair market value, as determined in good faith by the Company, of marketable securities or other property received from the sale of:

(A) Equity Interests to any future, present or former employees, directors, managers or consultants of the Company, any direct or indirect parent company of the Company or any of the Company’s Subsidiaries after the Issue Date to the extent such amounts have been applied to Restricted Payments made in accordance with Section 1010(b)(4); and

(B) Designated Preferred Stock; and

(ii) to the extent actually contributed to the Company, Equity Interests of the Company’s direct or indirect parent companies (excluding contributions of the proceeds from the sale of Designated Preferred Stock of such companies or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with Section 1010(b)(4)); or

(y) debt securities of the Company that have been converted into or exchanged for such Equity Interests of the Company;

provided that this clause (2) shall not include the proceeds from (a) Refunding Capital Stock, (b) Equity Interests of the Company or debt securities of the Company that have been converted into or exchanged for Equity Interests of the Company sold to a Restricted Subsidiary or the Company, as the case may be, (c) Disqualified Stock or debt securities that have been converted into or exchanged for Disqualified Stock or (d) Excluded Contributions, plus

(3) 100% of the aggregate amount of cash and the fair market value, as determined in good faith by the Company, of marketable securities or other property contributed to the capital of the Company after the Issue Date (less the amount of such net cash proceeds to the extent such amount has been relied upon to permit the incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock pursuant to Section 1011(b)(22)(ii) (other than by a Restricted Subsidiary and other than by any Excluded Contributions), plus

(4) to the extent not already included in Consolidated Net Income, 100% of the aggregate amount received in cash and the fair market value, as determined in good faith by the Company, of marketable securities or other property received after the Issue Date by means of

(A) the sale or other disposition (other than to the Company or a Restricted Subsidiary) of Restricted Investments made by the Company or any Restricted Subsidiary and repurchases and redemptions of such Restricted Investments from the Company or any Restricted Subsidiary and repayments to the Company or a Restricted Subsidiary of loans or advances that constitute Restricted Investments; or

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(B) the sale (other than to the Company or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary or a distribution from an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to Section 1010(b)(9) or (13) or to the extent such Investment constituted a Permitted Investment) or a dividend from an Unrestricted Subsidiary, plus

(5) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary after the Issue Date, the fair market value of the Investment in such Unrestricted Subsidiary, as determined by the Company in good faith or if, in the case of an Unrestricted Subsidiary, such fair market value may exceed $100 million, in writing by an Independent Financial Advisor, at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary, other than an Unrestricted Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to Section 1010(b)(9) or (13) or to the extent such Investment constituted a Permitted Investment.

(b) The foregoing provisions shall not prohibit:

(1) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture;

(2) (a) the redemption, repurchase, retirement or other acquisition of any Equity Interests (“Retired Capital Stock”) or Subordinated Indebtedness of the Company or any Equity Interests of any direct or indirect parent company of the Company, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary) of, Equity Interests of the Company (in each case, other than any Disqualified Stock) (“Refunding Capital Stock”) and (b) if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this Section 1010(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of the Company) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that was declarable and payable on such Retired Capital Stock immediately prior to such retirement;

(3) the defeasance, redemption, repurchase or other acquisition or retirement of (a) Subordinated Indebtedness of the Company or a Restricted Subsidiary made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of such Person or (b) Disqualified Stock of the Company or a Restricted Subsidiary made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of such Person that, in each case, is incurred in compliance with Section 1011 of this Indenture so long as:

(A) the principal amount of such new Indebtedness or liquidation preference of such new Disqualified Stock does not exceed the principal amount (or accreted value, if applicable) of the Subordinated Indebtedness or the liquidation preference of the Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired for value, plus the amount of any reasonable premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness or Disqualified Stock;

(B) such Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so defeased, redeemed, repurchased, acquired or retired;

(C) such Indebtedness or Disqualified Stock has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired; and

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(D) such Indebtedness or Disqualified Stock has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired;

(4) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Company or any of its direct or indirect parent companies held by any future, present or former employee, director, manager or consultant of the Company, any of its Subsidiaries or any of its direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement; provided that the aggregate Restricted Payments made under this clause (4) do not exceed in any calendar year $15.0 million (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $30.0 million in any calendar year); provided, further, that such amount in any calendar year may be increased by an amount not to exceed

(A) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of the Company and, to the extent contributed to the Company, Equity Interests of any of the Company’s direct or indirect parent companies, in each case to members of management, directors, managers or consultants of the Company, any of its Subsidiaries or any of its direct or indirect parent companies that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (C) of Section 1010(a), plus

(B) the cash proceeds of key man life insurance policies received by the Company and the Restricted Subsidiaries after the Issue Date, less

(C) the amount of any Restricted Payments previously made pursuant to clauses (A) and (B) of this clause (4);

and provided, further, that cancellation of Indebtedness owing to the Company from members of management, directors, managers or consultants of the Company, any of its direct or indirect parent companies or any Restricted Subsidiary in connection with a repurchase of Equity Interests of the Company or any of its direct or indirect parent companies shall not be deemed to constitute a Restricted Payment for purposes of this Section 1010(b) or any other provision of this Indenture;

(5) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary issued in accordance with Section 1011 to the extent such dividends are included in the definition of “Fixed Charges”;

(6) (A) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by the Company after the Issue Date;

(B) the declaration and payment of dividends to a direct or indirect parent company of the Company, the proceeds of which shall be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of such parent company issued after the Issue Date; provided that the amount of dividends paid pursuant to this clause (B) shall not exceed the aggregate amount of cash actually contributed to the Company from the sale of such Designated Preferred Stock; or

(C) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this Section 1010(b);

provided, however, in the case of each of (A), (B) and (C) of this clause (6), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding

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the date of issuance of such Designated Preferred Stock or the declaration of such dividends on Refunding Capital Stock that is Preferred Stock, after giving effect to such issuance or declaration on a pro forma basis, the Company and the Restricted Subsidiaries on a consolidated basis would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

(7) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(8) the declaration and payment of dividends on the Company’s common stock following the first public offering of the Company’s common stock or the common stock of any of its direct or indirect parent companies after the Issue Date, of up to 6% per annum of the net proceeds received by or contributed to the Company in or from any such public offering, other than public offerings with respect to the Company’s common stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

(9) Restricted Payments that are made with Excluded Contributions;

(10) the declaration and payment of dividends by the Company to, or the making of loans to, its direct parent company in amounts required for the Company’s direct or indirect parent companies to pay:

(A) franchise taxes and other fees, taxes and expenses required to maintain their corporate existence;

(B) Federal, state and local income taxes, to the extent such income taxes are attributable to the income of the Company and the Restricted Subsidiaries and, to the extent of the amount actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries;

(C) customary salary, bonus and other benefits payable to officers and employees of any direct or indirect parent company of the Company to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Company and the Restricted Subsidiaries;

(D) general corporate overhead expenses of any direct or indirect parent company of the Company to the extent such expenses are attributable to the ownership or operation of the Company and the Restricted Subsidiaries; and

(E) reasonable fees and expenses incurred in connection with any unsuccessful debt or equity offering by such direct or indirect parent company of the Company;

(11) any Restricted Payments used to fund the Transactions and the fees and expenses related thereto, including those owed to Affiliates, in each case to the extent permitted by Section 1013;

(12) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness in connection with events similar to those described under Section 1017 and Section 1018 of this Indenture; provided that, prior to such repurchase, redemption or other acquisition, the Company (or a third party to the extent permitted by this Indenture) shall have made a Change of Control Offer or Asset Sale Offer, as the case may be, with respect to the Notes and shall have repurchased all Notes validly tendered and not withdrawn in connection with such Change of Control Offer or Asset Sale Offer;

(13) Investments in Unrestricted Subsidiaries, having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (13) that are at the time outstanding, without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities, not to exceed the greater of (x) $50.0 million and (y) 1.5% of Total

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Assets at the time of such Investment (with the fair market value of each Investment being measured at the time such Investment is made and without giving effect to subsequent changes in value);

(14) distributions or payments of Receivables Fees;

(15) the distribution, as a dividend or otherwise (and the declaration of such dividend), of shares of Capital Stock of, or Indebtedness owed to the Company or a Restricted Subsidiary by, any Unrestricted Subsidiary; and

(16) other Restricted Payments in an amount which, when taken together with all other Restricted Payments made pursuant to this clause (16), does not exceed the greater of (x) $100.0 million and (y) 3.0% of Total Assets;

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (15) and (16) of this Section 1010(b) no Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) As of the time of issuance of the Notes, all of the Company’s Subsidiaries shall be Restricted Subsidiaries. The Company shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the penultimate paragraph of the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation shall be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to Section 1010(a) or under clauses (9), (13) or (16) of this Section 1010(b), or pursuant to the definition of “Permitted Investments,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries shall not be subject to any of the restrictive covenants set forth in this Indenture.

(d) Notwithstanding anything to the contrary herein, the Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, make any (x) Restricted Payment covered in clauses (1) through (3) of the definition of “Restricted Payments” to the holders of Equity Interests of the Company or any of its direct or indirect parent companies (which shall include the Sponsor and the Co-Investors) (other than to the Company’s and its Restricted Subsidiaries’ future, present or former employees, directors or managers or consultants of the Company, any of its Subsidiaries or any of its direct or indirect parent companies with respect to Equity Interests held by them in such capacities and other than a Restricted Payment made pursuant to clause (10) of Section 1010(b)) or (y) Investment in the Sponsor, the Co-Investors, any Permitted Holders who are members of a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) with the Sponsor or any Co-Investors or any Person or group who becomes a Permitted Holder following a Change of Control as provided for in the definition of “Permitted Holders” (other than to the Company and its Restricted Subsidiaries and members of management of the Company (or its direct parent)), in each case during any period beginning on the date on which the Company makes an election to pay PIK Interest with respect to any Interest Period and ending on the first date after such Interest Period on which the Company makes a payment of Cash Interest with respect to a subsequent Interest Period.

SECTION 1011. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness), and the Company shall not issue any shares of Disqualified Stock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company’s and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma

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application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $125 million at any one time outstanding.

(b) The foregoing limitations shall not apply to any of the following items (collectively, “Permitted Debt”):

(1) Indebtedness incurred pursuant to the ABL Credit Agreement by the Company or any Restricted Subsidiary; provided that immediately after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) and then outstanding does not exceed $50.0 million plus the greater of (A) $850.0 million and (B) the sum of (i) 85.0% of the net book value of accounts receivable of the Company and its Restricted Subsidiaries and (ii) the lesser of (x) 75.0% of the net book value or (y) 85.0% of the net orderly liquidation value of inventory of the Company and its Restricted Subsidiaries;

(2) Indebtedness incurred pursuant to the Term Credit Agreement by the Company or any Restricted Subsidiary; provided that after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (2) and then outstanding does not exceed $1,225.0 million less up to $150.0 million in the aggregate of all principal payments with respect to such Indebtedness made pursuant to Section 1018(b)(1)(x) of this Indenture;

(3) the incurrence by the Company and any Subsidiary Guarantor of Indebtedness represented by the Notes issued on the Issue Date and the Subsidiary Guarantees thereof and the Exchange Notes and related exchange guarantees to be issued in exchange for the Notes and the Subsidiary Guarantees pursuant to the Registration Rights Agreement (other than any Additional Notes);

(4) the incurrence by the Company and any Subsidiary Guarantor of Indebtedness represented by the Senior Subordinated Notes issued on the Issue Date (and the guarantees thereof and the Exchange Notes and related exchange guarantees to be issued in exchange for the Senior Subordinated Notes pursuant to the Registration Rights Agreement (other than any Additional Senior Subordinated Notes (as defined in the Senior Subordinated Indenture));

(5) Existing Indebtedness (other than Indebtedness described in clauses (1), (2), (3) and (4) of this Section 1011(b));

(6) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of the Restricted Subsidiaries, to finance the development, construction, purchase, lease (other than the lease, pursuant to Sale and Lease-Back Transactions, of property (real or personal), equipment or other fixed or capital assets owned by the Company or any Restricted Subsidiary as of the Issue Date or acquired by the Company or any Restricted Subsidiary after the Issue Date in exchange for, or with the proceeds of the sale of, such assets owned by the Company or any Restricted Subsidiary as of the Issue Date), repairs, additions or improvement of property (real or personal), equipment or other fixed or capital assets that are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and any Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (6); provided that the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (6) (including any such Refinancing Indebtedness) does not exceed the greater of (x) $175.0 million and (y) 5.5% of Total Assets at any one time outstanding;

(7) Indebtedness incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of

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such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

(8) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that

(A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this clause (8)(A)); and

(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and the Restricted Subsidiaries in connection with such disposition;

(9) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor is subordinated in right of payment to the Notes; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;

(10) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Subsidiary Guarantor such Indebtedness is subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor; provided, further, that any subsequent issuance or transfer of Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;

(11) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of such shares of Preferred Stock;

(12) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting: (A) interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding, (B) exchange rate risk with respect to any currency exchange or (C) commodity pricing risk with respect to any commodity;

(13) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;

(14) (x) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other Obligations of any Restricted Subsidiary, so long as the incurrence of such Indebtedness by such Restricted Subsidiary is permitted under the terms of this Indenture or (y) any guarantee by a Restricted Subsidiary of Indebtedness of the Company permitted to be incurred under the terms of this Indenture; provided that such guarantee is incurred in accordance with Section 1015 of this Indenture;

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(15) the incurrence by the Company or any Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock that serves to extend, replace, refund, refinance, renew or defease any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 1011(a) and clauses (3), (4) and (5) above, this clause (15) and clauses (16) and (22)(ii) below of this Section 1011(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so extend, replace, refund, refinance, renew or defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:

(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased;

(B) to the extent such Refinancing Indebtedness extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated to the Notes or any Subsidiary Guarantee, such Refinancing Indebtedness is subordinated to the Notes or such Subsidiary Guarantee at least to the same extent as the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively; and

(C) shall not include:

(x) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company;

(y) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary Guarantor; or

(z) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

(16) Indebtedness, Disqualified Stock or Preferred Stock (x) of the Company or any of its Restricted Subsidiaries incurred to finance the acquisition of any Person or assets or (y) of Persons that are acquired by the Company or any Restricted Subsidiary or merged into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that either (A) after giving effect to such acquisition or merger, either:

(i) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 1011(a); or

(ii) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries on a consolidated basis is greater than immediately prior to such acquisition or merger; or

(B) such Indebtedness, Disqualified Stock or Preferred Stock (i) is not Secured Indebtedness and is Subordinated Indebtedness with subordination terms no more favorable to the holders thereof than the subordination terms set forth in the Senior Subordinated Indenture as in effect on the Issue Date, (ii) is not incurred while a Default exists and no Default shall result therefrom, (iii) does not mature (and is not mandatorily redeemable in the case of Disqualified Stock or Preferred Stock) and does not require any payment of principal prior to the final maturity of the Notes, (iv) is incurred by the Company or a Subsidiary Guarantor and (v) in the case of sub-clause (y) above only, is not incurred in contemplation of such acquisition or merger;

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(17) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its incurrence;

(18) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Senior Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;

(19) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred to finance or assumed in connection with an acquisition and any Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (19) which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (19) and then outstanding (including any such Refinancing Indebtedness) does not exceed $50.0 million (it being understood that any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (19) shall cease to be deemed incurred or outstanding for purposes of this clause (19) but shall be deemed incurred pursuant to Section 1011(a) from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 1011(a) without reliance on this clause (19));

(20) Indebtedness incurred by a Foreign Subsidiary which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this clause (20) and then outstanding, does not exceed the greater of (x) $75.0 million and (y) 4.0% of Foreign Subsidiary Total Assets (it being understood that any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (20) shall cease to be deemed incurred or outstanding for purposes of this clause (20) but shall be deemed incurred pursuant to Section 1011(a) from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 1011(a) without reliance on this clause (20));

(21) Indebtedness issued by the Company or any Restricted Subsidiary to current or former employees, directors, managers and consultants thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any direct or indirect parent company of the Company to the extent described in Section 1010(b(4) of this Indenture);

(22) Indebtedness, Disqualified Stock and Preferred Stock of the Company or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (22) and then outstanding, does not at any one time outstanding exceed the sum of:

(i) $150.0 million (it being understood that any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (22)(i) shall cease to be deemed incurred or outstanding for purposes of this clause (22)(i) but shall be deemed incurred pursuant to Section 1011(a) from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 1011(a) without reliance on this clause (22)(i)); plus

(ii) 200% of the net cash proceeds received by the Company since after the Issue Date from the issue or sale of Equity Interests of the Company or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (C)(2) and (C)(3) of Section 1010(a) of this Indenture to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other investments, payments or exchanges pursuant to Section 1010(b) of this Indenture or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof); and

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(23) Attributable Debt incurred by the Company or any Restricted Subsidiary pursuant to Sale and Lease-Back Transactions of property (real or personal), equipment or other fixed or capital assets owned by the Company or any Restricted Subsidiary as of the Issue Date or acquired by the Company or any Restricted Subsidiary after the Issue Date in exchange for, or with the proceeds of the sale of, such assets owned by the Company or any Restricted Subsidiary as of the Issue Date and any Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (23), provided that the aggregate amount of Attributable Debt incurred under this clause (23) (including any such Refinancing Indebtedness) does not exceed $50.0 million.

(c) For purposes of determining compliance with this Section 1011, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (23) of Section 1011(b) or is entitled to be incurred pursuant to Section 1011(a), the Company, in its sole discretion, shall classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and shall only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in one or more of the above clauses; provided that all Indebtedness outstanding under the Senior Credit Facilities on the Issue Date shall be deemed to have been incurred on such date in reliance on the exception in clauses (1) and (2) of Section 1011(b).

(d) The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness, Disqualified Stock or Preferred Stock shall not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 1011.

(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed or incurred (as determined by the Company), in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased.

(f) The principal amount of any Indebtedness incurred to extend, replace, refund, refinance, renew or defease other Indebtedness, if incurred in a different currency from the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance.

SECTION 1012. Liens. The Company shall not, and shall not permit any of the Subsidiary Guarantors to, directly or indirectly, create, incur, assume or suffer to exist any Lien (except Permitted Liens) that secures obligations under any Indebtedness on any asset or property of the Company or any Subsidiary Guarantor now owned or hereafter acquired, or any income or profits therefrom, or assign or convey any right to receive income therefrom, unless:

(1) in the case of Liens securing Subordinated Indebtedness, the Notes or the applicable Subsidiary Guarantee of a Subsidiary Guarantor, as the case may be, are secured by a Lien on such property or assets that is senior in priority to such Liens; and

(2) in all other cases, the Notes or the applicable Subsidiary Guarantee of a Subsidiary Guarantor, as the case may be, are equally and ratably secured;

provided that any Lien which is granted to secure the Notes under this Section 1012 shall be discharged at the same time as the discharge of the Lien (other than through the exercise of remedies with respect thereto) that gave rise to the obligation to so secure the Notes.

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SECTION 1013. Limitations on Transactions with Affiliates. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (each of the foregoing, an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $10.0 million, unless

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person and

(2) the Company delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $30.0 million, a Board Resolution adopted by the majority of the members of the Board of Directors of the Company approving such Affiliate Transaction and set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (1) above.

(b) The foregoing provisions shall not apply to the following:

(1) Transactions between or among the Company or any of the Restricted Subsidiaries;

(2) Restricted Payments permitted by Section 1010 of this Indenture and the definition of “Permitted Investments”;

(3) the payment of management, consulting, monitoring and advisory fees and related expenses to the Sponsor and any Co-Investors and any termination or other fee payable to the Sponsor or any Co-Investors upon a change of control or initial public equity offering of the Company or any direct or indirect parent company thereof pursuant to the Management Services Agreement as in effect on the Issue Date;

(4) the payment of reasonable and customary fees paid to, and indemnities provided on behalf of, officers, directors, managers, employees or consultants of the Company, any of its direct or indirect parent companies or any Restricted Subsidiary;

(5) payments by the Company or any Restricted Subsidiary to the Sponsor or any Co-Investors for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are approved by a majority of the members of the Board of Directors of the Company in good faith;

(6) transactions in which the Company or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (1) of Section 1013(a);

(7) payments or loans (or cancellations of loans) to employees or consultants of the Company, any of its direct or indirect parent companies or any Restricted Subsidiary and employment agreements, employee benefit plans, stock option plans and other compensatory or severance arrangements with such employees or consultants that are, in each case, approved by the Company in good faith;

(8) any agreement, instrument or arrangement as in effect as of the Issue Date, or any amendment thereto (so long as any such amendment is not disadvantageous to the Holders in any material respect as compared to the applicable agreement as in effect on the Issue Date as reasonably determined by the Company in good faith);

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(9) the existence of, or the performance by the Company or any of the Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement or its equivalent (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any similar agreements which it may enter into thereafter; provided, however that the existence of, or the performance by the Company or any Restricted Subsidiary of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (9) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or new agreement are not otherwise more disadvantageous to the Holders in any material respect than the terms of the original agreement in effect on the Issue Date as reasonably determined in good faith by the Company;

(10) the Transactions and the payment of all fees and expenses related to the Transactions, in each case as disclosed in the Offering Circular;

(11) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture that are fair to the Company and the Restricted Subsidiaries, in the reasonable determination of the Board of Directors or the senior management of the Company, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(12) the issuance of Equity Interests (other than Disqualified Stock) of the Company to any Permitted Holder or to any director, manager, officer, employee or consultant of the Company or any direct or indirect parent company thereof;

(13) sales of accounts receivable, or participations therein, in connection with any Receivables Facility; and

(14) investments by the Sponsor and the Co-Investors in securities of the Company or any of its Restricted Subsidiaries so long as (i) the investment is being offered generally to other investors on the same or more favorable terms and (ii) the investment constitutes less than 5.0% of the proposed or outstanding issue amount of such class of securities.

SECTION 1014. Limitations on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries. The Company shall not, and shall not permit any Restricted Subsidiary that is not a Subsidiary Guarantor to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any such Restricted Subsidiary to:

(a) (1) pay dividends or make any other distributions to the Company or any Restricted Subsidiary on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits or

(2) pay any Indebtedness owed to the Company or any Restricted Subsidiary;

(b) make loans or advances to the Company or any Restricted Subsidiary; or

(c) sell, lease or transfer any of its properties or assets to the Company or any Restricted Subsidiary;

except (in each case) for such encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Senior Credit Facilities and the related documentation (including security documents and intercreditor agreements) and Hedging Obligations;

(2) the Indentures, the New Notes and the guarantees thereof;

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(3) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions of the nature discussed in clause (c) above on the property so acquired;

(4) applicable law or any applicable rule, regulation or order;

(5) any agreement or other instrument of a Person acquired by the Company or any Restricted Subsidiary in existence at the time of such acquisition (but not created in connection therewith or in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired;

(6) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(7) Secured Indebtedness otherwise permitted to be incurred pursuant to Sections 1011 and 1012 of this Indenture that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(8) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(9) other Indebtedness, Disqualified Stock or Preferred Stock of Restricted Subsidiaries permitted to be incurred after the Issue Date pursuant to the provisions of Section 1011 of this Indenture;

(10) customary provisions in joint venture agreements, asset sale agreements, sale and leaseback agreements and other similar agreements;

(11) customary provisions contained in leases and other agreements entered into in the ordinary course of business;

(12) restrictions created in connection with any Receivables Facility; provided that in the case of Receivables Facilities established after the Issue Date, such restrictions are necessary or advisable, in the good faith determination of the Company, to effect such Receivables Facility;

(13) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Company or any of its Restricted Subsidiaries is a party entered into in the ordinary course of business; provided that such agreement prohibits the encumbrance of solely the property or assets of the Company or such Restricted Subsidiary that are the subject of such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of the Company or such Restricted Subsidiary or the assets or property of any other Restricted Subsidiary; and

(14) any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (13) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Company, not materially more restrictive with respect to such encumbrance and other restrictions than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing; provided, further, that with respect to contracts, instruments or obligations existing on the Issue Date, any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive with respect to such encumbrances and other restrictions than those contained in such contracts, instruments or obligations as in effect on the Issue Date.

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SECTION 1015. Limitation on Guarantees of Indebtedness by Restricted Subsidiaries. The Company shall not permit any of its Wholly Owned Subsidiaries that are Restricted Subsidiaries (and non-Wholly Owned Subsidiaries if such non-Wholly Owned Subsidiaries guarantee other capital markets debt securities) of the Company or any Subsidiary Guarantor, other than a Subsidiary Guarantor or a Foreign Subsidiary, to guarantee the payment of any Indebtedness of the Company or any Subsidiary Guarantor unless:

(1) such Restricted Subsidiary within 30 days executes and delivers a supplemental indenture to this Indenture providing for a Subsidiary Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of the Company or any Subsidiary Guarantor, that is by its express terms subordinated in right of payment to the Notes or such Subsidiary Guarantor’s Subsidiary Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Subsidiary Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes;

(2) such Restricted Subsidiary waives and shall not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against the Company or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Subsidiary Guarantee; and

(3) such Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that:

(a) such Subsidiary Guarantee has been duly executed and authorized; and

(b) such Subsidiary Guarantee constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity,

provided that this Section 1015 shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.

SECTION 1016. Limitation on Sale and Lease-Back Transactions. The Company shall not, and shall not permit any Restricted Subsidiary to, enter into any Sale and Lease-Back Transaction with respect to any property unless:

(1) the Company or such Restricted Subsidiary would be entitled to (A) incur Indebtedness in an amount equal to the Attributable Debt with respect to such Sale and Lease-Back Transaction pursuant to Section 1011 of this Indenture and (B) create a Lien on such property securing such Attributable Debt without equally and ratably securing the Notes pursuant to Section 1012;

(2) the consideration received by the Company or any Restricted Subsidiary in connection with such Sale and Lease-Back Transaction is at least equal to the fair market value (as determined in good faith by the Company) of such property; and

(3) the Company applies the proceeds of such transaction in compliance with Section 1018 of this Indenture.

SECTION 1017. Change of Control.

(a) If a Change of Control occurs, the Company shall make an offer to purchase all of the Notes pursuant to the offer described below (the “Change of Control Offer”) at a price in cash (the “Change of Control Payment”) equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, and Additional Interest, if any, to the date of purchase, subject to the right of Holders of record on the relevant record date to receive

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interest due on the relevant Interest Payment Date. Within 30 days following any Change of Control, the Company shall send notice of such Change of Control Offer by first class mail, with a copy to the Trustee, to each Holder to the address of such Holder appearing in the security register with a copy to the Trustee, with the following information:

(1) a Change of Control Offer is being made pursuant to this Section 1017 and all Notes properly tendered pursuant to such Change of Control Offer shall be accepted for payment;

(2) the purchase price and the purchase date, which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”);

(3) any Note not properly tendered shall remain outstanding and continue to accrue interest;

(4) unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on the Change of Control Payment Date;

(5) Holders electing to have any Notes purchased pursuant to a Change of Control Offer shall be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes completed, to the paying agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(6) Holders shall be entitled to withdraw their tendered Notes and their election to require the Company to purchase such Notes; provided that the paying agent receives, not later than the close of business on the last day of the offer period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased; and

(7) Holders whose Notes are being purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 or an integral multiple of $1,000 in excess of $1,000.

(b) While the Notes are in global form and the Company makes a Change of Control Offer, a Holder may exercise its option to elect for the purchase of the Notes through the facilities of DTC, subject to its rules and regulations.

(c) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

(d) On the Change of Control Payment Date, the Company shall, to the extent permitted by law,

(1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer,

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officers’ Certificate stating that such Notes or portions thereof have been tendered to and purchased by the Company.

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(e) The Paying Agent shall promptly mail to each Holder the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note shall be in a principal amount of $1,000 or an integral multiple of $1,000 in excess of $1,000. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

(f) The Company shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the time and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. A Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

SECTION 1018. Asset Sales.

(a) The Company shall not, and shall not permit any Restricted Subsidiary to, cause, make or suffer to exist an Asset Sale, unless:

(1) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (as determined in good faith by the Company) of the assets sold or otherwise disposed of (notwithstanding the foregoing, the consideration received by the Company or any of its Restricted Subsidiaries from the sale of the Saginaw, Michigan facility on terms materially consistent with the terms, as in effect as of October 6, 2003, set forth in Exhibit 5 to the Long Term Agreement as in effect as of October 6, 2003 between General Motors Corporation and Alchem Aluminum Inc., dated as of February 26, 1999, shall, in each case, be deemed to be fair market value for purposes of this paragraph); and

(2) except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that the amount of

(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of the Company or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the Notes, that are assumed by the transferee of any such assets (or a third party on behalf of the transferee) and for which the Company or such Restricted Subsidiary has been validly released by all creditors in writing,

(B) any securities, notes or other obligations or assets received by the Company or such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received) within 180 days following the closing of such Asset Sale and

(C) any Designated Noncash Consideration received by the Company or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Noncash Consideration received pursuant to this clause (C) that has not previously been converted to cash, not to exceed the greater of (x) $100.0 million and (y) 3.0% of Total Assets at the time of receipt of such Designated Noncash Consideration, with the fair market value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value,

shall be deemed to be cash for purposes of this provision and for no other purpose.

(b) Within 450 days after any of the Company’s or any Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, the Company or such Restricted Subsidiary may, at its option, apply the Net Proceeds from such Asset Sale:

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(1) to permanently reduce

(x) Obligations under the Senior Credit Facilities or other any Senior Indebtedness, in each case, of the Company or any Subsidiary Guarantor and, in the case of Obligations under revolving credit facilities or other similar Indebtedness, to correspondingly permanently reduce commitments with respect thereto (other than Obligations owed to the Company or a Restricted Subsidiary); provided that if the Company or any Restricted Subsidiary shall so reduce Obligations under any Senior Indebtedness that is not Secured Indebtedness, the Company or such Subsidiary Guarantor shall, equally and ratably, reduce Obligations under the Notes by, at its option, (A) redeeming Notes if the Notes are then redeemable as provided by the terms of the Notes, (B) making an offer (in accordance with the procedures set forth in this Section 1018) to all Holders to purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued and unpaid interest and Additional Interest, if any, on the principal amount of Notes to be repurchased or (C) purchasing Notes through open market purchases (to the extent such purchases are at a price equal to or higher than 100% of the principal amount thereof) in a manner that complies with this Indenture and applicable securities law; or

(y) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor, other than Indebtedness owed to the Company or another Restricted Subsidiary; or

(2) to an investment in (A) any one or more businesses; provided that such investment in any business is in the form of the acquisition of Capital Stock and results in the Company or any Restricted Subsidiary owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (B) properties, (C) capital expenditures and (D) acquisitions of other assets, that in each of (A), (B), (C) and (D), are used or useful in a Similar Business or replace the businesses, properties and assets that are the subject of such Asset Sale.

(c) Any Net Proceeds from any Asset Sale that are not invested or applied in accordance with the preceding paragraph within 450 days from the date of the receipt of such Net Proceeds shall be deemed to constitute “Excess Proceeds”; provided that if during such 450-day period the Company or a Restricted Subsidiary enters into a definitive binding agreement committing it to apply such Net Proceeds in accordance with the requirements of clause (2) of Section 1018(b) after such 450th day, such 450-day period shall be extended with respect to the amount of Net Proceeds so committed until such Net Proceeds are required to be applied in accordance with such agreement (but such extension shall in no event be for a period longer than 180 days) (or, if earlier, the date of termination of such agreement). When the aggregate amount of Excess Proceeds exceeds $35.0 million, the Company shall make an offer to all Holders and, if required by the terms of any Senior Indebtedness, to the holders of such Senior Indebtedness (other than with respect to Hedging Obligations) (an “Asset Sale Offer”), to purchase the maximum aggregate principal amount of Notes and such Senior Indebtedness that is an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Company shall commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $35.0 million by mailing the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. The Company may satisfy the foregoing obligations with respect to any Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the relevant 450 days (or such longer period provided above) or with respect to Excess Proceeds of $35.0 million or less. To the extent that the aggregate amount of Notes and such Senior Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes, subject to the other covenants contained in this Indenture. If the aggregate principal amount of Notes or the Senior Indebtedness surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Company shall select or cause to be selected the Notes and such Senior Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Senior Indebtedness tendered. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds related to such Asset Sale Offer shall be reset at zero.

(d) Pending the final application of any Net Proceeds pursuant to this Section 1018, the Company or the applicable Restricted Subsidiary may apply such Net Proceeds temporarily to reduce Indebtedness outstanding

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under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.

(e) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

(f) If the Company is repurchasing less than all of the Notes at any time, the Company shall select the Notes to be repurchased (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which such Notes are listed or (b) if such Notes are not so listed, on a pro rata basis to the extent practicable; provided that no Notes of $1,000 or less shall be repurchased in part.

(g) Notices of repurchase shall be mailed by first class mail, postage prepaid, at least 30 days but not more than 60 days before the date of repurchase to each Holder at such Holder’s registered address, except that notices of repurchase may be mailed more than 60 days prior to a date of repurchase if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture. If any Note is to be repurchased in part only, any notice of repurchase that relates to such Note shall state the portion of the principal amount thereof to be repurchased.

(h) A new Note in principal amount equal to the unrepurchased portion of any Note repurchased in part shall be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for repurchase become due and payable on the date fixed for repurchase. On and after the date of repurchase, unless the Company defaults in the repurchase payment, interest shall cease to accrue on the Note or portions thereof called for repurchase. The Paying Agent, if not the Company, shall return to the Company any cash that remains unclaimed, together with interest, if any, thereon, held by the Paying Agent for the payment of the amount required pursuant to the Asset Sale Offer.

SECTION 1019. No Amendment to Subordination Provisions. Without the consent of the Holders of a majority in Outstanding aggregate principal amount of the Notes, the Company shall not amend, modify or alter the Senior Subordinated Indenture in any way to:

(1) increase the rate of or change the time for payment of interest on any Senior Subordinated Notes;

(2) increase the principal of, advance the final maturity date of or shorten the Weighted Average Life to Maturity of any Senior Subordinated Notes;

(3) alter the redemption provisions or the price or terms at which the Company is required to offer to purchase any Senior Subordinated Notes; or

(4) amend the provisions of the Senior Subordinated Indenture that relate to subordination.

SECTION 1020. Designation of “Designated Senior Indebtedness”. The Company hereby designates the Notes to be “Designated Senior Indebtedness” under the Senior Subordinated Indenture.

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ARTICLE ELEVEN

REDEMPTION OF NOTES

SECTION 1101. Right of Redemption.

(a) At any time prior to December 15, 2010, the Company may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the Redemption Date, subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(b) From and after December 15, 2010, the Company may redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days’ prior notice at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, and Additional Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on December 15 of each of the years indicated below:

Year	Percentage
2010	104.500	%
2011	102.250	%
2012 and thereafter	100.000	%

(c) Prior to December 15, 2009, the Company may, at its option, redeem up to 35% of the original aggregate principal amount of Notes (and the original principal amount of any Additional Notes and PIK Notes) issued under this Indenture at a redemption price equal to 109.000% of the aggregate principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds of one or more Equity Offerings of the Company or any direct or indirect parent of the Company to the extent such net cash proceeds are contributed to the Company; provided that at least 50% of the sum of the aggregate principal amount of Notes originally issued under this Indenture and the aggregate principal amount of any Additional Notes and PIK Notes issued under this Indenture after the Issue Date remains Outstanding immediately after the occurrence of each such redemption; provided, further, that each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

SECTION 1102. Mandatory Redemption.

(a) Except as set forth in Section 1102(b), the Company shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

(b) If the aggregate amount which would be includible in gross income for federal income tax purposes with respect to a Note before the close of any “accrual period” (as defined in Treasury Regulation Section 1.1272-1(b)(1)(ii)) ending after five years from the Issue Date (the “Aggregate Inclusion”) exceeds an amount equal to the sum of (x) the aggregate amount of interest that has been paid in cash under such Note before the close of such accrual period and (y) the product of the issue price of such Note (as determined under Section 1273(b) of the Code) multiplied by the yield to maturity of such Note (as determined for purposes of applying Section 163(i) of the Code) (the sum of (x) and (y), the “Adjusted Actual Payment”), the Company shall, before the close of such accrual period, make a mandatory prepayment (any such prepayment a “Special Mandatory Redemption”) on such Note, to the extent that the Aggregate Inclusion as of such time exceeds the Adjusted Actual Payment. Such mandatory prepayment will be applied against and reduce the principal amount of the applicable Note outstanding at such time and shall be made at the applicable redemption price set forth Section 1101(b). The Company intends that the Special Mandatory Redemption be sufficient to result in each Note being treated as not having “significant original issue discount” within the meaning of Section 163(i)(2) of the Code.

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SECTION 1103. Applicability of Article. Redemption of Notes at the election of the Company or otherwise, as permitted or required by any provision of this Indenture or the Notes, shall be made in accordance with such provision and this Article Eleven.

SECTION 1104. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Notes pursuant to Section 1101 above shall be evidenced by a Board Resolution. If the Company elects to redeem Notes pursuant to Section 1101 hereof, it shall furnish to the Trustee, at least five Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 1106 hereof, an Officers’ Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the Redemption Date, (iii) the principal amount of the Notes to be redeemed and (iv) the Redemption Price.

SECTION 1105. Selection by Trustee of Notes to Be Redeemed.

(a) If the Company is redeeming less than all of the Notes at any time, the Trustee shall select the Notes to be redeemed (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which such Notes are listed or (b) if such Notes are not so listed, on a pro rata basis to the extent practicable; provided that no Notes of $1,000 or less shall be redeemed in part.

(b) If any Note is to be redeemed in part only, any notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed.

(c) A new Note in principal amount equal to the unredeemed portion of any Note redeemed in part shall be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due and payable on the date fixed for redemption. On and after the Redemption Date, unless the Company defaults in the redemption payment, interest shall cease to accrue on the Note or portions thereof called for redemption.

SECTION 1106. Notice of Redemption. Notices of redemption shall be mailed by first class mail, postage prepaid, at least 30 days but not more than 60 days before the Redemption Date to each Holder at such Holder’s registered address, except that notices of redemption may be mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price and the amount of accrued interest to the Redemption Date payable as provided in Section 1108, if any,

(3) if less than all Outstanding Notes are to be redeemed, the identification (and, in the case of a partial redemption, the principal amounts) of the particular Notes to be redeemed,

(4) in case any Note is to be redeemed in part only, the notice which relates to such Note shall state that on and after the Redemption Date, upon surrender of such Note, the Holder shall receive, without charge, a new Note or Notes of authorized denominations for the principal amount thereof remaining unredeemed,

(5) that on the Redemption Date the Redemption Price (and accrued interest, if any, to the Redemption Date payable as provided in Section 1108) shall become due and payable upon each such Note, or the portion thereof, to be redeemed, and that interest thereon shall cease to accrue on and after said date,

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(6) the place or places where such Notes are to be surrendered for payment of the Redemption Price and accrued interest, if any,

(7) the name and address of the Paying Agent,

(8) that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price,

(9) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;

(10) the “CUSIP” number, ISIN or “Common Code” number and that no representation is made as to the accuracy or correctness of the “CUSIP” number, ISIN or “Common Code” number, if any, listed in such notice or printed on the Notes, and

(11) the paragraph of the Notes or Section of the Indenture pursuant to which the Notes are to be redeemed.

At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at its expense; provided that the Company shall have delivered to the Trustee, at least five Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 1106 (unless a shorter notice shall be agreed to by the Trustee), an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in Section 1104.

SECTION 1107. Effect of Notice of Redemption. Once notice of redemption is mailed in accordance with Section 1106 hereof, Notes called for redemption become irrevocably due and payable on the Redemption Date at the Redemption Price. The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 1108 hereof, on and after the Redemption Date, interest and Additional Interest, if any, shall cease to accrue on Notes or portions of Notes called for redemption.

SECTION 1108. Deposit of Redemption Price. Prior to 12:00 p.m. (Eastern Time) on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and accrued interest and Additional Interest, if any, on, all the Notes that are to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest and Additional Interest, if any, on, all Notes to be redeemed or purchased. In addition, all money, if any, earned on funds held by the Trustee or the Paying Agent shall be remitted to the Company.

SECTION 1109. Notes Payable on Redemption Date.

(a) Notice of redemption having been given as aforesaid, the Notes so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified (together with accrued interest and Additional Interest, if any, to the Redemption Date), and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Notes shall cease to bear interest. Upon surrender of any such Note for redemption in accordance with said notice, such Note shall be paid by the Company at the Redemption Price, together with accrued interest and Additional Interest, if any, to the Redemption Date and such Notes shall be canceled by the Trustee; provided, however, that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Notes, or one or more Predecessor Notes, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 306.

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(b) If any Note called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne by the Notes.

SECTION 1110. Notes Redeemed in Part. Any Note which is to be redeemed only in part (pursuant to the provisions of this Article Eleven) shall be surrendered at the office or agency of the Company maintained for such purpose pursuant to Section 1002 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Note without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Note so surrendered; provided that no Note of $1,000 or less will be redeemed in part.

ARTICLE TWELVE

GUARANTEES

SECTION 1201. Guarantees. From and after the consummation of the Merger, each Subsidiary Guarantor hereby jointly and severally, irrevocably and unconditionally irrevocably guarantees, as primary obligor and not merely as surety, the Notes and obligations of the Company hereunder and thereunder, and guarantees to each Holder of a Note authenticated and delivered by the Trustee, and to the Trustee for itself and on behalf of such Holder, that: (1) the principal of (and premium, if any) and interest on, or Additional Interest in respect of, the Notes shall be paid in full when due, whether at Stated Maturity, by acceleration or otherwise (including the amount that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Law), subject to any applicable grace period, together with interest on the overdue principal, if any, and interest on any overdue interest, to the extent lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder shall be paid in full or performed, all in accordance with the terms hereof and thereof; and (2) in case of any extension of time of payment or renewal of any Notes or of any such other obligations, the same shall be paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise, subject to any applicable grace period, and subject, however, in the case of clauses (1) and (2) above, to the limitation set forth in Section 1204 hereof.

(a) Each Subsidiary Guarantor hereby agrees that (to the extent permitted by law) its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, any release of any other Subsidiary Guarantor, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Subsidiary Guarantor.

(b) Each Subsidiary Guarantor hereby waives (to the extent permitted by law) the benefits of diligence, presentment, demand for payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company or any other Person, protest, notice and all demands whatsoever and covenants that the Subsidiary Guarantee of such Subsidiary Guarantor shall not be discharged as to any Note except by complete performance of the obligations contained in such Note, this Indenture and such Subsidiary Guarantee. Each Subsidiary Guarantor acknowledges that the Subsidiary Guarantee is a guarantee of payment, performance and compliance when due and not of collection. Each of the Subsidiary Guarantors hereby agrees that, in the event of a default in payment of principal (or premium, if any) or interest on such Note, whether at its Stated Maturity, by acceleration, purchase or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Note, subject to the terms and conditions set forth in this Indenture, directly against each of the Subsidiary Guarantors to enforce such Subsidiary Guarantor’s Subsidiary Guarantee without first proceeding against the Company or any other Subsidiary Guarantor. Each Subsidiary Guarantor agrees that if, after the occurrence and during the continuance of an Event of Default, the Trustee or any of the Holders are prevented by applicable law from exercising their respective rights to accelerate the Maturity of the Notes, to collect interest on the Notes, or to enforce or exercise any other right or remedy with respect to the Notes, such Subsidiary Guarantor shall pay to the Trustee for the account of the Holder, upon demand therefor, the amount that would otherwise

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have been due and payable had such rights and remedies been permitted to be exercised by the Trustee or any of the Holders.

(c) If any Holder or the Trustee is required by any court or otherwise to return to the Company or any Subsidiary Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or any Subsidiary Guarantor, any amount paid by any of them to the Trustee or such Holder, the Subsidiary Guarantee of each of the Subsidiary Guarantors, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Subsidiary Guarantor further agrees that, as between each Subsidiary Guarantor, on the one hand, and the Holders and the Trustee on the other hand, (1) subject to this Article Twelve, the Maturity of the obligations guaranteed hereby may be accelerated as provided in Article Five hereof for the purposes of the Subsidiary Guarantee of such Subsidiary Guarantor notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any acceleration of such obligation as provided in Article Five hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by each Subsidiary Guarantor for the purpose of the Subsidiary Guarantee of such Subsidiary Guarantor. The Subsidiary Guarantors shall have the right to seek contribution from any non-paying Subsidiary Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Subsidiary Guarantees.

(d) Each Subsidiary Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation, reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

SECTION 1202. Severability. In case any provision of any Subsidiary Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby to the extent permitted by applicable law.

SECTION 1203. Reserved.

SECTION 1204. Limitation of Subsidiary Guarantors’ Liability. Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Subsidiary Guarantee or the provisions of its local law relating to fraudulent transfer or conveyance. To effectuate the foregoing intention, the Trustee, the Holders and each such Subsidiary Guarantor hereby irrevocably agree that the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Subsidiary Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under this Article Twelve, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law.

SECTION 1205. Contribution. Each Subsidiary Guarantor that makes a payment under its Subsidiary Guarantee shall be entitled upon payment in full of all guaranteed Obligations under this Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such other Subsidiary Guarantor’s pro rata portion of such payment based on the respective net assets of all the Subsidiary Guarantors at the time of such payment determined in accordance with GAAP.

SECTION 1206. Subrogation. Each Subsidiary Guarantor shall be subrogated to all rights of Holders against the Company in respect of any amounts paid by any Subsidiary Guarantor pursuant to the provisions of

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Section 1201; provided, however, that, if a Default or Event of Default has occurred and is continuing, no Subsidiary Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Company under this Indenture or the Notes shall have been paid in full.

SECTION 1207. Reinstatement. Each Subsidiary Guarantor hereby agrees (and each Person who becomes a Subsidiary Guarantor shall agree) that the Subsidiary Guarantee provided for in Section 1201 shall continue to be effective or be reinstated, as the case may be, if at any time, payment, or any part thereof, of any obligations or interest thereon is properly rescinded or must otherwise be restored by a Holder to the Company upon the bankruptcy or insolvency of the Company or any Subsidiary Guarantor.

SECTION 1208. Release of a Subsidiary Guarantor. The Subsidiary Guarantee of a Subsidiary Guarantor shall automatically and unconditionally be released and discharged, and no further action by such Subsidiary Guarantor, the Company or the Trustee is required for the release of such Subsidiary Guarantor’s Subsidiary Guarantee, upon:

(1) (A) the sale, disposition or other transfer (including through merger or consolidation) of all of the Capital Stock (or any sale, disposition or other transfer of Capital Stock following which such Subsidiary Guarantor is no longer a Restricted Subsidiary), or all or substantially all the assets, of such Subsidiary Guarantor (other than a sale, disposition or other transfer to a Restricted Subsidiary) if such sale, disposition or other transfer is made in compliance with the applicable provisions of this Indenture;

(B) the designation by the Company of such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance Section 1010 of this Indenture and the definition of “Unrestricted Subsidiary”;

(C) the release or discharge of such Subsidiary Guarantor from its guarantee of Indebtedness under the Senior Credit Facilities or the guarantee that resulted in the obligation of such Subsidiary Guarantor to guarantee the Notes, in each case, if such Subsidiary Guarantor would not then otherwise be required to guarantee the Notes pursuant to Section 1015 of this Indenture (treating any guarantees of such Subsidiary Guarantor that remain outstanding as incurred at least 30 days prior to such release), except, in each case, a release or discharge by, or as a result of, payment under such Subsidiary Guarantee or payment in full of the Indebtedness under the Senior Credit Facilities; or

(D) the exercise by the Company of its Legal Defeasance of the Notes under Section 1302 of this Indenture or its Covenant Defeasance of the Notes under Section 1303 of this Indenture or if the Company’s obligations under this Indenture are discharged in accordance with Section 401 of this Indenture; and

(2) in the case of clause (1)(A) above, the release of such Subsidiary Guarantor from its guarantee, if any, of and all pledges and security, if any, granted by such Subsidiary Guarantor in connection with, the Senior Credit Facilities and the Senior Subordinated Notes.

SECTION 1209. Benefits Acknowledged. Each Subsidiary Guarantor acknowledges that it shall receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and from its guarantee and waivers pursuant to its Subsidiary Guarantees under this Article Twelve.

ARTICLE THIRTEEN

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1301. Company’s Option to Effect Legal Defeasance or Covenant Defeasance. The Company may, at its option, and at any time, elect to have either Section 1302 or Section 1303 be applied to all Outstanding Notes upon compliance with the conditions set forth below in this Article Thirteen.

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SECTION 1302. Legal Defeasance and Discharge. Upon the Company’s exercise under Section 1301 of the option applicable to this Section 1302, each of the Company and the Subsidiary Guarantors shall be deemed to have been discharged from its respective obligations with respect to all Outstanding Notes on the date the conditions set forth in Section 1304 are satisfied (hereinafter, “Legal Defeasance”). For this purpose, such Legal Defeasance means that each of the Company and the Subsidiary Guarantors shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Notes, which shall thereafter be deemed to be “Outstanding” only for the purposes of Section 1305 and the other Sections of this Indenture referred to in (1) and (2) below, and to have satisfied all its other obligations under such Notes and this Indenture insofar as such Notes and their related Subsidiary Guarantees are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder:

(1) the rights of Holders of Outstanding Notes to receive payments in respect of the principal of (and premium, if any, on) and interest on such Notes when such payments are due, solely out of the trust created pursuant to this Indenture (as described in Section 1304),

(2) the Company’s obligations with respect to such Notes under Sections 303, 304, 305, 1002 and 1003,

(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder, and the obligations of each of the Company and the Subsidiary Guarantors in connection therewith and

(4) this Article Thirteen.

Subject to compliance with this Article Thirteen, the Company may exercise its option under this Section 1302 notwithstanding the prior exercise of its option under Section 1303 with respect to the Notes.

SECTION 1303. Covenant Defeasance. Upon the Company’s exercise under Section 1301 of the option applicable to this Section 1303, each of the Company and the Subsidiary Guarantors shall be released from its respective obligations under any covenant contained in Sections 801 and 802 and in Sections 1005 and 1009 through and including 1018 and 1019 with respect to the Outstanding Notes on and after the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed not to be “Outstanding” for the purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “Outstanding” for all other purposes hereunder. For this purpose, such Covenant Defeasance means that, with respect to the Outstanding Notes, the Company or any Subsidiary Guarantor, as applicable, may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Sections 501(3), 501(4), 501(5) and 501(7) and, with respect to only any Significant Subsidiary and not the Company, Section 501(6), but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby.

SECTION 1304. Conditions to Legal Defeasance or Covenant Defeasance. The following shall be the conditions to application of either Section 1302 or Section 1303 to the Outstanding Notes:

(1) the Company shall irrevocably have deposited with the Trustee (or another trustee satisfying the requirements of Section 608 who shall agree to comply with the provisions of this Article Thirteen applicable to it) in trust for the benefit of Holders of such Notes; (A) cash in U.S. dollars, or (B) non-callable Government Securities, or (C) a combination thereof, in such amounts as shall be sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay , and which shall be applied by the Trustee (or other qualifying trustee) to pay, the principal of, premium, if any, and interest due on the Outstanding Notes on the Stated Maturity or Redemption Date, as the case may be; provided that the Trustee shall have been irrevocably instructed to apply such cash or the proceeds of such Government Securities to said payments with respect to the Notes; before such a deposit, the Company may give to the Trustee, in accordance with Section 1104

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hereof, a notice of its election to redeem all of the Outstanding Notes at a future date in accordance with Article Eleven hereof, which notice shall be irrevocable; such irrevocable redemption notice, if given, shall be given effect in applying the foregoing;

(2) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,

(A) the Company has received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(B) since the issuance of the Notes, there has been a change in the applicable U.S. Federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel in the United States shall confirm that, subject to customary assumptions and exclusions, the Holders shall not recognize income, gain or loss for U.S. Federal income tax purposes as a result of such Legal Defeasance and shall be subject to U.S. Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders shall not recognize income, gain or loss for U.S. Federal income tax purposes as a result of such Covenant Defeasance and shall be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default (other than that resulting from borrowing funds to be applied to make such deposit and the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any of the Senior Credit Facilities, the Senior Subordinated Indenture, the Senior Subordinated Notes or any other material agreement or instrument (other than this Indenture) to which, the Company or any Subsidiary Guarantor is a party or by which the Company or any Subsidiary Guarantor is bound;

(6) the Company shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or any Subsidiary Guarantor or others; and

(7) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel in the United States of America (which Opinion of Counsel may be subject to customary assumptions and exclusions) each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

Notwithstanding the foregoing, the Opinion of Counsel required by clause (2) above with respect to Legal Defeasance need not be delivered if all Notes not theretofore delivered to the Trustee for cancellation (A) have become due and payable by reason of the making of a notice of redemption or otherwise, (B) will become due and payable within one year or (C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company.

SECTION 1305. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions. All cash and Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 1305, the “Qualifying Trustee”) pursuant to Section

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1304 in respect of the Outstanding Notes shall be held in trust and applied by the Qualifying Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company or a Subsidiary acting as its own Paying Agent) as the Qualifying Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal (and premium, if any) and interest, but such money or Government Securities need not be segregated from other funds except to the extent required by law.

The Company shall pay and indemnify the Qualifying Trustee against any tax, fee or other charge imposed on or assessed against the Government Securities deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Notes.

Anything in this Article Thirteen to the contrary notwithstanding, the Qualifying Trustee shall deliver or pay to the Company from time to time upon Company Request any money or Government Securities held by it as provided in Section 1304 which, in the opinion of a nationally recognized firm of independent public accountants, expressed in a written certification thereof delivered to the Qualifying Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance, as applicable, in accordance with this Article Thirteen.

SECTION 1306. Reinstatement. If the Trustee or any Paying Agent is unable to apply any money or Government Securities in accordance with Section 1305 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s and each Subsidiary Guarantor’s obligations under this Indenture and the Outstanding Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 1302 or 1303, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such money or Government Securities in accordance with Section 1305; provided, however, that (a) if the Company makes any payment of principal of (or premium, if any) or interest on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent; and (b) unless otherwise required by any legal proceeding or any other order or judgment of any court or governmental authority, the Trustee or Paying Agent (if other than the Company) shall return all such money and Government Securities to the Company promptly after receiving a written request therefor at any time, if such reinstatement of the Company’s obligations has occurred and continues to be in effect.

SECTION 1307. Repayment to Company. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium and Additional Interest, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium and Additional Interest, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease.

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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

AURORA ACQUISITION MERGER SUB, INC.
By:	/s/ Clive Bode

Name:	Clive Bode
Title:	Vice President and Corporate Secreatry

S-1

The undersigned hereby acknowledges and agrees that, upon the effectiveness of the Merger of Aurora Acquisition Merger Sub, Inc. with and into Aleris International, Inc. with Aleris International, Inc. continuing as the surviving corporation, it shall succeed by operation of law to all of the rights and obligations of Aurora Acquisition Merger Sub, Inc., set forth herein and that all references to the “Company” shall thereupon be deemed to be references to the undersigned.
ALERIS INTERNATIONAL, INC.
By:	/s/ Michael D. Friday

Name:	Michael D. Friday
Title:	Executive Vice President and Chief Financial Officer

S-2

Each of the GUARANTORS listed on Schedule I hereto
By:	/s/ Michael D. Friday

Name:	Michael D. Friday
Title:	President

S-3

LASALLE BANK NATIONAL ASSOCIATION, as Trustee
By:	/s/ Gregory S. Clarke

Name:	Gregory S. Clarke
Title:	Vice President

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SCHEDULE I

Subsidiary Guarantors

Alchem Aluminum, Inc.

Alchem Aluminum Shelbyville Inc.

Aleris Blanking and Rim Products, Inc. (formerly Indiana Aluminum Inc.)

Aleris, Inc.

Aleris Ohio Management, Inc.

ALSCO Holdings, Inc.

ALSCO Metals Corporation

Alumitech, Inc.

Alumitech of Cleveland, Inc.

Alumitech of Wabash, Inc.

Alumitech of West Virginia, Inc.

AWT Properties, Inc.

CA Lewisport, LLC

CI Holdings, LLC

Commonwealth Aluminum, LLC

Commonwealth Aluminum Concast, Inc.

Commonwealth Aluminum Lewisport, LLC

Commonwealth Aluminum Metals, LLC

Commonwealth Aluminum Sales Corporation

Commonwealth Aluminum Tube Enterprises, LLC

Commonwealth Financing Corporation

Commonwealth Industries, Inc.

Corus Aluminium Corp.

ETS Schaefer Corporation

Gulf Reduction Corporation

Hoogovens Aluminium Europe Inc.

IMCO Indiana Partnership L.P.

IMCO International, Inc.

IMCO Investment Company

IMCO Management Partnership L.P.

IMCO Recycling of California, Inc.

IMCO Recycling of Idaho Inc.

IMCO Recycling of Illinois Inc.

IMCO Recycling of Indiana Inc.

IMCO Recycling of Michigan L.L.C.

IMCO Recycling of Ohio Inc.

IMCO Recycling of Utah Inc.

IMCO Recycling Services Company

IMSAMET, Inc.

Interamerican Zinc, Inc.

MetalChem, Inc.

Midwest Zinc Corporation

Rock Creek Aluminum, Inc.

Silver Fox Holding Corp.

U.S. Zinc Corporation

U.S. Zinc Export Corporation

Western Zinc Corporation

Rule 144A / Regulation S Appendix

PROVISIONS RELATING TO INITIAL NOTES,

PRIVATE EXCHANGE NOTES

AND EXCHANGE NOTES

1. Definitions

1.1 Definitions.

For the purposes of this Appendix the following terms shall have the meanings indicated below:

“Applicable Procedures” means, with respect to any transfer or transaction involving a Temporary Regulation S Global Note or beneficial interest therein, the rules and procedures of the Depository for such a Temporary Regulation S Global Note, to the extent applicable to such transaction and as in effect from time to time.

“Certificated Note” means a certificated Initial Note or Exchange Note or Private Exchange Note (other than a Global Note) bearing, if required, the appropriate restricted notes legend set forth in Section 2.3(e) of this Appendix.

“Depository” means The Depository Trust Company, its nominees and their respective successors.

“Distribution Compliance Period,” with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (i) the day on which such Notes are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S and (ii) the issue date with respect to such Notes.

“Exchange Notes” means (1) the 9%/9 ³/4% Senior Notes Due 2014 issued pursuant to the Indenture in connection with a Registered Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional Notes, if any, issued pursuant to a registration statement filed with the SEC under the Securities Act.

“Initial Notes” means (1) $600,000,000 aggregate principal amount of 9%/9 ³/4% Senior Notes Due 2014 issued on the Issue Date and (2) Additional Notes, if any, issued in a transaction exempt from the registration requirements of the Securities Act.

“Initial Purchasers” means (1) with respect to the Initial Notes issued on the Issue Date, Deutsche Bank Securities Inc., Goldman Sachs & Co., KeyBanc Capital Markets, a division of McDonald Investments Inc., and PNC Capital Markets LLC and (2) with respect to each issuance of Additional Notes, the Persons purchasing such Additional Notes under the related Purchase Agreement.

“Notes” means the Initial Notes, any PIK Notes, any Additional Notes, the Exchange Notes and the Private Exchange Notes (including, in each case, any increase in the principal amount thereof as a result of a PIK Payment), treated as a single class.

“Notes Custodian” means the custodian with respect to a Global Note (as appointed by the Depository), or any successor Person thereto and shall initially be the Trustee.

“Private Exchange” means the offer by the Company, pursuant to a Registration Rights Agreement, to the Initial Purchasers to issue and deliver to each Initial Purchaser, in exchange for the Initial Notes held by the Initial Purchaser as part of its initial distribution, a like aggregate principal amount of Private Exchange Notes.

“Private Exchange Notes” means any 9%/9 ³/4% Senior Notes Due 2014 issued in connection with a Private Exchange.

“Purchase Agreement” means (1) with respect to the Initial Notes issued on the Issue Date, the Purchase Agreement dated December 13, 2006, among the Company and the Initial Purchasers, and (2) with respect to each issuance of Additional Notes, the purchase agreement or underwriting agreement among the Company and the Persons purchasing such Additional Notes.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Registered Exchange Offer” means the offer by the Company, pursuant to a Registration Rights Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act.

“Registration Rights Agreement” means (1) with respect to the Initial Notes issued on the Issue Date, the Registration Rights Agreement dated December 19, 2006, among the Company, the Subsidiary Guarantors and the Initial Purchasers and (2) with respect to each issuance of Additional Notes issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Company and the Persons purchasing such Additional Notes under the related Purchase Agreement.

“Representative” means Deutsche Bank Securities Inc. as representative of the Initial Purchasers.

“Rule 144A Notes” means all Notes offered and sold to QIBs in reliance on Rule 144A.

“Securities Act” means the Securities Act of 1933, as amended.

“Shelf Registration Statement” means the registration statement issued by the Company in connection with the offer and sale of Initial Notes or Private Exchange Notes pursuant to a Registration Rights Agreement.

“Transfer Restricted Notes” means Notes that bear or are required to bear the legend relating to restrictions on transfer relating to the Securities Act set forth in Section 2.3(e) hereto.

1.2 Other Definitions.

Term	Defined in Section:
“Agent Members”	2.1	(b)
“Global Notes”	2.1	(a)
“Permanent Regulation S Global Note”	2.1	(a)
“Regulation S”	2.1	(a)
“Regulation S Global Note”	2.1	(a)
“Rule 144A”	2.1	(a)
“Rule 144A Global Note”	2.1	(a)
“Temporary Regulation S Global Note”	2.1	(a)

1.3 Capitalized terms used in this Appendix, but not defined, have the meanings ascribed to such terms in the Indenture to which this Appendix is attached.

2. The Notes.

2.1 (a) Form and Dating. The Initial Notes shall be offered and sold by the Company pursuant to the Purchase Agreement. The Initial Notes shall be resold initially only to (i) QIBs in reliance on Rule 144A under the Securities Act (“Rule 144A”) and (ii) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act (“Regulation S”). Initial Notes may thereafter be transferred to, among others, QIBs and purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein. Initial Notes initially resold pursuant to Rule 144A shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the “Rule 144A Global Note”); and Initial Notes initially resold pursuant to Regulation S shall be issued initially in the form of one or more temporary global notes in fully

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registered form (collectively, the “Temporary Regulation S Global Note”), in each case without interest coupons and with the global notes legend and the applicable restricted notes legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Initial Notes represented thereby with the Notes Custodian and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as provided in this Indenture. Except as set forth in this Section 2.1(a), beneficial ownership interests in the Temporary Regulation S Global Note shall be held only through the Euroclear System (“Euroclear”) and Clearstream Banking, S.A. (“Clearstream”) (as indirect participants in the Depository) and shall not be exchangeable for interests in the Rule 144A Global Note, a permanent Regulation S global note in fully registered form (the “Permanent Regulation S Global Note,” and together with the Temporary Regulation S Global Note, the “Regulation S Global Note”) or any other Note prior to the expiration of the Distribution Compliance Period and then, after the expiration of the Distribution Compliance Period, may be exchanged for interests in a Rule 144A Global Note or the Permanent Regulation S Global Note only upon certification in the form attached hereto as Exhibit 3 or otherwise in a form reasonably satisfactory to the Trustee that beneficial ownership interests in such Temporary Regulation S Global Note are owned either by Non-U.S. Persons or U.S. Persons who purchased such interests in a transaction that is exempt from the registration requirements under the Securities Act.

Prior to the expiration of the Distribution Compliance Period, beneficial interests in Temporary Regulation S Global Notes may be exchanged for interests in Rule 144A Global Notes if (1) such exchange occurs in connection with a transfer of Notes in compliance with Rule 144A and (2) the transferor of the beneficial interest in the Temporary Regulation S Global Note first delivers to the Trustee a written certificate (in a form substantially similar to that attached hereto as Exhibit 2) to the effect that the beneficial interest in the Temporary Regulation S Global Note is being transferred (a) to a Person who the transferor reasonably believes to be a QIB that is purchasing for its own account or the account of a QIB in a transaction meeting the requirements of Rule 144A, and (b) in accordance with all applicable securities laws of the States of the United States and other jurisdictions.

Beneficial interests in a Rule 144A Global Note may be transferred to a Person who takes delivery in the form of an interest in a Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, only if the transferor first delivers to the Trustee a written certificate (in a form substantially similar to that attached hereto as Exhibit 2) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if applicable).

The Rule 144A Global Note, the Temporary Regulation S Global Note and the Permanent Regulation S Global Note are collectively referred to herein as “Global Notes.” The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.

(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Depository.

The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Notes that (a) shall be registered in the name of the Depository or the nominee of the Depository and (b) shall be delivered by the Trustee to the Depository or pursuant to the Depository’s instructions or held by the Trustee as custodian for the Depository.

Members of, or participants in, the Depository (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Note, and the Company, the Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depository as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a Holder of a beneficial interest in any Global Note.

(c) Certificated Notes. Except as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global Notes shall not be entitled to receive physical delivery of Certificated Notes.

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2.2 Authentication; PIK Interest. The Trustee shall upon receipt of a Company Order specified in Section 202 of the Indenture authenticate and deliver: (1) on the Issue Date, an aggregate principal amount of $600,000,000 9%/9 ³/4% Senior Notes Due 2014, (2) any Additional Notes for an original issue in an aggregate principal amount specified in the written order of the Company pursuant to Section 202 of the Indenture, (3) any PIK Notes issued in payment of PIK Interest in an aggregate principal amount specified in the written order of the Company pursuant to Section 301 of the Indenture and (4) Exchange Notes or Private Exchange Notes for issue only in a Registered Exchange Offer or a Private Exchange, respectively, pursuant to a Registration Rights Agreement, for a like principal amount of Initial Notes, in each case upon a Company Order signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company. Such Company Order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of any issuance of Additional Notes pursuant to Section 312 of the Indenture, shall certify that such issuance is in compliance with Section 1011 of the Indenture. On any Interest Payment Date on which the Company pays PIK Interest with respect to a Global Note, the Trustee shall increase the principal amount of such Global Note by an amount equal to the interest payable, rounded up to the nearest $1,000, for the relevant Interest Period on the principal amount of such Global Note as of the relevant Record Date for such Interest Payment Date, to the credit of the Holders on such Record Date, pro rata in accordance with their interests, and an adjustment shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such increase.

2.3 Transfer and Exchange.

(a) Transfer and Exchange of Certificated Notes. When Certificated Notes are presented to the Note Registrar with a request:

(x) to register the transfer of such Certificated Notes; or

(y) to exchange such Certificated Notes for an equal principal amount of Certificated Notes of other authorized denominations,

the Note Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Certificated Notes surrendered for transfer or exchange:

(i) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Note Registrar, duly executed by the Holder thereof or its attorney duly authorized in writing; and

(ii) if such Certificated Notes are required to bear a restricted notes legend, they are being transferred or exchanged pursuant to an effective registration statement under the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are accompanied by the following additional information and documents, as applicable:

(A) if such Certificated Notes are being delivered to the Note Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect; or

(B) if such Certificated Notes are being transferred to the Company, a certification to that effect; or

(C) if such Certificated Notes are being transferred (x) pursuant to an exemption from registration in accordance with Rule 144A, Regulation S or Rule 144 under the Securities Act; or (y) in reliance upon another exemption from the requirements of the Securities Act: (i) a certification to that effect (in the form set forth on the reverse of the Note) and (ii) if the Company so requests, an Opinion of Counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i).

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(b) Restrictions on Transfer of a Certificated Note for a Beneficial Interest in a Global Note. A Certificated Note may not be exchanged for a beneficial interest in a Rule 144A Global Note or a Permanent Regulation S Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Certificated Note, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with:

(i) certification, in a form substantially similar to that attached hereto as Exhibit 2, that such Certificated Note is either (A) being transferred to a QIB in accordance with Rule 144A or (B) being transferred after expiration of the Distribution Compliance Period by a Person who initially purchased such Note in reliance on Regulation S to a buyer who elects to hold its interest in such Note in the form of a beneficial interest in the Permanent Regulation S Global Note; and

(ii) written instructions directing the Trustee to make, or to direct the Notes Custodian to make, an adjustment on its books and records with respect to such Rule 144A Global Note (in the case of a transfer pursuant to clause (b)(i)(A)) or Permanent Regulation S Global Note (in the case of a transfer pursuant to clause (b)(i)(B)) to reflect an increase in the aggregate principal amount of the Notes represented by the Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, such instructions to contain information regarding the Depository account to be credited with such increase, then the Trustee shall cancel such Certificated Note and cause, or direct the Notes Custodian to cause, in accordance with the standing instructions and procedures existing between the Depository and the Notes Custodian, the aggregate principal amount of Notes represented by the Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, to be increased by the aggregate principal amount of the Certificated Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, equal to the principal amount of the Certificated Note so canceled. If no Rule 144A Global Notes or Permanent Regulation S Global Notes, as applicable, are then outstanding, the Company shall issue and the Trustee shall authenticate, upon receipt of a Company Order, a new Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, in the appropriate principal amount.

(c) Transfer and Exchange of Global Notes.

(i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Note shall deliver to the Note Registrar a written order given in accordance with the Depository’s procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Note. The Note Registrar shall, in accordance with such instructions instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Note and to debit the account of the Person making the transfer the beneficial interest in the Global Note being transferred.

(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Note Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Note Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Note from which such interest is being transferred.

(iii) Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.

(iv) In the event that Global Note is exchanged for Certificated Notes pursuant to Section 2.4 of this Appendix, prior to the consummation of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes (as set forth in Exhibit 2, hereto) intended to ensure that such transfers comply with

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Rule 144A, Regulation S or another applicable exemption under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Company.

(d) Restrictions on Transfer of Temporary Regulation S Global Notes. During the Distribution Compliance Period, beneficial ownership interests in Temporary Regulation S Global Notes may only be sold, pledged or transferred in accordance with the Applicable Procedures and only (i) to the Company, (ii) in an offshore transaction in accordance with Regulation S (other than a transaction resulting in an exchange for an interest in a Permanent Regulation S Global Note), (iii) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any State of the United States.

(e) Legend.

(i) Except as permitted by the following paragraphs (ii), (iii) and (iv), each Note certificate evidencing the Global Notes (and all Notes issued in exchange therefor or in substitution thereof), in the case of Notes offered otherwise than in reliance on Regulation S shall bear a legend in substantially the following form:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO ALERIS INTERNATIONAL, INC. (THE “COMPANY”) OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (AN “ACCREDITED INVESTOR”) THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

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Each certificate evidencing a Note offered in reliance on Regulation S shall, in addition to the foregoing, bear a legend in substantially the following form:

THIS SECURITY WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

Each Certificated Note shall also bear the following additional legend:

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE NOTE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

(ii) Upon any sale or transfer of a Transfer Restricted Note (including any Transfer Restricted Note represented by a Global Note) pursuant to Rule 144 under the Securities Act, the Note Registrar shall permit the transferee thereof to exchange such Transfer Restricted Note for a certificated Note that does not bear the legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Note, if the transferor thereof certifies in writing to the Note Registrar that such sale or transfer was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Note).

(iii) After a transfer of any Initial Notes or Private Exchange Notes pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes or Private Exchange Notes, as the case may be, all requirements pertaining to legends on such Initial Note or such Private Exchange Note shall cease to apply, the requirements requiring any such Initial Note or such Private Exchange Note issued to certain Holders be issued in global form shall cease to apply, and a certificated Initial Note or Private Exchange Note or an Initial Note or Private Exchange Note in global form, in each case without restrictive transfer legends, shall be available to the transferee of the Holder of such Initial Notes or Private Exchange Notes upon exchange of such transferring Holder’s certificated Initial Note or Private Exchange Note or directions to transfer such Holder’s interest in the Global Note, as applicable.

(iv) Upon the consummation of a Registered Exchange Offer with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form shall still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form, in each case without the restricted notes legend set forth in Exhibit 1 hereto shall be available to Holders that exchange such Initial Notes in such Registered Exchange Offer.

(v) Upon the consummation of a Private Exchange with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form shall still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Private Exchange Notes in global form with the global notes legend and the applicable restricted notes legend set forth in Exhibit 1 hereto shall be available to Holders that exchange such Initial Notes in such Private Exchange.

(f) Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have been exchanged for Certificated Notes, redeemed, purchased or canceled, such Global Note shall be returned to the Depository for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.

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(g) No Obligation of the Trustee.

(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.

(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

2.4 Certificated Notes.

(a) A Global Note deposited with the Depository or with the Trustee as Notes Custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Certificated Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 hereof and (i) the Depository notifies the Company that it is unwilling or unable to continue as depository for such Global Note and the Depository fails to appoint a successor depository or if at any time such Depository ceases to be a “clearing agency” registered under the Exchange Act, in either case, and a successor depository is not appointed by the Company within 90 days of such notice, or (ii) a Default has occurred and is continuing or (iii) if requested by a Holder of beneficial interest in a Global Note.

(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depository to the Trustee located at its principal Corporate Trust Office to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Certificated Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in denominations of $1,000 principal amount and any integral multiple of $1,000 in excess thereof and registered in such names as the depository shall direct. Any Certificated Note delivered in exchange for an interest in the Transfer Restricted Note shall, except as otherwise provided by Section 2.3(e) hereof, bear the applicable restricted notes legend and certificated notes legend set forth in Exhibit 1 hereto.

(c) Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

(d) In the event of the occurrence of one of the events specified in Section 2.4(a) hereof, the Company shall promptly make available to the Trustee a reasonable supply of Certificated Notes in definitive, fully registered form without interest coupons. In the event that such Certificated Notes are not issued, the Company expressly acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to this Indenture, including pursuant to Section 507, the right of any beneficial owner of Notes to pursue such remedy with respect to the portion of the Global Note that represents such beneficial owner’s Notes as if such Certificated Notes had been issued.

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EXHIBIT 1

to Rule 144A / Regulation S Appendix

[FORM OF FACE OF INITIAL NOTE]

[Global Notes Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]

[Restricted Notes Legend for Notes offered otherwise

than in Reliance on Regulation S]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO ALERIS INTERNATIONAL, INC. (THE “COMPANY”) OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (AN “ACCREDITED INVESTOR”) THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS

SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

[Restricted Notes Legend for Notes Offered in Reliance on Regulation S]

THIS SECURITY WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

[Temporary Regulation S Global Note Legend]

EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN INTEREST IN THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE COMPANY, (II) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE WILL NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.

AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL NOTE ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE NOTES IN COMPLIANCE WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL NOTE FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL NOTE IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

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BENEFICIAL INTERESTS IN A RULE 144A GLOBAL NOTE MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL NOTE, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE).

[Certificated Notes Legend]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE NOTE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

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No. $

9%/9 ³/4% Senior Notes Due 2014

Aleris International, Inc., a Delaware corporation, promises to pay to                     , or registered assigns, the principal sum of                      U.S. Dollars on December 15, 2014.

Interest Payment Dates: June 15 and December 15.

Record Dates: June 1 and December 1.

Additional provisions of this Note are set forth on the other side of this Note.

Dated:

AURORA ACQUISITION MERGER SUB, INC.
By:
	Name:
	Title:

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The undersigned hereby acknowledges and agrees that, upon the effectiveness of the Merger of Aurora Acquisition Merger Sub, Inc. with and into Aleris International, Inc. with Aleris International, Inc. continuing as the surviving corporation, it shall succeed by operation of law to all of the rights and obligations of Aurora Acquisition Merger Sub, Inc., set forth herein and that all references to the “Company” shall thereupon be deemed to be references to the undersigned.
ALERIS INTERNATIONAL, INC.
By	:
	Name:
	Title:

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TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

LASALLE BANK NATIONAL

ASSOCIATION, as Trustee

certifies that this is one of the Notes

referred to in the Indenture.

By
	Authorized Signatory

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[FORM OF REVERSE SIDE OF INITIAL NOTE]

9%/9 ³/4% Senior Note Due 2014

Capitalized terms used herein but not defined herein shall have the meanings given to such terms in the Indenture.

1. Principal and Interest.

Aleris International, Inc. (the “Company”) shall pay the principal of this Note on December 15, 2014.

The Company promises to pay interest and Additional Interest, if any, on the principal amount of this Note on each Interest Payment Date, as set forth below, at the rate set forth below (subject to adjustment as provided below).

The Company shall pay interest with respect to the first Interest Period entirely in cash. For any Interest Period thereafter through the Interest Period ending December 15, 2010, the Company may, at its option, elect to pay interest on the Notes:

(a) entirely in cash (“Cash Interest”) or

(b) entirely by increasing the principal amount of the Outstanding Notes or by issuing PIK Notes (“PIK Interest”) or

(c) pay 50% with Cash Interest and the remaining portion with PIK Interest.

The Company must elect the form of interest payment with respect to each Interest Period by delivering a notice to the Trustee at or prior to the beginning of such Interest Period. The Trustee shall promptly deliver a corresponding notice to the Holders. In the absence of such an election, interest on the Notes shall be payable entirely in cash. From and after the Interest Period commencing December 15, 2010, the Company shall make all interest payments on the Notes entirely in cash.

Cash Interest on the Notes shall accrue at the rate of 9% per annum and be payable in cash. PIK Interest on the Notes shall accrue at the rate of 9 ³/4% per annum.

Interest, and Additional Interest, if any, shall be payable quarterly (to the Holders of the Notes at the close of business on June 1 or December 1 immediately preceding the Interest Payment Date) on each Interest Payment Date, commencing June 15, 2007.

The Holder of this Note is entitled to the benefits of the Registration Rights Agreement, dated December 19, 2006, among the Company, the Subsidiary Guarantors and the Initial Purchasers named therein (the “Registration Rights Agreement”), including with respect to Additional Interest.

Interest on this Note shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from December 19, 2006; provided that, if there is no existing Default in the payment of interest and if this Note is authenticated between a Regular Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

The Company shall pay interest and Additional Interest if any, on overdue principal and premium, if any, and interest on overdue installments of interest, to the extent lawful, at a rate per annum equal to the rate of interest applicable to the Notes.

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2. Method of Payment.

The Company shall pay interest (except Defaulted Interest) on the principal amount of the Notes on each June 15 and December 15 to the Persons who are Holders (as reflected in the Note Register at the close of business on June 1 and December 1 immediately preceding the Interest Payment Date), in each case, even if the Note is transferred or exchanged after such Regular Record Date, except as provided in Section 306(b) with respect to Defaulted Interest; provided that, with respect to the payment of principal, the Company shall make payment to the Holder that surrenders this Note to any Paying Agent on or after December 15, 2014.

PIK Interest shall be payable by increasing the principal amount of this global Note by an amount equal to the amount of PIK Interest for the applicable Interest Period (rounded up to the nearest $1,000). Following an increase in the principal amount of the outstanding global Notes as a result of a PIK Payment, this global Note shall bear interest on such increased principal amount from and after the date of such PIK Payment, and shall be governed by, and subject to the terms, provisions and conditions of, the Indenture and shall have the same rights and benefits as the Notes issued on the Issue Date.

The Company shall pay principal (premium, if any) and Cash Interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal (premium, if any) and Cash Interest by its check payable in such money. The Company may pay Cash Interest on the Notes either (a) by mailing a check for such interest to a Holder’s registered address (as reflected in the Note Register) or (b) by wire transfer to an account located in the United States maintained by the payee. If a payment date is a date other than a Business Day at a place of payment, payment may be made at that place on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period.

3. Paying Agent and Note Registrar.

Initially, LaSalle Bank National Association (the “Trustee”) shall act as Paying Agent and Note Registrar. The Company may change any Paying Agent or Note Registrar upon written notice thereto and without notice to the Holders. The Company, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Note Registrar or co-registrar.

4. Indenture.

The Company issued the Notes under a Senior Indenture dated as of December 19, 2006 (the “Indenture”), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control.

The Notes are unsecured senior obligations of the Company. The Indenture does not limit the aggregate principal amount of the Notes. Subject to the conditions set forth in the Indenture, the Company may issue Additional Notes.

5. Mandatory Redemption.

Except as set forth in this paragraph, the Company is not required to make any mandatory redemption or sinking fund payments with respect to the Notes. If the aggregate amount which would be includible in gross income for federal income tax purposes with respect to a Note before the close of any “accrual period” (as defined in Treasury Regulation Section 1.1272-1(b)(1)(ii)) ending after five years from the Issue Date (the “Aggregate Inclusion”) exceeds an amount equal to the sum of (x) the aggregate amount of interest that has been paid in cash under such Note before the close of such accrual period and (y) the product of the issue price of such Note (as determined under Section 1273(b) of the Code) multiplied by the yield to maturity of such Note (as determined for purposes of applying Section 163(i) of the Code) (the sum of (x) and (y), the “Adjusted Actual Payment”), the Company shall, before the close of such accrual period, make a mandatory prepayment on such Note, to the extent that the Aggregate

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Inclusion as of such time exceeds the Adjusted Actual Payment. Such mandatory prepayment will be applied against and reduce the principal amount of the applicable Note outstanding at such time and will be made at the applicable redemption price set forth in Section 6 of the Note below. The Company intends that the Special Mandatory Redemption be sufficient to result in each Note being treated as not having “significant original issue discount” within the meaning of Section 163(i)(2) of the Code.

6. Optional Redemption.

At any time prior to December 15, 2010, the Company may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date.

On and after December 15, 2010, the Company may redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days’ prior notice to each Holder at the Redemption Prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on December 15 of each of the years indicated below:

Year	Percentage
2010	104.500	%
2011	102.250	%
2012 and thereafter	100.000	%

In addition, until December 15, 2009, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture at a redemption price equal to 109.000% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds of one or more Equity Offerings of the Company or any direct or indirect parent of the Company to the extent such net cash proceeds are contributed to the Company; provided that at least 50% of the sum of the aggregate principal amount of Notes originally issued under the Indenture remains Outstanding immediately after the occurrence of each such redemption; provided, further, that each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

7. Repurchase upon a Change of Control and Asset Sales.

Upon the occurrence of (a) a Change of Control, the Holders shall have the right to require that the Company purchase such Holder’s Outstanding Notes, in whole or in part, at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase and (b) Asset Sales, the Company may be obligated to make offers to purchase Notes and Senior Indebtedness of the Company with a portion of the Net Proceeds of such Asset Sales at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase.

8. Denominations; Transfer; Exchange.

The Notes are in registered form without coupons in denominations of $1,000 principal amount and integral multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the Indenture. The Note Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Note Registrar need not register the transfer or exchange of a Note or portion of a Note selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Note or portion of a Note for a period of 15 days before a selection of Notes to be redeemed or 15 days before an Interest Payment Date.

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9. Persons Deemed Owners.

A registered Holder may be treated as the owner of a Note for all purposes.

10. Unclaimed Money.

Subject to any laws relating to abandoned property, if money for the payment of principal (premium, if any) or interest remains unclaimed for two years, the Trustee and the Paying Agent shall pay the money back to the Company at its request or (if then held by the Company) shall be discharged from such trust. After that, Holders entitled to the money must look to the Company for payment and all liability of the Trustee and such Paying Agent with respect to such money, and all liability of the Company as trustee thereof, shall cease.

11. Discharge and Defeasance Prior to Redemption or Maturity.

Subject to satisfaction of conditions set forth in the Indenture, the Company at any time may terminate some or all of its obligations under the Notes and the Indenture if the Company irrevocably deposits with the Trustee cash or Government Securities or a combination thereof sufficient for the payment of the then outstanding principal of and interest on the Notes to Redemption or Stated Maturity, as the case may be.

12. Amendment; Supplement; Waiver.

Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Outstanding Notes, including consents obtained in connection with a purchase of, or tender offer or Exchange Offer for, the Notes, and any existing Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the Outstanding Notes. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture or the Notes to, among other things, cure any ambiguity, omission, mistake, defect or inconsistency and make any change that does not adversely affect the legal rights of any Holder.

13. Restrictive Covenants.

The Indenture contains certain covenants, including covenants with respect to the following matters: (i) Restricted Payments; (ii) incurrence of Indebtedness and issuance of Disqualified Stock and Preferred Stock; (iii) Liens; (iv) transactions with Affiliates; (v) dividend and other payment restrictions affecting Restricted Subsidiaries; (vi) guarantees of Indebtedness by Restricted Subsidiaries; (vii) changes to the terms of certain Subordinated Indebtedness; (viii) merger, consolidation or sale of all or substantially all assets; (ix) purchase of Notes upon a Change in Control; (x) sale and lease-back transactions; and (xi) disposition of proceeds of Asset Sales. Within 120 days (or the successor time period then in effect under the rules and regulations of the Exchange Act) after the end of each fiscal year, the Company must report to the Trustee on compliance with such limitations.

14. Successor Persons.

When a successor Person or other entity assumes all the obligations of its predecessor under the Notes and the Indenture, the predecessor Person shall be released from those obligations, subject to certain exceptions.

15. Remedies for Events of Default.

If an Event of Default, as defined in the Indenture, occurs and is continuing, the Trustee or the Holders of at least 30% in principal amount of the Outstanding Notes may declare all Outstanding Notes to be immediately due and payable. If an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Company occurs and is continuing, the Notes automatically become immediately due and payable. Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against

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any loss, liability or expense. Subject to certain restrictions, the Holders of a majority in principal amount of the Outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

16. Subsidiary Guarantees.

The Company’s obligations under the Notes are fully, irrevocably and unconditionally guaranteed on an unsecured senior basis, to the extent set forth in the Indenture, by each of the Subsidiary Guarantors.

17. Trustee Dealings with Company.

The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may make loans to, accept deposits from, perform services for, and otherwise deal with, the Company and its Affiliates as if it were not the Trustee.

18. Authentication.

This Note shall not be valid until the Trustee signs the certificate of authentication on the other side of this Note.

19. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).

20. CUSIP Numbers.

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

21. Holders’ Compliance with the Registration Rights Agreement.

Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the Holders with respect to a registration and the indemnification of the Company to the extent provided therein.

22. Governing Law.

THIS SECURITY AND INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to Aleris International, Inc., 25825 Science Park Drive, Suite 400, Beachwood, Ohio 44122, Attention: General Counsel.

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EXHIBIT 2

to Rule 144A / Regulation S Appendix

ASSIGNMENT/TRANSFER FORM

To assign and transfer this Note, fill in the form below:

I or we assign and transfer this Note to

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint                          agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date: Your Signature:

Sign exactly as your name appears on the other side of this Note.

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Securities Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Company or any Affiliate of the Company, the undersigned confirms that such Notes are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

to the Company; or

(1)	¨	pursuant to an effective registration statement under the Securities Act of 1933, as amended; or
(2)	¨	inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or
(3)	¨	outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933, as amended; or
(4)	¨	pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933, as amended.

Unless one of the boxes is checked, the Trustee shall refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (4) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, as amended, such as the exemption provided by Rule 144 under such Act.

Signature

Signature Guarantee:

Signature must be guaranteed Signature

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Dated:
	Notice: To be executed by an executive officer

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[TO BE ATTACHED TO GLOBAL NOTES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

The following increases or decreases in this Global Note have been made:

Date of Exchange or payment of PIK Interest Amount of decrease in
Principal amount of this
Global Note Amount of increase in
Principal amount of this
Global Note Principal amount of this
Global Note following
such decrease or increase Signature of authorized
officer of Trustee or
Notes Custodian

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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 1017 or 1018 of the Indenture, check the box:    ¨

If you want to elect to have only part of this Note purchased by the Company pursuant to Section 1017 or 1018 of the Indenture, state the amount in principal amount: $

Dated:	Your Signature:
		(Sign exactly as your name appears on             the other side of this Note. )

Signature Guarantee:
	(Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

EXHIBIT 3

to Rule 144A / Regulation S Appendix

FORM OF NON-U.S. BENEFICIAL OWNERSHIP

CERTIFICATION BY EURO CLEAR OR CLEARSTREAM LUXEMBOURG

[Date]

LaSalle Bank National Association

Re: 9%/9 ³/4% Senior Notes due 2014 (the “Notes”) of Aleris International, Inc. (the “Company”)

Reference is hereby made to the Senior Indenture, dated as of December 19, 2006 (as amended and supplemented from time to time, the “Indenture”), among the Company, the Subsidiary Guarantors named therein and LaSalle Bank National Association, as Trustee. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.

This is to certify with respect to $             principal amount of the Notes that, except as set forth below, we have received in writing, by tested telex or by electronic transmission, from member organizations appearing in our records as persons being entitled to a portion of such principal amount (our “Member Organizations”) certifications with respect to such portion, that such portion is beneficially owned by (a) Non-U.S. Person(s) or (b) U.S. Person(s) who purchased the portion beneficially owned by such U.S. Person(s) in transactions that did not require registration under the Securities Act of 1933, as amended (the “Act”). As used in this paragraph the term “U.S. Person” has the meaning given to it by Regulation S under the Act.

We further certify:

(i) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the Regulation S Temporary Global Note excepted in such certifications; and

(ii) that as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as the date hereof.

We understand that this certification is required in connection with certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you or the Company to produce this certification to any interested party in such proceedings.

Dated:             , 20

Yours faithfully,

[Euroclear or Clearstream Luxembourg]

By

EXHIBIT A

[FORM OF FACE OF EXCHANGE NOTE

OR PRIVATE EXCHANGE NOTE]^{1, 2}

No. $

9%/9 ³/4% Senior Notes Due 2014

Aleris International Inc., a Delaware corporation, promises to pay to             , or registered assigns, the principal sum of                  U.S. Dollars on December 15, 2014.

Interest Payment Dates: June 15 and December 15.

Record Dates: June 1 and December 1.

Additional provisions of this Note are set forth on the other side of this Note.

¹ [If the Note is to be issued in global form add the Global Notes Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1 captioned “[TO BE ATTACHED TO GLOBAL NOTES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE.”

² [If the Note is a Private Exchange Note issued in a Private Exchange to an Initial Purchaser holding an unsold portion of its initial allotment, add the Restricted Notes Legend from Exhibit 1 to Appendix A and replace the Assignment Form included in this Exhibit A with the Assignment Form included in such Exhibit 1.]

Dated:
	ALERIS INTERNATIONAL, INC.
	By:
		Name:
		Title:

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TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

LASALLE BANK NATIONAL

ASSOCIATION, as Trustee

certifies that this is one of the Notes

referred to in the Indenture.

By
	Authorized Signatory

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[FORM OF REVERSE SIDE OF EXCHANGE NOTE

OR PRIVATE EXCHANGE NOTE]

9%/9 ³/4% Senior Note Due 2014

Capitalized terms used herein but not defined herein shall have the meanings given to such terms in the Indenture.

1. Principal and Interest.

Aleris International, Inc. (the “Company”) shall pay the principal of this Note on December 15, 2014.

The Company promises to pay interest and Additional Interest, if any, on the principal amount of this Note on each Interest Payment Date, as set forth below, at the rate set forth below (subject to adjustment as provided below).

The Company shall pay interest with respect to the first Interest Period entirely in cash. For any Interest Period thereafter through the Interest Period ending December 15, 2010, the Company may, at its option, elect to pay interest on the Notes:

(a) entirely in cash (“Cash Interest”) or

(b) entirely by increasing the principal amount of the Outstanding Notes or by issuing PIK Notes (“PIK Interest”) or

(c) pay 50% with Cash Interest and the remaining portion with PIK Interest.

The Company must elect the form of interest payment with respect to each Interest Period by delivering a notice to the Trustee at or prior to the beginning of such Interest Period. The Trustee shall promptly deliver a corresponding notice to the Holders. In the absence of such an election, interest on the Notes shall be payable entirely in cash. From and after the Interest Period commencing December 15, 2010, the Company shall make all interest payments on the Notes entirely in cash.

Cash Interest on the Notes shall accrue at the rate of 9% per annum and be payable in cash. PIK Interest on the Notes shall accrue at the rate of 9 ³/4% per annum.

Interest, and Additional Interest, if any, shall be payable quarterly (to the Holders of the Notes at the close of business on June 1 or December 1 immediately preceding the Interest Payment Date) on each Interest Payment Date, commencing June 15, 2007.

[The Holder of this Note is entitled to the benefits of the Registration Rights Agreement, dated December 19, 2006, among the Company, the Subsidiary Guarantors and the Initial Purchasers named therein (the “Registration Rights Agreement”), including with respect to Additional Interest.]³

Interest, including Additional Interest, if any, on this Note shall accrue from the most recent date to which interest has been paid on this Note or the Note surrendered in exchange herefor or, if no interest has been paid, from December 19, 2006; provided that, if there is no existing Default in the payment of interest and if this Note is authenticated between a Regular Record Date referred to on the face hereof and the next succeeding Interest Payment

³ Insert if at the date of issuance of the Exchange Note or Private Exchange Note (as the case may be) any Registration Default has occurred with respect to the related Initial Notes during the Interest Period in which such date of issuance occurs.

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Date, interest shall accrue from such next succeeding Interest Payment Date. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

The Company shall pay interest and Additional Interest if any, on overdue principal and premium, if any, and interest on overdue installments of interest, to the extent lawful, at a rate per annum equal to the rate of interest applicable to the Notes.

2. Method of Payment.

The Company shall pay interest (except defaulted interest) on the principal amount of the Notes on each June 15 and December 15 to the Persons who are Holders (as reflected in the Note Register at the close of business on June 1 and December 1 immediately preceding the Interest Payment Date), in each case, even if the Note is transferred or exchanged after such Regular Record Date, except as provided in Section 306(b) with respect to defaulted interest; provided that, with respect to the payment of principal, the Company shall make payment to the Holder that surrenders this Note to any Paying Agent on or after December 15, 2014.

PIK Interest shall be payable by increasing the principal amount of this global Note by an amount equal to the amount of PIK Interest for the applicable Interest Period (rounded up to the nearest $1,000). Following an increase in the principal amount of the outstanding global Notes as a result of a PIK Payment, this global Note shall bear interest on such increased principal amount from and after the date of such PIK Payment, and shall be governed by, and subject to the terms, provisions and conditions of, the Indenture and shall have the same rights and benefits as the Notes issued on the Issue Date.

The Company shall pay principal (premium, if any) and Cash Interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal (premium, if any) and Cash Interest by its check payable in such money. The Company may pay Cash Interest on the Notes either (a) by mailing a check for such interest to a Holder’s registered address (as reflected in the Note Register) or (b) by wire transfer to an account located in the United States maintained by the payee. If a payment date is a date other than a Business Day at a place of payment, payment may be made at that place on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period.

3. Paying Agent and Note Registrar.

Initially, LaSalle Bank National Association (the “Trustee”) shall act as Paying Agent and Note Registrar. The Company may change any Paying Agent or Note Registrar upon written notice thereto and without notice to the Holders. The Company, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Note Registrar or co-registrar.

4. Indenture.

The Company issued the Notes under a Senior Indenture dated as of December 19, 2006 (the “Indenture”), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control.

The Notes are unsecured senior obligations of the Company. The Indenture does not limit the aggregate principal amount of the Notes. Subject to the conditions set forth in the Indenture, the Company may issue Additional Notes.

5. Mandatory Redemption.

Except as set forth in this paragraph, the Company is not required to make any mandatory redemption or sinking fund payments with respect to the Notes. If the aggregate amount which would be includible in gross income

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for federal income tax purposes with respect to a Note before the close of any “accrual period” (as defined in Treasury Regulation Section 1.1272-1(b)(1)(ii)) ending after five years from the Issue Date (the “Aggregate Inclusion”) exceeds an amount equal to the sum of (x) the aggregate amount of interest that has been paid in cash under such Note before the close of such accrual period and (y) the product of the issue price of such Note (as determined under Section 1273(b) of the Code) multiplied by the yield to maturity of such Note (as determined for purposes of applying Section 163(i) of the Code) (the sum of (x) and (y), the “Adjusted Actual Payment”), the Company shall, before the close of such accrual period, make a mandatory prepayment on such Note, to the extent that the Aggregate Inclusion as of such time exceeds the Adjusted Actual Payment. Such mandatory prepayment will be applied against and reduce the principal amount of the applicable Note outstanding at such time and will be made at the applicable redemption price set forth in Section 6 below. The Company intends that the Special Mandatory Redemption be sufficient to result in each Note being treated as not having “significant original issue discount” within the meaning of Section 163(i)(2) of the Code.

6. Optional Redemption.

At any time prior to December 15, 2010, the Company may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date.

On and after December 15, 2010, the Company may redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days’ prior notice to each Holder at the Redemption Prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on December 15 of each of the years indicated below:

Year	Percentage
2010	104.500	%
2011	102.250	%
2012 and thereafter	100.000	%

In addition, until December 15, 2009, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture at a redemption price equal to 109.000% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds of one or more Equity Offerings of the Company or any direct or indirect parent of the Company to the extent such net cash proceeds are contributed to the Company; provided that at least 50% of the sum of the aggregate principal amount of Notes originally issued under the Indenture remains Outstanding immediately after the occurrence of each such redemption; provided, further, that each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

7. Repurchase upon a Change of Control and Asset Sales.

Upon the occurrence of (a) a Change of Control, the Holders shall have the right to require that the Company purchase such Holder’s outstanding Notes, in whole or in part, at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase and (b) Asset Sales, the Company may be obligated to make offers to purchase Notes and Senior Indebtedness of the Company with a portion of the Net Proceeds of such Asset Sales at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase.

8. Denominations; Transfer; Exchange.

The Notes are in registered form without coupons in denominations of $1,000 principal amount and integral multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the Indenture. The Note

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Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Note Registrar need not register the transfer or exchange of a Note or portion of a Note selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Note or portion of a Note for a period of 15 days before a selection of Notes to be redeemed or 15 days before an interest payment date.

9. Persons Deemed Owners.

A registered Holder may be treated as the owner of a Note for all purposes.

10. Unclaimed Money.

Subject to any laws relating to abandoned property, if money for the payment of principal (premium, if any) or interest remains unclaimed for two years, the Trustee and the Paying Agent shall pay the money back to the Company at its request or (if then held by the Company) shall be discharged from such trust. After that, Holders entitled to the money must look to the Company for payment and all liability of the Trustee and such Paying Agent with respect to such money and all liability of the Company as trustee thereof shall cease.

11. Discharge and Defeasance Prior to Redemption or Maturity.

Subject to satisfaction of conditions set forth in the Indenture, the Company at any time may terminate some or all of its obligations under the Notes and the Indenture, if the Company irrevocably deposits with the Trustee cash or Government Securities or a combination thereof sufficient for the payment of the then outstanding principal of and interest on the Notes to Redemption or Stated Maturity, as the case may be.

12. Amendment; Supplement; Waiver.

Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Outstanding Notes, including consents obtained in connection with a purchase of, or tender offer or Exchange Offer for, the Notes, and any existing Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the Outstanding Notes. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture or the Notes to, among other things, cure any ambiguity, omission, mistake, defect or inconsistency and make any change that does not adversely affect the legal rights of any Holder.

13. Restrictive Covenants.

The Indenture contains certain covenants, including covenants with respect to the following matters: (i) Restricted Payments; (ii) incurrence of Indebtedness and issuance of Disqualified Stock and Preferred Stock; (iii) Liens; (iv) transactions with Affiliates; (v) dividend and other payment restrictions affecting Restricted Subsidiaries; (vi) guarantees of Indebtedness by Restricted Subsidiaries; (vii) changes to the terms of certain Subordinated Indebtedness; (viii) merger, consolidation or sale of all or substantially all assets; (ix) purchase of Notes upon a Change in Control; (x) sale and lease-back transactions and (xi) disposition of proceeds of Asset Sales. Within 120 days (or the successor time period then in effect under the rules and regulations of the Exchange Act) after the end of each fiscal year, the Company must report to the Trustee on compliance with such limitations.

14. Successor Persons.

When a successor Person or other entity assumes all the obligations of its predecessor under the Notes and the Indenture, the predecessor Person shall be released from those obligations, subject to certain exceptions.

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15. Remedies for Events of Default.

If an Event of Default, as defined in the Indenture, occurs and is continuing, the Trustee or the Holders of at least 30% in principal amount of the Outstanding Notes may declare all Outstanding Notes to be immediately due and payable. If an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Company occurs and is continuing, the Notes automatically become immediately due and payable. Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Subject to certain restrictions, the Holders of a majority in principal amount of the Outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

16. Subsidiary Guarantees.

The Company’s obligations under the Notes are fully, irrevocably and unconditionally guaranteed on an unsecured senior basis, to the extent set forth in the Indenture, by each of the Subsidiary Guarantors.

17. Trustee Dealings with Company.

The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may make loans to, accept deposits from, perform services for, and otherwise deal with, the Company and its Affiliates as if it were not the Trustee.

18. Authentication.

This Note shall not be valid until the Trustee signs the certificate of authentication on the other side of this Note.

19. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).

20. CUSIP Numbers.

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

21. Holders’ Compliance with the Registration Rights Agreement.

Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the Holders with respect to a registration and the indemnification of the Company to the extent provided therein.

22. Governing Law.

THIS SECURITY AND INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

-8-

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to Aleris International, Inc., 25825 Science Park Drive, Suite 400, Beachwood, Ohio 44122, Attention: General Counsel.

-9-

ASSIGNMENT/TRANSFER FORM

To assign and transfer this Note, fill in the form below:

I or we assign and transfer this Note to

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint                          agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date: Your Signature:

Sign exactly as your name appears on the other side of this Note.

-1-

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 1017 or 1018 of the Indenture, check the box:    ¨

If you want to elect to have only part of this Note purchased by the Company pursuant to Section 1017 or 1018 of the Indenture, state the amount in principal amount: $

Dated:	Your Signature:
		(Sign exactly as your name appears on             the other side of this Note.)

Signature Guarantee:
	(Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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EXHIBIT B

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of                     , 200    , among (the “Guaranteeing Subsidiary”), a subsidiary of Aleris International, Inc. (or its permitted successor), a Delaware corporation (the “Company”), the Company, the other Subsidiary Guarantors (as defined in the Indenture referred to herein) and LaSalle Bank National Association, as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee a senior unsecured indenture (the “Indenture”), dated as of December 19, 2006 providing for the issuance of 9%/9 ³/4% Senior Notes Due 2014 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Subsidiary Guarantee”); and

WHEREAS, pursuant to Section 901 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Subsidiary Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 12 thereof.

3. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

4. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

5. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

6. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.

7. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

Dated:                     , 20    

[GUARANTEEING SUBSIDIARY]
By:
	Name:
	Title:

ALERIS INTERNATIONAL, INC.
By:
	Name:
	Title:

[Existing Guarantors]
By:
	Name:
	Title:

LASALLE BANK NATIONAL ASSOCIATION, as Trustee
By:
	Authorized Signatory

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EX-4.2

Exhibit 4.2

AURORA ACQUISITION MERGER SUB, INC.

to be merged with and into

ALERIS INTERNATIONAL, INC.

the SUBSIDIARY GUARANTORS named in Schedule I hereto

and

LASALLE BANK NATIONAL ASSOCIATION, as Trustee

SENIOR SUBORDINATED INDENTURE

Dated as of December 19, 2006

$400,000,000

10% Senior Subordinated Notes Due 2016

Reconciliation and tie between Trust Indenture Act

of 1939 and Indenture, dated as of December 19, 2006*

Trust Indenture Act Section	Indenture Section
§ 310(a)(1)	608
(a)(2)	608
(a)(3)	N.A.
(a)(4)	N.A.
(b)	608, 609
(c)	N.A.
§ 311(a)	605
(b)	605
(c)	N.A.
§ 312(a)	701
(b)	702
(c)	702
§ 313(a)	703
(a)(4)	703
(b)(1)	N.A.
(b)(2)	N.A.
(c)(1)	703
(c)(2)	703
(d)	703
§ 314(a)	1009
(b)	N.A.
(c)(1)	103
(c)(2)	103
(c)(3)	N.A.
(d)	N.A.
(e)	103
(f)	N.A.
§ 315(a)	601
(b)	602
(c)	601
(d)	601
(e)	515
§ 316(a) (last sentence)	102 (“Outstanding”)
(a)(1)(A)	502, 512
(a)(1)(B)	513
(a)(2)	N.A.
(b)	508
(c)	105(d)
§ 317(a)(1)	503
(a)(2)	504
(b)	1003
§ 318(a)	115

N.A. means Not Applicable.

* This reconciliation and tie shall not, for any purpose, be deemed to be a part of this Indenture.

TABLE OF CONTENTS¹

		Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101.	Rules of Construction and Incorporation by Reference of Trust Indenture Act	1
SECTION 102.	Definitions	2
SECTION 103.	Compliance Certificates and Opinions	33
SECTION 104.	Form of Documents Delivered to Trustee	33
SECTION 105.	Acts of Holders	34
SECTION 106.	Notices, Etc., to Trustee, Company, Any Subsidiary Guarantor and Agent	35
SECTION 107.	Notice to Holders; Waiver	35
SECTION 108.	Effect of Headings and Table of Contents	36
SECTION 109.	Successors and Assigns	36
SECTION 110.	Separability Clause	36
SECTION 111.	Benefits of Indenture	36
SECTION 112.	Governing Law	36
SECTION 113.	Legal Holidays	36
SECTION 114.	No Personal Liability of Directors, Officers, Employees and Stockholders	36
SECTION 115.	Trust Indenture Act Controls	37
SECTION 116.	Counterparts	37
ARTICLE TWO
NOTE FORMS
SECTION 201.	Form and Dating	37
SECTION 202.	Execution, Authentication, Delivery and Dating	37
ARTICLE THREE
THE NOTES
SECTION 301.	Title and Terms	39
SECTION 302.	Denominations	39
SECTION 303.	Temporary Notes	39
SECTION 304.	Note Registrar; Paying Agent; Registration of Transfer and Exchange	40
SECTION 305.	Mutilated, Destroyed, Lost and Stolen Notes	41
SECTION 306.	Payment of Interest; Interest Rights Preserved	41
SECTION 307.	Persons Deemed Owners	42

¹ This table of contents shall not, for any purpose, be deemed to be a part of this Indenture.

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		Page
SECTION 308.	Cancellation	43
SECTION 309.	Computation of Interest	43
SECTION 310.	Transfer and Exchange	43
SECTION 311.	CUSIP Numbers	43
SECTION 312.	Issuance of Additional Notes	44
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401.	Satisfaction and Discharge of Indenture	44
SECTION 402.	Application of Trust Money	45
ARTICLE FIVE
REMEDIES
SECTION 501.	Events of Default	46
SECTION 502.	Acceleration of Maturity; Rescission and Annulment	47
SECTION 503.	Collection of Indebtedness and Suits for Enforcement by Trustee	49
SECTION 504.	Trustee May File Proofs of Claim	49
SECTION 505.	Trustee May Enforce Claims Without Possession of Notes	50
SECTION 506.	Application of Money Collected	50
SECTION 507.	Limitation on Suits	50
SECTION 508.	Unconditional Right of Holders to Receive Principal, Premium and Interest	51
SECTION 509.	Restoration of Rights and Remedies	51
SECTION 510.	Rights and Remedies Cumulative	51
SECTION 511.	Delay or Omission Not Waiver	51
SECTION 512.	Control by Holders	51
SECTION 513.	Waiver of Default	52
SECTION 514.	Waiver of Stay or Extension Laws	52
SECTION 515.	Undertaking for Costs	52
ARTICLE SIX
THE TRUSTEE
SECTION 601.	Duties of the Trustee	52
SECTION 602.	Notice of Defaults	53
SECTION 603.	Certain Rights of Trustee	53
SECTION 604.	Trustee Not Responsible for Recitals or Issuance of Notes	55
SECTION 605.	May Hold Notes	55
SECTION 606.	Money Held in Trust	55
SECTION 607.	Compensation and Reimbursement	55
SECTION 608.	Corporate Trustee Required; Eligibility	56
SECTION 609.	Resignation and Removal; Appointment of Successor	56
SECTION 610.	Acceptance of Appointment by Successor	57
SECTION 611.	Merger, Conversion, Consolidation or Succession to Business	57
SECTION 612.	Appointment of Authenticating Agent	57

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ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701.	Holder Lists	59
SECTION 702.	Disclosure of Names and Addresses of Holders	59
SECTION 703.	Reports by Trustee	59
ARTICLE EIGHT
MERGER, CONSOLIDATION OR SALE
OF ALL OR SUBSTANTIALLY ALL ASSETS
SECTION 801.	Company May Consolidate, Etc., Only on Certain Terms	59
SECTION 802.	Subsidiary Guarantors May Consolidate, Etc., Only on Certain Terms	60
SECTION 803.	Reserved	61
SECTION 804.	Successor Substituted	61
SECTION 805.	The Merger Permitted	61
SECTION 806.	Assets of Subsidiary Apply to Company	61
ARTICLE NINE
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 901.	Amendments or Supplements Without Consent of Holders	62
SECTION 902.	Amendments or Supplements with Consent of Holders	63
SECTION 903.	Execution of Amendments, Supplements or Waivers	64
SECTION 904.	Effect of Amendments, Supplements or Waivers	64
SECTION 905.	Compliance with Trust Indenture Act	64
SECTION 906.	Reference in Notes to Supplemental Indentures	64
SECTION 907.	Notice of Supplemental Indentures	64
ARTICLE TEN
COVENANTS
SECTION 1001.	Payment of Principal, Premium, if Any, and Interest	64
SECTION 1002.	Maintenance of Office or Agency	65
SECTION 1003.	Paying Agent to Hold Money in Trust	65
SECTION 1004.	Corporate Existence	66
SECTION 1005.	Payment of Taxes and Other Claims	66
SECTION 1006.	Reserved	66
SECTION 1007.	Reserved	66
SECTION 1008.	Statement by Officers as to Default	66
SECTION 1009.	Reports and Other Information	67
SECTION 1010.	Limitation on Restricted Payments	68
SECTION 1011.	Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock	75
SECTION 1012.	Liens	81
SECTION 1013.	Limitations on Transactions with Affiliates	81

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SECTION 1014.	Limitations on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries	83
SECTION 1015.	Limitation on Guarantees of Indebtedness by Restricted Subsidiaries	84
SECTION 1016.	Limitation on Other Senior Subordinated Indebtedness	85
SECTION 1017.	Change of Control	86
SECTION 1018.	Asset Sales	87
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101.	Right of Redemption	90
SECTION 1102.	Applicability of Article	91
SECTION 1103.	Election to Redeem; Notice to Trustee	91
SECTION 1104.	Selection by Trustee of Notes to Be Redeemed	91
SECTION 1105.	Notice of Redemption	91
SECTION 1106.	Effect of Notice of Redemption	92
SECTION 1107.	Deposit of Redemption Price	93
SECTION 1108.	Notes Payable on Redemption Date	93
SECTION 1109.	Notes Redeemed in Part	93
ARTICLE TWELVE
GUARANTEES
SECTION 1201.	Guarantees	93
SECTION 1202.	Severability	95
SECTION 1203.	Subordination of Subsidiary Guarantees	95
SECTION 1204.	Limitation of Subsidiary Guarantors’ Liability	95
SECTION 1205.	Contribution	95
SECTION 1206.	Subrogation	95
SECTION 1207.	Reinstatement	96
SECTION 1208.	Release of a Subsidiary Guarantor	96
SECTION 1209.	Benefits Acknowledged	96
ARTICLE THIRTEEN
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301.	Company’s Option to Effect Legal Defeasance or Covenant Defeasance	97
SECTION 1302.	Legal Defeasance and Discharge	97
SECTION 1303.	Covenant Defeasance	97
SECTION 1304.	Conditions to Legal Defeasance or Covenant Defeasance	98
SECTION 1305.	Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions	99
SECTION 1306.	Reinstatement	100
SECTION 1307.	Repayment to Company	100

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ARTICLE FOURTEEN
SUBORDINATION
SECTION 1401.	Agreement to Subordinate	100
SECTION 1402.	Liquidation, Dissolution, Bankruptcy	100
SECTION 1403.	Default on Designated Senior Indebtedness of the Company	101
SECTION 1404.	Acceleration of Payment of Securities	102
SECTION 1405.	When Distribution Must Be Paid Over	102
SECTION 1406.	Subrogation	102
SECTION 1407.	Relative Rights	102
SECTION 1408.	Subordination May Not Be Impaired by Company	102
SECTION 1409.	Rights of Trustee and Paying Agent	102
SECTION 1410.	Distribution or Notice to Representative	103
SECTION 1411.	Article Fourteen Not to Prevent Events of Default or Limit Right to Accelerate	103
SECTION 1412.	Trust Moneys Not Subordinated	103
SECTION 1413.	Trustee Entitled to Rely	103
SECTION 1414.	Trustee to Effectuate Subordination	104
SECTION 1415.	Trustee Not Fiduciary for Holders of Senior Indebtedness of the Company	104
SECTION 1416.	Reliance by Holders of Senior Indebtedness of the Company on Subordination Provisions	104
APPENDIX & EXHIBITS
Rule 144A/Regulation S Appendix
EXHIBIT 1 to Rule 144A/Regulation S Appendix – Form of Initial Note
EXHIBIT 2 to Rule 144A/Regulation S Appendix – Form of Transferee Letter of Representation
EXHIBIT 3 to Rule 144A/Regulation S Appendix – Form of Non-U.S. Beneficial Ownership Certification by Euroclear or Clearstream Luxembourg
EXHIBIT A – Form of Exchange Security or Private Exchange Security
EXHIBIT B – Form of Supplemental Indenture

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SENIOR SUBORDINATED INDENTURE dated as of December 19, 2006 (this “Indenture”), among AURORA ACQUISITION MERGER SUB, INC., a Delaware corporation that shall be merged with and into ALERIS INTERNATIONAL, INC., a Delaware corporation, with Aleris International, Inc. continuing as the surviving corporation (the “Company”), and certain of Aleris International, Inc.’s direct and indirect Domestic Subsidiaries (as defined below), each named in Schedule I hereto (each, a “Subsidiary Guarantor” and collectively, the “Subsidiary Guarantors”), and LASALLE BANK NATIONAL ASSOCIATION, as Trustee (the “Trustee”).

RECITALS

The Company has duly authorized the creation of an issue of (i) 10% Senior Subordinated Notes Due 2016 issued on the date hereof (the “Initial Notes”) and (ii) if and when issued as required by the Registration Rights Agreement dated the date hereof, among Aurora Acquisition Merger Sub, Inc., the Company, the Subsidiary Guarantors and the Initial Purchasers (as defined therein) (the “Registration Rights Agreement”), 10% Senior Subordinated Exchange Notes Due 2016 issued in an Exchange Offer in exchange for any Initial Notes (the “Exchange Notes” and, collectively with the Initial Notes, the “Notes”), of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company and the Subsidiary Guarantors have duly authorized the execution and delivery of this Indenture. On the date hereof, Aurora Acquisition Merger Sub, Inc. shall be merged with and into Aleris International, Inc., with Aleris International, Inc. continuing as the surviving corporation and assuming all of the obligations of Aurora Acquisition Merger Sub, Inc. under this Indenture.

The Subsidiary Guarantors have each duly authorized their Subsidiary Guarantee of the Initial Notes and, if and when issued, the Exchange Notes, and to provide therefor the Subsidiary Guarantors have each duly authorized the execution and delivery of this Indenture.

All things necessary have been done to make the Notes, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid and legally binding obligations of the Company and to make this Indenture a valid and legally binding agreement of the Company, in accordance with their and its terms.

All things necessary have been done to make the Subsidiary Guarantees, upon execution and delivery of this Indenture, the valid obligations of each Subsidiary Guarantor and to make this Indenture a valid and legally binding agreement of each Subsidiary Guarantor, in accordance with their and its terms.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and ratable benefit of all Holders, as follows:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION

SECTION 101. Rules of Construction and Incorporation by Reference of Trust Indenture Act. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(1) the terms defined in this Article One have the meanings assigned to them in this Article One, and words in the singular include the plural and words in the plural include the singular;

(2) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP (as herein defined); provided that for clarity purposes, determination of whether an action is for speculative purposes is not an accounting term;

(3) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

(4) all references to Articles, Sections, Exhibits and Appendices shall be construed to refer to Articles and Sections of, and Exhibits and Appendices to, this Indenture;

(5) “including” means including without limitation;

(6) all references to the date the Notes were originally issued shall refer to the Issue Date; and

(7) all references, in any context, to any interest or other amount payable on or with respect to the Notes shall be deemed to include any Additional Interest (as herein defined) pursuant to the Registration Rights Agreement.

This Indenture is subject to the mandatory provisions of the TIA (as herein defined) which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings:

(1) “Commission” means the SEC;

(2) “indenture securities” means the Notes and the Subsidiary Guarantees;

(3) “indenture security holder” means a Holder;

(4) “indenture to be qualified” means this Indenture;

(5) “indenture trustee” or “institutional trustee” means the Trustee; and

(6) “obligor” on the Notes means the Company, each Subsidiary Guarantor and any successor obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

SECTION 102. Definitions.

“ABL Credit Agreement” means the amended and restated credit agreement dated as of August 1, 2006 and amended and restated as of December 19, 2006, among the Company, Corus S.E.C./Corus L.P., Aleris Switzerland GmbH, each other Subsidiary of the Company set forth on the signature pages thereto, the lenders party thereto from time to time and Deutsche Bank AG New York Branch, as Administrative Agent, together with the related documents thereto (including, without limit-

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ation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, including one or more credit facilities, credit agreements, loan agreements, indentures, commercial paper facilities or similar agreements extending the maturity of, refinancing, refunding, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder or adding Restricted Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether by the same or any other agent, lender or group of lenders, or other investors and whether involving the same or different group of the Company and Restricted Subsidiaries as principal obligors or guarantors.

“Acquired Indebtedness” means, with respect to any specified Person,

(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of such specified Person; and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Act”, when used with respect to any Holder, has the meaning specified in Section 105 of this Indenture.

“Additional Interest” means all liquidated damages then owing pursuant to the Registration Rights Agreement.

“Additional Notes” means any Notes issued by the Company pursuant to Section 312.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

“Affiliate Transaction” has the meaning specified in Section 1013(a) of this Indenture.

“Applicable Premium” means, with respect to a Note at any Redemption Date, the greater of (i) 1.0% of the principal amount of such Note and (ii) the excess of (A) the present value at such Redemption Date of (1) the Redemption Price of such Note on December 15, 2011, (such Redemption Price being that described in the table set forth in Section 1101(b)) plus (2) all required remaining scheduled interest payments due on such Note through such date (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (B) the principal amount of such Note on such Redemption Date, as calculated by the Company or on behalf of the Company by such Person as the Company shall designate; provided that such calculation shall not be a duty or obligation of the applicable Trustee.

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“Asset Sale” means

(1) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of the Company or any Restricted Subsidiary (each referred to in this definition as a “disposition”); and

(2) the issuance or sale of Equity Interests of any Restricted Subsidiary, whether in a single transaction or a series of related transactions,

in each case, other than:

(a) a disposition of cash, Cash Equivalents or Investment Grade Securities or excess, damaged, obsolete or worn out equipment, vehicles or other similar assets in the ordinary course of business or any disposition of inventory or goods held for sale in the ordinary course of business;

(b) the disposition of all or substantially all of the assets of the Company in a manner permitted pursuant to the provisions described under Section 801 of this Indenture or any disposition that constitutes a Change of Control pursuant to this Indenture;

(c) the making of any Permitted Investment or the making of any Restricted Payment that is not prohibited by Section 1010;

(d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of transactions with an aggregate fair market value of less than $25.0 million;

(e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;

(f) to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(g) the lease, assignment license, sub-license or sub-lease of any real or personal property in the ordinary course of business;

(h) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(i) foreclosures on assets;

(j) sales of accounts receivable, or participations therein, in connection with any Receivables Facility; and

(k) the unwinding of any Hedging Obligations.

“Asset Sale Offer” has the meaning specified in Section 1018 of this Indenture.

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“Attributable Debt” in respect of a Sale and Lease-Back Transaction means, as at the time of determination, the present value (discounted at the cash interest rate borne by the Notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Lease-Back Transaction (including any period for which such lease has been extended); provided, however, that if such Sale and Lease-Back Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capitalized Lease Obligation.”

“Authenticating Agent” has the meaning specified in Section 612 of this Indenture.

“Bankruptcy Law” means Title 11, United States Bankruptcy Code of 1978, as amended, or any similar United States federal or state or foreign law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law.

“Blockage Notice” has the meaning specified in Section 1403 of this Indenture.

“Board of Directors” means:

(1) with respect to a corporation, the board of directors of the corporation;

(2) with respect to a partnership, the board of directors of the general partner of the partnership; and

(3) with respect to any other Person, the board or committee of such Person serving a similar function.

“Board Resolution” means, with respect to the Company, a duly adopted resolution of the Board of Directors of the Company or any committee thereof.

“Business Day” means each day that is not a Legal Holiday.

“Capital Stock” means

(1) in the case of a corporation, corporate stock,

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock,

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited), and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

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“Cash Equivalents” means, as to any Person,

(1) securities issued or directly and fully guaranteed or insured by the United States or any agency, instrumentality or sponsored corporation thereof and backed by the full faith and credit of the United States, and in each case having maturities of not more than 24 months from the date of acquisition;

(2) U.S. Dollar denominated time deposits, certificates of deposit, overnight bank deposits and bankers’ acceptances having maturities within one year from the date of acquisition thereof issued by any lender under the Senior Credit Facilities or any commercial bank of recognized standing, having capital and surplus in excess of $250,000,000;

(3) repurchase obligations for underlying securities of the types described in clauses (1) and (2) above and entered into with any commercial bank meeting the qualifications specified in clause (2) above;

(4) other investment instruments having maturities within 180 days from the date of acquisition thereof offered or sponsored by financial institutions having capital and surplus in excess of $500,000,000;

(5) readily marketable direct obligations issued by any state of the United States or any political subdivision thereof having maturities within 180 days from the date of acquisition thereof and having, at the time of acquisition thereof, one of the two highest rating categories obtainable from either Moody’s or S&P (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency);

(6) commercial paper rated, at the time of acquisition thereof, at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), in each case maturing within one year after the date of acquisition;

(7) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (1) through (6) above;

(8) in the case of any Foreign Subsidiary of the Company, (x) certificates of deposit or bankers’ acceptances of any bank organized under the laws of Canada, Japan or any country that is a member of the European economic and monetary union pursuant to the Treaty whose short term commercial paper, at the time of acquisition thereof, is rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), or, if no such commercial paper rating is available, a long-term debt rating, at the time of acquisition thereof, of at least A or the equivalent thereof by S&P or at least A-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), in each case maturing not more than one year from the date of acquisition by such Foreign Subsidiary, (y) overnight deposits and demand deposit accounts maintained with any bank that such Foreign Subsidiary regularly transacts business and (z) securities of the type and maturity described in clause (i) above but issued by the principal governmental authority in which such Foreign Subsidiary is organized so long as such security has the highest rating available from either S&P or Moody’s;

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(9) Indebtedness or Preferred Stock issued by Persons with a rating of “A” or higher from S&P or “A2” or higher from Moody’s with maturities of one year or less from the date of acquisition;

(10) U.S. Dollars; and

(11) Canadian dollars, Japanese yen, pounds sterling, Euros or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business.

“Change of Control” means the occurrence of any of the following:

(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any Person other than a Permitted Holder, or

(2) the Company becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act, or any successor provision), other than the Permitted Holders, in a single transaction or in a series of related transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more of the total voting power of the Voting Stock of the Company or any of its direct or indirect parent companies.

“Change of Control Offer” has the meaning specified in Section 1017 of this Indenture.

“Change of Control Payment” has the meaning specified in Section 1017 of this Indenture.

“Change of Control Payment Date” has the meaning specified in Section 1017 of this Indenture.

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

“Co-Investors” means Persons (and their Affiliates) who, on the Issue Date, are limited partners of TPG Partners IV, L.P. or TPG Partners V, L.P.

“Company” means the Person named as the “Company” in the first paragraph of this Indenture, until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter, “Company” shall mean such successor Person; provided that when used in the context of determining the fair market value of an asset or liability under this Indenture, “Company” shall, unless otherwise expressly stated, be deemed to mean the Board of Directors of the Company when the fair market value of such asset or liability is equal to or in excess of $100.0 million.

“Company Request” or “Company Order” means a written request or order signed in the name of the Company by two Officers or one Officer and either an Assistant Treasurer or an Assistant Secretary of the Company, and delivered to the Trustee.

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“consolidated” or “Consolidated” means, with respect to any Person, such Person consolidated with its Restricted Subsidiaries, and excludes from such consolidation any Unrestricted Subsidiary as if such unrestricted subsidiary were not an Affiliate of such Person.

“Consolidated Depreciation and Amortization Expense” means, with respect to any Person for any period, the total amount of depreciation and amortization expense, including the amortization of deferred financing fees and other related noncash charges of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

“Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication, of:

(a) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including (a) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers’ acceptances, (c) noncash interest payments (but excluding any noncash interest expense attributable to the movement in the mark-to-market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations and (e) net payments, if any, pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (i) Additional Interest, (ii) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses, (iii) any expensing of bridge, commitment and other financing fees and (iv) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Facility; plus

(b) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; less

(c) interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided that, without duplication:

(1) any net after-tax extraordinary gains or losses or any non-recurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses (including, but not limited to, any expenses relating to severance, relocation, one-time compensation charges and the Transactions and any expenses directly attributable to the implementation of cost saving initiatives) shall be excluded;

(2) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period, whether effected through a cumulative effect adjustment or a retroactive application in each case in accordance with GAAP;

(3) any net after-tax income (loss) from disposed or discontinued operations and any net after-tax gains or losses on disposal of disposed or discontinued operations shall be excluded;

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(4) any net after-tax gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions or the sale or other disposition of any Capital Stock of any Person other than in the ordinary course of business, as determined in good faith by the Company, shall be excluded;

(5) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of such Person shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period (subject in the case of dividends, distributions or other payments made to a Restricted Subsidiary to the limitations contained in clause (6) below);

(6) solely for the purpose of determining the amount available for Restricted Payments under clause (C)(1) of Section 1010(a) of this Indenture, the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded if the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination wholly permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived; provided that Consolidated Net Income of the Company shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) to the Company or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein;

(7) any increase in amortization or depreciation or other noncash charges resulting from the application of purchase accounting in relation to the Corus Transaction, the Transactions or any acquisition that is consummated after the Issue Date, net of taxes, shall be excluded;

(8) any net after-tax income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments shall be excluded;

(9) any impairment charge or asset write-off, in each case pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded; and

(10) any noncash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights to officers, directors or employees shall be excluded.

Notwithstanding the foregoing, for the purpose of Section 1010(a) of this Indenture (other than clause (C)(4) thereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Company and the Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Company and the Restricted Subsidiaries, any repayments to the Company or a Restricted Subsidiary of loans and advances that constitute Restricted Investments, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under Section 1010(a) of this Indenture pursuant to clause (C)(4).

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“Consolidated Total Indebtedness” means, as at any date of determination, an amount equal to the sum of (1) the aggregate amount of all outstanding Indebtedness of the Company and the Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, Obligations in respect of Capitalized Lease Obligations, Attributable Debt in respect of Sale and Lease-Back Transactions and debt obligations evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (and excluding (x) any undrawn letters of credit and (y) all obligations relating to Receivables Facilities) and (2) the aggregate amount of all outstanding Disqualified Stock of the Company and all Disqualified Stock and Preferred Stock of the Restricted Subsidiaries (excluding items eliminated in consolidation), with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences and Maximum Fixed Repurchase Prices, in each case determined on a consolidated basis in accordance with GAAP.

For purposes hereof, the “Maximum Fixed Repurchase Price” of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock, such fair market value shall be determined reasonably and in good faith by the Company.

“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (the “primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent,

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,

(2) to advance or supply funds

(a) for the purchase or payment of any such primary obligation or

(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

“Corporate Trust Office” means the principal corporate trust office of the Trustee, at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Indenture is located at 135 S. LaSalle Street, Suite 1560, Chicago IL 60603; Attn: Corporate Trust Services Division, except that with respect to presentation of the Notes for payment or for registration of transfer or exchange, such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate agency business shall be conducted.

“Corus Acquisitions” means the acquisition consummated on August 1, 2006 by the Company and its Subsidiaries of (i) all of the limited partnership interests in Corus L.P., a limited partnership organized under the laws of Quebec and all of the shares of Corus Aluminum Inc., a corporation organized under the laws of Quebec and each of their respective Subsidiaries and (ii) all of the beneficial interest in the entire share capital of Corus Hylite BV, Corus Aluminium Rolled Products BV, Corus Aluminium NV,

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Corus Aluminium GmbH, Corus Aluminium Corp. and Hoogovens Aluminium Europe Inc. and each of their respective Subsidiaries.

“Corus Credit Documents” means collectively, (i) the Senior Bridge Loan Agreement dated as of August 1, 2006 among the Company and the lenders party thereto, (ii) the Term Loan Agreement dated as of August 1, 2006 among the Company, certain of its Subsidiaries and the agents and lenders party thereto and (iii) the Credit Agreement dated as of August 1, 2006 among the Company, certain of its Subsidiaries and the agents and lenders party thereto and, in each case, all other instruments, documents, agreements and certificates executed in connection with the foregoing.

“Corus Transaction” means collectively, (i) the entering into of the Corus Credit Documents and the incurrence of borrowings thereunder (including the issuance of letters of credit), (ii) the consummation of the Corus Acquisitions, (iii) the refinancing of Indebtedness consummated in connection with the transactions described in clauses (i) and (ii), (iv) all intercompany loans, equity contributions, repayments of intercompany loans, dividends, distributions and other intercompany Investments related to the foregoing and (v) the payment of all fees and expenses in connection with the foregoing.

“Covenant Defeasance” has the meaning specified in Section 1303 of this Indenture.

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“Defaulted Interest” has the meaning specified in Section 306(b) of this Indenture.

“Depository” means The Depository Trust Company, its nominees and their respective successors.

“Designated Noncash Consideration” means the fair market value of noncash consideration received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such valuation, executed by an executive vice president and the principal financial officer of the Company (or a parent company thereof), less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Noncash Consideration.

“Designated Preferred Stock” means Preferred Stock of the Company or any parent company thereof (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary) and is so designated as Designated Preferred Stock pursuant to an Officers’ Certificate executed by an executive vice president and the principal financial officer of the Company or the applicable parent company thereof, as the case may be, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (C) of Section 1010(a) of this Indenture.

“Designated Senior Indebtedness” means:

(1) any Indebtedness outstanding under the Senior Credit Facilities;

(2) any Indebtedness outstanding under the Senior Indenture; and

(3) any other Senior Indebtedness permitted under this Indenture that, at the date of determination, has an aggregate principal amount outstanding of at least $35.0 million and is specifically designated by the issuer thereof in the instrument evidencing or governing such Senior Indebtedness as “Designated Senior Indebtedness” for purposes of this Indenture.

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“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable (other than solely for Capital Stock that is not Disqualified Stock), other than as a result of a change of control or asset sale, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, other than as a result of a change of control or asset sale, in whole or in part, in each case prior to the date that is 91 days after the earlier of the maturity date of the Notes and the date the Notes are no longer outstanding; provided that if such Capital Stock is issued to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

“Domestic Subsidiary” means, with respect to any Person, any Restricted Subsidiary of such Person other than (i) a Foreign Subsidiary or (ii) a Domestic Subsidiary of a Foreign Subsidiary, but, in each case, including any Subsidiary that guarantees or otherwise provides direct credit support for any indebtedness of the Company.

“EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period,

(1) increased by (without duplication):

(a) provision for taxes based on income or profits, plus franchise or similar taxes, of such Person for such period deducted in computing Consolidated Net Income; plus

(b) consolidated Fixed Charges of such Person for such period to the extent the same was deducted in computing Consolidated Net Income; plus

(c) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent deducted in computing Consolidated Net Income; plus

(d) any expenses or charges related to any Equity Offering, Permitted Investment, acquisition, disposition, recapitalization or the incurrence of Indebtedness permitted to be incurred by this Indenture including a refinancing thereof (whether or not successful) and any amendment or modification to the terms of any such transactions, including such fees, expenses or charges related to the Corus Transaction and the Transactions, in each case, deducted in computing Consolidated Net Income; plus

(e) the amount of any restructuring charge or reserve deducted in such period in computing Consolidated Net Income, including any one-time costs incurred in connection with (x) acquisitions after the Issue Date or (y) the closing of any production or manufacturing facilities after the Issue Date; plus

(f) any write offs, write downs or other noncash charges reducing Consolidated Net Income for such period, excluding any such charge that represents an accrual or reserve for a cash expenditure for a future period; plus

(g) the amount of any minority interest expense deducted in computing Consolidated Net Income; plus

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(h) the amount of management, monitoring, consulting and advisory fees and related expenses paid (or any accruals related to such fees or related expenses) during such period to the Sponsor and the Co-Investors to the extent permitted under Section 1013 of this Indenture; plus

(i) (A) the amount of cost savings projected by the Company in good faith to be realized as a result of actions taken or expected to be taken during such period (calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (x) such cost savings are reasonably identifiable and factually supportable, (y) such actions are taken within 36 months after the Issue Date and (z) the aggregate amount of cost savings added pursuant to this clause (i)(A) shall not exceed $40.0 million for any four consecutive quarter period (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definition of “Fixed Charge Coverage Ratio”) and (B) the amount of (i) cost savings or (ii) increases in EBITDA, in each case projected by the Company in good faith to be realized as the result of the replacement of or modification to contractual arrangements with unaffiliated third parties (calculated on a pro forma basis as though such cost savings or increases in EBITDA had been realized on the first day of such period) and, in the case of cost savings, net of the amount of actual benefits realized during such period from such action; provided that such contractual arrangements were entered into with a Person that was acquired by the Company or its Restricted Subsidiaries within 12 months of any such replacement or modification; plus

(j) any costs or expenses incurred by the Company or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or stockholders agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Company or net cash proceeds of issuance of Equity Interests of the Company (other than Disqualified Stock that is Preferred Stock) in each case, solely to the extent that such cash proceeds are excluded from the calculation set forth in clause (C) of Section 1010(a);

(2) decreased by (without duplication) noncash gains increasing Consolidated Net Income of such Person for such period, excluding any gains that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period (other than such cash charges that have been added back to Consolidated Net Income in computing EBITDA in accordance with this definition); and

(3) increased or decreased, as applicable, by (without duplication):

(a) any net gain or loss resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards #133;

(b) any net gain or loss resulting in such period from currency translation gains or losses related to currency remeasurements of Indebtedness; and

(c) the amount of gain or loss resulting in such period from a sale of receivables and related assets to a Receivables Subsidiary in connection with a Receivables Facility.

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“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.

“Equity Offering” means any public or private sale of common stock or Preferred Stock of the Company or any of its direct or indirect parent companies (excluding Disqualified Stock), other than

(a) public offerings with respect to the Company’s or any direct or indirect parent company’s common stock registered on Form S-4 or Form S-8;

(b) any such public or private sale that constitutes an Excluded Contribution; and

(c) an issuance to any Subsidiary of the Company.

“Event of Default” has the meaning specified in Section 501 of this Indenture.

“Excess Proceeds” has the meaning specified in Section 1018 of this Indenture.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Exchange Notes” has the meaning specified in the first recital of this Indenture. Unless the context otherwise requires, all references to the Exchange Notes shall include 10% Senior Subordinated Exchange Notes Due 2016 issued in exchange for any Additional Notes.

“Exchange Offer” means the Exchange Offer as defined in the Registration Rights Agreement.

“Exchange Offer Registration Statement” means the Exchange Offer Registration Statement as defined in the Registration Rights Agreement.

“Excluded Contribution” means net cash proceeds, marketable securities or Qualified Proceeds received by the Company from

(a) contributions to its common equity capital, and

(b) the sale (other than to a Subsidiary of the Company or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Company) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Company,

in each case designated as Excluded Contributions pursuant to an Officers’ Certificate executed by an executive vice president and the principal financial officer of the Company on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in clause (C) of Section 1010(a) of this Indenture.

“Existing Indebtedness” means Indebtedness of the Company or the Restricted Subsidiaries in existence on the Issue Date, plus interest accruing thereon.

“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the

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event that the Company or any Restricted Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than Indebtedness incurred under any revolving credit facility that has been permanently repaid and has not been replaced) or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishing of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period (the “reference period”).

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, consolidations and disposed operations (as determined in accordance with GAAP) that have been made by the Company or any Restricted Subsidiary during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and disposed operations (and the change in any associated fixed charges and the change in EBITDA resulting therefrom) had occurred on the first day of the reference period. If since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made any Investment, acquisition, disposition, merger, consolidation or disposed operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or disposed operation had occurred at the beginning of the reference period.

For purposes of this definition, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.

“Fixed Charges” means, with respect to any Person for any period, the sum of

(a) Consolidated Interest Expense of such Person for such period,

(b) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock made during such period, and

(c) all cash dividend payments (excluding items eliminated in consolidation) on any series of Disqualified Stock made during such period.

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“Foreign Subsidiary” means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States of America, any state thereof, the District of Columbia, or any territory thereof.

“Foreign Subsidiary Total Assets” means the total amount of all assets of Foreign Subsidiaries of the Company and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP as shown on the most recent balance sheet of the Company.

“GAAP” means generally accepted accounting principles in the United States of America that are in effect on the Issue Date.

“Government Securities” means securities that are

(a) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or

(b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in either case, are not callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such Government Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.

“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations, and, when used as a verb, shall have a corresponding meaning.

“Hedging Obligations” means, with respect to any Person, the obligations of such Person under currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements and other agreements or arrangements, in each case designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

“Holder” means the Person in whose name a Note is registered on the books of the Note Registrar.

“incur” has the meaning specified in Section 1011 of this Indenture.

“incurrence” has the meaning specified in Section 1011 of this Indenture.

“Indebtedness” means, with respect to any Person:

(a) any indebtedness (including principal and premium) of such Person, whether or not contingent:

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(1) in respect of borrowed money;

(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without double counting, reimbursement agreements in respect thereof);

(3) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except any such balance that constitutes a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business; or

(4) representing any Hedging Obligations;

if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(b) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (a) of another Person (whether or not such items would appear upon the balance sheet of such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business;

(c) to the extent not otherwise included, the obligations of the type referred to in clause (a) of another Person secured by a Lien on any asset owned by such Person, whether or not such obligations are assumed by such Person and whether or not such obligations would appear upon the balance sheet of such Person; provided that the amount of such Indebtedness shall be the lesser of the fair market value of such asset at the date of determination and the amount of Indebtedness so secured; and

(d) Attributable Debt in respect of Sale and Lease-Back Transactions;

provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (A) Contingent Obligations incurred in the ordinary course of business and (B) Obligations under, or in respect of, Receivables Facilities.

“Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this Indenture and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be part of and govern this instrument and any such supplemental indenture, respectively.

“Indentures” means the Senior Indenture and this Indenture.

“Independent Financial Advisor” means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged and that is independent of the Company and its Affiliates.

“Initial Notes” has the meaning stated in the first recital of this Indenture.

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“Initial Purchasers” means Deutsche Bank Securities Inc., Goldman, Sachs & Co., KeyBanc Capital Markets, a division of McDonald Investments, Inc., and PNC Capital Markets LLC.

“Interest Payment Date” means the Stated Maturity of an installment of interest on the Notes.

“Investment Grade Securities” means:

(1) securities issued or directly and fully guaranteed or insured by the government of the United States of America or any agency or instrumentality thereof (other than Cash Equivalents);

(2) debt securities or debt instruments with a rating of BBB- or higher by S&P or Baa3 or higher by Moody’s or the equivalent of such rating by such rating organization, or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any other nationally recognized securities rating agency, but excluding any debt securities or instruments constituting loans or advances among the Company and its Subsidiaries;

(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2), which fund may also hold immaterial amounts of cash pending investment or distribution; and

(4) corresponding instruments in countries other than the United States of America customarily utilized for high quality investments.

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (including by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others, but excluding accounts receivable, trade credit, advances to customers, commission, travel and similar advances to officers and employees, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 1010 of this Indenture:

(1) “Investments” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to:

(x) the Company’s “Investment” in such Subsidiary at the time of such redesignation; less

(y) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and

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(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Company.

“Issue Date” means December 19, 2006.

“Legal Defeasance” has the meaning specified in Section 1302 of this Indenture.

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions are not required to be open in Chicago, Illinois or the State of New York.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease be deemed to constitute a Lien.

“Management Services Agreement” means the Management Services Agreement as in effect on the Issue Date between the Company and the Sponsor.

“Maturity”, when used with respect to any Note, means the date on which the principal of such Note or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, notice of redemption or otherwise.

“Merger” means the merger of Aurora Acquisition Merger Sub, Inc., a Delaware corporation, with and into Aleris International, Inc. pursuant to the Merger Agreement.

“Merger Agreement” means the Agreement and Plan of Merger among Aurora Acquisition Holdings, Inc., Aurora Acquisition Merger Sub, Inc. and Aleris International, Inc., dated as of August 7, 2006.

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

“Net Proceeds” means the aggregate cash proceeds received by the Company or any Restricted Subsidiary in respect of any Asset Sale, including any cash received upon the sale or other disposition of any Designated Noncash Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Noncash Consideration, including legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, other fees and expenses, including title and recordation expenses, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal, premium, if any, and interest on Indebtedness required (other than by Section 1018(b)(1)) to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Company or a Restricted Subsidiary as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Company or a Restricted Subsidiary after such sale or other disposition

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thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

“New Notes” means the Senior Notes and the Notes.

“Non-U.S. Person” means a Person who is not a U.S. Person.

“Note Register” and “Note Registrar” have the respective meanings specified in Section 304.

“Notes” has the meaning stated in the first recital of this Indenture and more particularly means any Notes authenticated and delivered under this Indenture. The Initial Notes and the Additional Notes shall be treated as a single class for all purposes of this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes, any Additional Notes and the Exchange Notes issued in exchange for the Initial Notes and any Additional Notes.

“Obligations” means any principal (including reimbursement obligations with respect to letters of credit whether or not drawn), interest (including, to the extent legally permitted, all interest accrued thereon after the commencement of any insolvency or liquidation proceeding at the rate, including any applicable post-default rate, specified in the applicable agreement), premium (if any), guarantees of payment, fees, indemnifications, reimbursements, expenses, damages and other liabilities payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Notes shall not include fees or indemnification in favor of the Trustee and any other third parties other than the Holders.

“Offering Circular” means the Offering Circular dated December 13, 2006 relating to the Notes.

“Officer” means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Company.

“Officers’ Certificate” means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements set forth in this Indenture.

“Opinion of Counsel” means a written opinion from legal counsel. The counsel may be an employee of or counsel to the Company. Opinions of Counsel required to be delivered under this Indenture may have qualifications customary for opinions of the type required and counsel delivering such Opinions of Counsel may rely on certificates of the Company or government or other officials customary for opinions of the type required, including certificates certifying as to matters of fact, including that various covenants have been complied with.

“Outstanding”, when used with respect to Notes, means, as of the date of determination, all Notes theretofore authenticated and delivered under this Indenture, except:

(1) Notes theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

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(2) Notes, or portions thereof, for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Notes; provided that, if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

(3) Notes, except to the extent provided in Sections 1302 and 1303, with respect to which the Company has effected Legal Defeasance or Covenant Defeasance as provided in Article Thirteen; and

(4) Notes which have been paid pursuant to Section 305 or in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, other than any such Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Notes are held by a Protected Purchaser in whose hands the Notes are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite principal amount of Outstanding Notes have given any request, demand, authorization, direction, consent, notice or waiver hereunder, and for the purpose of making the calculations required by TIA Section 316, Notes owned by the Company or any other obligor upon the Notes or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in making such calculation or in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded.

“pay the Notes” has the meaning specified in Section 1403 of this Indenture.

“Paying Agent” means any Person (including the Company acting as Paying Agent) authorized by the Company to pay the principal of (and premium, if any) or interest on any Notes on behalf of the Company.

“Payment Blockage Period” has the meaning specified in Section 1403 of this Indenture.

“Payment Default” has the meaning specified in Section 1403 of this Indenture.

“Permitted Asset Swap” means the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between the Company or any of its Restricted Subsidiaries and another Person that is not the Company or any of its Restricted Subsidiaries; provided that any cash or Cash Equivalents received must be applied in accordance with Section 1018 of this Indenture.

“Permitted Holders” means Sponsor and members of management of the Company (or its direct parent) who are holders of Equity Interests of the Company (or any of its direct or indirect parent companies) on the Issue Date (the “Management Investors”) and any Co-Investors or Subsequent Co-Investors; provided that the Sponsor, the Management Investors and the Co-Investors, collectively, have beneficial ownership of at least 50% of the total voting power of the Voting Stock of the Company or any of its direct or indirect parent companies. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture shall thereafter, together with its Affiliates, constitute an additional Permitted Holder.

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“Permitted Investments” means:

(a) any Investment in the Company or any Restricted Subsidiary;

(b) any Investment in cash and Cash Equivalents or Investment Grade Securities;

(c) (i) any Investment by the Company or any Restricted Subsidiary of the Company in a Person that is engaged in a Similar Business if as a result of such Investment

(1) such Person becomes a Restricted Subsidiary of the Company or

(2) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company and

(ii) any Investment held by such Person;

(d) any Investment in securities or other assets not constituting cash, Cash Equivalents or Investment Grade Securities and received in connection with an Asset Sale made pursuant to the provisions of Section 1018 of this Indenture or any other disposition of assets not constituting an Asset Sale;

(e) any Investment existing on the Issue Date or made pursuant to legally binding written commitments in existence on the Issue Date;

(f) loans and advances to, and guarantees of Indebtedness of, employees of the Company (or any of its direct or indirect parent companies) or a Restricted Subsidiary not in excess of $8.0 million outstanding at any one time, in the aggregate;

(g) any Investment acquired by the Company or any Restricted Subsidiary

(1) (x) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the Person in which such other Investment is made or which is the obligor with respect to such accounts receivable or (y) in good faith settlement of delinquent obligations of, and other disputes with, customers, trade debtors, licensors, licensees and suppliers arising in the ordinary course; or

(2) as a result of a foreclosure by the Company or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(h) Hedging Obligations permitted under Section 1011(b)(12) of this Indenture;

(i) loans and advances to officers, directors and employees of the Company (or any of its direct or indirect parent companies) or a Restricted Subsidiary for business-related travel expenses, moving expenses and other similar expenses, in each case incurred in the ordinary course of business or consistent with past practice or to fund such Person’s purchase of Equity Interests of the Company or any direct or indirect parent company thereof under compensation plans approved by the Board of Directors of the Company in good faith;

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(j) Investments the payment for which consists of Equity Interests of the Company, or any of its direct or indirect parent companies (exclusive of Disqualified Stock); provided that such Equity Interests shall not increase the amount available for Restricted Payments under clause (C) of Section 1010(a) of this Indenture;

(k) guarantees of Indebtedness permitted under Section 1011 and performance guarantees in the ordinary course of business;

(l) any transaction to the extent it constitutes an Investment that is permitted and made in accordance with Section 1013(b) (except transactions described in Sections1013(b)(2), (6) and (11));

(m) Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment or the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(n) Investments in a Similar Business having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (n) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities), not to exceed the greater of (x) $100.0 million and (y) 3.0% of Total Assets at the time of each Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(o) Investments relating to a Receivables Facility; provided that in the case of Receivables Facilities established after the Issue Date, such Investments are necessary or advisable (in the good faith determination of the Company) to effect such Receivables Facility;

(p) additional Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (p) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities), not to exceed the greater of (x) $125.0 million and (y) 4.0% of Total Assets (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value); and

(q) Investments in joint ventures having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (q) that are at that time outstanding, not to exceed the greater of (x) $100.0 million and (y) 3.0% of Total Assets (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value).

“Permitted Junior Securities” means:

(1) Equity Interests in the Company or any direct or indirect parent of the Company; or

(2) unsecured debt securities that are subordinated to all Senior Indebtedness (and any debt securities issued in exchange for Senior Indebtedness) to substantially the same extent as, or to a greater extent than, the Notes and the related Subsidiary Guarantees are subordinated to Senior Indebtedness under this Indenture and which do not mature or become subject to a mandatory redemption obligation prior to the maturity of the Notes.

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“Permitted Liens” means, with respect to any Person:

(1) Liens securing Hedging Obligations;

(2) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits, prepayments or cash pledges to secure bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred in the ordinary course of business;

(3) Liens imposed by law, such as landlords’, carriers’, warehousemen’s and mechanics’ Liens and other similar Liens, in each case, for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(4) Liens for taxes, assessments or other governmental charges or claims not yet overdue for a period of more than 30 days or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(5) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(6) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties, in each case, which were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(7) Liens existing on the Issue Date;

(8) Liens on property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided that such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, that such Liens may not extend to any other property owned by the Company or any Restricted Subsidiary;

(9) Liens on property at the time the Company or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition; provided, further, that the Liens may not extend to any other property owned by the Company or any Restricted Subsidiary;

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(10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary permitted to be incurred in accordance with Section 1011 of this Indenture;

(11) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(12) leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Company or any of the Restricted Subsidiaries and do not secure any Indebtedness;

(13) Liens arising from financing statement filings under the Uniform Commercial Code or similar state laws regarding (i) operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business and (ii) goods consigned or entrusted to or bailed with a Person in connection with the processing, reprocessing, recycling or tolling of such goods;

(14) Liens in favor of the Company or any Subsidiary Guarantor;

(15) Liens on inventory or equipment of the Company or any Restricted Subsidiary granted in the ordinary course of business to the Company’s client at which such inventory or equipment is located;

(16) Liens on accounts receivable and related assets incurred in connection with a Receivables Facility;

(17) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (1), (7), (8) and (9) and the following clause (18); provided that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (1), (7), (8), (9) and the following clause (18) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(18) Liens securing Indebtedness permitted to be incurred pursuant to Sections 1011(b)(6), (19), (20), (22)(i) and (23); provided that (A) Liens securing Indebtedness permitted to be incurred pursuant to clause (19) are solely on acquired property or the assets of the acquired entity, as the case may be and (B) Liens securing Indebtedness permitted to be incurred pursuant to clause (20) extend only to the assets of Foreign Subsidiaries;

(19) deposits in the ordinary course of business to secure liability to insurance carriers;

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(20) Liens securing judgments for the payment of money not constituting an Event of Default under clause (5) under Section 501 of this Indenture so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

(21) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation or exportation of goods in the ordinary course of business;

(22) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business and (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

(23) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Company or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Company and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(24) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

(25) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 1011 of this Indenture; provided that such Liens do not extend to any assets other than those assets that are the subject of such repurchase agreement; and

(26) other Liens securing obligations incurred in the ordinary course of business which obligations do not exceed $50.0 million.

“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“Predecessor Note” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 305 in exchange for a mutilated Note or in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note.

“Preferred Stock” means any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.

“Protected Purchaser” has the meaning specified in Section 305 of this Indenture.

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“Qualified Proceeds” means assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business; provided that the fair market value of any such assets or Capital Stock shall be determined by the Company in good faith.

“Qualifying Trustee” has the meaning specified in Section 1305 of this Indenture.

“Receivables Facility” means one or more receivables financing facilities, as amended, supplemented, modified, extended, renewed, restated, refunded, replaced or refinanced from time to time, the Indebtedness of which is non-recourse (except for standard representations, warranties, covenants and indemnities made in connection with such facilities) to the Company and its Restricted Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries sells its accounts receivable to either (a) a Person that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Facility.

“Receivables Subsidiary” means any Subsidiary formed solely for the purpose of engaging, and that engages only, in one or more Receivables Facilities.

“Redemption Date”, when used with respect to any Note to be redeemed, in whole or in part, means the date fixed for such redemption by or pursuant to this Indenture.

“Redemption Price”, when used with respect to any Note to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.

“Refinancing Indebtedness” has the meaning specified in Section 1011 of this Indenture.

“Refunding Capital Stock” has the meaning specified in Section 1010 of this Indenture.

“Registration Rights Agreement” means the Registration Rights Agreement dated as of the Issue Date, among the Company, the Subsidiary Guarantors and the Initial Purchasers.

“Regular Record Date” has the meaning specified in Section 301 of this Indenture.

“Related Business Assets” means assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by the Company or a Restricted Subsidiary in exchange for assets transferred by the Company or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.

“Representative” means, with respect to a person, any trustee, agent or representative (if any) for an issue of Senior Indebtedness of such Person.

“Responsible Officer”, when used with respect to the Trustee, means any vice president, any assistant treasurer, any trust officer or assistant trust officer, or any other officer of the Trustee customarily performing functions similar to those performed by any of the above-designated officers, and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

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“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Payments” has the meaning specified in Section 1010 of this Indenture.

“Restricted Subsidiary” means, at any time, any direct or indirect Subsidiary of the Company (including any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided that upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary.”

“Retired Capital Stock” has the meaning specified in Section 1010 of this Indenture.

“S&P” means Standard and Poor’s, a division of the McGraw-Hill Companies, Inc., and any successor to its rating agency business.

“Sale and Lease-Back Transaction” means any arrangement with any Person providing for the leasing by the Company or any Restricted Subsidiary of any real or tangible personal property, which property has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person in contemplation of such leasing.

“SEC” means the Securities and Exchange Commission.

“Secured Indebtedness” means any Indebtedness secured by a Lien.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Senior Credit Facilities” means the ABL Credit Agreement and the Term Credit Agreement.

“Senior Indebtedness” means with respect to any Person:

(1) all Indebtedness of such Person, whether outstanding on the Issue Date or thereafter incurred; and

(2) all other Obligations of such Person (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to such Person whether or not post-filing interest is allowed in such proceeding) in respect of Indebtedness described in clause (1) above

unless, in the case of clauses (1) and (2), the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness or other Obligations are subordinate in right of payment to or pari passu in right of payment with the Notes or the Subsidiary Guarantee of such Person, as the case may be; provided that Senior Indebtedness shall not include:

(1) any obligation of such Person to the Company or any Subsidiary or to any joint venture in which the Company or any Restricted Subsidiary has an interest;

(2) any liability for Federal, state, local or other taxes owed or owing by such Person;

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(3) any accounts payable or other liability to trade creditors in the ordinary course of business (including guarantees thereof as instruments evidencing such liabilities);

(4) any Indebtedness or other Obligation of such Person that is subordinate or junior in right of payment with respect to any other Indebtedness or other Obligation of such Person;

(5) that portion of any Indebtedness that at the time of incurrence is incurred in violation of this Indenture, provided, however, that such Indebtedness shall be deemed not to have been incurred in violation of this Indenture for purposes of this clause (5) if such Indebtedness consists of Designated Senior Indebtedness, and the holder(s) of such Indebtedness or their Representative shall have received a certificate from an officer of the Company to the effect that the incurrence of such Indebtedness does not (or, in the case of a revolving credit facility thereunder, the incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not) violate the provisions of this Indenture; or

(6) the Notes or the guarantees of the Notes.

“Senior Indenture” means the Senior Indenture dated as of the Issue Date, among the Company, as issuer, certain of its Subsidiaries, as guarantors and LaSalle Bank National Association, as trustee, pursuant to which the Senior Notes are issued.

“Senior Notes” means the $600,000,000 aggregate principal amount of 9%/9 3/4% Senior Notes due 2014 issued by the Company under the Senior Indenture on the Issue Date and any PIK Senior Notes or any increase in the outstanding principal amount of Senior Notes, in each case issued in lieu of the payment of cash interest on outstanding Senior Notes.

“Senior Subordinated Indebtedness” means, with respect to a Person, the Notes (in the case of the Company), a Subsidiary Guarantee (in the case of a Subsidiary Guarantor) and any other Indebtedness of such Person that specifically provides that such Indebtedness is to rank pari passu with the Notes or such Subsidiary Guarantee, as the case may be, in right of payment and is not subordinated by its terms in right of payment to any Indebtedness or other obligation of such Person that is not Senior Indebtedness of such Person.

“Shelf Registration Statement” means the shelf registration statement as defined in the Registration Rights Agreement.

“Significant Subsidiary” means any Restricted Subsidiary of the Company that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the date hereof.

“Similar Business” means any business conducted by the Company and its Restricted Subsidiaries on the Issue Date or any business that is similar, reasonably related, incidental or ancillary thereto.

“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 306.

“Sponsor” means Texas Pacific Group and its Affiliates, but not including any portfolio companies thereof.

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“Stated Maturity”, when used with respect to any Note or any installment of principal thereof or interest thereon, means the date specified in such Note as the fixed date on which the principal of such Note or such installment of principal or interest is due and payable.

“Subordinated Indebtedness” means

(a) with respect to the Company, any Indebtedness of the Company that is by its terms subordinated in right of payment to the Notes, and

(b) with respect to any Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor that is by its terms subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor.

“Subsequent Co-Investors” means any Person (other than the Sponsor and the Co-Investors) and its Affiliates who, in connection with the acquisition of Equity Interests of the Company (or any of its direct or indirect parent companies) after the Issue Date, is part of a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) in which any of the Sponsor, the Co-Investors or Management Investors is a member.

“Subsidiary” means, with respect to any Person,

(1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof and

(2) any partnership, joint venture, limited liability company or similar entity of which

(x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and

(y) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

“Subsidiary Guarantee” means the guarantee by any Subsidiary Guarantor of the Company’s Obligations under this Indenture and the Notes.

“Subsidiary Guarantor” means each Restricted Subsidiary of the Company that executes this Indenture as a guarantor on the Issue Date and each other Restricted Subsidiary of the Company that thereafter guarantees the Notes pursuant to the terms of this Indenture.

“Successor Company” has the meaning specified in Section 801 of this Indenture.

“Successor Person” has the meaning specified in Section 802 of this Indenture.

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“Term Credit Agreement” means the credit agreement dated as of December 19, 2006, among the Company, Aleris Deutschland Holding GmbH, the lenders party thereto from time to time and Deutsche Bank AG New York Branch, as Administrative Agent, together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, including one or more credit facilities, credit agreements, loan agreements, indentures, commercial paper facilities or similar agreements extending the maturity of, refinancing, refunding, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder or adding Restricted Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether by the same or any other agent, lender or group of lenders, or other investors and whether involving the same or different group of the Company and Restricted Subsidiaries as principal obligors or guarantors.

“Total Assets” means the total amount of all assets of the Company and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP as shown on the most recent balance sheet of the Company.

“Transactions” means the Merger, including the payment of the merger consideration in connection therewith, the investment by the Sponsor, the Co-Investors and members of management, the issuance of the New Notes and the execution of, and borrowings on the Issue Date under, the Senior Credit Facilities as in effect on the Issue Date, the pledge and security arrangements in connection with the foregoing, the refinancing of certain Indebtedness in connection with the foregoing and the related transactions described in Offering Circular, in particular as described under the section thereof entitled “The Transactions.”

“Treasury Rate” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to December 15, 2011; provided, however that if the period from the Redemption Date to December 15, 2011, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939 as in force at the date as of which this Indenture was executed, except as provided in Section 905.

“Trustee” means LaSalle Bank National Association until a successor replaces it and, thereafter, means the successor.

“Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to time.

“Unrestricted Subsidiary” means

(1) any Subsidiary of the Company that at the time of determination is an Unrestricted Subsidiary (as designated by the Company, as provided below) and

(2) any Subsidiary of an Unrestricted Subsidiary.

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The Company may designate any Subsidiary of the Company (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, the Company or any Subsidiary of the Company (other than any Subsidiary of the Subsidiary to be so designated); provided that

(a) any Unrestricted Subsidiary must be an entity of which shares of the Capital Stock or other Equity Interests (including partnership interests) entitled to cast at least a majority of the votes that may be cast by all shares of Capital Stock or Equity Interests having ordinary voting power for the election of directors or other governing body are owned, directly or indirectly, by the Company,

(b) such designation complies with Section 1010 of this Indenture and

(c) each of

(1) the Subsidiary to be so designated and

(2) its Subsidiaries

has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Company or any Restricted Subsidiary.

The Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation no Default shall have occurred and be continuing and either

(1) the Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described in Section 1011(a) of this Indenture; or

(2) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be greater than such ratio for the Company and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation.

Any such designation by the Company shall be notified by the Company to the Trustee by promptly filing with the Trustee a copy of any applicable Board Resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.

“Vice President”, when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

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“Weighted Average Life to Maturity” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing

(1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by

(2) the sum of all such payments.

“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person, 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

SECTION 103. Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture (including any covenant compliance with which constitutes a condition precedent) relating to the proposed action have been complied with and, other than in connection with the authentication and delivery of the Initial Notes, an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than pursuant to Section 1008(a) of this Indenture or Section 314(a)(4) of the TIA) shall include:

(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3) a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

SECTION 104. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

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Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

SECTION 105. Acts of Holders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agents duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

The principal amount and serial numbers of Notes held by any Person, and the date of holding the same, shall be proved by the Note Register.

If the Company shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. Notwithstanding TIA Section 316(c), such record date shall be a date not earlier than the date 30 days prior to the first solicitation of Holders generally in connection therewith and not later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Outstanding Notes have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Notes shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant

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to the provisions of this Indenture not later than eleven months after the record date. Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, the Company or any Subsidiary Guarantor in reliance thereon, whether or not notation of such action is made upon such Note.

Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

Without limiting the generality of the foregoing, a Holder, including the Depository that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and the Depository that is the Holder of a Global Note may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such depositary’s standing instructions and customary practices.

The Company may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by the Depository entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders.

SECTION 106. Notices, Etc., to Trustee, Company, Any Subsidiary Guarantor and Agent. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

(1) the Trustee by any Holder or by the Company or any Subsidiary Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (which may be via facsimile) to or with the Trustee at LaSalle Bank National Association, 135 S. LaSalle Street, Suite 1560, Chicago, IL 60603, Attn: Corporate Trust Services Division, or

(2) the Company or any Subsidiary Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or delivered in writing and mailed, first-class postage prepaid, or delivered by recognized overnight courier, to the Company or such Subsidiary Guarantor addressed to it at Aleris International, Inc., 25825 Science Park Drive, Beachwood, OH 44122, Attention: General Counsel, or at any other address previously furnished in writing to the Trustee by the Company or such Subsidiary Guarantor.

SECTION 107. Notice to Holders; Waiver. Where this Indenture provides for notice of any event to Holders by the Company or the Trustee, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Note Register, within the time prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Notices given by publication shall be deemed given on the first

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date on which publication is made and notices given by first-class mail, postage prepaid, shall be deemed given five calendar days after mailing.

In case by reason of the suspension of or irregularities in regular mail service or by reason of any other cause, it shall be impracticable to mail notice of any event to Holders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice for every purpose hereunder.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

SECTION 108. Effect of Headings and Table of Contents. The Article and Section headings herein, the Table of Contents and the reconciliation and tie between the TIA and this Indenture are for convenience of reference only, are not intended to be considered a part hereof and shall in no way affect the construction of, or modify or restrict, any of the terms or provisions hereof.

SECTION 109. Successors and Assigns. All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Subsidiary Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 1208 hereof.

SECTION 110. Separability Clause. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 111. Benefits of Indenture. Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto, any Paying Agent, any Note Registrar and their successors hereunder and the Holders any benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 112. Governing Law. This Indenture, the Notes and any Subsidiary Guarantee shall be governed by and construed in accordance with the laws of the State of New York. This Indenture is subject to the provisions of the Trust Indenture Act that are required to be part of this Indenture and shall, to the extent applicable, be governed by such provisions.

SECTION 113. Legal Holidays. In any case where any Interest Payment Date, Redemption Date or Stated Maturity or Maturity of any Note shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Notes) payment of principal (or premium, if any) or interest need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date, Redemption Date, or at the Stated Maturity or Maturity; provided that no interest shall accrue for purposes of such payment for the period from and after such Interest Payment Date, Redemption Date, Stated Maturity or Maturity, as the case may be.

SECTION 114. No Personal Liability of Directors, Officers, Employees and Stockholders. No director, officer, employee, incorporator or stockholder of the Company or any Subsidiary Guarantor (other than in the case of stockholders of any Subsidiary Guarantor, the Company or another Subsidiary Guarantor) or any of their parent companies shall have any liability for any obligations of the Company or the Subsidiary Guarantors under the Notes, the Subsidiary Guarantees and this Indenture or

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for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Subsidiary Guarantees.

SECTION 115. Trust Indenture Act Controls. Upon qualification of this Indenture under the TIA, if any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the provision required by the TIA shall control. If any provision of this Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or excluded, as the case may be.

SECTION 116. Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be original; but such counterparts shall together constitute but one and the same instrument. One signed copy is enough to prove this Indenture.

ARTICLE TWO

NOTE FORMS

SECTION 201. Form and Dating. Provisions relating to the Initial Notes, the Private Exchange Notes and the Exchange Notes are set forth in the Rule 144A/Regulation S Appendix attached hereto (the “Appendix”) which is hereby incorporated in, and expressly made part of, this Indenture. The Initial Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit 1 to the Appendix which is hereby incorporated in, and expressly made a part of, this Indenture. The Exchange Notes, the Private Exchange Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form reasonably acceptable to the Company). Each Note shall be dated the date of its authentication. The terms of the Note set forth in the Appendix and Exhibit A are part of the terms of this Indenture.

SECTION 202. Execution, Authentication, Delivery and Dating. The Notes shall be executed on behalf of the Company by any Officer. The signature of an Officer on the Notes may be manual or facsimile signature of the present or any future such authorized officer and may be imprinted or otherwise reproduced on the Notes.

Notes bearing the manual or facsimile signature of an individual who was at any time a proper officer of the Company shall bind the Company, notwithstanding that such individual ceased to hold such office prior to the authentication and delivery of such Notes or did not hold such office at the date of such Notes.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance with such Company Order shall authenticate and deliver such Notes.

On the Issue Date, the Company shall deliver the Initial Notes in the aggregate principal amount of $400,000,000 executed by the Company to the Trustee for authentication, together with a Company Order directing the Trustee to authenticate the Notes and certifying that all conditions precedent to the issuance of Notes contained herein have been fully complied with, and the Trustee in accordance

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with such Company Order shall authenticate and deliver such Initial Notes. At any time and from time to time after the Issue Date, the Company may deliver Additional Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Additional Notes, directing the Trustee to authenticate the Additional Notes and certifying that the issuance of such Additional Notes is in compliance with Article Ten hereof and that all other conditions precedent to the issuance of Notes contained herein have been fully complied with, and the Trustee in accordance with such Company Order shall authenticate and deliver such Additional Notes.

Upon receipt of a Company Order, the Trustee shall authenticate for original issue Exchange Notes in an aggregate principal amount not to exceed $400,000,000 plus the aggregate principal amount of any Additional Notes issued; provided that such Exchange Notes shall be issuable only upon the valid surrender for cancellation of Initial Notes and any Additional Notes of a like aggregate principal amount in accordance with an Exchange Offer pursuant to the Registration Rights Agreement and a Company Order for the authentication and delivery of such Exchange Notes and certifying that all conditions precedent to the issuance of such Exchange Notes are complied with.

In each case, the Trustee shall receive a Company Order and an Opinion of Counsel of the Company that it may reasonably require in connection with such authentication of Notes. Such Company Order shall specify the amount of Notes to be authenticated and the date on which the original issue of Notes is to be authenticated.

Each Note shall be dated the date of its authentication.

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for in Exhibit 1 to the Appendix, duly executed by the Trustee by manual signature of an authorized officer, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture.

In case the Company or any Subsidiary Guarantor, pursuant to Article Eight of this Indenture, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Company or such Subsidiary Guarantor shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed a supplemental indenture hereto with the Trustee pursuant to Article Eight of this Indenture, any of the Notes authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other Notes executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Notes surrendered for such exchange and of like principal amount; and the Trustee, upon Company Request of the successor Person, shall authenticate and deliver Notes as specified in such request for the purpose of such exchange. If Notes shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section in exchange or substitution for or upon registration of transfer of any Notes, such successor Person, at the option of the Holders but without expense to them, shall provide for the exchange of all Notes at the time outstanding for Notes authenticated and delivered in such new name.

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ARTICLE THREE

THE NOTES

SECTION 301. Title and Terms. The aggregate principal amount of Notes which may be authenticated and issued under this Indenture is not limited; provided, however, that any Additional Notes issued under this Indenture rank pari passu with the Initial Notes, are issued in accordance with Sections 202, 312 and 1011 hereof, form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes. Any Additional Notes shall be issued pursuant to a supplemental indenture to this Indenture.

The Notes shall be known and designated as the “10% Senior Subordinated Notes Due 2016” of the Company. The Stated Maturity of the Notes shall be December 15, 2016, and the Notes shall bear interest at the rate of 10% per annum from December 19, 2006, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable on June 15, 2007 and semi-annually thereafter on December 15 and June 15 in each year and at said Stated Maturity, until the principal thereof is paid or duly provided for and to the Person in whose name the Note (or any predecessor Note) is registered at the close of business on the December 1 and June 1 immediately preceding such Interest Payment Date (each, a “Regular Record Date”).

The principal of (and premium, if any), interest and Additional Interest, if any, on the Notes shall be payable at the office or agency of the Company maintained for such purpose in the City of Chicago or, at the option of the Company, payment of interest may be made by check mailed to the Holders of the Notes at their respective addresses set forth in the Note Register; provided that all payments of principal, premium, if any, and interest and Additional Interest, if any, with respect to Notes represented by one or more permanent global Notes registered in the name of or held by the Depository or its nominee shall be made by wire transfer of immediately available funds to the accounts specified by the Holder or Holders thereof.

Holders shall have the right to require the Company to purchase their Notes, in whole or in part, in the event of a Change of Control pursuant to Section 1017. The Notes shall be subject to repurchase pursuant to an Asset Sale Offer as provided in Section 1018.

The Notes shall be redeemable as provided in Article Eleven of this Indenture and Paragraph 5 of the Notes.

The due and punctual payment of principal of, premium, if any, and interest on the Notes payable by the Company is irrevocably unconditionally guaranteed, to the extent set forth herein, by each of the Subsidiary Guarantors.

SECTION 302. Denominations. The Notes shall be issuable only in registered form without coupons and only in denominations of $1,000 and any integral multiple of $1,000 in excess thereof.

SECTION 303. Temporary Notes. Pending the preparation of definitive Notes, the Company may execute, and upon receipt of a Company Order the Trustee shall authenticate and deliver, temporary Notes which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Notes in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Notes may determine, as conclusively evidenced by their execution of such Notes.

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If temporary Notes are issued, the Company shall cause definitive Notes to be prepared without unreasonable delay. After the preparation of definitive Notes, the temporary Notes shall be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the Company designated for such purpose pursuant to Section 1002, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Notes of authorized denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as definitive Notes.

SECTION 304. Note Registrar; Paying Agent; Registration of Transfer and Exchange. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 1002 being herein sometimes referred to as the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes. The Note Register shall be in written form or any other form capable of being converted into written form within a reasonable time. At all reasonable times, the Note Register shall be open to inspection by the Trustee. The Trustee is hereby initially appointed as note registrar (the “Note Registrar”) for the purpose of registering Notes and transfers of Notes as herein provided. The Trustee is hereby initially appointed to act as the Paying Agent and to act as Custodian with respect to the Global Notes.

Upon surrender for registration of transfer of any Note at the office or agency of the Company designated pursuant to Section 1002, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination or denominations of a like aggregate principal amount.

At the option of the Holder, Notes may be exchanged for other Notes of any authorized denomination and of a like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes which the Holder making the exchange is entitled to receive; provided that no exchange of Notes for Exchange Notes shall occur until an Exchange Offer Registration Statement shall have been declared effective by the SEC, the Trustee shall have received an Officers’ Certificate confirming that the Exchange Offer Registration Statement has been declared effective by the SEC and the Initial Notes to be exchanged for the Exchange Notes shall be cancelled by the Trustee.

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

Every Note presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Note Registrar) be duly endorsed, or be accompanied by written instruments of transfer, in form satisfactory to the Company and the Note Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange or redemption of Notes, but the Company may require payment of a sum sufficient to cover any taxes, fees or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Sections 202, 303, 906, 1017, 1018, or 1108 not involving any transfer.

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In case the Company, pursuant to Article Eight, shall, in one or more related transactions, be consolidated or merged with or into any other Person or shall sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all the assets of the Company and its Restricted Subsidiaries taken as a whole to any Person, and the surviving Person resulting from such consolidation or surviving such merger, or into which the Company shall have been merged, or the surviving Person which shall have participated in the sale, assignment, transfer, conveyance or other disposition as aforesaid, shall have assumed all of the obligations of the Company under the Notes and this Indenture pursuant to agreements reasonably satisfactory to the Trustee pursuant to Article Eight, any of the Notes authenticated or delivered prior to such consolidation, merger, sale, assignment, transfer, conveyance or other disposition may, from time to time, at the request of the surviving Person, be exchanged for other Notes executed in the name of the surviving Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Notes surrendered for such exchange and of like principal amount; and the Trustee, upon the request of the surviving Person, shall authenticate and deliver Notes as specified in such request for the purpose of such exchange. If Notes shall at any time be authenticated and delivered in any new name of a surviving Person pursuant to this Section 304 in exchange or substitution for or upon registration of transfer of any Notes, such Successor Company, at the option of the Holders but without expense to them, shall provide for the exchange of all Notes at the time outstanding for Notes authenticated and delivered in such new name.

SECTION 305. Mutilated, Destroyed, Lost and Stolen Notes. If (1) any mutilated Note is surrendered to the Trustee, or (2) the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Note, and there is delivered to the Company and the Trustee such security or indemnity as may be required to protect the Company, the Trustee, any agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced, then, in the absence of notice to the Company or the Trustee that such Note has been acquired by a Protected Purchaser (as defined in Section 8-303 of the Uniform Commercial Code) (a “Protected Purchaser”), the Company shall execute and upon Company Order the Trustee shall authenticate and deliver, in exchange for any such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a new Note of like tenor and principal amount, bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Note, pay such Note.

Upon the issuance of any new Note under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) in replacing a Note.

Every new Note issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Company and each Subsidiary Guarantor, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

SECTION 306. Payment of Interest; Interest Rights Preserved.

(a) Interest on any Note which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name such Note (or one or more

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Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest at the office or agency of the Company maintained for such purpose pursuant to Section 1002; provided that, subject to Section 301 hereof, each installment of interest may at the Company’s option be paid by (1) mailing a check for such interest, payable to or upon the written order of the Person entitled thereto pursuant to Section 307, to the address of such Person as it appears in the Note Register or (2) transfer to an account located in the United States maintained by the payee.

(b) Any interest on any Note which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease to be payable to the Holder on the Regular Record Date by virtue of having been such Holder, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate borne by the Notes (such defaulted interest and interest thereon herein collectively called “Defaulted Interest”) may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date, and in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given in the manner provided for in Section 107, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so given, such Defaulted Interest shall be paid to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2).

(2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

(c) Subject to the foregoing provisions of this Section, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

SECTION 307. Persons Deemed Owners. Prior to the due presentment of a Note for registration of transfer, the Company, any Subsidiary Guarantor, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Note is registered as the owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and (subject to Sections 304 and 306) interest on such Note and for all other purposes whatsoever, whether or not such Note be over-

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due, and none of the Company, the Trustee or any agent of the Company or the Trustee shall be affected by notice to the contrary.

SECTION 308. Cancellation. All Notes surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold, and all Notes so delivered shall be promptly cancelled by the Trustee. If the Company shall so acquire any of the Notes, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Notes unless and until the same are surrendered to the Trustee for cancellation. No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Notes held by the Trustee shall be disposed of by the Trustee in accordance with its customary procedures (subject to the record retention requirements of the Exchange Act). Certification of the destruction of all cancelled Notes shall be delivered to the Company by the Trustee. The Trustee shall maintain a record of all cancelled Notes. The Trustee shall provide the Company a list of all Notes that have been cancelled from time to time as requested by the Company.

SECTION 309. Computation of Interest. Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.

SECTION 310. Transfer and Exchange. The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer. When a Note is presented to the Note Registrar or a co-registrar with a request to register a transfer, the Note Registrar shall register the transfer as requested if the requirements of this Indenture and Section 8-401(a) of the Uniform Commercial Code are met. When Notes are presented to the Note Registrar or a co-registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Note Registrar shall make the exchange as requested if the same requirements are met.

The Company shall not be required and without the prior written consent of the Company, the Note Registrar shall not be required to register the transfer of or exchange of any Note (i) during a period beginning at the opening of business 15 days before mailing of a notice of redemption of Notes and ending at the close of business on the day of such mailing, (ii) selected for redemption in whole or in part, (iii) that has been tendered in a Change of Control Offer and (iv) beginning at the opening of business on any record date and ending on the close of business on the related Interest Payment Date.

SECTION 311. CUSIP Numbers. The Company in issuing the Notes may use “CUSIP” numbers, ISINs and “Common Code” numbers (in each case, if then generally in use) in addition to serial numbers, and, if so, the Trustee shall use such “CUSIP” numbers, ISINs and “Common Code” numbers in addition to serial numbers in notices of redemption, repurchase or other notices to Holders as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such “CUSIP” numbers, ISINs and “Common Code” numbers either as printed on the Notes or as contained in any notice of a redemption or repurchase and that reliance may be placed only on the serial or other identification numbers printed on the Notes, and any such redemption or repurchase shall not be affected by any defect in or omission of such numbers. The Company shall promptly notify the Trustee in writing of any change in the “CUSIP” numbers, ISINs and “Common Code” numbers applicable to the Notes.

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SECTION 312. Issuance of Additional Notes. The Company may, subject to Section 1011 of this Indenture, issue additional Notes having identical terms and conditions to the Initial Notes issued on the Issue Date, other than with respect to the date of issuance and issue price (the “Additional Notes”); provided, however, that no Additional Notes may be issued at a price that would cause such Additional Notes to have “original issue discount” within the meaning of Section 1273 of the Code. The Initial Notes issued on the Issue Date and any Additional Notes subsequently issued shall be treated as a single class for all purposes under this Indenture. Exchange Notes issued in exchange for Initial Notes issued on the Issue Date and Exchange Notes issued for any Additional Notes subsequently issued shall be treated as a single class for all purposes under this Indenture.

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture. This Indenture shall upon Company Request and at the Company’s expense cease to be of further effect as to all Notes issued hereunder and then outstanding (except as set forth in the last paragraph of this Section and as to surviving rights of registration of transfer or exchange of Notes expressly provided for herein or pursuant hereto) and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture when:

(1) either

(A) all Notes theretofore authenticated and delivered (other than (i) Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 305 and (ii) Notes for whose payment money has theretofore been deposited in trust with the Trustee or any Paying Agent or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or

(B) all such Notes not theretofore delivered to the Trustee for cancellation,

(i) have become due and payable by reason of the making of a notice of redemption pursuant to Section 1105 or otherwise, or

(ii) shall become due and payable at their Stated Maturity within one year, or

(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,

and the Company or any Subsidiary Guarantor, in the case of (i), (ii) or (iii) of this clause (B), has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as shall be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption, as the case may be;

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(2) no Default (other than that resulting from borrowing funds to be applied to make such deposit and the granting of Liens in connection therewith) with respect to this Indenture or the Notes issued hereunder shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit shall not result in a breach or violation of, or constitute a default under, the Senior Credit Facilities, the Senior Indenture, the Senior Notes or any other material agreement or instrument (other than this Indenture) to which the Company or any Subsidiary Guarantor is a party or by which the Company or any Subsidiary Guarantor is bound;

(3) the Company has paid or caused to be paid all sums payable by it under this Indenture;

(4) the Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of such Notes at Maturity or the Redemption Date, as the case may be; and

(5) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, if money or Government Securities shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive such satisfaction and discharge. In addition, nothing in this Section 401 shall be deemed to discharge the obligations of the Company to the Trustee under Section 607 and the obligations of the Company to any Authenticating Agent under Section 612 that, by their terms, survive the satisfaction and discharge of this Indenture.

SECTION 402. Application of Trust Money. Subject to the provisions of the last paragraph of Section 1003, all money or Government Securities deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium and Additional Interest, if any) and interest for whose payment such money or Government Securities has been deposited with the Trustee, but such money or Government Securities need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 401 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s and any Subsidiary Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 401 until such time as the Trustee or Paying Agent is permitted to apply all such money or Government Securities in accordance with Section 401; provided that if the Company has made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

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ARTICLE FIVE

REMEDIES

SECTION 501. Events of Default. “Event of Default”, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be occasioned by the provisions of Article Fourteen or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on the Notes issued under this Indenture, whether or not such payment shall be prohibited by Article Fourteen hereof or Section 1203;

(2) default for 30 days or more in the payment when due of interest on or with respect to the Notes issued under this Indenture, whether or not such payment shall be prohibited by Article Fourteen hereof or Section 1203;

(3) failure by the Company or any Subsidiary Guarantor for 60 days after receipt of written notice given by the Trustee or the Holders of at least 30% in principal amount of the then Outstanding Notes issued under this Indenture to comply with any of its other agreements contained in this Indenture or the Notes;

(4) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Company or any Restricted Subsidiary or the payment of which is guaranteed by the Company or any Restricted Subsidiary, other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is created after the issuance of the Notes, if both

(A) such default either

(i) results from the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods) or

(ii) relates to an obligation other than the obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated maturity and

(B) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at stated final maturity (after giving effect to any applicable grace periods), or the maturity of which has been so accelerated, aggregate $40.0 million or more at any one time outstanding;

(5) failure by the Company or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $40.0 million, which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, and in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed;

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(6) any of the following events with respect to the Company or any Significant Subsidiary:

(A) the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law

(i) commences a voluntary case;

(ii) consents to the entry of an order for relief against it in an involuntary case;

(iii) consents to the appointment of a custodian of it or for any substantial part of its property;

(iv) takes any comparable action under any foreign laws relating to insolvency; or

(B) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against the Company or any Significant Subsidiary in an involuntary case;

(ii) appoints a custodian of the Company or any Significant Subsidiary or for any substantial part of its property; or

(iii) orders the liquidation of the Company or any Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 days;

provided, that for the purposes of this clause (6), a Significant Subsidiary shall include any group of Subsidiaries that together would constitute a Significant Subsidiary; or

(7) the Subsidiary Guarantee of any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) shall for any reason cease to be in full force and effect or be declared null and void or any responsible officer of any Subsidiary Guarantor that is a Significant Subsidiary (or the responsible officers of any group of Subsidiaries that together would constitute a Significant Subsidiary), as the case may be, denies that it has any further liability under its Subsidiary Guarantee or gives notice to such effect, other than by reason of the termination of this Indenture or the release of any such Subsidiary Guarantee in accordance with this Indenture.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

(a) If any Event of Default (other than an Event of Default specified in Section 501(6) with respect to the Company) occurs and is continuing under this Indenture, the Trustee or the Holders of at least 30% in principal amount of the Outstanding Notes issued under this Indenture may declare the principal, premium, if any, interest and any other monetary Obligations on all the Outstanding Notes issued under this Indenture to be due and payable immediately by a notice in writing to the Company (and to the Trustee if given by the Holders); provided that, so long as any Indebtedness permitted to

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be incurred under this Indenture as part of the Senior Credit Facilities or the Senior Notes shall be outstanding, no such acceleration shall be effective until the earlier of

(1) acceleration of any such Indebtedness under the Senior Credit Facilities and the Senior Notes, and

(2) five Business Days after the giving of written notice of such acceleration to the Company, the administrative agent under each of the Senior Credit Facilities and the trustee under the Senior Indenture.

(b) Upon the effectiveness of such declaration, such principal of and premium, if any, and interest on the Notes shall be due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in Section 501(6) with respect to the Company occurs and is continuing, then the principal amount of all Outstanding Notes shall ipso facto become and be immediately due and payable without any notice, declaration or other act on the part of the Trustee or any Holder.

(c) At any time after a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided in this Article Five, the Holders of a majority in aggregate principal amount of the Outstanding Notes, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if:

(1) the Company has paid or deposited with the Trustee a sum sufficient to pay:

(A) all overdue interest on all Outstanding Notes,

(B) all unpaid principal of (and premium, if any, on) any Outstanding Notes which has become due otherwise than by such declaration of acceleration, and interest on such unpaid principal at the rate borne by the Notes,

(C) to the extent that payment of such interest is lawful, interest on overdue interest at the rate borne by the Notes, and

(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(2) Events of Default, other than the non-payment of amounts of principal of (or premium, if any, on) or interest on Notes which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

(d) Notwithstanding the preceding paragraph, in the event of any Event of Default specified in Section 501(4) above, such Event of Default and all consequences thereof (excluding any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose,

(1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged, or

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(2) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default, or

(3) the default that is the basis for such Event of Default has been cured.

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee. If an Event of Default specified in Section 501(1) or (2) occurs and is continuing, the Trustee, in its own name as trustee of an express trust, may institute a judicial proceeding for the collection of the sums due hereunder pursuant to this Article Five and unpaid, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. The Trustee may prosecute such proceeding to judgment or final decree and may enforce the same against the Company, any Subsidiary Guarantor or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company, any Subsidiary Guarantor or any other obligor upon the Notes, wherever situated.

If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders under this Indenture and the Subsidiary Guarantees by the judicial proceedings discussed above as the Trustee shall deem necessary to protect and enforce any such rights, including seeking recourse against any Subsidiary Guarantor.

SECTION 504. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor including any Subsidiary Guarantor, upon the Notes or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal, premium, if any, or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,

(1) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and

(2) to collect, receive and distribute any moneys or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

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SECTION 505. Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered.

SECTION 506. Application of Money Collected. Subject to Article Fourteen hereof and Section 1203, any money or property collected by the Trustee pursuant to this Article Five shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Notes and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under Section 607;

SECOND: To holders of Senior Indebtedness of the Company and, if such money or property has been collected from a Subsidiary Guarantor, to holders of Senior Indebtedness of such Subsidiary Guarantor, in each case to the extent required by Article Fourteen hereof and Section 1203 hereof, as applicable;

THIRD: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest on the Notes in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Notes for principal (and premium, if any) and interest, respectively; and

FOURTH: The balance, if any, to the Company or the applicable Subsidiary Guarantor or as a court of competent jurisdiction may direct in writing; provided that all sums due and owing to the Holders and the Trustee have been paid in full as required by this Indenture.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 506.

SECTION 507. Limitation on Suits. Subject to Section 508, no Holder of any Notes shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2) Holders of at least 30% in principal amount of the Outstanding Notes have requested the Trustee to pursue the remedy;

(3) such Holders have offered the Trustee reasonable security or indemnity reasonably satisfactory to it against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

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(5) Holders of a majority in principal amount of the Outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period,

it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture or the Subsidiary Guarantees to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture or the Subsidiary Guarantees, except in the manner herein provided and for the equal and ratable benefit of all the Holders (it being further understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders).

SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest. Notwithstanding any other provision in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment, as provided herein (including, if applicable, Article Eleven) and in such Note of the principal of (and premium, if any) and (subject to Section 306) interest on such Note on the respective Stated Maturities expressed in such Note (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment on or after such respective dates, and such rights shall not be impaired without the consent of such Holder.

SECTION 509. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture or the Subsidiary Guarantees and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, any Subsidiary Guarantor, any other obligor of the Notes, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

SECTION 510. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of Section 305, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

SECTION 511. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article Five or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

SECTION 512. Control by Holders. The Holders of not less than a majority in principal amount of the Outstanding Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, provided that:

(1) such direction shall not be in conflict with any rule of law or with this Indenture,

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(2) subject to Section 315 of the Trust Indenture Act, the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and

(3) the Trustee need not take any action which might involve it in personal liability or be unduly prejudicial to the Holders not consenting.

SECTION 513. Waiver of Default. Subject to Sections 508 and 902, the Holders of not less than a majority in principal amount of the Outstanding Notes may on behalf of the Holders of all such Notes waive any Default hereunder and its consequences, except a continuing Default or Event of Default (1) in respect of the payment of interest on, premium, if any, or the principal of any such Note held by a non-consenting Holder or (2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Note affected.

Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

SECTION 514. Waiver of Stay or Extension Laws. Each of the Company, the Subsidiary Guarantors and any other obligor on the Notes covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force that would prohibit or forgive the Company or a Subsidiary Guarantor from paying any portion of the principal of, and premium, if any, and interest on the Notes.

SECTION 515. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 515 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 508 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

ARTICLE SIX

THE TRUSTEE

SECTION 601. Duties of the Trustee.

(a) Except during the continuance of an Event of Default,

(1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith or willful misconduct on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions specifically required by any provision hereof to be provided to it, the Trustee shall be under a duty to examine the same to determine

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whether or not they conform to the requirements of this Indenture, but not to verify the contents thereof.

(b) If an Event of Default has occurred and is continuing of which a Responsible Officer of the Trustee has actual knowledge or of which written notice of such Event of Default shall have been given to the Trustee by the Company, any other obligor of the Notes or by any Holder, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

(c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that

(1) this paragraph (c) shall not be construed to limit the effect of paragraph (a) of this Section;

(2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in aggregate principal amount of the Outstanding Notes relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; and

(4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

SECTION 602. Notice of Defaults. If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall transmit, in the manner and to the extent provided in TIA Section 313(c), notice of such Default or Event of Default within 90 days after it occurs unless such Default or Event of Default shall have been cured or waived. Except in the case of a Default or Event of Default in the payment of the principal of (or premium, if any, on) or interest on any Note, the Trustee shall be protected in withholding such notice if it determines that the withholding of such notice is in the interest of the Holders. In addition, the Trustee shall have no obligation to accelerate the Notes if in the best judgment of the Trustee acceleration is not in the best interest of the Holders of such Notes.

SECTION 603. Certain Rights of Trustee. Subject to the provisions of TIA Sections 315(a) through 315(d):

(1) the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice,

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request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document (whether in original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;

(2) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;

(3) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’ Certificate and an Opinion of Counsel;

(4) the Trustee may consult with counsel of its own selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice or opinion of such counsel;

(5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses, losses and liabilities which might be incurred by it in compliance with such request or direction;

(6) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation;

(7) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

(8) the Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; provided, however, that the Trustee’s conduct does not constitute willful misconduct, bad faith or negligence;

(9) the rights, privileges, protections, immunities and benefits given to the Trustee pursuant to this Indenture including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder; and

(10) in no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective

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of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

SECTION 604. Trustee Not Responsible for Recitals or Issuance of Notes. The recitals contained herein and in the Notes, except for the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Notes and perform its obligations hereunder and that the statements made by it in a Statement of Eligibility on Form T-1 supplied to the Company are true and accurate, subject to the qualifications set forth therein. The Trustee shall not be accountable for the use or application by the Company of Notes or the proceeds thereof.

SECTION 605. May Hold Notes. The Trustee, any Paying Agent, any Note Registrar or any other agent of the Company or of the Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and 311, may otherwise deal with the Company with the same rights it would have if it were not the Trustee, Paying Agent, Note Registrar or such other agent; provided, however, that, if it acquires any conflicting interest, it must eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign.

SECTION 606. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company.

SECTION 607. Compensation and Reimbursement. The Company and the Subsidiary Guarantors, jointly and severally, agree:

(1) to pay to the Trustee from time to time such compensation as shall be agreed in writing between the Company and the Trustee for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined to have been caused by its own negligence or willful misconduct; and

(3) to indemnify the Trustee and any predecessor Trustee for, and to hold it harmless against, any and all loss, liability, claim, damage or reasonable out-of-pocket expenses, including taxes (other than the taxes based on the income of the Trustee) incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim regardless of whether the claim is asserted by the Company, a Subsidiary Guarantor, a Holder or any other Person or liability in connection with the exercise or performance of any of its powers or duties hereunder.

The obligations of the Company under this Section to compensate the Trustee, to pay or reimburse the Trustee for reasonable out-of-pocket expenses, disbursements and advances and to indemnify

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and hold harmless the Trustee shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture and resignation or removal of the Trustee. As security for the performance of such obligations of the Company, the Trustee shall have a claim prior to the Notes upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (and premium, if any) or interest on particular Notes.

When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 501(6), the expenses (including the reasonable charges and expenses of its counsel) of and the compensation for such services are intended to constitute expenses of administration under any applicable Bankruptcy Law.

The provisions of this Section shall survive the termination of this Indenture and resignation or removal of the Trustee.

SECTION 608. Corporate Trustee Required; Eligibility. There shall be at all times a Trustee hereunder which shall be eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined capital and surplus of at least $50,000,000. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of Federal, State, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article Six.

SECTION 609. Resignation and Removal; Appointment of Successor.

(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article Six shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 610.

(b) The Trustee may resign at any time by giving written notice thereof within 30 days of such resignation to the Company. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument executed by authority of the Board of Directors, a copy of which shall be delivered to the resigning Trustee and a copy to the successor Trustee. If the instrument of acceptance by a successor Trustee required by Section 610 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee.

(c) The Trustee may be removed at any time by Act of the Holders of not less than a majority in principal amount of the Outstanding Notes, delivered to the Trustee and to the Company. If the instrument of acceptance by a successor Trustee required by Section 610 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee.

(d) The Trustee shall comply with TIA Section 310(b); provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

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(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Notes delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Note for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

(f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to the Holders in the manner provided for in Section 107. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

SECTION 610. Acceptance of Appointment by Successor.

(a) Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

(b) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article Six.

SECTION 611. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder; provided that such corporation shall be otherwise qualified and eligible under this Article Six, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Notes shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Notes. In case at that time any of the Notes shall not have been authenticated, any successor Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor Trustee. In all such cases such certificates shall have the full force and effect which this Indenture provides for the certificate of authentication of the Trustee; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Notes in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.

SECTION 612. Appointment of Authenticating Agent. At any time when any of the Notes remain Outstanding, the Trustee may appoint an authenticating agent or agents with respect to the

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Notes which shall be authorized to act on behalf of the Trustee to authenticate Notes (an “Authenticating Agent”) and the Trustee shall give written notice of such appointment to all Holders of Notes with respect to which such Authenticating Agent shall serve, in the manner provided for in Section 107. Notes so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Any such appointment shall be evidenced by an instrument in writing signed by a Responsible Officer of the Trustee, and a copy of such instrument shall be promptly furnished to the Company. Wherever reference is made in this Indenture to the authentication and delivery of Notes by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any state thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or state authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent; provided that such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give written notice of such appointment to all Holders of Notes, in the manner provided for in Section 107. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

The Company agrees to pay to each Authenticating Agent from time to time such compensation for its services under this Section as shall be agreed in writing between the Company and such Authenticating Agent.

If an appointment is made pursuant to this Section, the Notes may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:

This is one of the Notes designated therein referred to in the within-mentioned Indenture.

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LASALLE BANK NATIONAL ASSOCIATION
	as Trustee
By:
	as Authenticating Agent
By:
	as Authorized Officer

ARTICLE SEVEN

HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with Trust Indenture Act Section 312(a). If the Trustee is not the Note Registrar, the Company shall furnish to the Trustee at least two Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise comply with Trust Indenture Act Section 312(a).

SECTION 702. Disclosure of Names and Addresses of Holders. Every Holder, by receiving and holding Notes, agrees with the Company and the Trustee that none of the Company or the Trustee or any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with TIA Section 312, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under TIA Section 312(b).

SECTION 703. Reports by Trustee. Within 60 days after May 15 of each year commencing with the first May 15 after the Issue Date, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders (with a copy to the Company at the address specified in Section 106), in the manner and to the extent provided in TIA Section 313(c), a brief report dated as of such May 15 that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b). The Trustee shall also transmit by mail all reports as required by the TIA Section 313(c).

ARTICLE EIGHT

MERGER, CONSOLIDATION OR SALE

OF ALL OR SUBSTANTIALLY ALL ASSETS

SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.

(a) The Company may not consolidate or merge with or into or wind up into (whether or not the Company is the surviving entity), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

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(1) the Company is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States of America, any state thereof, the District of Columbia, or any territory thereof (the Company or such Person, as the case may be, being herein called the “Successor Company”);

(2) the Successor Company, if other than the Company, expressly assumes all the obligations of the Company under this Indenture and the Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(3) immediately after such transaction, no Default exists;

(4) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period,

(A) the Successor Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 1011(a) of this Indenture or

(B) the Fixed Charge Coverage Ratio for the Successor Company and the Restricted Subsidiaries on a consolidated basis would be greater than such ratio for the Company and the Restricted Subsidiaries immediately prior to such transaction;

(5) each Subsidiary Guarantor, unless it is the other party to the transactions described above, in which case Section 802(A)(2) shall apply, shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

(6) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with this Indenture.

(b) Notwithstanding clauses (a)(3) and (a)(4) above,

(1) any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to the Company and

(2) the Company may merge with an Affiliate of the Company incorporated solely for the purpose of reincorporating the Company in another State of the United States so long as the amount of Indebtedness of the Company and the Restricted Subsidiaries is not increased thereby.

SECTION 802. Subsidiary Guarantors May Consolidate, Etc., Only on Certain Terms. Subject to Section 1208, each Subsidiary Guarantor shall not, and the Company shall not permit any Subsidiary Guarantor to, consolidate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

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(A)(1) such Subsidiary Guarantor is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States of America, any state thereof, the District of Columbia, or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the “Successor Person”);

(2) the Successor Person, if other than such Subsidiary Guarantor, expressly assumes all the obligations of such Subsidiary Guarantor under this Indenture and such Subsidiary Guarantor’s Subsidiary Guarantee, pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(3) immediately after such transaction, no Default exists; and

(4) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with this Indenture; or

(B) the transaction is made in compliance with Section 1018 of this Indenture.

Notwithstanding the foregoing, any Subsidiary Guarantor may merge into or transfer all or part of its properties and assets to another Subsidiary Guarantor or the Company.

SECTION 803. Reserved.

SECTION 804. Successor Substituted. Subject to Section 1208 hereof (with respect to any Subsidiary Guarantor only), upon any consolidation or merger, or any sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the assets of the Company or any Subsidiary Guarantor in accordance with Sections 801 and 802 hereof, the successor Person formed by such consolidation or into which the Company or such Subsidiary Guarantor, as the case may be, is merged or the successor Person to which such sale, assignment, conveyance, transfer, lease or disposition is made, shall succeed to, and be substituted for, and may exercise every right and power of, the Company or such Subsidiary Guarantor, as the case may be, under this Indenture or the Subsidiary Guarantees, as the case may be, with the same effect as if such successor Person had been named as the Company or such Subsidiary Guarantor, as the case may be, under this Indenture or the Subsidiary Guarantees, as the case may be; provided that the predecessor Company or any Subsidiary Guarantor shall not be relieved from the obligation to pay the principal of and interest and Additional Interest, if any, on the Notes except in the case of a sale, assignment, transfer, conveyance or other disposition of all of the assets of the Company or such Subsidiary Guarantor, as the case may be, that meets the requirements of Sections 801 and 802 hereof, as applicable.

SECTION 805. The Merger Permitted. Notwithstanding the foregoing, the Merger shall be permitted without compliance with this Article Eight.

SECTION 806. Assets of Subsidiary Apply to Company. For purposes of this Article Eight, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Company, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company and its Subsidiaries on a consolidated basis shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

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ARTICLE NINE

AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 901. Amendments or Supplements Without Consent of Holders. Notwithstanding Section 902 hereof, without the consent of any Holder, the Company, any Subsidiary Guarantor (with respect to a Subsidiary Guarantee or this Indenture to which it is a party), and the Trustee, at any time and from time to time, may amend or supplement this Indenture, any Subsidiary Guarantee or the Notes, in form satisfactory to the Trustee, for any of the following purposes:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

(3) to comply with Article Eight hereof and to provide for the assumption of the Company’s or such Subsidiary Guarantor’s obligations to Holders in connection therewith;

(4) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights of any such Holder under this Indenture;

(5) to add covenants for the benefit of the Holders or to surrender any right or power conferred in this Indenture upon the Company or a Subsidiary Guarantor;

(6) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act;

(7) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee pursuant to the requirements of Sections 609 and 610 hereof;

(8) to provide for the issuance of Exchange Notes or private exchange notes, which are identical to Exchange Notes except that they are not freely transferable;

(9) to add a Subsidiary Guarantor or any other guarantor under this Indenture;

(10) to conform the text of this Indenture, Subsidiary Guarantees or the Notes to any provision of the “Description of Senior Subordinated Notes” section of the Offering Circular to the extent that such provision in the “Description of Senior Subordinated Notes” was intended to be a verbatim recitation of a provision of this Indenture, the Subsidiary Guarantees or the Notes; or

(11) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes; provided, however, that (A) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (B) such amendment does not materially and adversely affect the rights of Holders to transfer Notes.

Upon the request of the Company accompanied by a Board Resolution authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 603 hereof, the Trustee shall join with the Company and the Subsidiary Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained,

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but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Notwithstanding the foregoing, no Opinion of Counsel shall be required in connection with the addition of a Subsidiary Guarantor under this Indenture upon execution and delivery by such Subsidiary Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as Exhibit B hereto, and delivery of an Officer’s Certificate.

SECTION 902. Amendments or Supplements with Consent of Holders. With the written consent of the Holders of not less than a majority in principal amount of the Outstanding Notes, delivered to the Company and the Trustee, the Company, any Subsidiary Guarantor (with respect to any Subsidiary Guarantee or this Indenture to which it is a party) and the Trustee may (a) amend or supplement this Indenture, any Subsidiary Guarantee or the Notes (including consents obtained in connection with a purchase of, or tender offer or Exchange Offer for, the Notes) and (b) waive any existing Default or Event of Default or compliance with any provision of this Indenture or the Notes (including consents obtained in connection with a purchase of, or tender offer or Exchange Offer, for Notes). Notwithstanding the foregoing sentence, no such amendment, supplement or waiver shall, without the consent of each Holder of the Outstanding Notes affected thereby:

(1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver,

(2) reduce the principal of or change the Maturity of any such Note or alter or waive the provisions with respect to the redemption of the Notes (other than Sections 1017 and 1018),

(3) reduce the rate of or change the time for payment of interest on any Note,

(4) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the Notes issued under this Indenture, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Outstanding Notes and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in this Indenture or any Subsidiary Guarantee that cannot be amended or modified without the consent of all Holders,

(5) make any Note payable in money other than that stated in the Notes,

(6) make any change in the provisions of Section 508 or Section 513 of this Indenture,

(7) make any change in Article Fourteen hereof or Section 1203 of this Indenture or in the ranking of this Indenture and the Notes that would adversely affect the Holders,

(8) except as otherwise expressly permitted by this Indenture, modify the Subsidiary Guarantee of any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) in any manner adverse to the Holders,

(9) make any change in these amendment and waiver provisions, or

(10) impair the right of any Holder to receive payment of principal of, or interest on, such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes.

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The consent of the Holders is not necessary under this Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

SECTION 903. Execution of Amendments, Supplements or Waivers. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article Nine if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment, supplement or waiver that requires consent of Holders until the Board of Directors approves it. In executing any amendment, supplement or waiver, the Trustee shall be entitled to receive and (subject to Section 601 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 103 hereof, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Company and any Subsidiary Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 905). Notwithstanding the foregoing, no Opinion of Counsel will be required for the Trustee to execute any amendment or supplement adding a new Subsidiary Guarantor under this Indenture.

SECTION 904. Effect of Amendments, Supplements or Waivers. Upon the execution of any supplemental indenture under this Article Nine, this Indenture shall be modified in accordance therewith, and such amendment, supplement or waiver shall form a part of this Indenture for all purposes; and every Holder of Notes theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

SECTION 905. Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the Trust Indenture Act as then in effect.

SECTION 906. Reference in Notes to Supplemental Indentures. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article Nine may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Notes so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Notes.

SECTION 907. Notice of Supplemental Indentures. Promptly after the execution by the Company, any Subsidiary Guarantor and the Trustee of any supplemental indenture pursuant to the provisions of Section 902, the Company shall give notice thereof to the Holders, in the manner provided for in Section 107, setting forth in general terms the substance of such supplemental indenture.

ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium, if Any, and Interest. The Company shall pay or cause to be paid the principal of, premium, if any, Additional Interest, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, Additional Interest, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the

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Company or a Subsidiary, holds as of 12:00 p.m. (Eastern Time) on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, interest and Additional Interest, if any, then due.

The Company shall pay interest on overdue principal at the rate equal to the then applicable interest rate on the Notes, and it shall pay interest on overdue installments of interest at the same rate, in any case to the extent lawful.

SECTION 1002. Maintenance of Office or Agency. The Company shall maintain an office or agency in the United States where Notes may be presented or surrendered for payment, where Notes may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Corporate Trust Office of the Trustee shall be such office or agency of the Company, unless the Company shall designate and maintain some other office or agency for one or more of such purposes. The Company shall give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation. The Company shall give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

SECTION 1003. Paying Agent to Hold Money in Trust. If the Company shall at any time act as its own Paying Agent, it shall, on or before each due date of the principal of (or premium, if any) or interest on any of the Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal of (or premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and shall promptly notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for the Notes, it shall, on or before each due date of the principal of (or premium, if any) or interest on any Notes, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee of such action or any failure so to act.

The Company shall cause each Paying Agent (other than the Trustee) to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent shall:

(1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest on Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

(2) give the Trustee notice of any Default by the Company (or any other obligor upon the Notes) in the making of any payment of principal (and premium, if any) or interest; and

(3) at any time during the continuance of any such Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

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The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such sums.

Subject to applicable laws relating to abandoned property, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (or premium, if any) or interest on any Note and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as Trustee thereof, shall thereupon cease.

SECTION 1004. Corporate Existence. Subject to Article Eight, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect the corporate existence and that of each Restricted Subsidiary and the corporate rights (charter and statutory) and franchises of the Company and each Restricted Subsidiary; provided, however, that the Company shall not be required to preserve any such corporate existence, right or franchise if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries as a whole.

SECTION 1005. Payment of Taxes and Other Claims. The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment or charge whose amount, applicability or validity is being contested in good faith by appropriate proceedings and for which appropriate reserves, if necessary (in the good faith judgment of management of the Company) are being maintained in accordance with GAAP. Notwithstanding anything to the contrary contained in this Indenture, the Company and its Restricted Subsidiaries may, to the extent required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest payments under this Indenture.

SECTION 1006. Reserved.

SECTION 1007. Reserved.

SECTION 1008. Statement by Officers as to Default.

(a) The Company shall deliver to the Trustee within 120 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Company and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether it has kept, observed, performed and fulfilled, and has caused each of its Restricted Subsidiaries to keep, observe, perform and fulfill its obligations under this Indenture and further stating, as to each such Officer signing such certificate, that, to the best of his or her knowledge, the Company during such preceding fiscal year has kept, observed, performed and fulfilled, and has caused each of its Restricted Subsidiaries to keep, observe, perform and fulfill each and every such covenant contained in this Indenture and no Default occurred during such year and at the date of such certificate

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there is no Default which has occurred and is continuing or, if such signers do know of such Default that is continuing, the certificate shall specify such Default and that, to the best of his or her knowledge, no event has occurred and remains by reason of which payments on the account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event. The Officers’ Certificate shall also notify the Trustee should the Company elect to change the manner in which it fixes its fiscal year-end. For purposes of this Section 1008(a), such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture.

(b)(1) When any Default has occurred and is continuing under this Indenture, or (2) if the trustee for or the holder of any other evidence of Indebtedness of the Company or any Restricted Subsidiary gives any notice or takes any other action with respect to a claimed Default (other than with respect to Indebtedness in the principal amount of less than $40,000,000), the Company shall deliver to the Trustee by registered or certified mail or facsimile transmission an Officers’ Certificate specifying such event, notice or other action within five Business Days of its occurrence (with respect to clause (1)) or such notice or other action (with respect to clause (2)).

SECTION 1009. Reports and Other Information.

(a) Whether or not required by the SEC, so long as any Notes are outstanding, the Company shall furnish to the Holders, within the time periods specified in the SEC’s rules and regulations (as in effect on the Issue Date) for non-accelerated filers:

(1) all quarterly and annual financial information that would be required to be contained in a filing by a non-accelerated filer with the SEC on Forms 10-Q and 10-K (or any successor or comparable forms) if the Company were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Company’s certified independent accountants; and

(2) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

In addition, whether or not required by the SEC, the Company shall file a copy of all of the information and reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the SEC’s rules and regulations (unless the SEC shall not accept such a filing) and make such information available to securities analysts and prospective investors upon request. The Company will be deemed to have furnished to the Holders the reports referred to in clauses (1) and (2) of this Section 1009(a) if the Company has either (i) filed such reports with the SEC (and such reports are publicly available) or (ii) posted such reports on the Company Website and issued a press release in respect thereof. For purposes of this Section 1009(a), the term “Company Website” means the collection of web pages that may be accessed on the World Wide Web using the URL address http://www.aleris.com or such other address as the Company may from time to time designate in writing to the Trustee. In addition, the Company has agreed that, for so long as any Notes remain outstanding, it shall furnish to Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(b) In addition, if at any time any direct or indirect parent company of the Company becomes a guarantor of the Notes (there being no obligation of such parent to do so), the reports, information and other documents required to be filed and furnished to the Holders pursuant to this Section 1009 may, at the option of the Company, be filed by and be those of such parent rather than the Company; provided that the same is accompanied by consolidating information that explains in reasonable detail the

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differences between the information relating to such parent, on the one hand, and the information relating to the Company and its Restricted Subsidiaries on a standalone basis, on the other hand.

(c) Notwithstanding the foregoing, the requirements of this Section 1009 shall be deemed satisfied prior to the commencement of the Exchange Offer or the effectiveness of the Shelf Registration Statement by the filing with the SEC of the Exchange Offer Registration Statement or Shelf Registration Statement, and any amendments thereto, with such financial information that satisfies Regulation S-X of the Securities Act.

(d) Notwithstanding anything herein to the contrary, the Company shall not be deemed to have failed to comply with any of its obligations under this Section 1009 for the purposes of Section 501(3) until 120 days after the date any report hereunder is due.

SECTION 1010. Limitation on Restricted Payments.

(a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly:

(1) declare or pay any dividend or make any distribution on account of the Company’s or any Restricted Subsidiary’s Equity Interests, including any dividend or distribution payable in connection with any merger or consolidation other than:

(A) dividends or distributions by the Company payable in Equity Interests (other than Disqualified Stock) of the Company or in options, warrants or other rights to purchase such Equity Interests (other than Disqualified Stock); or

(B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;

(2) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Company or any direct or indirect parent of the Company, including in connection with any merger or consolidation;

(3) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value in each case, prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness, other than:

(A) Indebtedness permitted under Sections 1011(b)(9) and (10) of this Indenture; or

(B) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or

(4) make any Restricted Investment

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(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of such Restricted Payment:

(A) no Default shall have occurred and be continuing or would occur as a consequence thereof;

(B) immediately after giving effect to such transaction on a pro forma basis, the Company could incur $1.00 of additional Indebtedness under Section 1011(a) of this Indenture; and

(C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and the Restricted Subsidiaries after the Issue Date pursuant to this Section 1010(a) or clauses (1), (2) (with respect to the payment of dividends on Refunding Capital Stock pursuant to clause (b) thereof only), (6)(C), (8) and (12) of Section 1010(b) (and excluding, for the avoidance of doubt, all other Restricted Payments made pursuant to Section 1010(b)), is less than the sum, without duplication, of:

(1) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the first day of the fiscal quarter in which the Issue Date occurs to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit, plus

(2) 100% of the aggregate net cash proceeds and the fair market value, as determined in good faith by the Company, of marketable securities or other property received by the Company after the Issue Date (less the amount of such net cash proceeds to the extent such amount has been relied upon to permit the incurrence of Indebtedness, or issuance of Disqualified Stock or Preferred Stock pursuant to Section 1011(b)(22)(ii) of this Indenture from the issue or sale of:

(x)(i) Equity Interests of the Company, including Retired Capital Stock (as defined below), but excluding cash proceeds and the fair market value, as determined in good faith by the Company, of marketable securities or other property received from the sale of:

(A) Equity Interests to any future, present or former employees, directors, managers or consultants of the Company, any direct or indirect parent company of the Company or any of the Company’s Subsidiaries after the Issue Date to the extent such amounts have been applied to Restricted Payments made in accordance with Section 1010(b)(4); and

(B) Designated Preferred Stock; and

(ii) to the extent actually contributed to the Company, Equity Interests of the Company’s direct or indirect parent companies (excluding contributions of the proceeds from the sale of Designated Preferred Stock of such companies or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with Section 1010(b)(4)); or

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(y) debt securities of the Company that have been converted into or exchanged for such Equity Interests of the Company;

provided that this clause (2) shall not include the proceeds from (a) Refunding Capital Stock, (b) Equity Interests of the Company or debt securities of the Company that have been converted into or exchanged for Equity Interests of the Company sold to a Restricted Subsidiary or the Company, as the case may be, (c) Disqualified Stock or debt securities that have been converted into or exchanged for Disqualified Stock or (d) Excluded Contributions, plus

(3) 100% of the aggregate amount of cash and the fair market value, as determined in good faith by the Company, of marketable securities or other property contributed to the capital of the Company after the Issue Date (less the amount of such net cash proceeds to the extent such amount has been relied upon to permit the incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock pursuant to Section 1011(b)(22)(ii) of this Indenture (other than by a Restricted Subsidiary and other than by any Excluded Contributions), plus

(4) to the extent not already included in Consolidated Net Income, 100% of the aggregate amount received in cash and the fair market value, as determined in good faith by the Company, of marketable securities or other property received after the Issue Date by means of

(A) the sale or other disposition (other than to the Company or a Restricted Subsidiary) of Restricted Investments made by the Company or any Restricted Subsidiary and repurchases and redemptions of such Restricted Investments from the Company or any Restricted Subsidiary and repayments to the Company or a Restricted Subsidiary of loans or advances that constitute Restricted Investments; or

(B) the sale (other than to the Company or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary or a distribution from an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to Section 1010(b)(9) or (13) or to the extent such Investment constituted a Permitted Investment) or a dividend from an Unrestricted Subsidiary, plus

(5) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary after the Issue Date, the fair market value of the Investment in such Unrestricted Subsidiary, as determined by the Company in good faith or if, in the case of an Unrestricted Subsidiary, such fair market value may exceed $100.0 million, in writing by an Independent Financial Advisor, at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary, other than an Unrestricted Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to Section 1010(b)(9) or (13) or to the extent such Investment constituted a Permitted Investment.

(b) The foregoing provisions shall not prohibit:

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(1) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture;

(2)(a) the redemption, repurchase, retirement or other acquisition of any Equity Interests (“Retired Capital Stock”) or Subordinated Indebtedness of the Company or any Equity Interests of any direct or indirect parent company of the Company, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary) of, Equity Interests of the Company (in each case, other than any Disqualified Stock) (“Refunding Capital Stock”) and (b) if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this Section 1010(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of the Company) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that was declarable and payable on such Retired Capital Stock immediately prior to such retirement;

(3) the defeasance, redemption, repurchase or other acquisition or retirement of (a) Subordinated Indebtedness of the Company or a Restricted Subsidiary made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of such Person or (b) Disqualified Stock of the Company or a Restricted Subsidiary made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of such Person that, in each case, is incurred in compliance with Section 1011 of this Indenture so long as:

(A) the principal amount of such new Indebtedness or liquidation preference of such new Disqualified Stock does not exceed the principal amount (or accreted value, if applicable) of the Subordinated Indebtedness or the liquidation preference of the new Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired for value, plus the amount of any reasonable premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness or Disqualified Stock;

(B) such Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so defeased, redeemed, repurchased, acquired or retired;

(C) such Indebtedness or Disqualified Stock has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired; and

(D) such Indebtedness or Disqualified Stock has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired;

(4) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Company or any of its direct or indirect parent companies held by any future, present or former employee, director,

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manager or consultant of the Company, any of its Subsidiaries or any of its direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement; provided that the aggregate Restricted Payments made under this clause (4) do not exceed in any calendar year $15.0 million (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $30.0 million in any calendar year); provided, further, that such amount in any calendar year may be increased by an amount not to exceed

(A) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of the Company and, to the extent contributed to the Company, Equity Interests of any of the Company’s direct or indirect parent companies, in each case to members of management, directors, managers or consultants of the Company, any of its Subsidiaries or any of its direct or indirect parent companies that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (c) of Section 1010(a), plus

(B) the cash proceeds of key man life insurance policies received by the Company and the Restricted Subsidiaries after the Issue Date, less

(C) the amount of any Restricted Payments previously made pursuant to clauses (A) and (B) of this clause (4);

and provided, further, that cancellation of Indebtedness owing to the Company from members of management, directors, managers or consultants of the Company, any of its direct or indirect parent companies or any Restricted Subsidiary in connection with a repurchase of Equity Interests of the Company or any of its direct or indirect parent companies shall not be deemed to constitute a Restricted Payment for purposes of this Section 1010 or any other provision of this Indenture;

(5) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary issued in accordance with Section 1011 to the extent such dividends are included in the definition of “Fixed Charges”;

(6)(A) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by the Company after the Issue Date;

(B) the declaration and payment of dividends to a direct or indirect parent company of the Company, the proceeds of which shall be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of such parent company issued after the Issue Date; provided that the amount of dividends paid pursuant to this clause (B) shall not exceed the aggregate amount of cash actually contributed to the Company from the sale of such Designated Preferred Stock; or

(C) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this Section 1010(b);

provided, however, in the case of each of (A), (B) and (C) of this clause (6), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately

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preceding the date of issuance of such Designated Preferred Stock or the declaration of such dividends on Refunding Capital Stock that is Preferred Stock, after giving effect to such issuance or declaration on a pro forma basis, the Company and the Restricted Subsidiaries on a consolidated basis would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

(7) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(8) the declaration and payment of dividends on the Company’s common stock following the first public offering of the Company’s common stock or the common stock of any of its direct or indirect parent companies after the Issue Date, of up to 6% per annum of the net proceeds received by or contributed to the Company in or from any such public offering, other than public offerings with respect to the Company’s common stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

(9) Restricted Payments that are made with Excluded Contributions;

(10) the declaration and payment of dividends by the Company to, or the making of loans to, its direct parent company in amounts required for the Company’s direct or indirect parent companies to pay:

(A) franchise taxes and other fees, taxes and expenses required to maintain their corporate existence;

(B) Federal, state and local income taxes, to the extent such income taxes are attributable to the income of the Company and the Restricted Subsidiaries and, to the extent of the amount actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries;

(C) customary salary, bonus and other benefits payable to officers and employees of any direct or indirect parent company of the Company to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Company and the Restricted Subsidiaries;

(D) general corporate overhead expenses of any direct or indirect parent company of the Company to the extent such expenses are attributable to the ownership or operation of the Company and the Restricted Subsidiaries; and

(E) reasonable fees and expenses incurred in connection with any unsuccessful debt or equity offering by such direct or indirect parent company of the Company;

(11) any Restricted Payments used to fund the Transactions and the fees and expenses related thereto, including those owed to Affiliates, in each case to the extent permitted by Section 1013;

(12) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness in connection with events similar to those described under Section 1017 and Section 1018 of this Indenture; provided that, prior to such repurchase, redemption or other acquisition, the Company (or a third party to the extent permitted by this Indenture) shall

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have made a Change of Control Offer or Asset Sale Offer, as the case may be, with respect to the Notes and shall have repurchased all Notes validly tendered and not withdrawn in connection with such Change of Control Offer or Asset Sale Offer;

(13) Investments in Unrestricted Subsidiaries, having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (13) that are at the time outstanding, without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities, not to exceed the greater of (x) $50.0 million and (y) 1.5% of Total Assets at the time of such Investment (with the fair market value of each Investment being measured at the time such Investment is made and without giving effect to subsequent changes in value);

(14) distributions or payments of Receivables Fees;

(15) the distribution, as a dividend or otherwise (and the declaration of such dividend), of shares of Capital Stock of, or Indebtedness owed to the Company or a Restricted Subsidiary by, any Unrestricted Subsidiary; and

(16) other Restricted Payments in an amount which, when taken together with all other Restricted Payments made pursuant to this clause (16), does not exceed the greater of (x) $100.0 million and (y) 3.0% of Total Assets;

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (15) and (16) of this Section 1010(b) no Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) As of the time of issuance of the Notes, all of the Company’s Subsidiaries shall be Restricted Subsidiaries. The Company shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the penultimate paragraph of the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation shall be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to Section 1010(a) or under clause (9), (13) or (16) of Section 1010(b), or pursuant to the definition of “Permitted Investments,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries shall not be subject to any of the restrictive covenants set forth in this Indenture.

(d) Notwithstanding anything to the contrary herein, the Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, make any (x) Restricted Payment covered in clauses (1) through (3) of the definition of “Restricted Payments” to the holders of Equity Interests of the Company or any of its direct or indirect parent companies (which shall include the Sponsor and the Co-Investors) or any Person or group who becomes a Permitted Holder following a Change of Control as provided for in the definition of “Permitted Holders” (other than in the Company’s and its Restricted Subsidiaries’ future, present or former employees, directors or managers or consultants of the Company, any of its Subsidiaries or any of its direct or indirect parent companies with respect to Equity Interests held by them in such capacities and other than a Restricted Payment made pursuant to clause (10) of Section 1010(b)) or (y) Investment in the Sponsor, the Co-Investors, any Permitted Holders who are members of a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) with the Sponsor or any Co-Investors or any Person or group who becomes a Permitted Holder following a Change of Control as provided for in the definition of “Permitted Holders” (other than in the

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Company and its Restricted Subsidiaries and members of management of the Company (or its direct parent)), in each case during any period when the Company is prohibited from making such Restricted Payments or Investments pursuant to the Senior Indenture or any other instrument governing Indebtedness, Disqualified Stock or Preferred Stock issued to extend, replace, refund, refinance, renew or defease the Senior Notes.

SECTION 1011. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.

(a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness), and the Company shall not issue any shares of Disqualified Stock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company’s and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $125.0 million at any one time outstanding.

(b) The foregoing limitations shall not apply to any of the following items (collectively, “Permitted Debt”):

(1) Indebtedness incurred pursuant to the ABL Credit Agreement by the Company or any Restricted Subsidiary; provided that immediately after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) and then outstanding does not exceed $50.0 million plus the greater of (A) $850.0 million and (B) the sum of (i) 85.0% of the net book value of accounts receivable of the Company and its Restricted Subsidiaries and (ii) the lesser of (x) 75.0% of the net book value or (y) 85.0% of the net orderly liquidation value of inventory of the Company and its Restricted Subsidiaries;

(2) Indebtedness incurred pursuant to the Term Credit Agreement by the Company or any Restricted Subsidiary; provided that after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (2) and then outstanding does not exceed $1,225.0 million less up to $150.0 million in the aggregate of all principal payments with respect to such Indebtedness made pursuant to Section 1018(b)(1)(x) of this Indenture;

(3) the incurrence by the Company and any Subsidiary Guarantor of Indebtedness represented by the Notes issued on the Issue Date and the Subsidiary Guarantees thereof and the Exchange Notes and related exchange guarantees to be issued in exchange for the Notes and the Subsidiary Guarantees pursuant to the Registration Rights Agreement (other than any Additional Notes);

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(4) the incurrence by the Company and any Subsidiary Guarantor of Indebtedness represented by the Senior Notes issued on the Issue Date and the guarantees thereof and the exchange notes and related exchange guarantees to be issued in exchange for the Senior Notes pursuant to the Registration Rights Agreement (other than any Additional Notes (as defined in the Senior Indenture));

(5) Existing Indebtedness (other than Indebtedness described in clauses (1), (2), (3) and (4) of this Section 1011(b));

(6) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of the Restricted Subsidiaries, to finance the development, construction, purchase, lease (other than the lease, pursuant to Sale and Lease-Back Transactions, of property (real or personal), equipment or other fixed or capital assets owned by the Company or any Restricted Subsidiary as of the Issue Date or acquired by the Company or any Restricted Subsidiary after the Issue Date in exchange for, or with the proceeds of the sale of, such assets owned by the Company or any Restricted Subsidiary as of the Issue Date), repairs, additions or improvement of property (real or personal), equipment or other fixed or capital assets that are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and any Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (6); provided that the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (6) (including any such Refinancing Indebtedness), does not exceed the greater of (x) $175.0 million and (y) 5.5% of Total Assets at any one time outstanding;

(7) Indebtedness incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

(8) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that

(A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this clause (8)(A)); and

(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and the Restricted Subsidiaries in connection with such disposition;

(9) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor is subordinated

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in right of payment to the Notes; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;

(10) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Subsidiary Guarantor such Indebtedness is subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor; provided, further, that any subsequent issuance or transfer of Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;

(11) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of such shares of Preferred Stock;

(12) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting: (A) interest rate risk with respect to any Indebtedness, (B) exchange rate risk with respect to any currency exchange or (C) commodity pricing risk with respect to any commodity;

(13) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;

(14)(x) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other Obligations of any Restricted Subsidiary, so long as the incurrence of such Indebtedness by such Restricted Subsidiary is permitted under the terms of this Indenture or (y) any guarantee by a Restricted Subsidiary of Indebtedness of the Company permitted to be incurred under the terms of this Indenture; provided that such guarantee is incurred in accordance with Section 1015 of this Indenture;

(15) the incurrence by the Company or any Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock that serves to extend, replace, refund, refinance, renew or defease any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 1011(a) clauses (3), (4) and (5) above, this clause (15) and clauses (16) and (22)(ii) below or any Indebtedness, Disqualified Stock or Preferred Stock issued to so extend, replace, refund, refinance, renew or defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:

(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to

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Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased;

(B) to the extent such Refinancing Indebtedness extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated to or pari passu with the Notes or any Subsidiary Guarantee, such Refinancing Indebtedness is subordinated to or pari passu with the Notes or such Subsidiary Guarantee at least to the same extent as the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively; and

(C) shall not include:

(x) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company;

(y) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary Guarantor; or

(z) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

and provided, further, that subclause (A) of this clause (15) shall not apply to any refunding or refinancing of any Senior Indebtedness outstanding under the Senior Notes or the guarantees of the Senior Notes;

(16) Indebtedness, Disqualified Stock or Preferred Stock (x) of the Company or any of its Restricted Subsidiaries incurred to finance the acquisition of any Person or assets or (y) of Persons that are acquired by the Company or any Restricted Subsidiary or merged into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that either (A) after giving effect to such acquisition or merger, either:

(i) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 1011(a); or

(ii) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries on a consolidated basis is greater than immediately prior to such acquisition or merger; or

(B) such Indebtedness, Disqualified Stock or Preferred Stock (i) is not Secured Indebtedness and is Subordinated Indebtedness with subordination terms no more favorable to the holders thereof than the subordination terms set forth in this Indenture as in effect on the Issue Date, (ii) is not incurred while a Default exists and no Default shall result therefrom, (iii) does not mature (and is not mandatorily redeemable in the case of Disqualified Stock or Preferred Stock) and does not require any payment of principal prior to the final maturity of the Senior Notes; (iv) is incurred by the Company or a Subsidiary Guarantor and (v) in the case of sub-clause (y) above only, is not incurred in contemplation of such acquisition or merger;

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(17) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its incurrence;

(18) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Senior Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;

(19) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred to finance or assumed in connection with an acquisition and any Refinancing Indebtedness incurred to refund, replace or refinance any other Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (19) which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (19) and then outstanding (including any such Refinancing Indebtedness) does not exceed $50.0 million (it being understood that any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (19) shall cease to be deemed incurred or outstanding for purposes of this clause (19) but shall be deemed incurred pursuant to Section 1011(a) from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 1011(a) without reliance on this clause (19));

(20) Indebtedness incurred by a Foreign Subsidiary which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this clause (20) and then outstanding, does not exceed the greater of (x) $75.0 million and (y) 4.0% of Foreign Subsidiary Total Assets (it being understood that any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (20) shall cease to be deemed incurred or outstanding for purposes of this clause (20) but shall be deemed incurred pursuant to Section 1011(a) from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 1011(a) without reliance on this clause (20));

(21) Indebtedness issued by the Company or any Restricted Subsidiary to current or former employees, directors, managers and consultants thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any direct or indirect parent company of the Company to the extent described in Section 1010(b)(4) of this Indenture;

(22) Indebtedness, Disqualified Stock and Preferred Stock of the Company or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (22) and then outstanding, does not at any one time outstanding exceed the sum of:

(i) $150.0 million (it being understood that any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (22)(i) shall cease to be deemed incurred or outstanding for purposes of this clause (22)(i) but shall be deemed incurred pursuant to Section 1011(a) from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 1011(a) without reliance on this clause (22)(i)); plus

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(ii) 200% of the net cash proceeds received by the Company since after the Issue Date from the issue or sale of Equity Interests of the Company or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (C)(2) and (C)(3) of Section 1010(a) of this Indenture to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other investments, payments or exchanges pursuant to Section 1010(b) of this Indenture or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof); and

(23) Attributable Debt incurred by the Company or any Restricted Subsidiary pursuant to Sale and Lease-Back Transactions of property (real or personal), equipment or other fixed or capital assets owned by the Company or any Restricted Subsidiary as of the Issue Date or acquired by the Company or any Restricted Subsidiary after the Issue Date in exchange for, or with the proceeds of the sale of, such assets owned by the Company or any Restricted Subsidiary as of the Issue Date and any Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (23), provided that the aggregate amount of Attributable Debt incurred under this clause (23) (including any such Refinancing Indebtedness) does not exceed $50.0 million.

(c) For purposes of determining compliance with this Section 1011, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (23) of Section 1011(b) or is entitled to be incurred pursuant to Section 1011(a), the Company, in its sole discretion, shall classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and shall only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in one or more of the above clauses; provided that all Indebtedness outstanding under the Senior Credit Facilities on the Issue Date shall be deemed to have been incurred on such date in reliance on the exception in clauses (1) and (2) of Section 1011(b).

(d) The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness, Disqualified Stock or Preferred Stock shall not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 1011.

(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed or incurred (as determined by the Company), in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased.

(f) The principal amount of any Indebtedness incurred to extend, replace, refund, refinance, renew or defease other Indebtedness, if incurred in a different currency from the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency

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exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance.

SECTION 1012. Liens. The Company shall not, and shall not permit any of the Subsidiary Guarantors to, directly or indirectly, create, incur, assume or suffer to exist any Lien (except Permitted Liens) that secures obligations under any Senior Subordinated Indebtedness or Subordinated Indebtedness on any asset or property of the Company or any Subsidiary Guarantor now owned or hereafter acquired, or any income or profits therefrom, or assign or convey any right to receive income therefrom, unless:

(1) in the case of Liens securing Subordinated Indebtedness, the Notes or the applicable Subsidiary Guarantee of a Subsidiary Guarantor, as the case may be, are secured by a Lien on such property or assets that is senior in priority to such Liens; and

(2) in all other cases, the Notes or the applicable Subsidiary Guarantee of a Subsidiary Guarantor, as the case may be, are equally and ratably secured;

provided that any Lien which is granted to secure the Notes under this Section 1012 shall be discharged at the same time as the discharge of the Lien (other than through the exercise of remedies with respect thereto) that gave rise to the obligation to so secure the Notes.

SECTION 1013. Limitations on Transactions with Affiliates.

(a) The Company shall not, and shall not permit any Restricted Subsidiary to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (each of the foregoing, an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $10.0 million, unless

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person and

(2) the Company delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $30.0 million, a Board Resolution adopted by the majority of the members of the Board of Directors of the Company approving such Affiliate Transaction and set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (1) above.

(b) The foregoing provisions shall not apply to the following:

(1) Transactions between or among the Company or any of the Restricted Subsidiaries;

(2) Restricted Payments permitted by Section 1010 of this Indenture and the definition of “Permitted Investments”;

(3) the payment of management, consulting, monitoring and advisory fees and related expenses to the Sponsor and any Co-Investors and any termination or other fee payable to

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the Sponsor or any Co-Investors upon a change of control or initial public equity offering of the Company or any direct or indirect parent company thereof pursuant to the Management Services Agreement as in effect on the Issue Date;

(4) the payment of reasonable and customary fees paid to, and indemnities provided on behalf of, officers, directors, managers, employees or consultants of the Company, any of its direct or indirect parent companies or any Restricted Subsidiary;

(5) payments by the Company or any Restricted Subsidiary to the Sponsor or any Co-Investors for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are approved by a majority of the members of the Board of Directors of the Company in good faith;

(6) transactions in which the Company or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (1) of Section 1013;

(7) payments or loans (or cancellations of loans) to employees or consultants of the Company, any of its direct or indirect parent companies or any Restricted Subsidiary and employment agreements, employee benefit plans, stock option plans and other compensatory or severance arrangements with such employees or consultants that are, in each case, approved by the Company in good faith;

(8) any agreement, instrument or arrangement as in effect as of the Issue Date, or any amendment thereto (so long as any such amendment is not disadvantageous to the Holders in any material respect as compared to the applicable agreement as in effect on the Issue Date as reasonably determined by the Company in good faith);

(9) the existence of, or the performance by the Company or any of the Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement or its equivalent (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any similar agreements which it may enter into thereafter; provided, however that the existence of, or the performance by the Company or any Restricted Subsidiary of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (9) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or new agreement are not otherwise more disadvantageous to the Holders in any material respect than the terms of the original agreement in effect on the Issue Date as reasonably determined in good faith by the Company;

(10) the Transactions and the payment of all fees and expenses related to the Transactions, in each case as disclosed in the Offering Circular;

(11) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture that are fair to the Company and the Restricted Subsidiaries, in the reasonable determination of the Board of Directors or the senior management of the Company, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

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(12) the issuance of Equity Interests (other than Disqualified Stock) of the Company to any Permitted Holder or to any director, manager, officer, employee or consultant of the Company or any direct or indirect parent company thereof;

(13) sales of accounts receivable, or participations therein, in connection with any Receivables Facility; and

(14) investments by the Sponsor and the Co-Investors in securities of the Company or any of its Restricted Subsidiaries so long as (i) the investment is being offered generally to other investors on the same or more favorable terms and (ii) the investment constitutes less than 5.0% of the proposed or outstanding issue amount of such class of securities.

SECTION 1014. Limitations on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries. The Company shall not, and shall not permit any Restricted Subsidiary that is not a Subsidiary Guarantor to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any such Restricted Subsidiary to:

(a)(1) pay dividends or make any other distributions to the Company or any Restricted Subsidiary on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits or

(2) pay any Indebtedness owed to the Company or any Restricted Subsidiary;

(b) make loans or advances to the Company or any Restricted Subsidiary; or

(c) sell, lease or transfer any of its properties or assets to the Company or any Restricted Subsidiary;

except (in each case) for such encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Senior Credit Facilities and the related documentation (including security documents and intercreditor agreements) and Hedging Obligations;

(2) the Indentures, the New Notes and the guarantees thereof;

(3) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions of the nature discussed in clause (c) above on the property so acquired;

(4) applicable law or any applicable rule, regulation or order;

(5) any agreement or other instrument of a Person acquired by the Company or any Restricted Subsidiary in existence at the time of such acquisition (but not created in connection therewith or in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired;

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(6) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(7) Secured Indebtedness otherwise permitted to be incurred pursuant to Sections 1011 and 1012 of this Indenture that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(8) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(9) other Indebtedness, Disqualified Stock or Preferred Stock of Restricted Subsidiaries permitted to be incurred after the Issue Date pursuant to the provisions of Section 1011 of this Indenture;

(10) customary provisions in joint venture agreements, asset sale agreements, sale and leaseback agreements and other similar agreements;

(11) customary provisions contained in leases and other agreements entered into in the ordinary course of business;

(12) restrictions created in connection with any Receivables Facility; provided that in the case of Receivables Facilities established after the Issue Date, such restrictions are necessary or advisable, in the good faith determination of the Company, to effect such Receivables Facility;

(13) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Company or any of its Restricted Subsidiaries is a party entered into in the ordinary course of business; provided that such agreement prohibits the encumbrance of solely the property or assets of the Company or such Restricted Subsidiary that are the subject of such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of the Company or such Restricted Subsidiary or the assets or property of any other Restricted Subsidiary; and

(14) any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (13) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Company, not materially more restrictive with respect to such encumbrance and other restrictions than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing; provided, further, that with respect to contracts, instruments or obligations existing on the Issue Date, any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive with respect to such encumbrances and other restrictions than those contained in such contracts, instruments or obligations as in effect on the Issue Date.

SECTION 1015. Limitation on Guarantees of Indebtedness by Restricted Subsidiaries. The Company shall not permit any of its Wholly Owned Subsidiaries that are Restricted Subsidiaries (and non-Wholly Owned Subsidiaries if such non-Wholly Owned Subsidiaries guarantee other capital markets debt securities of the Company or any Subsidiary Guarantor), other than a Subsidiary Guarantor or a Foreign Subsidiary,

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to guarantee the payment of any Indebtedness of the Company or any Subsidiary Guarantor unless:

(1) such Restricted Subsidiary within 30 days executes and delivers a supplemental indenture to this Indenture providing for a Subsidiary Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of the Company or any Subsidiary Guarantor:

(a) if the Notes or such Subsidiary Guarantor’s Subsidiary Guarantee are subordinated in right of payment to such Indebtedness, the Subsidiary Guarantee under the supplemental indenture shall be subordinated to such Restricted Subsidiary’s guarantee with respect to such Indebtedness substantially to the same extent as the Notes are subordinated to such Indebtedness; and

(b) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or such Subsidiary Guarantor’s Subsidiary Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Subsidiary Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes;

(2) such Restricted Subsidiary waives and shall not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against the Company or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Subsidiary Guarantee; and

(3) such Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that:

(a) such Subsidiary Guarantee has been duly executed and authorized; and

(b) such Subsidiary Guarantee constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity,

provided that this Section 1015 shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.

SECTION 1016. Limitation on Other Senior Subordinated Indebtedness. The Company shall not, and shall not permit any Subsidiary Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is contractually subordinated or junior in right of payment to any Senior Indebtedness of the Company or any Subsidiary Guarantor, as the case may be, unless such Indebtedness is either:

(1) pari passu in right of payment with the Notes or the Subsidiary Guarantees, as the case may be; or

(2) expressly subordinated in right of payment to the Notes or the Subsidiary Guarantees, as the case may be.

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Pursuant to this Indenture (1) no unsecured Indebtedness shall be considered subordinated or junior to Secured Indebtedness merely because it is unsecured and (2) no Senior Indebtedness shall be considered subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral.

SECTION 1017. Change of Control.

(a) If a Change of Control occurs, the Company shall make an offer to purchase all of the Notes pursuant to the offer described below (the “Change of Control Offer”) at a price in cash (the “Change of Control Payment”) equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, and Additional Interest, if any, to the date of purchase, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date. Within 30 days following any Change of Control, the Company shall send notice of such Change of Control Offer by first class mail, with a copy to the Trustee, to each Holder to the address of such Holder appearing in the security register with a copy to the Trustee, with the following information:

(1) a Change of Control Offer is being made pursuant to this Section 1017 and all Notes properly tendered pursuant to such Change of Control Offer shall be accepted for payment;

(2) the purchase price and the purchase date, which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”);

(3) any Note not properly tendered shall remain outstanding and continue to accrue interest;

(4) unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on the Change of Control Payment Date;

(5) Holders electing to have any Notes purchased pursuant to a Change of Control Offer shall be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes completed, to the paying agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(6) Holders shall be entitled to withdraw their tendered Notes and their election to require the Company to purchase such Notes; provided that the paying agent receives, not later than the close of business on the last day of the offer period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased; and

(7) Holders whose Notes are being purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 or an integral multiple of $1,000 in excess of $1,000.

(b) While the Notes are in global form and the Company makes a Change of Control Offer, a Holder may exercise its option to elect for the purchase of the Notes through the facilities of DTC, subject to its rules and regulations.

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(c) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

(d) On the Change of Control Payment Date, the Company shall, to the extent permitted by law,

(1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer,

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered, and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officers’ Certificate stating that such Notes or portions thereof have been tendered to and purchased by the Company.

(e) The Paying Agent shall promptly mail to each Holder the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note shall be in a principal amount of $1,000 or an integral multiple of $1,000 in excess of $1,000. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

(f) The Company shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the time and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. A Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

SECTION 1018. Asset Sales.

(a) The Company shall not, and shall not permit any Restricted Subsidiary to, cause, make or suffer to exist an Asset Sale, unless:

(1) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (as determined in good faith by the Company) of the assets sold or otherwise disposed of (notwithstanding the foregoing, the consideration received by the Company or any of its Restricted Subsidiaries from the sale of the Saginaw, Michigan facility on terms materially consistent with the terms, as in effect as of October 6, 2003, set forth in Exhibit 5 to the Long Term Agreement as in effect as of October 6, 2003 between General Motors Corporation and Alchem Aluminum Inc., dated as of February 26, 1999, shall, in each case, be deemed to be fair market value for purposes of this paragraph); and

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(2) except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that the amount of

(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of the Company or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the Notes, that are assumed by the transferee of any such assets (or a third party on behalf of the transferee) and for which the Company or such Restricted Subsidiary has been validly released by all creditors in writing,

(B) any securities, notes or other obligations or assets received by the Company or such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received) within 180 days following the closing of such Asset Sale and

(C) any Designated Noncash Consideration received by the Company or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Noncash Consideration received pursuant to this clause (C) that has not previously been converted to cash, not to exceed the greater of (x) $100.0 million and (y) 3.0% of Total Assets at the time of the receipt of such Designated Noncash Consideration, with the fair market value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value,

shall be deemed to be cash for purposes of this provision and for no other purpose.

(b) Within 450 days after any of the Company’s or any Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, the Company or such Restricted Subsidiary may, at its option, apply the Net Proceeds from such Asset Sale:

(1) to permanently reduce

(x) Obligations under the Senior Credit Facilities or any other Senior Indebtedness, the Notes or any other Senior Subordinated Indebtedness, in each case, of the Company or any Subsidiary Guarantor and, in the case of Obligations under revolving credit facilities or other similar Indebtedness, to correspondingly permanently reduce commitments with respect thereto (other than Obligations owed to the Company or a Restricted Subsidiary); provided that if the Company or any Restricted Subsidiary shall so reduce Obligations under any Senior Subordinated Indebtedness, the Company or such Subsidiary Guarantor shall, equally and ratably, reduce Obligations under the Notes by, at its option, (A) redeeming Notes if the Notes are then redeemable as provided by the terms of the Notes, (B) making an offer (in accordance with the procedures set forth in this Section 1018) to all Holders to purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued and unpaid interest and Additional Interest, if any, on the principal amount of Notes to be repurchased or (C) purchasing Notes through open market purchases (to the extent such purchases are at a price equal to or higher than 100% of the principal amount thereof) in a manner that complies with this Indenture and applicable securities law; or

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(y) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor, other than Indebtedness owed to the Company or another Restricted Subsidiary; or

(2) to an investment in (A) any one or more businesses; provided that such investment in any business is in the form of the acquisition of Capital Stock and results in the Company or any Restricted Subsidiary owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (B) properties, (C) capital expenditures and (D) acquisitions of other assets, that in each of (A), (B), (C) and (D), are used or useful in a Similar Business or replace the businesses, properties and assets that are the subject of such Asset Sale.

(c) Any Net Proceeds from any Asset Sale that are not invested or applied in accordance with the preceding paragraph within 450 days from the date of the receipt of such Net Proceeds shall be deemed to constitute “Excess Proceeds”; provided that if during such 450-day period the Company or a Restricted Subsidiary enters into a definitive binding agreement committing it to apply such Net Proceeds in accordance with the requirements of clause (2) of Section 1018(b) after such 450th day, such 450-day period shall be extended with respect to the amount of Net Proceeds so committed until such Net Proceeds are required to be applied in accordance with such agreement (but such extension shall in no event be for a period longer than 180 days) (or, if earlier, the date of termination of such agreement). When the aggregate amount of Excess Proceeds exceeds $35.0 million, the Company shall make an offer to all Holders and, if required by the terms of any Senior Subordinated Indebtedness, to the holders of such Senior Subordinated Indebtedness (other than with respect to Hedging Obligations) (an “Asset Sale Offer”), to purchase the maximum aggregate principal amount of Notes and such Senior Subordinated Indebtedness that is an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Company shall commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $35.0 million by mailing the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. The Company may satisfy the foregoing obligations with respect to any Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the relevant 450 days (or such longer period provided above) or with respect to Excess Proceeds of $35.0 million or less. To the extent that the aggregate amount of Notes and such Senior Subordinated Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes, subject to the other covenants contained in this Indenture. If the aggregate principal amount of Notes or the Senior Subordinated Indebtedness surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Company shall select or cause to be selected the Notes and such Senior Subordinated Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Senior Subordinated Indebtedness tendered. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds related to such Asset Sale Offer shall be reset at zero.

(d) Pending the final application of any Net Proceeds pursuant to this Section 1018, the Company or the applicable Restricted Subsidiary may apply such Net Proceeds temporarily to reduce Indebtedness outstanding under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.

(e) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture,

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the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

(f) If the Company is repurchasing less than all of the Notes at any time, the Company shall select the Notes to be repurchased (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which such Notes are listed or (b) if such Notes are not so listed, on a pro rata basis to the extent practicable; provided that no Notes of $1,000 or less shall be repurchased in part.

(g) Notices of repurchase shall be mailed by first class mail, postage prepaid, at least 30 days but not more than 60 days before the date of repurchase to each Holder at such Holder’s registered address, except that notices of repurchase may be mailed more than 60 days prior to a date of repurchase if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture. If any Note is to be repurchased in part only, any notice of repurchase that relates to such Note shall state the portion of the principal amount thereof to be repurchased.

(h) A new Note in principal amount equal to the unrepurchased portion of any Note repurchased in part shall be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for repurchase become due and payable on the date fixed for repurchase. On and after the date of repurchase, unless the Company defaults in the repurchase payment, interest shall cease to accrue on the Note or portions thereof called for repurchase. The Paying Agent, if not the Company, shall return to the Company any cash that remains unclaimed, together with interest, if any, thereby holding the Paying Agent for the payment of the amount required pursuant to the Asset Sale Offer.

ARTICLE ELEVEN

REDEMPTION OF NOTES

SECTION 1101. Right of Redemption.

(a) At any time prior to December 15, 2011, the Company may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the Redemption Date, subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(b) From and after December 15, 2011, the Company may redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days’ prior notice at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, and Additional Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on December 15 of each of the years indicated below:

Year	Percentage
2011	105.000	%
2012	103.333	%
2013	101.667	%
2014 and thereafter	100.000	%

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(c) Prior to December 15, 2009, the Company may, at its option, redeem up to 35% of the original aggregate principal amount of Notes (and the original principal amount of any Additional Notes) issued under this Indenture at a redemption price equal to 110.000% of the aggregate principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds of one or more Equity Offerings of the Company or any direct or indirect parent of the Company to the extent such net cash proceeds are contributed to the Company; provided that at least 50% of the sum of the aggregate principal amount of Notes originally issued under this Indenture and the aggregate principal amount of any Additional Notes issued under this Indenture after the Issue Date remains Outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

SECTION 1102. Applicability of Article. Redemption of Notes at the election of the Company or otherwise, as permitted or required by any provision of this Indenture or the Notes, shall be made in accordance with such provision and this Article Eleven.

SECTION 1103. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Notes pursuant to Section 1101 above shall be evidenced by a Board Resolution. If the Company elects to redeem Notes pursuant to Section 1101 hereof it shall furnish to the Trustee, at least five Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 1105 hereof, an Officers’ Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the Redemption Date, (iii) the principal amount of the Notes to be redeemed and (iv) the Redemption Price.

SECTION 1104. Selection by Trustee of Notes to Be Redeemed.

(a) If the Company is redeeming less than all of the Notes at any time, the Trustee shall select the Notes to be redeemed (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which such Notes are listed or (b) if such Notes are not so listed, on a pro rata basis to the extent practicable; provided that no Notes of $1,000 or less shall be redeemed in part.

(b) If any Note is to be redeemed in part only, any notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed.

(c) A new Note in principal amount equal to the unredeemed portion of any Note redeemed in part shall be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due and payable on the date fixed for redemption. On and after the Redemption Date, unless the Company defaults in the redemption payment, interest shall cease to accrue on the Note or portions thereof called for redemption.

SECTION 1105. Notice of Redemption. Notices of redemption shall be mailed by first class mail, postage prepaid, at least 30 days but not more than 60 days before the Redemption Date to each Holder at such Holder’s registered address, except that notices of redemption may be mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture.

All notices of redemption shall state:

(1) the Redemption Date,

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(2) the Redemption Price and the amount of accrued interest to the Redemption Date payable as provided in Section 1107, if any,

(3) if less than all Outstanding Notes are to be redeemed, the identification (and, in the case of a partial redemption, the principal amounts) of the particular Notes to be redeemed,

(4) in case any Note is to be redeemed in part only, the notice which relates to such Note shall state that on and after the Redemption Date, upon surrender of such Note, the Holder shall receive, without charge, a new Note or Notes of authorized denominations for the principal amount thereof remaining unredeemed,

(5) that on the Redemption Date the Redemption Price (and accrued interest, if any, to the Redemption Date payable as provided in Section 1107) shall become due and payable upon each such Note, or the portion thereof, to be redeemed, and that interest thereon shall cease to accrue on and after said date,

(6) the place or places where such Notes are to be surrendered for payment of the Redemption Price and accrued interest, if any,

(7) the name and address of the Paying Agent,

(8) that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price,

(9) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;

(10) the “CUSIP” number, ISIN or “Common Code” number and that no representation is made as to the accuracy or correctness of the “CUSIP” number, ISIN or “Common Code” number, if any, listed in such notice or printed on the Notes, and

(11) the paragraph of the Notes or Section of the Indenture pursuant to which the Notes are to be redeemed.

At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at its expense; provided that the Company shall have delivered to the Trustee, at least five Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 1105 (unless a shorter notice shall be agreed to by the Trustee), an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in Section 1103.

SECTION 1106. Effect of Notice of Redemption. Once notice of redemption is mailed in accordance with Section 1105 hereof, Notes called for redemption become irrevocably due and payable on the Redemption Date at the Redemption Price. The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 1107 hereof, on and after the Redemption Date, interest and Additional Interest if any, shall cease to accrue on Notes or portions of Notes called for redemption.

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SECTION 1107. Deposit of Redemption Price. Prior to 12:00 p.m. (Eastern Time) on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and accrued interest and Additional Interest, if any, on, all the Notes that are to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest and Additional Interest, if any, on, all Notes to be redeemed or purchased. In addition, all money, if any, earned on funds held by the Trustee or the Paying Agent shall be remitted to the Company.

SECTION 1108. Notes Payable on Redemption Date.

(a) Notice of redemption having been given as aforesaid, the Notes so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified (together with accrued interest and Additional Interest, if any, to the Redemption Date), and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Notes shall cease to bear interest. Upon surrender of any such Note for redemption in accordance with said notice, such Note shall be paid by the Company at the Redemption Price, together with accrued interest and Additional Interest, if any, to the Redemption Date and such Notes shall be canceled by the Trustee; provided, however, that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Notes, or one or more Predecessor Notes, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 306.

(b) If any Note called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne by the Notes.

SECTION 1109. Notes Redeemed in Part. Any Note which is to be redeemed only in part (pursuant to the provisions of this Article Eleven) shall be surrendered at the office or agency of the Company maintained for such purpose pursuant to Section 1002 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Note without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Note so surrendered; provided that no Note of $1,000 or less will be redeemed in part.

ARTICLE TWELVE

GUARANTEES

SECTION 1201. Guarantees.

(a) From and after the consummation of the Merger, each Subsidiary Guarantor hereby jointly and severally, irrevocably and unconditionally irrevocably guarantees, as primary obligor and not merely as surety, the Notes and obligations of the Company hereunder and thereunder, and guarantees to each Holder of a Note authenticated and delivered by the Trustee, and to the Trustee for itself and on behalf of such Holder, that: (1) the principal of (and premium, if any) and interest on, or Additional Interest in respect of, the Notes shall be paid in full when due, whether at Stated Maturity, by acceleration or otherwise (including the amount that would become due but for the operation of the automatic

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stay under Section 362(a) of the Bankruptcy Law), subject to any applicable grace period, together with interest on the overdue principal, if any, and interest on any overdue interest, to the extent lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder shall be paid in full or performed, all in accordance with the terms hereof and thereof; and (2) in case of any extension of time of payment or renewal of any Notes or of any such other obligations, the same shall be paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise, subject to any applicable grace period, subject, however, in the case of clauses (1) and (2) above, to the limitation set forth in Section 1204 hereof.

(b) Each Subsidiary Guarantor hereby agrees that (to the extent permitted by law) its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, any release of any other Subsidiary Guarantor, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Subsidiary Guarantor.

(c) Each Subsidiary Guarantor hereby waives (to the extent permitted by law) the benefits of diligence, presentment, demand for payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company or any other Person, protest, notice and all demands whatsoever and covenants that the Subsidiary Guarantee of such Subsidiary Guarantor shall not be discharged as to any Note except by complete performance of the obligations contained in such Note, this Indenture and such Subsidiary Guarantee. Each Subsidiary Guarantor acknowledges that the Subsidiary Guarantee is a guarantee of payment, performance and compliance when due and not of collection. Each of the Subsidiary Guarantors hereby agrees that, in the event of a default in payment of principal (or premium, if any) or interest on such Note, whether at its Stated Maturity, by acceleration, purchase or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Note, subject to the terms and conditions set forth in this Indenture, directly against each of the Subsidiary Guarantors to enforce such Subsidiary Guarantor’s Subsidiary Guarantee without first proceeding against the Company or any other Subsidiary Guarantor. Each Subsidiary Guarantor agrees that if, after the occurrence and during the continuance of an Event of Default, the Trustee or any of the Holders are prevented by applicable law from exercising their respective rights to accelerate the Maturity of the Notes, to collect interest on the Notes, or to enforce or exercise any other right or remedy with respect to the Notes, such Subsidiary Guarantor shall pay to the Trustee for the account of the Holder, upon demand therefor, the amount that would otherwise have been due and payable had such rights and remedies been permitted to be exercised by the Trustee or any of the Holders.

(d) If any Holder or the Trustee is required by any court or otherwise to return to the Company or any Subsidiary Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or any Subsidiary Guarantor, any amount paid by any of them to the Trustee or such Holder, the Subsidiary Guarantee of each of the Subsidiary Guarantors, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Subsidiary Guarantor further agrees that, as between each Subsidiary Guarantor, on the one hand, and the Holders and the Trustee on the other hand, (1) subject to this Article Twelve, the Maturity of the obligations guaranteed hereby may be accelerated as provided in Article Five hereof for the purposes of the Subsidiary Guarantee of such Subsidiary Guarantor notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any acceleration of such obligation as provided in Article Five hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by each Subsidiary Guarantor for the purpose of the Subsidiary Guarantee of such Subsidiary Guarantor. The Subsidiary Guarantors shall have the right to seek contribution from

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any non-paying Subsidiary Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Subsidiary Guarantees.

(e) Each Subsidiary Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation, reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

SECTION 1202. Severability. In case any provision of any Subsidiary Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby to the extent permitted by applicable law.

SECTION 1203. Subordination of Subsidiary Guarantees. The Subsidiary Guarantee issued by any Subsidiary Guarantor shall be unsecured senior subordinated obligations of such Subsidiary Guarantor, ranking pari passu with all other existing and future Senior Subordinated Indebtedness of such Subsidiary Guarantor, if any. The Indebtedness evidenced by such Subsidiary Guarantee shall be subordinated on the same basis to Senior Indebtedness of such Subsidiary Guarantor as the Notes are subordinated to Senior Indebtedness under Article Fourteen.

SECTION 1204. Limitation of Subsidiary Guarantors’ Liability. Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Subsidiary Guarantee or the provisions of its local law relating to fraudulent transfer or conveyance. To effectuate the foregoing intention, the Trustee, the Holders and each Subsidiary Guarantor hereby irrevocably agree that the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Subsidiary Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under this Article Twelve, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law.

SECTION 1205. Contribution. Each Subsidiary Guarantor that makes a payment under its Subsidiary Guarantee shall be entitled upon payment in full of all guaranteed Obligations under this Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such other Subsidiary Guarantor’s pro rata portion of such payment based on the respective net assets of all the Subsidiary Guarantors at the time of such payment determined in accordance with GAAP.

SECTION 1206. Subrogation. Each Subsidiary Guarantor shall be subrogated to all rights of Holders against the Company in respect of any amounts paid by any Subsidiary Guarantor pursuant to the provisions of Section 1201; provided, however, that, if a Default or Event of Default has occurred and is continuing, no Subsidiary Guarantor shall be entitled to enforce or receive any payments

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arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Company under this Indenture or the Notes shall have been paid in full.

SECTION 1207. Reinstatement. Each Subsidiary Guarantor hereby agrees (and each Person who becomes a Subsidiary Guarantor shall agree) that the Subsidiary Guarantee provided for in Section 1201 shall continue to be effective or be reinstated, as the case may be, if at any time, payment, or any part thereof, of any obligations or interest thereon is properly rescinded or must otherwise be restored by a Holder to the Company upon the bankruptcy or insolvency of the Company or any Subsidiary Guarantor.

SECTION 1208. Release of a Subsidiary Guarantor. The Subsidiary Guarantee of a Subsidiary Guarantor shall automatically and unconditionally be released and discharged, and no further action by such Subsidiary Guarantor, the Company or the Trustee is required for the release of such Subsidiary Guarantor’s Subsidiary Guarantee, upon:

(1)(A) the sale, disposition or other transfer (including through merger or consolidation) of all of the Capital Stock (or any sale, disposition or other transfer of Capital Stock following which such Subsidiary Guarantor is no longer a Restricted Subsidiary), or all or substantially all the assets, of such Subsidiary Guarantor (other than a sale, disposition or other transfer to a Restricted Subsidiary) if such sale, disposition or other transfer is made in compliance with the applicable provisions of this Indenture;

(B) the designation by the Company of such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance Section 1010 of this Indenture and the definition of “Unrestricted Subsidiary”;

(C) the release or discharge of such Subsidiary Guarantor from its guarantee of Indebtedness under the Senior Credit Facilities or the guarantee that resulted in the obligation of such Subsidiary Guarantor to guarantee the Notes, in each case, if such Subsidiary Guarantor would not then otherwise be required to guarantee the Notes pursuant to Section 1015 of this Indenture (treating any guarantees of such Subsidiary Guarantor that remain outstanding as incurred at least 30 days prior to such release), except, in each case, a release or discharge by, or as a result of, payment under such Subsidiary Guarantee or payment in full of the Indebtedness under the Senior Credit Facilities; or

(D) the exercise by the Company of its Legal Defeasance of the Notes under Section 1302 of this Indenture or its Covenant Defeasance of the Notes under Section 1303 of this Indenture or if the Company’s obligations under this Indenture are discharged in accordance with Section 401 of this Indenture; and

(2) in the case of clause (1)(A) above, the release of such Subsidiary Guarantor from its guarantee, if any, of and all pledges and security, if any, granted by such Subsidiary Guarantor in connection with, the Senior Credit Facilities and the Senior Notes.

SECTION 1209. Benefits Acknowledged. Each Subsidiary Guarantor acknowledges that it shall receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and from its guarantee and waivers pursuant to its Subsidiary Guarantees under this Article Twelve.

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ARTICLE THIRTEEN

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1301. Company’s Option to Effect Legal Defeasance or Covenant Defeasance. The Company may, at its option and at any time, elect to have either Section 1302 or Section 1303 be applied to all Outstanding Notes upon compliance with the conditions set forth below in this Article Thirteen.

SECTION 1302. Legal Defeasance and Discharge. Upon the Company’s exercise under Section 1301 of the option applicable to this Section 1302, each of the Company and the Subsidiary Guarantors shall be deemed to have been discharged from its respective obligations with respect to all Outstanding Notes on the date the conditions set forth in Section 1304 are satisfied (hereinafter, “Legal Defeasance”). For this purpose, such Legal Defeasance means that each of the Company and the Subsidiary Guarantors shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Notes, which shall thereafter be deemed to be “Outstanding” only for the purposes of Section 1305 and the other Sections of this Indenture referred to in (1) and (2) below, and to have satisfied all its other obligations under such Notes and this Indenture insofar as such Notes and their related Subsidiary Guarantees are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder:

(1) the rights of Holders of Outstanding Notes to receive payments in respect of the principal of (and premium, if any, on) and interest on such Notes when such payments are due, solely out of the trust created pursuant to this Indenture (as described in Section 1304);

(2) the Company’s obligations with respect to such Notes under Sections 303, 304, 305, 1002 and 1003;

(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder, and the obligations of each of the Company and the Subsidiary Guarantors in connection therewith; and

(4) this Article Thirteen.

Subject to compliance with this Article Thirteen, the Company may exercise its option under this Section 1302 notwithstanding the prior exercise of its option under Section 1303 with respect to the Notes.

SECTION 1303. Covenant Defeasance. Upon the Company’s exercise under Section 1301 of the option applicable to this Section 1303, each of the Company and the Subsidiary Guarantors shall be released from its respective obligations under any covenant contained in Sections 801 and 802 and in Sections 1005 and 1009 through and including 1018 with respect to the Outstanding Notes on and after the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed not to be “Outstanding” for the purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “Outstanding” for all other purposes hereunder. For this purpose, such Covenant Defeasance means that, with respect to the Outstanding Notes, the Company or any Subsidiary Guarantor, as applicable, may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a

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Default or an Event of Default under Sections 501(3), 501(4), 501(5) and 501(7) and, with respect to only any Significant Subsidiary and not the Company, Section 501(6), but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby.

SECTION 1304. Conditions to Legal Defeasance or Covenant Defeasance. The following shall be the conditions to application of either Section 1302 or Section 1303 to the Outstanding Notes:

(1) the Company shall irrevocably have deposited with the Trustee (or another trustee satisfying the requirements of Section 608 who shall agree to comply with the provisions of this Article Thirteen applicable to it) in trust for the benefit of Holders of such Notes; (A) cash in U.S. dollars, or (B) non-callable Government Securities, or (C) a combination thereof, in such amounts as shall be sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay, and which shall be applied by the Trustee (or other qualifying trustee) to pay, the principal of premium, if any, and interest due on the Outstanding Notes on the Stated Maturity or Redemption Date, as the case may be; provided that the Trustee shall have been irrevocably instructed to apply such cash or the proceeds of such Government Securities to said payments with respect to the Notes; and provided further that upon the effectiveness of this Section 1304, the cash or Government Securities deposited shall not be subject to the rights of the holders of Senior Indebtedness pursuant to the provisions of Article Fourteen of this Indenture, so long as the provisions of Article Fourteen were not violated at the time the cash or Government Securities were so deposited. Before such a deposit, the Company may give to the Trustee, in accordance with Section 1103 hereof, a notice of its election to redeem all of the Outstanding Notes at a future date in accordance with Article Eleven hereof, which notice shall be irrevocable. Such irrevocable redemption notice, if given, shall be given effect in applying the foregoing;

(2) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,

(A) the Company has received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(B) since the issuance of the Notes, there has been a change in the applicable U.S. Federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel in the United States shall confirm that, subject to customary assumptions and exclusions, the Holders shall not recognize income, gain or loss for U.S. Federal income tax purposes as a result of such Legal Defeasance and shall be subject to U.S. Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders shall not recognize income, gain or loss for U.S. Federal income tax purposes as a result of such Covenant Defeasance and shall be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

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(4) no Default (other than that resulting from borrowing funds to be applied to make such deposit and the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any of the Senior Credit Facilities, the Senior Indenture, the Senior Notes or any other material agreement or instrument (other than this Indenture) to which, the Company or any Subsidiary Guarantor is a party or by which the Company or any Subsidiary Guarantor is bound;

(6) the Company shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or any Subsidiary Guarantor or others; and

(7) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel in the United States of America (which Opinion of Counsel may be subject to customary assumptions and exclusions) each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

Notwithstanding the foregoing, the Opinion of Counsel required by clause (2) above with respect to Legal Defeasance need not be delivered if all Notes not theretofore delivered to the Trustee for cancellation (A) have become due and payable by reason of the making of a notice of redemption or otherwise, (B) will become due and payable within one year or (C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company.

SECTION 1305. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions. All cash and Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 1305, the “Qualifying Trustee”) pursuant to Section 1304 in respect of the Outstanding Notes shall be held in trust and applied by the Qualifying Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company or a Subsidiary acting as its own Paying Agent) as the Qualifying Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal (and premium, if any) and interest, but such money or Government Securities need not be segregated from other funds except to the extent required by law. Money and Government Securities so held in trust are not subject to Article Fourteen or Section 1204 hereof; provided that the subordination provisions of Article Fourteen and Section 1204 were not violated at the time the such amounts were deposited in trust.

The Company shall pay and indemnify the Qualifying Trustee against any tax, fee or other charge imposed on or assessed against the Government Securities deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Notes.

Anything in this Article Thirteen to the contrary notwithstanding, the Qualifying Trustee shall deliver or pay to the Company from time to time upon Company Request any money or Government Securities held by it as provided in Section 1304 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Qualifying Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an

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equivalent Legal Defeasance or Covenant Defeasance, as applicable, in accordance with this Article Thirteen.

SECTION 1306. Reinstatement. If the Trustee or any Paying Agent is unable to apply any money or Government Securities in accordance with Section 1305 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s and each Subsidiary Guarantor’s obligations under this Indenture and the Outstanding Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 1302 or 1303, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such money or Government Securities in accordance with Section 1305; provided, however, that (a) if the Company makes any payment of principal of (or premium, if any) or interest on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent; and (b) unless otherwise required by any legal proceeding or any other order or judgment of any court or governmental authority, the Trustee or Paying Agent (if other than the Company) shall return all such money and Government Securities to the Company promptly after receiving a written request therefor at any time, if such reinstatement of the Company’s obligations has occurred and continues to be in effect.

SECTION 1307. Repayment to Company. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium and Additional Interest, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium and Additional Interest, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease.

ARTICLE FOURTEEN

SUBORDINATION

SECTION 1401. Agreement to Subordinate. The Company agrees, and each Holder by accepting a Note agrees, that the Indebtedness evidenced by the Notes is subordinated in right of payment, to the extent and in the manner provided in this Article Fourteen, to the prior payment in full in cash of all Senior Indebtedness of the Company, including the obligations of the Company under the Senior Credit Facilities, and that the subordination is for the benefit of and enforceable by the holders of such Senior Indebtedness. The Notes shall in all respects rank pari passu in right of payment with all existing and future Senior Subordinated Indebtedness of the Company, and will be senior in right of payment to all existing and future Subordinated Indebtedness of the Company; and only Indebtedness of the Company that is Senior Indebtedness shall rank senior to the Notes in accordance with the provisions set forth herein. All provisions of this Article Fourteen shall be subject to Section 1412 hereof.

SECTION 1402. Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution of the assets of the Company upon a total or partial liquidation or dissolution or reorganization of or similar proceeding relating to the Company or its property:

(1) the holders of Senior Indebtedness of the Company shall be entitled to receive payment in full in cash of such Senior Indebtedness before the Holders are entitled to receive any payment or distribution of any kind or character with respect to any obligations on, or relating to, the Notes; and

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(2) until the Senior Indebtedness of the Company is paid in full in cash, any payment or distribution to which Holders would be entitled but for the subordination provisions of this Indenture shall be made to holders of such Senior Indebtedness as their interests may appear, except that Holders may receive Permitted Junior Securities.

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of the Senior Indebtedness of the Company and pay it over to them as their interest may appear.

SECTION 1403. Default on Designated Senior Indebtedness of the Company. The Company shall not pay the principal of, premium, if any, or interest on the Notes or make any deposit pursuant to Article Four or Article Thirteen and may not purchase, redeem or otherwise retire any Notes (collectively, “pay the Notes”) (except in the form of Permitted Junior Securities other than Disqualified Stock) if either of the following (a “Payment Default”) occurs: (a) any Obligation on any Designated Senior Indebtedness of the Company is not paid in full in cash when due; or (b) any other default on Designated Senior Indebtedness of the Company occurs and the maturity of such Designated Senior Indebtedness is accelerated in accordance with its terms unless, in either case, the Payment Default has been cured or waived and any such acceleration has been rescinded or such Designated Senior Indebtedness has been paid in full in cash; provided, however, that the Company shall be entitled to pay the Notes without regard to the foregoing if the Company and the Trustee receive written notice approving such payment from the Representatives of all Designated Senior Indebtedness with respect to which the Payment Default has occurred and is continuing.

During the continuance of any default (other than a Payment Default) (a “Non-Payment Default”) with respect to any Designated Senior Indebtedness of the Company pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, the Company shall not pay the Notes (except in the form of Permitted Junior Securities other than Disqualified Stock) for a period (a “Payment Blockage Period”) commencing upon the receipt by the Trustee (with a copy to the Company) of written notice (a “Blockage Notice”) of such default from the Representative of such Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period and ending 179 days thereafter. The Payment Blockage Period shall end earlier if such Payment Blockage Period is terminated (1) by written notice to the Trustee and the Company from the Person or Persons who gave such Blockage Notice; (2) because the default giving rise to such Blockage Notice is cured, waived or otherwise no longer continuing; or (3) because such Designated Senior Indebtedness has been discharged or repaid in full in cash.

Notwithstanding the provisions described above (but subject to the subordination provisions in Section 1402), unless the holders of such Designated Senior Indebtedness or the Representative of such Designated Senior Indebtedness shall have accelerated the maturity of such Designated Senior Indebtedness or a Payment Default has occurred and is continuing, the Company shall be permitted to resume paying the Notes after the end of such Payment Blockage Period. The Notes shall not be subject to more than one Payment Blockage Period in any consecutive 360-day period irrespective of the number of Non-Payment Defaults with respect to Designated Senior Indebtedness during such period; provided that if any Payment Blockage Notice is delivered to the Trustee by or on behalf of the holders of Designated Senior Indebtedness of the Company (other than holders of Indebtedness under the Senior Credit Facilities), a Representative of holders of Indebtedness under the Senior Credit Facilities shall be entitled to give another Payment Blockage Notice within such period. However, that in no event shall the total number of days during which any Payment Blockage Period or Periods on the notes is in effect exceed 179 days in the aggregate during any consecutive 365-day period, and there must be at least 186 days during any consecutive 365-day period during which no Payment Blockage Period is in effect.

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Notwithstanding the foregoing, no Non-Payment Default that existed or was continuing on the date of the commencement of any Payment Blockage Period with respect to any Designated Senior Indebtedness and that was the basis for the initiation of such Payment Blockage Period to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Period by the Representative of such Designated Senior Indebtedness unless such default has been waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of such initial Blockage Notice, that, in either case, would give rise to a Non-Payment Default pursuant to any provisions under which a Non-Payment Default previously existed or was continuing shall constitute a new Non-Payment Default for this purpose).

SECTION 1404. Acceleration of Payment of Securities. If payment of the Notes is accelerated because of an Event of Default, the Company or the Trustee shall promptly notify the holders of the Designated Senior Indebtedness or the Representative of such Designated Senior Indebtedness of the acceleration; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article Fourteen. If any Designated Senior Indebtedness is outstanding, neither the Company nor any Subsidiary Guarantor may pay the Notes until five Business Days after the Representatives of all the issuers of such Designated Senior Indebtedness receive notice of such acceleration and, thereafter, may pay the Notes only if this Indenture otherwise permits payment at that time.

SECTION 1405. When Distribution Must Be Paid Over. If a distribution is made to Holders that, because of this Article Fourteen should not have been made to them, the Holders are required to hold it in trust for holders of Senior Indebtedness of the Company and pay it over to them as their interests may appear.

SECTION 1406. Subrogation. After all Senior Indebtedness of the Company is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Senior Indebtedness to receive distributions applicable to such Senior Indebtedness. A distribution made under this Article Fourteen to holders of such Senior Indebtedness which otherwise would have been made to Holders is not, as between the Company and Holders, a payment by the Company on such Senior Indebtedness.

SECTION 1407. Relative Rights. This Article Fourteen defines the relative rights of Holders and holders of Senior Indebtedness of the Company. Nothing in this Indenture shall:

(1) impair, as between the Company and Holders, the obligation of the Company, which is absolute and unconditional, to pay principal of and interest on the Notes in accordance with their terms; or

(2) prevent the Trustee or any Holder from exercising its available remedies upon a Default, subject to the rights of holders of Senior Indebtedness of the Company to receive distributions otherwise payable to Holders.

SECTION 1408. Subordination May Not Be Impaired by Company. No right of any holder of Senior Indebtedness of the Company to enforce the subordination of the Indebtedness evidenced by the Notes shall be impaired by any act or failure to act by the Company or by its failure to comply with this Indenture.

SECTION 1409. Rights of Trustee and Paying Agent.

(a) Notwithstanding Section 1403, the Trustee or Paying Agent shall continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that under

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this Article Fourteen would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a trust officer of the Trustee receives notice satisfactory to it that such payments are prohibited by this Article Fourteen. The Company, the Note Registrar or co-registrar, the Paying Agent, a Representative or a holder of Senior Indebtedness of the Company shall be entitled to give the notice; provided, however, that, if an issue of Senior Indebtedness of the Company has a Representative, only the Representative shall be entitled to give the notice.

(b) The Trustee in its individual or any other capacity shall be entitled to hold Senior Indebtedness of the Company with the same rights it would have if it were not Trustee. The Note Registrar and co-registrar and the Paying Agent shall be entitled to do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article Fourteen with respect to any Senior Indebtedness of the Company which may at any time be held by it, to the same extent as any other holder of such Senior Indebtedness; and nothing in Article Six shall deprive the Trustee of any of its rights as such holder. Nothing in this Article Fourteen shall apply to claims of, or payments to, the Trustee under or pursuant to Section 607.

SECTION 1410. Distribution or Notice to Representative. Whenever any Person is to make a distribution or give a notice to holders of Senior Indebtedness of the Company, such Person shall be entitled to make such distribution or give such notice to their Representative (if any).

SECTION 1411. Article Fourteen Not to Prevent Events of Default or Limit Right to Accelerate. The failure to make a payment pursuant to the Notes by reason of any provision in this Article Fourteen shall not be construed as preventing the occurrence of a Default. Nothing in this Article Fourteen shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of the Notes.

SECTION 1412. Trust Moneys Not Subordinated. Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of U.S. Government Securities held in trust under Article Four or Article Thirteen by the Trustee for the payment of principal of and interest on the Notes shall not be subordinated to the prior payment of any Senior Indebtedness of the Company or subject to the restrictions set forth in this Article Fourteen, and none of the Holders shall be obligated to pay over any such amount to the Company or any holder of Senior Indebtedness of the Company or any other creditor of the Company; provided that the subordination provisions of this Article Fourteen and Section 1204 of this Indenture were not violated at the time the applicable amounts were deposited in trust pursuant to Article Four or Article Thirteen of this Indenture, as the case may be.

SECTION 1413. Trustee Entitled to Rely. Upon any payment or distribution pursuant to this Article Fourteen, the Trustee and the Holders shall be entitled to rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 1402 are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Representatives of Senior Indebtedness of the Company for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Senior Indebtedness and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Fourteen. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of the Company to participate in any payment or distribution pursuant to this Article Fourteen, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article Fourteen,

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and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 601 and 603 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article Fourteen.

SECTION 1414. Trustee to Effectuate Subordination. Each Holder by accepting a Note authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders and the holders of Senior Indebtedness of the Company as provided in this Article Fourteen and appoints the Trustee as attorney-in-fact for any and all such purposes.

SECTION 1415. Trustee Not Fiduciary for Holders of Senior Indebtedness of the Company. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Company and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or the Company or any other Person, money or assets to which any holders of Senior Indebtedness of the Company shall be entitled by virtue of this Article Fourteen or otherwise.

SECTION 1416. Reliance by Holders of Senior Indebtedness of the Company on Subordination Provisions. Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness of the Company, whether such Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of such Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

AURORA ACQUISITION MERGER SUB, INC.
By:	/s/ Clive Bode
	Name: Clive Bode
	Title: Vice President and Corporate Secretary

S-1

The undersigned hereby acknowledges and agrees that, upon the effectiveness of the Merger of Aurora Acquisition Merger Sub, Inc. with and into Aleris International, Inc. with Aleris International, Inc. continuing as the surviving corporation, it shall succeed by operation of law to all of the rights and obligations of Aurora Acquisition Merger Sub, Inc., set forth herein and that all references to the “Company” shall thereupon be deemed to be references to the undersigned.
ALERIS INTERNATIONAL, INC.
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Executive Vice President and Chief Financial Officer

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Each of the GUARANTORS listed on Schedule I hereto
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	President

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LASALLE BANK NATIONAL ASSOCIATION,
	as Trustee

By:	/s/ Gregory S. Clarke
	Name:	Gregory S. Clarke
	Title:	Vice President

S-4

SCHEDULE I

Subsidiary Guarantors

Alchem Aluminum, Inc.

Alchem Aluminum Shelbyville Inc.

Aleris Blanking and Rim Products, Inc. (formerly Indiana Aluminum Inc.)

Aleris, Inc.

Aleris Ohio Management, Inc.

ALSCO Holdings, Inc.

ALSCO Metals Corporation

Alumitech, Inc.

Alumitech of Cleveland, Inc.

Alumitech of Wabash, Inc.

Alumitech of West Virginia, Inc.

AWT Properties, Inc.

CA Lewisport, LLC

CI Holdings, LLC

Commonwealth Aluminum, LLC

Commonwealth Aluminum Concast, Inc.

Commonwealth Aluminum Lewisport, LLC

Commonwealth Aluminum Metals, LLC

Commonwealth Aluminum Sales Corporation

Commonwealth Aluminum Tube Enterprises, LLC

Commonwealth Financing Corporation

Commonwealth Industries, Inc.

Corus Aluminium Corp.

ETS Schaefer Corporation

Gulf Reduction Corporation

Hoogovens Aluminium Europe Inc.

IMCO Indiana Partnership L.P.

IMCO International, Inc.

IMCO Investment Company

IMCO Management Partnership L.P.

IMCO Recycling of California, Inc.

IMCO Recycling of Idaho Inc.

IMCO Recycling of Illinois Inc.

IMCO Recycling of Indiana Inc.

IMCO Recycling of Michigan L.L.C.

IMCO Recycling of Ohio Inc.

IMCO Recycling of Utah Inc.

IMCO Recycling Services Company

IMSAMET, Inc.

Interamerican Zinc, Inc.

MetalChem, Inc.

Midwest Zinc Corporation

Rock Creek Aluminum, Inc.

Silver Fox Holding Corp.

U.S. Zinc Corporation

U.S. Zinc Export Corporation

Western Zinc Corporation

Rule 144A/Regulation S Appendix

PROVISIONS RELATING TO INITIAL NOTES,

PRIVATE EXCHANGE NOTES AND EXCHANGE NOTES

1. Definitions.

1.1 Definitions.

For the purposes of this Appendix the following terms shall have the meanings indicated below:

“Applicable Procedures” means, with respect to any transfer or transaction involving a Temporary Regulation S Global Note or beneficial interest therein, the rules and procedures of the Depository for such a Temporary Regulation S Global Note, to the extent applicable to such transaction and as in effect from time to time.

“Certificated Note” means a certificated Initial Note or Exchange Note or Private Exchange Note (other than a Global Note) bearing, if required, the appropriate restricted notes legend set forth in Section 2.3(e) of this Appendix.

“Depository” means The Depository Trust Company, its nominees and their respective successors.

“Distribution Compliance Period”, with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (i) the day on which such Notes are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S and (ii) the issue date with respect to such Notes.

“Exchange Notes” means (1) the 10% Senior Subordinated Notes Due 2016 issued pursuant to the Indenture in connection with a Registered Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional Notes, if any, issued pursuant to a registration statement filed with the SEC under the Securities Act.

“Initial Notes” means (1) $400,000,000 aggregate principal amount of 10% Senior Subordinated Notes Due 2016 issued on the Issue Date and (2) Additional Notes, if any, issued in a transaction exempt from the registration requirements of the Securities Act.

“Initial Purchasers” means (1) with respect to the Initial Notes issued on the Issue Date, Deutsche Bank Securities Inc., Goldman Sachs & Co., KeyBanc Capital Markets, a division of McDonald Investments Inc., and PNC Capital Markets LLC and (2) with respect to each issuance of Additional Notes, the Persons purchasing such Additional Notes under the related Purchase Agreement.

“Notes” means the Initial Notes, any Additional Notes, the Exchange Notes and the Private Exchange Notes, treated as a single class.

“Notes Custodian” means the custodian with respect to a Global Note (as appointed by the Depository), or any successor Person thereto and shall initially be the Trustee.

“Private Exchange” means the offer by the Company, pursuant to a Registration Rights Agreement, to the Initial Purchasers to issue and deliver to each Initial Purchaser, in exchange for the Initial Notes held by the Initial Purchaser as part of its initial distribution, a like aggregate principal amount of Private Exchange Notes.

“Private Exchange Notes” means any 10% Senior Subordinated Notes Due 2016 issued in connection with a Private Exchange.

“Purchase Agreement” means (1) with respect to the Initial Notes issued on the Issue Date, the Purchase Agreement dated December 13, 2006, among the Company and the Initial Purchasers, and (2) with respect to each issuance of Additional Notes, the purchase agreement or underwriting agreement among the Company and the Persons purchasing such Additional Notes.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Registered Exchange Offer” means the offer by the Company, pursuant to a Registration Rights Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act.

“Registration Rights Agreement” means (1) with respect to the Initial Notes issued on the Issue Date, the Registration Rights Agreement dated December 19, 2006, among the Company, the Subsidiary Guarantors and the Initial Purchasers and (2) with respect to each issuance of Additional Notes issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Company and the Persons purchasing such Additional Notes under the related Purchase Agreement.

“Representative” means Deutsche Bank Securities Inc. as representative of the Initial Purchasers.

“Rule 144A Notes” means all Notes offered and sold to QIBs in reliance on Rule 144A.

“Securities Act” means the Securities Act of 1933, as amended.

“Shelf Registration Statement” means the registration statement issued by the Company in connection with the offer and sale of Initial Notes or Private Exchange Notes pursuant to a Registration Rights Agreement.

“Transfer Restricted Notes” means Notes that bear or are required to bear the legend relating to restrictions on transfer relating to the Securities Act set forth in Section 2.3(e) hereto.

1.2 Other Definitions.

Term	Defined in Section
“Agent Members”	2.1(b)
“Global Notes”	2.1(a)
“Permanent Regulation S Global Note”	2.1(a)
“Regulation S”	2.1(a)

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Term	Defined in Section
“Regulation S Global Note”	2.1(a)
“Rule 144A”	2.1(a)
“Rule 144A Global Note”	2.1(a)
“Temporary Regulation S Global Note”	2.1(a)

1.3 Capitalized terms used in this Appendix but not defined have the meanings ascribed to such terms in the Indenture to which this Appendix is attached.

2. The Notes.

2.1(a) Form and Dating. The Initial Notes shall be offered and sold by the Company pursuant to the Purchase Agreement. The Initial Notes shall be resold initially only to (i) QIBs in reliance on Rule 144A under the Securities Act (“Rule 144A”) and (ii) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act (“Regulation S”). Initial Notes may thereafter be transferred to, among others, QIBs and purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein. Initial Notes initially resold pursuant to Rule 144A shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the “Rule 144A Global Note”); and Initial Notes initially resold pursuant to Regulation S shall be issued initially in the form of one or more temporary global notes in fully registered form (collectively, the “Temporary Regulation S Global Note”), in each case without interest coupons and with the global notes legend and the applicable restricted notes legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Initial Notes represented thereby with the Notes Custodian and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as provided in this Indenture. Except as set forth in this Section 2.1(a), beneficial ownership interests in the Temporary Regulation S Global Note shall be held only through the Euroclear System (“Euroclear”) and Clearstream Banking, S.A. (“Clearstream”) (as indirect participants in the Depository) and shall not be exchangeable for interests in the Rule 144A Global Note, a permanent Regulation S global note in fully registered form (the “Permanent Regulation S Global Note,” and together with the Temporary Regulation S Global Note, the “Regulation S Global Note”) or any other Note prior to the expiration of the Distribution Compliance Period and then, after the expiration of the Distribution Compliance Period, may be exchanged for interests in a Rule 144A Global Note or the Permanent Regulation S Global Note only upon certification in the form attached hereto as Exhibit 3 or otherwise in a form reasonably satisfactory to the Trustee that beneficial ownership interests in such Temporary Regulation S Global Note are owned either by Non-U.S. Persons or U.S. Persons who purchased such interests in a transaction that is exempt from the registration requirements under the Securities Act.

Prior to the expiration of the Distribution Compliance Period, beneficial interests in Temporary Regulation S Global Notes may be exchanged for interests in Rule 144A Global Notes if (1) such exchange occurs in connection with a transfer of Notes in compliance with Rule 144A and (2) the transferor of the beneficial interest in the Temporary Regulation S Global Note, first delivers to the Trustee a written certificate (in a form substantially similar to that attached hereto as Exhibit 2) to the effect that the beneficial interest in the Temporary Regulation S Global Note is being transferred (a) to a Person who the transferor reasonably believes to be a QIB that is purchasing for its own account or the account of a QIB in a transaction meeting the requirements of Rule 144A, and (b) in accordance with all applicable securities laws of the States of the United States and other jurisdictions.

Beneficial interests in a Rule 144A Global Note may be transferred to a Person who takes delivery in the form of an interest in a Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, only if the transferor first delivers to the Trustee a written certificate

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(in a form substantially similar to that attached hereto as Exhibit 2) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if applicable).

The Rule 144A Global Note, the Temporary Regulation S Global Note and the Permanent Regulation S Global Note are collectively referred to herein as “Global Notes.” The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.

(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Depository.

The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Notes that (a) shall be registered in the name of the Depository or the nominee of the Depository and (b) shall be delivered by the Trustee to the Depository or pursuant to the Depository’s instructions or held by the Trustee as custodian for the Depository.

Members of, or participants in, the Depository (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Note, and the Company, the Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depository as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a Holder of a beneficial interest in any Global Note.

(c) Certificated Notes. Except as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global Notes shall not be entitled to receive physical delivery of Certificated Notes.

2.2 Authentication. The Trustee shall upon receipt of a Company Order specified in Section 202 of the Indenture authenticate and deliver: (1) on the Issue Date, an aggregate principal amount of $400,000,000 10% Senior Subordinated Notes Due 2016, (2) any Additional Notes for an original issue in an aggregate principal amount specified in the written order of the Company pursuant to Section 202 of the Indenture and (3) Exchange Notes or Private Exchange Notes for issue only in a Registered Exchange Offer or a Private Exchange, respectively, pursuant to a Registration Rights Agreement, for a like principal amount of Initial Notes, in each case upon a written order of the Company signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company. Such Company Order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of any issuance of Additional Notes pursuant to Section 312 of the Indenture, shall certify that such issuance is in compliance with Section 1011 of the Indenture.

2.3 Transfer and Exchange.

(a) Transfer and Exchange of Certificated Notes. When Certificated Notes are presented to the Note Registrar with a request:

(x) to register the transfer of such Certificated Notes; or

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(y) to exchange such Certificated Notes for an equal principal amount of Certificated Notes of other authorized denominations,

the Note Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Certificated Notes surrendered for transfer or exchange:

(i) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Note Registrar, duly executed by the Holder thereof or its attorney duly authorized in writing; and

(ii) if such Certificated Notes are required to bear a restricted notes legend, they are being transferred or exchanged pursuant to an effective registration statement under the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are accompanied by the following additional information and documents, as applicable:

(A) if such Certificated Notes are being delivered to the Note Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect; or

(B) if such Certificated Notes are being transferred to the Company, a certification to that effect; or

(C) if such Certificated Notes are being transferred (x) pursuant to an exemption from registration in accordance with Rule 144A, Regulation S or Rule 144 under the Securities Act; or (y) in reliance upon another exemption from the requirements of the Securities Act: (i) a certification to that effect (in the form set forth on the reverse of the Note) and (ii) if the Company so requests, an Opinion of Counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i).

(b) Restrictions on Transfer of a Certificated Note for a Beneficial Interest in a Global Note. A Certificated Note may not be exchanged for a beneficial interest in a Rule 144A Global Note or a Permanent Regulation S Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Certificated Note, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with:

(i) certification, in a form substantially similar to that attached hereto as Exhibit 2, that such Certificated Note is either (A) being transferred to a QIB in accordance with Rule 144A or (B) being transferred after expiration of the Distribution Compliance Period by a Person who initially purchased such Note in reliance on Regulation S to a buyer who elects to hold its interest in such Note in the form of a beneficial interest in the Permanent Regulation S Global Note; and

(ii) written instructions directing the Trustee to make, or to direct the Notes Custodian to make, an adjustment on its books and records with respect to such Rule 144A Global Note (in the case of a transfer pursuant to clause (b)(i)(A)) or Permanent Regulation S Global Note (in the case of a transfer pursuant to clause (b)(i)(B)) to reflect an increase in the aggregate principal amount of the Notes represented by the Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, such instructions to contain information regarding the Depository account to be credited with such increase, then the Trustee shall cancel such Certificated Note and cause, or direct the Notes Custodian to cause, in accordance with the standing instructions and

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procedures existing between the Depository and the Notes Custodian, the aggregate principal amount of Notes represented by the Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, to be increased by the aggregate principal amount of the Certificated Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, equal to the principal amount of the Certificated Note so canceled. If no Rule 144A Global Notes or Permanent Regulation S Global Notes, as applicable, are then outstanding, the Company shall issue and the Trustee shall authenticate, upon receipt of a Company Order, a new Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, in the appropriate principal amount.

(c) Transfer and Exchange of Global Notes.

(i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Note shall deliver to the Note Registrar a written order given in accordance with the Depository’s procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Note. The Note Registrar shall, in accordance with such instructions instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Note and to debit the account of the Person making the transfer the beneficial interest in the Global Note being transferred.

(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Note Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Note Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Note from which such interest is being transferred.

(iii) Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.

(iv) In the event that Global Note is exchanged for Certificated Notes pursuant to Section 2.4 of this Appendix, prior to the consummation of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes (as set forth in Exhibit 2 hereto) intended to ensure that such transfers comply with Rule 144A, Regulation S or another applicable exemption under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Company.

(d) Restrictions on Transfer of Temporary Regulation S Global Notes. During the Distribution Compliance Period, beneficial ownership interests in Temporary Regulation S Global Notes may only be sold, pledged or transferred in accordance with the Applicable Procedures and only (i) to the Company, (ii) in an offshore transaction in accordance with Regulation S (other than a transaction resulting in an exchange for an interest in a Permanent Regulation S Global Note), (iii) pursuant to an effective

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registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any State of the United States.

(e) Legend.

(i) Except as permitted by the following paragraphs (ii), (iii) and (iv), each Note certificate evidencing the Global Notes (and all Notes issued in exchange therefor or in substitution thereof), in the case of Notes offered otherwise than in reliance on Regulation S shall bear a legend in substantially the following form:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO ALERIS INTERNATIONAL, INC. (THE “COMPANY”) OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (AN “ACCREDITED INVESTOR”) THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

Each certificate evidencing a Note offered in reliance on Regulation S shall, in addition to the foregoing, bear a legend in substantially the following form:

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THIS SECURITY WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

Each Certificated Note shall also bear the following additional legend:

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE NOTE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

(ii) Upon any sale or transfer of a Transfer Restricted Note (including any Transfer Restricted Note represented by a Global Note) pursuant to Rule 144 under the Securities Act, the Note Registrar shall permit the transferee thereof to exchange such Transfer Restricted Note for a certificated Note that does not bear the legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Note, if the transferor thereof certifies in writing to the Note Registrar that such sale or transfer was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Note).

(iii) After a transfer of any Initial Notes or Private Exchange Notes pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes or Private Exchange Notes, as the case may be, all requirements pertaining to legends on such Initial Note or such Private Exchange Note shall cease to apply, the requirements requiring any such Initial Note or such Private Exchange Note issued to certain Holders be issued in global form shall cease to apply, and a certificated Initial Note or Private Exchange Note or an Initial Note or Private Exchange Note in global form, in each case without restrictive transfer legends, shall be available to the transferee of the Holder of such Initial Notes or Private Exchange Notes upon exchange of such transferring Holder’s certificated Initial Note or Private Exchange Note or directions to transfer such Holder’s interest in the Global Note, as applicable.

(iv) Upon the consummation of a Registered Exchange Offer with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form shall still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form, in each case without the restricted notes legend set forth in Exhibit 1 hereto shall be available to Holders that exchange such Initial Notes in such Registered Exchange Offer.

(v) Upon the consummation of a Private Exchange with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form shall still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Private Exchange Notes in global form with the global notes legend and the applicable restricted notes legend set forth in Exhibit 1 hereto shall be available to Holders that exchange such Initial Notes in such Private Exchange.

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(f) Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have been exchanged for Certificated Notes, redeemed, purchased or canceled, such Global Note shall be returned to the Depository for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.

(g) No Obligation of the Trustee.

(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.

(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

2.4 Certificated Notes.

(a) A Global Note deposited with the Depository or with the Trustee as Notes Custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Certificated Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 hereof and (i) the Depository notifies the Company that it is unwilling or unable to continue as depository for such Global Note and the Depository fails to appoint a successor depository or if at any time such Depository ceases to be a “clearing agency” registered under the Exchange Act, in either case, and a successor depository is not appointed by the Company within 90 days of such notice, or (ii) a Default has occurred and is continuing or (iii) if requested by a Holder of beneficial interest in a Global Note.

(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depository to the Trustee located at its principal Corporate Trust Office to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Certificated Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in denominations of $1,000 principal amount and any integral multiple of $1,000 in excess thereof and registered in such

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names as the depository shall direct. Any Certificated Note delivered in exchange for an interest in the Transfer Restricted Note shall, except as otherwise provided by Section 2.3(e) hereof, bear the applicable restricted notes legend and certificated notes legend set forth in Exhibit 1 hereto.

(c) Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

(d) In the event of the occurrence of one of the events specified in Section 2.4(a) hereof, the Company shall promptly make available to the Trustee a reasonable supply of Certificated Notes in definitive, fully registered form without interest coupons. In the event that such Certificated Notes are not issued, the Company expressly acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to this Indenture, including pursuant to Section 507, the right of any beneficial owner of Notes to pursue such remedy with respect to the portion of the Global Note that represents such beneficial owner’s Notes as if such Certificated Notes had been issued.

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EXHIBIT 1

to Rule 144A/Regulation S Appendix

[FORM OF FACE OF INITIAL NOTE]

[Global Notes Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]

[Restricted Notes Legend for Notes offered otherwise than in Reliance on Regulation S]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO ALERIS INTERNATIONAL, INC. (THE “COMPANY”) OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (AN “ACCREDITED INVESTOR”) THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A

Exhibit 1-1

U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

[Restricted Notes Legend for Notes Offered in Reliance on Regulation S]

THIS SECURITY WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

[Temporary Regulation S Global Note Legend]

EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN INTEREST IN THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE COMPANY, (II) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION

Exhibit 1-2

STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE WILL NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.

AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL NOTE ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE NOTES IN COMPLIANCE WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL NOTE FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL NOTE IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

BENEFICIAL INTERESTS IN A RULE 144A GLOBAL NOTE MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL NOTE, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE).

[Certificated Notes Legend]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE NOTE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

Exhibit 1-3

No. $

10% Senior Subordinated Notes Due 2016

Aleris International, Inc., a Delaware corporation, promises to pay to                     , or registered assigns, the principal sum of                      U.S. Dollars on December 15, 2016.

Interest Payment Dates: June 15 and December 15.

Record Dates: June 1 and December 1.

Additional provisions of this Note are set forth on the other side of this Note.

Exhibit 1-4

Dated:
	AURORA ACQUISITION MERGER SUB, INC.
	By:
		Name:
		Title:

Exhibit 1-5

The undersigned hereby acknowledges and agrees that, upon the effectiveness of the Merger of Aurora Acquisition Merger Sub, Inc. with and into Aleris International, Inc. with Aleris International, Inc. continuing as the surviving corporation, it shall succeed by operation of law to all of the rights and obligations of Aurora Acquisition Merger Sub, Inc., set forth herein and that all references to the “Company” shall thereupon be deemed to be references to the undersigned.
ALERIS INTERNATIONAL, INC.
By
	Name:
	Title:

Exhibit 1-6

TRUSTEE’S CERTIFICATE OF AUTHENTICATION
LASALLE BANK NATIONAL ASSOCIATION, as Trustee certifies that this is one of the Notes referred to in the Indenture.
By
	Authorized Signatory

Exhibit 1-7

[FORM OF REVERSE SIDE OF INITIAL NOTE]

10% Senior Subordinated Note Due 2016

Capitalized terms used herein but not defined herein shall have the meanings given to such terms in the Indenture.

1. Principal and Interest; Subordination.

Aleris International, Inc. (the “Company”) shall pay the principal of this Note on December 15, 2016. The Company promises to pay interest and Additional Interest, if any, on the principal amount of this Note on each Interest Payment Date, as set forth below, at the rate of 10% per annum (subject to adjustment as provided below). Interest, and Additional Interest, if any, shall be payable semi-annually (to the Holders of the Notes at the close of business on June 1 or December 1 immediately preceding the Interest Payment Date) on each Interest Payment Date, commencing June 15, 2007.

The Holder of this Note is entitled to the benefits of the Registration Rights Agreement, dated December 19, 2006, among the Company, the Subsidiary Guarantors and the Initial Purchasers named therein (the “Registration Rights Agreement”), including with respect to Additional Interest.

Interest on this Note shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from December 19, 2006; provided that, if there is no existing Default in the payment of interest and if this Note is authenticated between a Regular Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

The Company shall pay interest and Additional Interest if any, on overdue principal and premium, if any, and interest on overdue installments of interest, to the extent lawful, at a rate per annum equal to the rate of interest applicable to the Notes.

The indebtedness evidenced by the Notes is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness, and this Note is issued subject to such provisions. Each Holder of this Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on its behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture and (c) appoints the Trustee its attorney in-fact for such purpose.

2. Method of Payment.

The Company shall pay interest (except Defaulted Interest) on the principal amount of the Notes on each June 15 and December 15 to the Persons who are Holders (as reflected in the Note Register at the close of business on June 1 and December 1 immediately preceding the Interest Payment Date), in each case, even if the Note is transferred or exchanged after such Regular Record Date, except as provided in Section 306(b) with respect to Defaulted Interest; provided that, with respect to the payment of principal, the Company shall make payment to the Holder that surrenders this Note to any Paying Agent on or after December 15, 2016.

Exhibit 1-8

The Company shall pay principal (premium, if any) and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal (premium, if any) and interest by its check payable in such money. The Company may pay interest on the Notes either (a) by mailing a check for such interest to a Holder’s registered address (as reflected in the Note Register) or (b) by wire transfer to an account located in the United States maintained by the payee. If a payment date is a date other than a Business Day at a place of payment, payment may be made at that place on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period.

3. Paying Agent and Note Registrar.

Initially, LaSalle Bank National Association (the “Trustee”) shall act as Paying Agent and Note Registrar. The Company may change any Paying Agent or Note Registrar upon written notice thereto and without notice to the Holders. The Company, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Note Registrar or co-registrar.

4. Indenture.

The Company issued the Notes under a Senior Subordinated Indenture dated as of December 19, 2006 (the “Indenture”), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control.

The Notes are unsecured senior subordinated obligations of the Company. The Indenture does not limit the aggregate principal amount of the Notes. Subject to the conditions set forth in the Indenture, the Company may issue Additional Notes.

5. Optional Redemption.

At any time prior to December 15, 2011, the Company may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date.

On and after December 15, 2011, the Company may redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days’ prior notice to each Holder at the Redemption Prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on December 15 of each of the years indicated below:

Year	Percentage
2011	105.000	%
2012	103.333	%
2013	101.667	%
2014 and thereafter	100.000	%

Exhibit 1-9

In addition, until December 15, 2009, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture at a redemption price equal to 110.000% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds of one or more Equity Offerings of the Company or any direct or indirect parent of the Company to the extent such net cash proceeds are contributed to the Company; provided that at least 50% of the sum of the aggregate principal amount of Notes originally issued under the Indenture remains Outstanding immediately after the occurrence of each such redemption; provided, further, that each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

6. Repurchase upon a Change of Control and Asset Sales.

Upon the occurrence of (a) a Change of Control, the Holders shall have the right to require that the Company purchase such Holder’s Outstanding Notes, in whole or in part, at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase and (b) Asset Sales, the Company may be obligated to make offers to purchase Notes and Senior Subordinated Indebtedness of the Company with a portion of the Net Proceeds of such Asset Sales at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase.

7. Denominations; Transfer; Exchange.

The Notes are in registered form without coupons in denominations of $1,000 principal amount and integral multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the Indenture. The Note Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Note Registrar need not register the transfer or exchange of a Note or portion of a Note selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Note or portion of a Note for a period of 15 days before a selection of Notes to be redeemed or 15 days before an Interest Payment Date.

8. Persons Deemed Owners.

A registered Holder may be treated as the owner of a Note for all purposes.

9. Unclaimed Money.

Subject to any laws relating to abandoned property, if money for the payment of principal (premium, if any) or interest remains unclaimed for two years, the Trustee and the Paying Agent shall pay the money back to the Company at its request or (if then held by the Company) shall be discharged from such trust. After that, Holders entitled to the money must look to the Company for payment and all liability of the Trustee and such Paying Agent with respect to such money, and all liability of the Company as trustee thereof, shall cease.

10. Discharge and Defeasance Prior to Redemption or Maturity.

Subject to satisfaction of conditions set forth in the Indenture, the Company at any time may terminate some or all of its obligations under the Notes and the Indenture if the Company irrevocably deposits with the Trustee cash or Government Securities or a combination thereof sufficient for the payment

Exhibit 1-10

of the then outstanding principal of and interest on the Notes to Redemption or Stated Maturity, as the case may be.

11. Amendment; Supplement; Waiver.

Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Outstanding Notes, including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes, and any existing Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the Outstanding Notes. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture or the Notes to, among other things, cure any ambiguity, omission, mistake, defect or inconsistency and make any change that does not adversely affect the legal rights of any Holder.

12. Restrictive Covenants.

The Indenture contains certain covenants, including covenants with respect to the following matters: (i) Restricted Payments; (ii) incurrence of Indebtedness and issuance of Disqualified Stock and Preferred Stock; (iii) Liens; (iv) transactions with Affiliates; (v) dividend and other payment restrictions affecting Restricted Subsidiaries; (vi) guarantees of Indebtedness by Restricted Subsidiaries; (vii) incurrence of other Senior Subordinated Indebtedness; (viii) merger, consolidation or sale of all or substantially all assets; (ix) purchase of Notes upon a Change in Control; and (x) disposition of proceeds of Asset Sales. Within 120 days (or the successor time period then in effect under the rules and regulations of the Exchange Act) after the end of each fiscal year, the Company must report to the Trustee on compliance with such limitations.

13. Successor Persons.

When a successor Person or other entity assumes all the obligations of its predecessor under the Notes and the Indenture, the predecessor Person shall be released from those obligations, subject to certain exceptions.

14. Remedies for Events of Default.

If an Event of Default, as defined in the Indenture, occurs and is continuing, the Trustee or the Holders of at least 30% in principal amount of the Outstanding Notes may declare all Outstanding Notes to be immediately due and payable; provided, however, that, so long as any Indebtedness permitted to be incurred under the Indenture as part of the Senior Credit Facilities or the Senior Notes shall be outstanding, no such acceleration shall be effective until the earlier of (1) acceleration of any such Indebtedness under the Senior Credit Facilities and the Senior Notes, or (2) five Business Days after the giving of written notice of such acceleration to the Company, the administrative agent under the Senior Credit Facilities and the trustee under the Senior Indenture. If an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Company occurs and is continuing, the Notes automatically become immediately due and payable. Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Subject to certain restrictions, the Holders of a majority in principal amount of the Outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the

Exhibit 1-11

Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

15. Subsidiary Guarantees.

The Company’s obligations under the Notes are fully, irrevocably and unconditionally guaranteed on an unsecured senior subordinated basis, to the extent set forth in the Indenture, by each of the Subsidiary Guarantors.

16. Trustee Dealings with Company.

The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may make loans to, accept deposits from, perform services for, and otherwise deal with, the Company and its Affiliates as if it were not the Trustee.

17. Authentication.

This Note shall not be valid until the Trustee signs the certificate of authentication on the other side of this Note.

18. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).

19. CUSIP Numbers.

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

20. Holders’ Compliance with the Registration Rights Agreement.

Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the Holders with respect to a registration and the indemnification of the Company to the extent provided therein.

21. Governing Law.

THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to Aleris International, Inc. 25825 Science Park Drive, Suite 400, Beachwood, Ohio 44122, Attention: General Counsel.

Exhibit 1-12

EXHIBIT 2

to Rule 144A/Regulation S Appendix

ASSIGNMENT/TRANSFER FORM

To assign and transfer this Note, fill in the form below:

I or we assign and transfer this Note to

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint                      agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date:	Your Signature:
		Sign exactly as your name appears on the other side of this Note.

Exhibit 2-1

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Securities Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Company or any Affiliate of the Company, the undersigned confirms that such Notes are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

¨	to the Company; or
¨	(1)	pursuant to an effective registration statement under the Securities Act of 1933, as amended; or
¨	(2)	inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or
¨	(3)	outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933, as amended; or
¨	(4)	pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933, as amended.

Unless one of the boxes is checked, the Trustee shall refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (4) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, as amended, such as the exemption provided by Rule 144 under such Act.

Signature                                                                                                                                                                                                                                                     

Signature Guarantee:                                                                                                                                                                                                                              

Signature must be guaranteed Signature

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Exhibit 2-2

BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Dated:
	Notice: To be executed by an executive officer

Exhibit 2-3

[TO BE ATTACHED TO GLOBAL NOTES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

The following increases or decreases in this Global Note have been made:

Date of Exchange Amount of decrease in Principal amount of this Global Note Amount of increase in Principal amount of this Global Note Principal amount of this Global Note following such decrease or increase Signature of authorized officer of Trustee or Notes Custodian

Exhibit 2-4

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 1017 or 1018 of the Indenture, check the box:  ¨

If you want to elect to have only part of this Note purchased by the Company pursuant to Section 1017 or 1018 of the Indenture, state the amount in principal amount:  $

Dated:	Your Signature:
		(Sign exactly as your name appears on
		the other side of this Note.)

Signature Guarantee:
	(Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Exhibit 2-5

EXHIBIT 3

to Rule 144A / Regulation S Appendix

FORM OF NON-U.S. BENEFICIAL OWNERSHIP

CERTIFICATION BY EURO CLEAR OR CLEARSTREAM LUXEMBOURG

[Date]

LaSalle Bank National Association

Re: 10% Senior Subordinated Notes due 2016 (the “Notes”) of Aleris International, Inc. (the “Company”)

Reference is hereby made to the Senior Subordinated Indenture, dated as of December 19, 2006 (as amended and supplemented from time to time, the “Indenture”), among the Company, the Subsidiary Guarantors named therein and LaSalle Bank National Association, as Trustee. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.

This is to certify with respect to $________ principal amount of the Notes that, except as set forth below, we have received in writing, by tested telex or by electronic transmission, from member organizations appearing in our records as persons being entitled to a portion of such principal amount (our “Member Organizations”) certifications with respect to such portion, that such portion is beneficially owned by (a) Non-U.S. Person(s) or (b) U.S. Person(s) who purchased the portion beneficially owned by such U.S. Person(s) in transactions that did not require registration under the Securities Act of 1933, as amended (the “Act”). As used in this paragraph the term “U.S. Person” has the meaning given to it by Regulation S under the Act.

We further certify:

(i) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the Regulation S Temporary Global Note excepted in such certifications; and

(ii) that as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as the date hereof.

We understand that this certification is required in connection with certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you or the Company to produce this certification to any interested party in such proceedings.

Dated:                     , 20

Exhibit 3-1

Yours faithfully,

[Euroclear or Clearstream Luxembourg]

By

Exhibit 3-2

EXHIBIT A

[FORM OF FACE OF EXCHANGE NOTE OR PRIVATE EXCHANGE NOTE]¹²

No. $

10% Senior Subordinated Notes Due 2016

Aleris International, Inc., a Delaware corporation, promises to pay to                     , or registered assigns, the principal sum of                      U.S. Dollars on December 15, 2016.

Interest Payment Dates: June 15 and December 15.

Record Dates: June 1 and December 1.

Additional provisions of this Note are set forth on the other side of this Note.

¹ [If the Note is to be issued in global form add the Global Notes Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1 captioned “[TO BE ATTACHED TO GLOBAL NOTES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE.”

² [If the Note is a Private Exchange Note issued in a Private Exchange to an Initial Purchaser holding an unsold portion of its initial allotment, add the Restricted Notes Legend from Exhibit 1 to Appendix A and replace the Assignment Form included in this Exhibit A with the Assignment Form included in such Exhibit 1.]

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Dated:
	ALERIS INTERNATIONAL, INC.
	By:
		Name:
		Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION LASALLE NATIONAL BANK ASSOCIATION, as Trustee certifies that this is one of the Notes referred to in the Indenture.
By:
	Authorized Signatory

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[FORM OF REVERSE SIDE OF EXCHANGE NOTE

OR PRIVATE EXCHANGE NOTE]

10% Senior Subordinated Note Due 2016

Capitalized terms used herein but not defined herein shall have the meanings given to such terms in the Indenture.

1. Principal and Interest; Subordination.

Aleris International, Inc. (the “Company”) shall pay the principal of this Note on December 15, 2016.

The Company promises to pay interest and Additional Interest, if any, on the principal amount of this Note on each Interest Payment Date, as set forth below, at the rate of 10% per annum (subject to adjustment as provided below).

Interest, and Additional Interest, if any, shall be payable semi-annually (to the Holders of the Notes (or any predecessor Notes) at the close of business on June 1 or December 1 immediately preceding the Interest Payment Date) on each Interest Payment Date, commencing June 15, 2007.

[The Holder of this Note is entitled to the benefits of the Registration Rights Agreement, dated December 19, 2006, among the Company, the Subsidiary Guarantors and the Initial Purchasers named therein (the “Registration Rights Agreement”) including with respect to Additional Interest.]³

Interest, including Additional Interest if any, on this Note shall accrue from the most recent date to which interest has been paid on this Note or the Note surrendered in exchange herefor or, if no interest has been paid, from December 19, 2006; provided that, if there is no existing Default in the payment of interest and if this Note is authenticated between a Regular Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

The Company shall pay interest and Additional Interest if any, on overdue principal and premium, if any, and interest on overdue installments of interest, to the extent lawful, at a rate per annum equal to the rate of interest applicable to the Notes.

The indebtedness evidenced by the Notes is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior In

³ Insert if at the date of issuance of the Exchange Note or Private Exchange Note (as the case may be) any Registration Default has occurred with respect to the related Initial Note, during the interest period in which such date of issuance occurs.

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debtedness, and this Note is issued subject to such provisions. Each Holder of this Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on its behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture and (c) appoints the Trustee its attorney in-fact for such purpose

2. Method of Payment.

The Company shall pay interest (except defaulted interest) on the principal amount of the Notes on each June 15 and December 15 to the Persons who are Holders (as reflected in the Note Register at the close of business on June 1 and December 1 immediately preceding the Interest Payment Date), in each case, even if the Note is transferred or exchanged after such Regular Record Date, except as provided in Section 306(b) with respect to defaulted interest; provided that, with respect to the payment of principal, the Company shall make payment to the Holder that surrenders this Note to any Paying Agent on or after December 15, 2016.

The Company shall pay principal (premium, if any) and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal (premium, if any) and interest by its check payable in such money. The Company may pay interest on the Notes either (a) by mailing a check for such interest to a Holder’s registered address (as reflected in the Note Register) or (b) by wire transfer to an account located in the United States maintained by the payee. If a payment date is a date other than a Business Day at a place of payment, payment may be made at that place on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period.

3. Paying Agent and Note Registrar.

Initially, LaSalle Bank National Association (the “Trustee”) shall act as Paying Agent and Note Registrar. The Company may change any Paying Agent or Note Registrar upon written notice thereto and without notice to the Holders. The Company, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Note Registrar or co-registrar.

4. Indenture.

The Company issued the Notes under a Senior Subordinated Indenture dated as of December 19, 2006 (the “Indenture”), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control.

The Notes are unsecured senior subordinated obligations of the Company. The Indenture does not limit the aggregate principal amount of the Notes. Subject to the conditions set forth in the Indenture, the Company may issue Additional Notes.

5. Optional Redemption.

At any time prior to December 15, 2011, the Company may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to 100% of

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the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date.

On and after December 15, 2011, the Company may redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days’ prior notice to each Holder at the Redemption Prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on December 15 of each of the years indicated below:

Year	Percentage
2011	105.000	%
2012	103.333	%
2013	101.667	%
2014 and thereafter	100.000	%

In addition, until December 15, 2009, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture at a redemption price equal to 110.000% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds of one or more Equity Offerings of the Company or any direct or indirect parent of the Company to the extent such net cash proceeds are contributed to the Company; provided that at least 50% of the sum of the aggregate principal amount of Notes originally issued under the Indenture remains Outstanding immediately after the occurrence of each such redemption; provided, further, that each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

6. Repurchase upon a Change of Control and Asset Sales.

Upon the occurrence of (a) a Change of Control, the Holders shall have the right to require that the Company purchase such Holder’s outstanding Notes, in whole or in part, at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase and (b) Asset Sales, the Company may be obligated to make offers to purchase Notes and Senior Subordinated Indebtedness of the Company with a portion of the Net Proceeds of such Asset Sales at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase.

7. Denominations; Transfer; Exchange.

The Notes are in registered form without coupons in denominations of $1,000 principal amount and integral multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the Indenture. The Note Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Note Registrar need not register the transfer or exchange of a Note or portion of a Note selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Note or portion of a Note for a period of 15 days before a selection of Notes to be redeemed or 15 days before an interest payment date.

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8. Persons Deemed Owners.

A registered Holder may be treated as the owner of a Note for all purposes.

9. Unclaimed Money.

Subject to any laws relating to abandoned property, if money for the payment of principal (premium, if any) or interest remains unclaimed for two years, the Trustee and the Paying Agent shall pay the money back to the Company at its request or (if then held by the Company) shall be discharged from such trust. After that, Holders entitled to the money must look to the Company for payment and all liability of the Trustee and such Paying Agent with respect to such money and all liability of the Company as trustee thereof shall cease.

10. Discharge and Defeasance Prior to Redemption or Maturity.

Subject to satisfaction of conditions set forth in the Indenture, the Company at any time may terminate some or all of its obligations under the Notes and the Indenture, if the Company irrevocably deposits with the Trustee cash or Government Securities or a combination thereof sufficient for the payment of the then outstanding principal of and interest on the Notes to Redemption or Stated Maturity, as the case may be.

11. Amendment; Supplement; Waiver.

Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Outstanding Notes, including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes, and any existing Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the Outstanding Notes. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture or the Notes to, among other things, cure any ambiguity, omission, mistake, defect or inconsistency and make any change that does not adversely affect the legal rights of any Holder.

12. Restrictive Covenants.

The Indenture contains certain covenants, including covenants with respect to the following matters: (i) Restricted Payments; (ii) incurrence of Indebtedness and issuance of Disqualified Stock and Preferred Stock; (iii) Liens; (iv) transactions with Affiliates; (v) dividend and other payment restrictions affecting Restricted Subsidiaries; (vi) guarantees of Indebtedness by Restricted Subsidiaries; (vii) incurrence of other Senior Subordinated Indebtedness; (viii) merger, consolidation or sale of all or substantially all assets; (ix) purchase of Notes upon a Change in Control; and (x) disposition of proceeds of Asset Sales. Within 120 days (or the successor time period then in effect under the rules and regulations of the Exchange Act) after the end of each fiscal year, the Company must report to the Trustee on compliance with such limitations.

13. Successor Persons.

When a successor Person or other entity assumes all the obligations of its predecessor under the Notes and the Indenture, the predecessor Person shall be released from those obligations, subject to certain exceptions.

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14. Remedies for Events of Default.

If an Event of Default, as defined in the Indenture, occurs and is continuing, the Trustee or the Holders of at least 30% in principal amount of the Outstanding Notes may declare all Outstanding Notes to be immediately due and payable; provided, however, that, so long as any Indebtedness permitted to be incurred under the Indenture as part of the Senior Credit Facilities or the Senior Notes shall be outstanding, no such acceleration shall be effective until the earlier of (1) acceleration of any such Indebtedness under the Senior Credit Facilities and the Senior Notes, or (2) five Business Days after the giving of written notice of such acceleration to the Company, the administrative agent under the Senior Credit Facilities and the trustee under the Senior Indenture. If an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Company occurs and is continuing, the Notes automatically become immediately due and payable. Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Subject to certain restrictions, the Holders of a majority in principal amount of the Outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

15. Guarantees.

The Company’s obligations under the Notes are fully, irrevocably and unconditionally guaranteed on an unsecured senior subordinated basis, to the extent set forth in the Indenture, by each of the Subsidiary Guarantors.

16. Trustee Dealings with Company.

The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may make loans to, accept deposits from, perform services for, and otherwise deal with, the Company and its Affiliates as if it were not the Trustee.

17. Authentication.

This Note shall not be valid until the Trustee signs the certificate of authentication on the other side of this Note.

18. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).

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19. CUSIP Numbers.

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

20. Holders’ Compliance with the Registration Rights Agreement.

Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the Holders with respect to a registration and the indemnification of the Company to the extent provided therein.

21. Governing Law.

THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to Aleris International, Inc., 25825 Science Park Drive, Suite 400, Beachwood, Ohio 44122, Attention: General Counsel.

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ASSIGNMENT/TRANSFER FORM

To assign and transfer this Note, fill in the form below:

I or we assign and transfer this Note to

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint                      agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date:	Your Signature:
		Sign exactly as your name appears on the other side of this Note.

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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 1017 or 1018 of the Indenture, check the box:  ¨

If you want to elect to have only part of this Note purchased by the Company pursuant to Section 1017 or 1018 of the Indenture, state the amount in principal amount:  $

Dated:	Your Signature:
		Sign exactly as your name appears on the other side of this Note.)

Signature Guarantee:
	(Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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EXHIBIT B

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of                     , 200    , among                      (the “Guaranteeing Subsidiary”), a subsidiary of Aleris International, Inc. (or its permitted successor), a Delaware corporation (the “Company”), the Company, the other Subsidiary Guarantors (as defined in the Indenture referred to herein) and LaSalle Bank National Association, as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee a senior subordinated indenture (the “Indenture”), dated as of December 19, 2006 providing for the issuance of 10% Senior Subordinated Notes Due 2016 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Guarantee”); and

WHEREAS, pursuant to Section 901 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Subsidiary Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 12 thereof.

3. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

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4. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

5. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

6. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.

7. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

Dated:                     , 20    

[GUARANTEEING SUBSIDIARY]
By:
	Name:
	Title:
ALERIS INTERNATIONAL, INC.
By:
	Name:
	Title:
LASALLE BANK NATIONAL ASSOCIATION, as Trustee
By:
	Authorized Signatory

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EX-4.5

Exhibit 4.5

REGISTRATION RIGHTS AGREEMENT

Dated as of December 19, 2006

Among

AURORA ACQUISITION MERGER SUB, INC.

ALERIS INTERNATIONAL, INC.

and

THE GUARANTORS NAMED HEREIN

as Issuers,

and

DEUTSCHE BANK SECURITIES INC.,

GOLDMAN, SACHS & CO.

KEYBANC CAPITAL MARKETS, A DIVISION OF MCDONALD INVESTMENTS INC.

and

PNC CAPITAL MARKETS LLC

as Initial Purchasers

$600,000,000 9%/9 ³/4% Senior Notes due 2014

$400,000,000 10% Senior Subordinated Notes due 2016

TABLE OF CONTENTS

		Page
1	Definitions	1
2.	Exchange Offer	6
3.	Shelf Registration	10
4.	Additional Interest	11
5.	Registration Procedures	12
6.	Registration Expenses	20
7.	Indemnification and Contribution	21
8.	Rules 144 and 144A	25
9.	Underwritten Registrations	25
10.	Miscellaneous	25

-i-

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is dated as of December 19, 2006, among AURORA ACQUISITION MERGER SUB, INC., a Delaware corporation (“Aurora”), ALERIS INTERNATIONAL, INC., a Delaware corporation (“Aleris”), the subsidiaries of the Company listed on the signature page hereto (collectively, and together with any entity that in the future executes a supplemental indenture pursuant to which such entity agrees to guarantee the Senior Notes and the Senior Subordinated Notes (each as hereinafter defined), the “Guarantors,” and together with Aurora and the Company, the “Issuers”) and the initial purchasers listed in the signature pages hereto (the “Initial Purchasers”). As used in this Agreement, the term “Company” means, prior to the Merger (as defined in the Purchase Agreement (as defined below), Aurora, and thereafter, Aleris.

This Agreement is entered into in connection with the Purchase Agreement, dated as of December 13, 2006 (the “Purchase Agreement”), by and among Aurora (which will be merged with and into Aleris upon consummation of the Merger (as defined in the Purchase Agreement) of Aurora and Aleris with Aleris as survivor of the Merger) and Deutsche Bank Securities Inc., for itself and on behalf of the Initial Purchasers, which provides for, among other things, the sale by Aurora to the Initial Purchasers of $600,000,000 aggregate principal amount of Aurora’s 9%/9 ³/4% Senior Notes due 2014 (the “Senior Notes”) and $400,000,000 aggregate principal amount of Aurora’s 10% Senior Subordinated Notes due 2016 (the “Senior Subordinated Notes,” and together with the Senior Notes, the “Notes”). The Senior Notes are issued under an indenture, dated as of the date hereof (as amended or supplemented from time to time, the “Senior Notes Indenture”), among Aurora, the Company, the Guarantors and LaSalle Bank National Association, as Trustee. The Senior Subordinated Notes are issued under an indenture, dated as of the date hereof (as amended or supplemented from time to time, the “Senior Subordinated Notes Indenture,” and together with the Senior Notes Indenture, the “Indentures”), among Aurora, the Company, the Guarantors and the Trustee. Pursuant to the Purchase Agreement and the applicable Indenture, each Guarantor is required to guarantee on an unsecured senior basis (collectively, the “Senior Guarantees”) the Company’s obligations under the Senior Notes and to guarantee on an unsecured senior subordinated basis (collectively, the “Senior Subordinated Guarantees” and, together with the Senior Guarantees, the “Guarantees”) the Company’s obligations under the Senior Subordinated Notes. References to the “Securities” shall mean, collectively, the Notes and, when issued, the Guarantees. In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Issuers have agreed to provide the registration rights set forth in this Agreement for the benefit of the Initial Purchasers and any subsequent holder or holders of the Securities. The execution and delivery of this Agreement is a condition to the Initial Purchasers’ obligations under the Purchase Agreement.

The parties hereby agree as follows:

1. Definitions

As used in this Agreement, the following terms shall have the following meanings:

Additional Interest: Shall have the meaning set forth in Section 4(a) hereof.

Advice: Shall have the meaning set forth in the last paragraph of Section 5 hereof.

Agreement: Shall have the meaning set forth in the preamble hereto.

Applicable Period: Shall have the meaning set forth in Section 2(b) hereof.

Aurora: Shall have the meaning set forth in the preamble hereto.

Business Day: Any day that is not a Saturday, Sunday or a day on which banking institutions in New York are authorized or required by law to be closed.

Company: Shall have the meaning set forth in the preamble hereto and shall also include the Company’s successors.

Effectiveness Period: Shall have the meaning set forth in Section 3(a) hereof.

Event Date: Shall have the meaning set forth in Section 4(b) hereof.

Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Exchange Notes: Shall have the meaning set forth in Section 2(a) hereof.

Exchange Offer: Shall have the meaning set forth in Section 2(a) hereof.

Exchange Offer Registration Statement: Shall have the meaning set forth in Section 2(a) hereof.

Exchange Securities: Shall have the meaning set forth in Section 2(a) hereof.

Guarantees: Shall have the meaning set forth in the preamble hereto.

Guarantors: Shall have the meaning set forth in the preamble hereto and shall also include any Guarantor’s successors.

Holder: Any holder of a Registrable Security or Registrable Securities.

Indentures: Shall have the meaning set forth in the preamble hereto.

Information: Shall have the meaning set forth in Section 5(o) hereof.

Initial Purchasers: Shall have the meaning set forth in the preamble hereto.

Initial Shelf Registration: Shall have the meaning set forth in Section 3(a) hereof.

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Inspector: Shall have the meaning set forth in Section 5(o) hereof.

Issue Date: December 13, 2006, the date of original issuance of the Notes.

Issuer FWP: Shall have the meaning set forth in Section 7(a) hereof.

Issuers: Shall have the meaning set forth in the preamble hereto.

NASD: Shall have the meaning set forth in Section 5(s) hereof.

New Guarantees: Shall have the meaning set forth in Section 2(a) hereof.

New Senior Guarantees: Shall have the meaning set forth in Section 2(a) hereof.

New Senior Subordinated Guarantees: Shall have the meaning set forth in Section 2(a) hereof.

Notes: Shall have the meaning set forth in the preamble hereto.

Participant: Shall have the meaning set forth in Section 7(a) hereof.

Participating Broker-Dealer: Shall have the meaning set forth in Section 2(b) hereof.

Person: An individual, trustee, corporation, partnership, limited partnership, limited liability company, joint stock company, trust, unincorporated association, union, business association, firm or other legal entity.

Private Exchange: Shall have the meaning set forth Section 2(b) hereof.

Private Exchange Notes: Shall have the meaning set forth in Section 2(b) hereof.

Private Senior Guarantees: Shall have the meaning set forth in Section 2(b) hereof.

Private Senior Subordinated Guarantees: Shall have the meaning set forth in Section 2(b) hereof.

Prospectus: The prospectus included in any Registration Statement (including, without limitation, any prospectus subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Securities Act and any term sheet filed pursuant to Rule 433 under the Securities Act), as amended or supplemented by any prospectus supplement or free writing prospectus, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

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Purchase Agreement: Shall have the meaning set forth in the preamble hereto.

Records: Shall have the meaning set forth in Section 5(o) hereof.

Registrable Securities: Each Security upon its original issuance and at all times subsequent thereto, each Exchange Security as to which Section 2(c)(v) hereof is applicable upon original issuance and at all times subsequent thereto and each Private Exchange Note (and the related guarantees) upon original issuance thereof and at all times subsequent thereto, until, in each case, the earliest to occur of (i) a Registration Statement (other than, with respect to any Exchange Securities as to which Section 2(c)(v) hereof is applicable, the Exchange Offer Registration Statement) covering such Security, Exchange Security or Private Exchange Note (and the related guarantees) having been declared effective by the SEC and such Security, Exchange Security or such Private Exchange Note (and the related guarantees), as the case may be, has been disposed of in accordance with such effective Registration Statement or not tendered in connection with the Exchange Offer (provided that the Holder of such Security was eligible to participate in the Exchange Offer), (ii) such Security has been exchanged pursuant to the Exchange Offer for an Exchange Security or Exchange Securities that may be resold without restriction under state and federal securities laws, (iii) such Security, Exchange Security or Private Exchange Note (and the related guarantees), as the case may be, ceases to be outstanding for purposes of the applicable Indenture or (iv) such Security, Exchange Security or Private Exchange Note (and the related guarantees), as the case may be, may be resold without restriction pursuant to Rule 144(k) (as amended or replaced) under the Securities Act.

Registration Statement: Any registration statement of the Issuers that covers any of the Securities, the Exchange Securities or the Private Exchange Notes (and the related guarantees) filed with the SEC under the Securities Act, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

Rule 144: Rule 144 under the Securities Act.

Rule 144A: Rule 144A under the Securities Act.

Rule 405: Rule 405 under the Securities Act.

Rule 415: Rule 415 under the Securities Act.

Rule 424: Rule 424 under the Securities Act.

SEC: The U.S. Securities and Exchange Commission.

Securities: Shall have the meaning set forth in the preamble hereto.

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Securities Act: The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Senior Guarantees: Shall have the meaning set forth in the preamble hereto.

Senior Notes: Shall have the meaning set forth in the preamble hereto.

Senior Notes Indenture: Shall have the meaning set forth in the preamble hereto.

Senior Subordinated Guarantees: Shall have the meaning set forth in the preamble hereto.

Senior Subordinated Notes: Shall have the meaning set forth in the preamble hereto.

Senior Subordinated Notes Indenture: Shall have the meaning set forth in the preamble hereto.

Shelf Notice: Shall have the meaning set forth in Section 2(c) hereof.

Shelf Registration: Shall have the meaning set forth in Section 3(b) hereof.

Shelf Registration Statement: Any Registration Statement relating to a Shelf Registration.

Subsequent Shelf Registration: Shall have the meaning set forth in Section 3(b) hereof.

TIA: The Trust Indenture Act of 1939, as amended.

Trustee: The trustee under the applicable Indenture and the trustee (if any) under any indenture governing the Exchange Securities and Private Exchange Notes (and the related guarantees).

Underwritten registration or underwritten offering: A registration in which securities of the Company are sold to an underwriter for reoffering to the public.

Except as otherwise specifically provided, all references in this Agreement to acts, laws, statutes, rules, regulations, releases, forms, no-action letters and other regulatory requirements (collectively, “Regulatory Requirements”) shall be deemed to refer also to any amendments thereto and all subsequent Regulatory Requirements adopted as a replacement thereto having substantially the same effect therewith; provided that Rule 144 shall not be deemed to amend or replace Rule 144A.

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2. Exchange Offer

(a) Unless the Exchange Offer would violate applicable law or any applicable interpretation of the staff of the SEC or would not be permitted by the staff of the SEC, the Issuers shall use their commercially reasonable efforts to cause to be filed with the SEC a Registration Statement (the “Exchange Offer Registration Statement”) on an appropriate registration form with respect to a registered offer (the “Exchange Offer”) to exchange any and all of the Registrable Securities for a like aggregate principal amount of debt securities of the Company (the “Exchange Notes”), guaranteed with respect to Exchange Notes issued in exchange for Senior Notes on an unsecured senior basis (the “New Senior Guarantees”) and guaranteed with respect to Exchange Notes issued in exchange for Senior Subordinated Notes on an unsecured senior subordinated basis by the Guarantors (the “New Senior Subordinated Guarantees” and, collectively, the “New Guarantees” and, together with the Exchange Notes, the “Exchange Securities”), that have terms substantially identical in all material respects to the Senior Notes or Senior Subordinated Notes, as applicable, except that (i) the Exchange Notes shall contain no restrictive legend thereon and (ii) interest thereon shall accrue from the last date on which interest was paid on the Senior Notes or Senior Subordinated Notes, as applicable, or, if no such interest has been paid, from the Issue Date, and which are entitled to the benefits of the applicable Indenture or a trust indenture which is identical in all material respects to the applicable Indenture (other than the changes to the applicable Indenture or any such identical trust indenture as are necessary to comply with the TIA) and which, in either case, has been qualified under the TIA. The Exchange Offer shall comply with all applicable tender offer rules and regulations under the Exchange Act and other applicable laws. The Issuers shall (x) use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to be declared effective under the Securities Act; (y) keep the Exchange Offer open for at least 20 Business Days (or longer if required by applicable law) after the date that notice of the Exchange Offer is mailed to Holders; and (z) consummate the Exchange Offer on or prior to the 360th day following the Issue Date; provided, however, that if such day would otherwise fall on a day that is not a Business Day, then such Exchange Offer must be consummated not later than the next succeeding Business Day.

Each Holder (including, without limitation, each Participating Broker-Dealer) who participates in the Exchange Offer will be required to represent to the Company in writing (which may be contained in the applicable letter of transmittal) that: (i) any Exchange Securities acquired in exchange for Registrable Securities tendered are being acquired in the ordinary course of business of the Person receiving such Exchange Securities, whether or not such recipient is such Holder itself; (ii) at the time of the commencement of the Exchange Offer neither such Holder nor, to the knowledge of such Holder, any other Person receiving Exchange Securities from such Holder has an arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities in violation of the provisions of the Securities Act; (iii) neither the Holder nor, to the knowledge of such Holder, any other Person receiving Exchange Securities from such Holder is an “affiliate” (as defined in Rule 405) of the Company or any Guarantor; (iv) if such Holder is not a broker-dealer, neither such Holder nor, to the knowledge of such Holder, any other Person receiving Exchange

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Securities from such Holder is engaging in or intends to engage in a distribution of the Exchange Securities; and (v) if such Holder is a Participating Broker-Dealer, such Holder has acquired the Registrable Securities as a result of market-making activities or other trading activities and that it will comply with the applicable provisions of the Securities Act (including, but not limited to, the prospectus delivery requirements thereunder).

Upon consummation of the Exchange Offer in accordance with this Section 2, the provisions of this Agreement shall continue to apply, mutatis mutandis, solely with respect to Registrable Securities that are Private Exchange Notes (and the related guarantees), Exchange Securities as to which Section 2(c)(v) is applicable and Exchange Securities held by Participating Broker-Dealers, and the Issuers shall have no further obligation to register Registrable Securities (other than Private Exchange Notes (and the related guarantees) and Exchange Securities as to which clause 2(c)(v) hereof applies) pursuant to Section 3 hereof.

No securities other than the Exchange Securities shall be included in the Exchange Offer Registration Statement.

(b) The Issuers shall include within the Prospectus contained in the Exchange Offer Registration Statement a section entitled “Plan of Distribution,” reasonably aceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential “underwriter” status of any broker-dealer that is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer (a “Participating Broker-Dealer”), whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies represent the prevailing views of the staff of the SEC. Such “Plan of Distribution” section shall also expressly permit, to the extent permitted by applicable policies and regulations of the SEC, the use of the Prospectus by all Persons subject to the prospectus delivery requirements of the Securities Act, including, to the extent permitted by applicable policies and regulations of the SEC, all Participating Broker-Dealers, and include a statement describing the means by which Participating Broker-Dealers may resell the Exchange Securities in compliance with the Securities Act.

The Issuers shall use their commercially reasonable efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the Prospectus contained therein in order to permit such Prospectus to be lawfully delivered by all Persons subject to the prospectus delivery requirements of the Securities Act for such period of time as is necessary to comply with applicable law in connection with any resale of the Exchange Securities; provided, however, that such period shall not be required to exceed 180 days or such longer period if extended pursuant to the last paragraph of Section 5 hereof (the “Applicable Period”).

If, prior to consummation of the Exchange Offer, the Initial Purchasers hold any Notes acquired by them that have the status of an unsold allotment in the initial distribution, the Issuers, upon the request of the Initial Purchasers, shall simultaneously with the delivery of the Exchange Notes issue and deliver to the Initial Purchasers, in exchange (the “Private Exchange”) for such Notes held by any such Holder, a like principal amount of notes (the “Private Exchange

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Notes”) of the Company, guaranteed with respect to Private Exchange Notes issued in exchange for Senior Notes on an unsecured senior basis (the “Private Senior Guarantees”) and guaranteed with respect to Private Exchange Notes issued in exchange for Senior Subordinated Notes on an unsecured senior subordinated basis (the “Private Senior Subordinated Guarantees”) by the Guarantors, that have terms substantially identical in all material respects to the Exchange Notes except for the placement of a restrictive legend on such Private Exchange Notes. The Private Exchange Notes shall be issued pursuant to the same indenture as the Exchange Notes and bear the same CUSIP number and ISIN as the Exchange Notes if permitted by the CUSIP Service Bureau.

In connection with the Exchange Offer, the Issuers shall:

(1) mail, or cause to be mailed, to each Holder of record entitled to participate in the Exchange Offer a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;

(2) use their commercially reasonable efforts to keep the Exchange Offer open for not less than 20 Business Days after the date that notice of the Exchange Offer is mailed to Holders (or longer if required by applicable law);

(3) utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New York;

(4) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York time, on the last Business Day on which the Exchange Offer remains open; and

(5) otherwise comply in all material respects with all applicable laws, rules and regulations.

As soon as reasonably practicable after the close of the Exchange Offer and the Private Exchange, if any, the Issuers shall:

(1) accept for exchange all Registrable Securities validly tendered and not validly withdrawn pursuant to the Exchange Offer and the Private Exchange, if any;

(2) deliver to the Trustee for cancellation all Registrable Securities so accepted for exchange; and

(3)(a) cause the Trustee to authenticate and deliver promptly to each Holder of Senior Notes, Exchange Notes or Private Exchange Notes, as the case may be, with New Senior Guarantees or Private Senior Guarantees, as the case may be, and equal in principal amount to the Senior Notes of such Holder so accepted for exchange and (b) cause the Trustee to authenticate and deliver promptly to each Holder of Senior Subordinated

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Notes, Exchange Notes or Private Exchange Notes, as the case may be, with New Senior Subordinated Guarantees or Private Senior Subordinated Guarantees, as the case may be, and equal in principal amount to the Senior Subordinated Notes of such Holder so accepted for exchange; provided that, in the case of any Notes held in global form by a depositary, authentication and delivery to such depositary of one or more replacement Notes in global form in an equivalent principal amount thereto for the account of such Holders in accordance with the applicable Indenture shall satisfy such authentication and delivery requirement.

The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than that (i) the Exchange Offer or Private Exchange, as the case may be, does not violate applicable law or any applicable interpretation of the staff of the SEC; (ii) no action or proceeding shall have been instituted or threatened in any court or by any governmental agency which might materially impair the ability of the Issuers to proceed with the Exchange Offer or the Private Exchange, and no material adverse development shall have occurred in any existing action or proceeding with respect to the Issuers; and (iii) all governmental approvals shall have been obtained, which approvals the Issuers deem necessary for the consummation of the Exchange Offer or Private Exchange. If the Company determines in its reasonable judgment that either of the foregoing conditions is not satisfied, the Company may (a) refuse to accept any Registrable Securities and return all tendered Registrable Securities to the tendering Holders, (b) extend the Exchange Offer and retain all Registrable Securities tendered before the expiration of the Exchange Offer, subject, however, to the rights of Holders to withdraw those Registrable Securities, or (c) waive the unsatisfied conditions with respect to the Exchange Offer and accept all properly tendered Registrable Securities that have not been withdrawn.

The Exchange Securities and the Private Exchange Notes (and the related guarantees) shall be issued under (i) the applicable Indenture or (ii) indentures identical in all material respects to the applicable Indenture, with such changes as are necessary to comply with any requirements of the SEC to effect or maintain the qualification thereof under the TIA, and which, in either case, have been qualified under the TIA or are exempt from such qualification and shall provide that the Exchange Securities shall not be subject to the transfer restrictions set forth in the applicable Indenture. The Senior Notes Indenture or such identical indenture shall provide that the Senior Notes and the Exchange Notes or the Private Exchange Notes issued in exchange therefor shall vote and consent together on all matters as one class and that none of the Exchange Notes, the Private Exchange Notes or the Senior Notes will have the right to vote or consent as a separate class on any matter. The Senior Subordinated Notes Indenture or such identical indenture shall provide that the Senior Subordinated Notes and the Exchange Notes or the Private Exchange Notes issued in exchange therefor shall vote and consent together on all matters as one class and that none of the Exchange Notes, the Private Exchange Notes or the Senior Subordinated Notes will have the right to vote or consent as a separate class on any matter.

(c) If, (i) because of any change in law or in currently prevailing interpretations of the staff of the SEC, the Issuers are not permitted to effect the Exchange Offer, (ii) the Exchange Offer is not consummated within 360 days of the Issue Date; provided, however, that

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if such day would otherwise fall on a day that is not a Business Day, then such Exchange Offer must be consummated not later than the next succeeding Business Day, (iii) any Holder of Private Exchange Notes so reasonably requests in writing to the Company at any time after the consummation of the Exchange Offer, (iv) because of any change in law or in currently prevailing interpretation of the staff of the SEC, a Holder is not permitted to participate in the Exchange Offer or (v) in the case of any Holder that participates in the Exchange Offer, such Holder does not receive Exchange Securities on the date of the exchange that may be sold without restriction under state and federal securities laws (other than due solely to the status of such Holder as an affiliate of the Issuers within the meaning of the Securities Act) and so notifies the Company within 60 days after the consummation of the Exchange Offer, in the case of each of clauses (i) to and including (v) of this sentence, then the Issuers shall promptly deliver to the Holders and the Trustee written notice thereof (the “Shelf Notice”) and, in lieu of (or in the case of the preceding clauses (iii) and (v), in addition to) effecting registration of the Exchange Securities, shall file a Shelf Registration pursuant to Section 3 hereof.

3. Shelf Registration

If at any time a Shelf Notice is delivered as contemplated by Section 2(c) hereof, then:

(a) Shelf Registration. The Issuers shall as reasonably promptly as practicable file with the SEC a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the Registrable Securities (the “Initial Shelf Registration”). The Initial Shelf Registration shall be on Form S-3 or another appropriate form permitting registration of such Registrable Securities for resale by Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings). The Issuers shall not permit any securities other than the Registrable Securities and the guarantees thereof to be included in the Initial Shelf Registration or any Subsequent Shelf Registration (as defined below).

The Issuers shall use their commercially reasonable efforts to cause the Shelf Registration to be declared effective under the Securities Act and to keep the Initial Shelf Registration continuously effective under the Securities Act until the date that is two years from the Issue Date or such shorter period ending when all Registrable Securities covered by the Initial Shelf Registration have been sold in the manner set forth and as contemplated in the Initial Shelf Registration or, if applicable, a Subsequent Shelf Registration (the “Effectiveness Period”); provided, however, that the Effectiveness Period in respect of the Initial Shelf Registration shall be extended to the extent required to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 under the Securities Act and as otherwise provided herein and shall be subject to reduction to the extent that the applicable provisions of Rule 144(k) are amended or revised to reduce the two year holding period set forth therein.

In the event that the Company is required to file an Initial Shelf Registration Statement solely as a result of the matters referred to in clause 2(c)(ii) hereof, but the Exchange Offer is subsequently completed prior to the sale of all Registrable Securities eligible to be sold

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under such Initial Shelf Registration Statement, upon consummation of the Exchange Offer the Company will no longer be required to file, have declared effective or continue the effectiveness of the Initial Shelf Registration Statement pursuant to such clause 2(c)(ii) (without prejudice to its obligations under clause 2(c)(i), (iii), (iv) or (v) hereof).

(b) Withdrawal of Stop Orders; Subsequent Shelf Registrations. If the Initial Shelf Registration or any Subsequent Shelf Registration required hereby ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all of the Securities registered thereunder), the Issuers shall use their commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within 30 days of such cessation of effectiveness amend such Shelf Registration Statement in a manner to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration Statement pursuant to Rule 415 covering all of the Registrable Securities covered by and not sold under the Initial Shelf Registration or an earlier Subsequent Shelf Registration (each, a “Subsequent Shelf Registration”). If a Subsequent Shelf Registration is filed, the Issuers shall use their commercially reasonable efforts to cause the Subsequent Shelf Registration to be declared effective under the Securities Act as soon as reasonably practicable after such filing and to keep such subsequent Shelf Registration continuously effective for a period equal to the number of days in the Effectiveness Period less the aggregate number of days during which the Initial Shelf Registration or any Subsequent Shelf Registration was previously continuously effective. As used herein the term “Shelf Registration” means the Initial Shelf Registration and any Subsequent Shelf Registration.

(c) Supplements and Amendments. The Issuers shall promptly supplement and amend the Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration, if required by the Securities Act, or if reasonably requested by the Holders of a majority in aggregate principal amount of the Registrable Securities (or their counsel) covered by such Registration Statement with respect to the information included therein with respect to one or more of such Holders, or by any underwriter of such Registrable Securities with respect to the information included therein with respect to such underwriter.

4. Additional Interest

(a) The Issuers and the Initial Purchasers agree that the Holders will suffer damages if the Issuers fail to fulfill their obligations under Section 2 or Section 3 hereof. Accordingly, the Issuers agree to pay as liquidated damages, additional interest on the Notes (“Additional Interest”) if (A) the Issuers have not exchanged Exchange Securities for all Securities validly tendered in accordance with the terms of the Exchange Offer on or prior to the 360th day after the Issue Date, (B) notwithstanding clause (A), the Issuers are required to file a Shelf Registration Statement and such Shelf Registration Statement is not declared effective on or prior to the 360th day after the Issue Date or (C) if applicable, a Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time during the Effectiveness Period (other than because of the sale of all of the Securities registered thereunder), then Additional Interest shall accrue on the principal amount of the Registrable Securities at a rate of

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0.25% per annum for the first 90 day period commencing on the (x) 361st day after the Issue Date, in the case of (A) above, (y) the 361st day after the Issue Date if such Shelf Registration Statement is not declared effective in the case of (B) above or (z) the day such Shelf Registration ceases to be effective in the case of (C) above (which rate will be increased by an additional 0.25% per annum for each subsequent 90 day period that such Additional Interest continues to accrue, provided that the rate at which such Additional Interest accrues may in no event exceed 1.00% per annum) (such Additional Interest to be calculated by the Issuers); provided, however, that upon the exchange of the Exchange Securities for all Securities tendered (in the case of clause (A) of this Section 4), upon the effectiveness of the applicable Shelf Registration Statement which had not been declared effective (in the case of (B) of this Section 4), or upon the effectiveness of the applicable Shelf Registration Statement which had ceased to remain effective (in the case of (C) of this Section 4), Additional Interest on the Registrable Securities in respect of which such events relate as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue.

(b) The parties hereto agree that the liquidated damages provided for in Section 4(a) hereof constitute a reasonable estimate of the damages that will be suffered by the Holders by reason of the failure of the Issuers to comply with their obligations under Section 2 or Section 3 hereof.

(c) The Issuers shall notify the Trustee within one Business Day after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an “Event Date”). Any amounts of Additional Interest due pursuant to clause (a) of this Section 4 will be payable (i) in the case of the Senior Notes, in the same form elected by the Issuers pursuant to the terms of the Senior Notes Indenture semiannually on each June 15 and December 15 (to the holders of record on the June 1 and December 1 immediately preceding such dates), and (ii) in the case of the Senior Subordinated Notes, in cash semiannually on each June 15 and December 15 (to the holders of record on the June 1 and December 1 immediately preceding such dates), in each case, commencing with the first such date occurring after any such Additional Interest commences to accrue. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Registrable Securities, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360 day year comprised of twelve 30 day months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360.

5. Registration Procedures

In connection with the filing of any Registration Statement pursuant to Section 2 or 3 hereof, the Issuers shall effect such registrations to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto and in connection with any Registration Statement filed by the Issuers hereunder each of the Issuers shall:

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(a) Prepare and file with the SEC a Registration Statement or Registration Statements as prescribed by Section 2 or 3 hereof, and use their commercially reasonable efforts to cause each such Registration Statement to become effective and remain effective as provided herein; provided, however, that if (1) such filing is pursuant to Section 3 hereof or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period relating thereto from whom the Company has received prior written notice that it will be a Participating Broker-Dealer in the Exchange Offer, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Issuers shall furnish to and afford the Holders of the Registrable Securities covered by such Registration Statement (with respect to a Registration Statement filed pursuant to Section 3 hereof) or each such Participating Broker-Dealer (with respect to any such Registration Statement), as the case may be, their counsel (in the case of counsel for Holders, such counsel shall be selected by a majority in aggregate principal amount of the Registrable Securities covered) and the managing underwriters, if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed. The Issuers shall not file any Registration Statement or Prospectus or any amendments or supplements thereto if the Holders of a majority in aggregate principal amount of the Registrable Securities covered by such Registration Statement, their counsel, or the managing underwriters, if any, shall reasonably object on a timely basis.

(b) Prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration Statement or Exchange Offer Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period, the Applicable Period or until consummation of the Exchange Offer, as the case may be; cause the related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424; and comply with the provisions of the Securities Act and the Exchange Act applicable to it with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by an Participating Broker-Dealer covered by any such Prospectus. The Issuers shall be deemed not to have used their commercially reasonable efforts to keep a Registration Statement effective if any Issuer voluntarily takes any action that would result in selling Holders of the Registrable Securities covered thereby or Participating Broker-Dealers seeking to sell Exchange Securities not being able to sell such Registrable Securities or such Exchange Securities during that period unless such action is required by applicable law or permitted by this Agreement.

(c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period relating thereto from whom the Company has received written notice that it will be a Participating Broker-Dealer in the Exchange Offer, notify the selling Holders of Registrable Securities (with respect to a Registration

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Statement filed pursuant to Section 3 hereof), or each such Participating Broker-Dealer (with respect to any such Registration Statement), as the case may be, their counsel (in the case of counsel for Holders, such counsel shall be selected by a majority in aggregate principal amount of the Registrable Securities covered) and the managing underwriters, if any, as promptly as possible, and, if requested by any such Person, confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective under the Securities Act (including in such notice a written statement that any Holder may, upon request, obtain, at the sole expense of the Issuers, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Securities or resales of Exchange Securities by Participating Broker-Dealers the representations and warranties of the Issuers contained in any agreement (including any underwriting agreement) contemplated by Section 5(n) hereof cease to be true and correct in all material respects, (iv) of the receipt by any Issuer of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Securities or the Exchange Securities to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event, the existence of any condition or any information becoming known that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in or amendments or supplements to such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (vi) of the Issuers’ determination that a post-effective amendment to a Registration Statement would be appropriate.

(d) Use their commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Securities or the Exchange Securities to be sold by any Participating Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued, use their commercially reasonable efforts to obtain the withdrawal of any such order at the earliest practicable moment.

(e) If a Shelf Registration is filed pursuant to Section 3 and if requested during the Effectiveness Period by the managing underwriter or underwriters (if any), the Holders of

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a majority in aggregate principal amount of the Registrable Securities being sold in connection with an underwritten offering or any Participating Broker-Dealer, (i) as promptly as practicable incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters (if any), such Holders, any Participating Broker-Dealer or counsel for any of them reasonably request to be included therein, (ii) make all required filings of such prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such prospectus supplement or post-effective amendment, and (iii) supplement or make amendments to such Registration Statement.

(f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, furnish to each selling Holder of Registrable Securities (with respect to a Registration Statement filed pursuant to Section 3 hereof) and to each such Participating Broker-Dealer who so requests (with respect to any such Registration Statement) and to their respective counsel (in the case of counsel for Holders, such counsel shall be selected by a majority in aggregate principal amount of the Registrable Securities covered) and each managing underwriter, if any, at the sole expense of the Issuers, one conformed copy of the Registration Statement or Registration Statements and each post-effective amendment thereto, including financial statements and schedules, and, if requested, all documents incorporated or deemed to be incorporated therein by reference and all exhibits.

(g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, deliver to each selling Holder of Registrable Securities (with respect to a Registration Statement filed pursuant to Section 3 hereof), or each such Participating Broker-Dealer (with respect to any such Registration Statement), as the case may be, their respective counsel (in the case of counsel for Holders, such counsel shall be selected by a majority in aggregate principal amount of the Registrable Securities covered), and the underwriters, if any, at the sole expense of the Issuers, as many copies of the Prospectus or Prospectuses (including each form of preliminary prospectus) and each amendment or supplement thereto and any documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of this Section 5, the Issuers hereby consent to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders of Registrable Securities or each such Participating Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers, if any, in connection with the offering and sale of the Registrable Securities covered by, or the sale by Participating Broker-Dealers of the Exchange Securities pursuant to, such Prospectus and any amendment or supplement thereto.

(h) Prior to any public offering of Registrable Securities or any delivery of a Prospectus contained in the Exchange Offer Registration Statement by any Participating Broker-

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Dealer who seeks to sell Exchange Securities during the Applicable Period, use their commercially reasonable efforts to register or qualify, and to cooperate with the selling Holders of Registrable Securities or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters, if any, and their respective counsel (in the case of counsel for Holders, such counsel shall be selected by a majority in aggregate principal amount of the Registrable Securities covered) in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer, or the managing underwriter or underwriters reasonably request in writing; provided, however, that where Exchange Securities held by Participating Broker-Dealers or Registrable Securities are offered other than through an underwritten offering, the Issuers agree to cause their counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed pursuant to this Section 5(h), keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Exchange Securities held by Participating Broker-Dealers or the Registrable Securities covered by the applicable Registration Statement; provided, however, that no Issuer shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so required to be qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject, (C) subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject or (D) make any change to its certificate of incorporation or by-laws.

(i) If a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the selling Holders of Registrable Securities and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company; and enable such Registrable Securities to be in such denominations (subject to applicable requirements contained in the applicable Indenture) and registered in such names as the managing underwriter or underwriters, if any, or Holders may request in a reasonable period of time prior to sales of such Registrable Securities pursuant to such Shelf Registration.

(j) Use their commercially reasonable efforts to cause the Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Securities, except as may be required solely as a consequence of the nature of such selling Holder’s business, in which case the Issuers will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals.

(k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer

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who seeks to sell Exchange Securities during the Applicable Period, upon the occurrence of any event contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as reasonably practicable prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole expense of the Issuers, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder (with respect to a Registration Statement filed pursuant to Section 3 hereof) or to the purchasers of the Exchange Securities to whom such Prospectus will be delivered by a Participating Broker-Dealer (with respect to any such Registration Statement), any such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(l) Use their commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement or the Exchange Securities, as the case may be, to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Registrable Securities covered by such Registration Statement or the Exchange Securities, as the case may be, or the managing underwriter or underwriters, if any.

(m) Prior to the effective date of the first Registration Statement relating to the Registrable Securities, (i) provide the Trustee with certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number and ISIN for the Registrable Securities.

(n) In connection with any underwritten offering of Registrable Securities pursuant to a Shelf Registration, enter into an underwriting agreement as is customary in underwritten offerings of debt securities similar to the Securities, and take all such other actions as are reasonably requested by the managing underwriter or underwriters in order to expedite or facilitate the registration or the disposition of such Registrable Securities and, in such connection, (i) make such representations and warranties to, and covenants with, the underwriters with respect to the business of the Issuers (including any acquired business, properties or entity, if applicable), and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, as are customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Securities, and confirm the same in writing if and when requested; (ii) obtain the written opinions of counsel to the Issuers, and written updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters, addressed to the underwriters covering the matters customarily covered in opinions reasonably requested in underwritten offerings; (iii) obtain “cold comfort” letters and updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters from the independent certified public accountants of the Issuers (and, if necessary, any other independent certified public accountants of the Issuers, or of any business acquired by the Issuers, for which financial statements and financial data are, or are required to be, included or incorporated by reference in the Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type

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customarily covered in “cold comfort” letters in connection with underwritten offerings of debt securities similar to the Securities; and (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures to be agreed to among the Issuers and the managing underwriter or underwriters. The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder.

(o) If a Shelf Registration is filed pursuant to Section 3 hereof, make available for inspection by a representative of any Holders of such Registrable Securities being sold (with respect to a Registration Statement filed pursuant to Section 3 hereof) (any such representative, the “Inspector”), upon written request, at the offices where normally kept, during reasonable business hours, all pertinent financial and other records, pertinent corporate documents and instruments of the Issuers and subsidiaries of the Issuers (collectively, the “Records”), as shall be reasonably necessary to enable the Inspector to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Issuers and any of their respective subsidiaries to supply all information (“Information”) reasonably requested by the Inspector in connection with such due diligence responsibilities; provided, however, that the foregoing inspection and information gathering shall be coordinated by the Initial Purchasers and, on behalf of the other parties, by one counsel designated by a majority in aggregate principal amount of the Registrable Securities covered by such Registration Statement. The Inspector shall agree in writing that it will keep the Records and Information confidential and that it will not disclose any of the Records or Information that any Issuer determines, in good faith, to be confidential and notifies the Inspector in writing are confidential unless (i) the disclosure of such Records or Information is necessary to avoid or correct a material misstatement or omission in such Registration Statement or Prospectus, (ii) the release of such Records or Information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) disclosure of such Records or Information is necessary or advisable, in the opinion of counsel for the Inspector, in connection with any action, claim, suit or proceeding, directly or indirectly, involving or potentially involving the Inspector and arising out of, based upon, relating to, or involving this Agreement, the applicable Indenture or the Purchase Agreement, or any transactions contemplated hereby or thereby or arising hereunder or thereunder, or (iiv) the information in such Records or Information has been made generally available to the public other than by the Inspector or an “affiliate” (as defined in Rule 405) thereof; provided, however, that prior notice shall be provided as soon as practicable to the Company of the potential disclosure of any information by the Inspector pursuant to clauses (i) or (ii) of this sentence to permit the Issuers to obtain a protective order (or waive the provisions of this paragraph (o)) and that the Inspector shall take such actions as are reasonably necessary to protect the confidentiality of such information (if practicable) to the extent such action is otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of the Holder or the Inspector.

(p) Provide an indenture trustee for the Registrable Securities or the Exchange Securities, as the case may be, and cause the applicable Indenture or the trust indenture provided for in Section 2(a) hereof, as the case may be, to be qualified under the TIA not later than the effective date of the first Registration Statement relating to the Registrable Securities; and in connection therewith, cooperate with the trustee under any such indenture and the Holders of the

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Registrable Securities, to effect such changes (if any) to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use its reasonable efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner.

(q) Comply with all applicable rules and regulations of the SEC and make generally available to the Company’s securityholders with regard to any applicable Registration Statement, a consolidated earnings statement satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any fiscal quarter (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm commitment or efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company, after the effective date of a Registration Statement, which statements shall cover said 12-month periods.

(r) Upon consummation of the Exchange Offer or a Private Exchange, if requested by a Holder, obtain an opinion of counsel to the Issuers, in a form customary for underwritten transactions, addressed to the Trustee for the benefit of all Holders of Registrable Securities participating in the Exchange Offer or the Private Exchange, as the case may be, that the Exchange Notes or Private Exchange Notes, as the case may be, the related guarantees and the related indentures constitute legal, valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with their respective terms, subject to customary exceptions and qualifications. If the Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Securities by Holders to the Company (or to such other Person as directed by the Company), in exchange for the Exchange Securities or the Private Exchange Notes, as the case may be, the Issuers shall mark, or cause to be marked, on such Registrable Securities that such Registrable Securities are being cancelled in exchange for the Exchange Securities or the Private Exchange Notes (and the related guarantees), as the case may be; in no event shall such Registrable Securities be marked as paid or otherwise satisfied.

(s) Cooperate with each seller of Registrable Securities covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc. (the “NASD”).

(t) Use their commercially reasonable efforts to take all other steps necessary to effect the registration of the Exchange Securities and/or Registrable Securities covered by a Registration Statement contemplated hereby.

The Issuers may require each seller of Registrable Securities as to which any registration is being effected to furnish to the Issuers such information regarding such seller and the distribution of such Registrable Securities as the Issuers may, from time to time, reasonably request. The Issuers may exclude from such registration the Registrable Securities of any seller so

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long as such seller fails to furnish such information within a reasonable time after receiving such request and the failure to include any such seller shall not be deemed to be a default hereunder. Each seller as to which any Shelf Registration is being effected agrees to furnish promptly to the Issuers all information required to be disclosed in order to make the information previously furnished to the Issuers by such seller not materially misleading.

If any such Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Issuers, then such Holder shall have the right to require (i) the insertion therein of language, in form and substance reasonably satisfactory to such Holder, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Issuers, or (ii) in the event that such reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the reference to such Holder in any amendment or supplement to the Registration Statement filed or prepared subsequent to the time that such reference ceases to be required.

Each Holder of Registrable Securities and each Participating Broker-Dealer agrees by its acquisition of such Registrable Securities or Exchange Securities to be sold by such Participating Broker-Dealer, as the case may be, that, upon actual receipt of any notice from the Company of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such Holder will forthwith discontinue disposition of such Registrable Securities covered by such Registration Statement or Prospectus or Exchange Securities to be sold by such Holder or Participating Broker-Dealer, as the case may be, until such Holder’s or Participating Broker-Dealer’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto. In the event that the Issuers shall give any such notice, each of the Applicable Period and the Effectiveness Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement or Exchange Securities to be sold by such Participating Broker-Dealer, as the case may be, shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof or (y) the Advice.

6. Registration Expenses

All fees and expenses incident to the performance of or compliance with this Agreement by the Issuers shall be borne by the Issuers, whether or not the Exchange Offer Registration Statement or any Shelf Registration Statement is filed or becomes effective or the Exchange Offer is consummated, including, without limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the NASD in connection with an underwritten offering and (B) fees and expenses of compliance with state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel in connection with Blue Sky qualifications of the Registrable Securities or Exchange

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Securities and determination of the eligibility of the Registrable Securities or Exchange Securities for investment under the laws of such jurisdictions (x) where the holders of Registrable Securities are located, in the case of the Exchange Securities, or (y) as provided in Section 5(h) hereof, in the case of Registrable Securities or Exchange Securities to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including, without limitation, expenses of printing certificates for Registrable Securities or Exchange Securities in a form eligible for deposit with The Depository Trust Company and of printing prospectuses if the printing of prospectuses is requested by the managing underwriter or underwriters, if any, by the Holders of a majority in aggregate principal amount of the Registrable Securities included in any Registration Statement or in respect of Registrable Securities or Exchange Securities to be sold by any Participating Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Issuers and, in the case of a Shelf Registration, reasonable fees and disbursements of one special counsel for all of the sellers of Registrable Securities (exclusive of any counsel retained pursuant to Section 7 hereof), (v) fees and disbursements of all independent certified public accountants referred to in Section 5(n)(iii) hereof (including, without limitation, the expenses of any “cold comfort” letters required by or incident to such performance), (vi) Securities Act liability insurance, if the Issuers desire such insurance, (vii) fees and expenses of all other Persons retained by the Issuers, (viii) internal expenses of the Issuers (including, without limitation, all salaries and expenses of officers and employees of the Issuers performing legal or accounting duties), (ix) the expense of any annual audit, (x) any fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange, and the obtaining of a rating of the securities, in each case, if applicable and (xi) the expenses relating to printing, word processing and distributing all Registration Statements, underwriting agreements, indentures and any other documents necessary in order to comply with this Agreement. Notwithstanding the foregoing or anything to the contrary in this Agreement, each Holder shall pay all underwriting discounts and commissions of any underwriters with respect to any Registrable Securities sold by or on behalf of it.

7. Indemnification and Contribution

(a) The Issuers agree jointly and severally, to indemnify and hold harmless each Holder of Registrable Securities and each Participating Broker-Dealer selling Exchange Securities during the Applicable Period, and each Person, if any, who controls such Person or its affiliates within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, a “Participant”) against any losses, claims, damages or liabilities to which any Participant may become subject under the Securities Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon:

(i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if any of the Issuers shall have furnished any amendments or supplements thereto) or any preliminary prospectus or “issuer free writing prospectus” (as defined in Rule 405) (an “Issuer FWP”); or

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(ii) the omission or alleged omission to state, in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if any of the Issuers shall have furnished any amendments or supplements thereto) or any preliminary prospectus or any Issuer FWP or any other document or any amendment or supplement thereto, a material fact required to be stated therein or necessary to make the statements therein not misleading;

and will reimburse, as incurred, the Participant for any legal or other expenses incurred by the Participant in connection with investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided, however, none of the Issuers will be liable in any such case to the extent that any such loss, claim, damage, or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if any of the Issuers shall have furnished any amendments or supplements thereto) or any preliminary prospectus or any Issuer FWP or any amendment or supplement thereto in reliance upon and in conformity with information relating to any Participant furnished to the Issuers by such Participant specifically for use therein. The indemnity provided for in this Section 7 will be in addition to any liability that the Issuers may otherwise have to the indemnified parties. The Issuers shall not be liable under this Section 7 for any settlement of any claim or action effected without their prior written consent, which shall not be unreasonably withheld.

(b) Each Participant, severally and not jointly, agrees to indemnify and hold harmless the Issuers, their directors, their officers and each person, if any, who controls the Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which the Issuers or any such director, officer or controlling person may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement or Prospectus, any amendment or supplement thereto, or any preliminary prospectus or Issuer FWP, or (ii) the omission or the alleged omission to state therein a material fact necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning such Participant, furnished to the Issuers by the Participant, specifically for use therein; and subject to the limitation set forth immediately preceding this clause, will reimburse, as incurred, any reasonable legal or other expenses incurred by the Issuers or any such director, officer or controlling person in connection with investigating or defending against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action in respect thereof. The indemnity provided for in this Section 7 will be in addition to any liability that the Participants may otherwise have to the indemnified parties. The Participants shall not be liable under this Section 7 for any settlement of any claim or action effected without their consent, which shall not be unreasonably withheld.

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(c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action for which such indemnified party is entitled to indemnification under this Section 7, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party of the commencement thereof in writing; but the omission to so notify the indemnifying party (i) will not relieve it from any liability under paragraph (a) or (b) above unless and to the extent such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraphs (a) and (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have been advised by counsel that there may be one or more legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, or (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after receipt by the indemnifying party of notice of the institution of such action, then, in each such case, the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence (it being understood, however, that in connection with such action the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, designated by Participants who sold a majority in interest of the Registrable Securities and Exchange Securities sold by all such Participants in the case of paragraph (a) of this Section 7 or the Issuers in the case of paragraph (b) of this Section 7, representing the indemnified parties under such paragraph (a) or paragraph (b), as the case may be, who are parties to such action or actions) or (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party. All fees and expenses reimbursed pursuant to this paragraph (c) shall be reimbursed as they are incurred. After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified party without the prior written consent of the indemnifying party (which consent shall not be unreasonably withheld),

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unless such indemnified party waived in writing its rights under this Section 7, in which case the indemnified party may effect such a settlement without such consent. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement or compromise of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party, or indemnity could have been sought hereunder by any indemnified party, unless such settlement (A) includes an unconditional written release of the indemnified party, in form and substance reasonably satisfactory to the indemnified party, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of any indemnified party.

(d) In circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 7 is unavailable to, or insufficient to hold harmless, an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), each indemnifying party, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the offering of the Securities or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof). The relative benefits received by the Issuers on the one hand and such Participant on the other shall be deemed to be in the same proportion as the total proceeds from the offering (before deducting expenses) of the Securities received by the Company bear to the total net profit received by such Participant in connection with the sale of the Securities. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers on the one hand, or the Participants on the other, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or alleged statement or omission, and any other equitable considerations appropriate in the circumstances. The parties agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the first sentence of this paragraph (d). Notwithstanding any other provision of this paragraph (d), no Participant shall be obligated to make contributions hereunder that in the aggregate exceed the total net profit received by such Participant in connection with the sale of the Securities, less the aggregate amount of any damages that such Participant has otherwise been required to pay by reason of the untrue or alleged untrue statements or the omissions or alleged omissions to state a material fact, and no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls a Participant within the meaning of Section 15 of the Act or Section 20 of the Exchange

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Act shall have the same rights to contribution as the Participants, and each director of any Issuer, each officer of any Issuer and each person, if any, who controls any Issuer within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall have the same rights to contribution as the Issuers.

8. Rules 144 and 144A

Each of the Issuers covenants and agrees that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder in a timely manner in accordance with the requirements of the Securities Act and the Exchange Act and, if at any time such Issuer is not required to file such reports, such Issuer will, upon the request of any Holder or beneficial owner of Registrable Securities, make available such information necessary to permit sales pursuant to Rule 144A. Each of the Issuers further covenants and agrees, for so long as any Registrable Securities remain outstanding that it will take such further action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144(k) under the Securities Act and Rule 144A.

9. Underwritten Registrations

If any of the Registrable Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such Registrable Securities included in such offering and shall be reasonably acceptable to the Issuers.

No Holder of Registrable Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

10. Miscellaneous

(a) No Inconsistent Agreements. None of the Issuers has, as of the date hereof, and none of the Issuers shall, after the date of this Agreement, entered into any agreement with respect to any of its securities that is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuers’ other issued and outstanding securities under any such agreements.

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(b) Adjustments Affecting Registrable Securities. The Issuers shall not, directly or indirectly, take any action with respect to the Registrable Securities as a class that would adversely affect the ability of the Holders of Registrable Securities to include such Registrable Securities in a registration undertaken pursuant to this Agreement.

(c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of (I) the Issuers, and (II)(A) the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Securities and (B) in circumstances that would adversely affect the Participating Broker-Dealers, the Participating Broker-Dealers holding not less than a majority in aggregate principal amount of the Exchange Securities held by all Participating Broker-Dealers. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Securities whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Securities may be given by Holders of at least a majority in aggregate principal amount of the Registrable Securities being sold pursuant to such Registration Statement.

(d) Notices. All notices and other communications (including, without limitation, any notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day air courier or facsimile:

(i) if to a Holder of the Registrable Securities or any Participating Broker-Dealer, at the most current address of such Holder or Participating Broker-Dealer, as the case may be, set forth on the records of the registrar under the applicable Indenture, with a copy in like manner to the Initial Purchasers as follows:

Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

Facsimile No.: (212) 269-5420

Attention: William Gannett, Esq.

(ii) if to the Initial Purchasers, at the address specified in Section 10(d)(i);

(iii) if to the Issuers, at the address as follows:

Aleris International, Inc.

25825 Science Park Drive, Suite 400

Beachwood, Ohio 44122

Facsimile No.: (216) 910-3400

Attention: Christopher R. Clegg, Esq.

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with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

(212) 859-8000

Attention: Daniel J. Bursky, Esq.

All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; one Business Day after being timely delivered to a next-day air courier; and upon written confirmation, if sent by facsimile.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address and in the manner specified in the applicable Indenture.

(e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, the Holders and the Participating Broker-Dealers; provided, however, that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the applicable Indenture.

(f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD REQUIRE THE APPLICATION OF ANY OTHER LAW.

(i) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the

-27-

parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(j) Securities Held by the Issuers or Their Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Issuers or their affiliates (as such term is defined in Rule 405) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

(k) Third-Party Beneficiaries. Holders of Registrable Securities and Participating Broker-Dealers are intended third-party beneficiaries of this Agreement, and this Agreement may be enforced by such Persons.

(l) Entire Agreement. This Agreement, together with the Purchase Agreement and the applicable Indenture, is intended by the parties as a final and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein and any and all prior oral or written agreements, representations, or warranties, contracts, understandings, correspondence, conversations and memoranda between the Holders on the one hand and the Issuers on the other, or between or among any agents, representatives, parents, subsidiaries, affiliates, predecessors in interest or successors in interest with respect to the subject matter hereof and thereof are merged herein and replaced hereby.

[Signature page follows]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

AURORA ACQUISITION MERGER SUB, INC.
By:	/s/ Clive Bode
Name:	Clive Bode
Title:	Vice President and Corporate Secretary

ALERIS INTERNATIONAL, INC.
By:	/s/ Michael D. Friday
Name:	Michael D. Friday
Title:	Executive Vice President and Chief Financial Officer

ALCHEM ALUMINUM, INC.

ALCHEM ALUMINUM SHELBYVILLE INC.

ALERIS BLANKING AND RIM PRODUCTS, INC. (FORMERLY INDIANA ALUMINUM INC.)

ALERIS, INC.

ALERIS OHIO MANAGEMENT, INC.

ALSCO HOLDINGS, INC.

ALSCO METALS CORPORATION

ALUMITECH, INC.

ALUMITECH OF CLEVELAND, INC.

ALUMITECH OF WABASH, INC.

ALUMITECH OF WEST VIRGINIA, INC.

AWT PROPERTIES, INC.

CA LEWISPORT, LLC

CI HOLDINGS, LLC

COMMONWEALTH ALUMINUM, LLC

COMMONWEALTH ALUMINUM CONCAST, INC.

COMMONWEALTH ALUMINUM LEWISPORT, LLC

COMMONWEALTH ALUMINUM METALS, LLC

COMMONWEALTH ALUMINUM SALES CORPORATION

COMMONWEALTH ALUMINUM TUBE ENTERPRISES, LLC

COMMONWEALTH FINANCING CORPORATION

COMMONWEALTH INDUSTRIES, INC.

CORUS ALUMINIUM CORP.

ETS SCHAEFER CORPORATION

GULF REDUCTION CORPORATION

HOOGOVENS ALUMINIUM EUROPE INC.

IMCO INDIANA PARTNERSHIP L.P.

IMCO INTERNATIONAL, INC.

IMCO INVESTMENT COMPANY

IMCO MANAGEMENT PARTNERSHIP L.P.

IMCO RECYCLING OF CALIFORNIA, INC.

IMCO RECYCLING OF IDAHO INC.

IMCO RECYCLING OF ILLINOIS INC.

IMCO RECYCLING OF INDIANA INC.

IMCO RECYCLING OF MICHIGAN L.L.C.

IMCO RECYCLING OF OHIO INC.

IMCO RECYCLING OF UTAH INC.

IMCO RECYCLING SERVICES COMPANY

IMSAMET, INC.

INTERAMERICAN ZINC, INC.

METALCHEM, INC.

MIDWEST ZINC CORPORATION

ROCK CREEK ALUMINUM, INC.

SILVER FOX HOLDING CORP.

U.S. ZINC CORPORATION
U.S. ZINC EXPORT CORPORATION
WESTERN ZINC CORPORATION
By:	/s/ Michael D. Friday
Name:	Michael D. Friday
Title:	President

The foregoing Agreement is hereby confirmed and accepted by the Initial Purchasers as of the date first above written.

DEUTSCHE BANK SECURITIES INC.
By:	/s/ Stephen R. Lapidus
Name:	Stephen R. Lapidus
Title:	Director
By:	/s/ Edwin Roland
Name:	Edwin Roland
Title:	Managing Director

EX-10.1

Exhibit 10.1

EXECUTION COPY

AMENDED AND RESTATED CREDIT AGREEMENT

among

ALERIS INTERNATIONAL, INC.,

AURORA ACQUISITION MERGER SUB, INC.

(to be merged with and into Aleris International, Inc.),

EACH OTHER U.S. BORROWER PARTY HERETO,

CORUS S.E.C./CORUS L.P.,

acting and represented by its general partner Corus Aluminium Inc.,

EACH OTHER CANADIAN BORROWER PARTY HERETO,

ALERIS SWITZERLAND GMBH,

VARIOUS LENDERS,

DEUTSCHE BANK AG NEW YORK BRANCH,

as ADMINISTRATIVE AGENT,

DEUTSCHE BANK AG, CANADA BRANCH,

as CANADIAN ADMINISTRATIVE AGENT,

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as SYNDICATION AGENT,

and

PNC BANK, NATIONAL ASSOCIATION,

NATIONAL CITY BUSINESS CREDIT, INC.

and

KEY BANK NATIONAL ASSOCIATION

as CO-DOCUMENTATION AGENTS

Dated as of August 1, 2006

and amended and restated as of December 19, 2006

DEUTSCHE BANK SECURITIES INC.

and

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as JOINT LEAD ARRANGERS

and

JOINT BOOK RUNNING MANAGERS

TABLE OF CONTENTS

		Page
SECTION 1.	Defined Terms	3
SECTION 2.	Amount and Terms of Credit	73
2.01	The Commitments	73
2.02	Minimum Amount of Each Borrowing; Limitation on Euro Rate Loans	79
2.03	Notice of Borrowing	79
2.04	Disbursement of Funds	81
2.05	Notes	82
2.06	Conversions	86
2.07	Pro Rata Borrowings	87
2.08	Interest	87
2.09	Interest Periods for Euro Rate Loans	89
2.10	Increased Costs, Illegality, etc.	90
2.11	Compensation	93
2.12	Change of Lending Office	93
2.13	Replacement of Lenders	94
2.14	Special Provisions Applicable to Lenders Upon the Occurrence of a Conversion Event	96
2.15	Incremental Commitments	96
2.16	Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of Interest	98
2.17	Canadian Lenders	99
2.18	Provisions Regarding Bankers’ Acceptances, Drafts, etc.	99
2.19	U.S./European Lenders	100
SECTION 3.	Letters of Credit	100
3.01	Letters of Credit	100
3.02	Maximum Letter of Credit Outstandings; Final Maturities; etc.	101
3.03	Letter of Credit Requests; Minimum Stated Amount	102
3.04	Letter of Credit Participations	103
3.05	Agreement to Repay Letter of Credit Drawings	105
3.06	Increased Costs	106
SECTION 4.	Commitment Commission; Fees; Reductions of Commitment	107
4.01	Fees	107
4.02	Voluntary Termination of Unutilized Commitments	108
4.03	Mandatory Reduction of Commitments	109
SECTION 5.	Prepayments; Payments; Taxes	109
5.01	Voluntary Prepayments	109
5.02	Mandatory Repayments	111

(i)

Table of Contents

(continued)

		Page
5.03	Payments and Computations; Maintenance of Accounts; Statement of Accounts	114
5.04	Net Payments	119
5.05	Minimum Interest Rates and Payments	123
SECTION 6.	Conditions Precedent to Credit Events on the Restatement Effective Date	124
6.01	Execution of Agreement; Notes	125
6.02	Opinions of Counsel	125
6.03	Corporate Documents; Proceedings; etc.	125
6.04	Consummation of the Merger	126
6.05	Equity Financing, New Notes, Term Loans, etc.	126
6.06	Refinancing; Excess Availability	126
6.07	Adverse Change	127
6.08	Credit Document Acknowledgment and Amendment; Security Document Amendments; Pledge Agreements; Luxco Guaranty, etc.	127
6.09	Mortgage; Title Insurance; Landlord Waivers; etc.	130
6.10	Intercreditor Agreement	132
6.11	Financial Statements; Projections	132
6.12	Solvency Certificate; Insurance Certificates	132
6.13	Fees, etc.	133
6.14	Initial Borrowing Base Certificate; etc.	133
6.15	Merger Agreement Representations and Warranties	133
SECTION 7.	Conditions Precedent to All Credit Events	133
7.01	No Default; Representations and Warranties	133
7.02	Notice of Borrowing; Letter of Credit Request	133
7.03	Borrowing Base Limitations	134
SECTION 8.	Representations and Warranties	134
8.01	Organizational Status	134
8.02	Power and Authority	135
8.03	No Violation	135
8.04	Approvals	135
8.05	Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; No Material Adverse Effect	136
8.06	Litigation	138
8.07	True and Complete Disclosure	138
8.08	Use of Proceeds; Margin Regulations	138
8.09	Tax Returns and Payments	138
8.10	Compliance with ERISA	139
8.11	The Security Documents	139

(ii)

Table of Contents

(continued)

		Page
8.12	Properties	141
8.13	Subsidiaries; etc.	141
8.14	Compliance with Statutes, etc.	141
8.15	Investment Company Act	142
8.16	Environmental Matters	142
8.17	Employment and Labor Relations	142
8.18	Intellectual Property, etc.	142
8.19	Indebtedness	143
8.20	Insurance	143
8.21	Ten Non-Bank Regulations and Twenty Non-Bank Regulations	143
8.22	Corus Aluminium Inc.	143
8.23	Senior Indebtedness	143
SECTION 9.	Affirmative Covenants	143
9.01	Information Covenants	144
9.02	Notice of Material Events	148
9.03	Existence; Franchises	148
9.04	Payment of Taxes	149
9.05	Maintenance of Properties	149
9.06	Books and Records; Inspection Rights; Appraisals; Field Examinations	149
9.07	Compliance with Laws	150
9.08	Use of Proceeds	150
9.09	Insurance	150
9.10	Compliance with Environmental Laws	150
9.11	New Subsidiaries; Additional Security; Further Assurances; etc.	151
9.12	Ownership of Subsidiaries; etc.	154
9.13	Permitted Acquisitions	154
9.14	European Restructuring	155
9.15	Cash Management Control Agreements	155
9.16	Designation of Subsidiaries	155
9.17	Designated Senior Indebtedness	155
SECTION 10.	Negative Covenants	155
10.01	Liens	156
10.02	Consolidation, Merger, Purchase or Sale of Assets, etc.	160
10.03	Dividends	166
10.04	Indebtedness	168
10.05	Advances, Investments and Loans	171
10.06	Transactions with Affiliates	174
10.07	Fixed Charge Coverage Ratio	175

(iii)

Table of Contents

(continued)

		Page
10.08	Limitations on Payments of Certain Indebtedness; Modifications of Certain Indebtedness Documents, Certificate of Incorporation, By-Laws and Certain Other Agreements, etc.	176
10.09	Limitation on Certain Restrictions on Subsidiaries	178
10.10	Business, etc.	178
10.11	Limitation on Issuance of Equity Interests	179
10.12	Changes to Legal Names, Organizational Identification Numbers, Jurisdiction or Type or Organization	180
10.13	No Additional Deposit Accounts; etc.	180
10.14	Negative Covenants of Non-U.S. Credit Parties	181
10.15	No Personal Assets of Corus Aluminium Inc.	181
SECTION 11.	Events of Default	181
11.01	Payments	181
11.02	Representations, etc.	181
11.03	Covenants	182
11.04	Default Under Other Agreements	182
11.05	Bankruptcy, etc.	183
11.06	ERISA	183
11.07	Security Documents	183
11.08	Guaranties	183
11.09	Judgments	183
11.10	Subordination Provisions	184
11.11	Change of Control	184
SECTION 12.	The Administrative Agent	185
12.01	Appointment	185
12.02	Nature of Duties	186
12.03	Lack of Reliance on the Administrative Agent	186
12.04	Certain Rights of the Administrative Agent	187
12.05	Reliance	187
12.06	Indemnification	187
12.07	The Administrative Agent in its Individual Capacity	188
12.08	Holders	188
12.09	Resignation by the Administrative Agent	188
12.10	Collateral Matters	189
12.11	Amendments to Guaranties and Security Documents on the Restatement Effective Date	190
12.12	Delivery of Information	190
SECTION 13.	Miscellaneous	191

(iv)

Table of Contents

(continued)

		Page
13.01	Payment of Expenses, etc.	191
13.02	Right of Setoff	192
13.03	Notices	193
13.04	Benefit of Agreement; Assignments; Participations	194
13.05	No Waiver; Remedies Cumulative	198
13.06	Payments Pro Rata	199
13.07	Calculations; Computations	199
13.08	GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL	200
13.09	Counterparts	201
13.10	Effectiveness	201
13.11	Headings Descriptive	202
13.12	Amendment or Waiver; etc.	202
13.13	Survival	204
13.14	Domicile of Loans	204
13.15	Register	205
13.16	Confidentiality	205
13.17	INTERCREDITOR AGREEMENT	206
13.18	Aleris as Agent for the Borrowers	207
13.19	Special Provisions Regarding Pledges of Equity Interests in, and Promissory Notes Owed by, Persons Not Organized in the United States	207
13.20	Post-Closing Actions	208
13.21	The PATRIOT Act	209
13.22	Judgment Currency	209
13.23	Abstract Acknowledgment of Indebtedness and Joint Creditorship	210
13.24	Special Appointment of Collateral Agent for German Security	211
13.25	Conflicting Provisions in Security Documents	211
SECTION 14.	U.S. Borrower Guaranty	212
14.01	Guaranty	212
14.02	Reinstatement	212
14.03	Bankruptcy	212
14.04	Nature of Liability	212
14.05	Independent Obligation	213
14.06	Authorization	213
14.07	Reliance	214
14.08	Waiver	214
14.09	Maximum Liability	216
SECTION 15.	Nature of U.S. Borrower Obligations; Limitation on Canadian Borrower Obligations and European Borrower Obligations	216
15.01	Nature of U.S. Borrower Obligations and Canadian Borrower Obligations	216

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Table of Contents

(continued)

		Page
15.02	Independent Obligation	217
15.03	Authorization	217
15.04	Reliance	217
15.05	Contribution; Subrogation	218
15.06	Waiver	218
15.07	Limitation on Canadian Borrower Obligations and European Borrower Obligations	218
15.08	Limited Recourse Against Corus Aluminium Inc.	218
15.09	Maximum Liability	218
SECTION 16.	U.S./European Revolving Loans; Intra-Lender Issues	219
16.01	Specified Foreign Currency Participations	219
16.02	Settlement Procedures for Specified Foreign Currency Participations	219
16.03	Obligations Irrevocable	221
16.04	Recovery or Avoidance of Payments	222
16.05	Indemnification by Lenders	222
16.06	Specified Foreign Currency Loan Participation Fee	222

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TABLE OF CONTENTS

			Page
SCHEDULES
SCHEDULE I-A	—	Commitments
SCHEDULE I-B	—	Canadian Lenders
SCHEDULE I-C	—	Swiss Qualifying Banks
SCHEDULE II	—	Lender Addresses
SCHEDULE III	—	Provisions Relating to Bankers’ Acceptance Loans
SCHEDULE IV	—	Existing Letters of Credit
SCHEDULE V	—	Real Property
SCHEDULE VI	—	Deposit Accounts
SCHEDULE VII	—	Certain Tax Matters
SCHEDULE VIII-A	—	Subsidiaries
SCHEDULE VIII-B	—	European Manufacturing Subsidiaries
SCHEDULE IX	—	Existing Indebtedness
SCHEDULE X	—	Insurance
SCHEDULE XI	—	Existing Liens
SCHEDULE XII	—	Existing Investments
SCHEDULE XIII	—	Eligible Inventory Locations
SCHEDULE XIV	—	Designated Assets
SCHEDULE XV	—	Post Closing Actions
SCHEDULE XVI	—	Tier I Countries
SCHEDULE XVII	—	Tier II Countries
SCHEDULE XVIII	—	Applicable Jurisdiction Requirements
SCHEDULE XIX	—	Immaterial Subsidiaries
SCHEDULE XX	—	Local Law Pledge Agreements
SCHEDULE XXI	—	Affiliate Transactions
SCHEDULE XXII	—	ERISA
EXHIBIT
EXHIBIT A-1	—	Notice of Borrowing
EXHIBIT A-2	—	Notice of Conversion/Continuation
EXHIBIT B-1	—	U.S. Borrower Revolving Note
EXHIBIT B-2	—	Canadian Revolving Note
EXHIBIT B-3	—	European Borrower Revolving Note
EXHIBIT B-4	—	U.S. Borrower Swingline Note
EXHIBIT B-5	—	Canadian Swingline Note
EXHIBIT B-6	—	European Borrower Swingline Note
EXHIBIT C	—	Letter of Credit Request
EXHIBIT D	—	Section 5.04(b)(ii) Certificate
EXHIBIT E-1	—	Opinion of Fried, Frank, Harris, Shriver & Jacobson LLP
EXHIBIT E-2	—	Opinion of Torys LLP
EXHIBIT E-3	—	Opinion of Pestalozzi Lachenal Patry
EXHIBIT F	—	Officers’ Certificate
EXHIBIT G-1	—	U.S. Pledge Agreement

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Table of Contents

(continued)

			Page
EXHIBIT G-2	—	European Parent Pledge Agreement
EXHIBIT G-3	—	Canadian Parent Pledge Agreement
EXHIBIT G-4	—	Credit Document Acknowledgement and Amendment
EXHIBIT H-1	—	U.S. Subsidiaries Guaranty
EXHIBIT H-2	—	Canadian Subsidiaries Guaranty
EXHIBIT H-3	—	European Distribution Subsidiaries Guaranty
EXHIBIT H-4	—	European Parent Guaranty
EXHIBIT H-5	—	Canadian Parent Guaranty
EXHIBIT I	—	U.S. Security Agreement
EXHIBIT J	—	Solvency Certificate
EXHIBIT K	—	Compliance Certificate
EXHIBIT L	—	Borrowing Base Certificate
EXHIBIT M	—	[Intentionally Omitted]
EXHIBIT N-1	—	ABL Creditor Mortgage
EXHIBIT N-2	—	Canadian Mortgage
EXHIBIT O	—	Incremental Revolving Loan Commitment Agreement
EXHIBIT P	—	Intercreditor Agreement
EXHIBIT Q	—	Joinder Agreement

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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 1, 2006 and amended and restated as of December 19, 2006, among AURORA ACQUISITION MERGER SUB, INC. (“Merger Sub”), a Delaware corporation to be merged with and into ALERIS INTERNATIONAL, INC., a Delaware corporation (“Aleris”), Aleris, each Domestic Subsidiary of Aleris set forth on the signature pages hereto (together with Merger Sub, Aleris and any entity that becomes a U.S. Borrower pursuant to Section 9.11, collectively, the “U.S. Borrowers” and each, a “U.S. Borrower”), CORUS S.E.C./CORUS L.P., a limited partnership existing under the laws of Québec, acting and represented by its general partner, Corus Aluminium Inc., a corporation organized under the laws of Québec (“Aleris Canada”, and together with any entity that becomes a Canadian Borrower pursuant to Section 9.11, collectively, the “Canadian Borrowers” and each, a “Canadian Borrower”), ALERIS SWITZERLAND GMBH, a company with limited liability organized under the laws of Switzerland (the “European Borrower” and, together with the Canadian Borrowers and the U.S. Borrowers, the “Borrowers” and each, a “Borrower”), the Lenders party hereto from time to time, PNC BANK, NATIONAL ASSOCIATION, NATIONAL CITY BUSINESS CREDIT, INC. and KEY BANK NATIONAL ASSOCIATION, as co-documentation agents, GOLDMAN SACHS CREDIT PARTNERS L.P. as Syndication Agent, DEUTSCHE BANK AG NEW YORK BRANCH, as administrative agent and DEUTSCHE BANK AG, CANADA BRANCH, as Canadian administrative agent (in such capacity, the “Canadian Administrative Agent”).

W I T N E S S E T H :

WHEREAS, the Borrowers, the Existing Lenders and the Administrative Agent are parties to a Credit Agreement, dated as of August 1, 2006 (as the same has been amended, modified or supplemented to, but not including the Restatement Effective Date, the “Existing ABL Credit Agreement”); and

WHEREAS, the Borrowers have requested that the Existing ABL Credit Agreement be amended and restated in its entirety and, subject to and upon the terms and conditions set forth herein, the Borrowers have requested the credit facilities more fully provided pursuant to the terms of this Agreement, namely (i) the facility evidenced by the Canadian Commitments (and the extensions of credit made pursuant thereto), which extensions of credit shall be made to the Canadian Borrowers (who, subject to Section 15.09 shall be jointly and severally obligated therefor) and (ii) the facility evidenced by the U.S./European Commitments (and the extensions of credit made pursuant thereto), which extensions of credit shall be made (x) subject to Section 15.09 to the U.S. Borrowers on a joint and several basis and (y) subject to the Total European Sub-Commitment, to the European Borrower; and

WHEREAS, extensions of credit hereunder to the Canadian Borrowers shall be made to them on a joint and several basis, and shall be fully guaranteed (as more fully provided and described herein) by the U.S. Credit Parties and the Canadian Credit Parties; and

WHEREAS, the extensions of credit to the European Borrower hereunder shall be guaranteed by the U.S. Credit Parties, the European Parent Guarantors and Subsidiaries of the European Borrower, but shall not be guaranteed by German Sub-Holdco and its Subsidiaries or any other Foreign Subsidiary of Aleris (except to the extent any such Subsidiary constitutes a Transitory European Subsidiary); and

WHEREAS, all obligations of the U.S. Credit Parties hereunder (whether as borrowers or guarantors) shall be secured pursuant to the relevant U.S. Security Documents executed and delivered by the U.S. Credit Parties, with the intent being that (x) First Priority security interests be granted to secure the ABL Obligations in all ABL Priority Collateral of the U.S. Credit Parties and (y) second priority security interests be granted to secure the ABL Obligations in all Term Priority Collateral of the U.S. Credit Parties; and

WHEREAS, all obligations of the Canadian Credit Parties (whether as borrowers or guarantors) shall be secured by First Priority security interests in the assets of the Canadian Credit Parties provided as collateral pursuant to the relevant Security Documents; and

WHEREAS, all obligations of the European Borrower (pursuant to the U.S./European Commitments, and subject to the Total European Sub-Commitment) shall be secured by First Priority security interest in all Collateral provided by the European Borrower and the guaranties of the European Subsidiary Guarantors shall be unsecured; and

WHEREAS, Collateral consisting of all Equity Interests in the European Parent Guarantors and any Collateral provided by them pursuant to the Security Documents entered into and delivered by them will be shared (with the creditors pursuant to the Term Loan Agreement and any refinancing thereof as permitted pursuant to the Intercreditor Agreement) on the basis provided in the Intercreditor Agreement; and

WHEREAS, the Term Loan Agreement is being entered into substantially concurrently with the amendment and restatement of this Agreement, and all Collateral provided by the U.S. Credit Parties is intended to provide the Term Secured Parties pursuant to the Term Loan Agreement with second priority security interests in the ABL Priority Collateral, and with First Priority security interests in the Term Priority Collateral, granted pursuant to the relevant security documents securing the Term Obligations; and

WHEREAS, a portion of the loans made available pursuant to the Term Loan Agreement shall be borrowed directly by German Sub-Holdco, which, as of the Restatement Effective Date, shall be a sister subsidiary of the European Borrower (with each of the European Borrower and German Sub-Holdco being owned by a common parent which is a European Parent Guarantor), and the Term Obligations may be secured by assets of German Sub-Holdco and its Subsidiaries and other Foreign Subsidiaries of Aleris (other than the European Borrower and its Subsidiaries), which assets shall not (except to the extent at any time constituting assets of a Transitory European Subsidiary or assets sold to the European Borrower pursuant to a Receivables Purchase Agreement) secure the ABL Obligations; and

WHEREAS, this Agreement (and all Lenders from time to time party hereto) shall be subject to the terms and conditions of the Intercreditor Agreement, which more fully describes the sharing arrangements referenced above (and which in the event of any conflict with this Agreement, including the above description, shall be binding); and

WHEREAS, subject to the terms and conditions of this Agreement and the other Credit Documents, and subject to the terms of the Intercreditor Agreement, the Lenders are

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willing to amend and restate the Existing ABL Credit Agreement, and to make available to the Borrowers the respective credit facilities provided for herein;

NOW, THEREFORE, IT IS AGREED:

SECTION 1. Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“ABL Creditor Mortgage” shall mean a mortgage substantially in the form of Exhibit N-1, with such modifications thereto as the relevant local counsel of the Collateral Agent may deem necessary or appropriate in order to create and perfect the mortgage liens intended to be created thereby under the local law of the jurisdiction in which the relevant property is located.

“ABL Obligations” shall mean all obligations (including guaranty obligations) of every nature of each Credit Party from time to time owed to the Agents (including former Agents), Issuing Lenders, Lenders, or any of them, under any Credit Document, whether for principal, premium, interest (including interest which, but for the filing of a petition in bankruptcy or a similar proceeding with respect to such Credit Party, would have accrued on any ABL Obligation, whether or not a claim is allowed against such Credit Party for such interest in the related bankruptcy or similar proceeding), reimbursement of amounts drawn under (and obligations to cash collateralize) Letters of Credit and Bankers’ Acceptances, fees, expenses (including Expenses), indemnification (including, without limitation, pursuant to Section 13.01) or otherwise.

“ABL Priority Collateral” shall mean, all “ABL Priority Collateral” as defined in the Intercreditor Agreement and shall include, collectively, all of the personal property in which First Priority Liens are granted (or purported to be granted) pursuant to the Security Documents as security for the ABL Obligations including, without limitation, all Accounts and Inventory of Borrowers and certain of the Guarantors.

“ABL Secured Parties” shall mean (i) Lenders (including, in any event, each Issuing Lender and each Swingline Lender) and Agents, (ii) the Other Creditors and (iii) the Treasury Services Creditors.

“Account” shall mean an “account” (as such term is defined in Article 9 of the UCC), and any and all supporting obligations (as such term is defined in Article 9 of the UCC) in respect thereof.

“Account Debtor” shall mean each Person who is obligated on an Account, chattel paper (as such term is defined in Article 9 of the UCC), or a General Intangible constituting a payment intangible (as such term is defined in Article 9 of the UCC).

“Account Party” shall mean, with respect to any Letter of Credit, (i) in the case of a U.S. Letter of Credit, all of the U.S. Borrowers, as joint and several account parties with respect to such Letter of Credit, (ii) in the case of a Canadian Letter of Credit, all of the Canadian Borrowers, as joint and several account parties with respect to such Letter of Credit and (iii) in

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the case of a European Letter of Credit, the European Borrower as the account party with respect to such Letter of Credit.

“Acquired Entity or Business” shall mean either (x) the assets constituting a business, division or product line of any Person or (y) the assets or business of a Person who shall, as a result of the respective acquisition, become a Subsidiary (or, in accordance with Section 9.16, an Unrestricted Subsidiary) of Aleris (or shall be merged with and into Aleris (with Aleris being the surviving Person) or a Subsidiary of Aleris with the surviving Person being a Subsidiary (or, in accordance with Section 9.16, an Unrestricted Subsidiary) of Aleris).

“Action” shall have the meaning provided in Section 9.13(a).

“Additional Debt” shall have the meaning provided in Section 10.04(xiv).

“Additional Security Documents” shall mean each additional security agreement, pledge, mortgage or other document granting a lien in the Collateral delivered pursuant to Section 9.11 (as amended, modified or supplemented from time to time).

“Adjustment Date” shall mean the first day of each Fiscal Quarter of Aleris.

“Administrative Agent” shall mean DBNY, in its capacity as Administrative Agent for the Lenders hereunder, and shall include any successor to the Administrative Agent appointed pursuant to Section 12.09; provided that with respect to the facility made available to the Canadian Borrowers hereunder, references in this Agreement and the other Credit Documents to the Administrative Agent shall be deemed a reference to the Canadian Administrative Agent.

“Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise; provided, however, that neither the Administrative Agent nor any Lender nor any Affiliate thereof shall, as a result of its acting as such, be considered an Affiliate of Aleris or any Subsidiary thereof.

“Agent Advance” shall have the meaning provided in Section 2.01(f).

“Agent Advance Period” shall have the meaning provided in Section 2.01(f).

“Agents” shall mean the Administrative Agent, the Canadian Administrative Agent, the Collateral Agent, the Syndication Agent, each Co-Documentation Agent, the Joint Lead Arrangers and the Joint Book Running Managers.

“Aggregate Canadian Exposure” at any time shall mean the sum of (i) the aggregate principal amount of all Canadian Revolving Loans (including the Face Amount of all Bankers’ Acceptance Loans) then outstanding (for this purpose, using the Dollar Equivalent of each Canadian Dollar Denominated Loan then outstanding), (ii) the aggregate amount of all

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Letter of Credit Outstandings with respect to Canadian Letters of Credit (for this purpose, using the Dollar Equivalent of all amounts denominated in a currency other than U.S. Dollars) at such time and (iii) the aggregate principal amount of all Canadian Swingline Loans (for this purpose, using the Dollar Equivalent of each Canadian Dollar Denominated Loan then outstanding) then outstanding.

“Aggregate European Borrower Exposure” at any time shall mean (i) the aggregate principal amount of all European Borrower Revolving Loans then outstanding (for this purpose, using the Dollar Equivalent of each Non-Dollar Denominated Loan then outstanding), (ii) the aggregate amount of all Letter of Credit Outstandings with respect to European Letters of Credit (for this purpose, using the Dollar Equivalent of all amounts denominated in a currency other than U.S. Dollars) at such time and (iii) the aggregate principal amount of all European Borrower Swingline Loans then outstanding (for this purpose, using the Dollar Equivalent of each Non-Dollar Denominated Loan then outstanding).

“Aggregate Exposure” at any time shall mean the sum of the Aggregate U.S./European Exposure and the Aggregate Canadian Exposure.

“Aggregate Non-U.S. Borrowing Base Usage” shall mean, at any time, the sum of the European U.S. Borrowing Base Usage and the Canadian U.S. Borrowing Base Usage at such time.

“Aggregate U.S. Borrower Exposure” at any time shall mean the sum of (i) the aggregate principal amount of all U.S. Borrower Revolving Loans then outstanding, (ii) the aggregate amount of all Letter of Credit Outstandings with respect to U.S. Letters of Credit at such time and (iii) the aggregate principal amount of all U.S. Borrower Swingline Loans then outstanding.

“Aggregate U.S./European Exposure” at any time shall mean the sum of (i) the Aggregate U.S. Borrower Exposure at such time and (ii) the Aggregate European Borrower Exposure at such time.

“Agreement” shall mean this Amended and Restated Credit Agreement, as modified, supplemented, amended, restated (including any amendment and restatement hereof), extended or renewed from time to time.

“Aleris” shall have the meaning provided in the first paragraph of this Agreement.

“Aleris Canada” shall have the meaning provided in the first paragraph of this Agreement.

“Aleris Common Stock” shall mean the common stock of Aleris.

“Applicable Commitment Commission Percentage” shall mean with respect to any period during which Commitment Commission is payable hereunder, (x) if on or prior to March 31, 2007, a percentage per annum equal to 0.375% and (y) if on or after April 1, 2007, the percentage per annum set forth below opposite the applicable daily average Total Unutilized Commitment for the period for which such Commitment Commission is payable:

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Total Unutilized Commitment	Applicable Commitment Commission
Less than 50% of the Total Commitment	0.25	%
Greater than or equal to 50% of the Total Commitment	0.375	%

“Applicable Eligible Jurisdiction” shall mean (i) in the case of Eligible Accounts or Eligible Inventory of the U.S. Borrowers, the United States, Canada and, in the case of Eligible Accounts only, Puerto Rico, (ii) in the case of Eligible Accounts or Eligible Inventory of the Canadian Borrowers, Canada and the United States and (iii) in the case of Eligible Accounts of the European Borrower, an Applicable European Jurisdiction.

“Applicable European Jurisdiction” shall mean each Tier I Country and each Tier II Country.

“Applicable Margin” initially shall mean a percentage per annum equal to in the case of Revolving Loans maintained as (A) Base Rate Loans, Canadian Prime Rate Loans or Swingline Loans, 0.50% and (B) Euro Rate Loans or Bankers’ Acceptance Loans, 1.50%; provided that the Applicable Margin shall be adjusted quarterly on a prospective basis on each Adjustment Date (commencing with the Adjustment Date to occur on April 1, 2007) in accordance with the table below based on the Average Historical Excess Availability for such Adjustment Date:

Average Historical Excess Availability	Revolving Loan Euro Rate Applicable Margin and/or Drawing Fee		Revolving Loan Base Rate and Canadian Prime Rate Margin and Swingline Loan Base Rate Applicable Margin
Less than $150,000,000	2.00	%	1.00	%
Greater than or equal to $150,000,000 but less than $250,000,000	1.75	%	0.75	%
Greater than or equal to $250,000,000 but less than $350,000,000	1.50	%	0.50	%
Greater than or equal to $350,000,000	1.25	%	0.25	%

The Applicable Margins as so determined shall apply from the relevant Adjustment Date to the next Adjustment Date; provided that if an Event of Default shall have occurred and be continuing at the time any reduction in the Applicable Margin would otherwise be implemented, no such reduction shall be implemented until the date on which such Event of Default shall have been cured or waived.

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“Asset Sale” shall mean (a) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of Aleris or any Restricted Subsidiary (each referred to in this definition as a “disposition”), and (b) the issuance or sale of Equity Interests of any Restricted Subsidiary, whether in a single transaction or a series of related transactions, in each case, other than:

(i) a disposition of cash, Cash Equivalents or Investment Grade Securities or excess, damaged, obsolete or worn out assets in the ordinary course of business or any disposition of inventory or goods held for sale in the ordinary course of business;

(ii) the disposition of all or substantially all of the assets of Aleris in a manner permitted pursuant to Section 10.02 or any disposition that constitutes a Change of Control;

(iii) the making of any Permitted Investment or the making of any Dividend that is not prohibited by Section 10.03;

(iv) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary, in each case that do not or would not upon issuance constitute Fixed Assets, in any transaction or series of transactions with an aggregate fair market value of less than $25,000,000;

(v) any disposition of Fixed Assets in any transaction or series of transactions with an applicable fair market value of less than $10,000,000;

(vi) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to Aleris or by Aleris or a Restricted Subsidiary to a Restricted Subsidiary;

(vii) to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(viii) the lease, assignment, license, sublicense, or sub-lease of any real or personal property in the ordinary course of business;

(ix) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(x) foreclosures on assets;

(xi) the unwinding of any Hedging Obligations; and

(xii) the sale or discount, in each case without recourse and in the ordinary course of business, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof and not as part of any financing transaction or bulk sale.

“Asset Swap” shall mean the substantially concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or

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Cash Equivalents between Aleris or any of its Subsidiaries and another Person; provided that any cash or Cash Equivalents received must be applied in accordance with Section 5.02(c).

“Assignment and Assumption Agreement” shall mean an Assignment and Assumption Agreement in form and substance reasonably satisfactory to the Administrative Agent.

“Attributable Debt” in respect of a Sale and Lease-Back Transaction shall mean, as at the time of determination, the present value (discounted at the interest rate then borne by the Loans, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Lease-Back Transaction (including any period for which such lease has been extended); provided, however, that if such Sale and Lease-Back Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capitalized Lease Obligation”.

“Available Currency” shall mean with respect to (i) U.S. Borrower Revolving Loans, U.S. Borrower Swingline Loans and U.S. Letters of Credit, U.S. Dollars, (ii) European Borrower Revolving Loans and European Letters of Credit, U.S. Dollars, Euros, Swiss Francs, Pounds Sterling and any other currency that the European Borrower requests, by at least ten Business Days’ prior written notice to the U.S./European Lenders through the Administrative Agent, be included as an additional Available Currency for purposes of this Agreement, so long as at such time (A) such currency is dealt with in the London interbank deposit market, (B) such currency is freely transferable and convertible into U.S. Dollars in the London foreign exchange market or the European foreign exchange market, as applicable, (C) no central bank or other governmental authorization in the country of issue of such currency is required to permit the use of such currency by any U.S./European Lender or any Issuing Lender, as applicable, for making any European Borrower Revolving Loan or issuing any European Letter of Credit hereunder and/or to permit the European Borrower to borrow and repay the principal thereof (or, in the case of European Letters of Credit, to request the issuance of and reimburse Unpaid Drawings in respect thereof) and to pay interest thereon, unless such authorization has been obtained and remains in full force and effect and (D) no U.S./European Lender or Issuing Lender shall have objected to the inclusion of such currency as an Available Currency by notice to Aleris and the Administrative Agent given within ten Business Days of such U.S./European Lender’s or Issuing Lender’s, as applicable, receipt of the notice referred to above (which notice shall be promptly transmitted by the Administrative Agent to such Lenders upon its receipt thereof), (iii) with respect to European Borrower Swingline Loans, Euros and (iv) with respect to Canadian Revolving Loans, Canadian Swingline Loans and Canadian Letters of Credit, U.S. Dollars and Canadian Dollars.

“Average Historical Excess Availability” shall mean, at any Adjustment Date, the average daily Excess Availability for the three-month period immediately preceding such Adjustment Date (with the Borrowing Base for any day during such period calculated by reference to the most recent Borrowing Base Certificate delivered to the Administrative Agent on or prior to such day pursuant to Section 9.01(h)).

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“B/A Discount Proceeds” shall mean, in respect of any Bankers’ Acceptance or Draft to be purchased by a Canadian Lender on any date pursuant to Section 2.01(b), and Schedule III hereto, the difference between (i) the result (rounded to the nearest whole Canadian cent, and with one-half of one Canadian cent being rounded up) calculated on such day by dividing the aggregate Face Amount of such Bankers’ Acceptance or Draft by the sum of one plus the product of (x) the Reference Discount Rate (expressed as a decimal) applicable to such Bankers’ Acceptance or Draft multiplied by (y) a fraction, the numerator of which is the number of days in the term of such Bankers’ Acceptance or Draft and the denominator of which is 365; and (ii) the aggregate applicable Drawing Fee with such product being rounded up or down to the fifth decimal place and .000005 being rounded up.

“B/A Equivalent Note” shall have the meaning provided in Schedule III hereto.

“B/A Instruments” shall mean, collectively, Bankers’ Acceptances, Drafts and B/A Equivalent Notes, and, in the singular, any one of them.

“B/A Lender” shall mean any Canadian Lender other than a Non-B/A Lender.

“Bank Product Provider” shall mean each Guaranteed Creditor party to a Treasury Services Agreement with a Guaranteed Party.

“Bank Product Reserve” shall mean, as of any date of determination, the Guaranteed Parties’ exposure (as determined by the Administrative Agent in its Permitted Discretion) under any Treasury Services Agreement which exposure is to be secured by a First Priority Lien on the Collateral as notified by the respective Bank Product Provider or any Borrower to the Administrative Agent and updated from time to time.

“Bankers’ Acceptance” shall mean a Draft drawn by the Canadian Borrowers and accepted by a Canadian Lender pursuant to Section 2.01(b) and Schedule III hereto.

“Bankers’ Acceptance Loans” shall mean (i) the creation of Bankers’ Acceptances or (ii) the creation and purchase of completed Drafts and the exchange of such Drafts for B/A Equivalent Notes, in each case as contemplated in Sections 2.01(b) and Schedule III hereto.

“Bankruptcy Code” shall have the meaning provided in Section 11.05.

“Base Rate” shall mean, at any time, the higher of (i) the Prime Lending Rate at such time and (ii) 1/2 of 1% in excess of the overnight Federal Funds Rate at such time.

“Base Rate Loan” shall mean (i) each U.S. Borrower Swingline Loan and (ii) each other Dollar Denominated Loan designated or deemed designated as such by the applicable Borrower or Borrowers at the time of the incurrence thereof or conversion thereto.

“Books” shall mean all of each Borrower’s and its Subsidiaries’ now owned or hereafter acquired books and records (including all of their Records indicating, summarizing, or evidencing their assets (including the Collateral) or liabilities, all of each Borrower’s or its

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Subsidiaries’ Records relating to their business operations or financial condition, and all of their goods or General Intangibles related to such information).

“Borrowers” shall have the meaning provided in the first paragraph of this Agreement. Unless the context otherwise requires, and subject to Section 15.09, each reference in this Agreement to “each Borrower” or “the applicable Borrower” shall be deemed to be a reference to (x) each U.S. Borrower on a joint and several basis, (y) each Canadian Borrower on a joint and several basis or (z) the European Borrower, as the case may be.

“Borrowing” shall mean the borrowing of one Type of Loan of a single Tranche and currency by either the U.S. Borrowers (on a joint and several basis), the Canadian Borrowers (on a joint and several basis) or the European Borrower, from all the Lenders having Commitments under the applicable Tranche (or from the U.S./European Swingline Lender, in the case of U.S./European Borrower Swingline Loans and the Canadian Swingline Lender, in the case of Canadian Swingline Loans) on a given date (or resulting from a conversion or conversions on such date) having in the case of Euro Rate Loans the same Interest Period, provided that Base Rate Loans incurred pursuant to Section 2.10(b) shall be considered part of the related Borrowing of Euro Rate Loans.

“Borrowing Base” shall mean the U.S. Borrowing Base, the Canadian Borrowing Base, the European Borrowing Base and/or the Total Borrowing Base, as the context may require.

“Borrowing Base Certificate” shall have the meaning provided in Section 9.01(h).

“Business Day” shall mean (i) for all purposes other than as covered by clauses (ii) and (iii) below, any day except Saturday, Sunday and any day which shall be in New York City a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close, (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on or with respect to, Euro Rate Loans, any day which is a Business Day described in clause (i) and which is also (A) a day for trading by and between banks in deposits in the applicable Available Currency in which such Euro Rate Loans was incurred in the London interbank market and which shall not be a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close in the country in whose Available Currency the applicable payment is denominated and (B) in relation to any transaction in Euros (or a notice with respect thereto), a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open and (iii) with respect to all notices and determinations in connection with, and payments of principal (or, Face Amount, as applicable) and interest on, Canadian Revolving Loans, any day which is a Business Day described in clauses (i) and, if relevant, (ii) above and which is also a day which is not a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close in Toronto, Ontario.

“Calculation Period” shall mean, in the case of any Permitted Acquisition, the Test Period most recently ended prior to the date of any such Permitted Acquisition for which financial statements are available.

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“Canadian Administrative Agent” shall have the meaning provided in the first paragraph of this Agreement.

“Canadian Borrower Obligations” shall mean all ABL Obligations owing to the Canadian Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender by the Canadian Borrowers.

“Canadian Borrowers” shall have the meaning provided in the first paragraph of this Agreement.

“Canadian Borrowing Base” shall mean, as of any date of determination, the result of, in each case using the Dollar Equivalent of all amounts not denominated in U.S. Dollars:

(a) 85% of the amount of Eligible Canadian Accounts, plus

(b) the lower of:

(i) 75% of the net book value of Eligible Canadian Inventory, and

(ii) 85% times the then extant Net Liquidation Percentage times the net book value of the Eligible Canadian Inventory, minus

(c) the aggregate amount of reserves, if any, established by the Administrative Agent under Section 2.01(e) with respect to the Canadian Borrowing Base.

“Canadian Collection Account” shall mean each account established at a Canadian Collection Bank and subject to a Cash Management Control Agreement into which funds shall be transferred as provided in Section 5.03(b).

“Canadian Collection Banks” shall have the meaning provided in Section 5.03(b)(i).

“Canadian Commitment” shall mean, for each Lender, the amount set forth opposite such Lender’s name in Schedule I-A directly below the column entitled “Canadian Commitment,” as the same may be (x) reduced from time to time or terminated pursuant to Sections 4.02, 4.03 and/or 11, as applicable, (y) increased pursuant to Section 2.15 and (z) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 2.13 or 13.04(b).

“Canadian Credit Party” shall mean the Canadian Borrowers, each Canadian Parent Guarantor and each Canadian Subsidiary Guarantor.

“Canadian Disbursement Account” shall mean each checking and/or disbursement account of the Canadian Borrowers for their general corporate purposes, including for the purpose of paying the Canadian Borrowers’ trade payables and other operating expenses.

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“Canadian Dollar Denominated Loan” shall mean each Canadian Swingline Loan and each Canadian Revolving Loan denominated in Canadian Dollars at the time of the incurrence thereof, unless and until converted into Dollar Denominated Loans pursuant to Section 2.14.

“Canadian Dollars” shall mean the lawful currency of Canada, as in effect from time to time.

“Canadian Lender” shall mean each Lender which has a Canadian Commitment (without giving effect to any termination of the Total Canadian Commitment if any Canadian Swingline Loans remain outstanding or there are any Letter of Credit Outstandings in respect of Canadian Letters of Credit) or which has any outstanding Canadian Revolving Loans. Unless the context otherwise requires, each reference in this Agreement to a Lender includes each Canadian Lender and shall include references to any Affiliate of any such Lender which is acting as a Canadian Lender.

“Canadian Letter of Credit” shall have the meaning provided in Section 3.01(a).

“Canadian Parent Guarantor” shall mean each Person (other than a U.S. Credit Party) which (i) owns an Equity Interest in Aleris Canada and (ii) is the direct or indirect parent of any entity described in clause (i). On the Restatement Effective Date, the Canadian Parent Guarantors are Aleris Holding Canada Limited, Aleris Holding Luxembourg S.A.R.L. and Aleris Global Luxembourg S.A.R.L.

“Canadian Parent Guaranty” shall mean each Canadian Parent Guaranty in the form of Exhibit H-5 or such other guaranty in form and substance reasonably satisfactory to the Administrative Agent (as amended, modified or supplemented from time to time).

“Canadian Parent Pledge Agreement” shall have the meaning provided in Section 6.08(b).

“Canadian Percentage” of any Canadian Lender at any time shall be that percentage which is equal to a fraction (expressed as a percentage) the numerator of which is the Canadian Commitment of such Canadian Lender at such time and the denominator of which is the Total Canadian Commitment at such time, provided that if any such determination is to be made after the Total Canadian Commitment (and the related Canadian Commitments of the Lenders) has (or have) terminated, the determination of such percentages shall be made immediately before giving effect to such termination.

“Canadian Prime Rate” shall mean, for any day, the rate of interest per annum equal to the greater of (i) the per annum rate of interest quoted or established as the “prime rate” of DBAG which it quotes or establishes for such day as its reference rate of interest in order to determine interest rates for commercial loans in Canadian Dollars in Canada to its Canadian borrowers; and (ii) the average rate for Canadian Dollar banker’s acceptances having a term of 30 days that appears on Reuters Screen CDOR Page (or such other page as may be selected by the Canadian Administrative Agent as a replacement page for such Banker’s Acceptances if such screen is not available) at approximately 10:00 a.m. (Toronto time) on such day plus 75 basis

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points per annum, adjusted automatically with each quoted or established change in such rate, all without the necessity of any notice to any Borrower or any other Person.

“Canadian Prime Rate Loans” shall mean any Canadian Dollar Denominated Loan designated or deemed designated as such by the Canadian Borrowers at the time of the incurrence thereof or conversion thereto.

“Canadian Reference Lender” shall mean DBAG.

“Canadian Resident” shall mean, (a) a person resident in Canada for purposes of the Income Tax Act (Canada), (b) an authorized foreign bank which at all times holds all of its interest in any Canadian Borrower Obligations owed by the Canadian Borrowers hereunder in the course of its Canadian banking business for purposes of subsection 212(13.3) of the Income Tax Act (Canada) or (c) any Lender or other Person able to establish to the satisfaction of the Canadian Administrative Agent and the Canadian Borrowers based on applicable law in effect on the date on which it becomes a Lender that such Lender is not subject to deduction or withholding of income or similar Taxes imposed by Canada (or any political subdivision or taxing authority thereof or therein) with respect to any payments to such Lender of interest, fees, commission, or any other amount payable by the Canadian Borrowers under the Credit Documents.

“Canadian Revolving Loan” shall have the meaning provided in Section 2.01(b).

“Canadian Revolving Note” shall have the meaning provided in Section 2.05(a).

“Canadian Security Agreement” shall mean each security agreement or document delivered by a Canadian Credit Party pursuant to the Existing ABL Credit Agreement.

“Canadian Security Documents” shall mean each Canadian Security Agreement, each Canadian Parent Pledge Agreement and each Additional Security Document covering assets of any Canadian Credit Party.

“Canadian Subsidiaries Guaranty” shall mean a guarantee of the ABL Obligations of the Canadian Borrowers substantially in the form of Exhibit H-2 or such other form satisfactory to the Administrative Agent, in each case, as amended, modified, restated and/or supplemented from time to time.

“Canadian Subsidiary” shall mean each Subsidiary of Aleris that is incorporated or organized under the laws of Canada or any province thereof.

“Canadian Subsidiary Guarantor” shall mean each Wholly-Owned Canadian Subsidiary of Aleris, in each case, unless and until such time as the relevant Canadian Subsidiary Guarantor is released from all of its obligations under its Canadian Subsidiaries Guaranty in accordance with the terms and provisions thereof.

“Canadian Swingline Lender” shall mean DBAG, or any Person serving as a successor Canadian Administrative Agent hereunder, in its capacity as a lender of Canadian Swingline Loans.

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“Canadian Swingline Loans” shall have the meaning provided in Section 2.01(c).

“Canadian Swingline Note” shall have the meaning provided in Section 2.05(a).

“Canadian U.S. Borrowing Base Usage” shall mean, at any time, the amount by which the Aggregate Canadian Exposure exceeds the Canadian Borrowing Base at such time (based upon the Borrowing Base Certificate most recently delivered).

“Capital Expenditures” shall mean, with respect to any Person, (a) all expenditures by such Person which should be capitalized in accordance with GAAP and, without duplication, the amount of Capitalized Lease Obligations incurred by such Person less (b) any expenditure which is contractually required to be, and is, reimbursed to the Credit Parties in cash by a third party (including landlords and developers) during such period of calculation.

“Capitalized Lease Obligations” shall mean, with respect to any Person, all rental obligations of such Person which, under GAAP, are required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles.

“Carson Facility” shall mean the manufacturing facility described under clause 8 of Schedule XIV.

“Cash Equivalents” shall mean, as to any Person, (i) securities issued or directly and fully guaranteed or insured by the United States or any agency, instrumentality or sponsored corporation thereof and backed by the full faith and credit of the United States, and in each case having maturities of not more than 24 months from the date of acquisition, (ii) U.S. Dollar denominated time deposits, certificates of deposit, overnight bank deposits and bankers’ acceptances having maturities within one year from the date of acquisition thereof issued by any Lender or any commercial bank of recognized standing, having capital and surplus in excess of $250,000,000, (iii) repurchase obligations for underlying securities of the types described in clauses (i) and (ii) above and entered into with any commercial bank meeting the qualifications specified in clause (ii) above, (iv) other investment instruments having maturities within 180 days from the date of acquisition thereof offered or sponsored by financial institutions having capital and surplus in excess of $500,000,000, (v) readily marketable direct obligations issued by any state of the United States or any political subdivision thereof having maturities within 180 days from the date of acquisition thereof and having, at the time of acquisition thereof, one of the two highest rating categories obtainable from either Moody’s or S&P (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), (vi) commercial paper rated, at the time of acquisition thereof, at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), in each case maturing within one year after the date of acquisition, (vii) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (i) through (vi) above, (viii) in the case of any Foreign Subsidiary of Aleris, (x) certificates of deposit or bankers’ acceptances of any bank organized under the laws of Canada, Japan or any country that is a member of the European economic and monetary union pursuant to the Treaty whose short term commercial paper, at the time of acquisition thereof, is rated at least A-2 or the

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equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), or, if no such commercial paper rating is available, a long term debt rating, at the time of acquisition thereof, of at least A or the equivalent thereof by S&P or at least A-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), in each case maturing not more than one year from the date of acquisition by such Foreign Subsidiary, (y) overnight deposits and demand deposit accounts maintained with any bank that such Foreign Subsidiary regularly transacts business and (z) securities of the type and maturity described in clause (i) above but issued by the principal Governmental Authority in which such Foreign Subsidiary is organized so long as such security has the highest rating available from either S&P or Moody’s, (ix) Indebtedness or Preferred Stock issued by Persons with a rating of “A” or higher from S&P or “A2” or higher from Moody’s with maturities of one year or less from the date of acquisition, (x) U.S. Dollars and (xi) Canadian dollars, Japanese yen, pounds sterling, Euros or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business.

“Cash Management Control Agreement” shall mean a “control agreement,” power of attorney in respect of the respective Deposit Account(s) or other agreement, in each case, in form and substance reasonably acceptable to the Administrative Agent and containing terms regarding the treatment of all cash and other amounts on deposit in the Deposit Account(s) governed by such Cash Management Control Agreement consistent with the requirements of Section 5.03.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as the same has been amended and may hereafter be amended from time to time, 42 U.S.C. § 9601 et seq.

“Change of Control” shall mean the occurrence of any of the following:

(i) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of Aleris and its Subsidiaries, taken as a whole, to any Person other than a Permitted Holder;

(ii) Aleris becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b) under the Exchange Act, or any successor provision), other than the Permitted Holders, in a single transaction or in a series of related transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more of the total voting power of the Voting Stock of Aleris or any of its direct or indirect parent companies; or

(iii) a “change of control” or similar event shall occur as provided in the Term Loan Agreement and/or any Permitted Refinancing Indebtedness relating thereto, and/or as provided in

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the documentation relating to the New Senior Notes or the New Senior Subordinated Notes or, in each case, any Permitted Refinancing Indebtedness relating thereto.

“Chief Executive Office” shall mean, with respect to any Person, the location from which such Person manages the main part of its business operations or other affairs.

“Code” shall mean the U.S. Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder. Section references to the Code are to the Code as in effect at the date of this Agreement and any subsequent provisions of the Code amendatory thereof, supplemental thereto or substituted therefor.

“Co-Documentation Agents” shall mean each of PNC Bank, National Association, National City Business Credit, Inc. and Key Bank National Association, in their respective capacities as Co-Documentation Agents, and any successors thereto.

“Co-Investors” shall mean Persons (and their Affiliates) who, on the Restatement Effective Date, are limited partners of TPG Partners IV, L.P. or TPG Partners V, L.P.

“Collateral” shall mean, collectively, the Term Priority Collateral and the ABL Priority Collateral.

“Collateral Access Agreement” shall mean a landlord waiver, bailee letter, or acknowledgment agreement of any lessor, warehouseman, processor, consignee, or other Person (other than Aleris or any other Credit Party) in possession of, having a Lien upon, or having rights or interests in the Books, Equipment or Inventory of any Borrower or any Subsidiary of a Borrower, in each case, in form and substance reasonably satisfactory to the Collateral Agent.

“Collateral Agent” shall mean DBNY, in its capacity as Collateral Agent for the Lenders hereunder, and shall include any successor to the Collateral Agent appointed pursuant to Section 12.09.

“Collection Accounts” shall mean and include each U.S. Collection Account, each Canadian Collection Account and each European Collection Account.

“Collection Banks” shall mean each U.S. Collection Bank, each Canadian Collection Bank and each European Collection Bank.

“Collections” shall mean all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, proceeds of any issuance of equity interests, and tax refunds).

“Combined Commitments” shall mean, with respect to any Lender at any time, the sum of the Commitments of such Lender at such time.

“Combined U.S./Canadian Borrowing Base” at any time, shall mean the sum of the U.S. Borrowing Base at such time and the Canadian Borrowing Base at such time.

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“Combined U.S./European Borrowing Base” at any time, shall mean the sum of the U.S. Borrowing Base at such time and the European Borrowing Base at such time.

“Commitment” shall mean any of the commitments of any Lender, i.e., whether the U.S./European Commitment or the Canadian Commitment.

“Commitment Commission” shall have the meaning provided in Section 4.01(a).

“Company Material Adverse Effect” shall mean a material adverse effect on (i) the business, results of operations or condition (financial or otherwise) of Aleris and its Subsidiaries taken as a whole or (ii) the ability of Aleris to timely consummate the transactions contemplated by the Merger Agreement, provided, that, a Company Material Adverse Effect shall not be deemed to include effects to the extent resulting from (A) changes in general economic conditions, (B) general changes or developments in the industries in which Aleris or its Subsidiaries operate, (C) changes in securities markets generally, (D) any act of war or terrorism (other than any of the foregoing that causes any damage or destruction to or renders unusable any facility or property of Aleris or any of its Subsidiaries), (E) changes, after the date hereof, in generally accepted accounting principles or interpretations thereof, (F) changes, after the date hereof, in Laws (as defined in the Merger Agreement), rules or regulations of general applicability or interpretations thereof by courts or Governmental Entities (as defined in the Merger Agreement), (G) the announcement of the Merger Agreement and the transactions contemplated thereby or (H) changes in the market price of the Shares (as defined in the Merger Agreement), unless in the case of the foregoing clauses (A), (B), (E) and (F), such changes referred to therein have a disproportionate effect on Aleris and its Subsidiaries, taken as a whole, when compared to other companies operating in the same industries in which Aleris or its Subsidiaries operate.

“Compliance Period” shall mean any period during which Excess Availability (as determined pursuant to the Borrowing Base Certificate most recently delivered) is less than the greater of (x) $65,000,000 and (y) 10% of the Total Commitment; provided that the Administrative Agent has notified Aleris thereof.

“Conditions” shall have the meaning provided in Section 8.16(a)(iii).

“Confidential Information Memorandum” shall mean the Confidential Information Memorandum of Aleris, dated November 2006.

“Consolidated EBITDA” shall mean, for any period, the sum of (without duplication) (i) net income (or loss) of Aleris and its Subsidiaries on a consolidated basis for such period (excluding extraordinary, non-recurring or unusual gains or losses), (ii) plus all interest expense of Aleris and its Subsidiaries on a consolidated basis for such period, (iii) plus all charges against or minus credits to income of Aleris and its Subsidiaries on a consolidated basis for such period for federal, state, local and foreign taxes, (iv) plus depreciation expenses of Aleris and its Subsidiaries on a consolidated basis for such period, (v) plus amortization expenses of Aleris and its Subsidiaries (including, without limitation, amortization of goodwill and other intangible assets) on a consolidated basis for such period, (vi) plus all non-cash charges against (including, without limitation, charges in respect of impairment of goodwill and any

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other non-cash items of loss) and minus all non-cash credits to income (including without limitation, all non-cash items of gain) of Aleris and its Subsidiaries on a consolidated basis for such period, (vii) plus or minus, as applicable, (a) all items of loss or gain arising from non-cash gains or losses accrued during such period as a result of mark to market accounting (pursuant to Financial Accounting Standards number 133) for Interest Rate Protection Agreements and Other Hedging Agreements, and (b) non-cash purchase accounting adjustments during such period as a result of the Corus Transaction, the Transaction or any Permitted Acquisition (or any acquisition of an Acquired Entity or Business permitted pursuant to Section 10.05), (viii) plus, to the extent not otherwise included in the determination of net income for such period, all proceeds of business interruption insurance policies, if any, received during such period, (ix) plus, to the extent deducted from net income for such period, the amount of all financial advisory fees, accounting fees, legal fees and other similar advisory and consulting fees and related out-of-pocket fees and expenses incurred (1) on or prior to September 30, 2006 in connection with the Corus Transaction and (2) on or prior to March 31, 2007 in connection with the Transaction, (x) plus, to the extent deducted from net income for such period, any financial advisory fees, accounting fees, legal fees and other similar advisory and consulting fees and related out-of-pocket expenses of Aleris and its Subsidiaries incurred in connection with a Permitted Acquisition or any other acquisition permitted pursuant to Section 10.05, (xi) plus factually supportable and identifiable cost savings and expenses relating to the Corus Transaction, or any Permitted Acquisition effected during such period, including, without limitation, cash charges resulting from restructuring, severance, integration and other adjustments, which are reasonably acceptable to the Administrative Agent, as if such cost savings or expenses were realized on the first day of the respective period, (xii) plus, to the extent deducted from net income for such period, restructuring charges (whether cash or non-cash) in connection with the Corus Transaction, any Permitted Acquisition and/or any other acquisition permitted pursuant to Section 10.05, in an aggregate amount not to exceed $25,000,000 since the Restatement Effective Date, (xiii) less the aggregate amount of all cash payments made during such period in connection with non-cash charges incurred in a prior period, to the extent such non-cash charges were added back pursuant to clauses (vi) and/or (vii) above in a prior period, (xiv) plus, to the extent deducted from net income for such period, fees and expenses in connection with any Permitted Refinancing Indebtedness relating to the New Senior Notes and/or the New Senior Subordinated Notes or the exchange of the New Senior Notes or the New Senior Subordinated Notes for registered notes with substantially identical terms as contemplated by the New Senior Notes Documents or the New Senior Subordinated Notes, as applicable, (xv) plus the amount of any minority interest expense deducted in computing net income for such period, (xvi) plus the amount of management, monitoring, consulting and advisory fees and related expenses paid (or any accruals related to such fees or related expenses) during such period to the Sponsor and the Co-Investors to the extent permitted pursuant to Section 10.06 and (xvii) plus the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to Aleris or a Restricted Subsidiary thereof during such period by a Person other than Aleris or a Restricted Subsidiary.

“Consolidated Secured Debt Ratio” as of any date of determination shall mean the ratio of (a) Consolidated Total Indebtedness of Aleris and its Subsidiaries that is secured by Liens as of the end of the most recent Fiscal Quarter for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (b) the aggregate amount of Consolidated EBITDA of Aleris and its

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Subsidiaries for the most recently ended consecutive four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and Consolidated EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio” in the Term Loan Agreement as in effect on the Restatement Effective Date and without giving effect to any amendment, modification or termination thereof.

“Consolidated Total Indebtedness” shall mean, as at any date of determination, an amount equal to the sum of (a) the aggregate amount of all outstanding Indebtedness of Aleris and its Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, obligations in respect of Capitalized Lease Obligations, Attributable Debt in respect of Sale and Lease-Back Transactions and debt obligations evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (and excluding (x) any undrawn letters of credit issued and (y) all obligations relating to Receivables Facilities (as defined in the Term Loan Agreement)) and (b) the aggregate amount of all outstanding Disqualified Stock of Aleris and all Disqualified Stock and Preferred Stock of its Subsidiaries (excluding items eliminated in consolidation), with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences and Maximum Fixed Repurchase Prices, in each case determined on a consolidated basis in accordance with GAAP. For purposes of this definition, the “Maximum Fixed Repurchase Price” of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to this Agreement, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock, such fair market value shall be determined reasonably and in good faith by Aleris.

“Contingent Obligation” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Restatement Effective Date or entered into in connection with any acquisition or disposition of assets permitted hereunder (other than obligations with respect to Indebtedness). The amount of any Contingent Obligation shall be deemed to be an amount equal to the lesser of (x) the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform

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thereunder) as determined by such Person in good faith and (y) in the case of any Contingent Obligation which is expressly limited in amount, the stated maximum amount of such Contingent Obligation.

“Conversion Event” shall mean (i) the occurrence of any Event of Default with respect to any Borrower pursuant to Section 11.05, (ii) the declaration of the termination of any Commitment, or the acceleration of the maturity of any Revolving Loans, in each case pursuant to the last paragraph of Section 11 or (iii) the failure of any Borrower to pay any principal of, or interest on, Loans of any Tranche or any Letter of Credit Outstandings on or before the tenth Business Day following the Final Maturity Date (or in the case of Swingline Loans, the Swingline Expiry Date).

“Converted Canadian Borrower Revolving Loan” shall have the meaning provided in Section 2.01(b).

“Converted Canadian Swingline Loan” shall have the meaning provided in Section 2.01(c).

“Converted European Borrower Swingline Loan” shall have the meaning provided in Section 2.01(c).

“Converted U.S. Borrower Revolving Loan” shall have the meaning provided in Section 2.01(a).

“Converted U.S. Borrower Swingline Loan” shall have the meaning provided in Section 2.01(c).

“Core Canadian Concentration Account” shall have the meaning provided in Section 5.03(c).

“Core European Concentration Account” shall have the meaning provided in Section 5.03(c).

“Core U.S. Concentration Account” shall have the meaning provided in Section 5.03(c).

“Corus Acquisitions” shall mean, the acquisition by Aleris on August 1, 2006 of (i) all of the limited partnership interests in Corus L.P., a limited partnership organized under the laws of Quebec and all of the shares of Corus Aluminium Inc., a corporation organized under the laws of Quebec and each of their respective Subsidiaries and (ii) all of the beneficial interest in the entire share capital of Corus Hylite BV, Corus Aluminium Rolled Products BV, Corus Aluminium NV, Corus Aluminium GmbH, Corus Aluminium Corp. and Hoogovens Aluminium Europe Inc. and each of their respective Subsidiaries.

“Corus Transaction” shall mean, collectively, (i) the entering into of the Existing Term Loan Agreement and the related documentation and the incurrence of Loans on the Initial Borrowing Date, (ii) the refinancing of certain existing Indebtedness of Aleris and the Corus Acquired Business on the Initial Borrowing Date, (iii) the consummation of the Corus

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Acquisitions, (iv) the incurrence of the Existing Senior Bridge Loans on the Initial Borrowing Date, (v) the incurrence of the Revolving Loans and the issuance of letters of credit under the Existing ABL Credit Agreement on the Initial Borrowing Date, (vi) all intercompany loans, equity contributions, repayments of intercompany loans, dividends, distributions and other intercompany Investments related to the foregoing and (vii) the payment of all fees and expenses in connection with the foregoing.

“Credit Account” shall have the meaning provided in Section 5.03(e).

“Credit Document Acknowledgment and Amendment” shall mean the Credit Document Acknowledgment and Amendment in the form of Exhibit G-4, as amended, modified, restated or supplemented from time to time.

“Credit Documents” shall mean this Agreement and, after the execution and delivery thereof pursuant to the terms of this Agreement, each Note, each B/A Instrument, each Guaranty and each Security Document.

“Credit Event” shall mean the making of any Loan or the issuance of any Letter of Credit.

“Credit Party” shall mean each Borrower and each Guarantor.

“Cure Amount” shall have the meaning set forth in Section 10.07(b).

“Cure Right” shall have the meaning provided in Section 10.07(b).

“Currency Hedging Agreement” shall mean any foreign exchange contracts, currency swap agreements, currency hedging agreements or other similar arrangements, or arrangements designed to protect against fluctuations in currency values.

“DB Account” shall have the meaning provided in Section 5.03(d)(iii).

“DBAG” shall mean Deutsche Bank AG, Canada Branch, in its individual capacity, and any successor corporation thereto by merger, consolidation or otherwise.

“DBAG Account” shall have the meaning provided in Section 5.03(d)(ii).

“DBNY” shall mean Deutsche Bank AG New York Branch, in its individual capacity, and any successor corporation thereto by merger, consolidation or otherwise.

“DBNY Account” shall have the meaning provided in Section 5.03(d)(i).

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

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default is in effect.

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“Deposit Account” shall mean any “deposit account” (as such term is defined in Article 9 of the UCC).

“Disbursement Account” shall mean each U.S. Disbursement Account, each Canadian Disbursement Account and each European Disbursement Account.

“Disqualified Lender” shall mean any Person designated by Aleris in writing to the Administrative Agent in accordance with that certain letter agreement dated as of August 7, 2006 between Aurora Acquisition Holdings, Inc., Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc. and DBNY.

“Disqualified Stock” shall mean any Equity Interests that are not Qualified Equity Interests.

“Distribution Subsidiary” shall mean each Subsidiary of the European Borrower.

“Dividend” shall mean any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in any Borrower or its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in any Borrower or any option, warrant or other right to acquire any such Equity Interests in any Borrower.

“Documents” shall mean the Credit Documents and the Merger Documents.

“Dollar Denominated Loan” shall mean a Loan incurred in U.S. Dollars, including, from and after the date of any conversion of a Loan into U.S. Dollars pursuant to Section 2.14.

“Dollar Equivalent” shall mean, the amount of U.S. Dollars which could be purchased with the amount of the applicable Available Currency involved in such computation at (x) the spot exchange rate as shown in the Wall Street Journal on the date which is one Business Day prior to any such determination (or on such other basis as is satisfactory to the Administrative Agent) or (y) if the provisions of the foregoing clause (x) are not applicable, the “official” exchange rate (if applicable) or the spot exchange rate for the applicable Available Currency in question calculated by the Administrative Agent (each such exchange rate, the “Spot Exchange Rate”); provided that (i) for purposes of (x) determining compliance with Sections 2.01(b), 2.01(c)(II), 3.02 and 5.02(a) and (y) calculating Fees pursuant to Section 4.01, the Dollar Equivalent of any amounts denominated in a currency other than U.S. Dollars shall be calculated on the Restatement Effective Date and revalued on a monthly basis using the Spot Exchange Rate therefor on the first Business Day of each calendar month, (ii) at any time during a calendar month, if the Aggregate Exposure (for the purposes of the determination thereof, using the Dollar Equivalent as recalculated based on the Spot Exchange Rate therefor on the respective date of determination pursuant to this exception) would exceed 95% of the lesser of (x) the Total Commitment and (y) the Total Borrowing Base at such time, then in the sole discretion of the Administrative Agent or at the request of the Required Lenders, the Dollar Equivalent shall be reset based upon the Spot Exchange Rates on such date, which rates shall remain in effect until the last Business Day of such calendar month or such earlier date, if any, as the rate is reset

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pursuant to this proviso, (iii) notwithstanding anything to the contrary contained in this definition, at any time that a Default or an Event of Default then exists, the Administrative Agent may revalue the Dollar Equivalent of any amounts outstanding under the Credit Documents in a currency other than U.S. Dollars in its reasonable discretion using the Spot Exchange Rates therefor and (iv) the Spot Exchange Rate used to make determination of any Borrowing Base as reported in any Borrowing Base Certificate shall be determined using the Spot Exchange Rate as in effect on the date on which such Borrowing Base Certificate is required to be delivered to the Administrative Agent pursuant to Section 9.01(h).

“Domestic Subsidiary” shall mean each Subsidiary of Aleris incorporated or organized in the United States or any State or territory thereof.

“Dominion Event” shall mean any period (i) commencing on the date on which either (x) an Event of Default has occurred and is continuing or (y) the Excess Availability (based on the Borrowing Base Certificate last delivered) is less than the greater of (x) $65,000,000 and (y) 10% of the Total Commitment and (ii) ending on the first date thereafter on which (x) no Event of Default exists and (y) the Excess Availability (based on the Borrowing Base Certificate last delivered) has been equal to or greater than the greater of (m) $65,000,000 and (n) 10% of the Total Commitment for 30 consecutive days (the “Liquidity Cure”); provided that a Liquidity Cure may be used as the basis for the termination of a Dominion Event no more than four times in any Fiscal Year.

“Draft” shall mean at any time either a depository bill within the meaning of the Depository Bills and Notes Act (Canada), or a bill of exchange, within the meaning of the Bills of Exchange Act (Canada), drawn by the Canadian Borrowers on a Canadian Lender and bearing such distinguishing letters and numbers as such Canadian Lender may determine, but which at such time has not been completed or accepted by such Canadian Lender.

“Drawing” shall have the meaning provided in Section 3.05(b).

“Drawing Date” shall mean any Business Day fixed pursuant to Schedule III for the creation of Bankers’ Acceptances or the purchase of completed Drafts and the exchange thereof for B/A Equivalent Notes, in each case by a Canadian Lender pursuant to Schedule III.

“Drawing Fee” shall mean, in respect of each Draft drawn by any Canadian Borrower hereunder and accepted by a B/A Lender and each Draft purchased by a Non-B/A Lender, a fee calculated on the Face Amount of such Draft at a rate per annum equal to the Applicable Margin on the Drawing Date of such Draft. Drawing Fees shall be calculated on the basis of the term to maturity of the Draft and a year of 365 days.

“Eligible Accounts” shall mean those Accounts created by one of Borrowers in the ordinary course of its business (or, in the case of Accounts of the European Borrower, created by one of the Distribution Subsidiaries or a Transitory European Subsidiary or, prior to the European Restructuring Completion Date, a Specified European Manufacturing Subsidiary, in the ordinary course of its business and acquired by the European Borrower pursuant to a Receivables Purchase Agreement), that arise out of its sale of goods or rendition of services, that comply with each of the representations and warranties respecting Eligible Accounts made in the

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Credit Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below. In determining the amount to be included, Eligible Accounts shall be calculated net of customer deposits, unapplied cash, returns, rebates, discounts, credits, allowances or sales or excise taxes. Eligible Accounts shall not include the following:

(a) Accounts that the Account Debtor has failed to pay within 120 days of original invoice date or more than 60 days after the original due date,

(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of the total amount of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible hereunder,

(c) Accounts with respect to which the Account Debtor is (i) an Affiliate of any Borrower or (ii) an employee or agent of any Borrower or any Affiliate of such Borrower,

(d) the sale to the Account Debtor is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis or is evidenced by chattel paper,

(e) Accounts that are not payable in U.S. Dollars; provided that (i) Eligible Canadian Accounts may also be payable in Canadian Dollars and (ii) Eligible European Accounts may also be payable in any Available Currency,

(f) Accounts with respect to which the Account Debtor is not a Governmental Authority unless: (i) the Account Debtor either (A) maintains its Chief Executive Office in an Applicable Eligible Jurisdiction, or (B) is organized under the laws of an Applicable Eligible Jurisdiction or any state, territory, province or subdivision thereof; or (ii) (A) the Account is supported by an irrevocable letter of credit reasonably satisfactory to the Administrative Agent in its Permitted Discretion (as to form, substance, and issuer or domestic confirming bank), or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, reasonably satisfactory to the Administrative Agent, in its Permitted Discretion,

(g) Accounts with respect to which the Account Debtor is a Governmental Authority (other than Accounts (x) with respect to which the applicable Borrower has complied, to the reasonable satisfaction of the Administrative Agent, with the Assignment of Claims Act, 31 USC § 3727 or any applicable similar laws of the jurisdiction of such Governmental Authority or (y) the assignability of which, and the enforcement of such assignment against the relevant Governmental Authority of which, is not restricted pursuant to the laws of the jurisdiction of such Governmental Authority), unless (i) the Account is supported by an irrevocable letter of credit reasonably satisfactory to the Administrative Agent, in its Permitted Discretion (as to form, substance, and issuer or domestic confirming bank), or (ii) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, reasonably satisfactory to the Administrative Agent, in its Permitted Discretion,

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(h) Accounts with respect to which the Account Debtor (i) is a creditor of any Borrower, (ii) has or has asserted a right of setoff, or (iii) has disputed its obligation to pay all or any portion of the Account, in each case to the extent of such claim, right of setoff, or dispute or the Account is contingent in any respect or for any reason (the amount of each such offset includes, but is not limited to, tolling liability, which is represented by the value of materials that are owned by any Account Debtor but that are in the possession of a Borrower for the purpose of being tolled into finished goods for an Account Debtor),

(i) Accounts with respect to an Account Debtor whose total obligations owing to one or more Borrowers exceed 15% of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided, however, that, in each case, the amount of Eligible Accounts that are excluded because they exceed the foregoing percentage shall be determined by Administrative Agent based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit,

(j) Accounts with respect to which the Account Debtor shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the purpose of effecting any of the foregoing,

(k) Accounts that are not subject to a valid and perfected First Priority Lien in favor of the Collateral Agent pursuant to the relevant Security Document and no other Lien (other than Liens permitted pursuant to Section 10.01),

(l) Accounts with respect to which (i) the goods giving rise to such Account have not been shipped to the Account Debtor or the goods have been shipped to the Account Debtor with shipping terms of FOB destination and the goods have not been received by the Account Debtor, (ii) the services giving rise to such Account have not been performed by the applicable Borrower and its Subsidiaries or (iii) the Account otherwise does not represent a final sale,

(m) Accounts that represent the right to receive progress payments or other advance billings that are due prior to the completion of performance by the applicable Borrower and its Affiliates of the subject contract for goods or services,

(n) the applicable Borrower has made any agreement with any Account Debtor for any deduction therefrom (but only to the extent of such deductions from time to time), except for discounts or allowances made in the ordinary course of business for

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prompt payment and except for volume discounts, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto and except for returns, rebates or credits reflected in the calculation of the face value of each such amount,

(o) any return, rejection or repossession of the merchandise has occurred or the rendition of services has been disputed,

(p) such Account is not payable to a Borrower (or, in the case of the European Borrower, has not been sold to the European Borrower by a Distribution Subsidiary or a Transitory European Subsidiary, or, prior to the European Restructuring Completion Date, a Specified European Manufacturing Subsidiary, pursuant to a Receivables Purchase Agreement),

(q) such Account has not been invoiced,

(r) with respect to Accounts of the European Borrower, Accounts that are subject to extended retention of title arrangements (verlängerter Eigentumsvorbehalf) with respect to any part of the Inventory or goods giving rise to such Account or similar arrangements under any applicable law or that are subject to an enforceable restriction on assignment (other than with respect to accounts of Account Debtors located in the United States),

(s) with respect to Accounts of the European Borrower, Accounts which are not otherwise excluded under clause (f) of this definition where the Account Debtor either (A) maintains its Chief Executive Office in a Tier II Country, or (B) is organized under the laws of a Tier II Country or any state, territory, province or subdivision thereof, to the extent aggregate amount of all Accounts described in this clause (s) would exceed $20,000,000,

(t) with respect to Accounts of the European Borrower, Accounts with respect to which the agreement evidencing such Accounts (A) are not governed by the laws of Switzerland, Germany, France, Belgium, England or any state in the United States, or the laws of such other jurisdictions acceptable to the Administrative Agent in its Permitted Discretion, (each, an “Acceptable Governing Law”) or (B) if governed by an Acceptable Governing Law, the requirements, if any, set forth on Schedule XVIII hereto with respect to such Acceptable Governing Law (or the respective Accounts) are not satisfied,

(u) Accounts for which credit insurance has been formally applied for and denied on the basis of the financial condition of the relevant Account Debtor, it being understood and agreed that the amount of any Account which exceeds any applicable credit insurance shall not be deemed ineligible solely as a result of such excess,

(v) with respect to Accounts of the European Borrower, Accounts where the Account Debtor either maintains its Chief Executive Office or is organized under the laws of an Applicable European Jurisdiction and the requirements, if any, set forth on

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Schedule XVIII with respect to such Account Debtor in such Applicable European Jurisdiction have not been satisfied,

(w) Accounts to the extent representing service charges and late fees, or

(x) Accounts acquired pursuant to a Receivables Purchase Agreement which is not in full force and effect or under which any party thereto has defaulted in its obligations thereunder or disaffirmed in writing its obligations thereunder.

“Eligible Canadian Accounts” shall mean the Eligible Accounts owned by the Canadian Borrowers.

“Eligible Canadian Inventory” shall mean the Eligible Inventory owned by the Canadian Borrowers.

“Eligible European Accounts” shall mean the Eligible Accounts owned by the European Borrower (including Eligible Accounts acquired from a Distribution Subsidiary, any Transitory European Subsidiary or, prior to the European Restructuring Completion Date, a Specified European Manufacturing Subsidiary, in each case pursuant to a Receivables Purchase Agreement).

“Eligible European Unbilled Accounts” shall mean Accounts (which are Eligible European Accounts except for their failure to comply with clause (q) of the definition of Eligible Accounts) which have not been invoiced but for which Inventory has been sold and shipped or services have been rendered and which shall be billed not more than 30 days after such Account is first included on the Borrowing Base Certificate or otherwise reported to the Administrative Agent as Collateral.

“Eligible Inventory” shall mean Inventory of the U.S. Borrowers and the Canadian Borrowers consisting of first quality goods, including raw materials and work in progress, of a type held for sale in the ordinary course of the Borrowers’ business, that complies with each of the representations and warranties respecting Eligible Inventory made in the Credit Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below. In determining the amount to be so included, Inventory shall be valued at the lower of cost or market on a basis consistent with the Borrowers’ historical accounting practices. An item of Inventory shall not be included in Eligible Inventory if:

(a) a Borrower does not have good, valid, and marketable title thereto,

(b) it is not located at one of the locations in the continental United States or Canada set forth on Schedule XIII, as same may be modified from time to time to the extent promptly notified to the Administrative Agent,

(c) it is located on real property leased by a Borrower, in a contract warehouse or in a warehouse owned or leased by the supplier of such goods (other than a Borrower), in each case, unless (i) it is subject to a Collateral Access Agreement executed by the lessor, warehouseman or supplier, as the case may be, and (except in the case of raw materials consisting of zinc) unless it is segregated or otherwise separately identifiable

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from goods of others, if any, stored on the premises; provided that to the extent a Collateral Access Agreement has not been obtained with respect to Inventory located on any such property on or prior to the Restatement Effective Date, such Inventory shall not be deemed ineligible pursuant to this clause (c)(i) so long as the relevant Collateral Access Agreement is obtained on or prior to the 45th day (or in the case of raw materials consisting of zinc, 90th day) after the Restatement Effective Date (or such later date as may be agreed to by the Administrative Agent), (ii) a Rent Reserve (other than with respect to inventory in a warehouse owned or leased by a supplier of such goods (other than a Borrower)) has been taken against such Inventory in the Administrative Agent’s Permitted Discretion or (iii) the aggregate Dollar Equivalent of the amount of all Inventory of the Borrowers located at such location does not exceed $100,000,

(d) it is not subject to a valid and perfected First Priority Lien in favor of the Collateral Agent pursuant to the relevant Security Document,

(e) it consists of goods that are obsolete or slow moving, restrictive or custom items, or goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in a Borrower’s business, bill and hold goods, defective or unusable goods, or Inventory acquired on consignment,

(f) it is not owned by such Borrower free and clear of all Liens and rights of any other Person (including the rights of a purchaser that has made progress payments and the rights of a surety that has issued a bond to assure such Borrower’s performance with respect to that Inventory), except the Liens created pursuant to the Security Documents and other Liens permitted pursuant to Section 10.01,

(g) it is in transit unless such otherwise Eligible Inventory is in transit from (A) (1) a location in an Applicable Eligible Jurisdiction owned or, subject to the restrictions set forth in clause (c) above, leased by a Credit Party or (2) a location in an Applicable Eligible Jurisdiction identified on Schedule XIII (as such Schedule may be updated from time to time as promptly notified to the Administrative Agent) to (B) (1) a location in an Applicable Eligible Jurisdiction owned or, subject to the restrictions set forth in clause (c) above, leased by a Credit Party or (2) a location in an Applicable Eligible Jurisdiction identified on Schedule XIII (as such Schedule may be updated from time to time as promptly notified to the Administrative Agent),

(h) it is covered by a negotiable document of title, unless such document has been delivered to Administrative Agent with all necessary endorsements, free and clear of all Liens except those created pursuant to the Security Documents,

(i) it consists of any costs associated with “freight-in” charges,

(j) it consists of any gross profit mark-up in connection with the sale and distribution thereof to any division of any Borrower or to any Affiliate of such Borrower,

(k) it consists of Hazardous Materials or goods that can be transported or sold only with licenses that are not readily available (unless otherwise deemed to be Eligible Inventory by Administrative Agent in its Permitted Discretion),

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(l) it is not covered by casualty insurance as required by terms of this Agreement, or

(m) it was produced in violation of the Fair Labor Standards Act and subject to the “hot goods” provision contained in Title 29 U.S.C. §215(a)(1), to the extent applicable.

“Eligible Transferee” shall mean and include a commercial bank, an insurance company, a finance company, a financial institution, any fund that invests in loans or any other “accredited investor” as defined in Regulation D of the Securities Act) (but excluding natural persons), but in any event excluding the Permitted Holders and their Affiliates and Holdings and its Subsidiaries; provided, however, that, unless otherwise agreed by Aleris, during the existence of an Event of Default, no Person (other than a Lender) shall be an “Eligible Transferee” if the assignment of any Commitment (or, if the Commitments have terminated, outstanding ABL Obligations) to such Person would cause such Person to have Commitments (or, if the Commitments have terminated, outstanding ABL Obligations) in excess of 25% of the Total Commitment (or, if the Commitments have terminated, aggregate outstanding ABL Obligations) at such time.

“Eligible U.S. Accounts” shall mean the Eligible Accounts owned by the U.S. Borrowers.

“Eligible U.S. Inventory” shall mean the Eligible Inventory owned by the U.S. Borrowers.

“Eligible U.S. Unbilled Accounts” shall mean Accounts (which are Eligible U.S. Accounts except for their failure to comply with clause (q) of the definition of Eligible Accounts) which have not been invoiced but for which Inventory has been sold and shipped or services have been rendered and which shall be billed not more than 30 days after such Account is first included on the Borrowing Base Certificate or otherwise reported to the Administrative Agent as Collateral.

“Enhanced Disclosure Period” shall have the meaning provided in Section 9.01(h).

“Environmental Claims” shall mean any and all administrative, regulatory or judicial actions, suits, written demands, demand letters, directives, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, “Claims”), including, without limitation, (a) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials.

“Environmental Law” shall mean any federal, state, provincial, foreign, multi-national or local statute, law, rule, regulation, ordinance, code, directive, guidance or

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policy having the effect of law, and rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment or Hazardous Materials, including, without limitation, CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq.; and any state and local or foreign counterparts or equivalents, in each case as amended from time to time.

“Equipment” shall mean “equipment” (as such term is defined in Article 9 of the UCC) and includes machinery, machine tools, motors, furniture, furnishings, fixtures, vehicles (including motor vehicles), computer hardware, tools, parts, and goods (other than consumer goods, farm products, or Inventory), wherever located, including all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing.

“Equity Financing” shall have the meaning provided in Section 6.05.

“Equity Interests” shall mean (a) in the case of a corporation, corporate stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that together with Aleris is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) 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; (c) 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; (d) the incurrence by Aleris or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by Aleris or any ERISA Affiliate from the PBGC or a plan administrator of any notice of an intent to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by Aleris or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by Aleris or any ERISA Affiliate of any notice, or

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the receipt by any Multiemployer Plan from Aleris or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is insolvent or in reorganization, within the meaning of Title IV of ERISA.

“EURIBOR Rate” shall mean, with respect to Other Foreign Currency Denominated Loans, (i) the rate per annum that appears on page 3750 of the Dow Jones Markets Screen (or any successor page) for deposits in the applicable Available Currency with maturities comparable to the Interest Period applicable to the Other Foreign Currency Denominated Loans incurred in such Available Currency subject to the respective Borrowing commencing two Business Days thereafter as of 11:00 a.m. (London time) on the date which is two Business Days prior to the commencement of the respective Interest Period or (ii) if such a rate does not appear on page 3750 of the Dow Jones Markets Screen (or any successor page), the offered quotation to first-class banks in the London interbank market by the Administrative Agent for deposits in the respective Available Currency of amounts in immediately available funds comparable to the outstanding principal amount of the Other Foreign Currency Denominated Loan to be made by the Administrative Agent as part of such Borrowing (or, if the Administrative Agent is not a Lender with respect thereto, taking the average principal amount of Other Foreign Currency Denominated Loans then being made by the various Lenders pursuant thereto) with maturities comparable to the Interest Period applicable to such Other Foreign Currency Denominated Loan commencing two Business Days thereafter as of 11:00 a.m. (London time) on the date which is two Business Days prior to the commencement of such Interest Period; provided that, in the event the Administrative Agent has made any determination pursuant to Section 2.10(a)(i) in respect of Other Foreign Currency Denominated Loans, or in the circumstances described in clause (i) to the proviso to Section 2.10(b) in respect of Other Foreign Currency Denominated Loans, the “EURIBOR Rate” determined pursuant to this definition shall instead be the rate determined by the Administrative Agent as the all-in-cost of funds for the Administrative Agent to fund a Borrowing of Other Foreign Currency Denominated Loans in the applicable Available Currency with maturities comparable to the Interest Period applicable thereto.

“Euro Denominated Loan” shall mean each European Borrower Revolving Loan and European Borrower Swingline Loan, in each case denominated in Euros at the time of the incurrence thereof, unless and until converted into Dollar Denominated Loans pursuant to Section 2.14.

“Euro LIBOR Rate” shall mean, with respect to each Borrowing of Euro Denominated Loans, (i) the rate per annum for deposits in Euros as determined by the Administrative Agent for a period corresponding to the duration of the relevant Interest Period which appears on Reuters Page EURIBOR-01 (or any successor page) at approximately 11:00 a.m. (Brussels time) on the date which is two Business Days prior to the commencement of such Interest Period or (ii) if such rate is not shown on Reuters Page EURIBOR-01 (or any successor page), the average offered quotation to prime banks in the Euro-zone interbank market by the Administrative Agent for Euro deposits of amounts comparable to the principal amount of the Euro Denominated Loan to be made by the Administrative Agent as part of such Borrowing (or, if the Administrative Agent is not a Lender with respect thereto, taking the average principal amount of Euro Denominated Loans then being made by the various Lenders pursuant thereto) with maturities comparable to the Interest Period to be applicable to such Loan (rounded upward to the next whole multiple of 1/16 of 1%), determined as of 11:00 a.m. (Brussels time) on the

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date which is two Business Days prior to the commencement of such Interest Period; provided that in the event the Administrative Agent has made any determination pursuant to Section 2.10(a)(i) in respect of Euro Denominated Loans, or in the circumstances described in clause (i) to the proviso to Section 2.10(b) in respect of Euro Denominated Loans, Euro LIBOR determined pursuant to this definition shall instead be the rate determined by the Administrative Agent as the all-in-cost of funds for the Administrative Agent (or such other Lenders) to fund a Borrowing of Euro Denominated Loans with maturities comparable to the Interest Period applicable thereto.

“Euro Rate” shall mean and include each of the Eurodollar Rate, Euro LIBOR Rate and the EURIBOR Rate.

“Euro Rate Loan” shall mean and include each Eurodollar Loan, each Euro Denominated Loan and each Other Foreign Currency Denominated Loan.

“Eurodollar Loans” shall mean each Dollar Denominated Loan (excluding Swingline Loans) designated as such by the respective Borrower or Borrowers at the time of the incurrence thereof or conversion thereto.

“Eurodollar Rate” shall mean the rate per annum obtained by dividing (i)(a) the per annum rate that appears on page 3750 of the Dow Jones Markets Screen (or any successor page) for U.S. Dollar deposits with maturities comparable to the Interest Period applicable to the Eurodollar Loan subject to the respective Borrowing commencing two Business Days thereafter as of 10:00 a.m. (New York time) on the date which is two Business Days prior to the commencement of the respective Interest Period or (b) if such a rate does not appear on page 3750 of the Dow Jones Markets Screen (or any successor page), the offered quotation to first-class banks in the New York interbank Eurodollar market by the Administrative Agent for U.S. Dollar deposits of amounts in immediately available funds comparable to the outstanding principal amount of the applicable Eurodollar Loan for which the Eurodollar Rate is being determined with maturities comparable to the Interest Period applicable to such Eurodollar Loan commencing two Business Days thereafter as of 10:00 a.m. (New York time) on the applicable Interest Determination Date, in each case, (and rounded upward to the nearest 1/16 of 1%) by (ii) a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves required by applicable law) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D).

“European Borrower” shall have the meaning provided in the first paragraph of this Agreement.

“European Borrower Obligations” shall mean all ABL Obligations owing to the Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender by the European Borrower.

“European Borrower Revolving Loan” shall have the meaning provided in Section 2.01(a).

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“European Borrower Revolving Note” shall have the meaning provided in Section 2.05(a).

“European Borrower Swingline Loan” shall have the meaning provided in Section 2.01(c)(I).

“European Borrowing Base” shall mean, as of any date of determination, the result of, in each case using the Dollar Equivalent of all amounts in any Available Currency:

(a) 85% of the amount of Eligible European Accounts, plus

(b) 75% of the amount of Eligible European Unbilled Accounts, provided, however, that the amount calculated under clause (b) of this definition of European Borrowing Base shall not exceed $5,000,000, minus

(c) the aggregate amount of reserves, if any, established by the Administrative Agent under Section 2.01(e) with respect to the European Borrowing Base.

“European Collection Account” shall mean each account established at a European Collection Bank and subject to a Cash Management Control Agreement into which funds shall be transferred as provided in Section 5.03(b).

“European Collection Banks” shall have the meaning provided in Section 5.03(b)(i).

“European Credit Party” shall mean the European Borrower, each European Parent Guarantor and each European Subsidiary Guarantor.

“European Disbursement Account” shall mean each checking and/or disbursement account of the European Borrower for its general corporate purposes, including for the purpose of paying the European Borrower’s trade payables and other operating expenses.

“European Distribution Subsidiary” shall mean each Distribution Subsidiary that is incorporated or organized under the laws of any country which is a member state of the European Community established pursuant to the Treaty.

“European Intercompany Loans” shall have the meaning provided in Section 10.05(viii).

“European Letter of Credit” shall have the meaning provided in Section 3.01(a).

“European Manufacturing Subsidiaries” shall mean each of the Subsidiaries of Aleris organized in any country which is a member state of the European Community established pursuant to the Treaty or any other jurisdiction reasonably satisfactory to the Administrative Agent, designated by Aleris in writing to the Administrative Agent as a “European Manufacturing Subsidiary”; provided that in no event shall such term include the European Borrower or any of its Subsidiaries. On the Restatement Effective Date, the European Manufacturing Subsidiaries consist of the Subsidiaries set forth on Schedule VIII-B.

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“European Parent Guarantor” shall mean each of (i) the direct parent of each of the European Borrower and German Sub-Holdco and (ii) the direct or indirect parent of the entity described in preceding clause (i) which is not a U.S. Credit Party. On the Restatement Effective Date, the European Parent Guarantors are Dutch Aluminum CV and IMCO Recycling Holding BV.

“European Parent Guaranty” shall mean the European Parent Guaranty in the form of Exhibit H-4 (as amended, modified or supplemented from time to time).

“European Parent Pledge Agreement” shall mean each European Parent Pledge Agreement in the form of Exhibit G-2 or such other pledge agreement in form and substance reasonably satisfactory to the Administrative Agent (as amended, modified or supplemented from time to time).

“European Restructuring” shall mean the restructuring of certain aspects of the European business of Aleris such that (i) the European Borrower will acquire and own substantially all of the Inventory (including, without limitation, raw materials and finished goods) related to the European business of Aleris, (ii) the European Borrower will enter into Tolling Agreements with Subsidiaries of Aleris, (iii) the Distribution Subsidiaries will market and/or distribute the Inventory produced pursuant to such Tolling Agreements and (iv) substantially all of the Accounts related to the European business of Aleris will be either originated and owned by the European Borrower or originated by the Distribution Subsidiaries and sold to the European Borrower pursuant to one or more Receivables Purchase Agreements (it being understood that (x) receivables generated under existing customer agreements which have not been amended, replaced or have otherwise expired on or prior to the European Restructuring Completion Date may continue to be generated by the Specified European Manufacturing Subsidiaries until the date of any amendment, replacement or expiration of the respective customer agreement and (y) the business of Subsidiaries acquired by Aleris after the Initial Borrowing Date might not be incorporated in the foregoing structure during a transitional period following the acquisition thereof).

“European Restructuring Completion Date” shall mean the date on which the European Restructuring is completed, as certified in certificate of an officer of Aleris delivered to the Administrative Agent.

“European Security Agreement” shall mean each security agreement or document delivered by a European Credit Party pursuant to the Existing ABL Credit Agreement.

“European Security Documents” shall mean each European Security Agreement and each Additional Security Document covering assets of the European Credit Parties.

“European Sub-Commitment” shall mean, for any U.S./European Lender at any time, such Lender’s U.S./European Percentage of the Total European Sub-Commitment as then in effect.

“European Subsidiaries Guaranty” shall mean an amended and restated guarantee of the ABL Obligations of the European Borrower in substantially the form of Exhibit H-3 or

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such other form as shall be reasonably satisfactory to the Administrative Agent, in each case, as amended, modified, restated and/or supplemented from time to time.

“European Subsidiary Guarantor” shall mean each European Distribution Subsidiary and each of its Subsidiaries and each Transitory European Subsidiary which executes and delivers a European Subsidiaries Guaranty unless and until such time as the applicable European Subsidiary Guarantor is released from all of its obligations under its European Subsidiaries Guaranty in accordance with the terms and provisions hereof or thereof.

“European U.S. Borrowing Base Usage” shall mean, at any time, the amount by which the Aggregate European Borrower Exposure at such time exceeds the European Borrowing Base at such time (based upon the Borrowing Base Certificate most recently delivered).

“Euros” and the designation “€” shall mean the currency introduced on January 1, 1999 at the start of the third stage of European economic and monetary union pursuant to the Treaty.

“Event of Default” shall have the meaning provided in Section 11.

“Excess Availability” shall mean, at any time, the amount by which the lesser of (A) the Total Commitment at such time and (B) the Total Borrowing Base at such time exceeds (y) the Aggregate Exposure at such time.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Exempted Deposit Account” shall mean a Deposit Account the balance of which consists exclusively of (A) withheld income taxes and federal, state, local or foreign employment taxes in such amounts as are required in the reasonable judgment of any Borrower to be paid to the Internal Revenue Service or any other U.S. federal, state or local or foreign government agencies within the following two months with respect to employees of any of the Credit Parties and (B) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 or any Foreign Plan on behalf of or for the benefit of employees of one or more Credit Parties.

“Exempted Disbursement Account” shall mean a U.S. Disbursement Account, a Canadian Disbursement Account or a European Disbursement Account designated as an “Exempted Disbursement Account” on Part C of Schedule VI from time to time.

“Existing ABL Credit Agreement” shall mean the Credit Agreement, dated as of August 1, 2006 (as amended, supplemented or modified to the Restatement Effective Date), among the U.S. Borrowers, the Canadian Borrowers, the European Borrower, the lenders party hereto from time to time, PNC Bank, National Association, National City Business Credit, Inc. and Key Bank National Association, as co-documentation agents, Citicorp North America, Inc., as syndication Agent and collateral Agent, Deutsche Bank AG New York Branch, as administrative agent and Deutsche Bank AG, Canada Branch, as Canadian administrative agent.

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“Existing ABL Creditor Mortgages” shall mean the mortgages, debentures or deeds of trust delivered pursuant to the Existing ABL Credit Agreement.

“Existing Canadian Commitment” shall mean a “Canadian Commitment” under, and as defined in, the Existing ABL Credit Agreement.

“Existing Canadian Revolving Loan” shall mean a “Canadian Revolving Loan” under, and as defined in, the Existing ABL Credit Agreement.

“Existing Canadian Swingline Loan” shall mean a “Canadian Swingline Loan” under, and as defined in, the Existing ABL Credit Agreement.

“Existing European Borrower Revolving Loan” shall mean a “European Borrower Revolving Loan” under, and as defined in, the Existing ABL Credit Agreement.

“Existing European Borrower Swingline Loan” shall mean a “European Borrower Swingline Loan” under, and as defined in, the Existing ABL Credit Agreement.

“Existing Indebtedness” shall have the meaning provided in Section 8.19.

“Existing Lender” shall mean each “Lender” under, and as defined in, the Existing ABL Credit Agreement as of the Restatement Effective Date.

“Existing Letter of Credit” shall have the meaning provided in Section 3.01(c).

“Existing Loan” shall mean a “Loan” under, and as defined in, the Existing ABL Credit Agreement.

“Existing Mortgage Policy” shall mean each mortgagee title insurance policy issued in connection with the Existing ABL Creditor Mortgages.

“Existing Revolving Loan” shall mean a “Revolving Loan” under, and as defined in, the Existing ABL Credit Agreement.

“Existing Senior Bridge Loan Agreement” shall mean the Bridge Loan Credit Agreement dated August 1, 2006 among Aleris and the lenders party thereto as in effect on the Restatement Effective Date.

“Existing Swingline Loan” shall mean a “Swingline Loan” under, and as defined in, the Existing ABL Credit Agreement.

“Existing U.S. Borrower Revolving Loan” shall mean a “U.S. Borrower Revolving Loan” under, and as defined in, the Existing ABL Credit Agreement.

“Existing U.S. Borrower Swingline Loan” shall mean a “U.S. Borrower Swingline Loan” under, and as defined in, the Existing ABL Credit Agreement.

“Existing U.S. Mortgaged Properties” shall have the meaning provided in Section 6.09.

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“Existing U.S./European Commitment” shall mean a “U.S./European Commitment” under, and as defined in, the Existing ABL Credit Agreement.

“Expenses” shall mean all present and future reasonable and invoiced expenses incurred by or on behalf of the Administrative Agent, the Collateral Agent, or any Issuing Lender in connection with this Agreement, any other Credit Document or otherwise in its capacity as the Administrative Agent or the Collateral Agent under this Agreement or under any Security Document or as an Issuing Lender under this Agreement, whether incurred heretofore or hereafter, which expenses shall include, without limitation, the cost of record searches, the reasonable fees and expenses of attorneys and paralegals, all reasonable and invoiced costs and expenses incurred by the Administrative Agent in opening bank accounts, depositing checks, electronically or otherwise receiving and transferring funds, and any other charges imposed on the Administrative Agent due to insufficient funds of deposited checks and the standard fee of the Administrative Agent relating thereto, reasonable collateral examination fees and expenses (for examinations conducted as contemplated by Section 9.06(b)), reasonable fees and expenses of accountants, appraisers (for appraisals conducted as contemplated by Section 9.06(b)) or other consultants, experts or advisors employed or retained by the Administrative Agent, fees and taxes related to the filing of financing statements, reasonable costs of preparing and recording any other Credit Documents, all expenses, costs and fees set forth in this Agreement and the other Credit Documents, all other fees and expenses required to be paid pursuant to any other letter agreement and all reasonable fees and expenses incurred in connection with releasing Collateral and the amendment or termination of any of the Credit Documents, in each case to the extent that such costs, fees or expenses are reimbursable pursuant to Section 13.01.

“Face Amount” shall mean, in respect of a Draft, Bankers’ Acceptance or B/A Equivalent Note, as the case may be, the amount payable to the holder thereof on its maturity. The Face Amount of any Bankers’ Acceptance Loan shall be equal to the aggregate Face Amounts of the underlying Bankers’ Acceptances, B/A Equivalent Notes or Drafts, as the case may be.

“Facility Percentage” of any Lender at any time, with respect to the U.S./European Commitments or the Canadian Commitments (or, in each case, the related Loans), such Lender’s U.S./European Percentage or Canadian Percentage, as applicable.

“Facing Fee” shall have the meaning provided in Section 4.01(c).

“Federal Funds Rate” shall mean, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent.

“Fees” shall mean all amounts payable pursuant to or referred to in Section 4.01.

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“Final Maturity Date” shall mean December 19, 2011.

“Financial Officer” of any Person shall mean the chief financial officer, controller or treasurer of such Person.

“First Priority” shall mean, with respect to any Lien purported to be created on any Collateral pursuant to any Security Document, that such Lien is prior in right to any other Lien thereon, other than Permitted Liens described in clauses (i), (ii), (v), (viii), (xi), (xii), (xiii), (xvii), (xxvii) and (xviii) of Section 10.01 applicable to such Collateral which have priority over the respective Liens on such Collateral created pursuant to the relevant Security Document.

“Fiscal Quarter” shall mean a fiscal quarter of any Fiscal Year.

“Fiscal Year” shall mean the fiscal year of Aleris and its Subsidiaries ending on December 31 of each calendar year.

“Fixed Assets” shall mean at any time (i) all of the Term Priority Collateral at such time, (ii) the Equity Interests of any Person and (iii) all other Material Real Property and other property, plant, equipment and intellectual property, in each case with a fair market value in excess of $2,500,000 of Aleris and its Restricted Subsidiaries at such time.

“Fixed Charge Coverage Ratio” shall mean and include, with respect to any fiscal period, the ratio of (a) Consolidated EBITDA for such period minus Capital Expenditures that were not specifically funded by Indebtedness (other than a Revolving Loan or Swingline Loan) of Aleris and its Subsidiaries on a consolidated basis with respect to such period, minus cash taxes of Aleris and its Subsidiaries on a consolidated basis paid during such period to (b) Fixed Charges for such period.

“Fixed Charges” shall mean, with respect to any fiscal period, the sum of (a) interest expense of Aleris and its Subsidiaries on a consolidated basis with respect to such period (for this purpose, excluding that portion of interest expense which is capitalized and/or paid-in-kind through the issuance of Indebtedness in the same form as the Indebtedness with respect to which such interest is required to be paid in accordance with the terms thereof, and so long as such interest shall not be paid in cash (until the maturity of the respective Indebtedness and so long as same does not occur in such period), non-cash deferred financing fees and amortization of premiums paid in respect of the repayment or prepayment of Indebtedness), plus (b) any scheduled principal payments on long-term Indebtedness of Aleris and its Subsidiaries on a consolidated basis with respect to such period (other than payments made by Aleris or a Subsidiary to Aleris or a Subsidiary), plus (c) Dividends of Aleris and its Subsidiaries on a consolidated basis paid in cash during such period as permitted by Section 10.03.

“Foreign Lender” shall mean a Lender to the U.S. Borrower that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code).

“Foreign Pension Plan” shall mean a material registered pension plan which is subject to applicable pension legislation other than ERISA or the Code, which Aleris or a Subsidiary of Aleris sponsors or maintains, or to which it makes or is obligated to make

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contributions with respect to which any liability is borne, outside the 50 states of the United States.

“Foreign Plan” shall mean each Foreign Pension Plan, and each material deferred compensation or other retirement or superannuation plan, fund, program, agreement, commitment or arrangement whether oral or written, funded or unfunded, sponsored, established, maintained or contributed to, or required to be contributed to, or with respect to which any liability is borne, outside the fifty states of the United States of America, by Aleris or any of its Subsidiaries, which plan, fund, agreement, commitment or arrangement provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment and which plan is not subject to ERISA or the Code.

“Foreign Subsidiary” shall mean each Subsidiary of Aleris that is incorporated or organized under the laws of any jurisdiction other than the United States or any State or territory thereof.

“Funded Specified Foreign Currency Participation” shall mean, with respect to any Participating Specified Foreign Currency Lender relating to Specified Foreign Currency Loans funded by DBNY, (i) the aggregate amount paid by such Participating Specified Foreign Currency Lender to DBNY pursuant to Section 16.02 of this Agreement in respect of such Participating Specified Foreign Currency Lender’s participation in the principal amount of Specified Foreign Currency Loans funded by DBNY minus (ii) the aggregate amount paid to such Participating Specified Foreign Currency Lender by DBNY pursuant to Section 16.02 of this Agreement in respect of its participation in the principal amount of Specified Foreign Currency Loans funded by DBNY, excluding in each case any payments made in respect of interest accrued on the Specified Foreign Currency Loans funded by DBNY. DBNY’s Funded Specified Foreign Currency Participation in any Specified Foreign Currency Loans funded by DBNY shall be equal to the outstanding principal amount of such Specified Foreign Currency Loans minus the total Funded Specified Foreign Currency Participation of all other Lenders therein.

“GAAP” shall mean generally accepted accounting principles in the United States as in effect from time to time; provided that determinations in accordance with GAAP for purposes of Section 10, including defined terms as used therein, and for all purposes of determining the Fixed Charge Coverage Ratio, are subject (to the extent provided therein) to Section 13.07(a).

“General Intangibles” shall mean “general intangibles” (as such term is defined in Article 9 of the UCC), including payment intangibles, contract rights, rights to payment, rights arising under common law, statutes, or regulations, choses or things in action, goodwill, patents, trade names, trade secrets, trademarks, servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing agreements, infringement claims, computer programs, information contained on computer disks or tapes, software, literature, reports, catalogs, insurance premium rebates, tax refunds, and tax refund claims, and any and all supporting obligations in respect thereof, and any other personal property other than Accounts, Deposit Accounts, goods, Investment Property, and Negotiable Collateral.

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“German Security” shall have the meaning provided in Section 13.24(b).

“German Sub-Holdco” shall mean Aleris Deutschland Holding GmbH.

“Governmental Authority” shall mean any federal (including the federal government of Canada), state, local, provincial, foreign, multi-national or other governmental or administrative body, instrumentality, department, board, or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.

“Guaranteed Creditors” shall mean and include (x) the Administrative Agent, the Collateral Agent, each Lender and each Issuing Lender, (y) each Other Creditor and (z) each Treasury Services Creditor.

“Guaranteed Party” shall mean (x) each Borrower and (y) each Subsidiary thereof party to a Secured Hedging Agreement and/or a Treasury Services Agreement with any Other Creditor.

“Guarantor” shall mean each U.S. Borrower, each U.S. Subsidiary Guarantor, each Canadian Parent Guarantor, each Canadian Subsidiary Guarantor, each European Parent Guarantor, each European Subsidiary Guarantor and the Luxco Guarantor.

“Guaranty” shall mean the U.S. Borrower Guaranty, the U.S. Subsidiaries Guaranty, the Canadian Parent Guaranty, each Canadian Subsidiaries Guaranty, each European Parent Guaranty, each European Subsidiaries Guaranty and the Luxco Guaranty.

“Hazardous Materials” shall mean (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation and dielectric fluid containing levels of polychlorinated biphenyls; (b) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous substances,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” under any applicable Environmental Law; and (c) any other chemical, material or substance, the exposure to, or Release of which is prohibited, limited or regulated by any Governmental Authority under any applicable Environmental Law.

“Hedge Product Reserve” shall mean, as of any date of determination, the U.S. Borrowers’ exposure (as determined by the Administrative Agent in its Permitted Discretion) under any Secured Hedging Agreement.

“Hedging Obligations” shall mean, with respect to any Person, the obligations of such Person under currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements and other agreements or arrangements, in each case designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

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“Holdings” shall mean Aurora Acquisition Holdings, Inc., a Delaware corporation.

“IFRS” shall mean the body of pronouncements issued by the International Accounting Standards Board (IASB), including International Financial Reporting Standards and interpretations approved by the IASB, International Accounting Standards and Standing Interpretations Committee interpretations approved by the predecessor International Accounting Standards Committee and adapted for use in the European Union.

“Immaterial Subsidiary” shall mean, at any date of determination, any Subsidiary designated as such in writing by Aleris to the Administrative Agent that (i) contributed 2.5% or less of Consolidated EBITDA for the period of four Fiscal Quarters most recently ended more than 45 days prior to the date of determination, (ii) had consolidated assets representing 2.5% or less of the consolidated total assets of Aleris and its Subsidiaries on the last day of the most recent Fiscal Quarter ended more than 45 days prior to the date of determination and (iii) owned Accounts and Inventory with an aggregate value representing 2.5% or less of the total Accounts and Inventory included in the Total Borrowing Base as of the last day of the most recent Fiscal Quarter ended more than 45 days prior to the date of determination. The Immaterial Subsidiaries as of the Restatement Effective Date are listed on Schedule XIX.

“Incremental Commitment” shall mean, for any Lender, any commitment by such Lender to make Revolving Loans and participate in Swingline Loans and Letters of Credit pursuant to Section 2.01 as agreed to by such Lender in an Incremental Commitment Agreement delivered pursuant to Section 2.15; it being understood that on each date upon which an Incremental Commitment of any Lender becomes effective, such Incremental Commitment of such Lender shall be added to (and thereafter become a part of) the Commitment of such Lender under the Tranche or Tranches specified in the related Incremental Commitment Agreement for all purposes of this Agreement as contemplated by Section 2.15.

“Incremental Commitment Agreement” shall mean each Incremental Commitment Agreement in substantially the form of Exhibit O (appropriately completed) executed and delivered in accordance with Section 2.15.

“Incremental Commitment Date” shall mean each date upon which an Incremental Commitment under an Incremental Commitment Agreement becomes effective as provided in Section 2.15(b).

“Incremental Commitment Requirements” shall mean with respect to any provision of an Incremental Commitment on a given Incremental Commitment Date, the satisfaction of each of the following conditions on or prior to the effective date of the respective Incremental Commitment Agreement: (i) the delivery by Aleris to the Administrative Agent of an opinion or opinions, in form and substance reasonably satisfactory to the Administrative Agent, from counsel to the Credit Parties reasonably satisfactory to the Administrative Agent and dated such date, covering such matters incident to the transactions contemplated thereby as the Administrative Agent may reasonably request; and (ii) the completion by each Credit Party under the relevant Tranche or Tranches of such other actions as the Administrative Agent may reasonably request in connection with such Incremental Loan Commitment in order to create,

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continue or maintain the security interests of the Collateral Agent in the Collateral and the perfection thereof (including, without limitation, any mortgage amendments, Mortgage Policies and such other documents required to be delivered with the Mortgages on the Restatement Effective Date pursuant to Sections 6.09 and 6.02(iv)).

“Incremental Lender” shall have the meaning specified in Section 2.15(b).

“Indebtedness” shall mean, as to any Person, without duplication, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services except any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP, (ii) the maximum amount available to be drawn or paid under all letters of credit (other than commercial letters of credit), bankers’ acceptances, bank guaranties and similar obligations issued for the account of such Person and all unpaid drawings in respect of such letters of credit, bankers’ acceptances and similar obligations, (iii) all Indebtedness of the types described in clause (i), (ii), (iv), (v) or (vi) of this definition secured by any Lien on any property owned by such Person, whether or not such Indebtedness has been assumed by such Person (provided that, if the Person has not assumed or otherwise become liable in respect of such Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the lesser of the fair market value of the property to which such Lien relates as determined in good faith by such Person and the amount of such Indebtedness), (iv) the aggregate amount of all Capitalized Lease Obligations and Synthetic Lease Obligations of such Person, (v) all Contingent Obligations of such Person and (vi) all preferred stock of such Person (other than preferred stock consisting of Qualified Equity Interests). Notwithstanding the foregoing, Indebtedness shall not include trade payables and accrued expenses incurred by any Person in the ordinary course of business of such Person or purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset to satisfy warranties or other unperformed obligations of the seller of such asset (other than earn-out obligations).

“Indirect Section 5.04 Indemnitee” shall mean each Section 5.04 Indemnitee that is not a Lender, an Issuing Lender or the Administrative Agent.

“Individual Canadian Exposure” of any Canadian Lender shall mean, at any time, the sum of (I) the aggregate principal amount of all Canadian Revolving Loans made by such Canadian Lender and then outstanding, (II) the sum of such Canadian Lender’s L/C Participation Percentage in each then outstanding Canadian Letter of Credit multiplied by the sum of the Stated Amount of the respective Canadian Letter of Credit and any Unpaid Drawings relating thereto and (III) such Canadian Lender’s Canadian Percentage multiplied by the aggregate principal amount of all outstanding Canadian Swingline Loans. For purposes of this definition, the Dollar Equivalent of amounts not denominated in U.S. Dollars shall be used.

“Individual European Borrower Exposure” of any U.S./European Lender shall mean, at any time, the sum of (I) the aggregate principal amount of all European Borrower Revolving Loans made by such U.S./European Lender (and the aggregate principal amount of all Specified Foreign Currency Participations purchased by such Lender pursuant to Section 16) and then outstanding, (II) the sum of such U.S./European Lender’s L/C Participation Percentage in each then outstanding European Letter of Credit multiplied by the sum of the Stated Amount of

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the respective European Letter of Credit and any Unpaid Drawings relating thereto and (III) such U.S./European Lender’s U.S./European Percentage multiplied by the aggregate principal amount of all outstanding European Borrower Swingline Loans. For purposes of this definition, (x) the Dollar Equivalent amounts not denominated in U.S. Dollars shall be used and (y) the amount of European Borrower Revolving Loans made by DBNY at any time shall be reduced by the aggregate amount of Specified Foreign Currency Participations therein purchased by the other Lenders in such Loans pursuant to Section 16.

“Individual Exposure” of any Lender shall mean, at any time, the sum of the Individual U.S./European Exposure and the Individual Canadian Exposure of such Lender at such time.

“Individual U.S. Borrower Exposure” of any U.S./European Lender shall mean, at any time, the sum of (I) the aggregate principal amount of all U.S. Borrower Revolving Loans made by such U.S./European Lender and then outstanding, (II) the sum of such U.S./European Lender’s L/C Participation Percentage in each then outstanding U.S. Letter of Credit multiplied by the sum of the Stated Amount of the respective U.S. Letter of Credit and any Unpaid Drawings relating thereto and (III) such U.S./European Lender’s U.S./European Percentage multiplied by the aggregate principal amount of all outstanding U.S./European Borrower Swingline Loans.

“Individual U.S./European Exposure” of any U.S./European Lender shall mean, at any time, the sum of its Individual U.S. Borrower Exposure and its Individual European Borrower Exposure at such time.

“Initial Borrowing Date” shall mean August 1, 2006.

“Intercompany Loan” shall have the meaning provided in Section 10.05(viii).

“Intercreditor Agreement” shall have the meaning provided in Section 6.10.

“Interest Determination Date” shall mean, with respect to any Euro Rate Loan for any Interest Period, the second Business Day prior to the commencement of such Interest Period.

“Interest Period” shall mean as to any Borrowing of Euro Rate Loans, the interest period applicable to such Borrowing of Euro Rate Loans selected pursuant to, and otherwise subject to the provisions of, Section 2.09.

“Interest Rate Protection Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement or other similar agreement or arrangement.

“Inventory” shall mean “inventory” (as such term is defined in Article 9 of the UCC).

“Investment Property” shall mean “investment property” (as such term is defined in Article 9 of the UCC), and any and all supporting obligations in respect thereof.

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“Investments” shall have the meaning provided in Section 10.05.

“Issuing Lender” shall mean each of (i) DBNY (except as otherwise provided in Section 12.09), (ii) any other Lender reasonably acceptable to the Administrative Agent and the respective Account Party which agrees to issue Letters of Credit hereunder and (iii) with respect to the Existing Letters of Credit, the Lender designated as the issuer thereof on Schedule IV (or any Affiliate of such Lender designated by it as provided on Schedule IV). Any Issuing Lender may, in its discretion, arrange for one or more Letters of Credit to be issued by one or more Affiliates of such Issuing Lender, in which case any such Affiliates also shall be an Issuing Lender hereunder.

“Joinder Agreement” shall have the meaning provided in Section 9.11.

“Joint Book Running Managers” shall mean Deutsche Bank Securities Inc. and Goldman Sachs Credit Partners L.P.

“Joint Lead Arrangers” shall mean Deutsche Bank Securities Inc. and Goldman Sachs Credit Partners L.P. each in its capacity as a Joint Lead Arranger, and any successors thereto.

“Judgment Currency” shall have the meaning provided in Section 13.22(a).

“Judgment Currency Conversion Date” shall have the meaning provided in Section 13.22(a).

“L/C Participant” shall have the meaning provided in Section 3.04(a).

“L/C Participation Percentages” shall have the meaning provided in Section 3.04(a).

“L/C Supportable Obligations” shall mean (i) obligations of each Account Party or any of its Subsidiaries with respect to workers’ compensation, surety bonds and other similar statutory or regulatory obligations, (ii) obligations of each Account Party or any of its Subsidiaries with respect to customer contracts entered into in the ordinary course of business and (iii) such other obligations of each Account Party or any of its Subsidiaries as are permitted to exist pursuant to the terms of this Agreement (other than obligations in respect of the Existing Senior Unsecured Notes, the New Senior Notes (or any Permitted Refinancing Indebtedness in respect thereof), the New Senior Subordinated Notes (or any Permitted Refinancing Indebtedness in respect thereof), Indebtedness which is subordinated to any of the ABL Obligations or Equity Interests).

“Leaseholds” of any Person shall mean all the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures.

“Lender” shall mean (i) each financial institution listed on Schedule I-A, as well as any Person that becomes a “Lender” hereunder pursuant to Section 2.13, 2.15 or 13.04(b) and (ii) each Swingline Lender. Unless the context otherwise requires, each reference in this

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Agreement to a Lender includes each Canadian Lender and shall include references to any Affiliate of any such Lender which is acting as a Canadian Lender.

“Lender Default” shall mean (i) the refusal (which has not been retracted) or the failure of a Lender to make available its portion of any Borrowing or to fund its portion of any unreimbursed payment under Section 3.04(c), (ii) a Lender having notified in writing any Credit Party and/or the Administrative Agent that such Lender does not intend to comply with its obligations under Section 2.01 or 3 or (iii) for purposes of Section 2.13 and Section 4.02(b) only, the commencement of any insolvency proceeding with respect to a Lender or the takeover by any Governmental Authority of the assets or management of a Lender.

“Letter of Credit” shall have the meaning provided in Section 3.01(a).

“Letter of Credit Fee” shall have the meaning provided in Section 4.01(b).

“Letter of Credit Outstandings” shall mean, at any time, the sum of (i) the Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all Letters of Credit.

“Letter of Credit Request” shall have the meaning provided in Section 3.03(a).

“Lien” shall mean any mortgage, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other) or other security agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any other similar recording or notice statute (other than any unauthorized notice or filing for which there is not otherwise any underlying lien or obligation, so long as the Borrowers are (if aware of the same) using commercially reasonable efforts to cause the removal of the same), and any financing lease having substantially the same effect as any of the foregoing).

“Loan” shall mean each Revolving Loan and each Swingline Loan.

“Local GAAP” shall mean with respect to any Foreign Subsidiary of Aleris generally accepted accounting principles in the jurisdiction of organization of such Subsidiary as in effect from time to time or, at the option of such Foreign Subsidiary, IFRS.

“Local Law Pledge Agreement” shall have the meaning provided in Section 6.08(i).

“Luxco Guarantor” shall mean Aleris Luxembourg S.A.R.L.

“Luxco Guaranty” shall mean the Guaranty by the Luxco Guarantor in favor of the Administrative Agent guaranteeing all of the obligations of the Borrowers, which Guaranty shall be in form and substance satisfactory to the Administrative Agent (as the same may be amended, modified, or supplemented from time to time).

“Luxco Pledge Agreement” shall mean the Pledge Agreement by the Luxco Guarantor in favor of the Collateral Agent, which pledge agreement shall be in form and

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substance satisfactory to the Collateral Agent (as the same may be amended, modified, or supplemented from time to time).

“Management Services Agreement” shall mean the agreement among Aleris and the Sponsor dated as of the Restatement Effective Date, as amended from time to time in accordance with the terms hereof, pursuant to which the Sponsor agrees to provide certain advisory services to Aleris in exchange for certain fees.

“Management Stockholders” shall mean the members of management of Aleris (or its direct parent) who are holders of Equity Interests of Aleris (or any of its direct or indirect parent companies) on the Restatement Effective Date.

“Mandatory Borrowing” shall have the meaning provided in Section 2.01(d).

“Mandatory Cost” shall mean the cost imputed to each Lender of compliance with any reserve asset requirements of the European Central Bank.

“Margin Stock” shall have the meaning provided in Regulation U.

“Material Adverse Effect” shall mean a material adverse effect on (a) the financial condition, results of operations or business of Aleris and its Subsidiaries taken as a whole, (b) Aleris and its Subsidiaries’ collective ability to pay the ABL Obligations in accordance with the terms thereof or (c) the rights of, or remedies available to, the Administrative Agent, the Issuing Banks or the Lenders under the Credit Documents.

“Material Indebtedness” shall mean any Indebtedness of Aleris or any of Subsidiaries in an aggregate principal amount exceeding $40,000,000.

“Material Real Property” shall mean any Real Property owned in fee by Aleris or any of its Subsidiaries the fair market value of which (as determined in good faith by Aleris) is equal to or greater than $2,500,000.

“Maximum Incremental Commitment Amount” shall mean $100,000,000.

“Maximum Swingline Amount” shall mean (i) in the case of U.S./European Borrower Swingline Loans (for this purpose using the Dollar Equivalent of any Non-Dollar Denominated Loans), $30,000,000 and (ii) in the case of Canadian Swingline Loans, Cdn$ 10,000,000.

“Merger” shall mean the merger of Merger Sub with and into Aleris pursuant to the Merger Agreement, with Aleris as the Surviving Corporation (as defined in the Merger Agreement) of the merger.

“Merger Agreement” shall mean the Agreement and Plan of Merger, dated as of August 7, 2006, among Holdings, Merger Sub and Aleris, as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof.

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“Merger Documents” shall mean the Merger Agreement, and each other agreement, document or instrument related to any of the foregoing.

“Merger Sub” shall have the meaning provided in the first paragraph of this Agreement.

“Minimum Borrowing Amount” shall mean (i) in the case of U.S. Dollar Denominated Loans (excluding Swingline Loans and Dollar Denominated Revolving Loans maintained as Base Rate Loans), $5,000,000, (ii) in the case of Revolving Loans maintained from time to time as Base Rate Loans, $1,000,000, (iii) in the case of Canadian Dollar Denominated Loans (excluding Canadian Dollar Denominated Loans maintained as Canadian Prime Rate Loans), Cdn.$5,000,000, (iv) in the case of Canadian Dollar Denominated Loans maintained as Canadian Prime Rate Loans, Cdn.$1,000,000, (v) in the case of Euro Denominated Loans, €5,000,000, (vi) in the case of Other Foreign Currency Denominated Loans incurred in Swiss Francs, CHF5,000,000, (vii) in the case of Other Foreign Currency Denominated Loans incurred in Pounds Sterling, £5,000,000, (viii) in the case of U.S./European Borrower Swingline Loans, $0, (ix) in the case of Canadian Swingline Loans, Cdn.$0 and (x) in the case of a Loan not denominated in U.S. Dollars, Canadian Dollars, Euros, Swiss Francs or Pounds Sterling, the amount specified by the Administrative Agent.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgage” shall mean each Existing ABL Creditor Mortgage, each mortgage granted by a Canadian Subsidiary Guarantor pursuant to the Existing ABL Credit Agreement and/or Section 9.11 substantially in the form of Exhibit N-2, and each Mortgage (if any) granted by the European Borrower or a European Distribution Subsidiary with such modifications as local counsel to the Collateral Agent may deem reasonably necessary or appropriate in order to create and perfect the mortgage liens intended to be created thereby under the local law of the jurisdiction in which the relevant Real Property is located.

“Mortgage Policy” shall mean a Lender’s title insurance policy (Form 1992).

“Mortgaged Property” shall mean any Real Property owned by Aleris or any other Credit Party which is required to be encumbered by a Mortgage.

“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section 3(37) or 4001(a)(3) of ERISA, which is contributed to by (or to which there is an obligation to contribute of) Aleris or an ERISA Affiliate, and each such plan for the five year period immediately following the latest date on which Aleris or an ERISA Affiliate contributed or had an obligation to contribute to such plan.

“NAIC” shall mean the National Association of Insurance Commissioners.

“Negotiable Collateral” shall mean letters of credit, letter of credit rights, instruments, promissory notes, drafts, documents, and chattel paper (including electronic chattel paper and tangible chattel paper), and any and all supporting obligations in respect thereof.

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“Net Debt Proceeds” shall mean, with respect to any incurrence or issuance of Indebtedness for borrowed money, the cash proceeds (net of underwriting discounts and commissions and other reasonable fees, expenses and costs associated therewith including, without limitation, those of attorneys, accountants and other professionals) received by the respective Person from the respective incurrence of such Indebtedness for borrowed money.

“Net Insurance Proceeds” shall mean, with respect to any Recovery Event, the cash proceeds (net of costs incurred by Aleris or any of its Restricted Subsidiaries in good faith in connection with such Recovery Event) received by the applicable Person in connection with such Recovery Event, and shall be net of (i) any taxes paid or payable in connection with the applicable Recovery Event and taxes paid or payable as a result of any transactions effected or deemed effected in order to make the related required prepayment of the ABL Obligations under Section 5.02(d), including, without limitation, in respect of proceeds received by any Foreign Subsidiary of Aleris, taxes that are or would be payable if such proceeds were repatriated to any direct or indirect parent of such Foreign Subsidiary which has made all or a portion of any required prepayment of the ABL Obligations under Section 5.02(d) in respect of such proceeds, (ii) all appropriate amounts that must be set aside as a reserve in accordance with GAAP or Local GAAP, as applicable, against any liabilities associated with such Recovery Event, provided that, upon any termination of such reserve, all amounts not paid-out in connection therewith shall be deemed to be “Net Insurance Proceeds” of such Recovery Event and (iii) required payments of any Indebtedness (other than Indebtedness secured pursuant to the Security Documents) which is secured by the respective assets which were subject to such Recovery Event. Notwithstanding the foregoing, no Net Insurance Proceeds calculated in accordance with the foregoing shall constitute Net Insurance Proceeds for purposes of Section 5.02(d) (i) unless such Net Insurance Proceeds shall exceed $2,500,000 from any single Recovery Event and (ii) until the aggregate amount of all such Net Insurance Proceeds in any applicable Fiscal Year (together with any Net Sale Proceeds from Asset Sales in such Fiscal Year) exceed $35,000,000 (and thereafter only Net Insurance Proceeds in excess of such amount shall constitute Net Insurance Proceeds for purposes of Section 5.02(d)).

“Net Liquidation Percentage” shall mean the percentage of the book value of the U.S. Borrowers’ or the Canadian Borrowers’, as the case may be, Inventory that is estimated to be recoverable in an orderly liquidation of such Inventory, such percentage to be as determined from time to time by a qualified appraisal company selected by the Administrative Agent, net of the expenses reasonably estimated to be associated with any such liquidation.

“Net Sale Proceeds” shall mean, for any Asset Sale (including an Asset Swap), the gross cash proceeds (including any cash received by way of deferred payment pursuant to a promissory note, receivable or otherwise, but only as and when received) received by Aleris or any of its Restricted Subsidiaries from such Asset Sale, in each case net of (i) the costs of such Asset Sale incurred by Aleris or any of its Subsidiaries in good faith (including fees and commissions, attorneys’ and other professional fees, payments of unassumed liabilities relating to the assets sold and required payments of any Indebtedness (other than Indebtedness secured pursuant to the Security Documents) which is secured by the respective assets which were sold), (ii) taxes paid or payable as a result of such Asset Sale and taxes paid or payable as a result of any transactions effected or deemed effected in order to make the related required prepayment of the ABL Obligations under Section 5.02(c), including in respect of any proceeds received by any

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Foreign Subsidiary of Aleris, taxes that are or would be payable if such proceeds were repatriated to any direct or indirect parent of such Foreign Subsidiary which has made all or a portion of any required prepayment of the ABL Obligations under Section 5.02(c) in respect of such proceeds, (iii) all appropriate amounts that must be set aside as a reserve in accordance with GAAP or Local GAAP, as applicable, against any liabilities associated with the asset sold pursuant to such Asset Sale; provided that, upon any termination of such reserve, all amounts not paid-out in connection therewith shall be deemed “Net Sale Proceeds” of such Asset Sale and (iv) the amount of any payments to be made by Aleris or any Subsidairy as agreed between such Person and the purchaser of any assets sold pursuant to such sale in connection therewith; provided that Net Sale Proceeds arising from any Asset Sale to a non-Wholly-Owned Subsidiary shall equal the amount of such Net Sale Proceeds calculated as provided above less the percentage thereof equal to the percentage of any Equity Interests of such non-Wholly-Owned Subsidiary owned by Aleris and its Subsidiaries. Notwithstanding the foregoing, no Net Sale Proceeds calculated in accordance with the foregoing shall constitute Net Sale Proceeds for purposes of Section 5.02(c) until the aggregate amount of all such Net Sale Proceeds in any applicable Fiscal Year (together with any Net Insurance Proceeds in such Fiscal Year from Recovery Events where the Net Insurance Proceeds exceed $2,500,000) exceed $35,000,000 (and thereafter only Net Sale Proceeds in excess of such amount shall constitute Net Sale Proceeds for purposes of Section 5.02(c)).

“New Note Documents” shall mean, collectively, the New Senior Subordinated Note Documents and the New Senior Note Documents.

“New Notes” shall mean, collectively, the New Senior Notes and the New Senior Subordinated Notes.

“New Senior Note Documents” shall mean and include each of the documents, instruments (including the New Senior Notes) and other agreements entered into by Aleris or any other U.S. Credit Party (including, without limitation, the New Senior Note Indenture and any documents in respect of any New Senior Notes issued upon the exchange offer as contemplated by the New Senior Note Indenture) relating to the issuance by Aleris of the New Senior Notes, as in effect on the Restatement Effective Date and as the same may be entered into, supplemented, amended or modified from time to time in accordance with the terms hereof and thereof.

“New Senior Note Indenture” shall mean an Indenture entered into by and between Aleris and LaSalle Bank National Association, as trustee thereunder, with respect to New Senior Notes as in effect on the Restatement Effective Date and as the same may be modified, amended or supplemented from time to time in accordance with the terms hereof and thereof.

“New Senior Notes” shall mean the 9% Senior Notes due 2014 in an initial aggregate amount of $600,000,000 and issued by Aleris under the New Senior Note Indenture and all New Senior Notes issued upon the exchange offer as contemplated in the New Senior Note Indenture, as in effect on the Restatement Effective Date and as the same may be issued, supplemented, amended or modified from time to time in accordance with the terms thereof and hereof.

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“New Senior Subordinated Note Documents” shall mean and include each of the documents, instruments (including the New Senior Subordinated Notes) and other agreements entered into by Aleris or any other U.S. Credit Party (including, without limitation, the New Senior Subordinated Note Indenture and any documents in respect of any New Senior Subordinated Notes issued upon the exchange offer as contemplated by the New Senior Subordinated Note Indenture) relating to the issuance by Aleris of the New Senior Subordinated Notes, as in effect on the Restatement Effective Date and as the same may be entered into, supplemented, amended or modified from time to time in accordance with the terms hereof and thereof.

“New Senior Subordinated Note Indenture” shall mean an Indenture entered into by and between Aleris and LaSalle Bank National Association, as trustee thereunder, with respect to New Senior Subordinated Notes as in effect on the Restatement Effective Date and as the same may be modified, amended or supplemented from time to time in accordance with the terms hereof and thereof.

“New Senior Subordinated Notes” shall mean the 10% Senior Subordinated Notes due 2016 in an initial aggregate amount of $400,000,000 and issued by Aleris under the New Senior Subordinated Note Indenture and all New Senior Subordinated Notes issued upon the exchange offer as contemplated in the New Senior Subordinated Note Indenture, as in effect on the Restatement Effective Date and as the same may be issued, supplemented, amended or modified from time to time in accordance with the terms thereof and hereof.

“Non-B/A Lender” shall mean any Canadian Lender which is unwilling or unable to create Bankers’ Acceptances by accepting Drafts and which has identified itself as a “Non-B/A Lender” by written notice to the Canadian Borrowers.

“Non-Defaulting Lender” shall mean and include each Lender other than a Defaulting Lender.

“Non-Dollar Denominated Euro Rate Loan” shall mean Euro Rate Loans which are Non-Dollar Denominated Loans.

“Non-Dollar Denominated Loans” shall mean all Loans other than Dollar Denominated Loans.

“Non-Wholly-Owned Subsidiary” shall mean, as to any Person, any Subsidiary of such Person which is not a Wholly-Owned Subsidiary of such Person.

“Note” shall mean each U.S. Borrower Revolving Note, each Canadian Revolving Note, each European Borrower Revolving Note, each U.S. Borrower Swingline Note, each European Borrower Swingline Note and each Canadian Swingline Note.

“Notice of Borrowing” shall have the meaning provided in Section 2.03(a).

“Notice of Conversion/Continuation” shall have the meaning provided in Section 2.06.

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“Notice Office” shall mean (i) for credit notices, the office of the Administrative Agent located at 60 Wall Street, MS NYC60-0208, New York, New York 10005, Attention: Marguerite Sutton (telephone: (212) 250-6150; facsimile: (212) 797-4655), and (ii) for operational notices, the office of the Administrative Agent located at 222 S. Riverside Plaza, Chicago, Illinois 60606-5808, Attention: Lianne Jaworski (telephone: (312) 537-4578; facsimile: (312) 537-1325), or such other office or person as the Administrative Agent may hereafter designate in writing as such to the other parties hereto; provided that in the case of all borrowings of Loans by any Canadian Borrower, “Notice Office” shall mean the office of the Canadian Administrative Agent located at 222 Bay Street, Toronto, M5K 1E7 Canada.

“Obligation Currency” shall have the meaning provided in Section 13.22(a).

“Other Creditors” shall mean each Person (other than any Credit Party or any Subsidiary of Aleris) party to (or participating in) a Secured Hedging Agreement.

“Other Foreign Currency Denominated Loan” shall mean each U.S./European Revolving Loan and European Borrower Swingline Loan denominated in a currency other than U.S. Dollars, Canadian Dollars or Euros at the time of incurrence thereof.

“Other Hedging Agreements” shall mean any Currency Hedging Agreements or commodity agreements or other similar arrangements, or arrangements designed to protect against fluctuations in commodity prices.

“Participant” shall mean a Lender that acquires a participation following the occurrence of a Conversion Event pursuant to an agreement among the Lenders and the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent; provided, however, that a Lender shall be considered a Participant only in respect of its interest in the acquired participation.

“Participating Specified Foreign Currency Lender” shall have the meaning provided in Section 16.01.

“PATRIOT Act” shall have the meaning provided in Section 13.21.

“Payment Conditions” shall mean that each of the following conditions are satisfied at the time of each action and after giving effect thereto: (i) no Default or Event of Default shall have occurred and be continuing, (ii) the Excess Availability shall have been equal to or greater than $90,000,000 for the preceding 30 day period (based on the Borrowing Base Certificate last delivered or delivered at the time of such action) and shall be at least $90,000,000 after giving effect thereto and (iii) the Borrowers shall be in compliance with Section 10.07 (determined as if a Compliance Period is then in existence, provided that for purposes of compliance with the requirements of Section 9.13, compliance with Section 10.07 shall only be required if a Compliance Period is in effect) on a Pro Forma Basis giving effect to the incurrence of any Indebtedness to finance the respective action and the payment of all amounts (including fees and expenses) owing in connection therewith (including any purchase price adjustments and other payments may be required to be made).

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“Payment Office” shall mean (i) in respect of Dollar Denominated Loans and other amounts owing in U.S. Dollars, 60 Wall Street, MS NYC 60-0208, New York, NY 10005 or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto, (ii) in the case of all payments of principal (or Face Amount, as applicable), interest and/or other amounts owing with respect to Canadian Revolving Loans, “Payment Office” shall mean the office of the Canadian Administrative Agent located at 222 Bay Street, Toronto, M5K 1E7, Canada, (iii) in respect of Euro Denominated Loans and other amounts owing in Euros, to Deutsche Bank AG, Frankfurt, D-11-18-DBAG (Mainzer), Mainzer Landstrabe 16, Frankfurt, Germany 60325 and (iv) in the case of Other Foreign Currency Loans and any other amount owing in any other Available Currency, such office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto or, in each case, such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

“Percentage” of any Lender at any time shall be that percentage which is equal to a fraction (expressed as a percentage) the numerator of which is the Commitment of such Lender at such time and the denominator of which is the Total Commitment at such time, provided that if any such determination is to be made after the Total Commitment (and the related Commitments of the Lenders) has terminated, the determination of such percentages shall be made immediately before giving effect to such termination.

“Permitted Acquisition” shall mean the acquisition by Aleris or a Subsidiary of Aleris of an Acquired Entity or Business; provided that (in each case) (A) the Acquired Entity or Business acquired pursuant to the respective Permitted Acquisition is in a business permitted by Section 10.10, and (B) all applicable requirements of Sections 9.13, 10.02 and 10.11 applicable to Permitted Acquisitions are satisfied. Notwithstanding anything to the contrary contained in the immediately preceding sentence, an acquisition which does not otherwise meet the requirements set forth above in the definition of “Permitted Acquisition” shall constitute a Permitted Acquisition if, and to the extent, the Required Lenders agree in writing, prior to the consummation thereof, that such acquisition shall constitute a Permitted Acquisition for purposes of this Agreement.

“Permitted Discretion” shall mean the commercially reasonable exercise of the Administrative Agent’s (or the Canadian Administrative Agent’s) good faith credit judgment in accordance with customary business practices for comparable asset-based lending transactions in Aleris’s industry in consideration of any factor which is reasonably likely to (i) materially and adversely affect the value of any Collateral, the enforceability or priority of the Liens thereon or the amount that Administrative Agent, the Collateral Agent and Lenders would be likely to receive (after giving consideration to delays in payment and costs of enforcement) in the liquidation thereof, or (ii) suggest that any collateral report or financial information delivered to Administrative Agent, Collateral Agent or Lenders by any Person on behalf of any Borrower is incomplete, inaccurate or misleading in any material respect. In exercising such commercially reasonable credit judgment, the Administrative Agent or the Canadian Administrative Agent, as applicable, may consider, without duplication, such factors already included in or tested by the

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definition of Eligible Accounts or Eligible Inventory, as well as any of the following: (i) changes after the Restatement Effective Date in any material respect in collection history and dilution or collectibility with respect to the Accounts; (ii) changes after the Restatement Effective Date in any material respect in demand for, pricing of, or product mix of Inventory; (iii) changes after the Restatement Effective Date in any material respect in any concentration of risk with respect to the respective Borrower’s Accounts or Inventory; and (iv) any other factors arising after the Restatement Effective Date that change in any material respect the credit risk of lending to the Borrowers on the security of the Borrowers’ Accounts or Inventory.

“Permitted Distribution Subsidiary Activities” shall mean (i) purchasing and/or holding items of Inventory to be held for sale in the ordinary course of business, (ii) the sale of such Inventory to end-use customers, (iii) selling Accounts arising out of the sale of Inventory to the European Borrower pursuant to the Receivables Purchase Agreements, (iv) soliciting sales of finished aluminum product to end-use customers by and on behalf of the European Borrower, (v) performance of obligations under and in connection with the Credit Documents, (vi) actions incidental to the consummation of the Transaction, (vii) actions required by law to maintain its existence, (viii) the holding of cash in amounts reasonably required to pay for its own costs and expenses, (ix) owing and paying legal, registered office and auditing fees, (x) the issuance of common Equity Interests to the extent otherwise permitted by this Agreement and (xi) activities incidental to any of the foregoing (including, without limitation, advertising and promotion and the employment of personnel in connection with the foregoing).

“Permitted Encumbrance” shall mean, collectively, (i) those Liens and other matters affecting title to any Mortgaged Property listed in the Mortgage Policies in respect thereof which, on the date of delivery of such Mortgage Policies to the Collateral Agent in accordance with the terms hereof, are reasonably acceptable by the Collateral Agent and (ii) zoning, building codes, land/use and other similar laws and municipal ordinances which are not violated in any material respect by the existing improvements and the present use by the mortgagor of the respective Mortgaged Property.

“Permitted European Borrower Activities” shall mean (i) operations related to the provision of certain shared services to the European Parent Guarantors and their Subsidiaries (including legal, human resources, finance, treasury, tax, payroll, customer service, non-metals purchasing, and information technology) in connection with its central entrepreneur status for the European business of Aleris and its Subsidiaries, (ii) the retention and employment of management personnel and other employees, (iii) entering into the Supply Agreements with the Seller’s aluminum smelting operations and other third-party suppliers for the purchase of raw materials necessary for the European Borrower and its Subsidiaries to conduct the business permitted pursuant to Section 10.10 and the performance of its obligations thereunder, (iv) entering into Other Hedging Agreements in connection with the foregoing, to the extent otherwise permitted by this Agreement, (v) entering into the Tolling Agreements with the European Manufacturing Subsidiaries or other tolling agreements with third party tolling providers for the processing of raw materials into finished aluminum product and the payment of tolling fees thereunder, (vi) acquiring legal title to Inventory pursuant to the Supply Agreements permitted pursuant to preceding clause (iii), (vii) the sale of Inventory to the Distribution Subsidiaries or end-use customers, (viii) acquiring and holding Accounts arising out of the sale of Inventory and/or purchasing Accounts from the Distribution Subsidiaries and the Transitory

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European Subsidiaries arising out of the sale of such Inventory pursuant to the Receivables Purchase Agreements, (ix) prior to the European Restructuring Date (and thereafter to the extent contemplated by clause (x) of the parenthetical in the definition of European Restructuring), purchasing Accounts from the Specified European Manufacturing Subsidiaries pursuant to Receivables Purchase Agreements, (x) ownership of the Equity Interests in the Distribution Subsidiaries, together with activities directly related thereto, (xi) performance of its obligations under and in connection with the Credit Documents, (xii) actions incidental to the consummation of the Transaction, (xiii) actions required by law to maintain its existence, (xiv) the holding of cash in amounts reasonably required to pay for its own costs and expenses, (xv) owing and paying legal, registered office and auditing fees, (xvi) the issuance of common Equity Interests to the extent otherwise permitted by this Agreement and (xvii) activities incidental to any of the foregoing (including, without limitation, advertising and promotion).

“Permitted Holders” shall mean each of the Sponsor, the Management Stockholders, the Co-Investors and any Subsequent Co-Investors; provided that, the Sponsor, the Co-Investors and the Management Stockholders, collectively, have beneficial ownership of at least 50% of the total voting power of the Voting Stock of Aleris or any of its direct or indirect parent companies. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control which has been waived by the Required Lenders in accordance with Section 13.12 will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

“Permitted Liens” shall have the meaning provided in Section 10.01.

“Permitted Refinancing Indebtedness” shall mean any Indebtedness of Aleris and its Subsidiaries issued or given in exchange for, or the proceeds of which are used to, extend, refinance, renew, replace, substitute or refund Indebtedness permitted under clauses (ii), (v), (vii), (xii), (xiv), (xv), (xxiii) and (xxiv) of Section 10.04, or any Indebtedness issued to so extend, refinance, renew, replace, substitute or refund any such Indebtedness, so long as (a) in the case of the refinancing of the New Senior Notes and the New Senior Subordinated Notes, such Indebtedness matures no earlier than one year after the Final Maturity Date and does not have any mandatory prepayment obligations prior to such maturity date (other than pursuant to customary asset sale and change of control provisions) and otherwise contains terms and conditions which are customary at the time of issuance for high yield financing, (b) in the case of the refinancing of Indebtedness incurred pursuant to clause (xiv) of Section 10.04, such refinancing Indebtedness shall satisfy the conditions set forth in sub-clauses (A), (B) and (C) of Section 10.04(xiv), (c) in each case, such Indebtedness has a weighted average life to maturity greater than or equal to the weighted average life to maturity of the Indebtedness being refinanced, (d) in each case, such refinancing or renewal does not (i) increase the principal amount of such Indebtedness outstanding immediately prior to such refinancing or renewal other than as a result of the refinancing of accrued unpaid interest, premiums (including applicable prepayment penalties) or fees and the costs of issuance of such refinancing Indebtedness or (ii) add guarantors, obligors or security from that which applied to such Indebtedness being refinanced or renewed, and (e) in each case, such refinancing or renewal Indebtedness has substantially the same (or, from the perspective of the Lenders, more favorable) subordination provisions, if any, as applied to the Indebtedness being renewed or refinanced.

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“Person” shall mean any individual, partnership, joint venture, firm, corporation, association, limited liability company, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

“Plan” shall mean any pension plan as defined in Section 3(2) of ERISA, subject to Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) Aleris or any ERISA Affiliate, and each such plan which is subject to Title IV of ERISA for the five year period immediately following the latest date on which Aleris, a Subsidiary of Aleris or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan but in all cases other than a Foreign Plan, Foreign Pension Plan or Multiemployer Plan.

“Pledge Agreement Collateral” shall mean all “Collateral”, “Charged Assets”, “Shares”, “Pledged Shares” or any similar term, in each case, as defined in the respective Pledge Agreement.

“Pledge Agreements” shall mean the U.S. Pledge Agreement, the Canadian Parent Pledge Agreement, the European Parent Pledge Agreement and the Local Law Pledge Agreements.

“Pledgee” shall have the meaning provided in the U.S. Pledge Agreement.

“Pounds Sterling” and the sign “£” shall mean freely transferable lawful money of the United Kingdom (expressed in Pounds Sterling).

“PPSA” shall mean the Personal Property Security Act (Ontario) and the regulations promulgated thereunder and other applicable personal property security legislation of the applicable Canadian province or provinces in respect of the Canadian Credit Parties (including the Civil Code of the Province of Quebec and the regulation respecting the register of personal and movable real rights promulgated thereunder) as all such legislation now exists or may from time to time hereafter be amended, modified, recodified, supplemented or replaced, together with all rules, regulations and interpretations thereunder or related thereto.

“Preferred Stock” shall mean any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.

“Prime Lending Rate” shall mean the rate which the Administrative Agent publicly announces from time to time as its prime lending rate through its offices in New York City (and, in the case of Base Rate Loans made to the Canadian Borrowers, such prime lending rate announced by the Canadian Administrative Agent for U.S. Dollar denominated commercial loans made through its office in Toronto, Canada), the Prime Lending Rate to change when and as such prime lending rate changes. The Prime Lending Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer by the Administrative Agent, which may make commercial loans or other loans at rates of interest at, above or below the Prime Lending Rate.

“Priority Payables” shall mean, at any time, with respect to the Borrowers:

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(a) (i) the amount past due and owing by each Borrower, or the accrued amount for which such Borrower has an obligation to remit to a Governmental Authority or other Person pursuant to any applicable law, rule or regulation, in respect of (u) pension fund obligations; (v) unemployment insurance; (w) goods and services taxes, sales taxes, employee income taxes and other taxes payable or to be remitted or withheld; and (ii) the amount of fees which an insolvency administrator in an insolvency proceeding is allowed to collect pursuant to German law, including, without limitation, determination fees and collection fees; (x) workers’ compensation; (y) vacation pay; and (z) other like charges and demands; in each case with respect to the preceding clauses (i) and (ii), to the extent any Governmental Authority or other Person may claim a security interest, Lien, trust or other claim ranking or capable of ranking in priority to or pari passu with one or more of the First Priority Liens granted in the Security Documents; and

(b) the aggregate amount of any other liabilities of each Borrower (i) in respect of which a trust has been or may be imposed on any Collateral to provide for payment or (ii) which are secured by a security interest, pledge, Lien, charge, right or claim on any Collateral; in each case, pursuant to any applicable law, rule or regulation and which trust, security interest, pledge, Lien, charge, right or claim ranks or, in the Permitted Discretion of the Administrative Agent, is capable of ranking in priority to or pari passu with one or more of the First Priority Liens granted in the Security Documents (such as Liens, trusts, security interests, pledges, Liens, charges, rights or claims in favor of employees, landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens, trusts, security interests, pledges, Liens, charges, rights or claims for ad valorem, excise, sales, or other taxes where given priority under applicable law);

in each case net of the aggregate amount of all Restricted cash held or set aside for the payment of such obligations.

“Pro Forma Basis” shall mean, in connection with any calculation of compliance with any financial covenant or financial term, the calculation thereof after giving effect on a pro forma basis to (w) the incurrence of any Indebtedness (other than revolving Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness or to finance a Permitted Acquisition) after the first day of the relevant Calculation Period as if such Indebtedness had been incurred (and the proceeds thereof applied) on the first day of the relevant Calculation Period, (x) the permanent repayment of any Indebtedness (other than revolving Indebtedness except to the extent accompanied by a corresponding permanent commitment reduction) after the first day of the relevant Calculation Period as if such Indebtedness had been retired or redeemed on the first day of the relevant Calculation Period, (y) any Asset Sale (including any Asset Swap) consummated after the first day of the relevant Calculation Period as if such Asset Sale (including any Asset Swap) (and the application of the proceeds therefrom) had occurred (and the proceeds therefrom had been applied) on the first day of the relevant Calculation Period, and/or (z) the Permitted Acquisition or any other acquisition of an Acquired Entity or Business permitted pursuant to Section 10.05, if any, then being consummated as well as any other Permitted Acquisition consummated after the first day of the relevant Calculation Period and on or prior to the date of the respective Permitted Acquisition then being effected, as the case may be, with the following rules to apply in connection therewith:

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(i) all Indebtedness (x) (other than revolving Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness or to finance a Permitted Acquisition) incurred or issued after the first day of the relevant Calculation Period (whether incurred to finance a Permitted Acquisition, to refinance Indebtedness or otherwise) shall be deemed to have been incurred or issued (and the proceeds thereof applied) on the first day of the respective Calculation Period and remain outstanding through the date of determination and (y) (other than revolving Indebtedness except to the extent accompanied by a corresponding permanent commitment reduction) permanently retired or redeemed after the first day of the relevant Calculation Period shall be deemed to have been retired or redeemed on the first day of the respective Calculation Period and remain retired through the date of determination;

(ii) all Indebtedness assumed to be outstanding pursuant to preceding clause (i) shall be deemed to have borne interest at (x) the rate applicable thereto, in the case of fixed rate indebtedness, or (y) at the rate which would have been applicable thereto on the last day of the respective Calculation Period, in the case of floating rate Indebtedness (although interest expense with respect to any Indebtedness for periods while same was actually outstanding during the respective period shall be calculated using the actual rates applicable thereto while same was actually outstanding); and

(iii) in making any determination of Consolidated EBITDA, pro forma effect shall be given to any Asset Sale (including any Asset Swap), Permitted Acquisition or acquisition of an Acquired Entity or Business permitted pursuant to Section 10.05 consummated during the periods described above, with such Consolidated EBITDA to be determined as if such Asset Sale (including any Asset Swap) or Permitted Acquisition was consummated on the first day of the relevant Calculation Period, and, in the case of any Permitted Acquisition or other acquisition, taking into account factually supportable and identifiable cost savings and expenses directly attributable to any such Permitted Acquisition or other acquisition which are reasonably acceptable to the Administrative Agent, as if such cost savings or expenses were realized on the first day of the respective period.

“Projections” shall mean the projections for the five Fiscal Years ended after the Restatement Effective Date (prepared on an annual basis) that were prepared by or on behalf of Aleris in connection with the Transaction and delivered to the Joint Lead Arrangers and the Lenders prior to the Restatement Effective Date.

“Qualified Equity Interests” shall mean any Equity Interests so long as the terms of any such Equity Interests (a) do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision (other than solely for Qualified Equity Interests) which could be triggered (including, without limitation, upon the occurrence of a change of control event) on or prior to the date that is 91 days after the earlier of the Final Maturity Date and the date the Loans are no longer outstanding and the Commitments have expired or been terminated and (b) do not require the cash payment of dividends or distributions on or prior to the date that is 91 days after the earlier of the Final Maturity Date and the date the Loans are no longer outstanding and the Commitments have expired or been terminated; provided that if such Equity Interests are issued to any plan for the benefit of employees of any Borrower or its Subsidiaries

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or by any such plan to such employees, such Equity Interests shall not fail to constitute Qualified Equity Interests solely because they may be required to be repurchased by such Borrower or any of its Subsidiaries in order to satisfy applicable statutory or regulatory obligations. Notwithstanding the preceding sentence, any Equity Interests that would not constitute Qualified Equity Interests solely because the holders of such Equity Interests have the right to require Aleris to repurchase such Equity Interests upon the occurrence of a change of control or an asset sale will constitute Qualified Equity Interests if the terms of such Equity Interests provide that Aleris may not repurchase or redeem any such Equity Interests pursuant to such provisions unless such repurchase or redemption complies with Section 10.03 or provide that such repurchase or redemption shall be subject to the prior repayment in full of the Loans and all other ABL Obligations that are then accrued and payable and the termination of the Commitments.

“Qualified Public Offering” shall mean any public or private sale of common stock or Preferred Stock of Aleris or any direct or indirect parent of Aleris pursuant to an effective registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act (other than a registration statement on Form S-8 or any successor form).

“Quarterly Payment Date” shall mean the last Business Day of each March, June, September and December occurring after the Restatement Effective Date.

“Quebec Secured Parties” shall have the meaning provided in Section 12.01(b).

“Real Property” shall mean all land, improvements and fixtures of any Person, including all the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds.

“Receivables Purchase Agreement” shall mean each receivables purchase agreement and any related servicing agreements between the European Borrower, on the one hand, and one or more Subsidiaries of Aleris, on the other hand, in substantially the form of Exhibit Q or otherwise in form and substance reasonably satisfactory to the Administrative Agent, in each case providing, inter alia, for the sale and transfer of Accounts by such Subsidiary to the European Borrower, as each such agreement may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.

“Record” shall mean information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.

“Recovery Event” shall mean the receipt by Aleris or any of its Subsidiaries of any cash insurance proceeds or condemnation awards payable (i) by reason of theft, loss, physical destruction, damage, taking or any other similar event with respect to any property or assets of Aleris or any of its Subsidiaries and (ii) under any policy of insurance required to be maintained under Section 9.09 (other than business interruption insurance and insurance proceeds relating to loss of rental payments).

“Reference Discount Rate” shall mean, in respect of any Bankers’ Acceptances or completed Drafts to be purchased by a Canadian Lender pursuant to Section 2.01(b) and Schedule III hereto, (i) by a Schedule I chartered bank, the average bankers’ acceptance discount

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rate for the appropriate term as quoted on Reuters Screen CDOR Page in respect of Schedule I chartered banks (or such other page as may be selected by the Canadian Administrative Agent as a replacement page for such Banker’s Acceptances if such screen is not available) at 10:00 a.m. (Toronto time); and (ii) by any other Canadian Lender, the lesser of (x) the rate specified in (i) plus 0.10% and (y) the arithmetic average of the discount rates (calculated on an annual basis and rounded to the nearest one-hundredth of 1%, with five-thousandths of 1% being rounded up) quoted by each Canadian Reference Lender at 10:00 a.m. (Toronto time) as the discount rate at which such Canadian Reference Lender would purchase, on the relevant Drawing Date, its own bankers’ acceptances or Drafts having an aggregate Face Amount equal to, and with a term to maturity the same as, the Bankers’ Acceptances or Drafts, as the case may be, to be acquired by such Canadian Lender on such Drawing Date.

“Refinancing” shall mean the refinancing transactions described in Section 6.06.

“Register” shall have the meaning provided in Section 13.15.

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

“Regulation T” shall mean Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Regulation X” shall mean Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Related Business Assets” shall mean assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by Aleris or a Restricted Subsidiary in exchange for assets transferred by Aleris or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary of Aleris.

“Related Pass Through Entity” shall mean, with respect to an Indirect Section 5.04 Indemnitee, the pass through entity for tax purposes which such Indirect Section 5.04 Indemnitee, by virtue of being a partner or member thereof, is an Indirect Section 5.04 Indemnitee; provided that such entity shall be a Related Pass Through Entity only if it is a Lender, an Issuing Lender or the Administrative Agent.

“Release” shall mean actively or passively disposing, discharging, injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring, seeping or migrating, into or upon any land or water or air, or otherwise entering into the environment.

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“Relevant ABL Guaranteed Obligations” shall mean in the case of the U.S. Borrower Guaranty provided by each of the U.S. Borrowers, (a) the principal and interest on each Note issued by the Canadian Borrowers, the European Borrower and each other Guaranteed Party (other than such U.S. Borrower) to each Lender, and all Loans made to the Canadian Borrowers, the European Borrower and each other Guaranteed Party (other than such U.S. Borrower) under this Agreement, all reimbursement obligations and Unpaid Drawings with respect to Letters of Credit, together with all the other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code or any other stay under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act or any other applicable bankruptcy law, would become due) and liabilities (including, without limitation, indemnities, fees and interest thereon) of the Canadian Borrowers, the European Borrower and each other Guaranteed Party (other than such U.S. Borrower) to any Guaranteed Creditor now existing or hereafter incurred under, arising out of or in connection with this Agreement and each other Credit Document, (b) all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code or any other stay under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act or any other applicable bankruptcy law, would become due) and liabilities of each other Guaranteed Party (other than such U.S. Borrower) owing under any Secured Hedging Agreement entered into by such Guaranteed Party with any Guaranteed Creditor, whether now in existence or hereafter arising, and (c) all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code or any other stay under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act or any other applicable bankruptcy law, would become due) and liabilities of each other Guaranteed Party (other than such U.S. Borrower) owing under any Treasury Services Agreement entered into by such Guaranteed Party with any Guaranteed Creditor, whether now in existence or hereafter arising.

“Remedial Action” shall mean all actions to (a) clean up, remove, remediate, contain, treat, monitor or investigate Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a Release or threatened Release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment, or (d) perform any pre-remedial, restoration or reclamation studies, investigations, or post-remedial, restoration or reclamation operation and maintenance activities.

“Rent Reserve” shall mean, a reserve established by the Administrative Agent in an amount equal to the latest three months rent payments made by any Borrower for each location at which Inventory of the Borrowers is located that is not subject to a Collateral Access Agreement (as reported to the Administrative Agent by Aleris from time to time as requested by the Administrative Agent), as such amount may be adjusted from time to time by the Administrative Agent in its Permitted Discretion taking into account any statutory provisions detailing the extent to which landlords may make claims against Inventory located thereon.

“Replaced Lender” shall have the meaning provided in Section 2.13.

“Replacement Lender” shall have the meaning provided in Section 2.13.

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“Required Lenders” shall mean Non-Defaulting Lenders the sum of whose outstanding Commitments (or after the termination thereof, outstanding Individual Exposures) represent at least a majority of the sum of the Total Commitment less the Commitments of all Defaulting Lenders (or after the termination thereof, the sum of the Individual Exposures of Non-Defaulting Lenders at such time).

“Requirements 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.

“Responsible Officer” of any Person shall mean the chief executive officer, the president, any vice president, the chief operating officer or any Financial Officer of such Person and any other officer or similar official thereof responsible for the administration of the obligations of such Person in respect of this Agreement, and, as to any document delivered on the Restatement Effective Date (but subject to the express requirements set forth in Section 6), shall include any secretary or assistant secretary of a Credit Party. Any document delivered hereunder that is signed by a Responsible Officer of a Credit Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Credit Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Credit Party.

“Restatement Effective Date” shall have the meaning provided in Section 13.10.

“Restricted” shall mean, when referring to cash or Cash Equivalents of Aleris or any of its Subsidiaries, that such cash or Cash Equivalents (i) appear (or would be required to appear) as “restricted” on a consolidated balance sheet of Aleris or of any such Subsidiary, (ii) is subject to any Lien (other than Liens permitted pursuant to Sections 10.01(i), (iv), (xiv) and (xvi)) in favor of any Person other than the Collateral Agent for the benefit of the Secured Creditors or (iii) is not otherwise generally available for use by Aleris or any of its Subsidiaries.

“Restricted Sub-Participation” shall mean a sub-participation of the rights and/or the obligations of a Lender under this Agreement which is not substantially in the form recommended from time to time by the London Loan Market Association (LMA) (including, in particular, a provision on status of participation substantially in the form set out in Clause 6.1 of the LMA Funded Participation (PAR) form as at the date of this Agreement and Clause 7.1 of the current LMA Risk Participation (PAR) form as at the date of this Agreement, except for changes that have been approved by the Administrative Agent.

“Returns” shall have the meaning provided in Section 8.09.

“Revolving Loan” shall mean each U.S./European Revolving Loan and each Canadian Revolving Loan.

“S&P” shall mean Standard & Poor’s Rating Services, a division of McGraw-Hill, Inc., or any successor thereto.

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“Sale and Lease-Back Transaction” shall mean any arrangement with any Person providing for the leasing by Aleris or any Restricted Subsidiary of any real or tangible personal property, which property has been or is to be sold or transferred by Aleris or such Restricted Subsidiary to such Person in contemplation of such leasing.

“Section 5.04 Indemnitee” shall mean a Lender, an Issuing Lender or the Administrative Agent (and, in the case of a Lender, an Issuing Lender or Administrative Agent that is a flow-through entity for tax purposes, each member or partner of such Lender, Issuing Lender or Administrative Agent, as the case may be). For this purpose, the term “Lender” shall include any Participant.

“Section 5.04(b)(ii) Certificate” shall have the meaning provided in Section 5.04(b)(ii).

“Secured Creditors” shall mean the ABL Secured Parties.

“Secured Debt Agreement” shall mean and include (w) this Agreement, (x) the other Credit Documents, (y) the Secured Hedging Agreements entered into with any Other Creditors and (z) the Treasury Services Agreements entered into with any Treasury Services Creditors.

“Secured Hedging Agreement” shall mean each Interest Rate Protection Agreement and/or Other Hedging Agreements provided that (i) such Interest Rate Protection Agreement and/or Other Hedging Agreement expressly states that (x) it constitutes a “Secured Hedging Agreement” for purposes of this Agreement and the other Credit Documents and (y) does not constitute a “Secured Hedging Agreement” for purposes of the Term Security Documents or any guaranties relating to the Term Loan Agreement, (ii) Aleris and the other parties thereto shall have delivered to the Collateral Agent a written notice specifying that such Interest Rate Protection Agreement and/or Other Hedging Agreement (x) constitutes a “Secured Hedging Agreement” for purposes of this Agreement and the other Credit Documents, (y) does not constitute a “Secured Hedging Agreement” for purposes of the Term Security Documents or any guaranties relating to the Term Loan Agreement and (z) in the case of Aleris, that such Interest Rate Protection Agreement and/or Other Hedging Agreement and the obligations of Aleris and its Subsidiaries thereunder have been, and will be, incurred in compliance with this Agreement, (iii) on the effective date of such Interest Rate Protection Agreement and/or Other Hedging Agreement and from time to time thereafter, at the request of the Collateral Agent, Aleris and the other parties thereto shall have notified the Administrative Agent in writing of the aggregate amount of exposure under such Interest Rate Protection Agreement and/or Other Hedging Agreement and (iv) such Other Creditor, if it is not a Lender or an affiliate thereof (even if such Lender subsequently ceases to be a Lender under this Agreement for any reason), has entered into an intercreditor agreement with respect to the relevant Interest Rate Protection Agreement or Other Hedging Agreement on terms reasonably satisfactory to the Collateral Agent; it being understood, however, that each Interest Rate Protection Agreement and/or Other Hedging Agreement with a Lender or an affiliate thereof (even if such Lender subsequently ceases to be a Lender under this Agreement for any reason) in effect on the Restatement Effective Date (other than the Specified Secured Hedging Agreement) which does not meet the requirements of clauses (i) and (ii) of the proviso in this definition but otherwise satisfies the

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condition set forth in clause (iii) of the such proviso (other than any notice required on or prior to the Restatement Effective Date) shall be deemed a Secured Hedging Agreement for purposes of this Agreement and the other Credit Documents.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Security Agreement” shall mean the U.S. Security Agreement, each Canadian Security Document and each European Security Document.

“Security Agreement Collateral” shall mean all “Collateral” as defined in the respective Security Agreement.

“Security Document Amendment” shall have the meaning provided in Section 6.08(f).

“Security Documents” shall mean and include each Pledge Agreement, each Security Agreement, each Mortgage, the Intercreditor Agreement and each other Additional Security Document.

“Significant Event of Default” shall mean any Event of Default under Section 11.01 or 11.05.

“Similar Business” shall mean any business conducted by Aleris and its Restricted Subsidiaries on the Restatement Effective Date or any business that is similar, reasonably related, incidental or ancillary thereto.

“Specified European Manufacturing Subsidiary” shall mean Corus Aluminium NV, Corus Aluminium Walzprodukte GmbH, Corus Aluminium Profiltechnik Bonn GmbH, Corus Aluminium Profiltechnik GmbH, Corus Aluminium Profiltechnik Bitterfeld GmbH and VAW-IMCO and any other Subsidiary of Aleris which shall be reasonably satisfactory to the Administrative Agent.

“Specified Foreign Currency” shall have the meaning provided in Section 2.01(a).

“Specified Foreign Currency Funding Capacity” at any date of determination, for any Lender, shall mean the ability of such Lender to fund U.S./European Revolving Loans denominated in an Available Currency other than U.S. Dollars, as set forth in the records of the Administrative Agent as notified in writing by such Lender to the Administrative Agent within 3 Business Days of such Lender becoming a Lender hereunder.

“Specified Foreign Currency Loan” shall have the meaning provided in Section 16.01.

“Specified Foreign Currency Participation” shall have the meaning provided in Section 16.01.

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“Specified Foreign Currency Participation Fee” shall have the meaning provided in Section 16.06.

“Specified Foreign Currency Participation Settlement” shall have the meaning provided in Section 16.02(i).

“Specified Foreign Currency Participation Settlement Amount” shall have the meaning provided in Section 16.02(ii).

“Specified Foreign Currency Participation Settlement Date” shall have the meaning provided in Section 16.02(i).

“Specified Foreign Currency Participation Settlement Period” shall have the meaning provided in Section 16.02(i).

“Specified Secured Hedging Agreement” shall mean the Other Hedging Agreement entered into on the date hereof by Aleris and J. Aron and Company.

“Sponsor” shall mean Texas Pacific Group and its Affiliates excluding any portfolio companies thereof.

“Stated Amount” shall mean at, any time, as to any Letter of Credit, the maximum amount available to be drawn thereunder (regardless of whether any conditions for drawing could then be met) (using in the case of Letters of Credit not denominated in U.S. Dollars, the Dollar Equivalent thereof).

“Subordinated Indebtedness” of a Person shall mean any Indebtedness of such Person that is by its terms subordinated in right of payment to the ABL Obligations on terms and conditions no less favorable to the Administrative Agent and the Lenders than those contained in the New Senior Subordinated Note Documents.

“Subsequent Co-Investors” shall mean any Person (other than the Sponsor and the Co-Investors) and its Affiliates who, in connection with the acquisition of Equity Interests of Aleris (or any of its direct or indirect parent companies) after the Restatement Effective Date, is part of a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) in which any of the Sponsor, the Co-Investors or the Management Stockholders is a member.

“Subsidiary” shall mean, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time. Notwithstanding the foregoing (and except for the purposes of the definition of Unrestricted Subsidiary contained herein) an Unrestricted

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Subsidiary shall be deemed not to be a Subsidiary of Aleris or any of its other Subsidiaries for the purposes of this Agreement.

“Supermajority Lenders” shall mean Non-Defaulting Lenders the sum of whose outstanding Commitments (or after the termination thereof, outstanding Individual Exposures) represent at least 66-2/3% of the sum of the Total Commitment less the Commitments of all Defaulting Lenders (or after the termination thereof, the sum of the Individual Exposures of Non-Defaulting Lenders at such time).

“Supply Agreement” shall mean each supply agreement entered into by the European Borrower for the purchase of raw materials in accordance with the Permitted European Borrower Activities.

“Swingline Expiry Date” shall mean the date that is five Business Days prior to the Final Maturity Date.

“Swingline Lenders” shall mean, collectively, the U.S./European Swingline Lender and the Canadian Swingline Lender.

“Swingline Loans” shall have the meaning provided in Section 2.01(c).

“Swiss Francs” shall mean the lawful currency of Switzerland, as in effect from time to time.

“Swiss Guarantor” shall mean a Credit Party organized under the laws of, or for tax purposes resident in, Switzerland.

“Swiss Non-Qualifying Bank” shall mean a Person which does not qualify as a Swiss Qualifying Bank.

“Swiss Obligor” shall mean the European Borrower or a Swiss Guarantor.

“Swiss Qualifying Bank” shall mean a financial institution which (i) qualifies as a bank pursuant to the banking laws in force in its country of incorporation, (ii) carries on a true banking activity in such jurisdiction as its main purpose, and (iii) has personnel, premises, communication devices and decision-making authority of its own, all as per explanatory notes of the Swiss Federal Tax Administration No. S-02-123(9.86) and No. S-02.128(1.2000) or legislation or explanatory notes addressing the same issues which are in force at such time.

“Swiss Withholding Tax” shall mean any withholding tax in accordance with the Swiss Federal Statute on Anticipatory Tax of 13 October 1965 (Bundesgesetz über die Ver-rechnungssteuer) and any successor provision, as appropriate.

“Syndication Agent” shall mean Goldman Sachs Credit Partners L.P., in its capacity as Syndication Agent, and any successor thereto.

“Synthetic Lease” shall mean, as to any Person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed)

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(a) that is accounted for as an operating lease under GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased for U.S. Federal income tax purposes, other than any such lease under which such person is the lessor.

“Synthetic Lease Obligations” shall mean, as to any Person, an amount equal to the capitalized amount of the remaining lease payments under any Synthetic Lease that would appear on a balance sheet of such person in accordance with GAAP if such obligations were accounted for as Capitalized Lease Obligations.

“Taxes” shall mean any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to payments made by any Credit Party under any Credit Document (but excluding any tax imposed on or measured by the net income or net profits (or any franchise or similar tax imposed in lieu of a net income or net profits tax and any branch profits tax imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrowers or any other Credit Party is located) of a Section 5.04 Indemnitee pursuant to the laws of the country or national jurisdiction (or any political subdivision thereof) in which such Section 5.04 Indemnitee is organized or the country or national jurisdiction (or any political subdivision thereof) in which the principal office or applicable lending office of such Section 5.04 Indemnitee is located), and all interest, penalties or similar liabilities with respect to such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges.

“Ten Non-Bank Regulations” shall mean, at any time, the regulations pursuant to the explanatory notes of the Swiss Federal Tax Administration No. S-02.128(1.2000), S-02.122.2(4.1999) and S-02.122.1(4.1999) or legislation or explanatory notes addressing the same issues which are in force at such time.

“Term Collateral Agent” shall mean the “Collateral Agent” as defined in the Term Loan Agreement.

“Term Creditor Mortgage” shall mean a mortgage substantially in the form of Exhibit M-1 to the Term Loan Agreement.

“Term Loan Agreement” shall mean the Amended and Restated Term Loan Agreement, dated as of August 1, 2006 and amended and restated as of the date hereof, by and among Aleris, Aleris Deutschland Holding GmbH, the Lenders party thereto from time to time, and Deutsche Bank AG New York Branch, as Administrative Agent, as it may be amended, supplemented or otherwise modified from time to time in accordance with the terms herewith and therewith.

“Term Loan Pari Passu Lien Obligations” shall mean any Indebtedness constituting debt securities incurred pursuant to an indenture with an institutional trustee or loans incurred in the bank credit market (including institutional investor participation therein), which Indebtedness is secured with Liens that rank pari passu with the Liens securing the Indebtedness under the Term Loan Agreement outstanding on the Restatement Effective Date and not

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constituting Indebtedness subordinated in right of payment to the obligations of the Borrowers hereunder.

“Term Loans” shall mean the Term Loans under (and as defined in) the Term Loan Agreement.

“Term Obligations” shall mean the Term Obligations under (and as defined in) the Term Loan Agreement.

“Term Priority Collateral” shall have the meaning provided in the Intercreditor Agreement.

“Term Secured Parties” shall have the meaning provided in the Term Loan Agreement.

“Test Period” shall mean each period of four consecutive fiscal quarters of Aleris then last ended (in each case taken as one accounting period).

“Tier I Country” shall mean each country listed on Schedule XVI and each additional country as agreed by the Administrative Agent from time to time in its Permitted Discretion.

“Tier II Country” shall mean each country listed on Schedule XVII and each additional country as agreed by the Administrative Agent from time to time in its Permitted Discretion.

“Tolling Agreement” shall mean each tolling agreement entered into by the European Borrower with a European Manufacturing Subsidiary for the processing of raw materials into finished aluminum product, in each case, in form and substance reasonably satisfactory to the Administrative Agent; provided that all tolling fees and other amounts payable under each Tolling Agreement shall be subordinated to the payment of the Obligations on terms reasonably satisfactory to the Administrative Agent.

“Total Assets” shall mean the total amount of all assets of Aleris and its Subsidiaries, determined on a consolidated basis in accordance with GAAP as shown on the most recent balance sheet of Aleris.

“Total Borrowing Base” shall mean, as of any date of determination, the sum of the U.S. Borrowing Base, the Canadian Borrowing Base and the European Borrowing Base.

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

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

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“Total European Sub-Commitment” at any time shall mean $250,000,000 or, if less, the Total U.S./European Commitment as such amount may be increased from time to time pursuant to Section 2.15.

“Total Unutilized Commitment” shall mean, at any time, an amount equal to the remainder of (x) the Total Commitment as in effect at such time less (y) the Aggregate Exposure at such time.

“Total U.S./European Commitment” shall mean, at any time, the sum of the U.S./European Commitments of each of the Lenders at such time.

“Tranche” shall mean the respective facility and commitments utilized in making Loans and issuing Letters of Credit hereunder, with there being two separate Tranches, i.e., U.S./European Commitments (and the Loans made, and Letters of Credit issued, pursuant thereto) and Canadian Commitments (and the Loans made, and Letters of Credit issued, pursuant thereto).

“Transaction” shall mean, collectively, (i) the entering into of the Credit Documents and the incurrence of Loans and issuance of Letters of Credit on the Restatement Effective Date, (ii) the Refinancing, (iii) the consummation of the Merger, (iv) the issuance of the New Notes on the Restatement Effective Date, (v) the incurrence of the Term Loans, (vi) the consummation of the Equity Financing, (vii) all intercompany loans, equity contributions, repayments of intercompany loans, dividends, distributions and other intercompany Investments related to the foregoing and (viii) the payment of all fees and expenses in connection with the foregoing.

“Transitory European Subsidiary” shall mean each Subsidiary of Aleris acquired pursuant to a Permitted Acquisition or an acquisition of an Acquired Entity or Business permitted by Section 10.05 and organized under the laws of any country which is a member state of the European Community established pursuant to the Treaty, or any other jurisdiction reasonably satisfactory to the Administrative Agent, designated by Aleris in writing to the Administrative Agent as a “Transitory European Subsidiary”; provided that at the time of any such designation (i) such Subsidiary has either (A) entered into a Receivables Purchase Agreement with the European Borrower or (B) entered into a guaranty of the Obligations of the European Borrower pursuant to a guarantee agreement reasonably satisfactory in form and substance to the Administrative Agent and secured such guaranty with valid and enforceable first priority, perfected security interests or charges in all of the Accounts owned by such Subsidiary and such security interests shall not be subject to avoidance under any fraudulent transfer, preference or other similar principle, (ii) the Administrative Agent shall have received opinions of counsel from counsel reasonably satisfactory to the Administrative Agent covering such matters as the Administrative Agent may reasonably request and (iii) to the extent requested by the Administrative Agent pursuant to the proviso to Section 9.06(b), any collateral examinations and appraisals of the Accounts of such Subsidiary shall have been completed; provided further, that each such Subsidiary shall cease to be a Transitory European Subsidiary on the 181st day (or upon the expiration of such longer period as agreed by the Administrative Agent) following the date of its acquisition by Aleris or any of its Subsidiaries.

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“Treasury Services Agreement” shall have the meaning provided in the U.S. Security Agreement.

“Treasury Services Creditors” shall have the meaning provided in the U.S. Security Agreement.

“Treaty” shall mean the Treaty establishing the European Community being the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1986, the Maastricht Treaty (which was signed at Maastricht on February 7, 1992) and the Treaty of Amsterdam (which was signed in Amsterdam on October 2, 1997).

“Twenty Non-Bank Regulations” shall mean the regulations pursuant to the explanatory notes S-02.122.1(4.99) and S-02.122.2(4.99) of the Swiss Federal Tax Administration (or legislation or explanatory notes addressing the same issues which are in force at such time) pursuant to which the aggregate number of persons and legal entities, which are not Swiss Qualifying Banks and to which the European Borrower directly or indirectly, including, without limitation, through a Restricted Sub-Participation or other sub-participations under any other agreement, owes interest-bearing borrowed money under all interest-bearing instruments including, inter alia, this Agreement, taken together (other than bond issues which are subject to Swiss Withholding Tax), shall not exceed twenty at any time in order to not trigger Swiss Withholding Tax.

“Type” shall mean the type of Loan determined with regard to the interest option applicable thereto, i.e., whether a Base Rate Loan, a Euro Rate Loan of a given currency, a Canadian Prime Rate Loan or a Bankers’ Acceptance Loan.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or the priority of the Liens of the Collateral Agent in any Collateral is governed by the Uniform Commercial Code as in effect in a United States jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

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

“Unpaid Drawing” shall have the meaning provided in Section 3.05(a).

“Unpaid Supplier Reserve” shall mean, at any time, with respect to the Canadian Borrowers, the amount equal to the percentage applicable to Inventory in the calculation of the Canadian Borrowing Base multiplied by the aggregate value of the Eligible Inventory which the Administrative Agent, in its Permitted Discretion, considers is or may be subject to a right of a supplier to repossess goods pursuant to Section 81.1 of the Bankruptcy and Insolvency Act (Canada) or any other laws of Canada or any other applicable jurisdiction granting revendication or similar rights to unpaid suppliers, in each case, where such supplier’s right ranks or is capable of ranking in priority to or pari passu with one or more of the First Priority Liens granted in the Security Documents.

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“Unrestricted Subsidiary” shall mean (A) any Subsidiary of Aleris designated by the board of directors of Aleris as an Unrestricted Subsidiary pursuant to Section 9.16 subsequent to the Restatement Effective Date and (B) any Subsidiary of an Unrestricted Subsidiary.

“Unutilized Commitment” shall mean, with respect to any Lender at any time, (x) the sum of such Lender’s U.S./European Commitment and Canadian Commitment, less (y) the sum of such Lender’s Individual U.S./European Exposure and Individual Canadian Exposure.

“U.S. Borrower Guaranty” shall mean the guaranty of the U.S. Borrowers pursuant to Section 14.

“U.S. Borrower Obligations” shall mean all ABL Obligations owing to the Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender by any U.S. Borrower.

“U.S. Borrower Revolving Loan” shall have the meaning provided in Section 2.01(a).

“U.S. Borrower Revolving Note” shall have the meaning provided in Section 2.05(a).

“U.S. Borrower Swingline Loans” shall have the meaning provided in Section 2.01(c).

“U.S. Borrower Swingline Note” shall have the meaning provided in Section 2.05(a).

“U.S. Borrowers” shall have the meaning provided in the first paragraph of this Agreement.

“U.S. Borrowing Base” shall mean, as of any date of determination, the result of:

(a) 85% of the amount of Eligible U.S. Accounts, plus

(b) 75% of the amount of Eligible U.S. Unbilled Accounts, plus

(c) the lower of

(i) 75% of the net book value of Eligible U.S. Inventory, and

(ii) 85% times the then extant Net Liquidation Percentage times the net book value of U.S. Borrowers’ Eligible U.S. Inventory, minus

(d) the aggregate amount of reserves, if any, established by the Administrative Agent under Section 2.01(e) with respect to the U.S. Borrowing Base;

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provided, however, that the amount calculated under clause (b) of this definition of U.S. Borrowing Base shall not exceed more than 20% of the amount in clause (a) of this definition.

“U.S. Collection Account” shall mean each account established at a U.S. Collection Bank subject to a Cash Management Control Agreement into which funds shall be transferred as provided in Section 5.03(b).

“U.S. Collection Banks” shall have the meaning provided in Section 5.03(b)(i).

“U.S. Credit Party” shall mean each U.S. Borrower and each U.S. Subsidiary Guarantor.

“U.S. Disbursement Account” shall mean each checking and/or disbursement account of Aleris and its Domestic Subsidiaries for their general corporate purposes, including for the purpose of paying Aleris and its Domestic Subsidiaries’ trade payables and other operating expenses.

“U.S. Dollars” and the sign “$” shall each mean freely transferable lawful money of the United States.

“U.S. Letter of Credit” shall have the meaning provided in Section 3.01(a).

“U.S. Mortgaged Property” shall mean each Real Property located in the United States or any State or territory thereof with respect to which a Mortgage is required to be delivered pursuant to the terms of this Agreement.

“U.S. Pledge Agreement” shall have the meaning provided in Section 6.08(a).

“U.S. Security Agreement” shall have the meaning provided in Section 6.08(c).

“U.S. Security Documents” shall mean the U.S. Pledge Agreement, the U.S. Security Agreement, the Intercreditor Agreement and each Mortgage and such Additional Security Document covering the assets of a U.S. Credit Party.

“U.S. Subsidiaries Guaranty” shall have the meaning provided in Section 6.08(d).

“U.S. Subsidiary Guarantor” shall mean each Wholly-Owned Domestic Subsidiary of Aleris which executes and delivers a U.S. Subsidiaries Guaranty, in each case, unless and until such time as the respective U.S. Subsidiary Guarantor is released from all of its obligations under the U.S. Subsidiaries Guaranty in accordance with terms and provisions thereof (it being understood that no Domestic Subsidiary of Aleris which is also a Subsidiary of a Foreign Subsidiary of Aleris shall be a U.S. Subsidiary Guarantor).

“U.S./European Borrower Swingline Loans” shall have the meaning provided in Section 2.01(c).

“U.S./European Commitment” shall mean, for each Lender, the amount set forth opposite such Lender’s name in Schedule I-A directly below the column entitled “U.S./European

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Commitment,” as the same may be (x) reduced from time to time or terminated pursuant to Sections 4.02, 4.03 and/or 11, as applicable, (y) increased from time to time pursuant to Section 2.15 or (z) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 2.13 or 13.04(b).

“U.S./European Lender” shall mean each Lender which has a U.S./European Commitment (without giving effect to any termination of the Total U.S./European Commitment if any U.S./European Borrower Swingline Loans or Letter of Credit Outstandings remain outstanding) or which has any outstanding U.S./European Revolving Loans (or an L/C Participation Percentage in any then outstanding Letter of Credit Outstandings).

“U.S./European Percentage” of any U.S./European Lender at any time shall be that percentage which is equal to a fraction (expressed as a percentage) the numerator of which is the U.S./European Commitment of such U.S./European Lender at such time and the denominator of which is the Total U.S./European Commitment at such time, provided that if any such determination is to be made after the Total U.S./European Commitment (and the related U.S./European Commitments of the Lenders) has (or have) terminated, the determination of such percentages shall be made immediately before giving effect to such termination.

“U.S./European Revolving Loan” shall have the meaning provided in Section 2.01(a).

“U.S./European Swingline Lender” shall mean DBNY, or any Person serving as a successor Administrative Agent hereunder, in its capacity as a lender of U.S./European Borrower Swingline Loans.

“VAW-IMCO” shall mean VAW-IMCO GUSS Und Recycling GmbH, a company with limited liability organized under the laws of Germany.

“Voting Stock” of any Person as of any date shall mean the Equity Interests of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“Wholly-Owned Canadian Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person which is also a Canadian Subsidiary of such Person.

“Wholly-Owned Domestic Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person which is also a Domestic Subsidiary of such Person.

“Wholly-Owned European Distribution Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person which is also a European Distribution Subsidiary.

“Wholly-Owned Foreign Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person which is also a Foreign Subsidiary of such Person.

“Wholly-Owned Subsidiary” shall mean, as to any Person, (i) any corporation 100% of whose Equity Interests (other than director’s qualifying shares and/or other nominal amounts of shares required by applicable law to be held by Persons other than such Person) is at

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the time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such time, provided that Corus Aluminum GmbH, VAW-IMCO or any other Subsidiary of Aleris which is organized in Germany which owns real property shall constitute a “Wholly-Owned Subsidiary” for all purposes of the Credit Documents so long as no more than 5.1% of the Equity Interests of such Subsidiary are owned by a Person other than Aleris or a Wholly-Owned Subsidiary of Aleris so long as (i) the holder of such Equity Interests is reasonably satisfactory to the Administrative Agent and (ii) all of the economic interests attributable to the Equity Interests in such Subsidiary are owned directly or indirectly by Aleris and its Subsidiaries.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 2. Amount and Terms of Credit.

2.01 The Commitments. (a) Subject to and upon the terms and conditions set forth herein (including, without limitation, the conditions set forth in Sections 7.01, 7.02 and 7.03), (I) each Existing U.S./European Commitment (as in effect on the Restatement Effective Date immediately prior to giving effect thereto) of each Existing Lender is hereby converted on the Restatement Effective Date into a U.S./European Commitment of such Existing Lender, and (II) each Lender severally agrees (A) that, on the Restatement Effective Date, (x) each Existing U.S. Borrower Revolving Loan made by each Existing Lender to the U.S. Borrowers pursuant to the Existing ABL Credit Agreement and outstanding on the Restatement Effective Date shall convert into a revolving loan owing by the U.S. Borrowers (each, a “Converted U.S. Borrower Revolving Loan”) and (y) each Existing European Borrower Revolving Loan made by each Existing Lender to the European Borrower pursuant to the Existing ABL Credit Agreement and outstanding on the Restatement Effective Date shall convert into a revolving loan owing by the European Borrower (each, a “Converted European Borrower Revolving Loan”) and (B) each Lender with a U.S./European Commitment severally agrees to make, at any time and from time to time on or after the Restatement Effective Date and prior to the Final Maturity Date, (x) a revolving loan or revolving loans to the U.S. Borrowers (on a joint and several basis) (together with each Converted U.S. Borrower Revolving Loan, each, a “U.S. Borrower Revolving Loan”) and (y) a revolving loan or revolving loans to the European Borrower (together with each Converted European Borrower Revolving Loan, each, a “European Borrower Revolving Loan”; and with the European Borrower Revolving Loans and the U.S. Borrower Revolving Loans being each called a “U.S./European Revolving Loan”), which U.S./European Revolving Loans:

(i) shall (subject to Section 2.14), be denominated in the applicable Available Currency elected by the applicable Borrower;

(ii) shall (x) in the case of U.S. Borrower Revolving Loans at the option of the U.S. Borrowers, be incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans and (y) in the case of European Borrower Revolving Loans, be incurred and maintained as Euro Rate Loans, provided that except as otherwise

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specifically provided in Section 2.10(b), all U.S./European Revolving Loans comprising the same Borrowing shall at all times be of the same Type;

(iii) may be repaid and reborrowed in accordance with the provisions hereof;

(iv) in the case of any Borrowing of U.S./European Revolving Loans, shall not be made (and shall not be required to be made) by any U.S./European Lender in any instance where the incurrence thereof (after giving effect to the use of the proceeds thereof on the date of the incurrence thereof to repay any amounts theretofore outstanding pursuant to this Agreement) would cause (x) the Individual U.S./European Exposure of such U.S./European Lender to exceed the amount of its U.S./European Commitment at such time, (y) the Aggregate U.S./European Exposure to exceed the Total U.S./European Commitment at such time or (z) the Aggregate European Borrower Exposure at such time to exceed the Total European Sub-Commitment at such time; and

(v) subject to Section 16, in the case of U.S./European Revolving Loans which are denominated in Euros, Swiss Francs, Pounds Sterling and any other currency agreed by DBNY (each a “Specified Foreign Currency”) which are required to be made by a Participating Specified Foreign Currency Lender, shall be made by DBNY.

(b) Subject to and upon the terms and conditions set forth herein (including, without limitation, the condition set forth in Sections 7.01, 7.02 and 7.03), (I) each Existing Canadian Commitment (as in effect on the Restatement Effective Date immediately prior to giving effect thereto) of each Existing Lender is hereby converted on the Restatement Effective Date into a Canadian Commitment of such Existing Lender, and (II) each Lender severally agrees (A) that, on the Restatement Effective Date, each Existing Canadian Revolving Loan made by each Existing Lender to the Canadian Borrowers pursuant to the Existing ABL Credit Agreement and outstanding on the Restatement Effective Date shall convert into a revolving loan owing by the Canadian Borrowers (each, a “Converted Canadian Borrower Revolving Loan”) and (B) each Canadian Lender severally agrees to make, at any time and from time to time on or after the Restatement Effective Date and prior to the Final Maturity Date, a revolving loan or revolving loans to the Canadian Borrowers (on a joint and several basis) (together with each Converted Canadian Borrower Revolving Loan, each, a “Canadian Revolving Loan”), which Canadian Revolving Loans:

(i) shall (subject to Section 2.14) be denominated in the applicable Available Currency elected by the Canadian Borrowers;

(ii) shall, at the option of the Canadian Borrowers, be incurred and maintained as, and/or converted into, (w) Base Rate Loans denominated in U.S. Dollars, (x) Eurodollar Loans denominated in U.S. Dollars, (y) Canadian Prime Rate Loans in Canadian Dollars, or (z) (i) in the case of a B/A Lender, the creation of Bankers’ Acceptances in Canadian Dollars on the terms and conditions provided for herein and in Schedule III hereto or (ii) in the case of a Non-B/A Lender, the creation and purchase of completed Drafts in Canadian Dollars and the exchange of such Drafts for B/A Equivalent Notes, in each case on the terms and conditions provided for herein and in Schedule III hereto, provided that (A) except as otherwise specifically provided in

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Section 2.10(b), all Canadian Revolving Loans comprising the same Borrowing shall at all times be of the same Type and (B) Canadian Revolving Loans may only be incurred and maintained as, and/or converted into, Bankers’ Acceptance Loans in the circumstances, and to the extent, provided in Schedule III;

(iii) may be repaid and reborrowed in accordance with the provisions hereof; and

(iv) shall not be made (and shall not be required to be made) by any Canadian Lender in any instance where the incurrence thereof (after giving effect to the use of the proceeds thereof on the date of the incurrence thereof to repay any amounts theretofore outstanding pursuant to this Agreement) would cause (x) the Individual Canadian Exposure of such Canadian Lender to exceed the amount of its Canadian Commitment at such time, or (y) the Aggregate Canadian Exposure to exceed the Total Canadian Commitment at such time.

(c) (I) (A) On the Restatement Effective Date, (x) the Existing U.S. Borrower Swingline Loans (if any) made by the U.S./European Swingline Lender to the U.S. Borrowers pursuant to the Existing ABL Credit Agreement and outstanding on the Restatement Effective Date (immediately prior to giving effect thereto) shall be converted to a revolving loan or revolving loans to the U.S. Borrowers (each, a “Converted U.S. Borrower Swingline Loan” and (y) the Existing European Borrower Swingline Loans (if any) made by the U.S./European Swingline Lender to the European Borrower pursuant to the Existing ABL Credit Agreement and outstanding on the Restatement Effective Date (immediately prior to giving effect thereto) shall be converted to a revolving loan or revolving loans to the European Borrower (each, a “Converted European Borrower Swingline Loan”) and (B) subject to and upon the terms and conditions set forth herein (including, without limitation, the conditions set forth in Sections 7.01, 7.02 and 7.03), the U.S./European Swingline Lender agrees to make, at any time and from time to time on or after the Restatement Effective Date and prior to the Swingline Expiry Date (x) a revolving loan or revolving loans to the U.S. Borrowers (on a joint and several basis) (together with each Converted U.S. Borrower Swingline Loan, each, a “U.S. Borrower Swingline Loan”) and (y) a revolving loan or revolving loans to the European Borrower (together with each Converted European Borrower Swingline Loan, each, a “European Borrower Swingline Loan”; and with the European Borrower Swingline Loans and the U.S. Borrower Swingline Loans being each called a “U.S./European Borrower Swingline Loan”), which U.S./European Borrower Swingline Loans:

(i) shall (x) in the case of U.S. Borrower Swingline Loans, be denominated in U.S. Dollars and (y) in the case of European Borrower Swingline Loans (subject to Section 2.14), be denominated in the applicable Available Currency elected by the European Borrower;

(ii) shall (x) in the case of U.S. Borrower Swingline Loans be incurred and maintained as Base Rate Loans and (y) in the case of European Borrower Swingline Loans, be incurred and maintained as Euro Rate Loans subject to an interest period of one to seven days, as selected by the Swingline Lender;

(iii) may be repaid and reborrowed in accordance with the provisions hereof;

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(iv) shall not be made by the U.S./European Swingline Lender in any instance where the incurrence thereof (after giving effect to the use of the proceeds thereof on the date of the incurrence thereof to repay any amounts theretofore outstanding pursuant to this Agreement) would cause (x) the Aggregate U.S./European Exposure to exceed the Total U.S./European Commitment as then in effect or (y) the Aggregate European Borrower Exposure at such time to exceed the Total European Sub-Commitment at such time; and

(v) shall not exceed in aggregate principal amount at any time outstanding the relevant Maximum Swingline Amount.

(II)(A) On the Restatement Effective Date, the Existing Canadian Swingline Loans (if any) made by the Canadian Swingline Lender to the Canadian Borrowers pursuant to the Existing ABL Credit Agreement and outstanding on the Restatement Effective Date (immediately prior to giving effect thereto) shall be converted to a revolving loan or revolving loans to the Canadian Borrowers (each, a “Converted Canadian Swingline Loan”) and (B) subject to and upon the terms and conditions set forth herein (including, without limitation, the conditions set forth in Sections 7.01, 7.02 and 7.03), the Canadian Swingline Lender agrees to make, at any time and from time to time on or after the Restatement Effective Date and prior to the Swingline Expiry Date, a revolving loan or revolving loans (together with each Converted Canadian Swingline Loan, each, a “Canadian Swingline Loan” and, collectively, the “Canadian Swingline Loans” and, together with the U.S./European Borrower Swingline Loans, the “Swingline Loans”) to the Canadian Borrowers, which Canadian Swingline Loans:

(i) shall (subject to Section 2.14) be denominated in the applicable Available Currency elected by the Canadian Borrowers;

(ii) shall be incurred and maintained as Base Rate Loans (in the case of Canadian Swingline Loans denominated in U.S. Dollars) or Canadian Prime Rate Loans (in the case of Canadian Swingline Loans denominated in Canadian Dollars);

(iii) may be repaid and reborrowed in accordance with the provisions hereof;

(iv) shall not be made by the Canadian Swingline Lender in any instance where the incurrence thereof (after giving effect to the use of the proceeds thereof on the date of the incurrence thereof to repay any amounts theretofore outstanding pursuant to this Agreement) would cause the Aggregate Canadian Exposure to exceed the Total Canadian Commitment as then in effect; and

(v) shall not exceed in aggregate principal amount at any time outstanding the relevant Maximum Swingline Amount.

Notwithstanding anything to the contrary contained in this Section 2.01(c), no Swingline Lender shall make any Swingline Loan after such Swingline Lender has received written notice from the Borrowers, any other Credit Party or the Required Lenders stating that a Default or an Event of Default exists and is continuing until such time as such Swingline Lender shall have received written notice (A) of rescission of all such notices from the party or parties

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originally delivering such notice or notices or (B) of the waiver of such Default or Event of Default by the Required Lenders.

(d) On any Business Day, either Swingline Lender may, in its sole discretion, give notice to the Lenders under the relevant Tranche (i.e., the U.S./European Lenders in the case of the U.S./European Borrower Swingline Loans and the Canadian Lenders in the case of the Canadian Swingline Loans) that such Swingline Lender’s outstanding Swingline Loans shall be funded with one or more Borrowings of Revolving Loans under the relevant Tranche (provided that such notice shall be deemed to have been automatically given upon the occurrence of a Default or an Event of Default under Section 11.05 or upon the exercise of any of the remedies provided in the last paragraph of Section 11), in which case one or more Borrowings of Revolving Loans constituting Base Rate Loans, in the case of Swingline Loans maintained in U.S. Dollars, Euro Rate Loans subject to an Interest Period of one month, in the case of Swingline Loans maintained in a currency other than U.S. Dollars or Canadian Dollars, or Canadian Prime Rate Loans, in the case of Canadian Swingline Loans maintained in Canadian Dollars, (each such Borrowing, a “Mandatory Borrowing”) shall be made on the immediately succeeding Business Day (or, in the case of a Mandatory Borrowing of Euro Rate Loans, the second succeeding Business Day) by all Lenders pro rata based on each such Lender’s Facility Percentage under the relevant Tranche (determined before giving effect to any termination of the Commitments pursuant to the last paragraph of Section 11) and the proceeds thereof shall be applied directly by such Swingline Lender to repay such Swingline Lender for such outstanding Swingline Loans. Each Lender with a Commitment under the relevant Tranche hereby irrevocably agrees to make Revolving Loans under the relevant Tranche upon one Business Day’s notice (or, in the case of a Mandatory Borrowing of Euro Rate Loans, two Business Days’ notice) pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified in writing by the relevant Swingline Lender notwithstanding (i) the amount of the Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any conditions specified in Section 7 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the date of such Mandatory Borrowing, and (v) the amount of any Borrowing Base or Commitment at such time. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code or any other relevant bankruptcy or insolvency laws with respect to any Borrower), then each Lender with a Commitment under the relevant Tranche hereby agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the relevant Borrowers on or after such date and prior to such purchase) from the relevant Swingline Lender such participations in the outstanding Swingline Loans of such Swingline Lender as shall be necessary to cause the Lenders with Commitments under the relevant Tranche to share in such relevant Swingline Loans ratably based upon their respective Percentages (determined before giving effect to any termination of the Commitments pursuant to the last paragraph of Section 11), provided that (x) all interest payable on such Swingline Loans shall be for the account of such Swingline Lender until the date as of which the respective participation is required to be purchased and, to the extent attributable to the purchased participation, shall be payable to the participant from and after such date and (y) at the time any purchase of participations pursuant to this sentence is actually made, the purchasing Lender shall be required to pay the relevant Swingline Lender interest on the principal amount of participation purchased for each day from

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and including the day upon which the Mandatory Borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the overnight Federal Funds Rate for the first three days and at the interest rate otherwise applicable to Revolving Loans maintained as Base Rate Loans (or, in the case of Non-Dollar Denominated Loans, the interest rate that is applicable to the respective Mandatory Borrowing) hereunder for each day thereafter.

(e) Notwithstanding anything to the contrary in Sections 2.01(a), (b), (c) or (d), Section 7.03 or elsewhere in this Agreement, upon at least 10 Business Days’ prior written notice to Aleris, the Administrative Agent shall have the right to establish reserves in such amounts, and with respect to such matters, as the Administrative Agent in its Permitted Discretion shall deem necessary, against any Borrowing Base, including, without limitation, (i) an Unpaid Supplier Reserve and a Rent Reserve against Eligible Inventory included in any Borrowing Base, (ii) Hedge Product Reserves and Bank Product Reserves and (iii) reserves for Priority Payables; provided, however, that the Administrative Agent may not implement reserves with respect to matters which are already specifically reflected as ineligible Accounts or Inventory or criteria deducted in computing the cost or market value of Eligible Inventory or the Net Liquidation Value of Eligible Inventory; and provided, further, that the Administrative Agent may only establish or increase a reserve (other than Rent Reserves, Hedge Product Reserves and Bank Product Reserves) after the Restatement Effective Date based on an event, condition or other circumstance arising after the Restatement Effective Date or based on facts not known to the Administrative Agent as of the Restatement Effective Date. The amount of any reserve established by the Administrative Agent shall have a reasonable relationship to the event, condition or other matter that is the basis for the reserve. Upon delivery of written notice to Aleris as provided above, the Administrative Agent shall be available to discuss the proposed reserve or increase, and Aleris and its Subsidiaries may take such action as may be required so that the event, condition or matter that is the basis for such reserve or increase no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent in the exercise of its Permitted Discretion. In no event shall such notice and opportunity limit the right of the Administrative Agent to establish or change such reserve, unless the Administrative Agent shall have determined in its Permitted Discretion that the event, condition or other matter that is the basis for such new reserve or such change no longer exists or has otherwise been adequately addressed by the Borrowers.

(f) In the event any of the U.S. Borrowers, the Canadian Borrowers or the European Borrower is unable to comply with the conditions precedent to the making of Revolving Loans or the issuance of Letters of Credit set forth in Section 7 (including, without limitation, the Borrowing Base limitations set forth in Section 7.03), (x) the U.S./European Lenders authorize the Administrative Agent, for the account of the U.S./European Lenders, to make U.S. Borrower Revolving Loans to the U.S. Borrowers and (y) the Canadian Lenders authorize the Canadian Administrative Agent, for the account of the Canadian Lenders, to make Canadian Revolving Loans to the Canadian Borrowers (each, an “Agent Advance”), which, in each case, (i) may only be made in U.S. Dollars as Base Rate Loans and (ii) may be made at any time or from time to time on or after the date the Administrative Agent first receives a Notice of Borrowing requesting an Agent Advance until the earlier of (A) the 30th Business Day after such date, (B) the date the respective Borrowers or Borrower are (or is) again able to comply with the Borrowing Base limitations and the conditions precedent to the making of Revolving Loans and issuance of Letters of Credit, or obtain (or obtains) an amendment or waiver with respect thereto

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and (C) the date the Required Lenders instruct the Administrative Agent and the Canadian Administrative Agent to cease making Agent Advances (in each case, the “Agent Advance Period”). Neither the Administrative Agent nor the Canadian Administrative Agent shall make any Agent Advance to the extent that at such time the amount of such Agent Advance (A) in the case of Agent Advances made to the Canadian Borrowers, (I) when added to the aggregate outstanding amount of all other Agent Advances made to the Canadian Borrowers and the U.S. Borrowers at such time, would exceed 5% of the Combined U.S./Canadian Borrowing Base at such time (based on the Borrowing Base Certificate last delivered) less the European U.S. Borrowing Base Usage at such time or (II) when added to the Aggregate Canadian Exposure as then in effect (immediately prior to the incurrence of such Agent Advance), would exceed the Total Canadian Commitment at such time, or (B) in the case of Agent Advances made to the U.S. Borrowers, (I) when added to the aggregate outstanding amount of all other Agent Advances made to the U.S. Borrowers at such time, would exceed 5% of the U.S. Borrowing Base at such time (based on the Borrowing Base Certificate last delivered) less the Aggregate Non-U.S. Borrowing Base Usage at such time, (II) when added to the aggregate outstanding amount of all other Agent Advances made to the U.S. Borrowers and the Canadian Borrowers at such time, would exceed 5% of the Combined U.S./Canadian Borrowing Base at such time (based on the Borrowing Base Certificate last delivered) less the European U.S. Borrowing Base Usage at such time or (III) when added to the Aggregate U.S./European Exposure at such time (immediately prior to the incurrence of such Agent Advance), would exceed the Total U.S./European Commitment at such time. It is understood and agreed that, subject to the requirements set forth above, Agent Advances may be made by the Administrative Agent or the Canadian Administrative Agent in the case of Canadian Borrower Obligations in their respective discretion to the extent the Administrative Agent or the Canadian Administrative Agent deems such Agent Advances necessary or desirable (x) to preserve and protect the applicable Collateral, or any portion thereof, (y) to enhance the likelihood of, or maximize the amount of, repayment of the Revolving Loans and other obligations of the Credit Parties hereunder and under the other Credit Documents or (z) 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 reimbursable expenses and other sums payable under the Credit Documents, and that the Borrowers shall have no right to require that any Agent Advances be made. Agent Advances will be deemed U.S./European Borrower Swingline Loans (if made to the U.S. Borrowers) or Canadian Swingline Loans (if made to the Canadian Borrowers) for all purposes of this Agreement and shall be subject to refunding as a Mandatory Borrowing pursuant to Section 2.01(d), in each case, notwithstanding (i) after giving effect thereto, the relevant Maximum Swingline Amount may be exceeded and (ii) the other conditions set forth in Sections 2.01(c) or (d), as applicable may not be satisfied at such time.

2.02 Minimum Amount of Each Borrowing; Limitation on Euro Rate Loans. The aggregate principal amount of each Borrowing of Loans under a respective Tranche of Loans shall not be less than the Minimum Borrowing Amount applicable to such Tranche of Loans. More than one Borrowing may occur on the same date, but at no time shall there be outstanding more than (x) 15 Borrowings of Euro Rate Loans in the aggregate for all Tranches of Loans and (y) more than 5 Borrowings of Bankers’ Acceptance Loans.

2.03 Notice of Borrowing. (a) Whenever a Borrower desires to incur (x) Euro Rate Loans (excluding Borrowings of Swingline Loans and Mandatory Borrowings) or Bankers’

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Acceptance Loans hereunder, such Borrower shall give the Administrative Agent at the Notice Office no later than 2:00 p.m. (New York time) at least three Business Days’ prior notice of each Euro Rate Loan or Bankers’ Acceptance Loan to be incurred hereunder, (y) Base Rate Loans hereunder (excluding Borrowings of Swingline Loans and Mandatory Borrowings), such Borrower shall give the Administrative Agent prior notice at the Notice Office no later than 2:00 p.m. (New York time) at least one Business Day’s prior notice of each Base Rate Loan to be incurred hereunder and (z) Canadian Prime Rate Loans hereunder (excluding Borrowings of Swingline Loans and Mandatory Borrowings), such Borrower shall give the Administrative Agent at the Notice Office no later than 12:00 noon (New York time) at least one Business Day’s prior notice of each Canadian Prime Rate Loan to be incurred hereunder. Each such notice (each, a “Notice of Borrowing”), except as otherwise expressly provided in Section 2.10, shall be irrevocable and shall be in writing, or by telephone promptly confirmed in writing, in the form of Exhibit A-1, appropriately completed to specify: (i) the aggregate principal amount or Face Amount, as the case may be, of the Loans to be made pursuant to such Borrowing (stated in the applicable Available Currency), (ii) the date of such Borrowing (which shall be a Business Day), (iii) whether the applicable Borrowing shall consist of U.S. Borrower Revolving Loans, Canadian Revolving Loans or European Borrower Revolving Loans, (iv) in the case of Dollar Denominated Loans, whether the Dollar Denominated Loans being made pursuant to such Borrowing are to be initially maintained as Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be initially applicable thereto, (v) in the case of Euro Denominated Loans and Other Foreign Currency Denominated Loans, the Interest Period to be initially applicable thereto, and (vi) in the case of Canadian Dollar Denominated Loans, whether the applicable Borrowing shall consist of Canadian Prime Rate Loans or Bankers’ Acceptance Loans and, if Bankers’ Acceptance Loans, the term thereof (which shall comply with the requirements of Schedule III). The Administrative Agent shall promptly give each Lender which is required to make Loans of the Tranche specified in the applicable Notice of Borrowing, notice of such proposed Borrowing, of such Lender’s proportionate share thereof and of the other matters required by the immediately preceding sentence to be specified in the Notice of Borrowing.

(b) (i) Whenever a Borrower desires to make a Borrowing of (x) U.S. Borrower Swingline Loans or Canadian Swingline Loans hereunder, such Borrower shall give the relevant Swingline Lender, not later than 1:00 p.m. (New York time) on the date such relevant Swingline Loan is to be made or (y) European Borrower Swingline Loans hereunder, such Borrower shall give the U.S./European Swingline Lender, not later than 1:00 p.m. (New York time) one Business Day prior to the date such European Borrower Swingline Loan is to be made, written notice or telephonic notice promptly confirmed in writing of each Swingline Loan to be made hereunder. Each such notice shall be irrevocable and shall be given by or on behalf of the respective Borrower in the form of Exhibit A-1, appropriately completed to specify: (A) the date of Borrowing (which shall be a Business Day), (B) the aggregate principal amount of the Swingline Loans to be made pursuant to such Borrowing and (C) in the case of Canadian Swingline Loans or European Borrower Swingline Loans, the relevant Available Currency in which such Swingline Loans are to be denominated.

(ii) Mandatory Borrowings shall be made upon the notice specified in Section 2.01(d), with the U.S. Borrowers or Canadian Borrowers, as applicable, irrevocably

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agreeing, by its incurrence of any Swingline Loan, to the making of the Mandatory Borrowings as set forth in Section 2.01(d).

(c) Without in any way limiting the obligation of any Borrower to confirm in writing any telephonic notice of any Borrowing or prepayment of Loans, the Administrative Agent or the Canadian Administrative Agent, as applicable, or the relevant Swingline Lender (in the case of a Borrowing of Swingline Loans) may act without liability upon the basis of telephonic notice of such Borrowing or prepayment, as the case may be, reasonably believed by the Administrative Agent or the Canadian Administrative Agent, as applicable, or such Swingline Lender, as the case, may be, in good faith to be from the president, the chief executive officer or a Financial Officer of such Borrower, or from any other authorized officer of such Borrower designated in writing by such Borrower to the Administrative Agent or the Canadian Administrative Agent, as applicable, or the Swingline Lender, as the case may be, as being authorized to give such notices, prior to receipt of written confirmation. In each such case, such Borrower hereby waives the right to dispute the Administrative Agent’s, the Canadian Administrative Agent’s or the Swingline Lender’s, as the case may be, record of the terms of such telephonic notice of such Borrowing or prepayment of Loans, as the case may be, absent manifest error.

2.04 Disbursement of Funds. No later than 1:00 p.m. (New York time) on the date specified in each Notice of Borrowing (or (x) in the case of Swingline Loans, not later than 3:00 p.m. (New York time) on the date specified pursuant to Section 2.03(b)(i) or (ii), as applicable, (y) in the case of Mandatory Borrowings, not later than 10:00 a.m. (New York time) on the date specified in Section 2.01(d) and (z) in the case of a Borrowing of Euro Denominated Loans and Other Foreign Currency Denominated Loans, no later than 1:00 p.m. (New York time), on such date), each Lender with a Commitment under the relevant Tranche of Loans will, subject to Section 16, make available its pro rata portion (determined in accordance with Section 2.07) of each such Borrowing requested to be made on such date (or, in the case of Swingline Loans, the respective Swingline Lender shall make available the full amount thereof). All such amounts will be made available in the relevant Available Currency, and in immediately available funds at the Payment Office, and the Administrative Agent or the Canadian Administrative Agent, as applicable, will make available to the respective Borrower or Borrowers (or to the relevant Swingline Lender, in the case of a Mandatory Borrowing at the Payment Office the aggregate of the amounts so made available by the Lenders. Unless the Administrative Agent or the Canadian Administrative Agent, as applicable, shall have been notified by any Lender prior to the date of Borrowing that such Lender does not intend to make available to the relevant Administrative Agent such Lender’s portion of any Borrowing to be made on such date (other than in the circumstances described in Section 16), the relevant Administrative Agent may assume that such Lender has made such amount available to the relevant Administrative Agent on such date of Borrowing and the relevant Administrative Agent may (but shall not be obligated to), in reliance upon such assumption, make available to the relevant Borrower or Borrowers a corresponding amount. If such corresponding amount is not in fact made available to the relevant Administrative Agent by such Lender, the relevant Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender. If such Lender does not pay such corresponding amount forthwith upon the relevant Administrative Agent’s demand therefor, the relevant Administrative Agent shall promptly notify the relevant Borrower or Borrowers and such Borrower or Borrowers shall immediately pay such corresponding

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amount to the relevant Administrative Agent. The relevant Administrative Agent also shall be entitled to recover on demand from such Lender or the relevant Borrower or Borrowers, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the relevant Administrative Agent to such Borrower or Borrowers until the date such corresponding amount is recovered by the relevant Administrative Agent, at a rate per annum equal to (i) if recovered from such Lender, the overnight Federal Funds Rate (or (x) in the case of Canadian Dollar Denominated Loans, the cost to the Canadian Administrative Agent of acquiring overnight funds in Canadian Dollars, (y) in the case of Euro Denominated Loans, the cost to the relevant Administrative Agent of acquiring overnight funds in Euros or (z) in the case of Other Foreign Currency Denominated Loans, the cost to the relevant Administrative Agent of acquiring overnight funds in the applicable Available Currency in which such Other Foreign Currency Denominated Loans were incurred) for the first three days and at the interest rate otherwise applicable to such Loans for each day thereafter, and (ii) if recovered from the relevant Borrower or Borrowers, the rate of interest applicable to the respective Borrowing, as determined pursuant to Section 2.08. Nothing in this Section 2.04 shall be deemed to relieve any Lender from its obligation to make Loans hereunder or to prejudice any rights which any Borrower may have against any Lender as a result of any failure by such Lender to make Loans hereunder; provided that the funding of all U.S./European Revolving Loans which are also denominated in a Specified Foreign Currency shall also be subject to the provisions of Section 16.

2.05 Notes. (a) Each Borrower’s obligation to pay the principal of, and interest on, the Loans made by each Lender shall be evidenced in the Register maintained by the Administrative Agent pursuant to Section 13.15 and shall, if requested by such Lender, also be evidenced (i) in the case of U.S. Borrower Revolving Loans, by a promissory note duly executed and delivered by each U.S. Borrower substantially in the form of Exhibit B-1, with blanks appropriately completed in conformity herewith (each, a “U.S. Borrower Revolving Note” and, collectively, the “U.S. Borrower Revolving Notes”), (ii) in the case of Canadian Revolving Loans, by a promissory note duly executed and delivered by each Canadian Borrower substantially in the form of Exhibit B-2, with blanks appropriately completed in conformity herewith (each, a “Canadian Revolving Note” and, collectively, the “Canadian Revolving Notes”), (iii) in the case of European Borrower Revolving Loans, by a promissory note duly executed and delivered by the European Borrower substantially in the form of Exhibit B-3, with blanks appropriately completed in conformity herewith (each, a “European Borrower Revolving Note” and, collectively, the “European Borrower Revolving Notes”), (iv) if U.S. Borrower Swingline Loans, by a promissory note duly executed and delivered by each U.S. Borrower substantially in the form of Exhibit B-4, with blanks appropriately completed in conformity herewith (the “U.S. Borrower Swingline Note”), (v) if Canadian Swingline Loans, by a promissory note duly executed and delivered by each Canadian Borrower substantially in the form of Exhibit B-5, with blanks appropriately completed in conformity herewith (the “Canadian Swingline Note”) and (vi) if European Borrower Swingline Loans, by a promissory note duly executed and delivered by the European Borrower substantially in the form of Exhibit B-6, with blanks appropriately completed in conformity herewith (the “European Borrower Swingline Note”).

(b) The U.S. Borrower Revolving Note issued to each Lender that has a U.S./European Commitment or outstanding U.S. Borrower Revolving Loans shall (i) be executed

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by each U.S. Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Restatement Effective Date (or, if issued after the Restatement Effective Date, be dated the date of the issuance thereof), (iii) be in a stated principal amount (expressed in U.S. Dollars) equal to the U.S./European Commitment of such Lender (or, if issued after the termination thereof, be in a stated principal amount equal to the Individual U.S. Borrower Exposure of such Lender at such time) and be payable in the outstanding principal amount of the U.S. Borrower Revolving Loans evidenced thereby from time to time, provided that if, because of fluctuations in exchange rates after the date of issuance thereof, the U.S. Borrower Revolving Note of any U.S./European Lender would not be at least as great as the outstanding principal amount (taking the Dollar Equivalent of all Non-Dollar Denominated Loans evidenced thereby) of the U.S. Borrower Revolving Loans made by such U.S./European Lender at any time outstanding, the respective U.S./European Lender may request (and in such case the U.S. Borrowers shall promptly execute and deliver) a new U.S. Borrower Revolving Note in an amount equal to the aggregate principal amount (taking the Dollar Equivalent of all Non-Dollar Denominated Revolving Loans evidenced thereby) of the U.S. Borrower Revolving Loans of such U.S./European Lender outstanding on the date of the issuance of such new U.S. Borrower Revolving Note, (iv) with respect to each U.S. Borrower Revolving Loan evidenced thereby, be payable (subject to Section 2.14) in the respective Available Currency in which such U.S. Borrower Revolving Loan was made, provided that the obligations with respect to each Non-Dollar Denominated Loan evidenced thereby shall be subject to conversion into Dollar Denominated Loans as provided in (and in the circumstances contemplated by) Section 2.14, (v) mature on the Final Maturity Date, (vi) bear interest as provided in the appropriate clause of Section 2.08 in respect of the Base Rate Loans and Euro Rate Loans, as the case may be, evidenced thereby, (vii) be subject to voluntary prepayment as provided in Section 5.01, and mandatory repayment as provided in Section 5.02, and (viii) be entitled to the benefits of this Agreement and the other Credit Documents.

(c) The Canadian Revolving Note issued to each Lender that has a Canadian Commitment or outstanding Canadian Revolving Loans shall (i) be executed by each Canadian Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Restatement Effective Date (or, if issued after the Restatement Effective Date, be dated the date of the issuance thereof), (iii) be in a stated principal amount (expressed in U.S. Dollars) equal to the Canadian Commitment of such Lender (or, if issued after the termination thereof, be in a stated principal amount equal to the Individual Canadian Exposure of such Lender at such time) and be payable in the outstanding principal amount of the Canadian Revolving Loans evidenced thereby from time to time, provided that if, because of fluctuations in exchange rates after the date of issuance thereof, the Canadian Revolving Note of any Canadian Lender would not be at least as great as the outstanding principal amount (taking the Dollar Equivalent of all Canadian Dollar Denominated Loans evidenced thereby) of the Canadian Revolving Loans made by such Canadian Lender at any time outstanding, the respective Canadian Lender may request (and in such case the Canadian Borrowers shall promptly execute and deliver) a new Canadian Revolving Note in an amount equal to the aggregate principal amount (taking the Dollar Equivalent of all Non-Dollar Denominated Loans evidenced thereby) of the Canadian Revolving Loans of such Canadian Lender outstanding on the date of the issuance of such new Canadian Revolving Note, (iv) with respect to each Canadian Revolving Loan evidenced thereby, be payable (subject to Section 2.14) in the respective Available Currency in which such Canadian Revolving Loan was made, provided that the obligations with respect to each Canadian Dollar Denominated Loan evidenced thereby shall be subject to conversion into Non-Dollar

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Denominated Loans as provided in (and in the circumstances contemplated by) Section 2.14, (v) mature on the Final Maturity Date, (vi) bear interest as provided in the appropriate clause of Section 2.08 in respect of the Base Rate Loans, Eurodollar Loans and Canadian Prime Rate Loans, as the case may be, evidenced thereby, (vii) be subject to voluntary prepayment as provided in Section 5.01, and mandatory repayment as provided in Section 5.02, and (viii) be entitled to the benefits of this Agreement and the other Credit Documents.

(d) The European Borrower Revolving Note issued to each Lender that has a U.S./European Commitment or outstanding European Borrower Revolving Loans shall (i) be executed by the European Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Restatement Effective Date (or, if issued after the Restatement Effective Date, be dated the date of the issuance thereof), (iii) be in a stated principal amount (expressed in U.S. Dollars) equal to the European Sub-Commitment of such Lender (or, if issued after the termination thereof, be in a stated principal amount equal to the Individual European Borrower Exposure of such Lender at such time) and be payable in the outstanding principal amount of the European Borrower Revolving Loans evidenced thereby from time to time, provided that if, because of fluctuations in exchange rates after the date of issuance thereof, the European Borrower Revolving Note of any U.S./European Lender would not be at least as great as the outstanding principal amount (taking the Dollar Equivalent of all Non-Dollar Denominated Loans evidenced thereby) of the European Borrower Revolving Loans made by such U.S./European Lender at any time outstanding, the respective U.S./European Lender may request (and in such case the European Borrower shall promptly execute and deliver) a new European Borrower Revolving Note in an amount equal to the aggregate principal amount (taking the Dollar Equivalent of all Non-Dollar Denominated Revolving Loans evidenced thereby) of the European Borrower Revolving Loans of such U.S./European Lender outstanding on the date of the issuance of such new European Borrower Revolving Note, (iv) with respect to each European Borrower Revolving Loan evidenced thereby, be payable (subject to Section 2.14) in the respective Available Currency in which such European Borrower Revolving Loan was made, provided that the obligations with respect to each Non-Dollar Denominated Loan evidenced thereby shall be subject to conversion into Dollar Denominated Loans as provided in (and in the circumstances contemplated by) Section 2.14, (v) mature on the Final Maturity Date, (vi) bear interest as provided in the appropriate clause of Section 2.08, (vii) be subject to voluntary prepayment as provided in Section 5.01, and mandatory repayment as provided in Section 5.02, and (viii) be entitled to the benefits of this Agreement and the other Credit Documents.

(e) The U.S. Borrower Swingline Note issued to the U.S./European Swingline Lender shall (i) be executed by each U.S. Borrower, (ii) be payable to the U.S./European Swingline Lender or its registered assigns and be dated the Restatement Effective Date, (iii) be in a stated principal amount (expressed in U.S. Dollars) equal to the relevant Maximum Swingline Amount and be payable in the outstanding principal amount of the U.S. Borrower Swingline Loans evidenced thereby from time to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided in the appropriate clause of Section 2.08, (vi) be subject to voluntary prepayment as provided in Section 5.01 and mandatory repayment as provided in Section 5.02 and (vii) be entitled to the benefits of this Agreement and the other Credit Documents.

(f) The Canadian Swingline Note issued to the Canadian Swingline Lender shall (i) be executed by each Canadian Borrower, (ii) be payable to the Canadian Swingline

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Lender or its registered assigns and be dated the Restatement Effective Date, (iii) be in a stated principal amount (expressed in U.S. Dollars) equal to the relevant Maximum Swingline Amount and be payable in the outstanding principal amount of the Canadian Swingline Loans evidenced thereby from time to time, provided that if, because of fluctuations in exchange rates after the date of issuance thereof, the Canadian Swingline Note of the Canadian Swingline Lender would not be at least as great as the outstanding principal amount (taking the Dollar Equivalent of all Canadian Swingline Loans evidenced thereby) of the Canadian Swingline Loans made by the Canadian Swingline Lender at any time outstanding, the Canadian Swingline Lender may request (and in such case the Canadian Borrowers shall promptly execute and deliver) a new Canadian Swingline Note in an amount equal to the aggregate principal amount (taking the Dollar Equivalent of all Canadian Swingline Loans evidenced thereby) of the Canadian Swingline Loans of the Canadian Swingline Lender outstanding on the date of the issuance of such new Canadian Swingline Note, (iv) with respect to each Canadian Swingline Loan evidenced thereby, be payable (subject to Section 2.14) in the respective Available Currency in which such Canadian Swingline Loan was made, provided that the obligations with respect to each Canadian Dollar Denominated Loan evidenced thereby shall be subject to conversion into Dollar Denominated Loans as provided in (and in the circumstances contemplated by) Section 2.14, (v) mature on the Swingline Expiry Date, (vi) bear interest as provided in the appropriate clause of Section 2.08, (vii) be subject to voluntary prepayment as provided in Section 5.01 and mandatory repayment as provided in Section 5.02 and (viii) be entitled to the benefits of this Agreement and the other Credit Documents.

(g) The European Borrower Swingline Note issued to the U.S./European Swingline Lender shall (i) be executed by the European Borrower, (ii) be payable to the U.S./European Swingline Lender or its registered assigns and be dated the Restatement Effective Date, (iii) be in a stated principal amount (expressed in U.S. Dollars) equal to the relevant Maximum Swingline Amount and be payable in the outstanding principal amount of the European Borrower Swingline Loans evidenced thereby from time to time, provided that if, because of fluctuations in exchange rates after the date of issuance thereof, the European Borrower Swingline Note of the U.S./European Swingline Lender would not be at least as great as the outstanding principal amount (taking the Dollar Equivalent of all European Borrower Swingline Loans evidenced thereby) of the European Borrower Swingline Loans made by the U.S./European Swingline Lender at any time outstanding, the U.S./European Swingline Lender may request (and in such case the European Borrower shall promptly execute and deliver) a new European Borrower Swingline Note in an amount equal to the aggregate principal amount (taking the Dollar Equivalent of all European Borrower Swingline Loans evidenced thereby) of the European Borrower Swingline Loans of the U.S./European Swingline Lender outstanding on the date of the issuance of such new European Borrower Swingline Note, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided in the appropriate clause of Section 2.08, (vi) be subject to voluntary prepayment as provided in Section 5.01 and mandatory repayment as provided in Section 5.02 and (vii) be entitled to the benefits of this Agreement and the other Credit Documents.

(h) Each Lender will note on its internal records the amount of each Loan made by it and each payment in respect thereof and prior to any transfer of any of its Notes will endorse on the reverse side thereof the outstanding principal amount of Loans evidenced thereby.

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Failure to make any such notation or any error in such notation shall not affect any Borrower’s obligations in respect of such Loans.

(i) Notwithstanding anything to the contrary contained above in this Section 2.05 or elsewhere in this Agreement, Notes shall only be delivered to Lenders which at any time specifically request the delivery of such Notes. No failure of any Lender to request or obtain a Note evidencing its Loans to any Borrower shall affect or in any manner impair the obligations of the applicable Borrower to pay the Loans (and all related ABL Obligations) incurred by such Borrower which would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to the various Credit Documents. Any Lender which does not have a Note evidencing its outstanding Loans shall in no event be required to make the notations otherwise described in preceding clause (h). At any time when any Lender requests the delivery of a Note to evidence any of its Loans, the applicable Borrower shall promptly execute and deliver to the relevant Lender, at such Borrower’s expense, the requested Note in the appropriate amount or amounts to evidence such Loans.

2.06 Conversions. (a) Each Borrower shall have the option to convert, on any Business Day, all or a portion equal to at least the Minimum Borrowing Amount of the outstanding principal amount of Dollar Denominated Loans (other than Swingline Loans, which shall at all times be maintained as Base Rate Loans or Canadian Prime Rate Loans, as the case may be) made pursuant to one or more Borrowings (so long as of the same Tranche) of one or more Types of Dollar Denominated Loans into a Borrowing (of the same Tranche) of another Type of Dollar Denominated Loan, provided that (i) except as otherwise provided in Section 2.10(b), Eurodollar Loans may be converted into Base Rate Loans only on the last day of an Interest Period applicable to the Loans being converted and no such partial conversion of Eurodollar Loans shall reduce the outstanding principal amount of such Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii) Revolving Loans maintained as Base Rate Loans may not be converted into Eurodollar Loans if any Event of Default is in existence on the date of the conversion and the Administrative Agent, at the request of the Required Lenders, so notifies the relevant Borrower, and (iii) no conversion pursuant to this Section 2.06(a) shall result in a greater number of Borrowings of Eurodollar Loans than is permitted under Section 2.02. Each such conversion shall be effected by the respective Borrower by giving the Administrative Agent at the Notice Office prior to 2:00 p.m. (New York time) at least three Business Days’ prior notice (each, a “Notice of Conversion/Continuation”) in the form of Exhibit A-2, appropriately completed to specify the Loans to be so converted, the Borrowing or Borrowings pursuant to which such Loans were incurred and, if to be converted into Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall give each Lender prompt notice of any such proposed conversion affecting any of its Loans. Upon any such conversion the proceeds thereof will be deemed to be applied directly on the day of such conversion to prepay the outstanding principal amount of the Loans being converted.

(b) Mandatory and voluntary conversions of Bankers’ Acceptance Loans into Canadian Prime Rate Loans shall be made in the circumstances, and to the extent, provided in Schedule III. Except as otherwise provided under Section 2.14, Bankers’ Acceptance Loans

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shall not be permitted to be converted into any other Type of Loan prior to the maturity date of the applicable Bankers’ Acceptance or B/A Equivalent Note, as the case may be.

(c) The Canadian Borrowers shall have the option to convert, on any Business Day occurring on or after the Restatement Effective Date, all or a portion at least equal to the applicable Minimum Borrowing Amount of the outstanding principal amount of Canadian Prime Rate Loans (other than Swingline Loans, which shall at all times be maintained as Base Rate Loans or Canadian Prime Rate Loans, as the case may be) made pursuant to one or more Borrowings under a single Tranche into a Borrowing or Borrowings of Bankers’ Acceptance Loans under such Tranche; provided that (i) Canadian Prime Rate Loans may not be converted into Bankers’ Acceptance Loans if any Event of Default is in existence on the date of such conversion and the Canadian Administrative Agent, at the request of the Required Lenders, so notifies the relevant Borrowers and (ii) Borrowings of Bankers’ Acceptance Loans resulting from this Section 2.06 shall be limited in number as provided in Section 2.02. Each such conversion shall be effected by the Canadian Borrowers by giving the Canadian Administrative Agent at its Notice Office, prior to 11:00 a.m.(New York time), at least three Business Days prior to the date of the proposed conversion, a Notice of Conversion/Continuation specifying the Canadian Dollar Denominated Loans to be so converted into Bankers’ Acceptance Loans, the Borrowing or Borrowings pursuant to which such Canadian Dollar Denominated Loans were made and the term of the proposed Borrowing of Bankers’ Acceptance Loans (which, in each case, shall comply with the requirements of Schedule III). The Canadian Administrative Agent shall give each Canadian Lender prompt notice of any such proposed conversion affecting any of its Canadian Revolving Loans maintained as Canadian Prime Rate Loans. Upon any such conversion, the proceeds thereof will be deemed to be applied directly on the day of such conversion to prepay the outstanding principal amount of the Canadian Revolving Loans being converted.

2.07 Pro Rata Borrowings. All Borrowings of Revolving Loans of a given Tranche under this Agreement shall be incurred from the Lenders pro rata on the basis of their Facility Percentages under such Tranche. All Borrowings of U.S./European Borrower Swingline Loans shall be incurred from the U.S./European Swingline Lender. All Borrowings of Canadian Swingline Loans shall be incurred from the Canadian Swingline Lender. It is understood that no Lender shall be responsible for any default by any other Lender of its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans hereunder.

2.08 Interest. (a) The U.S. Borrowers (jointly and severally) agree to pay (in the case of U.S. Borrower Revolving Loans and U.S. Borrower Swingline Loans), the Canadian Borrowers (jointly and severally) agree to pay (in the case of Canadian Revolving Loans and Canadian Swingline Loans) and the European Borrower agrees to pay (in the case of a conversion of any European Borrower Revolving Loan which is a Non-Dollar Denominated Loan into a Dollar Denominated Loan pursuant to Section 2.14) interest in respect of the unpaid principal amount of each Base Rate Loan (including any Canadian Dollar Denominated Loan made to the Canadian Borrowers and converted into a Dollar Denominated Loan pursuant to Section 2.14) from the date of Borrowing thereof (or, in the case of a conversion of any Non-Dollar Denominated Loan into a Dollar Denominated Loan pursuant to Section 2.14, from the date of the conversion of such Loan) until the earlier of (i) the maturity thereof (whether by

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acceleration or otherwise) and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 2.06 or 2.09, as applicable, at a rate per annum which shall be equal to the sum of the relevant Applicable Margin as in effect from time to time plus the Base Rate as in effect from time to time.

(b) The U.S. Borrowers (jointly and severally) agree to pay (in the case of U.S. Borrower Revolving Loans), the Canadian Borrowers (jointly and severally) agree to pay (in the case of Canadian Revolving Loans) and the European Borrower agrees to pay (in the case of European Borrower Revolving Loans and European Borrower Swingline Loans) interest in respect of the unpaid principal amount of each Euro Rate Loan from the date of Borrowing thereof until the earlier of (i) the maturity thereof (whether by acceleration or otherwise) and (ii) in the case of Eurodollar Loans, the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section 2.06 or 2.09, as applicable, at a rate per annum which shall, during each Interest Period applicable thereto, be equal to the sum of the relevant Applicable Margin as in effect from time to time during such Interest Period plus the relevant Euro Rate for such Interest Period plus in the case of Non-Dollar Denominated Euro Rate Loans, any Mandatory Costs.

(c) The Canadian Borrowers (jointly and severally) agree to pay (in the case of Canadian Revolving Loans and Canadian Swingline Loans, in each case, which are Canadian Dollar Denominated Loans) interest in respect of the unpaid principal amount of each Canadian Prime Rate Loan made to it from the date the proceeds thereof are made available to it (which shall, in the case of a conversion contemplated by Schedule III, be deemed to be the date upon which a maturing Bankers’ Acceptance or B/A Equivalent Note is converted into a Canadian Prime Rate Loan pursuant to said Schedule III, with the proceeds thereof to be equal to the full Face Amount of such maturing Bankers’ Acceptance or B/A Equivalent Note), until the earlier of (i) the maturity thereof (whether by acceleration, or otherwise) and (ii) the conversion of such Canadian Prime Rate Loan to a Bankers’ Acceptance Loan pursuant to Section 2.06, at a rate per annum which shall be equal to the sum of the Canadian Prime Rate in effect from time to time during the period such Canadian Prime Rate Loan is outstanding plus the relevant Applicable Margin as in effect from time to time.

(d) To the extent permitted by law, overdue principal and overdue interest in respect of each Loan and any other overdue amount payable hereunder and under any other Credit Document shall, in each case, bear interest at a rate per annum (1) in the case of overdue principal of, and interest or other amounts owing with respect to, Loans and any other amounts owing in Canadian Dollars, equal to 2% plus the Applicable Margin for Canadian Prime Rate Loans plus the Canadian Prime Rate, each as in effect from time to time, (2) in the case of overdue principal of, and interest or other overdue amounts owing with respect to, Non-Dollar Denominated Euro Rate Loans, equal to 2% plus the Applicable Margin for Euro Rate Loans as in effect from time to time plus the relevant Euro Rate for such successive periods not exceeding one month as the Administrative Agent may determine from time to time in respect of amounts comparable to the amount not paid plus any Mandatory Costs and (3) in all other cases, equal to the greater of (x) the rate which is 2% in excess of the rate then borne by such Loans and (y) the rate which is 2% in excess of the rate otherwise applicable to Base Rate Loans of the respective Tranche of Loans from time to time. Interest that accrues under this Section 2.08(d) shall be payable on demand.

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(e) Accrued (and theretofore unpaid) interest shall be payable (i) in respect of each Base Rate Loan and Canadian Prime Rate Loan (including, without limitation, Swingline Loans), (x) quarterly in arrears on each Quarterly Payment Date, (y) on the date of any repayment or prepayment in full of all outstanding Base Rate Loans or Canadian Prime Rate Loans, as the case may be, of the respective Tranche of Loans being so repaid or prepaid, and (z) at maturity (whether by acceleration or otherwise) and, after such maturity, on demand, and (ii) in respect of each Euro Rate Loan, (x) on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three month intervals after the first day of such Interest Period, (y) on the date of any repayment or prepayment (on the amount repaid or prepaid), and (z) at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.

(f) Upon each Interest Determination Date, the Administrative Agent shall determine the relevant Euro Rate for each Interest Period applicable to the relevant Euro Rate Loans and shall promptly notify Aleris and the Lenders thereof. Each such determination shall, absent manifest error, be final and conclusive and binding on all parties hereto.

2.09 Interest Periods for Euro Rate Loans. At the time any Borrower gives any Notice of Borrowing or Notice of Conversion/Continuation in respect of the making of, or conversion into, any Euro Rate Loan (in the case of the initial Interest Period applicable thereto) or prior to 12:00 noon (New York time) on the third Business Day prior to the expiration of an Interest Period applicable to such Euro Rate Loan (in the case of any subsequent Interest Period), such Borrower shall have the right to elect the Interest Period applicable to such Euro Rate Loan, which Interest Period shall, at the option of such Borrower be a one, two, three or six month (or, if agreed by all Lenders with Commitments and/or Loans under the relevant Tranche, nine or twelve month) period, provided that (in each case):

(i) all Euro Rate Loans comprising a Borrowing shall at all times have the same Interest Period;

(ii) the initial Interest Period for any Euro Rate Loan shall commence on the date of Borrowing of such Euro Rate Loan (including the date of any conversion thereto from a Base Rate Loan) and each Interest Period occurring thereafter in respect of such Euro Rate Loan shall commence on the day on which the next preceding Interest Period applicable thereto expires;

(iii) if any Interest Period for a Euro Rate Loan begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month;

(iv) if any Interest Period for a Euro Rate Loan would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided, however, that if any Interest Period for a Euro Rate Loan would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day;

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(v) no Interest Period for any Borrowing of Eurodollar Loans may be selected at any time when an Event of Default is then in existence and the Administrative Agent, at the request of the Required Lenders, has notified the relevant Borrower of same; and

(vi) no Interest Period in respect of any Borrowing of any Tranche of Euro Rate Loans shall be selected which extends beyond the Final Maturity Date.

If by 12:00 noon (New York time) on the third Business Day prior to the expiration of any Interest Period applicable to a Borrowing of Euro Rate Loans, any Borrower has failed to elect, or is not permitted to elect, a new Interest Period to be applicable to such Euro Rate Loans as provided above, such Borrower shall be deemed to have elected, (x) if Eurodollar Loans to convert such Eurodollar Loans into Base Rate Loans and (y) if Non-Dollar Denominated Euro Rate Loans, to select a one-month Interest Period for such Non-Dollar Denominated Euro Rate Loans, in any case, effective as of the expiration date of such current Interest Period.

2.10 Increased Costs, Illegality, etc. (a) In the event that any Lender shall have determined in good faith (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto but, with respect to clauses (i) and (iv) below, may be made only by the Administrative Agent or the Canadian Administrative Agent, as applicable):

(i) on any Interest Determination Date that, by reason of any changes arising after the Restatement Effective Date affecting the applicable interbank market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of the relevant Euro Rate; or

(ii) at any time, that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Euro Rate Loan because of any change since the Restatement Effective Date in any applicable law or governmental rule, regulation, order, guideline or request (whether or not having the force of law) or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, order, guideline or request, such as, but not limited to (A) a change in the basis of taxation of payment to any Lender of the principal of or interest on the Loans or the Notes or any other amounts payable hereunder (except for changes in taxes that are determined by reference to the net income or net profits or franchise taxes imposed in lieu thereof of such Lender or, in the case of a Lender that is a flow-through entity for tax purposes, a member or a partner of such Lender, pursuant to the laws of the country or national jurisdiction (or any political subdivision thereof) in which it is organized or in which its principal office or applicable lending office is located) and (B) a change in official reserve requirements, but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the relevant Euro Rate (provided that increased costs or reductions in the amounts received or receivable with respect to Taxes and Swiss Withholding Taxes shall be dealt with exclusively pursuant to Sections 5.04 and 5.05, respectively); or

(iii) at any time, that the making or continuance of any Euro Rate Loan has been made (x) unlawful by any change since the Restatement Effective Date in any

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applicable law or governmental rule, regulation or order, or (y) impossible by compliance by any Lender in good faith with any governmental request (whether or not having force of law) made after the Restatement Effective Date; or

(iv) at any time there is no market for Bankers’ Acceptances by reason of circumstances affecting the Canadian money market generally or the relevant Available Currency (other than U.S. Dollars) is not available in sufficient amounts, as determined in good faith by the Administrative Agent, acting reasonably, to fund any Borrowing of Bankers’ Acceptance Loans, Non-Dollar Denominated Loans, as the case may be, requested pursuant to Section 2.01;

then, and in any such event, such Lender (or the Administrative Agent, in the case of clauses (i) or (iv) above) shall promptly give notice (by telephone promptly confirmed in writing) to the affected Borrower and, except in the case of clauses (i) and (iv) above, to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (w) in the case of clause (i) above, (A) in the event Eurodollar Loans are so affected, Eurodollar Loans shall no longer be available until such time as the Administrative Agent notifies the affected Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or Notice of Conversion/Continuation given by any Borrower with respect to Eurodollar Loans which have not yet been incurred (including by way of conversion) shall be deemed rescinded by such Borrower, and (B) in the event that any Non-Dollar Denominated Loan is so affected, the relevant Euro Rate shall be determined on the basis provided in the proviso to the definition for the relevant Euro Rate, (x) in the case of clause (ii) above, the Borrowers agree to pay to such Lender, upon such Lender’s written request therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its reasonable discretion shall determine) as shall be required to compensate such Lender for such increased costs or reductions in amounts received or receivable hereunder (a written notice as to the additional amounts owed to such Lender, showing in reasonable detail the basis for and the calculation thereof, submitted to the Borrowers by such Lender shall, absent manifest error, be final and conclusive and binding on all the parties hereto), (y) in the case of clause (iii) above, the affected Borrower or Borrowers shall take one of the actions specified in Section 2.10(b) as promptly as possible and, in any event, within the time period required by law and (z) in the case of clause (iv) above, Bankers’ Acceptance Loans or Loans in the relevant Available Currency, as applicable (exclusive of any such Loans, that have theretofore been funded), shall no longer be available until such time as the Administrative Agent notifies the affected Borrower or Borrowers and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or notice pursuant to Section 2.03 given by the respective Borrower or Borrowers with respect to such Loans which have not been incurred shall be deemed rescinded by such Borrower or Borrowers. Each of the Administrative Agent and each Lender agrees that if it gives notice to any Borrower of any of the events described in clause (i), (ii), (iii) or (iv) above, it shall promptly notify such Borrower and, in the case of any such Lender, the Administrative Agent, promptly after it becomes aware that such event has ceased to exist.

(b) At any time that any Euro Rate Loan is affected by the circumstances described in Section 2.10(a)(ii), the affected Borrower may and, in the case of a Euro Rate Loan

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affected by the circumstances described in Section 2.10(a)(iii), the affected Borrower shall, either (x) if the affected Euro Rate Loan is then being made initially or pursuant to a conversion, cancel such Borrowing (or the conversion thereof) by giving the Administrative Agent telephonic notice (confirmed in writing) on the same date on which such Borrower was notified by the affected Lender or the Administrative Agent pursuant to Section 2.10(a)(ii) or (iii) or (y) if the affected Euro Rate Loan is then outstanding, upon at least three Business Days’ written notice to the Administrative Agent, (A) in the case of a Eurodollar Loan, require the affected Lender to convert such Eurodollar Loan into a Base Rate Loan or (B) in the case of any Non-Dollar Denominated Euro Rate Loan, repay such affected Non-Dollar Denominated Euro Rate Loan in full in accordance with the applicable requirements of Section 5.01; provided that, (i) if the circumstances described in Section 2.10(a)(iii) apply to any Non-Dollar Denominated Euro Rate Loan, the Borrowers may, in lieu of taking the actions described above, maintain such Non-Dollar Denominated Euro Rate Loan outstanding, in which case, the relevant Euro Rate shall be determined on the basis provided in the proviso to the definition of the relevant Euro Rate unless the maintenance of such Non-Dollar Denominated Euro Rate Loan outstanding on such basis would not stop the conditions described in Section 2.10(a)(iii) from existing (in which case the actions described above, without giving effect to this proviso, shall be required to be taken) and (ii) if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this Section 2.10(b).

(c) If any Lender reasonably determines that after the Restatement Effective Date the introduction of or any change in any applicable law or governmental rule, regulation, order, guideline, directive or request (whether or not having the force of law) concerning capital adequacy, or any change in interpretation or administration thereof by the NAIC or any Governmental Authority, central bank or comparable agency charged with the administration thereof, will have the effect of increasing the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender based on the existence of such Lender’s Commitments hereunder or its obligations hereunder, then each affected Borrower agrees to pay to such Lender, upon its written demand therefor, such additional amounts as shall be required to compensate such Lender or such other corporation for the increased cost to such Lender or such other corporation or the reduction in the rate of return to such Lender or such other corporation as a result of such increase of capital. In determining such additional amounts, each Lender shall act reasonably and in good faith and shall use averaging and attribution methods which are reasonable, provided that such Lender’s determination of compensation owing under this Section 2.10(c) shall, absent manifest error, be final and conclusive and binding on all the parties hereto. Each Lender, upon determining that any additional amounts will be payable pursuant to this Section 2.10(c), shall give prompt written notice thereof to each affected Borrower, which notice shall show in reasonable detail the basis for calculation of such additional amounts.

(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 (x) the affected Borrower or Borrowers shall not be required to compensate a Lender pursuant to this Section 2.10 for any increased costs or reductions incurred more than 180 days prior to the date on which such Lender notifies the Borrowers of the change in law or other circumstance described in Section 2.10(a)(ii) or 2.10(c) giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor and

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(y) if such 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.

2.11 Compensation. Each Borrower agrees to compensate each Lender, upon its written request (which request shall set forth in reasonable detail the basis for requesting such compensation), for all losses, expenses and liabilities (including, without limitation, any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund its Bankers’ Acceptance Loans, or Euro Rate Loans but excluding loss of anticipated profits and Mandatory Costs) which such Lender may sustain: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of, or conversion from or into, Euro Rate Loans or Banker’s Acceptances Loans does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn by the applicable Borrower or Borrowers or deemed withdrawn pursuant to Section 2.10(a)); (ii) if any prepayment or repayment (including any prepayment or repayment made pursuant to Section 5.01, Section 5.02 or as a result of an acceleration of the Loans pursuant to Section 11) or conversion of any of its Euro Rate Loans occurs on a date which is not the last day of an Interest Period with respect thereto; (iii) if any repayment (including any repayment made pursuant to Sections 5.01 or 5.02 or as a result of an acceleration of the Loans pursuant to Section 11 or as a result of the replacement of a Lender pursuant to Sections 2.13 or 13.12(d)) of any Bankers’ Acceptance Loan occurs on a date which is not the maturity date of the respective Bankers’ Acceptance Loan, as the case may be; (iv) if any prepayment of any of its Euro Rate Loans or Bankers’ Acceptance Loans is not made on any date specified in a notice of prepayment given by any Borrower; or (v) as a consequence of (x) any other default by any Borrower to repay Euro Rate Loans or Bankers’ Acceptance Loans when required by the terms of this Agreement or any Note or B/A Instrument held by such Lender or (y) any election made pursuant to Section 2.10(b). Any Lender’s or the Administrative Agent’s determination of compensation owing to it under this Section 2.11 shall, absent manifest error, be final and conclusive and binding on all the parties hereto.

2.12 Change of Lending Office. (a) Each Lender may at any time or from time to time designate, by written notice to the relevant Administrative Agent to the extent not already reflected on Schedule II, one or more lending offices (which, for this purpose, may include Affiliates of the respective Lender) for the various Loans made, and Letters of Credit participated in, by such Lender (including, in the case of Canadian Lenders, by designating a separate lending office (or Affiliate) to act as such with respect to Dollar Denominated Loans and Letter of Credit Outstandings versus Non-Dollar Denominated Loans; provided that, for designations made after the Restatement Effective Date (unless such designation is made after the occurrence of a Conversion Event), to the extent such designation shall result in increased costs under Section 2.10, 3.06 or 5.04 in excess of those which would be charged in the absence of the designation of a different lending office (including a different Affiliate of the respective Lender), then the Borrowers shall not be obligated to pay such excess increased costs (although the Borrowers, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay the costs which would apply in the absence of such designation and any subsequent increased costs of the type described above resulting from changes after the date of the respective designation). Each lending office and Affiliate of any Lender designated as provided above shall, for all purposes of this Agreement, be treated in the same manner as the

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respective Lender (and shall be entitled to all indemnities and similar provisions in respect of its acting as such hereunder).

(b) Each Lender agrees that on the occurrence of any event giving rise to the operation of Section 2.10(a)(ii) or (iii), Section 2.10(c), Section 3.06 or Section 5.04 with respect to such Lender, it will, if requested by any Borrower, use reasonable efforts to designate another lending office for any Loans or Letters of Credit affected by such event, provided that such designation is made on such terms that would not subject such Lender to any material unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender in any material respect, with the object of avoiding or mitigating the consequence of the event giving rise to the operation of such Section. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation. Nothing in this Section 2.12(b) shall affect or postpone any of the obligations of the Borrowers or the right of any Lender provided in Sections 2.10, 3.06 and 5.04.

2.13 Replacement of Lenders. (x) If any Lender becomes a Defaulting Lender or otherwise defaults in its obligations to make Loans, (y) upon the occurrence of an event giving rise to the operation of Section 2.10(a)(ii) or (iii), Section 2.10(c), Section 3.06 or Section 5.04 with respect to any Lender which results in such Lender charging to any Borrower increased costs or (z) in the case of a refusal by a Lender to consent to certain proposed changes or waivers with respect to this Agreement which have been approved by the Required Lenders as (and to the extent) provided in Section 13.12(d) but which require the consent of each Lender or each directly affected Lender, subject to the limitations set forth in Section 2.19, Aleris shall have the right, either (A) to replace such Lender with one or more other Eligible Transferees, none of whom shall constitute a Defaulting Lender at the time of such replacement (collectively, the “Replacement Lender”) and each of whom shall be reasonably acceptable to the Administrative Agent or (B) to replace only (a) the Commitment (and sub-commitments and outstandings pursuant thereto) of the Replaced Lender with an identical Commitment provided by the Replacement Lender or (b) in the case of a replacement as provided in Section 13.12(d) where the consent of the respective Lender is required with respect to less than all Tranches of its Loans or Commitments, the Commitments, sub-commitments and/or outstanding Loans of such Lender in respect of each Tranche where the consent of such Lender would otherwise be individually required, with identical Commitments, sub-commitments and/or Loans of the applicable Tranche provided by the Replacement Lender (each such Lender which is replaced by a Replacement Lender or whose Commitment (or any portion thereof) or Loans (or any portion thereof) is replaced (either pursuant to preceding clause (A) or (B)) is referred to herein as a “Replaced Lender”); provided that:

(i) at the time of any replacement pursuant to this Section 2.13, the Replacement Lender shall enter into one or more Assignment and Assumption Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant to said Section 13.04(b) to be paid by the Replacement Lender) pursuant to which the Replacement Lender shall acquire all of the Commitments and all then outstanding Loans (or, in the case of the replacement of less than all the Tranches of Commitments and outstanding Loans of the relevant Replaced Lender, all the Commitments and/or all then outstanding Loans relating to the Tranche or Tranches with respect to which such Lender is being replaced) of, and all participations in all then outstanding Letters of Credit issued

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pursuant to the respective Tranche or Tranches where the respective Lender is being replaced of, the Replaced Lender and, in connection therewith, shall pay to (w) the Replaced Lender in respect thereof an amount equal to the sum of (A) an amount equal to (in the relevant currency or currencies) the aggregate principal of, and all accrued and unpaid interest on, all then outstanding Loans (including the Face Amount of any outstanding Bankers’ Acceptances and B/A Equivalent Notes) of the respective Replaced Lender under each Tranche with respect to which such Replaced Lender is being replaced, (B) an amount equal to all Unpaid Drawings (if any) under each Tranche with respect to which the relevant Replaced Lender is being replaced, in each case that have been funded by (and not reimbursed to) such Replaced Lender at such time, together with all then unpaid interest with respect thereto at such time, and (C) an amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender (but only with respect to the relevant Tranche or Tranches, in the case of the replacement of less than all Tranches then held by the relevant Replaced Lender) pursuant to Section 4.01, (x) the relevant Issuing Lender amounts equal to such Replaced Lender’s relevant Facility Percentage of any Unpaid Drawings pursuant to Letters of Credit issued pursuant to the relevant Tranche evidenced by such Commitments (which at such time remain Unpaid Drawings) with respect to Letters of Credit issued by such Issuing Lender to the extent such amount was not theretofore funded by such Replaced Lender, (y) in the case of any replacement of U.S./European Commitments, the U.S./European Swingline Lender, an amount equal to such Replaced Lender’s pro rata share of any Mandatory Borrowing for the relevant Tranche (as appropriate) (determined in accordance with Sections 2.01(d)(I) and 2.07), to the extent such amount was not theretofore funded by such Replaced Lender, without duplication and (z) in the case of any replacement of Canadian Commitments, the Canadian Swingline Lender, an amount equal to such Replaced Lender’s pro rata share of any Mandatory Borrowing for the relevant Tranche (as appropriate) (determined in accordance with Sections 2.01(d)(II) and 2.07), to the extent such amount was not theretofore funded by such Replaced Lender, without duplication; and

(ii) all obligations of the Borrowers due and owing to the Replaced Lender at such time (other than those specifically described in clause (i) of this Section 2.13 in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Lender concurrently with such replacement.

Upon receipt by the Replaced Lender of all amounts required to be paid to it pursuant to this Section 2.13, the Administrative Agent shall be entitled (but not obligated) and authorized to execute an Assignment and Assumption Agreement on behalf of such Replaced Lender, and any such Assignment and Assumption Agreement so executed by the Administrative Agent and the Replacement Lender shall be effective for purposes of this Section 2.13 and Section 13.04. Upon the execution of the respective Assignment and Assumption Agreement, the payment of amounts referred to in clauses (i) and (ii) of this Section 2.13, if so requested by the Replacement Lender, delivery to the Replacement Lender of the appropriate Note or Notes executed by the relevant Borrowers and the satisfaction of the other applicable conditions in Section 13.04(b), the Replacement Lender shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender hereunder, except with respect to indemnification

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provisions under this Agreement (including, without limitation, Sections 2.10, 2.11, 3.06, 5.04, 12.06 and 13.01), which shall survive as to such Replaced Lender.

2.14 Special Provisions Applicable to Lenders Upon the Occurrence of a Conversion Event. (a) On the date of the occurrence of a Conversion Event, automatically (and without the taking of any action) (x) all then outstanding Non-Dollar Denominated Loans shall be automatically converted into Loans of the respective Tranche maintained in U.S. Dollars (in an amount equal to the Dollar Equivalent of the aggregate principal amount (or Face Amount, as applicable) of the respective Loans on the date such Conversion Event first occurred, which Loans (i) shall continue to be owed by the respective Borrower, and (ii) shall at all times thereafter be deemed to be Base Rate Loans and (y) all principal, accrued and unpaid interest and other amounts owing with respect to such Non-Dollar Denominated Loans shall be payable in U.S. Dollars, taking the Dollar Equivalent of such principal, accrued and unpaid interest and other amounts. The occurrence of any conversion of Non-Dollar Denominated Loans to Base Rate Loans as provided above in this Section 2.14(a) shall be deemed to constitute for purposes of Section 2.11, a prepayment of Loans before the last day of any Interest Period relating thereto.

(b) On the date of the occurrence of any Conversion Event (i) if any Swingline Loans are outstanding, one or more Mandatory Borrowings shall be made in accordance with the requirements of Section 2.01(d), and (ii) if there have been any Drawings pursuant to Letters of Credit which have not yet been reimbursed to the respective Issuing Lender pursuant to Section 3, the various L/C Participants in the respective Letters of Credit shall make payments to the Issuing Lender therefor in accordance with the requirements of Section 3.04. Each Lender which is required to make payments pursuant to the immediately preceding sentence shall be obligated to do so in accordance with the terms of this Agreement.

2.15 Incremental Commitments. (a) So long as no Default or Event of Default then exists or would result therefrom, the Borrowers shall have the right, in coordination with the Administrative Agent as to all of the matters set forth below in this Section 2.15, but without requiring the consent of any of the Lenders or the Administrative Agent, to request at any time and from time to time after the Restatement Effective Date and prior to the Final Maturity Date, that one or more Lenders (and/or one or more other Persons which are Eligible Transferees and which will become Lenders as provided below) provide Incremental Commitments under a Tranche and, subject to the applicable terms and conditions contained in this Agreement, make Revolving Loans and participate in Swingline Loans and Letters of Credit pursuant thereto, it being understood and agreed, however, that (i) no Lender shall be obligated to provide an Incremental Commitment as a result of any such request by the Borrowers, and until such time, if any, as such Lender has agreed in its sole discretion to provide an Incremental Commitment and executed and delivered to the Administrative Agent an Incremental Commitment Agreement in respect thereof as provided in clause (b) of this Section 2.15, such Lender shall not be obligated to fund any Revolving Loans or participate in Swingline Loans or Letters of Credit in excess of its Commitment under any Tranche as in effect prior to giving effect to such Incremental Commitment provided pursuant to this Section 2.15, (ii) any Lender (including any Eligible Transferee who will become a Lender) may so provide an Incremental Commitment without the consent of any other Lender, (iii) each provision of Incremental Commitments on a given date pursuant to this Section 2.15 shall be in a minimum aggregate amount (for all Lenders (including any Eligible Transferee who will become a Lender)) of at least $5,000,000 and in integral

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multiples of $1,000,000 in excess thereof, (iv) the aggregate amount of all Incremental Commitments provided pursuant to this Section 2.15, shall not exceed the Maximum Incremental Commitment Amount and (v) all Revolving Loans (and all interest, fees and other amounts payable thereon), made pursuant to an Incremental Commitment shall be entitled to the benefits of the guarantees and security provided under the Credit Documents to the other ABL Obligations under the relevant Tranche on a pari passu basis.

(b) At the time of the provision of Incremental Commitments pursuant to this Section 2.15, each Borrower under the relevant Tranche, the Administrative Agent and each such Lender or other Eligible Transferee which agrees to provide an Incremental Commitment (each, an “Incremental Lender”) shall execute and deliver to the Administrative Agent an Incremental Commitment Agreement, with the effectiveness of such Incremental Lender’s Incremental Commitment to occur on the date set forth in such Incremental Commitment Agreement, which date in any event shall be no earlier than the date on which (w) all fees required to be paid in connection therewith at the time of such effectiveness shall have been paid (including, without limitation, any agreed upon up-front or arrangement fees owing to the Administrative Agent (or any affiliate thereof)), (x) all Incremental Commitment Requirements are satisfied, (y) all other conditions set forth in this Section 2.15 shall have been satisfied, and (z) all other conditions precedent that may be set forth in such Incremental Commitment Agreement shall have been satisfied. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Incremental Commitment Agreement, and at such time, (i) the Total Commitment (and the Total U.S./European Commitment and/or Total Canadian Commitment, as applicable) under, and for all purposes of, this Agreement shall be increased by the aggregate amount of such Incremental Commitments, (ii) if the Total U.S./European Commitment is then being increased and the relevant Incremental Commitment Agreement so provides, the Total European Sub-Commitment shall be increased by the amount specified in such Incremental Commitment Agreement (not to exceed the amount of the related Incremental Commitment); (iii) Schedule I-A shall be deemed modified to reflect the revised Commitments of the affected Lenders and (iv) to the extent requested by any Incremental Lender, Revolving Loan Notes will be issued, at the expense of each applicable Borrower, to such Incremental Lender in conformity with the requirements of Section 2.05.

(c) At the time of any provision of Incremental Commitments pursuant to this Section 2.15, the Borrowers under the relevant Tranche or Tranches shall, in coordination with the Administrative Agent, repay outstanding Revolving Loans of certain of the Lenders under the relevant Tranche or Tranches, and incur additional Revolving Loans from certain other Lenders under the relevant Tranche or Tranches (including the Incremental Lenders), even though as a result thereof such new Loans (to the extent required to be maintained as Euro Rate Loans) may have a shorter Interest Period than the then outstanding Borrowings of such Loans, in each case to the extent necessary so that all of the Lenders under the relevant Tranche or Tranches participate in each outstanding Borrowing of Revolving Loans under the relevant Tranche or Tranches pro rata on the basis of their respective Commitments under the relevant Tranche or Tranches (after giving effect to any increase in the Total Commitment (and the Total U.S./European Commitment and/or Total Canadian Commitment, as applicable) pursuant to this Section 2.15) and with each affected Borrower under the relevant Tranche being obligated to pay to the respective Lenders any costs of the type referred to in Section 2.11 and such amounts, as reasonably determined by the respective Lenders, to compensate them for funding the various

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Revolving Loans during an existing Interest Period (rather than at the beginning of the respective Interest Period, based upon rates then applicable thereto) in connection with any such repayment and/or incurrence. All determinations by any Lender pursuant to the preceding sentence shall, absent manifest error, be final and conclusive and binding on all parties hereto. Without limiting the obligations of the Borrowers under this Section 2.15(c), the Administrative Agent and the Lenders agree that they will use their commercially reasonable efforts to attempt to minimize the costs of the type referred to in Section 2.11 that the Borrowers would otherwise incur in connection with the implementation of any Incremental Commitments.

2.16 Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of Interest. (a) Notwithstanding anything to the contrary contained in this Agreement or in any other Credit Document, solely to the extent that a court of competent jurisdiction finally determines that the calculation or determination of interest or any fee payable by the Canadian Borrowers in respect of the ABL Obligations pursuant to this Agreement and the other Credit Documents shall be governed by the laws of any province of Canada or the federal laws of Canada, in no event shall the aggregate “interest” (as defined in Section 347 of the Criminal Code, R.S.C. 1985, c. C-46, as the same shall be amended, replaced or re-enacted from time to time) payable by the Canadian Borrowers to the Agents or any Lender under this Agreement or any other Credit Document exceed the effective annual rate of interest on the “credit advances” (as defined in that section) under this Agreement or such other Credit Document lawfully permitted under that section and, if any payment, collection or demand pursuant to this Agreement or any other Credit Document in respect of “interest” (as defined in that section) is determined to be contrary to the provisions of that section, such payment, collection or demand shall be deemed to have been made by mutual mistake of the Agents, the Lenders and the Canadian Borrowers and the amount of such payment or collection shall be refunded by the relevant Agents and Lenders to the Canadian Borrowers. For the purposes of this Agreement and each other Credit Document to which the Canadian Borrowers is a party, the effective annual rate of interest payable by the Canadian Borrowers shall be determined in accordance with generally accepted actuarial practices and principles over the term of the loans on the basis of annual compounding for the lawfully permitted rate of interest and, in the event of dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by the for the account of the Canadian Borrowers will be conclusive for the purpose of such determination in the absence of evidence to the contrary.

(b) For the purposes of the Interest Act (Canada) and with respect to Canadian Credit Parties only:

(i) whenever any interest or fee payable by the Canadian Borrowers is calculated using a rate based on a year of 360 days or 365 days, as the case may be, the rate determined pursuant to such calculation, when expressed as an annual rate, is equivalent to (x) the applicable rate based on a year of 360 days or 365 days, as the case may be, (y) multiplied by the actual number of days in the calendar year in which such rate is to be ascertained and (z) divided by 360 or 365, as the case may be; and

(ii) all calculations of interest payable by the Canadian Borrowers under this Agreement or any other Credit Document are to be made on the basis of the nominal interest rate described herein and therein and not on the basis of effective yearly rates or on any other basis which gives effect to the principle of deemed reinvestment of interest.

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The parties hereto acknowledge that there is a material difference between the stated nominal interest rates and the effective yearly rates of interest and that they are capable of making the calculations required to determine such effective yearly rates of interest.

2.17 Canadian Lenders. (a) So long as no Significant Event of Default is in existence and no Conversion Event has occurred, each Canadian Lender shall at all times be a Canadian Resident or, at its option, such Canadian Lender shall designate an Affiliate of such Lender which is a Canadian Resident (which Affiliate shall be a signatory to this Agreement and be listed on Schedule I-B hereto, or shall become a party hereto by signing an assumption agreement in form and substance reasonably satisfactory to the Canadian Administrative Agent) to act as a Canadian Lender hereunder, in which case the Affiliate so designated as a Canadian Lender hereunder shall be required to be satisfactory to (and approved by) the Canadian Administrative Agent and shall at all times hold the Canadian Commitment (and all extensions of credit pursuant thereto) of the respective Canadian Lender. To the extent legally entitled to do so, the Canadian Administrative Agent and each Canadian Lender shall, upon written request by any Canadian Borrower, deliver to such Canadian Borrower or the applicable taxing authority, any form or certificate required in order that any payment by any Canadian Borrower under this Agreement may be made free and clear of, and without deduction or withholding for or on account of, any Taxes, provided that (x) in determining the reasonableness of such a request such Person shall be entitled to consider the cost (to the extent unreimbursed by the Canadian Borrower) which would be imposed on such Person of complying with such request, and (y) nothing in this Section 2.17(a) shall require a Lender to disclose any confidential information (including, without limitation, its tax returns or its calculations).

(b) A Canadian Lender may change its Affiliate acting as Canadian Lender hereunder but only pursuant to an assignment in form and substance reasonably satisfactory to the Canadian Administrative Agent (with the consent of the Administrative Agent), where the relevant assignee represents and warrants, unless a Significant Event of Default is in existence or a Conversion Event has occurred, that it is an Affiliate of the relevant Canadian Lender and represents and warrants that it is a Canadian Resident and will act directly as a Canadian Lender with respect to the Canadian Commitment of the relevant Canadian Lender.

(c) In connection with any assignment pursuant to Section 2.13 or 13.04 of all or any part of the Canadian Commitment of any Canadian Lender the Assignment and Assumption Agreement shall, unless a Significant Event of Default is in existence or a Conversion Event has occurred, contain the representation and warranties specified in the Assignment and Assumption Agreement including that it is a Canadian Resident.

(d) The foregoing shall in no event limit the sales or purchases of participations in Canadian Revolving Loans after the occurrence of a Conversion Event or a Significant Event of Default.

2.18 Provisions Regarding Bankers’ Acceptances, Drafts, etc. The parties hereto agree that the provisions of Schedule III shall apply to all Bankers’ Acceptances, Bankers’ Acceptance Loans, Drafts and B/A Equivalent Notes created hereunder, and that the provisions of Schedule III shall be deemed incorporated by reference into this Agreement as if such provisions were set forth in their entirety herein.

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2.19 U.S./European Lenders. Each U.S./European Lender party hereto on the Restatement Effective Date represents that it is a Swiss Qualifying Bank or a Swiss Non-Qualifying Bank as further indicated on Schedule I-C. Any Lender which ceases to be a Swiss Qualifying Bank shall promptly notify Aleris that it has ceased to be a Swiss Qualifying Bank. If as a result of such event the number of Swiss Non-Qualifying Banks under this Agreement exceeds the number ten, then, so long as no Significant Event or Default is in existence, Aleris shall have the right to request that the relevant Lender assign or transfer by novation all of its rights and obligations under this Agreement to an Eligible Transferee qualifying as a Swiss Qualifying Bank or another Lender qualifying as a Swiss Qualifying Bank, all in accordance with Section 13.04. The Administrative Agent shall have no responsibility for determining whether or not an entity is a Swiss Qualified Bank, but shall track the number of U.S./European Lenders from time to time that were unable to represent that they were Swiss Qualifying Banks in order to determine whether the number of Swiss Non-Qualifying Banks under this Agreement exceeds the number ten; provided that the Administrative Agent shall have no liability for any determinations made hereunder unless such liability arises from its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a non-appealable decision).

SECTION 3. Letters of Credit.

3.01 Letters of Credit. (a) Subject to and upon the terms and conditions set forth herein (including, without limitation, the conditions set forth in Sections 7.01, 7.02, and 7.03) (i) the U.S. Borrowers may jointly and severally request, (ii) the Canadian Borrowers may jointly and severally request and (iii) the European Borrower may request, in each case, that an Issuing Lender issue, at any time and from time to time on and after the Restatement Effective Date and prior to the 30th day prior to the Final Maturity Date, for the joint and several account of the U.S. Borrowers (if requested by the U.S. Borrowers), for the joint and several account of the Canadian Borrowers (if requested by the Canadian Borrowers) or for the account of the European Borrower (if requested by it) and for the benefit of (x) any holder (or any trustee, agent or other similar representative for any such holders) of L/C Supportable Obligations of the respective Account Parties or any of their respective Subsidiaries, an irrevocable standby letter of credit, in a form customarily used by such Issuing Lender or in such other form as is reasonably acceptable to such Issuing Lender, and (y) sellers of goods to the respective Account Parties or any of their respective Subsidiaries, an irrevocable trade letter of credit, in a form customarily used by such Issuing Lender or in such other form as has been approved by such Issuing Lender (each such letter of credit, a “Letter of Credit” and, collectively, the “Letters of Credit”). All Letters of Credit shall be denominated in the respective Available Currency and shall be issued on a sight basis only. Each Letter of Credit shall be deemed to constitute a utilization of the U.S./European Commitments (in the case of any Letters of Credit issued for the account of the U.S. Borrowers), the European Sub-Commitment (in the case of any Letters of Credit issued for the account of the European Borrower) or the Canadian Commitments (in the case of any Letters of Credit issued for the account of the Canadian Borrowers), as applicable, and shall be participated in (as more fully described in following Section 3.04(a)) by the Lenders in accordance with their respective Percentages. All Letters of Credit issued for the account of the U.S. Borrowers (each, a “U.S. Letter of Credit” and collectively, the “U.S. Letters of Credit”) shall be issued for the joint and several account of the U.S. Borrowers. All Letters of Credit issued for the account of the Canadian Borrowers (each, a “Canadian Letter of Credit” and collectively, the “Canadian Letters of Credit”) shall be issued, subject to Section 15.09, for the

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joint and several account of the Canadian Borrowers. As used herein, a “European Letter of Credit” and collectively, the “European Letters of Credit”, shall mean any Letter of Credit issued for the account of the European Borrower.

(b) Subject to and upon the terms and conditions set forth herein, each Issuing Lender agrees that it will, at any time and from time to time on and after the Restatement Effective Date and prior to the 30th day prior to the Final Maturity Date, following its receipt of the respective Letter of Credit Request, issue for account of the respective Account Party, one or more Letters of Credit as are permitted to remain outstanding hereunder without giving rise to a Default or an Event of Default, provided that no Issuing Lender shall be under any obligation to issue any Letter of Credit of the types described above if at the time of such issuance:

(i) any order, judgment or decree of any Governmental Authority or arbitrator shall purport by its terms to enjoin or restrain such Issuing Lender from issuing such Letter of Credit or any requirement of law applicable to such Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuing Lender shall prohibit, or request that such Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Lender with respect to such Letter of Credit any restriction or reserve or capital requirement (for which such Issuing Lender is not otherwise compensated hereunder) not in effect with respect to such Issuing Lender on the date hereof, or any unreimbursed loss, cost or expense (for which such Issuing Lender is not otherwise compensated hereunder) which was not applicable or in effect with respect to such Issuing Lender as of the date hereof and which such Issuing Lender reasonably and in good faith deems material to it; or

(ii) such Issuing Lender shall have received from any Borrower, any other Credit Party or the Required Lenders prior to the issuance of such Letter of Credit notice of the type described in the second sentence of Section 3.03(b).

(c) Schedule IV contains a description of certain letters of credit that were issued pursuant to the Existing ABL Credit Agreement and which remain outstanding on the Restatement Effective Date (and setting forth, with respect to each such letter of credit, (i) the name of the issuing lender, (ii) the letter of credit number, (iii) the name(s) of the account party or account parties, (iv) the stated amount, (v) the name of the beneficiary, (vi) the expiry date and (vii) whether such letter of credit constitutes a standby letter of credit or a trade letter of credit). Each such letter of credit, including any extension or renewal thereof in accordance with the terms thereof and hereof (each, as amended from time to time in accordance with the terms thereof and hereof, an “Existing Letter of Credit”) shall constitute a “Letter of Credit” for all purposes of this Agreement and shall be deemed issued on the Restatement Effective Date.

3.02 Maximum Letter of Credit Outstandings; Final Maturities; etc. Notwithstanding anything to the contrary contained in this Agreement, (i) no Letter of Credit shall be issued the Stated Amount of which, when added to the Letter of Credit Outstandings (for this purpose, using the Dollar Equivalent of all amounts denominated in a currency other than U.S. Dollars) (exclusive of Unpaid Drawings which are repaid on the date of, and prior to the issuance of, the respective Letter of Credit) at such time would exceed $50,000,000, (ii) no

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Letter of Credit shall be issued at any time when the Aggregate U.S./European Exposure exceeds (or would after giving effect to such issuance exceed) the Total U.S./European Commitment at such time, (iii) each Letter of Credit shall be denominated in the applicable Available Currency, (iv) the issuance of any Letter of Credit shall be subject to the conditions set forth in Sections 7.01, 7.02 and 7.03 and (v) each Letter of Credit shall by its terms terminate on or before the earlier of (A) the date which occurs 12 months after the date of the issuance thereof (although any standby Letter of Credit shall be extendible (including pursuant to an automatic extension provision on terms satisfactory to the applicable Issuing Lender) for successive periods of up to 12 months for each such extension and (B) the day that is five Business Days prior to the Final Maturity Date.

3.03 Letter of Credit Requests; Minimum Stated Amount. (a) Whenever the respective Account Parties desire that a Letter of Credit be issued for their account, the respective Account Parties shall give the Administrative Agent and the relevant Issuing Lender at least two Business Days’ (or such shorter period as is acceptable to such Issuing Lender) written notice thereof (including by way of facsimile). Each notice shall be in the form of Exhibit C, appropriately completed (each, a “Letter of Credit Request”) to specify: (i) the name of the relevant Issuing Lender thereof; (ii) whether such Letter of Credit is to be a standby or trade Letter of Credit; (iii) the date of issuance of such Letter of Credit (which shall be a Business Day); (iv) the initial Stated Amount of such Letter of Credit; (v) the beneficiary of such Letter of Credit and the obligations to be supported by such Letter of Credit; (vi) the stated expiration date of such Letter of Credit and (vii) whether such Letter of Credit shall be U.S. Letter of Credit, a Canadian Letter of Credit or a European Letter of Credit.

(b) The making of each Letter of Credit Request shall be deemed to be a representation and warranty by the applicable Borrowers to the Lenders that such Letter of Credit may be issued in accordance with, and will not violate the requirements of, Section 3.02. Unless the respective Issuing Lender has received notice from any Borrower, any other Credit Party or the Required Lenders before it issues a Letter of Credit that one or more of the conditions specified in Section 6 or 7 are not then satisfied, or that the issuance of such Letter of Credit would violate Section 3.02, then such Issuing Lender shall, subject to the terms and conditions of this Agreement, issue the requested Letter of Credit for the account of the respective Account Parties in accordance with such Issuing Lender’s usual and customary practices. Upon the issuance of or modification or amendment to any standby Letter of Credit, each Issuing Lender shall promptly notify the respective Account Parties and the Administrative Agent in writing of such issuance, modification or amendment and such notice shall be accompanied by a copy of such Letter of Credit or the applicable modification or amendment thereto, as the case may be. Promptly after receipt of such notice the Administrative Agent shall notify the L/C Participants, in writing, of such issuance, modification or amendment.

(c) On the first Business Day of each week, each Issuing Lender shall furnish the Administrative Agent with a written (including via facsimile) report of the daily aggregate Letter of Credit Outstandings issued by such Issuing Lender for the immediately preceding week.

(d) The initial Stated Amount of each Letter of Credit (other than Existing Letters of Credit which shall be in the Stated Amounts shown on Schedule IV) shall not be less

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than $50,000 (or the equivalent amount thereof in the applicable Available Currency) or such lesser amount as is acceptable to the applicable Issuing Lender.

3.04 Letter of Credit Participations. (a) Immediately upon the issuance by an Issuing Lender of any Letter of Credit, such Issuing Lender shall be deemed to have sold and transferred to each Lender in the applicable Tranche, and each such Lender (in its capacity under this Section 3.04, each, an “L/C Participant”) shall be deemed irrevocably and unconditionally to have purchased and received from such Issuing Lender, without recourse or warranty, an undivided interest and participation, to the extent of such L/C Participant’s Facility Percentage in such Letter of Credit, each Drawing or payment made thereunder and the obligations of the respective Account Parties under this Agreement with respect thereto (although Letter of Credit Fees shall be payable directly to the Administrative Agent for the account of the respective Lenders as provided in Section 4.01(b) and the L/C Participants shall have no right to receive any portion of any Facing Fees with respect to any such Letters of Credit), and any security therefor or guaranty pertaining thereto. Upon any change in the Commitments of any Tranche and, as a result thereof, the Facility Percentages of the applicable Tranche, of the respective Lenders pursuant to Section 2.19 or 13.04, it is hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid Drawings relating thereto, there shall be an automatic adjustment to the participations pursuant to this Section 3.04 to reflect the new Facility Percentages of the respective Lenders of the applicable Tranche (or in the circumstances provided in the proviso to the immediately preceding sentence, the Percentages of the respective Lenders). With respect to each Letter of Credit from time to time outstanding, the percentage participations therein of the various Lenders calculated as provided above in this Section 3.04(a) (including as provided in the proviso to the immediately preceding sentence) are herein called the “L/C Participation Percentages” of the various Lenders in such Letters of Credit.

(b) In determining whether to pay under any Letter of Credit, no Issuing Lender shall have any obligation relative to the other Lenders other than to confirm that any documents required to be delivered under such Letter of Credit appear to have been delivered and that they appear to substantially comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by an Issuing Lender under or in connection with any Letter of Credit issued by it shall not create for such Issuing Lender any resulting liability to the Account Parties, any other Credit Party, any Lender or any other Person unless such action is taken or omitted to be taken with bad faith, gross negligence, or willful misconduct on the part of such Issuing Lender (as determined by a court of competent jurisdiction in a final and non-appealable decision).

(c) In the event that an Issuing Lender makes any payment under any Letter of Credit issued by it and the respective Account Parties shall not have reimbursed such amount in full to such Issuing Lender pursuant to Section 3.05(a), such Issuing Lender shall promptly notify the Administrative Agent, which shall promptly notify each relevant L/C Participant of such failure, and each such L/C Participant shall promptly and unconditionally pay to such Issuing Lender the amount of such L/C Participant’s L/C Participation Percentage of such unreimbursed payment in the relevant Available Currency in same day funds. If the Administrative Agent so notifies, prior to 12:00 noon (New York time) on any Business Day, any L/C Participant required to fund a payment under a Letter of Credit, such L/C Participant shall make available to the applicable Issuing Lender in the relevant Available Currency such

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L/C Participant’s L/C Participation Percentage of the amount of such payment on such Business Day in same day funds. If and to the extent such L/C Participant shall not have so made its L/C Participation Percentage of the amount of such payment available to the applicable Issuing Lender, such L/C Participant agrees to pay to such Issuing Lender, forthwith on demand such amount, together with interest thereon, for each day from such date until the date such amount is paid to such Issuing Lender at the overnight Federal Funds Rate for the first three days and at the interest rate applicable to Revolving Loans that are maintained as Base Rate Loans for each day thereafter. The failure of any such L/C Participant to make available to an Issuing Lender its L/C Participation Percentage of any payment under any Letter of Credit issued by such Issuing Lender shall not relieve any such other L/C Participant of its obligation hereunder to make available to such Issuing Lender its L/C Participation Percentage of any payment under any Letter of Credit on the date required, as specified above, but no such L/C Participant shall be responsible for the failure of any such other L/C Participant to make available to such Issuing Lender such other L/C Participant’s L/C Participation Percentage of any such payment.

(d) Whenever an Issuing Lender receives a payment of a reimbursement obligation (or interest thereon) as to which it has received any payments from the respective L/C Participants pursuant to clause (c) above, such Issuing Lender shall pay to each such L/C Participant which has paid its L/C Participation Percentage thereof in the relevant Available Currency and in same day funds, an amount (net of any interest owing to such Issuing Lender with respect to such reimbursement obligation) equal to such L/C Participant’s share (based upon the proportionate aggregate amount originally funded by such L/C Participant to the aggregate amount funded by all such L/C Participants) of the principal amount of such reimbursement obligation and interest thereon (accruing after the funding of the respective participations) so received by the Issuing Lender.

(e) Upon the request of any L/C Participant, each Issuing Lender shall furnish to such L/C Participant copies of any standby Letter of Credit issued by it and such other documentation as may reasonably be requested by such L/C Participant.

(f) The obligations of the L/C Participants to make payments to each Issuing Lender with respect to Letters of Credit shall be irrevocable and not subject to any qualification or exception whatsoever and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances:

(i) any lack of validity or enforceability of this Agreement or any of the other Credit Documents;

(ii) the existence of any claim, setoff, defense or other right which Aleris or any of its Subsidiaries may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, any L/C Participant, or any other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between Aleris or any Subsidiary of Aleris and the beneficiary named in any such Letter of Credit);

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(iii) any draft, certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(iv) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Credit Documents; or

(v) the occurrence of any Default or Event of Default.

3.05 Agreement to Repay Letter of Credit Drawings. (a) Subject to Section 3.05(b), (i) the U.S. Borrowers hereby jointly and severally agree (with respect to the U.S. Letters of Credit), (ii) the Canadian Borrowers jointly and severally agree (with respect to the Canadian Letters of Credit) and (iii) the European Borrower agrees (with respect to the European Letters of Credit) to reimburse each Issuing Lender by making payment to the Administrative Agent in the relevant Available Currency in immediately available funds at the Payment Office for any payment or disbursement made by such Issuing Lender under any Letter of Credit issued by it (each such amount, so paid until reimbursed by the applicable Account Party, an “Unpaid Drawing”), not later than one Business Day following receipt by the applicable Account Party of notice of such payment or disbursement (provided that no such notice shall be required to be given if a Default or an Event of Default under Section 11.05 shall have occurred and be continuing, in which case the Unpaid Drawing shall be due and payable immediately without presentment, demand, protest or notice of any kind (all of which are hereby waived by the Borrowers)), with interest on the amount so paid or disbursed by such Issuing Lender, to the extent not reimbursed prior to 12:00 noon (New York time) on the date of such payment or disbursement, from and including the date paid or disbursed to but excluding the date such Issuing Lender was reimbursed by the respective Account Parties therefor at a rate per annum equal to the Base Rate in effect from time to time plus the Applicable Margin as in effect from time to time for Revolving Loans that are maintained as Base Rate Loans; provided, however, to the extent such amounts are not reimbursed prior to 12:00 noon (New York time) on the third Business Day following the receipt by the respective Account Parties of notice of such payment or disbursement or following the occurrence of a Default or an Event of Default under Section 11.05, interest shall thereafter accrue on the amounts so paid or disbursed by such Issuing Lender (and until reimbursed by the respective Account Party) at a rate per annum equal to the rate otherwise applicable to the respective Unpaid Drawing as provided above, plus 2%, with all such interest payable pursuant to this Section 3.05 to be payable on demand. Notwithstanding anything to the contrary in the preceding sentence, the relevant Account Party may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 that such payment be financed with a Revolving Loan or a Swingline Loan, in an equivalent amount and, to the extent so financed, such Account Party’s obligation to make such reimbursement shall be discharged and replaced by the resulting Revolving Loan or Swingline Loan. Each Issuing Lender shall give the respective Account Parties and the Administrative Agent prompt written notice of each Drawing under any Letter of Credit issued by it, provided that the failure to give any such notice shall in no way affect, impair or diminish the Borrowers’ obligations hereunder.

(b) The joint and several obligations of the U.S. Borrowers, the joint and several obligations of the Canadian Borrowers and the obligations of the European Borrower, as

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the case may be, under this Section 3.05 to reimburse each Issuing Lender with respect to drafts, demands and other presentations for payment under Letters of Credit issued by it (each, a “Drawing”) (including, in each case, interest thereon, if any) shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which Aleris or any of its Subsidiaries may have or have had against any Lender (including in its capacity as an Issuing Lender or as a L/C Participant), including, without limitation, any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter of Credit or any nonapplication or misapplication by the beneficiary of the proceeds of such Drawing; provided, however, that the Borrowers shall not be obligated to reimburse any Issuing Lender for any wrongful payment made by such Issuing Lender under a Letter of Credit issued by it as a result of acts or omissions constituting willful misconduct or gross negligence on the part of such Issuing Lender (as determined by a court of competent jurisdiction in a final and non-appealable decision).

3.06 Increased Costs. (a) If at any time after the Restatement Effective Date, the introduction of or any change in any applicable law, rule, regulation, order, guideline or request or in the interpretation or administration thereof by the NAIC or any Governmental Authority charged with the interpretation or administration thereof, or compliance by any Issuing Lender or any L/C Participant with any request or directive by the NAIC or by any such Governmental Authority (whether or not having the force of law), shall either (i) impose, modify or make applicable any reserve, deposit, capital adequacy or similar requirement against Letters of Credit issued by any Issuing Lender or participated in by any L/C Participant, or (ii) impose on any Issuing Lender or any L/C Participant any other conditions relating, directly or indirectly, to this Agreement or any Letter of Credit; and the result of any of the foregoing is to increase the cost to any Issuing Lender or any L/C Participant of issuing, maintaining or participating in any Letter of Credit, or reduce the amount of any sum received or receivable by any Issuing Lender or any L/C Participant hereunder or reduce the rate of return on its capital with respect to the Letters of Credit (except for changes in the rate of tax on, or determined by reference to, the net income or net profits (or any franchise or similar tax imposed in lieu of a net income or net profits tax of such Issuing Lender or such L/C Participant or, in the case of an Issuing Lender or L/C Participant that is a flow-through entity for tax purposes, a member or a partner of such Issuing Lender or L/C Participant, pursuant to the laws of the country or national jurisdiction (or any political subdivision thereof) in which it is organized or in which its principal office or applicable lending office is located), then, upon the delivery of the certificate referred to below to the Account Parties by any Issuing Lender or any L/C Participant (a copy of which certificate shall be sent by such Issuing Lender or such L/C Participant to the Administrative Agent), such Account Party agrees to pay to such Issuing Lender or such L/C Participant such additional amount or amounts as will compensate such Issuing Lender or such L/C Participant for such increased cost or reduction in the amount receivable or reduction on the rate of return on its capital. Any Issuing Lender or any L/C Participant, upon determining in good faith that any additional amounts will be payable pursuant to this Section 3.06, will give prompt written notice thereof to the respective Account Party, which notice shall include a certificate submitted to such Account Party by such Issuing Lender or such L/C Participant (a copy of which certificate shall be sent by such Issuing Lender or such L/C Participant to the Administrative Agent), setting forth in reasonable detail the basis for and the calculation of such additional amount or amounts necessary to compensate such Issuing Lender or such L/C Participant. The certificate required to

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be delivered pursuant to this Section 3.06 shall, absent manifest error, be final and conclusive and binding on the Borrowers.

(b) Notwithstanding anything to the contrary set forth in this Section 3.06, no Borrower shall be required to compensate any Issuing Lender or L/C Participant for any increased costs or reductions incurred more than 180 days prior to the date on which such Issuing Lender or L/C Participant notifies such Borrower of the change in applicable law or other circumstance under Section 3.06(a) giving rise to such increased costs or reductions and the intention of such Issuing Lender or L/C Participant to claim compensation therefor; provided that if such change in applicable law or other circumstance 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 4. Commitment Commission; Fees; Reductions of Commitment.

4.01 Fees. (a) The U.S. Borrowers jointly and severally agree (with respect to the U.S./European Commitments (excluding the European Sub-Commitment)), the Canadian Borrowers jointly and severally agree (with respect to the Canadian Commitments) and the European Borrower agrees (with respect to the European Sub-Commitment) to pay to the Administrative Agent for distribution to each Non-Defaulting Lender a commitment commission (the “Commitment Commission”) for the period from and including the Restatement Effective Date to but excluding the Final Maturity Date (or such earlier date on which the Total Commitment has been terminated) computed at a rate per annum equal to the Applicable Commitment Commission Percentage on the daily average Unutilized Commitment of such Non-Defaulting Lender as in effect from time to time. Accrued Commitment Commission shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the date upon which the Total Commitment is terminated.

(b) (i) The U.S. Borrowers jointly and severally agree (with respect to the U.S. Letters of Credit), (ii) the Canadian Borrowers jointly and severally agree (with respect to the Canadian Letters of Credit) and (iii) the European Borrower agrees (with respect to the European Letters of Credit) to pay to the Administrative Agent for distribution to each Lender of the relevant Tranche (based on each such Lender’s respective L/C Participation Percentage as from time to time in effect in each Letter of Credit), a fee in respect of each Letter of Credit (the “Letter of Credit Fee”) for the period from and including the date of issuance of such Letter of Credit to but excluding the date of termination or expiration of such Letter of Credit, computed at a rate per annum equal to (x) the Applicable Margin as in effect from time to time during such period with respect to Revolving Loans that are maintained as Euro Rate Loans on the daily Stated Amount of each such Letter of Credit less (y) the Facing Fee applicable to such Letter of Credit (expressed as a per annum percentage). Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the first day on or after the termination of the Total Commitment upon which no Letters of Credit remain outstanding.

(c) The U.S. Borrowers jointly and severally agree (with respect to the U.S. Letters of Credit), (ii) the Canadian Borrowers jointly and severally agree (with respect to the Canadian Letters of Credit) and (iii) the European Borrower agrees (with respect to the European Letters of Credit) to agree to pay to each Issuing Lender, for its own account, a facing fee in

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respect of each Letter of Credit issued by it (the “Facing Fee”) for the period from and including the date of issuance of such Letter of Credit to but excluding the date of termination or expiration of such Letter of Credit, (x) in respect of standby Letters of Credit, computed at a rate per annum equal to 1/8 of 1% on the daily Stated Amount of such Letter of Credit, provided that in any event the minimum amount of Facing Fees payable in any twelve-month period for each standby Letter of Credit shall be not less than $500; it being agreed that, on the day of issuance of any standby Letter of Credit and on each anniversary thereof prior to the termination or expiration of such standby Letter of Credit, if $500 will exceed the amount of Facing Fees that will accrue with respect to such standby Letter of Credit for the immediately succeeding twelve-month period, the full $500 shall be payable on the date of issuance of such standby Letter of Credit and on each such anniversary thereof and (y) in respect of trade Letters of Credit, in an amount to be agreed with the respective Issuing Lender. Except as otherwise provided in the proviso to the immediately preceding sentence, accrued Facing Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and upon the first day on or after the termination of the Total Commitment, upon which no Letters of Credit remain outstanding.

(d) Each Borrower agrees to pay to each Issuing Lender, for its own account, upon each payment under, issuance of, or amendment to, any Letter of Credit issued by it, such amount as shall at the time of such event be the administrative charge and the reasonable expenses which such Issuing Lender is generally imposing in connection with such occurrence with respect to letters of credit.

(e) The Drawing Fees shall be paid by the Canadian Borrowers at the time of the incurrence (by way of acceptance, purchase or otherwise) of each Bankers’ Acceptance Loan.

(f) Each Borrower agrees to pay to the relevant Administrative Agent such fees as may be agreed to in writing from time to time by Aleris or any of its Subsidiaries and the Administrative Agent.

4.02 Voluntary Termination of Unutilized Commitments. (a) Upon at least three Business Days’ prior written notice to the Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), Aleris shall have the right, at any time or from time to time, without premium or penalty, to terminate the Total Unutilized Commitment in whole, or reduce it in part in an amount of at least $5,000,000 and in an integral multiple of $1,000,000 with the amount of each reduction pursuant to this Section 4.02(a) to apply to reduce the Total U.S./European Commitment and/or the Total Canadian Commitment, as elected by Aleris. Each reduction to (x) the Total U.S./European Commitment pursuant to this Section 4.02(a) shall apply to proportionately and permanently reduce the U.S./European Commitment of each U.S./European Lender (based on its relevant U.S./European Percentage) and (y) the Total Canadian Commitment pursuant to this Section 4.02(a) shall apply to proportionately and permanently reduce the Canadian Commitment of each Canadian Lender (based on its relevant Canadian Percentage).

(b) In the event (i) of a refusal by a Lender to consent to certain proposed changes or waivers with respect to this Agreement which have been approved by the Required Lenders as (and to the extent) provided in Section 13.12(d) but which require the consent of each

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Lender or each directly affected Lender or (ii) that any Lender becomes a Defaulting Lender, Aleris may, subject to its compliance with the requirements of Section 13.12(d) (in the case of a non-consenting Lender, but not a Defaulting Lender), upon five Business Days’ prior written notice to the Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders) terminate all of the Commitments of such Lender (other than any such Commitment which is being maintained by such Lender (and not being terminated by Aleris) as provided in Section 13.12(d), so long as (x) all Loans (other than any such Loans that are being maintained by such Lender (and not being repaid by Aleris) as provided in Section 13.12(d)), together with accrued and unpaid interest, Fees and all other amounts, owing to such Lender are repaid concurrently with the effectiveness of such termination pursuant to Section 5.01(b) (at which time Schedule I-A shall be deemed modified to reflect such changed amounts) and (y) such Lender’s L/C Participation Percentage of all outstanding Letters of Credit under any relevant Tranche is cash collateralized by the respective Account Parties in a manner reasonably satisfactory to the Administrative Agent and the respective Issuing Lenders. After giving effect to the termination of the Commitments of any Lender pursuant to this Section 4.02(b), such Lender shall no longer constitute a “Lender” for purposes of this Agreement, except with respect to indemnifications under this Agreement (including, without limitation, Sections 2.10, 2.11, 3.06, 5.04, 12.06 and 13.01), which shall survive as to such repaid Lender. In cases where any Commitment of any Lender is terminated pursuant to this Section 4.02(b), except in cases where such Commitment is replaced in full, after giving effect to the termination of any such Commitment of a given Lender pursuant to this Section 4.02(b), there shall occur automatic adjustments (as determined by the Administrative Agent) in the U.S./European Percentages and Canadian Percentages (and as a result thereof in the related L/C Participation Percentages) of the remaining Lenders.

4.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and each Commitment of each Lender) shall terminate in its entirety on June 30, 2007, unless the Restatement Effective Date has occurred on or prior to such date.

(b) In addition to any other mandatory commitment reductions pursuant to this Section 4.03, the Total U.S./European Commitment and the Total Canadian Commitment (and the U.S./European Commitment and the Canadian Commitment of each Lender with such a Commitment) shall terminate in their entirety on the Final Maturity Date.

(c) Each reduction to, or termination of, the Total U.S./European Commitment and the Total Canadian Commitment pursuant to this Section 4.03 as provided above (or pursuant to Section 4.02(a)) shall be applied to proportionately reduce or terminate, as the case may be, the U.S./European Commitment and the Canadian Commitment, as the case may be, of each Lender with a such a Commitment.

SECTION 5. Prepayments; Payments; Taxes.

5.01 Voluntary Prepayments. (a) Each Borrower shall have the right to prepay the Loans made to such Borrower, without premium or penalty, in whole or in part at any time and from time to time on the following terms and conditions: (i) such Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) (x) prior to 10:00 a.m. (New York time) at the Notice Office on the date of such prepayment in the

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case of Base Rate Loans and (y) prior to 12:00 noon (New York time) at the Notice Office (1) at least one Business Day before the date of such prepayment of its intent to prepay Canadian Prime Rate Loans (other than Swingline Loans), (2) on the date of such prepayment in the case of Swingline Loans and (3) at least three Business Days before the date of such prepayment of its intent to prepay Euro Rate Loans or Bankers’ Acceptance Loans, which notice (in each case) shall specify whether U.S. Borrower Revolving Loans, Canadian Revolving Loans, European Borrower Revolving Loans, U.S. Borrower Swingline Loans, European Borrower Swingline Loans or Canadian Swingline Loans shall be prepaid, the amount of such prepayment and the Types of Loans to be prepaid and, in the case of Euro Rate Loans, the specific Borrowing or Borrowings pursuant to which such Euro Rate Loans were made, and which notice the Administrative Agent shall, except in the case of Swingline Loans, promptly transmit to each of the Lenders; (ii) (x) each partial prepayment of Revolving Loans (other than Swingline Loans) pursuant to this Section 5.01(a) shall be in an aggregate principal amount of at least $5,000,000 (or such lesser amount as is acceptable to the Administrative Agent), provided that (x) if any partial prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the outstanding principal amount of Eurodollar Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto, then such Borrowing may not be continued as a Borrowing of Eurodollar Loans (and same shall automatically be converted into a Borrowing of Base Rate Loans) and any election of an Interest Period with respect thereto given by such Borrower shall have no force or effect and (y) in the case of partial prepayments of any Borrowing of Euro Rate Loans, the European Borrower shall use reasonable efforts to allocate such prepayments in a manner so that Borrowings do not remain outstanding in amounts less than the Minimum Borrowing Amount applicable thereto (and, to the extent such Borrowings would remain outstanding in amounts which are less than the Minimum Borrowing Amount applicable thereto, in the case of Euro Rate Loans, the European Borrower shall repay any Borrowings which are less than the Minimum Borrowing Amount applicable thereto at the end of the then current Interest Period, unless at such time the European Borrower combines separate Borrowings into one Borrowing, which such Borrowing shall be greater than or equal to the Minimum Borrowing Amount); (iii) each prepayment pursuant to this Section 5.01(a) in respect of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans, provided that at such Borrower’s election in connection with any prepayment of Revolving Loans pursuant to this Section 5.01(a), such prepayment shall not, so long as no Default or Event of Default then exists, be applied to any Revolving Loan of a Defaulting Lender; and (iv) prepayments of Bankers’ Acceptance Loans may not be made prior to the maturity date of the respective underlying Bankers’ Acceptances or B/A Equivalent Notes, as the case may be.

(b) In the event of (i) a refusal by a Lender to consent to certain proposed changes or waivers with respect to this Agreement which have been approved by the Required Lenders as (and to the extent) provided in Section 13.12(d) but which require the consent of each Lender or each directly affected Lender or (ii) any Lender becoming a Defaulting Lender, any Borrower may, upon five Business Days’ prior written notice to the Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders) repay all Loans, together with accrued and unpaid interest, Fees, and other amounts owing to such Lender (or owing to such Lender with respect to each Tranche which gives rise to the need to obtain such Lender’s individual consent) so long as (1) in the case of the repayment of Revolving Loans of any Lender of any Tranche pursuant to this Section 5.01(b), (x) the Commitments of the respective Tranche or Tranches of such Lender are terminated concurrently

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with such repayment pursuant to Section 4.02(b) (at which time Schedule I-A shall be deemed modified to reflect the changed Commitments) and (y) such Lender’s L/C Participation Percentage of all outstanding Letters of Credit of the respective Tranche or Tranches is cash collateralized by such Borrower in a manner reasonably satisfactory to the Administrative Agent and the Issuing Lenders and (2) in the case of any non-consenting Lender, but not a Defaulting Lender, (x) the consents, if any, required under Section 13.12(d) in connection with the repayment pursuant to this Section 5.01(b) have been obtained and (y) the repayment of such Lender’s Loans is otherwise made in accordance with, and subject to the requirements of, said Section 13.12(d) to the extent applicable.

5.02 Mandatory Repayments. (a) (i) On any day on which any one or more of the following conditions shall exist, the Borrowers shall repay the Loans (other than Bankers’ Acceptance Loans where the underlying Bankers’ Acceptance or B/A Equivalent Notes, as the case may be, have not matured) and/or cash collateralize outstanding Letters of Credit and Bankers’ Acceptance Loans pursuant to clause (iii) below in such amount as may be required to cause such conditions to cease to exist on such day:

(t) the Aggregate U.S. Borrower Exposure exceeds 100% (or, during an Agent Advance Period, 105%) of the U.S. Borrowing Base at such time less the Aggregate Non-U.S. Borrowing Base Usage at such time;

(u) the Aggregate U.S./European Exposure exceeds 100% (or, during an Agent Advance Period, 105%) of the Combined U.S./European Borrowing Base at such time less the Canadian U.S. Borrowing Base Usage at such time;

(v) the sum of the Aggregate U.S. Borrower Exposure and the Aggregate Canadian Exposure exceeds 100% (or, during an Agent Advance Period, 105%) of the Combined U.S./Canadian Borrowing Base at such time less the European U.S. Borrowing Base Usage at such time;

(w) the Aggregate Exposure at such time exceeds 100% (or, during an Agent Advance Period, 105%) of the Total Borrowing Base at such time;

(x) the Aggregate U.S./European Exposure at such time exceeds the Total U.S./European Commitment at such time;

(y) the Aggregate Canadian Exposure at such time exceeds the Total Canadian Commitment at such time; and/or

(z) the Aggregate European Borrower Exposure at such time exceeds the Total European Sub-Commitment at such time.

For purposes of this Section 5.02(a)(i) the relevant Borrowing Bases will be based upon the Borrowing Base Certificate most recently delivered.

(ii) If any condition set forth in sub-clauses (x), (y) or (z) of Section 5.02(a)(i) exists solely as a result of currency fluctuations of Non-Dollar Denominated Loans, then the repayments or cash collateralizations required pursuant to Section 5.02(a)(i) shall

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only be required if the relevant excess amount (for this purpose, using the Dollar Equivalent thereof) exceeds 105% of the relevant permitted maximum amount of the relevant Commitment as then in effect as provided in Section 5.02(a)(i) for more than three consecutive Business Days (at which time the excess of 100% shall be required to be eliminated).

(iii) Subject to Section 2.11, the Borrowers may prepay U.S. Borrower Revolving Loans, European Borrower Revolving Loans, Canadian Revolving Loans, U.S. Borrower Swingline Loans, European Borrower Swingline Loans and Canadian Swingline Loans and cash collateralize Letters of Credit and Bankers’ Acceptances pursuant to this Section 5.02(a) as directed by Aleris (so long as such application cures the related conditions).

(b) In addition to any other mandatory repayments pursuant to this Section 5.02 (but subject to Sections 5.02(e), (f) and (g)), no later than the fifth Business Day following each date on or after the Restatement Effective Date upon which Aleris or any of its Subsidiaries receives any cash proceeds from any issuance or incurrence by Aleris or any of its Subsidiaries of Indebtedness for borrowed money (other than Indebtedness for borrowed money permitted to be incurred pursuant to Section 10.04), an amount equal to 100% of the Net Debt Proceeds of the respective issuance or incurrence of Indebtedness shall be applied in accordance with the requirements of Sections 5.02(e), (f) and (g).

(c) In addition to any other mandatory repayments pursuant to this Section 5.02 (but subject to Sections 5.02(e), (f) and (g)), no later than the tenth Business Day following each date on or after the Restatement Effective Date upon which Aleris or any of its Subsidiaries receives any Net Sale Proceeds from any Asset Sale (except to the extent that the assets sold consist of assets located at the Carson Facility), an amount equal to 100% of the Net Sale Proceeds therefrom shall be applied in accordance with the requirements of Sections 5.02(e), (f) and (g); provided, however, (i) that so long as no Event of Default then exists, an amount equal to the Net Sale Proceeds therefrom shall not be required to be so applied on such date to the extent that Aleris has given written notice to the Administrative Agent within such ten Business Day period stating that such Net Sale Proceeds shall be used to purchase assets used, or to be used, in the businesses permitted pursuant to Section 10.10 within 15 months following the receipt thereof (or, if within 15 months following receipt thereof, Aleris or any of its Subsidiaries enters into a legally binding commitment to reinvest such Net Sale Proceeds, within 180 days following the expiration date of such 15 month period), and (ii) if all or any portion of such Net Sale Proceeds not required to be so applied as provided above in this Section 5.02(c) are not so reinvested within such time period (or such earlier date, if any, as Aleris or the relevant Subsidiary determines not to reinvest the Net Sale Proceeds from such Asset Sale as set forth above), an amount equal to such remaining portion shall be applied on the last day of such period (or such earlier date, as the case may be) as provided above in this Section 5.02(c) without regard to the preceding proviso.

(d) In addition to any other mandatory repayments pursuant to this Section 5.02((but subject to Sections 5.02(e), (f) and (g)), no later than the tenth Business Day following each date on or after the Restatement Effective Date upon which Aleris or any of its Subsidiaries receives any cash proceeds from any Recovery Event, an amount equal to 100% of

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the Net Insurance Proceeds from such Recovery Event shall be applied on such date in accordance with the requirements of Sections 5.02(e), (f) and (g); provided, however, that so long as no Event of Default then exists, such Net Insurance Proceeds shall not be required to be so applied on such date to the extent that Aleris has given written notice to the Administrative Agent within such ten Business Day period stating that such Net Insurance Proceeds shall be used to replace or restore properties or assets in respect of which such Net Insurance Proceeds were paid within 15 months following the date of the receipt of such Net Insurance Proceeds (or, if within 15 months following the receipt thereof, Aleris or any of its Subsidiaries enters into a legally binding commitment to reinvest such Net Insurance Proceeds, within 180 days of the date following the expiration date of such 15-month period), and provided, further, that if all or any portion of such Net Insurance Proceeds not required to be so applied pursuant to the preceding proviso are not so used within such time period (or such earlier date, if any, as Aleris or the relevant Subsidiary determines not to reinvest the Net Insurance Proceeds relating to such Recovery Event as set forth above), an amount equal to such remaining portion shall be applied on the last day of such period (or such earlier date, as the case may be) as provided above in this Section 5.02(d) without regard to the preceding proviso.

(e) Each amount required to be applied pursuant to Sections 5.02(b), (c), or (d) in accordance with this Section 5.02(e) shall be applied as a mandatory repayment of Revolving Loans and/or Swingline Loans, with each such mandatory repayment to be applied to U.S./European Revolving Loans, Canadian Revolving Loans and/or Swingline Loans as directed by Aleris. In the absence of a designation by the Borrowers as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion.

(f) Subject to Section 2.11 and clause (j) of this Section 5.02, each repayment of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans.

(g) Notwithstanding anything to the contrary contained in Sections 5.02(b), (c) and (d), so long as any Term Loans are outstanding, then to the extent that any cash proceeds referred to in any such clause of this Section 5.02 are used to repay outstanding Term Loans, the repayments otherwise required pursuant to such clauses of this Section 5.02 shall not be required to the extent of the respective net cash proceeds so applied, provided that if at the time of any required repayment pursuant to Sections 5.02(b), (c) or (d), the sum (the “Sum”) of (1) Excess Availability and (2) the amount of the cash and Cash Equivalents of Aleris and its Subsidiaries (other than cash and Cash Equivalents which are Restricted, on deposit in an Exempted Deposit Account or to be applied to repay Term Loans) is less than $100,000,000, the amounts required to be applied pursuant to such Sections (before giving effect to this clause (g)) shall be applied first to the repayment of the Loans to the extent required to cause the Sum to equal $100,000,000 and thereafter to the Term Loans to the extent required under the Term Loan Agreement.

(h) In addition to any other mandatory repayments pursuant to this Section 5.02, (h) all then outstanding Swingline Loans shall be repaid in full no later than the seventh day following the incurrence thereof; provided that, if the seventh day is not a Business Day, such Swingline Loans shall be repaid on the next succeeding Business Day and (ii) all outstanding Swingline Loans shall be repaid in full on the Final Maturity Date.

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(i) Notwithstanding anything in this Section 5.02 to the contrary, it is understood and agreed that none of Sections 5.02(b) through (d), inclusive, shall require that amounts received by any Foreign Subsidiary or Foreign Subsidiaries or a Domestic Subsidiary which is a Subsidiary of a Foreign Subsidiary be used to repay ABL Obligations owed by any U.S. Credit Parties.

(j) Notwithstanding the foregoing provisions of this Section 5.02 (other than clause (a) of this Section 5.02, which clause shall not have the benefits of this sentence), if at any time the mandatory repayment of Loans pursuant to this Section 5.02 would result in the Borrowers’ incurring breakage costs under Section 2.11 as a result of Euro Rate Loans being repaid other than on the last day of an Interest Period applicable hereto (any such Euro Rate Loans, “Affected Loans”), Aleris may elect, by written notice to the Administrative Agent, to have the provisions of the following sentence be applicable so long as no Default or Event of Default then exists. At the time any Affected Loans are otherwise required to be prepaid, Aleris may elect to deposit 100% (or such lesser percentage elected by Aleris as not being repaid) of the principal amounts that otherwise would have been paid in respect of the Affected Loans with the Administrative Agent to be held as security for the obligations of the respective Borrowers hereunder pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to the Administrative Agent and shall provide for investments of such deposits in Cash Equivalents, with such cash collateral to be released upon the request of Aleris from such cash collateral account (and applied to repay the principal amount of such Euro Rate Loans) upon each occurrence thereafter of the last day of an Interest Period applicable to such Euro Rate Loans (or such earlier date or dates as shall be requested by Aleris, with the amount to be so released and applied on the last day of each Interest Period to be the amount of such Euro Rate Loans to which such Interest Period applies (or, if less, the amount remaining in such cash collateral account); provided that (i) interest in respect of such Affected Loans shall continue to accrue thereon at the rate provided hereunder until such Affected Loans have been repaid in full and (ii) at any time while an Event of Default has occurred and is continuing or upon written notice from the Required Lenders, the Required Lenders may direct the Administrative Agent (in which case the Administrative Agent shall, and is hereby authorized by the Borrowers to, follow said directions) to apply any or all proceeds then on deposit in such collateral account to the payment of such Affected Loans. All risk of loss in respect of investments made as contemplated in this clause (j) shall be on the Borrowers. Under no circumstances shall the Administrative Agent be liable or accountable to the Borrowers or any other Person for any decrease in the value of the cash collateral account or for any loss resulting from the sale of any investment so made.

5.03 Payments and Computations; Maintenance of Accounts; Statement of Accounts. (a) Except as otherwise specifically provided herein, all payments under this Agreement and under any Note shall be made to the Administrative Agent for the account of the Lender or Lenders entitled thereto not later than 1:00 p.m. (New York time) on the date when due and shall be made in (w) U.S. Dollars in immediately available funds at the Payment Office of the relevant Administrative Agent in respect of any obligation of the Borrowers under this Agreement except as otherwise provided in the immediately following clauses (x), (y) and (z), (x) subject to Section 2.14, Canadian Dollars in immediately available funds at the Payment Office of the Administrative Agent, if such payment is made in respect of (i) principal of, or Face Amount of, or interest on Canadian Dollar Denominated Loans or (ii) any increased costs,

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indemnities or other amounts owing with respect to Canadian Dollar Denominated Loans (or Commitments relating thereto) at any time prior to the occurrence of a Conversion Event, in the case of this clause (ii) to the extent the respective Lender which is charging the same denominates the amounts owing in Canadian Dollars, (y) subject to Section 2.14, Euros in immediately available funds at the Payment Office of the Administrative Agent, if such payment is made in respect of (i) principal of or interest on Euro Denominated Loans or (ii) any increased costs, indemnities or other amounts owing with respect to Euro Denominated Loans (or Commitments relating thereto) at any time prior to the occurrence of a Conversion Event and (z) subject to Section 2.14, the applicable Available Currency, in immediately available funds at the Payment Office of the Administrative Agent, if such payment is made in respect of (i) principal of or interest on Other Foreign Currency Denominated Loans or (ii) any increased costs, indemnities or other amounts owing with respect to Other Foreign Currency Denominated Loans (or Commitments relating thereto) at any time prior to the occurrence of a Conversion Event. Nothing in the succeeding clauses of this Section 5.03 shall affect or alter the Borrowers’ obligations to the relevant Administrative Agent, the Collateral Agent, the Issuing Lenders and the Lenders with respect to all payments otherwise required to be made by the Borrowers in accordance with the terms of this Agreement and the other Credit Documents. Whenever any payment to be made hereunder or under any Note shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable at the applicable rate during such extension.

(b) (i) (A) Each of Aleris and the other U.S. Credit Parties shall, along with the Administrative Agent and certain financial institutions selected by Aleris and reasonably acceptable to the Administrative Agent (the “U.S. Collection Banks”), enter into on or prior to the Restatement Effective Date and thereafter maintain Cash Management Control Agreements in respect of each of the U.S. Collection Accounts. Aleris and each of the other U.S. Credit Parties shall instruct all Account Debtors of Aleris and such U.S. Credit Parties to remit all payments to the applicable “P.O. Boxes” or “Lockbox Addresses” of the applicable U.S. Collection Bank with respect to all Accounts of such Account Debtor, which remittances shall be collected by the applicable U.S. Collection Bank and deposited in the applicable U.S. Collection Account. All amounts received by Aleris, any of its Domestic Subsidiaries and any Collection Bank in respect of any Account, in addition to all other cash received from any other source, shall upon receipt be deposited into a U.S. Collection Account or directly into the Core U.S. Concentration Account.

(B) Each Canadian Subsidiary shall, along with the Canadian Administrative Agent and certain financial institutions selected by Aleris and reasonably acceptable to the Canadian Administrative Agent (the “Canadian Collection Banks”), enter into on or prior to the Restatement Effective Date and thereafter maintain Cash Management Control Agreements in respect of each of the Canadian Collection Accounts. Each Canadian Subsidiary shall instruct all Account Debtors of such Canadian Subsidiaries to remit all payments to the applicable “P.O. Boxes” or “Lockbox Addresses” of the applicable Canadian Collection Bank with respect to all Accounts of such Account Debtor, which remittances shall be collected by the applicable Canadian Collection Bank and deposited in the applicable Canadian Collection Account. All amounts received by each Canadian Subsidiary and any Canadian Collection Bank in respect of any Account, in addition to all other cash received from any other source, shall upon receipt be

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deposited into a Canadian Collection Account or directly into the Core Canadian Concentration Account.

(C) The European Borrower and each European Distribution Subsidiary shall, along with the Administrative Agent and certain financial institutions selected by Aleris and reasonably acceptable to the Administrative Agent (the “European Collection Banks”), enter into on or prior to the Restatement Effective Date (or, in the case of European Distribution Subsidiaries organized after the Restatement Effective Date, on the date which such European Distribution Subsidiary begins to conduct business) and thereafter maintain Cash Management Control Agreements in respect of each European Collection Account. Each European Distribution Subsidiary shall instruct all Account Debtors of such Subsidiaries to remit all payments to the applicable “P.O. Boxes”, “Lockbox Addresses” or a sub-account of the European Collection Account of the applicable European Collection Bank with respect to all Accounts of such Account Debtor, which remittances shall be collected by the applicable European Collection Bank and deposited in the applicable European Collection Account. All amounts received by each European Distribution Subsidiary and any European Collection Bank in respect of any Account, in addition to all other cash received from any other source, shall upon receipt be deposited into a European Collection Account or directly into the Core European Concentration Account. It is understood and agreed that all European Collection Accounts shall be maintained in the name of the Collateral Agent.

(ii) Aleris and the other U.S. Credit Parties shall, along with the Administrative Agent and each of those banks in which the U.S. Disbursement Accounts are maintained, enter into on or prior to the Restatement Effective Date and thereafter maintain Cash Management Control Agreements with respect to each such U.S. Disbursement Account (except with respect to Exempted Disbursement Accounts and Exempted Deposit Accounts). Each Canadian Subsidiary shall, along with the Canadian Administrative Agent and each of those banks in which the Canadian Disbursement Accounts are maintained, enter into on or prior to the Restatement Effective Date and thereafter maintain Cash Management Control Agreements with respect to each such Canadian Disbursement Account (except with respect to Exempted Disbursement Accounts and Exempted Deposit Accounts). The European Borrower and each European Distribution Subsidiary shall, along with the Administrative Agent and each of those banks in which the European Disbursement Accounts are maintained, enter into on or prior to the Restatement Effective Date (or, in the case of European Distribution Subsidiaries organized after the Restatement Effective Date, on the date which such European Distribution Subsidiary begins to conduct business) and thereafter maintain Cash Management Control Agreements with respect to each such European Disbursement Account (except with respect to Exempted Disbursement Accounts and Exempted Deposit Account).

(c) All amounts held in the U.S. Collection Accounts and U.S. Disbursement Accounts (other than Exempted Disbursement Accounts) with respect to Aleris and its Domestic Subsidiaries shall be wired by the close of business on each Business Day into an account with a financial institution selected by Aleris and reasonably acceptable to the Administrative Agent and subject to a Cash Management Control Agreement (the “Core U.S. Concentration Account”) unless such amounts are otherwise required or permitted to be applied pursuant to Section 5.02. All amounts held in the Canadian Collection Accounts and Canadian Disbursement Accounts (other than Exempted Disbursement Accounts) with respect to the Canadian Subsidiaries shall be

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wired by the close of business on each Business Day into an account with a financial institution selected by Aleris and reasonably acceptable to the Canadian Administrative Agent and subject to a Cash Management Control Agreement (the “Core Canadian Concentration Account”) unless such amounts are otherwise required or permitted to be applied pursuant to Section 5.02. All amounts held in all of the European Collection Accounts and European Disbursement Accounts (other than Exempted Disbursement Accounts) with respect to the European Subsidiaries shall be wired by the close of business on each Business Day into an account with a financial institution selected by Aleris and reasonably acceptable to the Administrative Agent and subject to a Cash Management Control Agreement (the “Core European Concentration Account”) unless such amounts are otherwise required or permitted to be applied pursuant to Section 5.02.

(d) (i) Each Cash Management Control Agreement relating to a Core U.S. Concentration Account shall provide that after the occurrence and during the continuance of an Event of Default or a Dominion Event, all collected amounts held in the Core U.S. Concentration Account from and after the date requested by the Administrative Agent, shall be sent by ACH or wire transfer no less frequently than once per Business Day (unless the Commitments have been terminated and the ABL Obligations have been paid in full) to an account maintained by the Administrative Agent at DBNY (the “DBNY Account”). Subject to the terms of the respective Security Document, all amounts received in the DBNY Account shall be applied (and allocated) by the Administrative Agent on a daily basis in the following order (in each case, to the extent the Administrative Agent has actual knowledge of the amounts owing or outstanding as described below, and after giving effect to the application of any such amounts (x) otherwise required to be applied pursuant to Sections 5.02(b), (c) or (d) or (y) constituting proceeds from any Collateral otherwise required to be applied pursuant to the terms of the respective Security Document): (1) first, to the payment (on a ratable basis) of any outstanding Expenses actually due and payable to the Administrative Agent under any of the Credit Documents and to repay or prepay outstanding U.S. Borrower Swingline Loans advanced by the U.S./European Swingline Lender; (2) second, to the extent all amounts referred to in preceding clause (1) have been paid in full, to pay (on a ratable basis) all outstanding Expenses actually due and payable to each Issuing Lender under any of the Credit Documents and to repay all outstanding Unpaid Drawings and all interest thereon; (3) third, to the extent all amounts referred to in preceding clauses (1) and (2) have been paid in full, to pay (on a ratable basis) all accrued and unpaid interest actually due and payable on the U.S. Borrower Revolving Loans and all accrued and unpaid Fees actually due and payable to the Administrative Agent, the Issuing Lenders and the Lenders under any of the Credit Documents; (4) fourth, to the extent all amounts referred to in preceding clauses (1) through (3), inclusive, have been paid in full, to repay (on a ratable basis) the outstanding principal of U.S. Borrower Revolving Loans (whether or not then due and payable); (5) fifth, to the extent all amounts referred to in preceding clauses (1) through (4), inclusive, have been paid in full, to pay or cash collateralize, as the case may be, (on a ratable basis) ABL Obligations (guaranteed by the U.S. Borrowers) in accordance with following clauses (ii) and/or (iii) as selected by the U.S. Borrowers so long as no Default or Event of Default then exists or, in the absence of such designation or if a Default or Event of Default then exists, as determined by the Administrative Agent, (6) sixth, to the extent all amounts referred to in preceding clauses (1) through (5), inclusive, have been paid in full, to pay (on a ratable basis) all other outstanding ABL Obligations then due and payable to the Administrative Agent and the Lenders under any of the Credit Documents; and (7) seventh, to the U.S. Borrowers. Each Credit

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Party agrees that it will not cause any proceeds of any Core U.S. Concentration Account to be otherwise redirected.

(ii) Each Cash Management Control Agreement relating to a Core Canadian Concentration Account shall provide that after the occurrence and during the continuance of an Event of Default or a Dominion Event, all collected amounts held in the Core Canadian Concentration Account from and after the date requested by the Administrative Agent, shall be sent by ACH or wire transfer no less frequently than once per Business Day (unless the Commitments have been terminated and the Canadian Borrower Obligations have been paid in full) to an account maintained by the Canadian Administrative Agent at DBAG (the “DBAG Account”). Subject to the terms of the respective Security Agreement, all amounts received in the DBAG Account shall be applied (and allocated) by the Administrative Agent on a daily basis in the following order (in each case, to the extent the Administrative Agent has actual knowledge of the amounts owing or outstanding as described below, and after giving effect to the application of any such amounts (x) otherwise required to be applied pursuant to Sections 5.02(b), (c) or (d) or (y) constituting proceeds from any Collateral otherwise required to be applied pursuant to the terms of the respective Security Document): (1) first, to the payment (on a ratable basis) of any outstanding Expenses actually due and payable by the Canadian Borrowers to the Administrative Agent under any of the Credit Documents and to repay or prepay outstanding Canadian Swingline Loans advanced by the Canadian Swingline Lender; (2) second, to the extent all amounts referred to in preceding clause (1) have been paid in full, to pay (on a ratable basis) all accrued and unpaid interest actually due and payable on the Canadian Revolving Loans and all accrued and unpaid Fees actually due and payable by the Canadian Borrowers to the Administrative Agent and the Lenders under any of the Credit Documents; (3) third, to the extent all amounts referred to in preceding clauses (1) through (2), inclusive, have been paid in full, to repay (on a ratable basis) the outstanding principal of Canadian Revolving Loans (whether or not then due and payable); (4) fourth, to the extent all amounts referred to in preceding clauses (1) through (3), inclusive, have been paid in full, to pay (or, in the case of Bankers’ Acceptance Loans, cash collateralize) (on a ratable basis) all other outstanding ABL Obligations of the Canadian Borrowers then due and payable to the Administrative Agent, the Collateral Agent and the Lenders under any of the Credit Documents; and (5) fifth, to the Canadian Borrowers. Each Credit Party agrees that it will not cause any proceeds of any Core Canadian Concentration Account to be otherwise redirected.

(iii) Each Cash Management Control Agreement relating to a Core European Concentration Account shall provide that after the occurrence and during the continuance of an Event of Default or a Dominion Event, all collected amounts held in the Core European Concentration Account from and after the date requested by the Administrative Agent, shall be sent by ACH or wire transfer no less frequently than once per Business Day (unless the Commitments have been terminated and the European Borrower Obligations have been paid in full) to an account maintained by the Administrative Agent at Deutsche Bank AG, Zurich Branch (the “DB Account”). Subject to the terms of the respective Security Agreement, all amounts received in the DB Account shall be applied (and allocated) by the Administrative Agent on a daily basis in the following order (in each case, to the extent the Administrative Agent has actual knowledge of the amounts owing or outstanding as described below, and after giving effect to the application of any such amounts (x) otherwise required to be applied pursuant to Sections 5.02(b), (c) or (d) or (y) constituting proceeds from any Collateral otherwise required to be

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applied pursuant to the terms of the respective Security Document): (1) first, to the payment (on a ratable basis) of any outstanding Expenses actually due and payable by the European Borrower to the Administrative Agent and/or the Collateral Agent under any of the Credit Documents and to repay or prepay outstanding European Borrower Swingline Loans advanced by the U.S./European Swingline Lender; (2) second, to the extent all amounts referred to in preceding clause (1) have been paid in full, to pay (on a ratable basis) all accrued and unpaid interest actually due and payable on the European Facility Revolving Loans and all accrued and unpaid Fees actually due and payable by the European Borrower to the Administrative Agent and the Lenders under any of the Credit Documents; (3) third, to the extent all amounts referred to in preceding clauses (1) through (2), inclusive, have been paid in full, to repay (on a ratable basis) the outstanding principal of European Borrower Revolving Loans (whether or not then due and payable); (4) fourth, to the extent all amounts referred to in preceding clauses (1) through (3), inclusive, have been paid in full, to pay (on a ratable basis) all other outstanding ABL Obligations of the European Borrower then due and payable to the Administrative Agent, the Collateral Agent and the Lenders under any of the Credit Documents; and (5) fifth, to the European Borrower. Each Credit Party agrees that it will not cause any proceeds of any Core European Concentration Account to be otherwise redirected.

(e) Without limiting the provisions set forth in Section 13.15, the Administrative Agent shall maintain an account on its books in the name of each of the Borrowers (collectively, the “Credit Account”) in which each Borrower will be charged with all loans and advances made by the Lenders to such Borrower for such Borrower’s account, including the Loans, the Letter of Credit Outstandings, and the Fees, Expenses and any other ABL Obligations relating thereto. Each Borrower will be credited, in accordance with this Section 5.03, with all amounts received by the Lenders from such Borrower or from others for its account, including, as set forth above, all amounts received by the Administrative Agent and applied to the ABL Obligations. In no event shall prior recourse to any Accounts or other Collateral be a prerequisite to the Administrative Agent’s right to demand payment of any Obligation upon its maturity. Further, the Administrative Agent shall have no obligation whatsoever to perform in any respect any of Aleris’ or any of its Subsidiaries’ contracts or obligations relating to the Accounts.

(f) After the end of each month, the Administrative Agent shall send Aleris and each Lender a statement accounting for the charges, loans, advances and other transactions occurring among and between the Administrative Agent, the Lenders, the Issuing Lenders and each Borrower during that month. The monthly statements shall, absent manifest error, be final, conclusive and binding on each Borrower and the Lenders.

5.04 Net Payments. (a) All payments made by or on behalf of any Credit Party under any Credit Document (including, in the case of each Borrower, in its capacity as a guarantor pursuant to Section 14) in each case will be made without setoff, counterclaim or other defense. Except as provided in Section 5.04(b), all such payments will be made free and clear of, and without deduction or withholding for, any Taxes. If any Taxes are levied or imposed with respect to such payment, the relevant Borrower (and any Credit Party making the respective payment or which has guaranteed the obligations of the relevant Borrower) agrees to pay the full amount of such Taxes to the appropriate taxing authority, and shall pay to the applicable Section 5.04 Indemnitee such additional amounts as may be necessary so that every payment of all

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amounts due under this Agreement or under any other Credit Document, after withholding or deduction for or on account of any Taxes (including, for the avoidance of doubt, withholding and deductions applicable to additional amounts payable under this Section 5.04), will not be less than the amount provided for herein or in such other Credit Document. The respective Borrowers will furnish to the Administrative Agent within 45 days after the date the payment of any Taxes is due pursuant to applicable law certified copies of tax receipts or other evidence reasonably satisfactory to the Administrative Agent evidencing such payment by such Borrowers or the respective Credit Party. The U.S. Borrowers (jointly and severally), the Canadian Borrowers (jointly and severally) and the European Borrower (and any Credit Party making the respective payment or which has guaranteed the obligations of the respective Borrower), as applicable, agree to indemnify and hold harmless each Section 5.04 Indemnitee and reimburse such Section 5.04 Indemnitee upon its written request (which shall set forth the basis and calculation of such amount) for the amount of any Taxes so levied or imposed and paid by such Section 5.04 Indemnitee. Notwithstanding anything to the contrary in this Section 5.04(a), (i) any payments required to be made pursuant to this Section 5.04(a) to an Indirect Section 5.04 Indemnitee shall be made to the Related Pass Through Entity and (ii) any request for reimbursement pursuant to this Section 5.04(a) that is to be made by an Indirect Section 5.04 Indemnitee shall be made by the Related Pass Through Entity.

(b) The Administrative Agent and each Lender that is a Lender to the U.S. Borrowers and is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) agrees to deliver to Aleris and the Administrative Agent on or prior to the Restatement Effective Date or, in the case of a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 2.13 or 13.04(b) (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer and is in compliance with the provisions of this paragraph), on the date of such assignment or transfer to such Lender or, in the case of a successor Issuing Lender, the date such Issuing Lender becomes an Issuing Lender, (i) two accurate and complete original signed copies of U.S. Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption from withholding under an income tax treaty) (or successor forms) certifying to such Lender’s entitlement as of such date to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement and under any Note, or (ii) if the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver forms described in clause (i) above, (x) a certificate substantially in the form of Exhibit D (any such certificate, a “Section 5.04(b)(ii) Certificate”) and (y) two accurate and complete original signed copies of U.S. Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption) (or successor form) certifying to such Lender’s entitlement as of such date to a complete exemption from United States withholding tax with respect to payments of interest to be made under this Agreement and under any Note or (iii) in the case of the Administrative Agent and each such Lender, if a Lender or the Administrative Agent is a foreign intermediary or flow-through entity for U.S. federal income tax purposes, two accurate and complete signed copies of Internal Revenue Service Form W-8IMY (and all necessary attachments) establishing a complete exemption from United States withholding tax with respect to payments made to the Administrative Agent or the applicable Lender, as the case may be, under this Agreement and under any Note. In addition, the Administrative Agent and each Lender to the U.S. Borrowers agrees that from time to time after the Restatement Effective Date, when a lapse in time or change in circumstances or law renders the previous certification obsolete, invalid or inaccurate

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in any material respect, the Administrative Agent or such Lender will deliver to Aleris and the Administrative Agent two new accurate and complete original signed copies of U.S. Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits of any income tax treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and a Section 5.04(b)(ii) Certificate, or Form W-8IMY (with respect to foreign intermediary or flow through entity), as the case may be, and such other forms and necessary attachments as may be required in order to confirm or establish the entitlement of such Person to a continued exemption from United States withholding tax with respect to payments under this Agreement and any Note, or the Administrative Agent and/or such Lender shall immediately notify Aleris and the Administrative Agent of its inability to deliver any such form or Section 5.04(b)(ii) Certificate, in which case the Administrative Agent and/or such Lender shall not be required to deliver any such new form or Section 5.04(b)(ii) Certificate pursuant to this Section 5.04(b). Notwithstanding the foregoing, with respect to payments made by any Credit Party under any Credit Document to or for the benefit of a Participant, such Participant shall be required to provide forms and/or certificates pursuant to the preceding sentences of this Section 5.04(b) only to the extent that such Participant is legally entitled to do so. The Administrative Agent and each Lender that is a Lender to the U.S. Borrowers and is a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. federal income tax purposes (other than an Administrative Agent or Lender that may be treated as an exempt recipient based on the indicators described in U.S. Treasury Regulation Section 1.6049-4(c)(1)(ii) except to the extent required by Treasury Regulation Section 1.1441-1(d)(4) (and any successor provision)) agrees to deliver (with respect to itself only) to Aleris and the Administrative Agent, on or prior to the Restatement Effective Date or, in the case of such an Administrative Agent appointed after the Restatement Effective Date pursuant to Section 12.09 or a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 2.13 or 13.04(b) (unless the respective Lender was already a Lender to the U.S. Borrowers hereunder immediately prior to such assignment or transfer and is in compliance with the provisions of this paragraph), on the date of such assignment or transfer to such Lender, two accurate and complete original signed copies of U.S. Internal Revenue Service Form W-9 (or successor forms) certifying to such Person’s entitlement as of such date to a complete exemption from United States backup withholding tax with respect to payments to be made under this Agreement and under any other Credit Document. Notwithstanding anything to the contrary contained in Section 5.04(a), but subject to Section 13.04(b) and the second succeeding sentence, (x) the U.S. Borrowers shall be entitled, to the extent they are required to do so by law, to deduct or withhold Taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, Fees or other amounts payable hereunder for the account of the Administrative Agent and/or any Lender, as the case may be, to the extent that the Administrative Agent and/or such Lender, as the case may be, has not provided to such Borrower U.S. Internal Revenue Service Forms that establish a complete exemption from deduction or withholding and (y) no Borrower shall be obligated pursuant to Section 5.04(a) to gross-up payments to be made to the Administrative Agent and/or a Lender (other than a Participant following the occurrence of a Conversion Event), as the case may be, in respect of withholdings, income or similar taxes imposed by the United States federal government if (I) the Administrative Agent and/or such Lender, as the case may be, has not provided to such Borrower the U.S. Internal Revenue Service Forms required to be provided to such Borrower pursuant to this Section 5.04(b) or (II) in the case of a payment, other than interest, to the Administrative Agent and/or a Lender (other than a

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Participant following the occurrence of a Conversion Event), as the case may be, described in clause (ii) above, to the extent that such forms do not establish a complete exemption from withholding of such taxes. Except when a Significant Event of Default has occurred and is continuing or following a Conversion Event, and notwithstanding anything to the contrary in Section 5.04(a), but subject to Section 13.04(b) and the immediately succeeding sentence, (x) the Canadian Borrowers shall be entitled, to the extent they are required to do so by law, to deduct or withhold income or similar Taxes imposed by Canada (or any political subdivision or taxing authority thereof or therein) from interest, Fees or other amounts payable hereunder for the account of the Canadian Administrative Agent, any Canadian Lender and/or any Issuing Lender in respect of a Letter of Credit issued in favor of a Canadian Borrower, as the case may be, to the extent that the Canadian Administrative Agent and/or such Canadian Lender or Issuing Lender, as the case may be, is not a Canadian Resident or if the Canadian Administrative Agent or Canadian Lender or Issuing Lender (if not a Canadian Resident) has not provided forms required by Section 2.17(a) that establish a complete exemption from the withholding of such Taxes (or the withholding of such Taxes at a reduced rate) and (y) no Canadian Borrower shall be obligated pursuant to Section 5.04(a) to gross-up payments to be made to the Canadian Administrative Agent and/or a Canadian Lender or Issuing Lender, as the case may be, in respect of withholdings, income or similar Taxes imposed by Canada (or any political subdivision or taxing authority thereof or therein) if (I) the Canadian Administrative Agent, such Canadian Lender and/or such Issuing Lender in respect of a letter of credit issued in favor of a Canadian Borrower is not a Canadian Resident or (II) the Canadian Administrative Agent or such Canadian Lender or such Issuing Lender (if not a Canadian Resident) has not provided forms required by Section 2.17(a) that establish a complete exemption from the withholding of such Taxes (or the withholding of such Taxes at a reduced rate). Notwithstanding anything to the contrary contained in the two preceding sentences or elsewhere in this Section 5.04 and except as set forth in Section 13.04(b), the respective U.S. Borrowers (jointly and severally), Canadian Borrowers (jointly and severally as to amounts payable by any Canadian Borrower) and the European Borrower (and any Credit Party making the respective payment or which has guaranteed the obligations of the respective Borrower) agree to pay any additional amounts and to indemnify each Lender in the manner set forth in Section 5.04(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any amounts deducted or withheld by it as described in the two immediately preceding sentences as a result of any changes after the Restatement Effective Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of income or similar taxes; provided, however, that (x) this sentence shall not apply to the portion of such amounts required to be deducted or withheld by such Borrower or Borrowers to the extent such Borrower or Borrowers would have been required to pay additional amounts pursuant to Section 5.04(a) irrespective of such change in such applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof and (y) this sentence shall not be read to permit the Administrative Agent and/or a Lender to a U.S. Borrower to refuse to deliver any Form W-8ECI, Form W-8BEN, Form W-8IMY, or Section 5.04(b)(ii) Certificate, as the case may be, except where, as a result of such change in law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of income or similar taxes, the Administrative Agent and/or such Lender is unable to deliver such form or certificate as described above.

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(c) Each Lender agrees to use reasonable efforts (consistent with legal and regulatory restrictions and subject to overall policy considerations of such Lender) to file any certificate or document or to furnish to the relevant non-U.S. Borrower any information, in each case, as reasonably requested by such non-U.S. Borrower that may be necessary to establish any available exemption from, or reduction in the amount of, any Taxes; provided, however, that nothing in this Section 5.04(c) shall require a Lender to disclose any confidential information (including, without limitation, its tax returns or its calculations).

(d) If a Borrower pays any additional amount under this Section 5.04 to a Section 5.04 Indemnitee, and such Section 5.04 Indemnitee determines in its reasonable sole discretion that it has actually received or realized in connection therewith any refund or any reduction of, or credit against (including, for the avoidance of doubt, any foreign tax credit), its tax liabilities in or with respect to the taxable year in which the additional amount is paid (a “Tax Benefit”), such Section 5.04 Indemnitee shall pay to such Borrower an amount (not to exceed the additional amounts paid by such Borrower under this Section 5.04 with respect to Taxes giving rise to such Tax Benefit) that the Section 5.04 Indemnitee shall, in its reasonable sole discretion, determine is equal to the net benefit, after tax, which was obtained by such Section 5.04 Indemnitee in such year as a consequence of such Tax Benefit; provided, however, that (i) any Section 5.04 Indemnitee may determine, in its sole discretion consistent with the policies of such Section 5.04 Indemnitee, whether to seek a Tax Benefit; (ii) any taxes that are imposed on a Section 5.04 Indemnitee as a result of a disallowance or reduction (including through the expiration of any tax credit carryover or carryback of such Section 5.04 Indemnitee that otherwise would not have expired) of any Tax Benefit with respect to which such Section 5.04 Indemnitee has made a payment to such Borrower pursuant to this Section 5.04(d) shall be treated as a Tax for which such Borrower is obligated to indemnify such Section 5.04 Indemnitee pursuant to this Section 5.04 without any exclusions or defenses; (iii) nothing in this Section 5.04(d) shall require any Section 5.04 Indemnitee to disclose any confidential information to any Borrower (including, without limitation, its tax returns or its calculations); and (iv) no Section 5.04 Indemnitee shall be required to pay any amounts pursuant to this Section 5.04(d) at any time that a Default or an Event of Default exists.

(e) If a Borrower determines in good faith that a reasonable basis exists for contesting any Taxes for which additional amounts have been paid under this Section 5.04 to a Section 5.04 Indemnitee, such Section 5.04 Indemnitee shall cooperate with the Borrower in challenging such Taxes, at the Borrower’s expense, if so requested by the Borrower in writing.

5.05 Minimum Interest Rates and Payments. (a) The various rates of interests provided for in this Agreement (including, without limitation, under Section 2.08) are minimum interest rates.

(b) When entering into this Agreement, each party hereto has assumed that the payments required under this Agreement are not and will not become subject to Swiss Withholding Tax. Notwithstanding that the parties hereto do not anticipate that any payment will be subject to Swiss Withholding Tax, they agree that, in the event that Swiss Withholding Tax should be imposed on interest or other payments (the “Relevant Amount”) by a Swiss Obligor, any payment of interest due by such Swiss Obligor shall, subject to the provisions of this Agreement, be increased to an amount which (after making any deduction of the Swiss

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Withholding Tax) results in a payment to each Lender entitled to such payment of an amount equal to the payment which would have been due had no deduction of Swiss Withholding Tax been required. For this purpose, the Swiss Withholding Tax shall be calculated on the full grossed-up amount.

(c) The European Borrower shall not be required to make an increased payment to any specific Lender (but without prejudice to the rights of all other Lenders hereunder) under paragraph (b) above or under Section 5.04 in connection with a Swiss Withholding Tax if the European Borrower has breached the Ten Non-Bank Regulations and/or Twenty Non-Bank Regulations as a direct result of (i) the incorrectness of the representation made by such Lender on the Restatement Effective Date pursuant to the first sentence of Section 2.19 (if Schedule I-C specified that such Lender was a Swiss Qualifying Lender) or (ii) such Lender, as assignee or participant, breaching the requirements and limitations for transfers, assignments or sub-participations (including Restricted Sub-Participations) pursuant to Section 13.04.

(d) For the avoidance of doubt, the European Borrower shall be required to make an increased payment to a specific Lender under paragraph (b) above in connection with the imposition of a Swiss Withholding Tax if the European Borrower has breached the Ten Non-Bank Regulations and/or the Twenty Non-Bank Regulations as a result of its failure to comply with the provisions of Section 10.10 or, if after a Significant Event of Default or Conversion Event, lack of compliance with the Ten Non-Bank Regulations and/or the Twenty Non-Bank Regulations as a result of assignments or participation effected in accordance herewith.

(e) If requested by the Administrative Agent, a Swiss Obligor shall provide to the Administrative Agent those documents which are required by law and applicable double taxation treaties to be provided by the payer of such tax for each relevant Lender to prepare a claim for refund of Swiss Withholding Tax. In the event Swiss Withholding Tax is refunded to the Lender by the Swiss Federal Tax Administration, the relevant Lender shall forward, after deduction of costs, such amount to the Swiss Obligor; provided, however, that (i) the relevant Swiss Obligor has fully complied with its obligations under this Section 5.05; (ii) the relevant Lender may determine, in its sole discretion, consistent with the policies of such Lender, the amount of the refund attributable to Swiss Withholding Tax paid by the relevant Swiss Obligor; (iii) nothing in Section 5.05 shall require the Lender to disclose any confidential information to the Swiss Obligor (including, without limitation, its tax returns); and (iv) no Lender shall be required to pay any amounts pursuant to this Section 5.05(e) at any time during which a Default or Event of Default exists.

SECTION 6. Conditions Precedent to Credit Events on the Restatement Effective Date. The obligation of each Lender to make Loans (including by way of the conversion of the Existing Loans on the Restatement Effective Date as contemplated in Sections 2.01(a), (b) and (c)), and the obligation of each Issuing Lender to issue Letters of Credit (including any Existing Letters of Credit deemed issued on the Restatement Effective Date as contemplated in Section 3.01(c)), in each case on the Restatement Effective Date, are subject at the time of the making or converting of such Loans or the issuance or deemed issuance of such Letters of Credit to the satisfaction of the following conditions (unless waived in accordance with Section 13.12):

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6.01 Execution of Agreement; Notes. On or prior to the Restatement Effective Date (i) this Agreement shall have been executed and delivered as provided in Section 13.10 and (ii) there shall have been delivered to the Administrative Agent for the account of each of the Lenders that has requested same the appropriate U.S. Borrower Revolving Note, Canadian Revolving Note and/or European Borrower Revolving Note, and to the U.S./European Swingline Lender, if so requested by it, U.S. Borrower Swingline Note and European Borrower Swingline Note and/or to the Canadian Swingline Lender, if so requested by it, Canadian Swingline Note, in each case executed by the appropriate Borrower or Borrowers, and in the amount, maturity and as otherwise provided herein.

6.02 Opinions of Counsel. On the Restatement Effective Date, the Joint Lead Arrangers shall have received (i) from Fried, Frank, Harris, Shriver & Jacobson LLP, special counsel to the Credit Parties, an opinion addressed to the Administrative Agent, the Canadian Administrative Agent, the Collateral Agent and each of the Lenders and dated the Restatement Effective Date covering the matters set forth in Exhibit E-1, (ii) from Torys LLP special Canadian counsel to the Credit Parties organized under the laws of Canada or any province thereof, opinions addressed to the Administrative Agent, the Canadian Administrative Agent, the Collateral Agent and each of the Lenders and dated the Restatement Effective Date covering the matters set forth in Exhibit E-2, (iii) Pestalozzi Lachenal Patry, special Swiss counsel to the Credit Parties organized under the laws of Switzerland or any province thereof, opinions addressed to the Administrative Agent, the Canadian Administrative Agent, the Collateral Agent and each of the Lenders and dated the Restatement Effective Date covering the matters set forth in Exhibit E-3, (iv) from local counsel in each state, province or other jurisdiction in which Mortgaged Properties are located and/or Credit Parties are organized, an opinion in form and substance satisfactory to the Collateral Agent addressed to the Collateral Agent and each of the Lenders and dated the Restatement Effective Date covering such matters incident to the transactions contemplated herein as the Collateral Agent may reasonably request including but not limited to (x) the enforceability of each Mortgage and (y) the perfection of the security interests granted pursuant to the relevant Security Documents and (v) from foreign counsel to the Credit Parties in such jurisdictions as may be reasonably requested by the Administrative Agent, opinions which shall (x) be addressed to the Administrative Agent, the Canadian Administrative Agent, the Collateral Agent and each of the Lenders and be dated the Restatement Effective Date, (y) cover various matters regarding the execution, delivery and performance of the Local Law Pledge Agreements and European Security Documents and the perfection and/or such other matters incident to the transactions contemplated herein as the Joint Lead Arrangers may reasonably request and (z) be in form, scope and substance reasonably satisfactory to the Joint Lead Arrangers.

6.03 Corporate Documents; Proceedings; etc. (a) On the Restatement Effective Date, the Joint Lead Arrangers shall have received a certificate from each Credit Party, dated the Restatement Effective Date, signed by the chairman of the board, the chief executive officer, the president, the chief financial officer or any vice president of such Credit Party, and attested to by the secretary or any assistant secretary of such Credit Party, substantially in the form of Exhibit F with appropriate insertions, together with copies of the certificate or articles of incorporation and by-laws (or equivalent organizational documents), as applicable, of such Credit Party and the resolutions of such Credit Party referred to in such certificate, and each of the foregoing shall be in form and substance reasonably acceptable to the Joint Lead Arrangers.

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(b) On the Restatement Effective Date, the Joint Lead Arrangers shall have received all corporate, partnership, limited liability company and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement and the other Credit Documents shall be reasonably satisfactory in form and substance to the Joint Lead Arrangers, and the Joint Lead Arrangers shall have received all information and copies of all documents and papers, including records of corporate proceedings, governmental approvals, good standing certificates and bring-down telegrams or facsimiles, if any, which the Joint Lead Arrangers may have reasonably requested in connection therewith, such documents and papers where appropriate to be certified by proper corporate, partnership, limited liability company or governmental authorities.

(c) On the Restatement Effective Date, the Joint Lead Arrangers shall have received a certificate, dated the Restatement Effective Date and signed on behalf of Aleris by the chairman of the board, the chief executive officer, the chief financial officer, the president or any vice president of Aleris, certifying on behalf of Aleris that all of the conditions in Sections 6.04, 6.05, 6.06, 6.07 and 7.01 have been satisfied on such date.

6.04 Consummation of the Merger. On the Restatement Effective Date, the Merger shall have been (or simultaneously with the initial funding of the Loans shall be) consummated in all material respects in accordance with the Merger Documents. On the Restatement Effective Date, (i) the Joint Lead Arrangers shall have received true and correct copies of all Merger Documents, certified as such by an appropriate officer of Aleris, (ii) each of the conditions precedent to the consummation of the Merger as set forth in the Merger Documents as originally in effect shall have been satisfied in all material respects, and not waived in a manner that is materially adverse to the Lenders except with the prior written consent of the Joint Lead Arrangers, (iii) the Merger Documents shall not have been amended in any way materially adverse to the Lenders without the prior written consent of the Joint Lead Arrangers, and (iv) all Merger Documents shall be in full force and effect.

6.05 Equity Financing, New Notes, Term Loans, etc. On or prior to the Restatement Effective Date, the Borrowers shall received gross cash proceeds from (x) the issuance of the New Notes in an aggregate amount equal to $1,000,000,000 (or its equivalent in any other applicable currency), (y) the incurrence of Term Loans pursuant to the Term Loan Agreement in an aggregate amount equal to $1,225,000,000 (or its equivalent in any other applicable currency) and (z) cash equity financing from the Permitted Holders in an aggregate amount of $852,000,000 (the “Equity Financing”).

6.06 Refinancing; Excess Availability. (a) On the Restatement Effective Date and prior to or concurrently with the incurrence of the Loans hereunder:

(i) (x) the Borrowers shall, in coordination with the Administrative Agent, repay Existing Revolving Loans of certain of the Lenders under the relevant Tranche or Tranches, and incur Revolving Loans from certain other Lenders under the relevant Tranche or Tranches, (even though as a result thereof such new Loans (to the extent required to be maintained as Euro Rate Loans) may have a shorter Interest Period than the then outstanding Borrowings of the respective Existing Loans), in each case to the extent necessary so that all of the Lenders under the relevant Tranche or Tranches

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participate in each outstanding borrowing of Revolving Loans under the relevant Tranche or Tranches pro rata on the basis of their respective Commitments under the relevant Tranche or Tranches (after giving effect to any increase in the Total Commitment (and the Total U.S./European Commitment and/or Total Canadian Commitment, as applicable) on the Restatement Effective Date) and with the relevant Borrowers under the relevant Tranche being jointly and severally obligated to pay to the respective Lenders any costs of the type referred to in Section 2.11 and such amounts, as reasonably determined by the respective Lenders, to compensate them for funding the various Revolving Loans during an existing Interest Period (rather than at the beginning of the applicable Interest Period, based upon rates then applicable thereto) in connection with any such repayment and/or incurrence and (y) all accrued interest on all outstanding extensions of credit pursuant to the Existing ABL Credit Agreement, and all regularly accruing fees pursuant to the Existing ABL Credit Agreement, shall be repaid in full on, and through, the Restatement Effective Date (whether or not same would otherwise be then due and payable pursuant to the Existing ABL Credit Agreement);

(ii) all loans, interest and other amounts owing pursuant to the Existing Senior Bridge Loan Agreement shall have been repaid or otherwise satisfied in full and the Existing Senior Bridge Loan Agreement and all guarantees with respect thereto shall have been terminated and be of no further force and effect; and

(iii) the Administrative Agent shall have received evidence in form, scope and substance reasonably satisfactory to it, that the matters set forth in this Section 6.06(a) have been satisfied on such date.

(b) On the Restatement Effective Date, Excess Availability shall be at least $200,000,000.

6.07 Adverse Change. Since December 31, 2005, there shall not have occurred a Company Material Adverse Effect.

6.08 Credit Document Acknowledgment and Amendment; Security Document Amendments; Pledge Agreements; Luxco Guaranty, etc. (a) On the Restatement Effective Date, each U.S. Credit Party shall have duly authorized, executed and delivered the Amended and Restated U.S. Pledge Agreement in the form of Exhibit G-1 (as amended, modified or supplemented from time to time, the “U.S. Pledge Agreement”) and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral, if any, referred to therein and then owned by such U.S. Credit Party, (x) endorsed in blank in the case of promissory notes constituting Pledge Agreement Collateral and (y) together with executed and undated endorsements for transfer in the case of equity interests constituting certificated Pledge Agreement Collateral, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect (or maintain the perfection of) the security interests purported to be created (or maintained) by the U.S. Pledge Agreement have been taken and the U.S. Pledge Agreement shall be in full force and effect.

(b) On the Restatement Effective Date, each Canadian Parent Guarantor (other than Aleris Holding Luxembourg S.A.R.L.) shall have duly authorized, executed and

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delivered a pledge agreement in the form of the Amended and Restated Canadian Parent Pledge Agreement attached hereto as Exhibit G-3 or such other pledge agreement in form and substance reasonably satisfactory to the Administrative Agent (each, as amended, modified or supplemented from time to time, a “Canadian Parent Pledge Agreement”) and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral, if any, referred to therein and then owned by such Canadian Parent Guarantor, (x) endorsed in blank in the case of promissory notes constituting Pledge Agreement Collateral and (y) together with executed and undated endorsements for transfer in the case of equity interests constituting certificated Pledge Agreement Collateral, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect (or maintain the perfection of) the security interests purported to be created (or maintained) by the Canadian Parent Pledge Agreement have been taken and such Canadian Parent Pledge Agreement shall be in full force and effect.

(c) On the Restatement Effective Date, each U.S. Subsidiary Guarantor that is not a Borrower shall have duly authorized, executed and delivered the Amended and Restated U.S. Subsidiaries Guaranty in the form of Exhibit H-1 (as amended, modified or supplemented from time to time, the “U.S. Subsidiaries Guaranty”), guaranteeing all of the obligations of the Borrowers as more fully provided therein, and the U.S. Subsidiaries Guaranty shall be in full force and effect.

(d) On the Restatement Effective Date, each U.S. Credit Party shall have duly authorized, executed and delivered the Amended and Restated U.S. Security Agreement in the form of Exhibit I (as amended, modified or supplemented from time to time, the “U.S. Security Agreement”) covering all of such U.S. Credit Party’s Security Agreement Collateral (as defined in the U.S. Security Agreement), together with:

(i) proper financing statements (Form UCC-1 or the equivalent) (or amendments thereto) for filing under the UCC or other appropriate filing offices of each jurisdiction as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect (or maintain the perfection of) the security interests purported to be created (or maintained) by the U.S. Security Agreement;

(ii) certified copies of requests for information or copies (Form UCC-11), or equivalent reports as of a recent date, listing all effective financing statements that name Aleris or any of its Domestic Subsidiaries as debtor and that are filed in the jurisdictions referred to in clause (i) above and in such other jurisdictions in which Collateral is located on the Restatement Effective Date, together with copies of such other financing statements that name Aleris or any of its Domestic Subsidiaries as debtor (none of which shall cover any of the Collateral except (x) to the extent evidencing Permitted Liens or (y) those in respect of which the Collateral Agent shall have received termination statements (Form UCC-3) or such other termination statements as shall be required by local law fully executed for filing); and

(iii) all other documents or filings necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect (or maintain the perfection of) and protect the security interests purported to be created (or maintained) by the U.S. Security Agreement,

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and the U.S. Security Agreement shall be in full force and effect.

(e) On the Restatement Effective Date, each Credit Party, the Administrative Agent and the Collateral Agent shall have duly authorized, executed and delivered the Credit Document Acknowledgment and Amendment in the form of Exhibit G-4 and the Credit Document Acknowledgment and Amendment shall be in full force and effect.

(f) On the Restatement Effective Date, with respect to any Security Documents (other than the U.S. Pledge Agreement and the U.S. Security Agreement), if the Administrative Agent reasonably determines (based on advice of local counsel and taking into account the relative costs and benefits associated therewith) that it would be in the interests of the Lenders that the respective Credit Party authorize, execute and deliver one or more amendments to any such Security Document (or amended and restated agreements), then the respective Credit Party shall (i) so authorize, execute and deliver one or more such amendments (or amended and restated agreements) (each, a “Security Document Amendment”) and (ii) take such actions as may be necessary or, in the reasonable opinion of the Collateral Agent, advisable under local law (as advised by local counsel) to create, maintain, effect, perfect, preserve, maintain and protect the security interests granted (or purported to be granted) by each such Security Document. Each Security Document Amendment shall (i) be prepared by local counsel reasonably satisfactory to the Administrative Agent, (ii) be in form and substance reasonably satisfactory to the Administrative Agent and (iii) be in full force and effect on the Restatement Effective Date.

(g) On the Restatement Effective Date, Dutch Aluminum C.V. shall have duly authorized, executed and delivered a European Parent Pledge Agreement and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral, if any, referred to therein and then owned by such European Parent Guarantor, (x) endorsed in blank in the case of promissory notes constituting Pledge Agreement Collateral and (y) together with executed and undated endorsements for transfer in the case of equity interests constituting certificated Pledge Agreement Collateral, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests purported to be created by such European Parent Pledge Agreement have been taken and such European Parent Pledge Agreement shall be in full force and effect.

(h) On the Restatement Effective Date, the Luxco Guarantor shall have (i) duly authorized, executed and delivered the Luxco Guaranty, guaranteeing all of the obligations of the U.S. Borrowers as more fully provided therein, and the Luxco Guaranty shall be in full force and effect and (ii) duly authorized, executed and delivered the Luxco Pledge Agreement and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral, if any, referred to therein and then owned by such Luxco Guarantor, (x) endorsed in blank in the case of promissory notes constituting Pledge Agreement Collateral and (y) together with executed and undated endorsements for transfer in the case of equity interests constituting certificated Pledge Agreement Collateral, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests purported to be created by the Luxco Pledge Agreement have been taken and the Luxco Pledge Agreement shall be in full force and effect.

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(i) On the Restatement Effective Date, with respect to any Credit Party which is pledging promissory notes or equity interests in one or more Persons organized under the laws of a different jurisdiction from the jurisdiction of organization of the respective Credit Party, if the Collateral Agent reasonably determines (based on advice of local counsel and taking into account the relative costs and benefits associated therewith) that it would be in the interests of the Lenders that the respective Credit Party authorize, execute and deliver one or more additional pledge agreements governed by the laws of the jurisdiction or jurisdictions in which the Person or Persons whose promissory notes or equity interests are being pledged is (or are) organized, then the respective Credit Party shall (i) so authorize, execute and deliver one or more such additional pledge agreements (each, as amended, modified, restated and/or supplemented from time to time, a “Local Law Pledge Agreement” and, collectively, the “Local Law Pledge Agreements”) and (ii) take such actions as may be necessary or, in the reasonable opinion of the Collateral Agent, advisable under local law (as advised by local counsel) to create, maintain, effect, perfect, preserve, maintain and protect the security interests granted (or purported to be granted) by each such Local Law Pledge Agreement. Each Local Law Pledge Agreement shall (i) be prepared by local counsel reasonably satisfactory to the Collateral Agent , (ii) be in form and substance reasonably satisfactory to the Collateral Agent and (iii) be in full force and effect on the Restatement Effective Date, it being understood and agreed, however, in the case of any Local Law Pledge Agreement entered into by Aleris or any of the other U.S. Credit Parties, the respective Credit Party shall not be required to pledge more than 65% of the total combined voting power of all classes of equity interests entitled to vote of any “first-tier” Foreign Subsidiary that is a corporation (or treated as such for U.S. federal tax purposes) in support of its obligations (x) as a Borrower under the Credit Agreement (in the case of the U.S. Borrowers) or (y) under its guaranty in respect of the ABL Obligations of the U.S. Borrowers (in the case of the other U.S. Credit Parties) (it being understood and agreed that 100% of the non-voting equity interests, if any, of each such “first-tier” Foreign Subsidiary shall be required to be pledged in support of such obligations and no stock or assets of any such Subsidiaries of any such “first-tier” Foreign Subsidiary shall be required to be pledged in support of such obligations). Schedule XX sets forth a list of all Local Law Pledge Agreements to be executed and delivered on the Restatement Effective Date.

6.09 Mortgage; Title Insurance; Landlord Waivers; etc. On the Restatement Effective Date, the Collateral Agent shall have received:

(i) fully executed counterparts of amendments to (or amendments and restatements of) each of the Existing ABL Creditor Mortgages, in form and substance reasonably satisfactory to the Collateral Agent, which Existing ABL Creditor Mortgages (as amended or amended and restated, as the case may be) shall cover each Real Property (located in the United States or any State or territory thereof) owned by Aleris or any of the other Credit Parties and designated as an “Existing U.S. Mortgaged Property” on Schedule V hereto, together with evidence that counterparts of such Existing ABL Creditor Mortgages (as amended or amended and restated, as the case may be) have been delivered to the title insurance company insuring the Lien of each such ABL Creditor Mortgage for recording in the county where such Real Property is located, to effectively create (or maintain) a valid and enforceable second priority mortgage lien, subject only to the mortgage lien granted by the respective Term Creditor Mortgage and other Permitted Liens, on the Existing U.S. Mortgaged Property described therein, in each case in favor

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of the Collateral Agent (or such other trustee as may be required or desired under local law) for the benefit of the Secured Creditors;

(ii) amendments to the UCC-1 Fixture Filings covering each such Existing U.S. Mortgaged Property;

(iii) such consents, approvals, amendments, supplements, estoppels, tenant subordination agreements or other instruments as shall be reasonably deemed necessary by the Administrative Agent in order for the owner or holder of the fee interest constituting such Existing U.S. Mortgaged Property to grant the Lien contemplated by the Existing ABL Creditor Mortgage with respect to such Existing U.S. Mortgaged Property; provided, that notwithstanding the foregoing, the conditions set forth in this clause shall be considered satisfied even if the Borrowers do not deliver such items by the Restatement Effective Date, so long as the Borrowers have used commercially reasonable efforts to obtain and deliver such items by the Restatement Effective Date, so long as the Borrowers have used commercially reasonable efforts to obtain and deliver such items by the Restatement Effective Date.

(iv) (x) date-down endorsements to each Existing Mortgage Policy, issued by Chicago Title Insurance Company, insuring the Collateral Agent that the Existing ABL Mortgage on each such Existing U.S. Mortgaged Property will continue to be a valid and enforceable second priority mortgage lien on such Existing U.S. Mortgaged Property, free and clear of all defects and encumbrances except the mortgage lien granted by the respective Term Creditor Mortgage and other Permitted Liens and (y) with respect to each ABL Creditor Mortgage located in a jurisdiction where date-down endorsements are not available, a Mortgage Policy relating to each such ABL Creditor Mortgage, issued by Chicago Title Insurance Company, in an insured amount reasonably satisfactory to the Collateral Agent and insuring the Collateral Agent that the ABL Creditor Mortgage on each such U.S. Mortgaged Property is a valid and enforceable second priority mortgage lien on such U.S. Mortgaged Property, free and clear of all defects and encumbrances other than the mortgage lien granted by the respective Term Creditor Mortgage and other Permitted Liens. Each such Mortgage Policy and endorsement shall in addition be in form and substance reasonably satisfactory to the Collateral Agent and, with respect to any new Mortgage Policy, shall include, to the extent available in the applicable jurisdiction, supplemental endorsements (including, without limitation, endorsements relating to future advances under this Agreement and the Notes and Loans, usury, first loss, last dollar, tax parcel, subdivision, zoning, contiguity, variable rate, doing business, public road access, survey, environmental lien, mortgage tax and so-called comprehensive coverage over covenants and restrictions and for any other matters that the Collateral Agent in its discretion may reasonably request) and shall not include the “standard” title exceptions, a survey exception or an exception for mechanics’ liens, and shall provide for affirmative insurance and such reinsurance as the Collateral Agent in its discretion may reasonably request;

(v) such affidavits, certificates, information (including financial data) and instruments of indemnification (including, without limitation, a so-called “gap”

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indemnification) as shall be required to induce the title company to issue the Mortgage Policies referred to in subsection (iv) above;

(vi) evidence reasonably acceptable to the Administrative Agent of payment by Aleris and its Subsidiaries of all new Mortgage Policy premiums and date-down endorsement premiums in respect of such new Mortgage Policies and date-down endorsements, search and examination charges, and related charges, mortgage recording taxes, fees, charges, costs and expenses required for the recording of such Existing ABL Creditor Mortgages (and amendments thereto or amendments and restatements thereof) and issuance of such Existing Mortgage Policies and date-down endorsements and endorsements;

(vii) fully executed Collateral Access Agreements in respect of those Leaseholds of Aleris or any of its Subsidiaries designated as “Leaseholds Subject to Collateral Access Agreements” on Schedule V; provided, that notwithstanding the foregoing, the conditions set forth in this clause shall be considered satisfied even if the Borrowers do not deliver such items by the Restatement Effective Date, so long as the Borrowers have used commercially reasonable efforts to obtain and deliver such items by the Restatement Effective Date; and

(viii) flood certificates covering each Existing U.S. Mortgaged Property in form and substance reasonably acceptable to the Administrative Agent, certified to the Collateral Agent in its capacity as such and stating whether or not each such Existing U.S. Mortgaged Property is located in a flood hazard area, as determined by designation of each such Existing U.S. Mortgaged Property in a specified flood hazard zone by reference to the applicable FEMA map.

6.10 Intercreditor Agreement. On the Restatement Effective Date, each Credit Party, the Collateral Agent (for and on behalf of the ABL Secured Parties) and the Term Collateral Agent (for and on behalf of the Term Secured Parties) shall have duly authorized, executed and delivered the Amended and Restated Intercreditor Agreement in the form of Exhibit P (as amended, modified, restated and/or supplemented from time to time, the “Intercreditor Agreement”), and the Intercreditor Agreement shall be in full force and effect.

6.11 Financial Statements; Projections. On or prior to the Restatement Effective Date, the Joint Lead Arranger shall have received true and correct copies of the historical and pro forma consolidated financial statements and the Projections referred to in Section 8.05.

6.12 Solvency Certificate; Insurance Certificates. On the Restatement Effective Date, the Joint Lead Arranger shall have received:

(i) a solvency certificate from the chief financial officer of Aleris in the form of Exhibit J; and

(ii) certificates of insurance complying with the requirements of Section 9.09 for the business and properties of Aleris and its Subsidiaries, in form and substance reasonably satisfactory to the Joint Lead Arrangers.

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6.13 Fees, etc. On the Restatement Effective Date, all costs, fees, expenses (including, without limitation, reasonable and invoiced legal fees and expenses) and other compensation contemplated hereby, payable to the Agents and the Lenders or otherwise payable in respect of the Transaction shall have been paid by the Borrowers to the extent due and invoiced.

6.14 Initial Borrowing Base Certificate; etc. On the Restatement Effective Date, the Administrative Agent shall have received the initial Borrowing Base Certificate meeting the requirements of Section 9.01(h).

6.15 Merger Agreement Representations and Warranties. The representations and warranties contained in Article III of the Merger Agreement shall be true and correct in all material respects, but solely to the extent that (i) they are material to the interests of the Lenders and (ii) Parent (as defined in the Merger Agreement) has the right to terminate its obligations under the Merger Agreement as a result of any breach thereof.

SECTION 7. Conditions Precedent to All Credit Events. The obligation of each Lender to make Loans (including Loans made on the Restatement Effective Date (including by way of conversion of Existing Revolving Loans on the Restatement Effective Date as contemplated in Sections 2.01(a), (b) and (c)) and the obligation of each Issuing Lender to issue Letters of Credit (including Letters of Credit issued on the Restatement Effective Date), are subject, at the time of each such Credit Event (except as hereinafter indicated), to the satisfaction of the following conditions (or the waiver thereof in accordance with Section 13.12):

7.01 No Default; Representations and Warranties. At the time of each such Credit Event and also after giving effect thereto (i) there shall exist no Default or Event of Default (other than, in the case of any Credit Event on the Restatement Effective Date, a Default or Event of Default pursuant to Section 11.02 with respect to the representations enumerated in the parenthetical to clause (ii) below) and (ii) all representations and warranties contained herein and in the other Credit Documents (except, in the case of any Credit Event on the Restatement Effective Date, the representations contained in Sections 8.03(i) and (ii), 8.04, 8.05, 8.06, 8.07, 8.08(a), (b) and (c), 8.09, 8.10, 8.12, 8.13, 8.14, 8.16, 8.17, 8.18, 8.19, 8.20, 8.21, and 8.22) shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on the date of such Credit Event (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

7.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the making of each Loan (excluding Swingline Loans and Mandatory Borrowings or a conversion of Existing Revolving Loans), the Administrative Agent shall have received a Notice of Borrowing meeting the requirements of Section 2.03(a). Prior to the making of any Swingline Loan, the respective Swingline Lender shall have received the notice required by Section 2.03(b)(i) or (ii), as applicable.

(b) Prior to the issuance of each Letter of Credit, the Administrative Agent and the respective Issuing Lender shall have received a Letter of Credit Request meeting the requirements of Section 3.03(a).

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7.03 Borrowing Base Limitations. Notwithstanding anything to the contrary set forth herein (but subject to Section 2.01(f)), it shall be a condition precedent to each Credit Event that after giving effect thereto (and the use of the proceeds thereof) that:

(i) the Aggregate U.S. Borrower Exposure would not exceed the U.S. Borrowing Base at such time less the Aggregate Non-U.S. Borrowing Base Usage at such time;

(ii) the Aggregate U.S./European Exposure would not exceed the Combined U.S./European Borrowing Base at such time less the Canadian U.S. Borrowing Base Usage at such time;

(iii) the sum of the Aggregate U.S. Borrower Exposure and the Aggregate Canadian Exposure would not exceed the Combined U.S./Canadian Borrowing Base at such time less the European U.S. Borrowing Base Usage at such time; and

(iv) the Aggregate Exposure at such time would not exceed the Total Borrowing Base at such time.

For purposes of this Section 7.03, the relevant Borrowing Bases will be based upon the Borrowing Base Certificate most recently delivered.

The acceptance of the benefits of each Credit Event shall constitute a representation and warranty by Aleris and each of the Borrowers to the Administrative Agent and each of the Lenders that all the conditions specified in Section 6 (with respect to Credit Events on the Restatement Effective Date) and in this Section 7 (with respect to Credit Events on or after the Restatement Effective Date) and applicable to such Credit Event are satisfied as of that time. All of the Notes, certificates, legal opinions and other documents and papers referred to in Section 6 and in this Section 7, unless otherwise specified, shall be delivered to the Administrative Agent at the Notice Office for the account of each of the Lenders and, except for the Notes, in sufficient counterparts or copies for each of the Lenders and shall be in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders.

SECTION 8. Representations and Warranties. In order to induce the Lenders to enter into this Agreement and to make the Loans and issue (or participate in) the Letters of Credit, in each case as provided herein, each Borrower (with respect to itself and its Subsidiaries) makes the following representations and warranties, in each case after giving effect to the Transaction, all of which shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans and the issuance of the Letters of Credit, with the occurrence of each Credit Event on or after the Restatement Effective Date being deemed to constitute a representation and warranty that the matters specified in this Section 8 are true and correct in all material respects on and as of the Restatement Effective Date and on the date of each such other Credit Event (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

8.01 Organizational Status. Each of Aleris and each of its Subsidiaries (i) is a duly organized and validly existing corporation, partnership or limited liability company, as the

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case may be, in good standing under the laws of the jurisdiction of its organization, (ii) has the corporate, partnership or limited liability company power and authority, as the case may be, to own its property and assets and to transact the business in which it is engaged and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its property or the conduct of its business requires such qualifications except for failures to be so qualified which, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

8.02 Power and Authority. Each Credit Party has the corporate, partnership or limited liability company power and authority, as the case may be, to execute, deliver and perform the terms and provisions of each of the Credit Documents to which it is party and has taken all necessary corporate, partnership or limited liability company action, as the case may be, to authorize the execution, delivery and performance by it of each of such Credit Documents to which it is a party. Each Credit Party has duly executed and delivered each of the Credit Documents to which it is party, and each of such Credit Documents constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

8.03 No Violation. Neither the execution, delivery or performance by any Credit Party of the Credit Documents to which it is a party, nor compliance by it with the terms and provisions thereof, (i) will contravene any material applicable law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental instrumentality in any material respect, (ii) will conflict with or result in any breach of any of the material terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Term Security Documents and the Security Documents) upon any of the property or assets of any Credit Party or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, in each case to which any Credit Party or any of its Subsidiaries is a party or by which it or any its property or assets is bound or to which it may be subject, or (iii) will violate any provision of the certificate or articles of incorporation, certificate of formation, limited liability company agreement or by-laws (or equivalent organizational documents), as applicable, of any Credit Party or any of its Subsidiaries except, in each case other than with respect to the creation of Liens, referred to in clause (ii) above), to the extent that any such contravention, conflict or violation would not reasonably be expected to result in a Material Adverse Effect.

8.04 Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for (w) those that have otherwise been obtained or made on or prior to the Restatement Effective Date and which remain in full force and effect on the Restatement Effective Date, (x) filings which are necessary to perfect the security interests created under the Security Documents, which filings will be made within 21 days following the Restatement Effective Date, (y) filings in connection with consummating the Merger and filings as may be required under the Exchange Act and applicable stock exchange rules in connection therewith and (z) other than with respect to the Credit Documents, those the

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failure to obtain which would not reasonably be expected to have a Material Adverse Effect) or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to be obtained or made by, or on behalf of, any Credit Party to authorize, or is required to be obtained or made by, or on behalf of, any Credit Party in connection with, (i) the execution, delivery and performance of any Document or (ii) the legality, validity, binding effect or enforceability of any Document.

8.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; No Material Adverse Effect. (a) (I) The audited aggregated IFRS accounts of the Corus Acquired Business with reconciliation to GAAP for the fiscal years of the Corus Acquired Business ended December 31, 2004 and December 31, 2005 and the unaudited aggregated IFRS accounts of the Corus Acquired Business prepared on a comparable basis for the periods of the Corus Acquired Business ended (x) between December 31, 2004 and March 31, 2005 and (y) ended between December 31, 2005 and March 31, 2006 with reconciliation to GAAP, in each case for such periods furnished to the Lenders prior to the Restatement Effective Date, present fairly in all material respects the consolidated financial position of the Corus Acquired Business at the date of said financial statements and the consolidated results for the respective periods covered thereby, (II) the audited consolidated balance sheets of Aleris for its fiscal years ended December 31, 2003, December 31, 2004 and December 31, 2005 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of Aleris for such periods furnished to the Lenders prior to the Restatement Effective Date, present fairly in all material respects the consolidated financial position of Aleris at the date of said financial statements and the consolidated results for the respective periods covered thereby, and (III) the unaudited consolidated balance sheet of Aleris for its fiscal quarter ended September 30, 2006 and the related consolidated statements of income and cash flows and of Aleris for the three-month period ended on such date, furnished to the Lenders prior to the Restatement Effective Date, present fairly in all material respects the consolidated financial condition of Aleris and its Subsidiaries at the date of said financial statements and the results for the period covered thereby, subject to normal year-end adjustments and the absence of footnotes. All such financial statements have been prepared in accordance with IFRS or GAAP, as applicable, consistently applied except to the extent provided in the notes to said financial statements and subject, in the case of the unaudited financial statements, to normal year-end audit adjustments (all of which, when taken as a whole, would not be materially adverse) and the absence of footnotes.

(b) Aleris has heretofore furnished to the Joint Lead Arrangers and to the Lenders its pro forma consolidated balance sheet as of September 30, 2006, prepared giving effect to the Transaction as if the same had occurred on such date. Such pro forma consolidated balance sheet (i) has been prepared in good faith based on the same assumptions used to prepare the pro forma financial statements included in the Confidential Information Memorandum (which assumptions are believed by Aleris to be reasonable as of the Restatement Effective Date), (ii) subject to the assumptions and qualifications described in the Confidential Information Memorandum, accurately reflects all adjustments necessary to give effect to the Transaction and (iii) presents fairly, in all material respects, the pro forma financial position of the U.S. Borrower and the Subsidiaries as of September 30, 2006 as if the Transaction had occurred on such date.

(c) On and as of the Restatement Effective Date and after giving effect to the Transaction and to all Indebtedness (including, without limitation, the Loans, the New Notes and

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the Term Loans) being issued, incurred or assumed and Liens created by the Credit Parties in connection therewith, (i) the sum of the assets, at a fair valuation, of each of Aleris and its Subsidiaries taken as a whole, the U.S. Borrowers taken together as a whole, the U.S. Borrowers and their Subsidiaries taken as a whole, the Canadian Borrowers taken together as a whole, the Canadian Borrowers and their Subsidiaries taken as a whole, the European Borrower individually and the European Borrower and its Subsidiaries taken as a whole, as the case may be, will exceed its or their respective debts, (ii) Aleris and its Subsidiaries taken as a whole, the U.S. Borrowers taken together as a whole, the U.S. Borrowers and their Subsidiaries taken as a whole, the Canadian Borrowers taken together as a whole, the Canadian Borrowers and their Subsidiaries taken as a whole, the European Borrower individually and the European Borrower and its Subsidiaries taken as a whole, as the case may be, has or have not incurred and does or do not intend to incur, and does or do not believe that it or they will incur, debts beyond its or their respective ability to pay such debts as such debts mature, and (iii) Aleris and its Subsidiaries taken as a whole, the U.S. Borrowers taken together as a whole, the U.S. Borrowers and their Subsidiaries taken as a whole, the Canadian Borrowers taken together as a whole, the Canadian Borrowers and their Subsidiaries taken as a whole, the European Borrower individually and the European Borrower and its Subsidiaries taken as a whole, as the case may be, will have sufficient capital with which to conduct its or their respective businesses. For purposes of this Section 8.05(c), “debt” shall mean any liability on a claim, and “claim” shall mean (a) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (b) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

(d) Except for the Existing Letters of Credit outstanding on the Restatement Effective Date or as disclosed in the financial statements delivered pursuant to Section 8.05(a), there were as of the Restatement Effective Date no liabilities or obligations with respect to Aleris or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due, but not including accounts payable, accrued liabilities incurred in the ordinary course of business and contractual obligations of a type not required to be disclosed in financial statements or footnotes thereto) which, either individually or in the aggregate, would reasonably be expected to be material to Aleris and its Subsidiaries taken as a whole.

(e) The Projections most recently delivered to the Administrative Agent and the Lenders prior to the Restatement Effective Date have been prepared in good faith and are based on assumptions which were believed by management of Aleris to be reasonable when made (it being understood that actual results may vary materially from the Projections).

(f) Since December 31, 2005, there has been no change in the financial condition, results of operations or business of Aleris and its Subsidiaries, which individually or in the aggregate has had, or reasonably would be expected to have, a Material Adverse Effect.

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8.06 Litigation. There are no actions, suits or proceedings pending or, to the knowledge of Aleris or any Borrower, threatened in writing (i) with respect to the Transaction or any Credit Document or (ii) that has had, or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

8.07 True and Complete Disclosure. All factual information (taken as a whole), other than the Projections, the pro forma financial statements and estimates and information of a general economic nature, furnished by or on behalf of Aleris or the Borrowers in writing to the Administrative Agent or any Lender (including, without limitation, all factual information furnished by or on behalf of Aleris and its Subsidiaries contained in the Confidential Information Memorandum distributed to the Lenders prior to the Restatement Effective Date) for purposes of or in connection with the Transaction, this Agreement and the other Credit Documents is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of Aleris or the Borrowers in writing to the Administrative Agent or any Lender will be true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided.

8.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the Initial Revolving Loans incurred on the Restatement Effective Date will be used by the Borrowers to finance, in part, the cash payments required in connection with the Merger and the Refinancing and to pay the fees and expenses incurred in connection with the Transaction.

(b) All proceeds of the Revolving Loans and Swingline Loans incurred after the Restatement Effective Date will be used for the working capital, capital expenditures and general corporate purposes of Aleris and its Subsidiaries; provided that no proceeds of the Loans shall be used to consummate an acquisition which is not supported by the board of directors of the target.

(c) All Letters of Credit will be used for the purposes described in Section 3.01(a).

(d) At the time of each Credit Event occurring on or after the Restatement Effective Date, not more than 25% of the value of the assets of Aleris and its Subsidiaries taken as a whole will constitute Margin Stock. Neither the making of any Loan nor the use of the proceeds thereof nor the occurrence of any other Credit Event will violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

8.09 Tax Returns and Payments. Except as set forth in Schedule VII, each of the Borrowers and each of their Subsidiaries has (i) timely filed or caused to be timely filed with the appropriate taxing authority all returns, statements, forms and reports for taxes (the “Returns”) required to be filed by, or with respect to the income, properties or operations of, the Borrowers and/or any of their Subsidiaries and (ii) has paid, or has caused to be paid, all taxes and assessments payable by them, except for (a) taxes contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP

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and (b) to the extent the failure to have complied with either of clause (i) or (ii) above, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

8.10 Compliance with ERISA. (a) No ERISA Event has occurred in the five year period prior to the date on which this representation is made or deemed made and is continuing or is reasonably likely to occur that, when taken together with all other such ERISA Events for which liability has occurred and is continuing, would reasonably be expected to result in a Material Adverse Effect. Except as would not reasonably be expected to have a Material Adverse Effect or as set forth on Schedule XXII, the present value of all accumulated benefit obligations under all Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plans, in the aggregate.

(b) (i) Each Foreign Plan has been established, registered, qualified, invested and administered in substantial compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities; (ii) all contributions required to be made with respect to a Foreign Plan have been made in accordance with applicable laws and the terms of such plan; (iii) neither Aleris nor any of its Subsidiaries has incurred any obligation in connection with the termination of, or withdrawal from, any Foreign Plan; (iv) all Foreign Plans which are funded or insured plans are funded or insured at least to the extent required by any applicable laws; and (v) there are no outstanding disputes pending or, to the best knowledge of Borrowers, threatened, concerning the assets of any Foreign Plan (other than individual claims for the payment of benefits), and no facts exist which would reasonably be expected to give rise to such a dispute, except (with respect to any matter specified in clauses (b)(i) through (v) above, either individually or in the aggregate) such as would not reasonably be expected to have a Material Adverse Effect.

8.11 The Security Documents. (a) The security interests created under each Pledge Agreement in favor of the Collateral Agent, as Pledgee, for the benefit of the Secured Creditors, constitute perfected security interests in the Pledge Agreement Collateral described therein, superior to and prior to the rights of all third Persons (other than those in favor of the Term Collateral Agent under the Term Loan Agreement), and subject to no security interests of any other Person other than Permitted Liens.

(b) If any Mortgage (including any amendments thereto or amendments and restatements thereof) is executed and delivered in accordance with Sections 9.11 and/or 6.09, upon the proper filing of each such Mortgage in the appropriate filing office, each such Mortgage will create, as security for the obligations purported to be secured thereby, a valid and enforceable perfected security interest in and charge and mortgage lien on the respective Mortgaged Property in favor of the Collateral Agent (or such other trustee as may be required or desired under local law) for the benefit of the Secured Creditors, superior and prior to the rights of all third Persons and subject to no other Liens (other than Permitted Liens related thereto).

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(c) The provisions of each U.S. Security Agreement are effective to create in favor of the Collateral Agent for the benefit of the Secured Creditors, a legal, valid and enforceable security interest in all right, title and interest of the Credit Parties in the Security Agreement Collateral described therein, and, upon the proper filing of UCC financing statements, registrations, recordings and other actions required by the U.S. Security Documents (including, without limitation, the recordation of (x) grants of security interest in United States Patents and United States Trademarks, in each case in the United States Patent and Trademark Office and (y) grants of security interest in United States Copyrights with the United States Copyright Office), necessary or appropriate to create, preserve and perfect the security interest granted to the extent contemplated by the U.S. Security Documents (which filings, registrations, recordings and other actions have been accomplished), the Collateral Agent, for the benefit of the Secured Creditors, will have a fully perfected security interest in all right, title and interest in all of the Security Agreement Collateral described therein, to the extent that such Security Agreement Collateral consists of the type of property in which a security interest may be perfected by possession or control (within the meaning of the UCC as in effect on the Restatement Effective Date in the State of New York), by filing a financing statement under the UCC as enacted in any relevant jurisdiction or by a filing of a grant of security interest in the United States Patent and Trademark Office or in the United States Copyright Office in each case, subject to the exceptions contained in the relevant U.S. Security Document, superior to and prior to the rights of all third Persons, and subject to no other Liens other than Permitted Liens.

(d) The provisions of each Canadian Security Agreement are effective to create in favor of the Collateral Agent for the benefit of the Secured Creditors, a legal, valid and enforceable security interest (or, in the province of Quebec, a valid and enforceable hypothec) in all right, title and interest of the Credit Parties in the Security Agreement Collateral described therein, and, upon the proper filing of PPSA financing statements, registrations, recordings and other actions required by the Canadian Security Documents (including, without limitation, the recordation of a Confirmation of Security Interest in Intellectual Property in the form attached to the Canadian Security Agreement in the Canadian Intellectual Property Office), necessary or appropriate to create, preserve and perfect the security interest granted to the extent contemplated by the Canadian Security Documents (which filings, registrations, recordings and other actions have been accomplished), the Collateral Agent, for the benefit of the Secured Creditors, will have a fully perfected security interest in all right, title and interest in all of the Security Agreement Collateral described therein, to the extent that such Security Agreement Collateral consists of the type of property in which a security interest may be perfected by filing a PPSA financing statement or by a recording of a Confirmation of Security Interest in Intellectual Property in the Canadian Intellectual Property Office in each case, subject to the exceptions contained in the relevant Canadian Security Documents, superior to and prior to the rights of all third Persons, and subject to no other Liens other than Permitted Liens.

(e) The provisions of each European Security Agreement are effective to create in favor of the Collateral Agent for the benefit of the Secured Creditors, a legal, valid and enforceable security interest in all right, title and interest of the Credit Parties in the Security Agreement Collateral described therein, and, upon the registrations, recordings and other actions required by the European Security Documents necessary or appropriate to create, preserve and perfect the security interest granted to the extent contemplated by the European Security Documents (which filings, registrations, recordings and other actions have been accomplished),

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the Collateral Agent, for the benefit of the Secured Creditors, will have a fully perfected security interest in all right, title and interest in all of the Security Agreement Collateral described therein, in each case, subject to the exceptions contained in the relevant European Security Document, superior to and prior to the rights of all third Persons, and subject to no other Liens other than Permitted Liens.

(f) On the Restatement Effective Date, each Receivables Purchase Agreement entered into on the Initial Borrowing Date is in full force and in effect.

8.12 Properties. All Real Property owned or leased by Aleris or any of its Subsidiaries as of the Restatement Effective Date, and the nature of the interest therein, is correctly set forth in Schedule V. Each of Aleris and each of its Subsidiaries has good and indefeasible title to all Material Real Properties (and to all buildings, fixtures and improvements located thereon) owned by it, except for defects in title that do not materially interfere with its ability to conduct its business as currently conducted or to utilize such Material Real Property for its intended purposes and except where the failure to have such title would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. All Material Real Properties are owned by Aleris and its Subsidiaries free and clear of all Liens, other than Permitted Liens.

8.13 Subsidiaries; etc. (a) Aleris has no Subsidiaries other than (i) those Subsidiaries listed on Schedule VIII-A (which Schedule identifies the direct owners of each such Subsidiary on the Restatement Effective Date and their percentage ownership therein) and (ii) new Subsidiaries created or acquired after the Restatement Effective Date in accordance with the terms of this Agreement.

(b) The European Borrower has no Subsidiaries other than Wholly-Owned Subsidiaries that constitute Distribution Subsidiaries. Each direct and indirect parent of the European Borrower (which is not a U.S. Credit Party) is, and at all times shall be, a European Parent Guarantor with no material assets other than the Pledged Collateral (as defined in the European Parent Pledge Agreement), except that the Equity Interests of the top European Parent Guarantor may be owned by one or more U.S. Credit Parties. Each direct and indirect parent of Aleris Canada is, and at all times shall be, either (x) a U.S. Credit Party or (y) a Canadian Parent Guarantor with no material assets other than the Pledged Collateral (as defined in the Canadian Parent Pledge Agreement), except that the Equity Interests of the top Canadian Parent Guarantor may be owned by one or more U.S. Credit Parties.

(c) Schedule VIII-A also sets forth, as of the Restatement Effective Date, (A) the exact legal name of each Credit Party and the type of organization of such Credit Party and (B) in the case of U.S. Credit Parties, whether or not such Credit Party is a registered organization (within the meaning of the UCC), the jurisdiction of organization of such Credit Party, the location (within the meaning of the UCC) of such Credit Party, and the organizational identification number (if any) of such Credit Party.

8.14 Compliance with Statutes, etc. Each of Aleris and each of its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct

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of its business and the ownership of its property, except such noncompliances as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

8.15 Investment Company Act. Neither Aleris nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

8.16 Environmental Matters. (a) Subject to subclause (b) hereof, (i) each of Aleris and each of its Subsidiaries is in compliance with all applicable Environmental Laws and the requirements of any permits issued under such Environmental Laws; (ii) there are no pending or, to the knowledge of Aleris or any of the Borrowers, threatened (in writing) Environmental Claims against Aleris or any of its Subsidiaries (including any such claim arising out of the ownership, lease or operation by Aleris or any of its Subsidiaries of any Real Property formerly owned, leased or operated by Aleris or any of its Subsidiaries); and (iii) there are no facts, circumstances, conditions or occurrences (“Conditions”) with respect to the business or operations of Aleris or any of its Subsidiaries, or any Real Property owned, leased or operated by Aleris or any of its Subsidiaries (including any Real Property formerly owned, leased or operated by Aleris or any of its Subsidiaries) that would be reasonably expected to form the basis of an Environmental Claim against Aleris or any of its Subsidiaries or any restriction on the use or transferability of any Real Property owned, leased or operated by Aleris or any of its Subsidiaries.

(b) Notwithstanding anything to the contrary in this Section 8.16, the representations and warranties made in this Section 8.16 shall be untrue only if the effect of any or all Conditions, Environmental Claims, and noncompliances of the types described above would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

8.17 Employment and Labor Relations. Neither Aleris nor any of its Subsidiaries is engaged in any unfair labor practice that would reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against Aleris or any of its Subsidiaries or, to the knowledge of Aleris or any of the Borrowers, threatened in writing against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against Aleris or any of its Subsidiaries or, to the knowledge of Aleris or any of the Borrowers, threatened in writing against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against Aleris or any of its Subsidiaries or, to the knowledge of Aleris or any of the Borrowers, threatened against Aleris or any of its Subsidiaries, (iii) no equal employment opportunity charges or other claims of employment discrimination are pending or, to Aleris’ knowledge, threatened in writing against Aleris or any of its Subsidiaries and (iv) no wage and hour department investigation has been made of Aleris or any of its Subsidiaries, except (with respect to any matter specified in clauses (i) through (iv) above, either individually or in the aggregate) such as would not reasonably be expected to have a Material Adverse Effect.

8.18 Intellectual Property, etc. Each of Aleris and each of its Subsidiaries owns or has the right to use all the patents, trademarks, domain names, service marks, trade names,

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copyrights, licenses, franchises, inventions, trade secrets, proprietary information and know-how of any type, whether or not written (including, but not limited to, rights in computer programs and databases) and formulas, or rights with respect to the foregoing, and has obtained licenses and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others which, or the failure to own or have which, as the case may be, would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

8.19 Indebtedness. Schedule IX sets forth a true and complete list of all Indebtedness (including Contingent Obligations) of Aleris and its Subsidiaries as of the Restatement Effective Date (but excluding the ABL Obligations, any Existing Senior Unsecured Notes, the New Notes and the Term Loans, the “Existing Indebtedness”) and which is to remain outstanding after giving effect to the Transaction, in each case showing the aggregate principal amount thereof and the name of the respective borrower and any Credit Party or any of its Subsidiaries which directly or indirectly guarantees such Indebtedness.

8.20 Insurance. Schedule X sets forth a true and complete listing of all insurance maintained by Aleris and its Subsidiaries as of the Restatement Effective Date, with the amounts insured (and any deductibles) set forth therein.

8.21 Ten Non-Bank Regulations and Twenty Non-Bank Regulations. The aggregate number of Persons which are not Swiss Qualifying Banks to which the European Borrower directly or indirectly (whether through a Restricted Sub-Participation or other sub-participations under any other agreement) owes interest-bearing borrowed money under all interest-bearing instruments taken together (other than bond issues which are subject to Swiss Withholding Tax), except for any Swiss Qualifying Banks or holders of any Restricted Sub-Participation under this Agreement, does not, and will not, exceed 10 (ten) at any time and the European Borrower is in compliance with the Twenty Non-Bank Regulations (other than, in each case, any failure to comply arising from assignments and participations of the ABL Obligations following the occurrence of a Significant Event of Default or Conversion Event). For such purpose, the European Borrower and Aleris may assume that the number of Lenders to the European Borrower and holders of a Restricted Sub-Participations in respect of extensions of credit to the European Borrower under this Credit Agreement which are Swiss Non-Qualifying Banks from time to time equals ten, but does not exceed ten.

8.22 Corus Aluminium Inc. Corus Aluminium Inc. does not legally or beneficially own or hold any assets of whatever nature, except for, (i) its partnership interest in and to Corus LP and (ii) assets it owns or holds exclusively in its capacity as general partner of Corus LP.

8.23 Senior Indebtedness. The ABL Obligations constitute “Senior Indebtedness” and “Designated Senior Indebtedness” under and as defined in the New Senior Subordinated Note Documents.

SECTION 9. Affirmative Covenants. Each Borrower hereby covenants and agrees that on and after the Restatement Effective Date and until the Total Commitment and all Letters of Credit have terminated (or, in the case of Letters of Credit only, are supported by

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backstop letters of credit or cash collateral, in either case in amounts and on terms reasonably acceptable to the Administrative Agent and the respective Issuing Lenders) and the Loans, Notes and Unpaid Drawings (in each case together with interest thereon), Fees and all other ABL Obligations (other than indemnities described in Section 13.13 (and similar indemnities described in the other Credit Documents, in each case) which are not then due and payable) incurred hereunder and thereunder, are paid in full.

9.01 Information Covenants. Aleris will furnish to the Administrative Agent (which will promptly furnish to each Lender):

(a) Annual Financial Statements. Within ninety days after the end of each Fiscal Year, the audited consolidated balance sheet of Aleris and its Subsidiaries and related statements of income, stockholders’ equity and cash flows as of the end of and for such Fiscal Year (which financial statements shall also include information solely with respect to Aleris, its Subsidiaries that are Credit Parties and its Subsidiaries which are not Credit Parties on a condensed, consolidating basis, each in such detail as reasonably deemed necessary by the Administrative Agent in its discretion), setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent public accountants of recognized national standing and reasonably acceptable to the Administrative Agent (without a “going concern” or like qualification or exception or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly, in all material respects, the financial condition and results of operations of Aleris and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP.

(b) Quarterly Financial Statements. Within forty-five days after the end of each of the first three Fiscal Quarters of each Fiscal Year, the consolidated balance sheet of Aleris and its Subsidiaries and related statements of income, stockholders’ equity and cash flows as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year, (which financial statements shall also include information solely with respect to Aleris, its Subsidiaries that are Credit Parties and its Subsidiaries which are not Credit Parties on a condensed, consolidating basis, each in such detail as reasonably deemed necessary by the Administrative Agent in its discretion), setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, all certified by a Financial Officer of Aleris as presenting fairly, in all material respects, the financial condition and results of operations of Aleris and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes.

(c) Officer’s Certificates. Concurrently with any delivery of financial statements under Sections 9.01(a) and (b) (or, if earlier, the filing of the 10-Q Report or the 10-K Report), a certificate of a Financial Officer of Aleris in substantially the form of Exhibit K (i) certifying that no Event of Default or Default has occurred and, if an Event of Default or Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth, in the case of the financial statements delivered under Section 9.01(a) or (b), reasonably detailed calculations of

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Aleris’s Fixed Charge Coverage Ratio (whether or not a Compliance Period then exists) as of the end of the period to which such financial statements relate and (iii) certifying, the case of the financial statements delivered under clause (a), a list of names of all Immaterial Subsidiaries (if any) and including a certification that each Subsidiary set forth on such list individually qualifies as an Immaterial Subsidiary and that all Subsidiaries listed as Immaterial Subsidiaries in the aggregate comprise less than 5% of Total Assets of Aleris and its Subsidiaries at the end of the period to which such financial statements relate and represented (on a contribution basis) less than 5% of Consolidated EBITDA for the period to which such financial statements relate.

(d) Accountants’ Certificate. Concurrently with any delivery of financial statements under Section 9.01(a), a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default or Event of Default (which certificate may be limited to the extent required by accounting rules or guidelines and may be subject to such conditions and qualifications as are customary).

(e) Consolidating Statements. Concurrently with any delivery of consolidated financial statements under Sections 9.01(a) or (b), the related unaudited consolidating financial statements reflecting the adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such consolidated financial statements.

(f) Budgets. Within ninety days after the beginning of each Fiscal Year, a consolidated budget of Aleris and its Subsidiaries by month in reasonable detail for such Fiscal Year (including a projected consolidated balance sheet and the related consolidated statements of projected cash flows and projected income by month), including in each case a summary of the underlying material assumptions with respect thereto (collectively, the “Budget”), which Budget shall be accompanied by the statement of a Financial Officer of Aleris to the effect that, to the best of his knowledge, the Budget is a reasonable estimate for the period covered thereby.

(g) Environmental Matters. Promptly after any senior officer (including any Financial Officer) of Aleris obtains knowledge thereof, notice of one or more of the following environmental matters listed in (i), (ii) or (iii) below (“Environmental Matters”) to the extent that such Environmental Matters, either individually or when aggregated with all other such Environmental Matters, would reasonably be expected to have a Material Adverse Effect:

(i) any pending or threatened Environmental Claim against Aleris or any of its Subsidiaries or any Real Property owned, leased or operated by Aleris or any of its Subsidiaries;

(ii) any condition or occurrence on or arising from any Real Property owned, leased or operated by Aleris or any of its Subsidiaries that (a) results in noncompliance by Aleris or any of its Subsidiaries with any applicable Environmental Law or (b) would reasonably be expected to form the basis of an

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Environmental Claim against Aleris or any of its Subsidiaries or any restriction on the use or transferability of any such Real Property; and

(iii) the taking of any Remedial Action in response to the actual or alleged presence of any Hazardous Material on any Real Property owned, leased or operated by Aleris or any of its Subsidiaries as required by any Environmental Law or any Governmental Authority.

(h) Borrowing Base Certificate. (x) On the Restatement Effective Date, (y) for the first 90 days thereafter, not later than 5:00 p.m. (New York time) on or before the 25th day of each month, and (z) thereafter, on or before the 15th day of each month (or, in the case of clauses (y) or (z), more frequently as Aleris may elect), a borrowing base certificate setting forth the U.S. Borrowing Base, the Canadian Borrowing Base and the European Borrowing Base (in each case with supporting calculations) substantially in the form of Exhibit L (each, a “Borrowing Base Certificate”), which shall be prepared (A) as of October 31, 2006, in the case of the Borrowing Base Certificate delivered on the Restatement Effective Date and (B) as of the last Business Day of the preceding fiscal month of Aleris (or, in the case of any voluntary delivery of a Borrowing Base Certificate at the election of Aleris, a subsequent date), in the case of each subsequent Borrowing Base Certificate; provided that during any Compliance Period (or, during any period that an Event of Default has occurred and is continuing) (the “Enhanced Disclosure Period”), then at the request of the Administrative Agent within three Business Days after the last Business Day of each calendar week ending during each such Enhanced Disclosure Period, a Borrowing Base Certificate shall be required to be delivered by Aleris to the Administrative Agent, which shall be prepared as of the last Business Day of the preceding calendar week. Each such Borrowing Base Certificate shall include such supporting information as may be reasonably requested from time to time by the Administrative Agent.

(i) Collateral. As soon as practicable upon the reasonable request of the Administrative Agent, certify that there have been no changes to Annexes A through D, inclusive, and F through I, inclusive, in each case of the U.S. Security Agreement, Annexes A through G of the U.S. Pledge Agreement and the corresponding Annexes and Schedules to the European Security Documents, in each case since the Restatement Effective Date or, if later, since the date of the most recent certificate delivered pursuant to this Section 9.01(i), or if there have been any such changes, a list in reasonable detail of such changes (but, in each case with respect to this Section 9.01(i), only to the extent that such changes are required to be reported to the Collateral Agent pursuant to the terms of such Security Documents) and whether Aleris and the other Credit Parties have otherwise taken all actions required to be taken by them pursuant to such Security Documents in connection with any such changes.

(j) Other Reports and Filings. Promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials publicly filed by Aleris or any Subsidiary with the Securities and Exchange Commission, or with any national securities exchange, or, after an initial public offering of shares of

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Equity Interests of Aleris, distributed by Aleris to its shareholders generally, as the case may be.

(k) Management Letters. Promptly, a copy of any final “management letter” received from Aleris’ independent public accountants to the extent such independent public accountants have consented to the delivery of such management letter to the Administrative Agent upon the request of Aleris.

(l) PATRIOT Act Information. Promptly following the Administrative Agent’s request therefor, all documentation and other information that the Administrative Agent reasonably requests on its behalf or on behalf of any Lender in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including USA PATRIOT ACT (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001)) (the “PATRIOT Act”).

(m) Other Information. As promptly as reasonably practicable from time to time following the Administrative Agent’s request therefor, such other information regarding the operations, business affairs and financial condition of Aleris or any of its Subsidiaries, or compliance with the terms of any Credit Document, as the Administrative Agent may reasonably request (on behalf of itself or any Lender).

Notwithstanding the foregoing, the obligations in clauses (a) and (b) of this Section 9.01 may be satisfied with respect to financial information of Aleris and its Subsidiaries by furnishing (A) the applicable financial statements of Holdings (or any direct or indirect parent of Holdings) or (B) Aleris’ or Holdings’ (or any direct or indirect parent thereof), as applicable, Form 10-K or 10Q, as applicable, filed with the Securities and Exchange Commission; provided that, with respect to each of clauses (A) and (B), (i) to the extent such information relates to Holdings (or a parent thereof), such information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to Holdings (or such parent), on the one hand, and the information relating to Aleris and its Subsidiaries on a standalone basis, on the other hand and (ii) to the extent such information is in lieu of information required to be provided under clause (a) of this Section 9.01, such materials are accompanied by a report and opinion of Ernst & Young LLP or other independent certified public accountants of recognized national standing reasonably acceptable to the Administrative Agent, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit.

Documents required to be delivered pursuant to clauses (a), (b) or (j) of this Section 9.01 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which Aleris posts such documents, or provides a link thereto on Aleris’ website on the Internet; or (ii) on which such documents are posted on Aleris’ behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) upon written request by the Administrative Agent, Aleris shall deliver paper copies of such documents to the Administrative Agent for further distribution to each Lender until a written request to cease delivering paper

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copies is given by the Administrative Agent and (ii) Aleris shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance Aleris shall be required to provide paper copies of the compliance certificates required by clause (c) of this Section 9.01 to the Administrative Agent.

The financial statements required to be delivered pursuant to Section 9.01(b) with respect to the first Fiscal Quarter after the Restatement Effective Date shall not be required to contain all purchase accounting adjustments relating to the Transaction to the extent it is not practicable to include any such adjustments in such financial statements.

9.02 Notice of Material Events. Aleris will furnish to the Administrative Agent written notice of the following promptly after any Responsible Officer of Aleris obtains knowledge thereof:

(a) the occurrence of any Event of Default or Default;

(b) the filing or commencement of, or any written threat or notice of intention of any person to file or commence, any action, suit or proceeding, whether at law or in equity or by or before any Governmental Authority or in arbitration, against Aleris or any of its Subsidiaries as to which an adverse determination is reasonably probable and which, if adversely determined, would reasonably be expected to have a Material Adverse Effect;

(c) any loss, damage, or destruction to the Collateral in the amount of $25,000,000 or more, whether or not covered by insurance;

(d) any and all default notices received under or with respect to any leased location or public warehouse where any material Collateral is located;

(e) the occurrence of any ERISA Event that, together with all other ERISA Events that have occurred and are continuing, would reasonably be expected to have a Material Adverse Effect; and

(f) any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section 9.02 shall be accompanied by a statement of a Responsible Officer of Aleris setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

9.03 Existence; Franchises. Aleris will, and will cause each of its Subsidiaries to, do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits (except as such would otherwise reasonably expire, be abandoned or permitted to lapse in the ordinary course of business), necessary or desirable in the normal conduct of its business, and maintain all requisite

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authority to conduct its business in each jurisdiction in which its business is conducted, except (i) other than with respect to a Borrower’s existence, to the extent such failure to do so would not reasonably be expected to have a Material Adverse Effect or (ii) pursuant to a transaction permitted by Section 10.02.

9.04 Payment of Taxes. Aleris will, and will cause each of its Subsidiaries to, pay or discharge all material tax liabilities, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Credit Party or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest would not reasonably be expected to result in a Material Adverse Effect.

9.05 Maintenance of Properties. Aleris will, and will cause each of its Subsidiaries to (i) at all times maintain and preserve all material property necessary to the normal conduct of its business in good repair, working order and condition, ordinary wear and tear excepted and casualty or condemnation excepted and (ii) make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto as necessary in accordance with prudent industry practice in order that the business carried on in connection therewith, if any, may be properly conducted at all times, except, in each case, where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

9.06 Books and Records; Inspection Rights; Appraisals; Field Examinations. (a) Aleris will, and will cause each of its Subsidiaries to, (i) keep proper books of record and account in accordance with GAAP in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities and (ii) permit any representatives designated by the Administrative Agent (including employees of the Administrative Agent or any consultants, accountants, lawyers and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, including environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times during normal business hours and as often as reasonably requested.

(b)(i) Up to once per year and, during any Enhanced Disclosure Period, at such other times as the Administrative Agent may reasonably request, an appraisal of the Inventory of the U.S. Credit Parties and Canadian Credit Parties and (ii) up to twice per year and, during any Enhanced Disclosure Period, at such other times as the Administrative Agent may reasonably request, a collateral examination of the Credit Parties, in each case, in scope, and from a third-party appraiser and a third-party consultant, respectively, engaged by and reasonably satisfactory to the Collateral Agent and completed at the cost and expense of Aleris; provided that if, after giving effect to the consummation of any Permitted Acquisition, the Total Borrowing Base would increase in an amount equal to or greater than $10,000,000 as a result of the inclusion of any Accounts and/or Inventory of the respective Acquired Business or Entity, the Administrative Agent may request, (x) an appraisal of such Inventory and (y) a collateral examination of such Accounts and Inventory, in each case, in scope, and from a third-party

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appraiser and a third-party consultant, respectively, engaged by and reasonably satisfactory to the Administrative Agent and completed at the cost and expense of Aleris.

(c) Upon the request of the Administrative Agent during each Fiscal Year, Aleris will hold a meeting with all of the Lenders at which meeting will be reviewed the financial results of Aleris and its Subsidiaries for the previous Fiscal Year and the budgets presented for the current Fiscal Year.

9.07 Compliance with Laws. Aleris will, and will cause each of its Subsidiaries to, comply in all material respects with all Requirements of Law applicable to it or its property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

9.08 Use of Proceeds. The Borrowers will use the proceeds of the Loans and the Letters of Credit only as provided in Section 8.08.

9.09 Insurance. (a) Aleris will, and will cause each of its Subsidiaries to, maintain, with financially sound and reputable insurance companies insurance in such amounts and against such risks, as are customarily maintained by similarly situated companies engaged in the same or similar businesses operating in the same or similar locations (after giving effect to any self-insurance reasonable and customary for similarly situated companies). Aleris will furnish to the Administrative Agent, upon request, information in reasonable detail as to the insurance so maintained.

(b) Aleris will, and will cause each of the other Credit Parties to, at all times keep its property which constitutes Collateral insured in favor of the Collateral Agent, and all policies or certificates (or certified copies thereof) with respect to such insurance (i) shall be endorsed to the Collateral Agent’s reasonable satisfaction for the benefit of the Collateral Agent (including, without limitation, by naming the Collateral Agent as loss payee and/or additional insured) and (ii) shall state that such insurance policies shall not be canceled without at least 30 days’ prior written notice thereof by the respective insurer to the Collateral Agent (or at least 10 days’ prior written notice in the case of non-payment of premium).

(c) If Aleris or any of its Subsidiaries shall fail to maintain insurance in accordance with this Section 9.09, or if Aleris or any of its Subsidiaries shall fail to so endorse all policies or certificates with respect thereto, the Administrative Agent shall have the right, upon 10 days’ prior notice to Aleris (but shall be under no obligation), to procure such insurance and Aleris agrees to reimburse the Administrative Agent for all reasonable costs and expenses of procuring and maintaining such insurance.

9.10 Compliance with Environmental Laws. (a) Aleris will (i) comply, and will cause each of its Subsidiaries to comply, with all Environmental Laws and permits applicable to, or required by, the ownership, lease or operation of its Real Property now or hereafter owned, leased or operated by Aleris or any of its Subsidiaries, (ii) will promptly pay or cause to be paid all costs and expenses incurred in connection with such compliance, and (iii) will keep or cause to be kept all such Real Property free and clear of any Liens imposed pursuant to such Environmental Laws, in each case, except, in the case of clauses (i), (ii) and (iii), as

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would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) (i) After the receipt by the Administrative Agent or any Lender of any notice of the type described in Section 9.01(g), (ii) at any time that Aleris or any of its Subsidiaries are not in compliance with Section 9.10(a) or (iii) in the event that the Administrative Agent or the Lenders have exercised any of the remedies pursuant to the last paragraph of Section 11, the Borrowers will (in each case) provide, at the sole expense of the Borrowers and at the request of the Administrative Agent, an environmental site assessment report concerning the applicable Real Property owned, leased or operated by Aleris or any of its Subsidiaries, prepared by an environmental consulting firm reasonably acceptable to the Administrative Agent, potential cost (if reasonably estimable) of any Remedial Action in connection with such condition on such Real Property. If the Borrowers fail to provide the same within 60 days after such request was made, the Administrative Agent may order the same, the cost of which shall be borne by the Borrowers, and the Borrowers shall grant and hereby grant to the Administrative Agent and the Lenders and their respective agents access to such Real Property and specifically grant the Administrative Agent and the Lenders, subject to the rights of tenants, the right to undertake such an assessment at any reasonable time upon reasonable notice to the Borrowers, all at the sole expense of the Borrowers.

9.11 New Subsidiaries; Additional Security; Further Assurances; etc. (a) Subject to applicable law and the provisions of this Section 9.11, Aleris shall, and shall cause each of the Credit Parties to, cause (i) each of its Wholly-Owned Subsidiaries (other than (1) any Immaterial Subsidiary (except as otherwise provided in paragraph (e) of this Section 9.11), (2) any Unrestricted Subsidiary and (3) any Subsidiary of German Sub-Holdco) formed or acquired after the date of this Agreement in accordance with the terms of this Agreement and (ii) any such Subsidiary that was an Immaterial Subsidiary but, as of the end of the most recently ended Fiscal Quarter has ceased to qualify as an Immaterial Subsidiary, to become a Credit Party as promptly thereafter as reasonably practicable by executing a Joinder Agreement in substantially the form set forth as Exhibit R hereto (the “Joinder Agreement”). Upon execution and delivery thereof, each party to a Joinder Agreement (i) shall automatically become a Guarantor (or, to the extent requested by the Adminitrative Agent or Aleris, a Borrower) hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Credit Documents; provided however, that only entities which are organized under the laws of the United States or any state or territory thereof or the laws of Canada or any province or territory thereof shall be permitted to become a Borrower hereunder and (ii) will simultaneously therewith or as soon as practicable thereafter grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders and each other Secured Creditor at such time party to or benefiting from the Intercreditor Agreement or the Security Documents, on any property of such Credit Party which constitutes Collateral, on such terms as may be required pursuant to the terms of the Security Documents and in such priority as may be required pursuant to the terms of the Intercreditor Agreement, in each case to the extent required by the terms of this Section 9.11 and subject to any limitations set forth in the Security Documents.

(b) Aleris will, and will cause each of the Credit Parties to, cause (i) 100% (or such lesser percentage held by Aleris or such other Credit Party) of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries, other than any Domestic Subsidiary taxed

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as a partnership for federal income tax purposes that holds Equity Interests of a Foreign Subsidiary whose Equity Interests are pledged pursuant to clause (ii) below or any Domestic Subsidiary which is a Subsidiary of any Foreign Subsidiary, (ii) 65% (or such lesser percentage held by Aleris or such other Credit Party) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% (or such lesser percentage held by Aleris or such other Credit Party) of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary directly owned by Aleris or any of the Credit Parties which is a Domestic Subsidiary and (iii) 100% (or such lesser percentage held by Aleris or such other Credit Party) of the issued and outstanding Equity Interests of each of its Foreign Subsidiaries held by a European Credit Party, to be subject at all times to a first priority perfected Lien in favor of the Administrative Agent pursuant to the terms and conditions of the Credit Documents or other security documents as the Administrative Agent shall reasonably request; provided, however, this paragraph (b) shall not require Aleris or any of its Subsidiaries to grant a security interest in (i) any Equity Interests of a Subsidiary to the extent a pledge of such Equity Interests in favor of the Administrative Agent or to secure any debt securities of Aleris or any of its Subsidiaries that would be entitled to such a security interest would require separate financial statements of a Subsidiary to be filed with the Securities and Exchange Commission (or any other government agency) under Rule 3 10 or Rule 3 16 of Regulation S-X under the Securities Act (or any successor thereto) or any other law, rule or regulation, (ii) the Equity Interests of any Unrestricted Subsidiary or (iii) any interests in joint ventures and non-Wholly Owned Subsidiaries to the extent the same cannot be pledged without the consent of one or more third parties.

(c) Without limiting the foregoing, Aleris will, and will cause each of the Credit Parties to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents and such other actions or deliveries of the type required by Section 6, including opinions of counsel, as applicable), which may be required by law or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Credit Documents and to ensure perfection and priority of the Liens created or intended to be created by the Security Documents, all at the expense of the Credit Parties; provided that, in no event will Aleris or any of its Subsidiaries be required to take any action, other than using its commercially reasonable efforts, to obtain consents from third parties with respect to its compliance with this Section 9.11(c).

(d) Subject to the limitations set forth or referred to in this Section 9.11, if any material assets (including any real property or improvements thereto or any interest therein) are acquired by Aleris or any Credit Party after the Restatement Effective Date (other than assets constituting Collateral under the Security Documents that become subject to the Lien in favor of the Administrative Agent upon acquisition thereof), Aleris will notify the Administrative Agent and the Lenders thereof, and, if requested by the Administrative Agent or the Required Lenders, Aleris will cause such assets to be subjected to a Lien securing the ABL Obligations of such Credit Party and will take, and cause the Credit Parties to 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 9.11, all at the expense of the Credit Parties.

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(e) If, at any time and from time to time after the Restatement Effective Date, Subsidiaries that are not Credit Parties because they are Immaterial Subsidiaries comprise in the aggregate more than 5% of Total Assets as of the end of the most recently ended Fiscal Quarter or more than 5% of Consolidated EBITDA of Aleris and the Restricted Subsidiaries for the most recently ended Test Period, then Aleris shall, not later than 45 days after the date by which financial statements for such Fiscal Quarter are required to be delivered pursuant to this Agreement, cause one or more such Subsidiaries to become additional Credit Parties (notwithstanding that such Subsidiaries are, individually, Immaterial Subsidiaries) such that the foregoing condition ceases to be true.

(f) Notwithstanding anything to the contrary in this Section 9.11, real property required to be mortgaged under this Section 9.11 shall be limited to real property that is owned in fee by a Credit Party having a fair market value at the time of the acquisition thereof of $2,500,000 or more (provided that the cost of perfecting such Lien is not unreasonable in relation to the benefits to the Lenders of the security afforded thereby in the Administrative Agent’s reasonable judgment after consultation with Aleris).

(g) Notwithstanding anything to the contrary contained herein, neither Aleris nor any Subsidiary of Aleris shall be required to:

(i) execute and deliver any Joinder Agreement, Guaranty or any other document or grant a Lien in any Equity Interests or other property held by it if such action (w) is restricted or prohibited by general statutory limitations, financial assistance, corporate benefit, fraudulent preference, “thin capitalization” rules or similar principles, (x) would result in adverse tax consequences, (v) is not within the legal capacity of Aleris or such Subsidiary or would conflict with the fiduciary duties of its directors or contravene any legal prohibition or result in personal or criminal liability on the part of any officer or (z) for reasons of cost, legal limitations or other matters is unreasonably burdensome in relation to the benefits to the Secured Creditors of Aleris’ or such Subsidiary’s guaranty or security;

(ii) pledge as Collateral any assets excluded therefrom pursuant to the relevant Security Documents; or

(iii) to the extent it is a Foreign Subsidiary (other than the Luxco Guarantor) or a Domestic Subsidiary of a Foreign Subsidiary, guarantee the Term Obligations of any U.S. Credit Party.

(h) If the Administrative Agent, the Collateral Agent or the Required Lenders reasonably determine that they are required by law or regulation to have appraisals prepared in respect of any Real Property of Aleris and its Subsidiaries constituting Collateral, the Administrative Agent or the Collateral Agent will, at the expense of Aleris, obtain appraisals which satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of the Financial Institution Reform, Recovery and Enforcement Act of 1989, as amended, and which shall otherwise be in form and substance reasonably satisfactory to the Administrative Agent.

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9.12 Ownership of Subsidiaries; etc. Except as otherwise contemplated by Sections 10.02, 10.05 and 10.11, Aleris will cause each of its Subsidiaries to be a Wholly-Owned Subsidiary. The sale or issuance of the Equity Interests of a Subsidiary of Aleris to a Person other than Aleris or a Subsidiary of Aleris shall constitute an Investment by Aleris therein at the date of designation in an amount equal to the product of (x) percentage of Aleris’s Investment in such Subsidiary (after giving effect to such sales or issuance) and (y) the fair market value of the net assets of the respective Subsidiary at the time that the Equity Interests in such Subsidiary as sold at issue.

9.13 Permitted Acquisitions. (a) Subject to the provisions of this Section 9.13 and the requirements contained in the definition of Permitted Acquisition, Aleris and each of its Subsidiaries may from time to time effect Permitted Acquisitions, so long as (in each case except to the extent the Required Lenders otherwise specifically agree in writing in the case of a specific Permitted Acquisition): either (i) the consideration for the respective Permitted Acquisition shall consist solely of Qualified Equity Interests of Aleris and no Default or Event of Default shall have occurred and be continuing at the time of the proposed Permitted Acquisition and immediately after giving effect thereto, (ii) the Payment Conditions are satisfied (both before and after giving effect to the respective Permitted Acquisition) at such time or (iii) subject to the last sentence of this Section 9.13(a), the aggregate consideration (excluding consideration in form of Qualified Equity Interests, and treating any such consideration as if not paid under this clause (iii) for purposes of determinations pursuant to Sections 10.03(x), 10.05(xvi) and 10.08(i)(y)) for all Permitted Acquisitions made at any time when the Payment Conditions are not satisfied pursuant to this Section 9.13(a) (iii) would not exceed $40,000,000 in the aggregate since the Restatement Effective Date, less the sum of (1) the aggregate amount of Investments previously made by Aleris or any of its Subsidiaries pursuant to Section 10.05(xvi) since the Restatement Effective Date (determined as the amount originally advanced, loaned or otherwise invested (without giving effect to any write-downs or write-offs thereof), less any returns on the respective investment not to exceed the original amount invested), (2) the aggregate amount of Dividends previously paid by Aleris or any of its Subsidiaries pursuant to Section 10.03(x) since the Restatement Effective Date and (3) the aggregate amount of payments, prepayments and redemptions of Indebtedness previously made by Aleris or any of its Subsidiaries pursuant to Section 10.08(i)(y) since the Restatement Effective Date. If the aggregate consideration for such Permitted Acquisition (determined in accordance with preceding clause (iii)) equals or exceeds $10,000,000 Aleris shall have delivered to the Administrative Agent a certificate executed by one of its Financial Officers certifying compliance with the requirements of preceding clauses (i) through (iii) (to the extent applicable). In the event that Aleris or a Subsidiary consummates an acquisition, makes an Investment, pays a Dividend or pays, prepays or redeems Indebtedness (each an “Action”) in reliance on the basket provided under Section 9.13(a)(iii), Section 10.05(xvi), Section 10.03(x) or Section 10.08(i)(y), as the case may be, and the Payment Conditions are thereafter satisfied, such Action shall be deemed to have been made at a time when the Payment Conditions are satisfied and shall not be deemed to be a utilization of such basket.

(b) At the time of each Permitted Acquisition involving the creation or acquisition of a Subsidiary, or the acquisition of any Equity Interests of any Person, the Equity Interests thereof created or acquired in connection with such Permitted Acquisition shall be pledged to the extent required by Section 9.11.

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(c) Aleris will cause each Subsidiary which is formed to effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and to execute and deliver all of the documentation as and to the extent required by, Section 9.11, to the reasonable satisfaction of the Administrative Agent.

9.14 European Restructuring. Aleris will cause the European Restructuring to be completed in all material respects by no later than December 31, 2007 (or such later date as may be agreed to by the Administrative Agent).

9.15 Cash Management Control Agreements. On or prior to the forty-fifth day after the Restatement Effective Date (or such later date as may be agreed to by the Administrative Agent), (i) Aleris, its Subsidiaries, the Administrative Agent and the applicable Collection Banks shall have entered into one or more Cash Management Control Agreements pursuant to Section 5.03 with respect to each Collection Account listed on Part A of Schedule VI, (ii) Aleris and/or its respective Subsidiaries, the Administrative Agent and the applicable banks shall have entered into one or more Cash Management Control Agreements with respect to each Disbursement Account set forth on Part B of Schedule VI, (iii) Aleris the Administrative Agent and the applicable bank shall have entered into a Cash Management Control Agreement with respect to the Core U.S. Concentration Account, (iv) the Canadian Borrowers the Administrative Agent and the applicable bank shall have entered into a Cash Management Control Agreement with respect to the Core Canadian Concentration Account and (v) the European Borrower the Administrative Agent and the applicable bank shall have entered into a Cash Management Control Agreement with respect to the Core European Concentration Account.

9.16 Designation of Subsidiaries. The board of directors of Aleris may at any time designate any Subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary as a Subsidiary; provided that (i) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (ii) immediately after giving effect to such designation, any Investment in such Unrestricted Subsidiary is permitted pursuant to Section 10.05, (iii) none of Aleris, the Canadian Borrowers nor the European Borrower may be designated as an Unrestricted Subsidiary, and (iv) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for the purposes of the New Senior Subordinated Notes, the New Senior Notes or the Term Loan Agreement. The designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by Aleris therein at the date of designation in an amount equal to the product of (x) percentage of Aleris’s Investment in such Subsidiary and (y) the net book value of the respective Subsidiary at the time that such Subsidiary is designated an Unrestricted Subsidiary. The designation of any Unrestricted Subsidiary as a Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Subsidiary existing at such time.

9.17 Designated Senior Indebtedness. Aleris hereby designates the ABL Obligations to be “Designated Senior Indebtedness” under the New Senior Subordinated Note Indenture.

SECTION 10. Negative Covenants. Each Borrower hereby covenants and agrees that on and after the Restatement Effective Date and until the Total Commitment and all Letters

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of Credit have terminated or expired (or, in the case of Letters of Credit only, are supported by backstop letters of credit or cash collateral, in either case in amounts and on terms reasonably acceptable to the Administrative Agent and the respective Issuing Lenders) and the Loans, Notes and Unpaid Drawings (in each case, together with interest thereon), Fees and all other ABL Obligations (other than any indemnities described in Section 13.13 and similar indemnities in the Credit Documents, in each case which are not then due and payable) incurred hereunder and thereunder, are paid in full:

10.01 Liens. No Borrower will, or will permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets (real or personal, tangible or intangible) of such Borrower or any of its Subsidiaries, whether now owned or hereafter acquired, or sell any such property or assets subject to an agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable with recourse to such Borrower or any of its Subsidiaries), or assign any right to receive income; provided that the provisions of this Section 10.01 shall not prevent the creation, incurrence, assumption or existence of the following (Liens described below are herein referred to as “Permitted Liens”):

(i) Liens for taxes, assessments or governmental charges or levies not yet overdue for a period of more than 30 days or being contested in good faith and by appropriate proceedings that are diligently conducted, for which adequate reserves have been established in accordance with GAAP or Local GAAP, as applicable;

(ii) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen, repairmen, construction contractors or other like Liens arising in the ordinary course of business which secure amounts not overdue for a period of more than 30 days, or if more than 30 days overdue, are unfiled and no other action has been taken to enforce such Lien or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP or Local GAAP;

(iii) Liens in existence on the Restatement Effective Date which are listed, and the property subject thereto described, in Schedule XI, and renewals, replacements and extensions thereof, provided that (x) the aggregate principal amount of the Indebtedness, if any, secured by such Liens does not increase from that amount outstanding at the time of any such renewal, replacement or extension (except to the extent permitted under Section 10.04(x)) and (y) any such renewal, replacement or extension does not encumber any additional assets or properties of Aleris or any of its Subsidiaries (other than after-acquired property affixed or incorporated thereto and proceeds or products thereof);

(iv) Liens (x) in favor of the Collateral Agent for the benefit of the ABL Secured Parties granted pursuant to the Security Documents and (y) Liens in favor of the Term Collateral Agent for the benefit of the Term Secured Parties granted pursuant to any Security Document (as defined in the Term Loan Agreement), as in effect on the date hereof and as amended, supplemented or modified from time to time in accordance with

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the terms of the Intercreditor Agreement; provided that neither the European Borrower nor any of its Subsidiaries may grant Liens securing the Term Obligations;

(v) leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of Aleris or any of the Restricted Subsidiaries and do not secure any Indebtedness;

(vi) Liens upon assets of Aleris or any of its Subsidiaries (other than the European Distribution Subsidiaries) subject to Capitalized Lease Obligations and Synthetic Lease Obligations permitted by Section 10.04(v), provided that any Lien encumbering an asset giving rise to a Capitalized Lease Obligation or Synthetic Lease Obligation does not encumber any other asset (except for accessions to the asset giving rise to the Capitalized Lease Obligation or Synthetic Lease Obligation) of Aleris or any Subsidiary of Aleris; provided, further, that individual financings of property provided by one lender may be cross collateralized to other financings of property provided by such lender;

(vii) purchase money security interests in fixed or capital assets acquired by Aleris and its Subsidiaries (other than the European Distribution Subsidiaries) after the Restatement Effective Date or with respect to any construction, replacement or refinancing thereof, or repairs, renovations or improvements thereto, and Liens placed upon equipment acquired after the Restatement Effective Date and used in the ordinary course of business of Aleris or any of its Subsidiaries (other than the European Distribution Subsidiaries) and (in each case) placed at the time of such acquisition (or construction, replacement, refinancing, repair, renovation or improvement) by Aleris or such Subsidiary or within 270 days thereafter to secure Indebtedness incurred to pay all or a portion of the purchase or cost thereof or to secure Indebtedness incurred for the purpose of financing the acquisition (or construction, replacement or refinancing of, or repairs, renovations or improvements to) any such fixed or capital assets or equipment, provided that (x) the Indebtedness secured by such Liens is permitted by Section 10.04(v) and (y) in all events, the Lien encumbering such fixed or capital assets (or improvements thereto) does not encumber any other asset of Aleris or any Subsidiary of Aleris (other than accessions to such assets and any proceeds or products thereof); provided, that individual financings of property provided by one lender may be cross collateralized to other financings of property provided by such lender;

(viii) easements, rights-of-way, restrictions, encroachments, municipal and zoning ordinances and other similar charges or encumbrances, and minor title deficiencies, in each case not securing Indebtedness and not materially interfering with the conduct of the business of Aleris or any of its Subsidiaries taken as a whole (and any other Liens “insured over” by the applicable title insurance company);

(ix) Liens arising from precautionary UCC or like personal property security financing statement filings regarding operating leases entered into by any Borrower or its Subsidiaries;

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(x) Liens arising out of the existence of judgments or awards which do not constitute an Event of Default pursuant to Section 11.09;

(xi) (x) statutory and common law landlords’ liens under leases to which Aleris or any of its Subsidiaries is a party or (y) any interest or title of a lessor under leases, or secured by a lessor’s interests under leases, to which Aleris or any of its Subsidiaries is a party in the ordinary course of business;

(xii) Liens (x) incurred in the ordinary course of business in connection with workers compensation claims, unemployment insurance, social security benefits and other similar forms of governmental insurance benefits and (y) deposits securing the performance of bids, tenders, leases (other than Capitalized Lease Obligations) and contracts (other than Indebtedness) in the ordinary course of business, statutory obligations, trade contracts, surety bonds, performance bonds and other obligations of a like nature (including those to secure health, safety and environmental obligations) incurred in the ordinary course of business;

(xiii) Permitted Encumbrances;

(xiv) customary Liens in favor of banking institutions encumbering deposits (including the right of set-off) held by such banking institutions incurred in the ordinary course of business;

(xv) Liens on property or assets acquired pursuant to a Permitted Acquisition, or on property or assets of a Subsidiary of Aleris in existence at the time such Subsidiary is acquired pursuant to a Permitted Acquisition, provided that (x) any Indebtedness that is secured by such Liens is permitted to exist under Section 10.04, and (y) such Liens are not incurred in connection with, or in contemplation or anticipation of, such Permitted Acquisition and do not attach to (A) any asset of Aleris or any other asset of any Subsidiary of Aleris not acquired in connection with such Permitted Acquisition or (B) any asset of the European Borrower or its Subsidiaries;

(xvi) Liens securing Indebtedness of Foreign Subsidiaries (other than the European Borrower and its Subsidiaries) permitted pursuant to Section 10.04(xiii), provided that such Liens only attach to the assets of Foreign Subsidiaries;

(xvii) contractual options or rights to purchase Real Property and Equipment from any Credit Party; and

(xviii) pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations to (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Borrowers or any of their Subsidiaries;

(xix) Liens resulting from standard joint venture agreements or stockholder agreements and other similar agreements applicable to joint ventures;

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(xx) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;

(xxi) Liens (i) on cash advances in favor of the seller of any property to be acquired in an Investment permitted pursuant to Section 10.05 to be applied against the purchase price for such Investment, and (ii) consisting of an agreement to transfer any property in a disposition permitted under Section 10.02, in each case, solely to the extent such Investment or disposition, as the case may be, would have been permitted on the date of the creation of such Lien;

(xxii) Liens on property (i) of any Subsidiary that is not a Credit Party and (ii) that does not constitute Collateral, which Liens secure Indebtedness of the applicable Subsidiary permitted under Section 10.04;

(xxiii) Liens in favor of the Borrowers or any of their Subsidiaries securing Indebtedness permitted under Section 10.04, including Liens granted by a Subsidiary that is not a Credit Party in favor of the Borrower or another Credit Party in respect of Indebtedness owed by such Subsidiary;

(xxiv) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

(xxv) Liens that are contractual rights of set-off relating to purchase orders and other agreements entered into with customers of the Borrowers or any of their Subsidiaries in the ordinary course of business;

(xxvi) Liens solely on any cash earnest money deposits made by the Borrowers or any of their Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder;

(xxvii) Liens arising out of Sale and Lease-Back Transactions permitted by Section 10.02(xix);

(xxviii) Liens on goods or inventory the purchase, shipment or storage price of which is financed by a documentary letter of credit or bankers’ acceptance issued or created for the account of any Borrower or any of its Subsidiaries; provided that such Lien secures only the obligations of the Borrower or such Subsidiaries in respect of such letter of credit to the extent permitted under Section 10.04;

(xxix) Liens, in the case of any Term Loan Pari Passu Lien Obligations, granted pursuant to a security agreement or agreements substantially similar in all material respects to security agreements in respect of the Term Loans and any extensions and replacements thereof; provided that (x) such Liens secure only the obligations referred to in such security agreements (and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof (except to the extent permitted under Section 10.04(x)), (y) such Liens do not apply to any asset other than

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Collateral that is subject to a Lien granted under a Credit Document to secure the ABL Obligations (other than Term Exclusive Collateral (as defined in the Intercreditor Agreement)) and (z) all such Liens shall be subject to the terms of, and have the priorities with respect to the Collateral as set forth in, an intercreditor agreement that is no less favorable to the Secured Creditors than the Intercreditor Agreement;

(xxx) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by any Borrower or its Subsidiaries in the ordinary course of business or Liens arising by operation of law under Article 2 of the UCC in favor of a reclaiming seller of goods or buyer of goods;

(xxxi) Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon;

(xxxii) Liens deemed to exist in connection with investments in repurchase agreements under Section 10.05; provided that such Liens do not extend to any assets other than those assets that are the subject of such repurchase agreements; and

(xxxiii) Liens (which, if the same apply to any Collateral, are junior to the Liens on the Collateral securing the ABL Obligations) not otherwise permitted by clauses (i) through (xxxii) of this Section 10.01 to the extent attaching to properties and assets not constituting ABL Priority Collateral (as defined in the Intercreditor Agreement) or ABL Exclusive Collateral (as defined in the Intercreditor Agreement) and with an aggregate fair value not in excess of, and securing liabilities not in excess of, $25,000,000 in the aggregate at any time outstanding.

Notwithstanding the foregoing, Liens on assets of the European Borrower permitted pursuant to clauses (vi), (vii) and (xxxiii) of this Section 10.01, shall not secure Indebtedness or other liabilities in excess of $5,000,000 at any time outstanding.

In connection with the granting or assumption of Liens of the type described in clauses (vi), (vii) and (xv) of this Section 10.01 by Aleris of any of its Subsidiaries (other than the European Distribution Subsidiaries), the Collateral Agent shall be authorized to take any actions deemed appropriate by it in connection therewith (including, without limitation, by executing appropriate lien releases or lien subordination agreements in favor of the holder or holders of such Liens, in either case solely with respect to the property subject to such Liens).

10.02 Consolidation, Merger, Purchase or Sale of Assets, etc. No Borrower will, or will permit any of its Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any partnership or joint venture, or merge or consolidate, or convey, sell, lease or otherwise dispose of all or any part of its property or assets, or enter into any sale-leaseback transactions, or purchase or otherwise acquire (in one or a series of related transactions) any part of the property or assets (other than purchases or other acquisitions of inventory, materials, equipment, intangible assets, goods and Real Property in the ordinary course of business) of any Person, except that the following shall be permitted:

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(i) Capital Expenditures by Aleris and its Subsidiaries shall be permitted (other than Capital Expenditures consisting of the acquisition of an Acquired Entity or Business except to the extent otherwise permitted pursuant to Section 10.05);

(ii) each of Aleris and its Subsidiaries may convey, sell or dispose of inventory and other assets in the ordinary course of business;

(iii) Investments may be made to the extent permitted by Section 10.05;

(iv) each of Aleris and its Subsidiaries may sell or otherwise dispose of excess, used, obsolete, damaged or worn-out assets in the ordinary course of business or property no longer used or useful in the conduct of their business;

(v) Aleris and its Subsidiaries may sell, transfer or otherwise dispose of assets (other than the Equity Interests of any Subsidiary unless all of the Equity Interests of such Subsidiary then owned by Aleris and its Subsidiaries are sold in a sale permitted by this clause (v)), so long as (x) each such sale is in an arm’s-length transaction and Aleris or the respective Subsidiary receives at least fair market value (as determined in good faith by Aleris or such Subsidiary, as the case may be), (y) the Net Sale Proceeds therefrom are applied and/or reinvested as (and to the extent) required by Section 5.02(c) and (z) the aggregate fair market value of the proceeds received from all assets sold, transferred or disposed pursuant to this clause (v) shall not exceed $40,000,000 in any fiscal year of Aleris;

(vi) each of Aleris and its Subsidiaries may lease (as lessee) or license (as licensee) real or personal property (so long as any such lease or license does not create a Capitalized Lease Obligation except to the extent permitted by Section 10.04(v));

(vii) each of Aleris and its Subsidiaries may sell, discount, or otherwise dispose of accounts receivable in connection with the compromise or collection thereof, and not as part of any transaction, the primary purpose of which is to provide financing for Aleris and its Subsidiaries, provided that such accounts receivable were not included as Eligible Accounts in the Borrowing Base Certificate most recently delivered or, if so included, the exclusion of such accounts as Eligible Accounts (after giving effect to any concurrent prepayment of the Loans) would not cause the Borrowing Base limitations described in Section 5.02(a) to be exceeded;

(viii) each of Aleris and its Subsidiaries may grant licenses, sublicenses, leases or subleases to other Persons not materially interfering with the conduct of the business of Aleris or any of its Subsidiaries, in each case so long as no such grant would adversely affect any Collateral or the Collateral Agent’s rights or remedies with respect thereto;

(ix) any Person (other than a Canadian Borrower, the European Borrower or the Distribution Subsidiaries) may merge or consolidate with and into, or be dissolved or liquidated into, or transfer any of its assets to, Aleris or any Domestic Subsidiary of Aleris so long as (i) in the case of any such merger, consolidation, dissolution or liquidation involving Aleris, the surviving corporation of any such merger, consolidation, dissolution or liquidation is Aleris or another Person organized or existing under the laws

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of the United States of America, any State thereof or the District of Columbia and such Person (if not Aleris) expressly assumes in writing all obligations of Aleris under the Credit Documents, in which event such Person will succeed to, and be substituted for, Aleris, (ii) in the case of any such merger, consolidation, dissolution or liquidation involving a Wholly-Owned Domestic Subsidiary which is a U.S. Credit Party, a Canadian Credit Party or a European Credit Party (other than the European Borrower or any Distribution Subsidiary), a Wholly-Owned Domestic Subsidiary which is (or thereupon becomes) a U.S. Credit Party is the surviving corporation of any such merger, dissolution or liquidation, (iii) the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of any party to such transaction (if any) shall remain or shall be replaced such that they are in full force and effect and perfected to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation, and (iv) at the time thereof and immediately after giving effect thereto, no Event of Default shall have occurred and be continuing;

(x) any Distribution Subsidiary may merge or consolidate with and into, or be dissolved or liquidated into, or transfer any of its assets to, the European Borrower or any other Distribution Subsidiary;

(xi) any Person (other than a U.S. Credit Party or a Canadian Credit Party) may merge or consolidate with and into, or be dissolved or liquidated into, or transfer any of its assets to, the European Borrower or any of its Subsidiaries so long as (i) in the case of any such merger, consolidation, dissolution or liquidation involving the European Borrower, the European Borrower is the surviving entity of any such merger, consolidation, dissolution of liquidation, (ii) in the case of any such merger, consolidation, dissolution or liquidation involving a European Subsidiary Guarantor, a Subsidiary of the European Borrower which is (or thereupon becomes) a European Subsidiary Guarantor is the surviving entity of such merger or corporation, (iii) the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of any party to such transaction (if any) shall remain or shall be replaced such that they are in full force and effect and perfected to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation and (iv) at the time thereof and immediately after giving effect thereto, no Event of Default shall have occurred and be continuing;

(xii) any Person (other than a U.S. Credit Party, the European Borrower or the Distribution Subsidiaries) may merge or consolidate with and into, or be dissolved or liquidated into, or transfer any of its assets to, a Canadian Borrower or any Canadian Subsidiary of Aleris so long as (i) in the case of any such merger, consolidation, dissolution or liquidation involving a Canadian Credit Party, the surviving corporation of any such merger, consolidation, dissolution or liquidation is, or concurrently therewith becomes a Canadian Credit Party, (ii) the security interests and charges granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of any party to such transaction (if any) shall remain or shall be replaced such that they are in full force and effect and perfected to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation, and (iii) at

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the time thereof and immediately after giving effect thereto, no Event of Default shall have occurred and be continuing;

(xiii) any Person which is not a Credit Party may merge or consolidate with and into, or be dissolved or liquidated into, or transfer any of its assets to any Subsidiary of Aleris so long as, in the case of mergers or consolidations with and into a Credit Party, such Credit Party is the surviving entity of such merger;

(xiv) any non Wholly-Owned Subsidiary which is a Credit Party may merge or consolidate into, or be dissolved or liquidated into, or transfer any of its assets to any other Credit Party, so long as (i) if, after giving effect to such merger, consolidation, dissolution or liquidation the percentage ownership of Aleris and its Subsidiaries in any such Subsidiary or its assets is reduced, the value of such reduction shall be permitted as a Dividend pursuant to Section 10.03, (ii) the security interests and charges (if any) granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of the Subsidiaries party to such transaction shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation), and (iii) in the case of any such transaction pursuant to which any consideration is paid to a Person that is not a Wholly-Owned Subsidiary of Aleris, such consideration shall be permitted to be paid at such time only to the extent that it could otherwise have been paid pursuant to (and Aleris shall be required to satisfy the provisions of) Section 10.03;

(xv) if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing, (x) any Subsidiary of Aleris (other than any Canadian Borrower or the European Borrower) may liquidate or dissolve if Aleris determines in good faith that such liquidation or dissolution is in the best interests of Aleris and is not materially disadvantageous to the Lenders, (y) any Subsidiary (other than any Canadian Borrower or the European Borrower) may merge with any Person to effect an investment permitted under Section 10.05 and (z) any merger, dissolution or liquidation may be effected for the purposes of effecting a transaction otherwise permitted under this Section 10.02;

(xvi) sales, transfers and dispositions of (i) Investments (excluding the Equity Interests of any Subsidiary) permitted by clauses (ii), (iv), (ix) and (xvii) of Section 10.05 and (ii) other investments to the extent required by or made pursuant to customary buy/sell arrangements made in the ordinary course of business between the parties to agreements related thereto; provided, in each case, that such sales, transfer or dispositions are made for fair value and for at least 75% cash consideration;

(xvii) dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Borrower or its Subsidiaries;

(xviii) sales, transfers and dispositions effecting a transaction otherwise permitted under this Section 10.02, Section 10.03, Section 10.08 and Liens permitted by Section 10.01;

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(xix) sales, transfers and dispositions pursuant to Sale and Lease-Back Transactions if (A)(1) Aleris or such Restricted Subsidiary would be entitled to incur Indebtedness in amount equal to the Attributable Debt with respect to such Sale and Lease-Back Transaction pursuant to Section 10.04(xv), (2) the consideration received by Aleris or any Restricted Subsidiary in connection with such Sale and Lease-Back Transaction is at least equal to the fair market value (as determined in good faith by Aleris) of such property and (3) Aleris applies and or reinvests the proceeds of such transaction in compliance with Section 5.02(c) and (B) the Administrative Agent shall have received from the applicable purchaser or transferee a Collateral Access Agreement;

(xx) each of Aleris and its Subsidiaries may sell or liquidate Cash Equivalents, in each case for cash at fair market value (as determined in good faith by Aleris or such Subsidiary);

(xxi) Aleris and its Subsidiaries may sell the assets described on Schedule XIV so long as the Net Sale Proceeds therefrom are applied and/or reinvested as (and to the extent) required by Section 5.02(c);

(xxii) transfers or sales of assets (s) among the U.S. Credit Parties, (t) among Wholly-Owned Canadian Subsidiaries of Aleris which are Credit Parties, (u) among the European Borrower and its Wholly-Owned Subsidiaries which are Credit Parties, (v) among Wholly-Owned Foreign Subsidiaries (that are not Credit Parties) of Aleris, (w) by any Subsidiary of Aleris to any U.S. Credit Party, (x) by any Foreign Subsidiary of Aleris that is not a Credit Party to any Wholly-Owned Foreign Subsidiary of Aleris, (y) by any U.S. Credit Party to any Wholly-Owned Canadian Subsidiary or Wholly-Owned European Distribution Subsidiary of Aleris that is a Credit Party, and (z) by any U.S. Credit Party to any Wholly-Owned Foreign Subsidiary (that is not a Credit Party) of Aleris, so long as, (I) in the case of any transfer from one Credit Party to another Credit Party, any security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the relevant Security Documents in the assets so transferred shall (A) remain in full force and effect and perfected and enforceable (to at least the same extent as in effect immediately prior to such transfer) or (B) be replaced by security interests granted to the relevant Collateral Agent for the benefit of the relevant Secured Creditors pursuant to the relevant Security Documents, which new security interests shall be in full force and effect and perfected and enforceable (to at least the same extent as in effect immediately prior to such transfer) and (II) in the case of any transfer pursuant to preceding clause (z) (other than sales or transfer of assets (x) located at the 2211 East Carson Street, Long Beach, California and (y) located or previously located at State Road 7, Hannibal, OH 43931), either (A) the Payment Conditions are satisfied (both before and after giving effect to any such asset sale or transfer) at such time or (B) such transfer of assets would otherwise be permitted under Section 10.05;

(xxiii) Permitted Acquisitions may be made to the extent permitted by Section 9.13;

(xxiv) Aleris and its Subsidiaries may consummate Asset Swaps, so long as (w) each such sale is in an arm’s-length transaction and Aleris or the respective

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Subsidiary receives at least fair market value (as determined in good faith by Aleris or such Subsidiary, as the case may be), (x) the Net Sale Proceeds therefrom (if any) are applied and/or reinvested as (and to the extent) required by Section 5.02(c), (y) the Collateral Agent shall have a perfected Lien on the assets acquired pursuant to such Asset Swap at least to the same extent for the assets sold pursuant to such Asset Swap (immediately prior to giving effect thereto) subject to no other Lien other than Permitted Liens and (z) the aggregate fair market value of all assets sold pursuant to this clause (xxiv) shall not exceed $25,000,000 in the aggregate since the Restatement Effective Date; provided that so long as the assets acquired by Aleris or any of its Subsidiaries pursuant to the respective Asset Swap are located in the same jurisdiction (or in the case of the United States, any State of the United States) as the assets sold by Aleris or such Subsidiary neither the fair market value limitation described in clause (w) above nor the $25,000,000 aggregate cap on Asset Swaps described in clause (z) above will apply to such Asset Swap;

(xxv) the Transaction may be consummated on or about the Restatement Effective Date; and

(xxvi) European Distribution Subsidiaries, Transitory European Subsidiaries and, prior to the European Restructuring Completion Date, (or thereafter, as contemplated by Section 10.16) Specified European Manufacturing Subsidiaries may sell Accounts to the European Borrower pursuant to Receivables Purchase Agreements.

Notwithstanding anything to the contrary contained herein, the Equity Interests of any of the Subsidiaries of Corus Aluminium NV in existence on the Restatement Effective Date (each such Subsidiary, a “European Sales Office”) may be transferred to the European Borrower so long as (i) the respective European Sales Office owns no assets other than de minimis assets and (ii) the respective European Sales Office has no operations other than the solicitation of sales of finished aluminum product to end-use customers. by and on behalf of the European Borrower or the Specified European Manufacturing Subsidiaries, as permitted pursuant to this Agreement.

Notwithstanding anything to the contrary contained above, in no event shall the Equity Interests of (A) any Borrower (other than Aleris) be sold, issued, transferred or otherwise disposed of (x) to any Person that is not a Credit Party (or, in the case of the European Borrower, to a Person not a European Parent Guarantor), unless, in the case of a U.S. Borrower (other than Aleris) or a Canadian Borrower, (1) no Default or Event of Default is then in existence or would exist after giving effect thereto, and (2) each of the conditions set forth in Section 7.03 shall be satisfied at such time (after giving effect to such disposal), or (y) such that after giving effect thereto Aleris shall fail to own, directly or indirectly, all of the Equity Interests of the Canadian Borrowers, the European Borrower or German SubHoldco or all such Equity Interests shall fail to be subject to the Lien of the Secured Creditors as provided in this Agreement or (B) any Distribution Subsidiary be sold, issued, transferred or otherwise disposed of to a Person other than the European Borrower or another Distribution Subsidiary which is a Wholly-Owned Subsidiary.

To the extent the Required Lenders waive the provisions of this Section 10.02 with respect to the sale of any Collateral, or any Collateral is sold as permitted by this Section 10.02 (other than to Aleris or a Subsidiary thereof which is a Credit Party), such Collateral shall

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be sold free and clear of the Liens created by the Security Documents, and the Administrative Agent and the Collateral Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

10.03 Dividends. No Borrower will, or will permit any of its Subsidiaries to, pay any Dividends except that:

(i) Aleris may declare and pay dividends or make other distributions with respect to its Equity Interests payable solely in additional shares of its Equity Interests; provided, that such Equity Interests are Qualified Equity Interests;

(ii) Subsidiaries of Aleris may declare and pay dividends or make other distributions ratably with respect to their Equity Interests;

(iii) Aleris and its Subsidiaries may, or may pay Dividends to Holdings the proceeds of which are used to, (i) repurchase Equity Interests of Aleris (or any direct or indirect parent thereof) in connection with the exercise of stock options (including for purposes of paying tax withholding applicable to stock option exercises) granted to officers, directors, consultants or employees of Aleris, its Subsidiaries or any direct or indirect parent thereof and (ii) redeem, repurchase or otherwise acquire for value, outstanding Equity Interests of Aleris, or any direct or indirect parent thereof, (including related stock appreciation rights or similar securities) following the death, disability, retirement or termination of employment of officers, directors, consultants or employees of Aleris, any of its Subsidiaries, or any direct or indirect parent thereof or under the terms of any plan or any other agreement under which such Equity Interests or related rights were issued, in each case so long as (x) the aggregate amount paid by Aleris in cash in respect of all such redemptions or purchases pursuant to preceding clauses (i) and (ii) shall not exceed $5,000,000 in respect of all such redemptions, purchases and payments made in any Fiscal Year (plus the amount of net proceeds (x) received by Aleris during such Fiscal Year from sales of Equity Interests of Aleris or, to the extent contributed to Aleris, any of Aleris’ direct or indirect parents, to directors, consultants, officers or employees of Aleris, any of its Subsidiaries or any direct or indirect parent of Aleris in connection with permitted employee compensation and incentive arrangements and (y) of any key-man life insurance policies received during such Fiscal Year); provided that to the extent that any portion of such annual limit on such redemptions, purchases and payments is not utilized in any Fiscal Year, such unused portion will increase the annual limit applicable to the immediately subsequent Fiscal Year;

(iv) Aleris and its Subsidiaries may make non-cash repurchases of Equity Interests deemed to occur upon the exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(v) Aleris and its Subsidiaries may pay Dividends on the Restatement Effective Date to consummate the Transaction;

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(vi) to the extent constituting Dividends, Aleris and its Subsidiaries may enter into and consummate transactions expressly permitted by any provision of Sections 10.02 or 10.06(xi), (xii) and (xiv);

(vii) Aleris and its Subsidiaries may pay Dividends to Holdings to finance investments permitted pursuant to Section 10.05; provided, that (A) any such Dividend shall be made substantially concurrently with the closing of such investment and (B) Holdings shall, immediately following the closing thereof, cause (i) all property acquired (whether assets or Equity Interests) to be contributed to Aleris or its Subsidiaries or (ii) the merger (to the extent permitted in Section 10.02) of the Person formed or acquired into Aleris or its Subsidiaries in order to consummate such investment;

(viii) Aleris may pay Dividends (including in cash), so long as (a) the Payment Conditions are satisfied (both before and after giving effect to any such Dividends) or (b) such Dividends are made with the proceeds of any substantially contemporaneous issuance of Qualified Equity Interests by Aleris or any direct or indirect parent of Aleris to the extent such proceeds shall have actually been received by Aleris;

(ix) Aleris and its Subsidiaries may pay Dividends to Holdings (x) in an amount (together with loans or advances made pursuant to Section 10.05(xix)) not to exceed $1,500,000 in any Fiscal Year, to the extent necessary to pay (or allow any direct or indirect parent of Holdings to pay) general corporate and overhead expenses incurred by Holdings (or any direct or indirect parent thereof) in the ordinary course of business, plus the amount of any reasonable and customary indemnification claims made by any director or officer of Holdings (or any direct or indirect parent thereof), (y) to pay franchise taxes and other fees, taxes and expenses required to maintain its (or any of its direct or indirect parents’) corporate existence and (z) in an amount necessary to pay the tax liabilities of Holdings (or any such direct or indirect parent) attributable to (or arising as a result of) the operations of Aleris and its Subsidiaries; provided, however, that in the case of clause (z), the amount of such dividends shall not exceed the amount that Aleris and its Subsidiaries would be required to pay in respect of federal, state and local taxes and any other taxes were Aleris and the Subsidiaries to pay such taxes as stand alone taxpayers;

(x) so long as no Event of Default is in existence or would exist immediately after giving effect thereto, Aleris may pay additional Dividends in an amount not to exceed $40,000,000 in the aggregate since the Restatement Effective Date (subject to the last sentence of Section 9.13(a)), less the sum of (i) the aggregate amount of Investments previously actually made by Aleris or any of their Subsidiaries pursuant to Section 10.05(xvi) since the Restatement Effective Date (determined as the amount originally advanced, loaned or otherwise invested (without giving effect to any write-downs or write-offs thereof), less any returns on the respective investment not to exceed the original amount invested), (ii) the aggregate amount of payments, prepayments and redemptions of Indebtedness actually made by Aleris or any of its Subsidiaries pursuant to Section 10.08(i)(y) since the Restatement Effective Date and (iii) the aggregate amount of Permitted Acquisitions previously made by Aleris or any of its Subsidiaries pursuant to Section 9.13(a)(iii) since the Restatement Effective Date; and

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(xi) so long as no Default or Event of Default is in existence or would exist immediately after giving effect thereto, Aleris may pay Dividends in an amount equal to the Net Sale Proceeds received by Aleris and its Subsidiaries from the sale of assets located at the Carson Facility.

10.04 Indebtedness. No Borrower will, or will permit any of its Subsidiaries to, contract, create, incur, assume or suffer to exist any Indebtedness or Interest Rate Protection Agreements or Other Hedging Agreements, except:

(i) the ABL Obligations;

(ii) Existing Indebtedness (not constituting Capitalized Lease Obligations, which shall be required to be justified under following clause (v)) outstanding on the Restatement Effective Date and listed on Schedule IX;

(iii) Interest Rate Protection Agreements entered into with respect to other Indebtedness permitted under this Section 10.04 so long as the entering into of such Interest Rate Protection Agreements are bona fide hedging activities and are not for speculative purposes;

(iv) Other Hedging Agreements providing protection to Aleris and its Subsidiaries against fluctuations in currency values and commodity prices so long as the entering into of such Other Hedging Agreements are bona fide hedging activities and are not for speculative purposes;

(v) Indebtedness of Aleris and its Subsidiaries (other than the European Distribution Subsidiaries) evidenced by Capitalized Lease Obligations and Synthetic Lease Obligations (to the extent permitted by Section 10.01(vi)) and purchase money Indebtedness secured by Liens described in Section 10.01(vii), provided that in no event shall the sum of the aggregate principal amount of all Capitalized Lease Obligations, Synthetic Lease Obligations and purchase money Indebtedness permitted by this clause (v) and any Permitted Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness incurred pursuant to this clause (v) exceed $175,000,000 at any time outstanding;

(vi) intercompany Indebtedness among Aleris and its Subsidiaries to the extent permitted by Sections 10.05(viii), (xiv) or (xvi);

(vii) (x) the Term Loans in an initial aggregate principal amount not to exceed $1,225,000,000 (or its equivalent in the applicable currencies) (less the aggregate principal amount of Permitted Refinancing Indebtedness incurred in respect thereof), (y) the New Senior Notes in an initial aggregate principal amount not to exceed $600,000,000 (less the aggregate principal amount of Permitted Refinancing Indebtedness incurred in respect thereof) and (z) the New Senior Subordinated Notes in an aggregate principal amount not to exceed $400,000,000 (less the aggregate principal amount of Permitted Refinancing Indebtedness incurred in respect thereof);

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(viii) Indebtedness consisting of guaranties by Aleris and its Subsidiaries of each other’s Indebtedness or other obligations of any such Persons permitted under Section 10.05(viii), (xiv) or (xvi);

(ix) cash management obligations and other Indebtedness in respect of netting services, overdraft protections and similar arrangements in each case in connection with deposit accounts;

(x) Permitted Refinancing Indebtedness;

(xi) to the extent that same constitutes Indebtedness, indemnification obligations, purchase price or other similar adjustments in connection with acquisitions and dispositions permitted hereunder;

(xii) Indebtedness of Aleris or any Subsidiary of Aleris (other than the European Borrower and its Subsidiaries) acquired pursuant to a Permitted Acquisition or other acquisition of an Acquired Business or Entity permitted pursuant to Section 10.05 (or Indebtedness assumed at the time of a Permitted Acquisition or such other acquisition permitted pursuant to Section 10.05), provided that (x) such Indebtedness was not incurred in connection with, or in anticipation or contemplation of, such Permitted Acquisition or other acquisition permitted pursuant to Section 10.05, and (y) the aggregate principal amount of all Indebtedness permitted by this clause (xii) and any Permitted Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness incurred pursuant to this clause (xii) shall not exceed $50,000,000 at any one time outstanding;

(xiii) (x) Indebtedness of European Distribution Subsidiaries and any other Foreign Subsidiary (other than any such other Foreign Subsidiary which is a Credit Party), consisting of local lines of credit incurred in the ordinary course of business of such Foreign Subsidiary and, except as otherwise permitted by Section 10.04(viii), not guaranteed by a Credit Party, in an aggregate principal amount not to exceed at any time the Dollar Equivalent of $75,000,000 and (y) Indebtedness of any Foreign Subsidiary consisting of an Investment made by a Credit Party to such Foreign Subsidiary as permitted by Section 10.05(viii); provided that for purposes of determining compliance with this Section 10.04(xiii), the Dollar Equivalent of any amounts denominated in a currency other than U.S. Dollars shall be calculated on the date on which the applicable Indebtedness was incurred;

(xiv) unsecured Indebtedness of Aleris the net cash proceeds of which are used to consummate one or more Permitted Acquisitions or other acquisitions of Acquired Entities or Businesses permitted pursuant to Section 10.05 (“Additional Debt”); provided that (x) (A) the terms of such Additional Debt shall not contain any cross-default provisions (other than for material non-payment at final maturity, and may include a cross-acceleration provision), (B) the terms of the Additional Debt shall not contain any financial maintenance covenants, (C) the Additional Debt shall not be secured by any asset of Aleris or any of its Subsidiaries and shall not be guaranteed by Aleris or any Subsidiary of Aleris other than another Credit Party, and (D) no portion of the principal

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of the Additional Debt shall be scheduled to be redeemed, repurchased or otherwise repaid or prepaid (other than as a result of a change of control, customary offers upon asset sales, acceleration or such other provision as shall be customary for comparable high-yield debt securities) prior to the date that is six months after the Final Maturity Date and (y) after giving effect to the incurrence of such Indebtedness, (I) Aleris and its Subsidiaries shall be in compliance on a Pro Forma Basis with the financial covenant set forth in Section 10.07 (whether or not a Compliance Period is then in effect) and (II) no Default or Event of Default shall exist or would result therefrom; and

(xv) Attributable Debt incurred by Aleris or any Subsidiary pursuant to Sale and Lease-Back Transactions of property (real or personal), equipment or other fixed or capital assets owned by Aleris or any Subsidiary as of the Restatement Effective Date or acquired by Aleris or any Subsidiary after the Restatement Effective Date in exchange for, or with the proceeds of the sale of, such assets owned by Aleris or any Subsidiary as of the Restatement Effective Date and any Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (xv); provided that the aggregate amount of Attributable Debt incurred under this clause (xv) does not exceed $50,000,000;

(xvi) Indebtedness owed to any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

(xvii) Indebtedness of any Borrower or any of its Subsidiaries in respect of performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations, or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case provided in the ordinary course of business;

(xviii) Indebtedness consisting of promissory notes issued by any Credit Party to current or former officers, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) or of Aleris (following a Qualified Public Offering of Aleris) permitted by Section 10.03;

(xix) Indebtedness consisting of obligations of any Borrower or any of its Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction, Permitted Acquisitions or any other Investment expressly permitted hereunder;

(xx) Indebtedness consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;

(xxi) Indebtedness incurred by any Borrower or any of its Subsidiaries in respect of documentary letters of credit, bank guarantees, bankers’ acceptances or similar

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instruments issued or created in the ordinary course of business; provided that any such documentary letter of credit or other similar instrument may be secured only by Liens attaching to the related documents of title and not any Inventory represented thereby;

(xxii) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;

(xxiii) Term Loan Pari Passu Lien Obligations; provided that at the time of incurrence and after giving pro forma effect thereto, the Consolidated Secured Debt Ratio would be no greater than 3.00 to 1.00;

(xxiv) Subordinated Indebtedness constituting deferred purchase price of, or incurred to finance, Permitted Acquisitions or other acquisitions of Acquired Entities or Businesses permitted pursuant to Section 10.05; provided that no portion of the Subordinated Indebtedness shall be scheduled to be redeemed, repurchased or otherwise repaid or prepaid (other than as a result of a change of control, customary offers upon asset sales, acceleration or such other provision as shall be customary for comparable high-yield debt securities) prior to the date that is six months after the Final Maturity Date; and

(xxv) additional Indebtedness of Aleris and its Subsidiaries (other than the European Distribution Subsidiaries) not to exceed $150,000,000 in aggregate principal amount at any time outstanding.

Notwithstanding the foregoing, Indebtedness of the European Borrower and the European Distribution Subsidiaries permitted pursuant to clauses (v), (xiii), (xxiv) and (xxv) of this Section 10.04 shall not exceed $5,000,000 at any time outstanding.

The accrual of interest and the accretion or amortization of original issue discount on Indebtedness and the payment of interest in the form of additional Indebtedness originally incurred in accordance with this Section 10.04 will not constitute an incurrence of Indebtedness.

10.05 Advances, Investments and Loans. No Borrower will, or will permit any of its Subsidiaries to, directly or indirectly, lend money or credit or make advances to any Person, or hold any cash or Cash Equivalents (each of the foregoing an “Investment” and, collectively, “Investments”), except that the following shall be permitted:

(i) Aleris and its Subsidiaries may acquire and hold accounts receivables or notes receivable arising and trade credit granted in the ordinary course of business and other credit to suppliers or vendors in the ordinary course of business;

(ii) Aleris and its Subsidiaries may acquire and hold cash and Cash Equivalents;

(iii) Aleris and its Subsidiaries may hold the Investments held by them on the Restatement Effective Date and described on Schedule XII and any modification, replacement, renewal, reinvestment or extension thereof (provided that the amount of the original Investment is not increased except as otherwise permitted by this Section 10.05),

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and any Investments existing on the Restatement Effective Date by any Borrower or any of its Subsidiaries in or to any Borrower or any Subsidiary of such Borrower;

(iv) Aleris and its Subsidiaries may acquire and own Investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers, trade debtors, licensors, licensees and customers or in good faith settlement of delinquent obligations of, and other disputes with, customers, trade debtors, licensors, licensees and suppliers arising in the ordinary course of business;

(v) Aleris and its Subsidiaries may make loans and advances to officers, directors and employees of Holdings, Aleris or any of its Subsidiaries (i) for reasonable and customary business related travel, entertainment, relocation and analogous ordinary business purposes and (ii) in connection with such Persons’ purchase of Equity Interests of Holdings or any direct or indirect parent thereof (provided that the amount of such loans and advances shall be contributed to Aleris in cash as common equity) ;

(vi) Aleris and its Subsidiaries may enter into Interest Rate Protection Agreements to the extent permitted by Section 10.04(iii);

(vii) Aleris and its Subsidiaries may enter into Other Hedging Agreements to the extent permitted by Section 10.04(iv);

(viii) Aleris and its Subsidiaries may make intercompany loans and advances between and among one another and guarantee Indebtedness and other obligations permitted under this Agreement of each other (collectively, “Intercompany Loans”) provided that (i) unless the Payment Conditions are satisfied both before and after giving effect to such Intercompany Loan the aggregate amount of Intercompany Loans made by (x) the U.S. Credit Parties and their Domestic Subsidiaries to Foreign Subsidiaries (other than the Luxco Guarantor) and (y) the Credit Parties to Subsidiaries which are not Credit Parties at a time when the Payment Conditions are not satisfied both before and after giving effect thereto shall not exceed $25,000,000 at any time outstanding (determined without regard to any write-downs or write-offs thereof); it being understood that neither (1) Intercompany Loans made at a time when the Payment Conditions are satisfied nor (2) Intercompany Loans made by the European Borrower to Foreign Subsidiaries of Aleris in the ordinary course of business (“European Intercompany Loans”) shall be subject to the $25,000,000 aggregate cap described in this Section 10.05(viii), (ii) no Intercompany Loans (other than European Intercompany Loans) may be made by a Credit Party to a Subsidiary of Aleris that is not a Credit Party at a time that any Default or Event of Default exists and is continuing, and (iii) (x) each Intercompany Loan made by any Subsidiary of Aleris that is not a Credit Party to any Credit Party and (y) each Intercompany Loan made by a Subsidiary of Aleris to the European Borrower or any of its Subsidiaries shall be subject to subordination provisions reasonably satisfactory to the Administrative Agent;

(ix) Aleris and its Subsidiaries may acquire and hold promissory notes and other non-cash consideration issued by the purchaser of assets in connection with a sale of such assets to the extent permitted by Section 10.02;

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(x) Aleris and its Subsidiaries may own the capital stock of, or other equity interests in, their respective Subsidiaries created or acquired in accordance with the terms of this Agreement (although any amounts invested in such Subsidiaries must be independently justified pursuant to the other clauses of this Section 10.05);

(xi) Investments constituting guaranties permitted by Section 10.04;

(xii) Permitted Acquisitions permitted by Section 9.13;

(xiii) notes from employees of Aleris and its Subsidiaries in connection with such employees’ acquisition of shares of Aleris Common Stock so long as no cash is actually advanced by Aleris or any of its subsidiaries in connection with the acquisition of such Aleris Common Stock;

(xiv) additional Investments by Aleris and its Subsidiaries, so long as (a) the Payment Conditions are satisfied (both before and after giving effect to such Investment) or (b) such Investments are made with the proceeds of any substantially contemporaneous issuance of Qualified Equity Interests by Aleris or any direct or indirect parent of Aleris to the extent such proceeds shall have actually been received by Aleris;

(xv) the Transaction shall be permitted;

(xvi) other Investments so long as the aggregate amount thereof (determined as the amount originally advanced, loaned or otherwise invested (without giving effect to any write-downs or write-offs thereof), less any returns on the respective investment not to exceed the original amount invested) at any time outstanding pursuant to this Section 10.05(xvi) would not exceed $40,000,000 (subject to the last sentence of Section 9.13(a)), less the sum of (i) the aggregate amount of Dividends previously paid by Aleris or any of its Subsidiaries pursuant to Section 10.03(x) since the Restatement Effective Date, (ii) the aggregate amount of payments, prepayments and redemptions of Indebtedness pursuant to Section 10.08(i)(y) previously made by Aleris or any of its Subsidiaries pursuant to Section 10.08(i)(y) since the Restatement Effective Date and (iii) the aggregate amount of Permitted Acquisitions previously made by Aleris or any of its Subsidiaries pursuant to Section 9.13(a)(iii) since the Restatement Effective Date;

(xvii) investments of any Person existing at the time such Person becomes a Subsidiary of Aleris or consolidates or merges with Aleris or any of its Subsidiaries (including in connection with a Permitted Acquisition) so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

(xviii) investments constituting deposits permitted under clauses (xii)(x) and (xviii) of Section 10.01;

(xix) loans and advances to Holdings (or any direct or indirect parent thereof) in lieu of, and not in excess of the amount of (after giving effect to any other loans, advances or Dividends in respect thereof), Dividends to the extent permitted to be made to Holdings in accordance with Section 10.03(ix);

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(xx) advances of payroll payments to employees in the ordinary course of business;

(xxi) guarantees by Aleris or its Subsidiaries of leases (other than capitalized leases) or other obligations of Aleris or any of its Subsidiaries that do not constitute Indebtedness, in each case entered into in the ordinary course of business;

(xxii) investments in the ordinary course of business consisting of Article 3 endorsements for collection or deposit and Article 4 customary trade arrangements with customers consistent with past practices; and

(xxiii) Investments in Subsidiaries resulting from the transfer to a Subsidiary of Aleris of assets located on the Restatement Effective Date at 2211 Carson Street, Long Beach, California or State Road 7, Hannibal, Ohio.

10.06 Transactions with Affiliates. No Credit Party will, or will permit any of its Subsidiaries to, enter into any transaction or series of related transactions with any Affiliate of Aleris or any of its Subsidiaries, other than in the ordinary course of business and on terms and conditions substantially as favorable to Aleris or such Subsidiary as would reasonably be obtained by Aleris or such Subsidiary at that time in a comparable arm’s-length transaction with a Person other than an Affiliate, provided that the following shall not be prohibited by this Section 10.06:

(i) Dividends may be paid to the extent provided in Section 10.03;

(ii) loans may be made and other transactions may be entered into by Aleris and its Subsidiaries to the extent permitted by Sections 10.02, 10.04, 10.05, 10.08 and 10.11;

(iii) the payment of reasonable fees and out-of-pocket costs to directors of Holdings (or any direct or indirect parent thereof), Aleris or any of its Subsidiaries, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of Holdings (or any direct or indirect parent thereof), Aleris or its Subsidiaries in the ordinary course of business;

(iv) Aleris may issue Qualified Equity Interests;

(v) Aleris and its Subsidiaries may enter into, and may make payments under, employment agreements, employee benefits plans, stock option plans, indemnification provisions, severance arrangements, and other similar compensatory arrangements with officers, employees and directors of Aleris and its Subsidiaries in the ordinary course of business;

(vi) periodic allocations of overhead expenses among Aleris and its Subsidiaries may be made;

(vii) each of Aleris and its Subsidiaries may grant licenses or sublicenses, leases or subleases to other Persons not materially interfering with the conduct of the

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business of Aleris or any of its Subsidiaries, in each case so long as no such grant otherwise restricts any Credit Party’s right to grant a Lien on such assets or property in favor of the Collateral Agent (or the Collateral Agent’s rights and remedies with respect, or access, thereto);

(viii) transactions among Credit Parties or Aleris and its Wholly-Owned Subsidiaries which are otherwise permitted pursuant to this Agreement;

(ix) the European Borrower may enter into the Tolling Agreements with the European Manufacturing Subsidiaries and other Subsidiaries of Aleris and make payments thereunder;

(x) the European Borrower and the Distribution Subsidiaries may enter into the Receivables Purchase Agreements, and perform their respective obligations thereunder;

(xi) Aleris may pay (A) management or monitoring or similar fees to the Sponsor and Sponsor termination fees, (B) transaction advisory services fees with respect to transactions in respect of which the Sponsor provides any transaction, advisory or other similar services and (C) indemnities and reasonable expenses related to the foregoing, in each case pursuant to, and in accordance with, the Management Services Agreement as such agreement is in effect as of the Restatement Effective Date; provided that in the case of preceding clauses (A), (B) and (C), (x) no Event of Default has occurred and is continuing or would result after giving effect to such payment and (y) the Borrowers shall have Excess Availability of at least $65,000,000 after giving effect to such payment;

(xii) payments by Aleris and its Subsidiaries pursuant to the tax sharing agreements among Holdings (and any direct or indirect parent thereof), Aleris and its Subsidiaries on customary terms to the extent attributable to the ownership or operation of Aleris and its Subsidiaries;

(xiii) the Transaction shall be permitted;

(xiv) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by Holdings’ (or its direct or indirect parent company’s) or Aleris’s board of directors; and

(xv) transactions pursuant to permitted agreements in existence on the Restatement Effective Date and set forth on Schedule XXI or any amendment thereto to the extent such an amendment is not adverse to the Lenders in any material respect.

10.07 Fixed Charge Coverage Ratio. (a) During each Compliance Period, the Borrowers shall not permit (i) the Fixed Charge Coverage Ratio for the last Test Period ended prior to the beginning of such Compliance Period for which financial statements are available to be less than 1.00:1.00, (ii) the Fixed Charge Coverage Ratio for any Test Period for which financial statements first become available during such Compliance Period to be less than

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1.00:1.00 or (iii) the Fixed Charge Coverage Ratio for any Test Period ending during such Compliance Period to be less than 1.00:1.00. Within three Business Days after the beginning of a Compliance Period (or if the deadline for delivery of the financial statements for the applicable Fiscal Quarter in accordance with Section 9.01(a) or (b) has not expired, within three Business Days of such deadline), Aleris shall provide to Administrative Agent a compliance certificate (whether or not a Compliance Period is in effect on the date such compliance certificate is required to be delivered) calculating the Fixed Charge Coverage Ratio for the Test Period ended immediately prior to the beginning of such Compliance Period based on the most recent financial statements delivered pursuant to Section 9.01(a) or (b).

(b) Notwithstanding anything to the contrary contained in Section 11, in the event that the Borrowers fail (or, but for the operation of this Section 10.07(b), would fail) to comply with the requirements of the Fixed Charge Coverage Ratio set forth in Section 10.07(a) (the “Financial Performance Covenant”), until the expiration of the 10th day subsequent to the date the certificate calculating compliance with this Section 10.07 is required to be delivered pursuant to Section 9.01(c) (or, in the case of the initial calculation of the Financial Performance Covenant during a Compliance Period, the 10th day subsequent to the commencement of such Compliance Period), Holdings shall have the right to issue Equity Interests for cash or otherwise receive cash contributions to its capital, and, in each case, to contribute any such cash to the capital of Aleris (collectively, the “Cure Right”), and upon the receipt by Aleris of such cash (the “Cure Amount”) pursuant to the exercise by Holdings of such Cure Right, the Financial Performance Covenant shall be recalculated giving effect to the following pro forma adjustments: (i) Consolidated EBITDA shall be increased, solely for the purpose of measuring the Financial Performance Covenant and not for any other purpose under this Agreement, by an amount equal to the Cure Amount and (ii) if, after giving effect to the foregoing recalculations, the Borrowers shall then be in compliance with the requirements of the Financial Performance Covenant, then the Borrowers shall be deemed to have satisfied the requirements of the Financial Performance Covenant as of the relevant date of determination with the same effect as though there had been (or would have been) no failure to comply therewith at such date, and the applicable breach or default of the Financial Performance Covenant that had occurred (or would have occurred) shall be deemed cured for the purposes of this Agreement.

Notwithstanding anything herein to the contrary, (i) in each period of four Fiscal Quarters there shall be at least two Fiscal Quarters in which the Cure Right is not exercised and (ii) for purposes of this Section 10.07(b), the Cure Amount shall be no greater than the amount required for purposes of complying with the Financial Performance Covenant.

10.08 Limitations on Payments of Certain Indebtedness; Modifications of Certain Indebtedness Documents, Certificate of Incorporation, By-Laws and Certain Other Agreements, etc. Aleris will not, and will not permit any of its Subsidiaries to:

(i) make (or give any notice in respect of) any voluntary or optional payment or prepayment on or redemption or acquisition for value of, or any prepayment or redemption as a result of any asset sale, change of control or similar event (other than (x) any prepayment or redemption of Term Loans as a result of any asset sale, recovery event, change of control or similar event and (y) any Special Mandatory Redemption under, and as defined in, the New Senior Note Indenture) (including, in each case without

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limitation, by way of depositing with the trustee with respect thereto, or with any other Person, money or securities before due for the purpose of paying when due) of the following: the Term Obligations, the New Senior Subordinated Notes and the New Senior Notes (other than, in each case, pursuant to an issuance of Permitted Refinancing Indebtedness relating thereto), any Permitted Refinancing Indebtedness relating to any of the foregoing or, during the existence of an Event of Default, any other Material Indebtedness (other than Intercompany Loans), in each case unless, both before and after giving effect thereto, either (x) the Payment Conditions have been satisfied or (y) no Event of Default exists or would exist immediately after giving effect thereto and the amount of any such payments, prepayments and redemptions (other than any such payment, prepayment or redemption made pursuant to clause (x)) made pursuant to this clause (y) would not exceed $40,000,000 in the aggregate since the Restatement Effective Date (subject to the last sentence of Section 9.13(a)), less the sum of (i) the aggregate amount of Investments previously made by Aleris or any of their Subsidiaries pursuant to Section 10.05(xvi) since the Restatement Effective Date (determined as the amount originally advanced, loaned or otherwise invested (without giving effect to any write-downs or write-offs thereof), less any returns on the respective investment not to exceed the original amount invested), (ii) the aggregate amount of Dividends previously paid by Aleris or any of its Subsidiaries pursuant to Section 10.03(x) since the Restatement Effective Date and (iii) the aggregate amount of Permitted Acquisitions previously made by Aleris or any of its Subsidiaries pursuant to Section 9.13(a)(iii) since the Restatement Effective Date (determined as the amount originally advanced, loaned or otherwise invested (without giving effect to any write-downs or write-offs thereof), less any returns on the respective investment not to exceed the original amount invested);

(ii) amend or modify, or permit the amendment or modification of any provision of any Credit Document (as defined in the Term Loan Agreement) in respect of the Term Loans or any New Note Document (after the entering into thereof), in each case, other than any such amendments or modifications thereto which (taken as a whole) would not reasonably be expected to be adverse in any material respect to the interests of the Lenders;

(iii) amend, modify or change the Management Services Agreement, its certificate or articles of incorporation (including, without limitation, by the filing or modification of any certificate or articles of designation), certificate of formation, limited liability company agreement or by-laws (or the equivalent organizational documents), as applicable, unless such amendments, modifications, changes or other actions contemplated by this clause (iii) (taken as a whole) would not reasonably be expected to be adverse to the interests of the Lenders in any material respect; or

(iv) after the entering into thereof, amend or modify, or permit the amendment or modification of, any Receivables Purchase Agreement or any Tolling Agreement (or the subordination provisions relating to the Tolling Agreements) in each case without the prior written consent of the Administrative Agent; unless such amendment, modification change or other action contemplated by this clause (iv) would not reasonably be expected to be adverse to the interests of the Lenders in any material respect.

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10.09 Limitation on Certain Restrictions on Subsidiaries. Aleris will not permit any of its Subsidiaries that is not a Credit Party to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (a) pay dividends or make any other distributions on its Equity Interests owned by Aleris or any of its Subsidiaries, or pay any Indebtedness owed to Aleris or any of its Subsidiaries, (b) make loans or advances to Aleris or any of its Subsidiaries or (c) transfer any of its properties or assets to Aleris or any of its Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (i) applicable law or any applicable regulation, rule, order, approval, license or other restrictions issued by any Governmental Authority, (ii) this Agreement and the other Credit Documents, (iii) the New Senior Note Documents, the New Senior Subordinated Note Documents or the Term Loan Agreement (in each case as in effect on the Restatement Effective Date, and as the same may thereafter be amended, modified (or replaced) or refinanced (including pursuant to Permitted Refinancing Indebtedness) in accordance with the terms of this Agreement so long as the terms of any restrictions described in clauses (a) through (c) above are no more restrictive on Aleris or its Subsidiaries in any material respect (taken as a whole) than those terms as in effect on the Restatement Effective Date), (iv) customary provisions restricting subletting or assignment of any lease governing any leasehold interest of Aleris or any of its Subsidiaries, (v) customary provisions restricting assignment of any licensing agreement (in which Aleris or any of its Subsidiaries is the licensee) or other contract entered into by Aleris or any of its Subsidiaries in the ordinary course of business, (vi) restrictions on the transfer of any asset pending the close of the sale of such asset, (vii) restrictions on the transfer of any asset subject to a Lien permitted by Section 10.01(iii), (vi), (vii), (viii), (xv), (xvi) or (xvii), (viii) customary restrictions in the respective Subsidiary’s industry imposed by customers under contractual arrangements entered into in the ordinary course of business with respect to cash or other deposits or minimum net worth or similar requirements, (ix) restrictions on conditions imposed by any agreement relating to secured Indebtedness permitted to be incurred hereunder if such restrictions apply only to the property or assets securing such Indebtedness, (x) customary restrictions in joint venture agreements and other similar agreements applicable to joint ventures to the extent such joint ventures are permitted hereunder, (xi) any agreement or other instrument of a Person acquired in a Permitted Acquisition or other Investment or acquisition permitted hereunder in existence at the time of such Permitted Acquisition or other Investment or acquisition (but not created in connection therewith or in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person so acquired and (xii) provisions contained in agreements related to or instruments evidencing Indebtedness incurred pursuant to Section 10.04(ii).

10.10 Business, etc. (a) Aleris will not, and will not permit any of its Subsidiaries to, engage to any material extent directly or indirectly in any material line of business substantially different from the businesses engaged in by Aleris and its Subsidiaries as of the Restatement Effective Date and reasonable extensions thereof and businesses ancillary or complimentary thereto.

(b) Notwithstanding anything to the contrary contained herein, the European Borrower shall not incur any Indebtedness or other material liabilities, conduct any material operations or business or own or acquire any material assets or properties other than Indebtedness incurred pursuant to the Credit Documents and other Indebtedness permitted by

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Section 10.04 and activities which constitute Permitted European Borrower Activities; provided that in no event shall the European Borrower permit the aggregate number of Persons which are not Swiss Qualifying Banks to which the Swiss Borrower directly or indirectly (whether through a Restricted Sub-Participation or other sub-participations under any other agreement) owes interest-bearing borrowed money under all interest-bearing instruments taken together (other than bond issues which are subject to Swiss Withholding Tax), except for any Swiss Non-Qualifying Banks or holders of any Restricted Sub-Participation, to exceed 10 (ten) at any time and the European Borrower will comply with the Twenty Non-Bank Regulations (other than, in each case, any failure to comply arising from assignments and participations of the ABL Obligations following the occurrence of a Significant Event of Default or Conversion Event). For such purpose, the European Borrower and Aleris may assume that the number of Lenders or holders of a Restricted Sub-Participations under this Credit Agreement which are Swiss Qualifying Banks from time to time equals ten, but does not exceed ten.

(c) Notwithstanding anything to the contrary contained herein, the Borrowers shall not permit the Distribution Subsidiaries to incur any Indebtedness or other material liabilities, conduct any material operations or business or own or acquire any material assets or properties other than activities which constitute Permitted Distribution Subsidiary Activities.

(d) The Borrowers will not permit any Subsidiary, other than the European Borrower, the Distribution Subsidiaries, the Transitory European Subsidiaries and prior to the European Restructuring Completion Date, the Specified European Manufacturing Subsidiaries, to generate, originate or otherwise own any Accounts relating to the European business of Aleris and its Subsidiaries except any such accounts which, in the aggregate, are immaterial to the business of Aleris and its Subsidiaries taken as a whole. Aleris will, and will cause its Subsidiaries to, cause all Permitted European Borrower Activities and Permitted Distribution Subsidiary Activities to be conducted by the European Borrower and its Subsidiaries rather than by Aleris or any of its other Subsidiaries.

(e) (i) Aleris will not permit any European Parent Guarantor to engage in any business or activity other than the ownership of all the outstanding Equity Interests of the European Borrower, German Sub-Holdco, the other European Parent Guarantor or any other Subsidiary owned on the Restatement Effective Date after taking into account the Transaction or acquired pursuant to a Permitted Acquisition of an Acquired Entity or Business or in any transaction permitted by Section 10.05 hereof and activities incidental thereto and (ii) no European Parent Guarantor will own or acquire any assets (other than Equity Interests of the European Borrower, German Sub-Holdco or the other European Parent Guarantor and the cash proceeds of any Dividends permitted by Section 10.03) or incur any liabilities (other than liabilities under the Credit Documents and liabilities reasonably incurred in connection with its maintenance of its existence).

10.11 Limitation on Issuance of Equity Interests. (a) Aleris will not, and will not permit any of its Subsidiaries to, issue (i) any preferred stock or other preferred equity interests other than (x) Qualified Equity Interests of Aleris and any other preferred stock or other preferred equity interests of Aleris issued pursuant to Section 10.04 or (y) any preferred stock or other preferred equity interests issued by a Subsidiary of Aleris to the extent that such preferred stock or preferred equity interest are held by Aleris or a Wholly-Owned Subsidiary thereof or (ii)

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any redeemable common stock or other redeemable common equity interests other than common stock or other redeemable common equity interests that (x) is redeemable at the sole option of Aleris or such Subsidiary or (y) consists solely of Qualified Equity Interests.

(b) Aleris will not permit any of its Subsidiaries to issue any Equity Interests (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, Equity Interests, except (i) for transfers and replacements of then outstanding shares of Equity Interests, (ii) for stock splits, stock dividends and issuances which do not decrease the percentage ownership of Aleris or any of its Subsidiaries in any class of the Equity Interests of such Subsidiary, (iii) in the case of Foreign Subsidiaries, to qualify directors and other nominal amounts required to be held by local nationals in each case to the extent required by applicable law, (iv) for issuances by newly created or acquired Subsidiaries in accordance with the terms of this Agreement, (v) for Equity Interests held by Aleris or a Wholly-Owned Subsidiary thereof and (vi) subject to the penultimate paragraph of Section 10.02 and the last sentence of Section 9.12, for issuances of Qualified Equity Interests of any Subsidiary of Aleris.

10.12 Changes to Legal Names, Organizational Identification Numbers, Jurisdiction or Type or Organization. Aleris will not, and will not permit any of the other Credit Parties to, change its legal name until (i) it shall have given to the Administrative Agent not less than 15 days prior written notice of its intention so to do, clearly describing such new name and providing other information in connection therewith as the Collateral Agent may reasonably request, and (ii) with respect to such new name, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted pursuant to the applicable Security Documents at all times fully perfected and in full force and effect. In addition, to the extent that any Credit Party does not have an organizational identification number on the Restatement Effective Date and later obtains one, or if there is any change in the organizational identification number of any Credit Party, Aleris or such other Credit Party shall promptly notify the Collateral Agent of such new or changed organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interests of the Collateral Agent in the Collateral intended to be granted pursuant to the applicable Security Documents fully perfected and in full force and effect. Furthermore, Aleris will not, and will not permit any of the other Credit Parties to, change its jurisdiction of organization or its type of organization until (x) it shall have given to the Collateral Agent not less than 15 days prior written notice of its intention so to do, clearly describing such new jurisdiction of organization and/or type of organization and providing such other information in connection therewith as the Collateral Agent may reasonably request (although no change pursuant to this Section 10.12 shall be permitted to the extent that it involves (i) a U.S. Credit Party ceasing to be organized in the United States, except to a transaction otherwise permitted pursuant to Section 10.02, (ii) a Canadian Credit Party ceasing to be organized in the Canada or (iii) the European Borrower ceasing to be organized in Switzerland) and (y) with respect to such new jurisdiction and/or type of organization, it shall have taken all actions reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted pursuant to the Security Documents at all times fully perfected and in full force and effect.

10.13 No Additional Deposit Accounts; etc. Aleris will not, and will not permit any of its Subsidiaries to, directly or indirectly, open, maintain or otherwise have any checking,

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savings, deposit, securities or other accounts at any bank or other financial institution where cash or Cash Equivalents are or may be deposited or maintained with any Person, other than (i) the Core U.S. Concentration Account, (ii) the Core Canadian Concentration Account, (iii) the Core European Concentration Account, (iv) the Collection Accounts set forth on Part A of Schedule VI, (v) the Disbursement Accounts set forth on Part B of Schedule VI and (vi) the Exempted Disbursement Accounts and Exempted Deposit Accounts listed on Part C of Schedule VI in which only Restricted cash and Cash Equivalents may be deposited and/or maintained as described in said Part C; provided that Aleris or any of its Subsidiaries may open a new Collection Account, Disbursement Account, Core U.S. Concentration Account, Core Canadian Concentration Account or Core European Concentration Account not set forth in such Schedule VI, so long as prior to opening any such account (i) Aleris has delivered an updated Schedule VI to the Administrative Agent listing such new account and (ii) except with respect to (x) a Deposit Account that is an Exempted Deposit Account and (y) a Disbursement Account that is an Exempted Disbursement Account, the financial institution with which such account is opened, together with Aleris or its respective Subsidiary which has opened such account and the Collateral Agent have executed and delivered to the Administrative Agent a Cash Management Control Agreement; provided further, that at no time may the aggregate amount of cash and Cash Equivalents on deposit in all Exempted Disbursement Accounts exceed $5,000,000 (or the Dollar Equivalent thereof).

10.14 Negative Covenants of Non-U.S. Credit Parties. The parties hereto agree that the covenants and agreements made pursuant to this Section 10 by the European Credit Parties or the Canadian Credit Parties (but, for the avoidance of doubt, not the covenants and agreements of other Credit Parties in respect of the European Credit Parties or the Canadian Credit Parties) are made solely in support of the Loans to the European Borrower or the Canadian Borrowers and shall be solely for the benefit of the Lenders in their capacity as Lenders to the European Borrower or the Canadian Borrowers.

10.15 No Personal Assets of Corus Aluminium Inc. Aleris will not permit Corus Aluminium Inc. to acquire, own or hold any assets of whatever nature, except for (i) except for its partnership interest in and to Corus LP and (ii) assets it owns or holds exclusively in its capacity as general partner of such Canadian Borrower.

SECTION 11. Events of Default. Upon the occurrence of any of the following specified events (each an “Event of Default”):

11.01 Payments. Any Borrower shall (i) default in the payment when due of any principal of any Loan or any Note or any Unpaid Drawing or (ii) default, and such default shall continue unremedied for five or more Business Days, in the payment when due of any interest or Fees or any other amounts owing hereunder or under any other Credit Document; or

11.02 Representations, etc. Any representation or warranty made or deemed made by any Credit Party herein or in any other Credit Document or in any certificate delivered to the Administrative Agent or any Lender pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or

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11.03 Covenants. Any Credit Party shall (i) default in the due performance or observance by it of any term, covenant or agreement contained in Section 10, (ii) default in the due performance or observance by it of any term, covenant or agreement contained in Section 9.01(h) and such default shall continue unremedied for a period of one Business Day after written notice thereof to the defaulting party by the Administrative Agent or the Required Lenders or (iii) default in the due performance or observance by it of any term, covenant or agreement contained in Section 5.03(d), 9.02(a), 9.03 (but only with respect to Aleris), 9.06(b), 9.08 or 9.09 (provided that if (A) any such default described in this clause (iii) is of a type that can be cured within five Business Days and (B) such default could not materially adversely impact the Collateral Agent’s Liens on the Collateral, such default shall not constitute an Event of Default for five Business Days after the occurrence of such default so long as the Credit Parties are diligently pursuing the cure of such default) or (iv) default in the due performance or observance by it of any other term, covenant or agreement contained in this Agreement or in any other Credit Document (other than those set forth in Sections 11.01 and 11.02) and such default shall continue unremedied for a period of 30 days after written notice thereof to the defaulting party by the Administrative Agent or the Required Lenders; or

11.04 Default Under Other Agreements. (i) Aleris or any of its Subsidiaries shall (x) default in any payment of any Indebtedness (other than the ABL Obligations) beyond the period of grace, if any, provided in an instrument or agreement under which such Indebtedness was created or (y) default in the observance or performance of any agreement or condition relating to any Indebtedness (other than the ABL Obligations) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Indebtedness to become due prior to its stated maturity, (ii) any Indebtedness (other than the ABL Obligations) of Aleris or any of its Subsidiaries shall be declared to be (or shall become) due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof, provided that (1) it shall not be a Default or an Event of Default under this Section 11.04 unless the aggregate principal amount of all Indebtedness as described in preceding clauses (i) and (ii) is at least $40,000,000, (2) clauses (i) and (ii) 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 if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness, and (3) notwithstanding the foregoing, any requirement for any Credit Party to make a Special Mandatory Redemption under, and as defined in, the New Senior Note Indenture or any failure by such Credit Party to make such a Special Mandatory Redemption shall not constitute an Event of Default to the extent that such requirement and/or failure does not constitute an event of default under the New Senior Note Indenture or any other Indebtedness described in clause (1) of this proviso or (iii) there occurs under any Interest Rate Protection Agreement or Other Hedging Agreement an early termination date (as defined in such agreement) resulting from (A) any event of default under such Interest Rate Protection Agreement or Other Hedging Agreement as to which any Credit Party is the defaulting party or (B) any termination event as to which Aleris or any Subsidiary is an affected party and which occurs by reason of a default by Aleris or any of its Subsidiaries, and, in either event, the termination value owed by Aleris or any Subsidiary as a result thereof is greater than $40,000,000; or

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11.05 Bankruptcy, etc.Aleris or any of its Subsidiaries shall commence a voluntary case concerning itself under Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor thereto (the “Bankruptcy Code”); or an involuntary case is commenced against Aleris or any of its Subsidiaries, and the petition is not dismissed or stayed within 60 days, after commencement of the case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of Aleris or any of its Subsidiaries, or Aleris or any of its Subsidiaries commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, bankruptcy or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to Aleris or any of its Subsidiaries, or there is commenced against Aleris or any of its Subsidiaries any such proceeding which remains undismissed and unstayed for a period of 60 days, or Aleris or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or other order sought in or approving any such case or proceeding is entered; or Aleris or any of its Subsidiaries suffers any appointment of any receiver, receiver-manager, monitor, trustee in bankruptcy, custodian or the like for it or any substantial part of its property (which, continues undischarged and unstayed for a period of 60 days or is consented to by Aleris or such Subsidiary); or Aleris or any of its Subsidiaries makes a general assignment for the benefit of creditors; or any corporate, limited liability company or similar action is taken by Aleris or any of its Subsidiaries for the purpose of effecting any of the foregoing; or

11.06 ERISA. An ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred and are continuing would reasonably be expected to result in a Material Adverse Effect; or

11.07 Security Documents. (i) After the execution and delivery thereof, any Security Document shall for any reason, other than pursuant to the terms hereunder or thereunder (including as a result of a transaction permitted under Section 10.02), fail to create a valid and perfected security interest with the priority required by the Security Documents (subject to the Intercreditor Agreement) in any Collateral purported to be covered thereby, except to the extent that any such loss of perfection or priority results from the failure of the Administrative Agent to maintain possession of certificates actually delivered to it representing securities pledged under the Security Documents or to file Uniform Commercial Code continuation statements and except as to Collateral consisting of real property to the extent that such losses are covered by a lender’s title insurance policy and such insurer has been notified and has not denied coverage, or (ii) any Security Document shall fail to remain in full force or effect or any action shall be taken by any Credit Party to discontinue or to assert the invalidity or unenforceability of any Security Document; or

11.08 Guaranties. Any Guaranty at any time after its execution and delivery and for any reason, other than as expressly permitted hereunder or thereunder, shall fail to remain in full force or effect, or any action shall be taken by any Credit Party to discontinue or to assert the invalidity or unenforceability of any Guaranty, or any Guarantor shall deny or disaffirm in writing that it has any further liability under the Guaranty to which it is a party; or

11.09 Judgments. One or more final judgments for the payment of money in an aggregate amount in excess of $40,000,000 (in each case to the extent not covered by third-party insurance as to which the insurer has been notified of such judgment and does not deny

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coverage), shall be rendered against any Credit Party or any combination of Credit Parties and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, satisfied or bonded; or

11.10 Subordination Provisions. The ABL Obligations shall cease to constitute senior indebtedness under the subordination provisions of any document or instrument evidencing any permitted Subordinated Indebtedness (including the Indebtedness under the New Senior Subordinated Notes as evidenced by the New Senior Subordinated Note Documents) or such subordination provision shall be invalidated or otherwise cease, for any reason, to be valid, binding and enforceable obligations of the parties thereto; or

11.11 Change of Control. A Change of Control shall occur; or

11.12 Intercreditor Agreement. The Intercreditor Agreement or any material provision thereof shall cease to be in full force or effect other than as expressly permitted hereunder or thereunder or as a result of satisfaction in full of the Term Obligations;

then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent, upon the written request of the Required Lenders, shall by written notice to Aleris, take any or all of the following actions, without prejudice to the rights of the Administrative Agent, any Lender or the holder of any Note to enforce its claims against any Credit Party (provided that, if an Event of Default specified in Section 11.05 shall occur with respect to any Borrower, the result which would occur upon the giving of written notice by the Administrative Agent as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Total Commitment terminated, whereupon all Commitments of each Lender shall forthwith terminate immediately and any Commitment Commission shall forthwith become due and payable without any other notice of any kind; (ii) declare the principal of (or Face Amount in the case of any outstanding B/A Instrument) and any accrued interest in respect of all Revolving Loans and the Notes evidencing such Revolving Loans and all other ABL Obligations owing with respect thereto hereunder and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party; (iii) terminate any Letter of Credit which may be terminated in accordance with its terms; (iv) direct the U.S. Borrowers to pay (and the U.S. Borrowers jointly and severally agree that upon receipt of such notice, or upon the occurrence of an Event of Default specified in Section 11.05 with respect to any Borrower, it will pay) to the Collateral Agent at the Payment Office such additional amount of cash or Cash Equivalents, to be held as security by the Collateral Agent, as is equal to the aggregate Stated Amount of all Letters of Credit issued for the account of the U.S. Borrowers and then outstanding; (v) enforce, as Collateral Agent, all of the Liens and security interests created pursuant to the Security Documents securing ABL Obligations owing to the Lenders; and (vi) apply any cash collateral held by the Administrative Agent pursuant to Section 5.02 to the repayment of the ABL Obligations owing to the Lenders.

Solely for the purposes of determining whether an Event of Default has occurred under Section 11.04, Section 11.05, Section 11.06, and Section 11.09, any reference in any such paragraph to any Subsidiary shall be deemed not to include any Immaterial Subsidiary affected by any event or circumstance referred to in such Section; provided that if it is necessary to

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exclude more than one Subsidiary from Section 11.04, Section 11.05, Section 11.06 and Section 11.09, as the case may be, pursuant to this paragraph in order to avoid an Event of Default thereunder, all excluded Subsidiaries shall be considered to be a single consolidated Subsidiary for purposes of determining whether the condition specified above is satisfied.

SECTION 12. The Administrative Agent.

12.01 Appointment. (a) The Lenders hereby irrevocably designate and appoint DBNY as Administrative Agent (for purposes of this Section 12 and Section 13.01 (and all guarantees of obligations pursuant to said Sections, and for purposes of the Security Documents), the term “Administrative Agent” will include each of (x) DBNY (and any successor Collateral Agent or Collateral Agents) in its capacity as Collateral Agent pursuant to the Security Documents and (y) DBAG, in its capacity as the Canadian Administrative Agent, acting as such pursuant to the terms of this Agreement to act as specified herein and in the other Credit Documents). Each Lender hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, the Administrative Agent to take such action on its behalf under the provisions of this Agreement, the other Credit Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder by or through its officers, directors, agents, employees or affiliates (it being understood and agreed, for avoidance of doubt and without limiting the generality of the foregoing, that the Administrative Agent shall be permitted to designate one of its affiliates to perform the duties to be performed by the Administrative Agent hereunder (x) with respect to Loans and Letters of Credit denominated in a currency other than U.S. Dollars and (y) for purposes of holding any security granted by the Canadian Borrowers or by any Affiliate or Subsidiary of the Canadian Borrowers on property pursuant to the laws of any province of Canada to secure obligations of the Canadian Borrowers or such Affiliate or Subsidiary, and the provisions of this Section 12 shall apply to any such affiliates mutatis mutandis).

(b) For greater certainty, and without limiting the powers of the Collateral Agent hereunder or under any of the other Credit Documents, each Lender (for its benefit and the benefit of its affiliates), each Issuing Lender, the Canadian Administrative Agent, the Collateral Agent and each other Agent (all such Lenders (for their benefit and the benefit of their respective affiliates), Issuing Lenders, Canadian Administrative Agent, Collateral Agent and other Agents are collectively called, for purposes of this Section 12.01(b), the “Quebec Secured Parties”) hereby acknowledges and agrees that DBAG shall, for purposes of holding any security granted by the Canadian Borrowers or by any Affiliate or Subsidiary of the Canadian Borrowers on property pursuant to the laws of the Province of Quebec to secure obligations of the Canadian Borrowers or such Affiliate or Subsidiary under any bond or debenture (the “Quebec Secured Obligations”), be the holder of an irrevocable power of attorney (fondé de pouvoir) (within the meaning of the Civil Code of Quebec) for all present and future Quebec Secured Parties and holders of any bond or debenture. Each of the Quebec Secured Parties, for itself and for all present and future affiliates that are or may become Quebec Secured Parties hereby irrevocably constitutes, to the extent necessary, DBAG as the holder of an irrevocable power of attorney (fondé de pouvoir) (within the meaning of Article 2692 of the Civil Code of Quebec) in order to

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hold security granted by any of the Canadian Borrowers or by any of their Affiliates or Subsidiaries in the Province of Quebec to secure the Quebec Secured Obligations. Furthermore, each of the Quebec Secured Parties hereby appoints DBAG to act in the capacity of the holder and depositary of such bond or debenture on its own behalf as Collateral Agent and for and on behalf and for the benefit of all present and future Quebec Secured Parties. Each assignee (for itself and for all present and future affiliates) of a Quebec Secured Party shall be deemed to have confirmed and ratified the constitution of the Collateral Agent as the holder of such irrevocable power of attorney (fondé de pouvoir) by execution of the relevant Assignment and Assumption Agreement or other relevant documentation relating to such assignment. Notwithstanding the provisions of Section 32 of the An Act respecting the special powers of legal persons (Quebec), DBAG may acquire and be the holder of any bond or debenture. The Canadian Borrowers hereby acknowledge that such bond or debenture constitutes a title of indebtedness, as such term is used in Article 2692 of the Civil Code of Quebec.

12.02 Nature of Duties. (a) The Administrative Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and in the other Credit Documents. Neither the Administrative Agent nor any of its officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by their gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have by reason of this Agreement or any other Credit Document a fiduciary relationship in respect of any Lender or the holder of any Note; and nothing in this Agreement or in any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein or therein.

(b) Notwithstanding any other provision of this Agreement or any provision of any other Credit Document, the Syndication Agent, the Co-Documentation Agents, the Joint Lead Arrangers and the Joint Book Running Managers are named as such for recognition purposes only, and in their respective capacities as such shall have no powers, duties, responsibilities or liabilities with respect to this Agreement or the other Credit Documents or the transactions contemplated hereby and thereby; it being understood and agreed that the Syndication Agent, the Co-Documentation Agents, the Joint Lead Arrangers and the Joint Book Running Managers shall each be entitled to all indemnification and reimbursement rights in favor of the Administrative Agent (to the same extent as provided for the Administrative Agent) as, and to the extent, provided for under Sections 12.06 and 13.01 (which provisions shall be deemed incorporated by reference herein). Without limitation of the foregoing, neither the Syndication Agent, the Co-Documentation Agents, the Joint Lead Arrangers, nor the Joint Book Running Managers shall, solely by reason of this Agreement or any other Credit Documents, have any fiduciary relationship in respect of any Lender or any other Person.

12.03 Lack of Reliance on the Administrative Agent. Independently and without reliance upon the Administrative Agent, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of Aleris and its Subsidiaries in connection with the making

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and the continuance of the Loans and Letters of Credit and the taking or not taking of any action in connection herewith and (ii) its own appraisal of the creditworthiness of Aleris and its Subsidiaries and, except as expressly provided in this Agreement, the Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or the issuance of any Letter of Credit or at any time or times thereafter. The Administrative Agent shall not be responsible to any Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of Aleris or any of its Subsidiaries or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the financial condition of Aleris or any of its Subsidiaries or the existence or possible existence of any Default or Event of Default.

12.04 Certain Rights of the Administrative Agent. If the Administrative Agent requests instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, the Administrative Agent shall be entitled to refrain from such act or taking such action unless and until the Administrative Agent shall have received instructions from the Required Lenders; and the Administrative Agent shall not incur liability to any Lender by reason of so refraining. Without limiting the foregoing, neither any Lender nor the holder of any Note shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders.

12.05 Reliance. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that the Administrative Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by the Administrative Agent.

12.06 Indemnification. To the extent the Administrative Agent (or any affiliate thereof) is not reimbursed and indemnified by the Borrowers, the Lenders will reimburse and indemnify the Administrative Agent (and any affiliate thereof) in proportion to their respective “percentage” as used in determining the Required Lenders (determined as if there were no Defaulting Lenders) for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by the Administrative Agent (or any affiliate thereof) in performing its duties hereunder or under any other Credit Document (including, without limitation, any account control agreements entered into pursuant to any Security Agreement) or in any way relating to or arising out of this Agreement or any other Credit Document (including, without limitation, any account control agreements entered into pursuant to any Security Agreement); provided that no Lender shall be liable for any portion of

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such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent’s (or such affiliate’s) gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

12.07 The Administrative Agent in its Individual Capacity. With respect to its obligation to make Loans, or issue or participate in Letters of Credit, under this Agreement, the Administrative Agent shall have the rights and powers specified herein for a “Lender” and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term “Lender,” “Required Lenders,” “holders of Notes” or any similar terms shall, unless the context clearly indicates otherwise, include the Administrative Agent in its individual capacity. The Administrative Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, investment banking, trust or other business with, or provide debt financing, equity capital or other services (including financial advisory services) to any Credit Party or any Affiliate of any Credit Party (or any Person engaged in a similar business with any Credit Party or any Affiliate thereof) as if they were not performing the duties specified herein, and may accept fees and other consideration from any Credit Party or any Affiliate of any Credit Party for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

12.08 Holders. The Borrowers and the Administrative Agent shall deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, together with the relevant Assignment and Assumption Agreement shall have been filed with the Administrative Agent or the Canadian Administrative Agent, as applicable. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor.

12.09 Resignation by the Administrative Agent. (a) The Administrative Agent may resign from the performance of all its functions and duties hereunder and/or under the other Credit Documents at any time by giving 20 Business Days’ prior written notice to the Lenders and, unless an Event of Default under Section 11.05 then exists, Aleris. Any such resignation by the Administrative Agent hereunder shall also constitute its resignation as an Issuing Lender and Swingline Lender, in which case the Administrative Agent (x) shall not be required to issue any further Letters of Credit or make any additional Swingline Loans hereunder and (y) shall maintain all of its rights as Issuing Lender or Swingline Lender, as the case may be, with respect to any Letter of Credit issued by it, or Swingline Loans made by it, prior to the date of such resignation. Such resignation shall take effect upon the appointment of a successor Administrative Agent, Canadian Administrative Agent or Collateral Agent, as applicable, pursuant to clauses (b) and (c) below or as otherwise provided below.

(b) Upon any such notice of resignation by the Administrative Agent, the Required Lenders shall appoint a successor Administrative Agent, Canadian Administrative Agent or Collateral Agent, as applicable, hereunder or thereunder who shall be a commercial bank or trust company reasonably acceptable to Aleris, which acceptance shall not be

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unreasonably withheld or delayed (provided that Aleris’ approval shall not be required if an Event of Default then exists).

(c) If a successor Administrative Agent shall not have been so appointed within such 20 Business Day period, the resigning Administrative Agent, on behalf of the Lenders and with the consent of Aleris (which consent shall not be unreasonably withheld or delayed, provided that Aleris’ consent shall not be required if an Event of Default then exists), shall then appoint a successor Administrative Agent who shall serve as Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided in clause (b) above.

(d) If no successor Administrative Agent has been appointed pursuant to clause (b) or (c) above by the 45th Business Day after the date on which such notice of resignation was given by the resigning Administrative Agent, the Administrative Agent’s resignation shall become effective and the Required Lenders shall thereafter perform all the duties of the Administrative Agent hereunder and/or under any other Credit Document until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided in clause (b) above.

(e) Upon the resignation of the Administrative Agent pursuant to this Section 12.09, the Administrative Agent shall remain indemnified to the extent provided in this Agreement and the other Credit Documents and the provisions of this Section 12 shall continue in effect for the benefit of the Administrative Agent for all of its actions and inactions while serving as the Administrative Agent.

12.10 Collateral Matters. (a) Each Lender authorizes and directs the Collateral Agent to enter into the Security Documents for the benefit of the Lenders and the other Secured Creditors. Each Lender hereby agrees, and each holder of any Note by the acceptance thereof will be deemed to agree, that, except as otherwise set forth herein, any action taken by the Required Lenders in accordance with the provisions of this Agreement or the Security Documents, and the exercise by the Lenders (or any authorized sub-group thereof) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. The Collateral Agent is hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to an Event of Default, to take any action with respect to any Collateral or Security Documents which may be necessary to perfect and maintain perfected the security interest in and liens upon the Collateral granted pursuant to the Security Documents.

(b) The Lenders hereby authorize the Collateral Agent to release any Lien granted to or held by the Collateral Agent upon any Collateral (i) upon termination of the Commitments and payment and satisfaction of all of the ABL Obligations at any time arising under or in respect of this Agreement or the Credit Documents or the transactions contemplated hereby or thereby, (ii) constituting property being sold or otherwise disposed of (to Persons other than any Credit Party) upon the sale or other disposition thereof in compliance with Section 10.02, (iii) upon the request of the Borrowers, so long as the fair market value of any Collateral released in any Fiscal Year pursuant to this Section 12.10(b)(iii) does not exceed $5,000,000, (iv)

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if approved, authorized or ratified in writing by the Required Lenders (or all of the Lenders hereunder, to the extent required by Section 13.12), (v) as otherwise may be expressly provided in the relevant Security Documents or (vi) to the extent the property constituting such Collateral is owned by any Guarantor, upon the release of the Guarantor from its obligations under its Guaranty in accordance with the terms of this Agreement. Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Collateral Agent’s authority to release particular types or items of Collateral pursuant to this Section 12.10(b).

(c) The Collateral Agent shall have no obligation whatsoever to the Lenders or to any other Person to assure that the Collateral exists or is owned by any Credit Party or is cared for, protected or insured or that the Liens granted to the Collateral Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 12.10 or in any of the Security Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given the Collateral Agent’s own interest in the Collateral as one of the Lenders and that the Collateral Agent shall have no duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

(d) In no event will the Collateral Agent be replaced hereunder (or under any of the other Credit Documents) unless agreed to by the Administrative Agent and the Collateral Agent.

(e) Each Lender authorizes and directs the Collateral Agent and the Administrative Agent to enter into the intercreditor agreements and related documents in respect of (i) Secured Hedging Agreements and (ii) Term Loan Pari Passu Lien Obligations.

12.11 Amendments to Guaranties and Security Documents on the Restatement Effective Date. By their execution and delivery hereof, the Lenders party hereto hereby authorize and direct the Administrative Agent and the Collateral Agent to enter into the Credit Document Acknowledgment and Amendment in substantially the form of Exhibit G-4 hereto.

12.12 Delivery of Information. The Administrative Agent shall not be required to deliver to any Lender originals or copies of any documents, instruments, notices, communications or other information received by the Administrative Agent from any Credit Party, any Subsidiary, the Required Lenders, any Lender or any other Person under or in connection with this Agreement or any other Credit Document except (i) as specifically provided in this Agreement or any other Credit Document and (ii) as specifically requested from time to time in writing by any Lender with respect to a specific document, instrument, notice or other written communication received by and in the possession of the Administrative Agent at the time of receipt of such request and then only in accordance with such specific request.

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SECTION 13. Miscellaneous.

13.01 Payment of Expenses, etc.The U.S. Credit Parties hereby jointly and severally agree to: (i) pay all reasonable documented out-of-pocket costs and expenses of the Administrative Agent and its Affiliates (including, without limitation, the reasonable fees and disbursements of White & Case LLP and the Administrative Agent’s other counsel and consultants) in connection with the preparation, execution, delivery and administration of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and any amendment, waiver or consent relating hereto or thereto, and of the Administrative Agent and its Affiliates in connection with its or their syndication efforts with respect to this Agreement; (ii) pay all reasonable documented out-of-pocket costs and expenses of the Administrative Agent and, after the occurrence of an Event of Default, each of the Issuing Lenders and Lenders in connection with the enforcement of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work-out” or pursuant to any insolvency or bankruptcy proceedings (including, in each case without limitation, the reasonable fees and disbursements of counsel and consultants for the Administrative Agent and, after the occurrence of an Event of Default, no more than one outside law firm retained by the Issuing Lenders and Lenders; (iii) pay and hold the Administrative Agent, each of the Issuing Lenders and each of the Lenders harmless from and against any and all present and future stamp, documentary transfer, sales and use, value added, excise and other similar taxes with respect to the foregoing matters, the performance of any obligation under this Agreement or any other Credit Document or any payment thereunder, and save the Administrative Agent, each of the Issuing Lenders and each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to the Administrative Agent, such Issuing Lender or such Lender) to pay such taxes; and (iv) indemnify each Agent, each Issuing Lender and each Lender, and each of their respective officers, directors, employees, representatives, agents, Affiliates, trustees and investment advisors (each, an “Indemnitee”, and collectively, the “Indemnitees”) from and hold each of them harmless against any and all liabilities, obligations (including Remedial Actions), losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements (including reasonable attorneys’ and consultants’ fees and disbursements) incurred by, imposed on or assessed against any of them as a result of, or arising out of, or in any way related to, or by reason of, (a) any investigation, litigation or other proceeding (whether or not any Indemnitee is a party thereto and whether or not such investigation, litigation or other proceeding is brought by or on behalf of any Credit Party) related to the entering into and/or performance of this Agreement or any other Credit Document or the use of any Letter of Credit or the proceeds of any Loans hereunder or the consummation of the Transaction or any other transactions contemplated herein or in any other Credit Document or the exercise of any of their rights or remedies provided herein or in the other Credit Documents (but excluding any losses, liabilities, claims, damages or expenses to the extent (w) incurred by reason of the gross negligence, bad faith or willful misconduct of the applicable Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision), (x) brought solely by an Affiliate of such Indemnitee, (y) resulting from a breach of the Credit Documents by such Indemnitee or (z) relating solely to disputes among Indemnitees and not involving the Sponsor, the Borrower or any of their Affiliates, or (b) the actual or alleged presence of Hazardous Materials in the air, surface water or groundwater or on the surface or subsurface of any Real

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Property at any time owned, leased or operated by Aleris or any of its Subsidiaries, the generation, storage, transportation, handling or disposal of Hazardous Materials by Aleris or any of its Subsidiaries at any location, whether or not owned, leased or operated by Aleris or any of its Subsidiaries, the non-compliance by Aleris or any of its Subsidiaries with any Environmental Law (including applicable permits thereunder) applicable to any Real Property, or any Environmental Claim asserted against Aleris, any of its Subsidiaries or any Real Property at any time owned, leased or operated by Aleris or any of its Subsidiaries, including, in each case, without limitation, the reasonable fees and disbursements of counsel for the Administrative Agent and no more than one outside law firm retained by the Issuing Lenders and the Lenders and other consultants incurred in connection with any such investigation, litigation or other proceeding (but excluding any losses, liabilities, claims, damages or expenses to the extent (v) incurred by reason of the gross negligence, bad faith or willful misconduct of the applicable Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision), (w) brought solely by an Affiliate of such Indemnitee, (x) resulting from a breach of the Credit Documents by such Indemnitee, (y) relating solely to disputes among Indemnitees and not involving the Sponsor, the Borrowers or any of their Affiliates or (z) resulting solely from acts or omissions by Persons other than Aleris and its Subsidiaries with respect to the applicable Real Property after the Administrative Agent sells the respective Real Property pursuant to a foreclosure or has accepted a deed in lieu of foreclosure. To the extent that the undertaking to indemnify, pay or hold harmless the Administrative Agent, any Issuing Lender or any Lender set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, the Borrowers shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law. No party to this Agreement shall be responsible or liable to any other party to this Agreement (or any such party’s Affiliates, officers, directors, employees, representatives, Agents or investment advisors) for (and each such party hereby waives) any indirect, special, punitive or consequential damages (including, without limitation, any loss of profits, business or anticipated savings) which may be alleged as a result of the Credit Documents or the transactions contemplated hereby and thereby.

13.02 Right of Setoff. (a) In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default, the Administrative Agent, each Issuing Lender and each Lender is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Credit Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by the Administrative Agent, such Issuing Lender or such Lender (including, without limitation, by Affiliates, branches and agencies of the Administrative Agent, such Issuing Lender or such Lender wherever located) to or for the credit or the account of Aleris or any of its Subsidiaries against and on account of the ABL Obligations and liabilities of the Credit Parties to the Administrative Agent, such Issuing Lender or such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in ABL Obligations purchased by such Lender pursuant to Section 13.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not the Administrative Agent, such Issuing Lender or such Lender shall have made any demand hereunder and although said ABL Obligations, liabilities or claims, or any of them, shall be contingent or unmatured, provided, however, that none of the

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Administrative Agent, any Issuing Lender or any Lender may offset amounts (i) owed by it to the Canadian Credit Parties (or any of their Subsidiaries) against amounts owed to such Person by the U.S. Credit Parties (except in respect of the U.S. Credit Parties’ guaranties of the Canadian Credit Parties) or the European Credit Parties and (ii) owed by it to the European Credit Parties (or any of their Subsidiaries) against amounts owed to such Person by the U.S. Credit Parties (except in respect of the U.S. Credit Parties’ guaranties of the European Credit Parties) or the Canadian Credit Parties.

(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME THAT THE LOANS OR ANY OTHER ABL OBLIGATION SHALL BE SECURED BY REAL PROPERTY LOCATED IN CALIFORNIA, NO LENDER, ISSUING LENDER OR THE ADMINISTRATIVE AGENT SHALL EXERCISE A RIGHT OF SETOFF, LIEN OR COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY NOTE UNLESS IT IS TAKEN WITH THE CONSENT OF THE REQUIRED LENDERS OR, TO THE EXTENT REQUIRED BY SECTION 13.12 OF THIS AGREEMENT, ALL OF THE LENDERS AND THE ISSUING LENDERS, OR APPROVED IN WRITING BY THE ADMINISTRATIVE AGENT, IF SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE 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 COLLATERAL AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE ENFORCEABILITY OF THE NOTES AND OTHER ABL OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY LENDER, ISSUING LENDER OR THE ADMINISTRATIVE AGENT OF ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE REQUIRED LENDERS, ISSUING LENDER OR THE ADMINISTRATIVE AGENT SHALL BE NULL AND VOID. THIS SUBSECTION (b) SHALL BE SOLELY FOR THE BENEFIT OF EACH OF THE LENDERS, THE ISSUING LENDERS AND THE ADMINISTRATIVE AGENT HEREUNDER.

13.03 Notices. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, telecopier or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party, to such Credit Party c/o Aleris at 25825 Science Park Drive, Suite 400, Beachwood, OH 41122, Attention: General Counsel, Telephone No.: (216) 910-3400, Telecopier: (216) 910-3650, at the address specified opposite its signature below or in the other relevant Credit Documents; if to any Lender or any Issuing Lender, at its address specified on Schedule II; and if to the Administrative Agent, at the Notice Office. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Administrative Agent and Aleris shall not be effective until received by the Administrative Agent or Aleris, as the case may be. Each party hereto may change its information for notices and other communications hereunder by providing notice of such change to each other party hereto in accordance with this Section 13.03.

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13.04 Benefit of Agreement; Assignments; Participations. (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns permitted hereby of the parties hereto; provided, however, that no Borrower may assign or transfer any of its rights, obligations or interest hereunder without the prior written consent of all of the Lenders and, no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 13.04 (or as provided in Section 2.13). Any Lender may grant participations in its rights hereunder, 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, (C) the applicable 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, (D) the participant shall not constitute a “Lender” hereunder, (E) 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 this Agreement and (F) no Lender shall transfer or grant any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend or postpone the final scheduled maturity or any date fixed for any scheduled repayment of principal of, or interest on, the Commitments and/or Loans (or Letters of Credit) that are being participated in by such participant, (ii) reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that waivers or modifications of conditions, precedent, covenants, Defaults or Events of Default or of a mandatory prepayment or mandatory reduction in the Total Commitment shall not constitute a change in the terms of such participation, and that an increase in any Commitment (or the available portion thereof) or Loan shall be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof), (iii) consent to the assignment or transfer by any Borrower of any of its rights and obligations under this Agreement or (iv) release all or substantially all of the Collateral under all of the Security Documents (except as expressly provided in the Credit Documents) supporting the Loans or Letters of Credit hereunder in which such participant is participating. In the case of any such participation, (A) the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrowers hereunder shall be determined as if such Lender had not sold such participation and (B) following a Conversion Event each Participant shall be entitled to receive from relevant Borrowers any incremental costs and indemnities (including, without limitation, pursuant to Section 2.10, 2.11 and 3.06, and 5.04) directly from the Borrowers to the same extent as if it were the direct Lender as to which its interests were assigned after the occurrence of a Conversion Event as opposed to a participant therein, which incremental costs shall be calculated without regard to Section 2.12. A participant shall not be entitled to receive any greater payment under Section 2.10, 2.11, 3.06 or 5.04 than what the applicable Lender would have been entitled to receive with respect to the participation sold to such participant. A participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 5.04 unless the relevant Borrower is notified of the

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participation sold to such participant and such participant agrees, for the benefit of such Borrower, to comply with Section 5.04 as though it were a Lender.

(b) Subject to clauses (c) and (d) below, any Lender (or any Lender together with one or more other Lenders) may (x) assign all or a portion of its Commitments and related outstanding ABL Obligations (or, if the Commitments with respect to the relevant Tranche have terminated, outstanding ABL Obligations) hereunder to (i)(A) its parent company and/or any Affiliate of such Lender which is at least 50% owned by such Lender or its parent company or (B) to one or more other Lenders or any Affiliate of any such other Lender which is at least 50% owned by such other Lender or its parent company (provided that any fund that invests in loans and is managed or advised by the same investment advisor of another fund which is a Lender (or by an Affiliate of such investment advisor) shall be treated as an Affiliate of such other Lender for the purposes of this sub-clause (x)(i)(B)), or (ii) in the case of any Lender that is a fund that invests in loans, any other fund that invests in loans and is managed or advised by the same investment advisor of any Lender or by an Affiliate of such investment advisor or (y) assign all, or if less than all, a portion equal to at least $5,000,000 (for such purposes, using the Dollar Equivalent of any Non-Dollar Denominated Loans), in each case in the aggregate for the assigning Lender or assigning Lenders of such Commitments and related outstanding ABL Obligations (or, if the Commitments with respect to the relevant Tranche have terminated, outstanding ABL Obligations) hereunder to one or more Eligible Transferees (treating any funds that invest in loans and are managed or advised by the same investment advisor or by an Affiliate of such investment advisor as a single Eligible Transferee), each of which Eligible Transferees shall become a party to this Agreement as a Lender by execution of an Assignment and Assumption Agreement, provided that (i) so long as no Significant Event of Default then exists and no Conversion Event has occurred, any assignment of all or any portion of the Canadian Commitment of any Lender pursuant to clause (x) or (y) above shall be only to a Person who is a Canadian Resident complying with the relevant requirements of Section 2.17, (ii) at such time, Schedule I-A shall be deemed modified to reflect the Commitments (and, if an assignment of all or any portion of the Canadian Commitment is being made, Schedule I-B shall be deemed modified to reflect the new Canadian Lender) and/or outstanding Loans, as the case may be, of such new Lender and of the existing Lenders, (iii) upon the surrender of the relevant Notes by the assigning Lender (or, upon such assigning Lender’s indemnifying the respective Borrower or Borrowers for any lost Note pursuant to a customary indemnification agreement) new Notes will be issued, at the relevant Borrower’s expense, to such new Lender and to the assigning Lender upon the request of such new Lender or assigning Lender, such new Notes to be in conformity with the requirements of Section 2.05 (with appropriate modifications) to the extent needed to reflect the revised Commitments and/or outstanding Loans, as the case may be, (iv) so long as no Significant Event of Default with respect to Aleris then exists the consent of Aleris in each case shall be required in connection with any such assignment pursuant to clause (y) above (each of which consents shall not be unreasonably withheld or delayed), (v) the consent of the Administrative Agent (or if an assignment of any Canadian Commitment or related outstandings, the Canadian Administrative Agent), each Swingline Lender and each Issuing Lender (for the respective Tranche) shall be required in connection with any assignment of a Commitment to an Eligible Transferee pursuant to clause (y) above (which consents shall not be unreasonably withheld or delayed), (vi) the Administrative Agent shall receive at the time of each such assignment, from the assigning or assignee Lender, the payment of a non-refundable assignment fee of $3,500, (vii) no such transfer or assignment will be effective until recorded by the

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Administrative Agent on the Register pursuant to Section 13.15 and (viii) unless a Significant Event of Default with respect to Aleris has occurred and is continuing, no Lender may assign its Commitments or Loans to a Disqualified Lender. To the extent of any assignment pursuant to this Section 13.04(b), the assigning Lender shall be relieved of its obligations hereunder with respect to its assigned Commitments and outstanding Loans. At the time of each assignment pursuant to this Section 13.04(b) to a Person which is not already a Lender hereunder (other than a Canadian Lender in its capacity solely as a Lender to the Canadian Borrowers), the respective assignee Lender shall, to the extent legally entitled to do so, provide to Aleris the appropriate Internal Revenue Service Forms and necessary attachments (and, if applicable, a Section 5.04(b)(ii) Certificate) described in Section 5.04(b). At the time of each assignment pursuant to this Section 13.04(b) to a Person which is not already a Canadian Lender hereunder, the respective assignee shall, to the extent legally entitled to do so, provide the documents required by Section 2.17(a) and shall, to the extent it is legally entitled to do so, represent that it is a Canadian Resident. To the extent that prior to the occurrence of a Conversion Event an assignment of all or any portion of a Lender’s Commitments and related outstanding ABL Obligations pursuant to Section 2.13 or this Section 13.04(b) would, at the time of such assignment, result in amounts payable under Section 2.10, 3.06 or 5.04 (other than excess costs paid in respect of Canadian Borrower Obligations or European Borrower Obligations under Section 5.04 with respect to assignments effected when a Significant Event of Default exists, or after a Conversion Event has occurred) that exceed the respective amounts that would be payable by the Borrowers at such time to the respective assigning Lender under such Sections in the absence of such assignment, then the Borrowers shall not be obligated to pay such excess amount (although the Borrowers, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay any other excess amounts or increased costs of the type described above resulting from changes in any applicable law, treaty, governmental rule, regulation, guidelines or order, or in the interpretation thereof, after the date of the respective assignment; provided, however, that the preceding clause shall not apply to the portion of such excess amounts or increased costs required to be paid by the Borrowers to the extent the Borrowers would have been required to pay additional amounts pursuant to Section 2.10, 3.06 or 5.04 irrespective of such change in such applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof). Any assignment or transfer by a Lender of its rights or obligations under this Agreement that does not comply with this Section 13.04 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 13.04(a).

(c) In the event of an assignment or transfer of U.S./European Commitments or under the U.S/European Tranche including Restricted Sub-Participations (but not including participations that are not Restricted Sub-Participations), so long as no Significant Event of Default then exists and no Conversion Event has theretofore occurred, the assignee Lender shall make the representations in the Assignment and Assumption Agreement as to whether it is a Swiss Qualifying Bank on the effective date of the respective assignment, and if it represents that it is a Swiss Qualifying Bank and if such assignee Lender is not incorporated in an OECD country at such time, so long as no Significant Event of Default then exists and no Conversion Event has theretofore occurred, Aleris has the right prior to the transfer to request that such new Lender provide to it a written confirmation signed by the Swiss Federal Tax Administration that it is a bank as per explanatory note of the Swiss Federal Tax Administration No. S-02.123(9.86) as amended from time to time. If the assignee Lender is not a Swiss Qualifying Bank and there

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is reasonable doubt as to whether such assignee Lender counts as one or several Lenders, Aleris has the right (unless a Significant Event of Default then exists or a Conversion Event has theretofore occurred) prior to the transfer to request that such assignee Lender provide to it a written confirmation signed by the Swiss Federal Tax Administration that such assignee Lender counts as one (or several, as the case may be) Swiss Non-Qualifying Bank. In the event that the respective assignee (or participant pursuant to a Restricted Sub-Participation) in respect of U.S./European Commitments (or related outstandings to the European Borrower) is unable or unwilling to represent that it is a Swiss Qualifying Bank, then, unless a Significant Event of Default is in existence or a Conversion Event has occurred, the consent of the Administrative Agent and Aleris shall be required to effect the respective assignment or Restricted Sub-Participation (which consents shall not be unreasonably withheld or delayed); provided that no such consent shall be given by Aleris if, after giving effect to the respective assignment or Restricted Sub-Participation, the number of Lenders to the European Borrower or holders of Restricted Sub-Participations pursuant to extensions of credit to European Borrower under this Credit Agreement which are Swiss Non-Qualifying Banks would exceed 10.

(d) Any Lender which enters into an assignment, transfer or Restricted Sub-Participation (but not including (x) assignments effected in accordance with the relevant requirements of Sections 13.04(b) and (c), and (y) participations that are not Restricted Sub-Participations) of its U.S./European Commitment or any outstanding under the U.S./European Tranche shall ensure that:

(i) the terms of such assignment, transfer or sub-participation agreement prohibit the new Lender or sub-participant from entering into further assignment, transfer or sub-participation agreements (in relation to the rights between it and such Lender) and assigning or granting any interest over the assignment, transfer or sub-participation agreement, except in each case to a person who is a Swiss Qualifying Bank;

(ii) the new Lender or sub-participant enters into a unilateral undertaking in favor of each Lender and each Credit Party incorporated in Switzerland to abide by the terms included in the assignment, transfer or sub-participation agreement to reflect sub-clause (i) above;

(iii) the terms of such assignment, transfer or sub-participation agreement oblige the new Lender or sub-participant, in respect of any further assignment, transfer or sub-participation, assignment or grant, to include a term identical to the provisions of this Sections 13.04(c) and (d) mutatis mutandis, including a requirement that any further new Lender or sub-participant, assignee or grantee enters into such undertaking; and

(iv) the identity of the new Lender or sub-participant is permitted to be disclosed to the Swiss Federal Tax Administration by the European Borrower (if requested by the Swiss Federal Tax Administration to do so).

(e) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans and Notes (other than Canadian Revolving Loans and/or Canadian Revolving Notes) hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank and, with prior notification to the Administrative Agent (but without

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the consent of the Administrative Agent or Aleris), any Lender which is a fund may pledge all or any portion of its Loans and Notes to its trustee or to a collateral agent providing credit or credit support to such Lender in support of its obligations to such trustee, such collateral agent or a holder of such obligations, as the case may be. No pledge pursuant to this clause (e) shall release the transferor Lender from any of its obligations hereunder or substitute any such pledgee for such Lender as a party hereto.

(f) In the event that any Lender shall become a Defaulting Lender or S&P, Moody’s and Thompson’s BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders that are insurance companies (or Best’s Insurance Reports, if such insurance company is not rated by Insurance Watch Ratings Service)) shall downgrade the long term certificate deposit ratings of such Lender, and the resulting ratings shall be below BBB-, Baa3 and C (or BB, in the case of a Lender that is an insurance company (or B, in the case of an insurance company not rated by InsuranceWatch Ratings Service)) (or, with respect to any Lender that is not rated by any such ratings service or provider, the Issuing Lenders, the Swingline Lenders or DBNY (in the case of any Specified Foreign Currency Loans) shall have reasonably determined that there has occurred a material adverse change in the financial condition of any such Lender, or a material impairment of the ability of any such Lender to perform its obligations hereunder, as compared to such condition or ability as of the date that any such Lender became a Lender) then an Issuing Lender, a Swingline Lender or DBNY (in the case of any Specified Foreign Currency Loans) shall have the right, but not the obligation, at its own expense, upon notice to such Lender and the Administrative Agent, to replace such Lender with an assignee (in accordance with and subject to the restrictions contained in Section 13.04(b)), and such Lender hereby agrees to transfer and assign without recourse (in accordance with and subject to the restrictions contained in Section 13.04(b)) all its interests, rights and obligations in respect of its Commitments and Loans to such assignee; provided, however, that (i) no such assignment shall conflict with any law, rule and regulation or order of any Governmental Authority and (ii) such Issuing Lender or Swingline Lender, DBNY (in the case of any Specified Foreign Currency Loans) or such assignee, as the case may be, shall pay to such Lender in immediately available funds on the date of such assignment the principal of and interest accrued to the date of payment on the Loans made by such Lender hereunder and all other amounts accrued for such Lender’s account or owed to it hereunder.

13.05 No Waiver; Remedies Cumulative. No failure or delay on the part of the Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between any Borrower or any other Credit Party and the Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights, powers and remedies herein or in any other Credit Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which the Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender would otherwise have. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent, the Collateral Agent, any Issuing

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Lender or any Lender to any other or further action in any circumstances without notice or demand.

13.06 Payments Pro Rata. (a) Except as otherwise provided in this Agreement, the Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of any Borrower in respect of any ABL Obligations hereunder, the Administrative Agent shall distribute such payment to the Lenders entitled thereto (other than any Lender that has consented in writing to waive its pro rata share of any such payment) pro rata based upon their respective shares, if any, of the ABL Obligations with respect to which such payment was received.

(b) Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise), which is applicable to the payment of the principal of, or interest on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Obligation then owed and due to such Lender bears to the total of such ABL Obligations then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the ABL Obligations of the respective Credit Party to such Lenders in such amount as shall result in a proportional participation by all the Lenders in such amount; provided that if all or any portion of such excess amount is thereafter recovered from such Lenders, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

(c) Notwithstanding anything to the contrary contained herein, the provisions of the preceding Sections 13.06(a) and (b) shall be subject to the express provisions of this Agreement which require, or permit, differing payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.

13.07 Calculations; Computations. (a) The financial statements to be furnished to the Lenders pursuant hereto shall be made and prepared in accordance with GAAP consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by Aleris to the Lenders); provided that (i) if at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Credit Document, and either Aleris or the Required Lenders shall so request, the Administrative Agent, the Lenders and Aleris shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Administrative Agent or the Required Lenders); provided that, until so amended, (A) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (B) Aleris shall provide to the Administrative Agent and the Lenders financial statements and any other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP and (ii) to the extent expressly provided herein, certain calculations shall be made on a Pro Forma Basis.

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(b) All computations of interest, Commitment Commission and other Fees (other than Drawing Fees) hereunder shall be made on the basis of a year of 360 days (or in the case of Base Rate Loans (and other amounts owing hereunder or under any other Credit Document determined by reference to the Base Rate is applicable) 365 or 366 days, as the case may be) for the actual number of days (including the first day but excluding the last day; except that in the case of Letter of Credit Fees and Facing Fees, the last day shall be included) occurring in the period for which such interest, Commitment Commission or Fees are payable.

13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN CERTAIN OF THE OTHER CREDIT DOCUMENTS, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS RULES AND PRINCIPLES THEREUNDER). ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT. EACH BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE EUROPEAN BORROWER AND THE CANADIAN BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS ALERIS, WITH OFFICES ON THE DATE HEREOF AT THE ADDRESS SPECIFIED OPPOSITE ITS SIGNATURE BELOW, AS ITS AUTHORIZED DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH AUTHORIZED DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH OF THE EUROPEAN BORROWER AND THE CANADIAN BORROWER AGREES TO DESIGNATE A NEW AUTHORIZED DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT. EACH BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER ANY BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER ANY BORROWER. EACH BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER

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SUCH MAILING. EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY BORROWER IN ANY OTHER JURISDICTION.

(b) EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

13.09 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with Aleris and the Administrative Agent.

13.10 Effectiveness. This Agreement (as amended and restated) shall become effective on the date (the “Restatement Effective Date”) on which (i) each Borrower, the Administrative Agent, each Lender with a Commitment, (which shall include the Required Lenders (determined immediately before the occurrence of the Restatement Effective Date and without giving effect thereto)) shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered the same (including by way of facsimile transmission) to the Administrative Agent at the Notice Office (or, in the case of the Lenders, shall have given to the Administrative Agent telephonic (confirmed in writing), written or telex notice (actually received) at the Notice Office that the same has been signed and mailed to it); it being understood that any Existing Lender which does not execute a counterpart hereof shall be replaced in accordance with the provisions of Section 13.12(d) and (ii) the conditions contained in Section 6 are met to the reasonable satisfaction of the Administrative Agent. Unless the Administrative Agent has received actual notice from any Lender that the conditions contained in Section 6 have not been met to its satisfaction, upon the satisfaction of the condition described in clause (i) of the immediately preceding sentence and upon the Administrative Agent’s good faith determination that the conditions described in clause (ii) of the immediately preceding

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sentence have been met, then the Restatement Effective Date shall have been deemed to have occurred, regardless of any subsequent determination that one or more of the conditions thereto had not been met (although the occurrence of the Restatement Effective Date shall not release the Borrowers from any liability for failure to satisfy one or more of the applicable conditions contained in Section 7). The Administrative Agent will give each Lender prompt written notice of the occurrence of the Restatement Effective Date.

13.11 Headings Descriptive. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed or waived unless such change or waiver is in writing signed by the respective Credit Parties party hereto or thereto and the Required Lenders (although additional parties may be added to (and annexes may be modified to reflect such additions), and Subsidiaries of Aleris (other than the European Borrower and Aleris Canada) may be released from, this Agreement, the Guaranties and the Security Documents in accordance with the provisions hereof and thereof without the consent of the other Credit Parties party thereto or the Required Lenders), provided that no such change or waiver shall, without the consent of each Lender (other than a Defaulting Lender) (with ABL Obligations being directly affected in the case of following clause (i)), (i) extend or postpone the final scheduled maturity or any date fixed for any scheduled repayment of principal of any Loan or Note, extend the duration of any Interest Period for a Euro Rate Loan or an Other Foreign Currency Denominated Loan beyond six months or extend the stated expiration date of any Letter of Credit beyond the Final Maturity Date, or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with the waiver of applicability of any post-default increase in interest rates), or reduce the principal amount thereof, (ii) release all or substantially all of the Collateral (except as expressly provided in the Credit Documents) under all the Security Documents, (iii) amend, modify or waive any provision of this Section 13.12(a) (except for technical amendments with respect to additional extensions of credit pursuant to this Agreement which afford the protections to such additional extensions of credit of the type provided to the Commitments on the Restatement Effective Date), (iv) reduce the percentage specified in the definition of Required Lenders or Supermajority Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders and Supermajority Lenders on substantially the same basis as the extensions of Commitments are included on the Restatement Effective Date), (v) with respect to any payment to be made to a given Tranche, amend or modify the provisions of this Agreement in a manner that would by its terms alter the pro rata sharing of payments required by this Agreement, without the prior written consent of each Lender adversely affected thereby or (vi) consent to the assignment or transfer by any Borrower of any of its rights and obligations under this Agreement; provided further, that no such change or waiver shall (1) increase the Commitments of any Lender over the amount thereof then in effect without the consent of such Lender (it being understood that waivers or modifications of conditions precedent, covenants, Defaults or Events of Default or of a mandatory prepayment or mandatory reduction in the Total Commitment shall not constitute an increase of the Commitment of any Lender, and that an increase in the available portion of any Commitment of any Lender shall not constitute an increase of the Commitment of such Lender), (2) without the consent of each

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Issuing Lender, amend, modify or waive any provision of Section 3 or alter its rights or obligations with respect to Letters of Credit, (3) without the consent of the Administrative Agent, amend, modify or waive any provision of Section 12 or any other provision of this Agreement as same relates to the rights or obligations of the Administrative Agent, (4) without the consent of the Collateral Agent, amend, modify or waive any provision relating to the rights or obligations of the Collateral Agent, (5) without the consent of each Swingline Lender, alter its rights or obligations with respect to Swingline Loans, (6) without the consent of the Syndication Agent, either Co-Documentation Agent or the Joint Lead Arrangers, amend, modify or waive any provision relating to the rights or obligations of the Syndication Agent, either Co-Documentation Agent or the Joint Lead Arrangers, as the case may be, (7) without the consent of the Supermajority Lenders of the affected Tranche, amend the definition of U.S. Borrowing Base, Canadian Borrowing Base or European Borrowing Base (or any defined terms as used therein) as such definitions are set forth herein on the Restatement Effective Date (or as same may be amended from time to time pursuant to this clause (7)) in a manner which would have the effect of increasing availability thereunder as determined in good faith by the Administrative Agent, (8) without the consent of the Supermajority Lenders, increase the percentage of the Borrowing Base for which Agent Advances may be made pursuant to Section 2.01(f) or (9) without the consent of the Supermajority Lenders of the affected Tranche, amend, modify or waive any provision of this Agreement in a manner which would have a disproportionate effect on such Tranche (except for technical amendments with respect to additional extensions of credit pursuant to this Agreement which afford the protections to such additional extensions of credit of the type provided to the Commitments on the Restatement Effective Date). Notwithstanding the foregoing, Schedules XVI, XVII and XVIII may be amended by the Administrative Agent in its Permitted Discretion.

(b) Notwithstanding anything to the contrary in this Section 13.12, (i) a Guarantor or a Borrower (other than Aleris, the European Borrower or Aleris Canada) shall automatically be released from its obligations hereunder and its Guaranty shall be automatically released upon the consummation of any transaction permitted hereunder and the application of the proceeds therefrom in accordance with the provisions of this Agreement as a result of which such Guarantor or Borrower ceases to be a Subsidiary of Aleris and (ii) so long as no Event of Default has occurred and is continuing and a Responsible Officer of Aleris certifies in an officer’s certificate to the Administrative Agent that a Guarantor (A) is an Immaterial Subsidiary, and the release or such Guarantor would not result in any Immaterial Subsidiary being required pursuant to Section 9.12(e) to become a Credit Party hereunder (except to the extent that on and as of the date of such release, one or more other Immaterial Subsidiaries become Guarantors hereunder and the provisions of Section 9.12(e) are satisfied upon giving effect to all such additions and releases), or (B) is a Restricted Subsidiary which has been redesignated as an Unrestricted Subsidiary in accordance with Section 9.16, then in the case of each of clauses (A) and (B), the Administrative Agent shall promptly release such Guarantor from its obligations hereunder and its Guaranty. In connection with any such release, the Administrative Agent shall execute and deliver to any Guarantor or Borrower, at such Guarantor’s or Borrower’s expense, all documents that such Guarantor or Borrower shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to the preceding sentence of this Section 13.12(b) shall be without recourse to or warranty by the Administrative Agent.

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(c) Notwithstanding anything to the contrary in this Section 13.12, guarantees, collateral security documents and related documents executed by Foreign Subsidiaries in connection with this Agreement may be in a form reasonably determined by the Collateral Agent and may be amended and waived with the consent of the Collateral Agent at the request of Aleris without the need to obtain the consent of any other Lenders if such amendment or waiver is delivered in order (i) to reflect local law or advice of local counsel, (ii) to cure ambiguities or defects or (iii) to cause such guarantee, collateral security document or other document to be consistent with this Agreement and the other Credit Documents.

(d) If, in connection with any proposed change or waiver of any of the provisions of this Agreement as contemplated by clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a), the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained, then Aleris shall have the right, so long as all non-consenting Lenders whose individual consent is required are treated as described in either clauses (A) or (B) below, to either (A) subject to compliance with Sections 2.17 and 2.19, replace each such non-consenting Lender or Lenders (or, at the option of Aleris if the respective Lender’s consent is required with respect to less than all Tranches of Loans (or related Commitments), to replace only the respective Tranche of Commitments and/or Loans of the respective non-consenting Lender which gives rise to the need to obtain such Lender’s individual consent) with one or more Replacement Lenders pursuant to Section 2.13 so long as at the time of such replacement, each such Replacement Lender consents to the proposed change or waiver or (B) terminate each Tranche of such non-consenting Lender’s Commitment (if such Lender’s consent is required as a result of such Tranche of its Commitment) and/or repay each Tranche of outstanding Loans of such Lender which gave rise to the need to obtain such Lender’s consent and/or cash collateralize its applicable L/C Participation Percentage of the Letter of Credit Outstandings, in accordance with Sections 4.02(b) and/or 5.01(b), provided that, unless the Commitments that are terminated and Loans that are repaid pursuant to preceding clause (B) are immediately replaced in full at such time through the addition of new Lenders or the increase of the Commitments and/or outstanding Loans of existing Lenders (who must have consented thereto), then in the case of any action pursuant to preceding clause (B) the Required Lenders (determined after giving effect to the proposed action) shall specifically consent thereto, provided further, that in any event Aleris shall not have the right to replace a Lender, terminate its Commitments or repay its Loans solely as a result of the exercise of such Lender’s rights (and the withholding of any required consent by such Lender) pursuant to the second proviso to Section 13.12(a).

13.13 Survival. All indemnities set forth herein including, without limitation, in Sections 2.10, 2.11, 3.06, 5.04, 12.06 and 13.01 shall survive the execution, delivery and termination of this Agreement and the Notes and the making and repayment of the ABL Obligations.

13.14 Domicile of Loans. Each Lender may, subject to Sections 2.17 and 2.19, transfer and carry its Loans and/or participations in outstanding Letters of Credit at, to or for the account of any office, Subsidiary or Affiliate of such Lender. Notwithstanding anything to the contrary contained herein, to the extent that a transfer of Loans and/or participations in outstanding Letters of Credit pursuant to this Section 13.14 would, at the time of such transfer, result in amounts payable under Section 2.10, 2.11, 3.06 or 5.04 that exceed the amounts that

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would be payable by Borrowers under such sections to the relevant Lender prior to such transfer, then the Borrowers shall not be obligated to pay such increased costs (although the Borrowers shall be obligated to pay any other excess amounts of the type described above resulting from changes in any applicable law, treaty, governmental rule, regulation, guidelines or order, or in the interpretation thereof, after the date of the respective transfer).

13.15 Register. Each Borrower hereby designates the relevant Administrative Agent to serve as its agent, solely for purposes of this Section 13.15, to maintain a register (the “Register”) on which it will record the Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders, the amount of any principal or interest due and payable with respect to such Loans and each repayment in respect of the principal amount, and related interest amounts of the Loans of each Lender. Failure to make any such recordation, or any error in such recordation, shall not affect the Borrowers’ obligations in respect of such Loans. With respect to any Lender, the transfer of the Commitments of such Lender and the rights to the principal of, and interest on, any Loan made pursuant to such Commitments shall not be effective until such transfer is recorded on the Register maintained by the Administrative Agent with respect to ownership of such Commitments and Loans and prior to such recordation all amounts owing to the transferor with respect to such Commitments and for Loans shall remain owing to the transferor. The registration of assignment or transfer of all or part of any Commitments and Loans shall be recorded by the Administrative Agent on the Register only upon the acceptance by the Administrative Agent of a properly executed and delivered Assignment and Assumption Agreement pursuant to Section 13.04(b). Coincident with the delivery of such an Assignment and Assumption Agreement to the Administrative Agent for acceptance and registration of assignment or transfer of all or part of a Loan, or as soon thereafter as practicable, the assigning or transferor Lender shall surrender the Note (if any) evidencing such Loan, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender at the request of any such Lender. The Borrowers jointly and severally agree to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this Section 13.15.

13.16 Confidentiality. (a) Each Lender agrees that it will not disclose without the prior written consent of Aleris (other than to Affiliates of such Lender, its employees, auditors, advisors or counsel or to another Lender if such Lender or such Lender’s holding or parent company in its reasonable discretion determines that any such party should have access to such information, provided such Persons shall be subject to the provisions of this Section 13.16 to the same extent as such Lender) any information with respect to the Transaction, the Permitted Holders, Aleris or any of its Subsidiaries which is now or in the future furnished pursuant to this Agreement or any other Credit Document (other than information that is available to such Lender on a nonconfidential basis prior to such disclosure), provided that any Lender may disclose any such information (i) as is or has become generally available to the public other than by virtue of a breach of this Section 13.16(a) by the respective Lender, (ii) as may be required in any report, statement or testimony required to be submitted to any municipal, state or Federal regulatory body having jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar regulatory organizations (whether in the United States or elsewhere) or their successors, (iii) as may be required with respect to any summons or

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subpoena or in connection with any litigation, (iv) in order to comply with any law, order, regulation or ruling applicable to such Lender, (v) to the Administrative Agent or the Collateral Agent, (vi) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or to any such contractual counterparty’s professional advisor), so long as such contractual counterparty (or such professional advisor) agrees to be bound by the provisions of this Section 13.16, and (vii) to any pledgee under Section 13.04(e) or any prospective or actual transferee or participant in connection with any contemplated transfer or participation of any of the Notes or Commitments or any interest therein by such Lender, provided that such prospective transferee or participant agrees to be bound by the confidentiality provisions contained in, or provisions no less restrictive than, this Section 13.16. Any person required to maintain the confidentiality of information as provided in this Section 13.16 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 its own confidential information.

(b) Each Borrower hereby acknowledges and agrees that each Lender may share with any of its Affiliates, and such Affiliates may share with such Lender, any information related to Aleris or any of its Subsidiaries (including, without limitation, any non-public customer information regarding the creditworthiness of Aleris and its Subsidiaries), if such Lender or such Lender’s holding or parent company in its reasonable discretion determines that any such party should have access to such information provided such Persons shall be subject to the provisions of this Section 13.16 to the same extent as such Lender.

13.17 INTERCREDITOR AGREEMENT. (a) EACH LENDER PARTY HERETO UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT (X) IT IS THE INTENTION OF THE PARTIES HERETO THAT THE ABL OBLIGATIONS ARE INTENDED TO CONSTITUTE A DISTINCT AND SEPARATE CLASS FROM THE TERM OBLIGATIONS, (Y) AS BETWEEN THE SECURED CREDITORS, IT IS THE INTENTION OF THE PARTIES HERETO THAT THE ABL OBLIGATIONS (INCLUDING ALL POST-PETITION INTEREST WITH RESPECT THERETO) (1) HAVE A FIRST PRIORITY SECURITY INTEREST, AND THAT THE TERM OBLIGATIONS HAVE A SECOND PRIORITY SECURITY INTEREST, IN ALL COLLATERAL OF THE U.S. CREDIT PARTIES CONSTITUTING ABL PRIORITY COLLATERAL AND (2) HAVE A FIRST PRIORITY SECURITY INTEREST, AND THAT THE TERM OBLIGATIONS HAVE NO SECURITY INTEREST, IN ALL COLLATERAL OF THE CANADIAN CREDIT PARTIES AND THE EUROPEAN CREDIT PARTIES AND (Z) AS BETWEEN THE SECURED CREDITORS, IT IS THE INTENTION OF THE PARTIES HERETO THAT THE TERM OBLIGATIONS (INCLUDING ALL POST-PETITION INTEREST WITH RESPECT THERETO) (I) HAVE A FIRST PRIORITY SECURITY INTEREST, AND THAT THE ABL OBLIGATIONS HAVE A SECOND PRIORITY SECURITY INTEREST, IN ALL COLLATERAL OF THE U.S. CREDIT PARTIES CONSTITUTING TERM PRIORITY COLLATERAL AND (2) HAVE A FIRST PRIORITY SECURITY INTEREST, AND THAT THE ABL OBLIGATIONS HAVE NO SECURITY INTEREST, IN ALL COLLATERAL OF GERMAN SUB-HOLDCO AND ITS SUBSIDIARIES. EACH LENDER FURTHER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT THE PROVISIONS SETTING FORTH THE PRIORITIES AS BETWEEN THE HOLDERS OF ABL OBLIGATIONS ON

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THE ONE HAND, AND THE HOLDERS OF TERM OBLIGATIONS, ON THE OTHER HAND, ARE SET FORTH IN THE INTERCREDITOR AGREEMENT.

(b) EACH LENDER AUTHORIZES AND INSTRUCTS THE COLLATERAL AGENT AND THE ADMINISTRATIVE AGENT TO ENTER INTO THE SECURITY DOCUMENTS AND THE INTERCREDITOR AGREEMENT ON BEHALF OF THE LENDERS, AND TO TAKE ALL ACTIONS (AND EXECUTE ALL DOCUMENTS) REQUIRED (OR DEEMED ADVISABLE) BY IT IN ACCORDANCE WITH THE TERMS OF THE SECURITY DOCUMENTS AND THE INTERCREDITOR AGREEMENT.

(c) THE PROVISIONS OF THIS SECTION 13.17 ARE NOT INTENDED TO SUMMARIZE ALL RELEVANT PROVISIONS OF THE INTERCREDITOR AGREEMENT. REFERENCE MUST BE MADE TO THE INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND ALL TERMS AND CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND NEITHER THE ADMINISTRATIVE AGENT NOR THE COLLATERAL AGENT OR ANY OF ITS RESPECTIVE AFFILIATES MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE INTERCREDITOR AGREEMENT. EACH LENDER IS FURTHER AWARE THAT THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT ARE ALSO ACTING IN AN AGENCY CAPACITY PURSUANT TO THE TERM CREDIT AGREEMENT, AND EACH LENDER HEREBY IRREVOCABLY WAIVES ANY OBJECTION THERETO OR CAUSE OF ACTION ARISING THEREFROM.

13.18 Aleris as Agent for the Borrowers. Each Borrower hereby irrevocably appoints Aleris as its agent and attorney-in-fact for all purposes under this Agreement and each other Credit Document, which appointment shall remain in full force and effect unless and until the Administrative Agent shall have received prior written notice signed by the applicable appointing Borrower that such appointment has been revoked. Each Borrower hereby irrevocably appoints and authorizes Aleris (i) to provide the Administrative Agent with all notices with respect to Loans and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement or any other Credit Document and (ii) to take such action as Aleris deems appropriate on its behalf to obtain Loans and Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement and the other Credit Documents.

13.19 Special Provisions Regarding Pledges of Equity Interests in, and Promissory Notes Owed by, Persons Not Organized in the United States. The parties hereto acknowledge and agree that the provisions of the various Security Documents executed and delivered by the Credit Parties require that, among other things, promissory notes executed by, and Equity Interests in, various Persons owned by the applicable Credit Party be pledged, and delivered for pledge, pursuant to the Security Documents. The parties hereto further acknowledge and agree that each Credit Party shall be required to take all actions under the laws of the jurisdiction in which such Credit Party is organized to create and perfect all security interests granted pursuant to the various Security Documents and to take all actions under the laws of the United States, Canada, Switzerland, Germany, Belgium, France and England and any

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State, province or territory thereof to perfect the security interests in the Equity Interests of, and promissory notes issued by, any Person organized under the laws of said jurisdictions (in each case, to the extent said Equity Interests or promissory notes are owned by any Credit Party). Except as provided in the immediately preceding sentence, to the extent any Security Document requires or provides for the pledge of promissory notes issued by, or Equity Interests in, any Person organized under the laws of a jurisdiction other than those specified in the immediately preceding sentence, it is acknowledged that, as of the Restatement Effective Date, no actions have been required to be taken to perfect, under local law of the jurisdiction of the Person who issued the respective promissory notes or whose Equity Interests are pledged, under the Security Documents. Aleris hereby agrees that, following any request by the Administrative Agent or Required Lenders to do so, Aleris shall, and shall cause its Subsidiaries to, take such actions under the local law of any jurisdiction with respect to which such actions have not already been taken as are determined by the Administrative Agent or Required Lenders to be necessary or desirable in order to fully perfect, preserve or protect the security interests granted pursuant to the various Security Documents under the laws of such jurisdictions. If requested to do so pursuant to this Section 13.19, all such actions shall be taken in accordance with the provisions of this Section 13.19 and Section 9.11 and within the time periods set forth therein. All conditions and representations contained in this Agreement and the other Credit Documents shall be deemed modified to the extent necessary to effect the foregoing and so that same are not violated by reason of the failure to take actions under local law (but only with respect to Equity Interest of, and promissory notes issued by, Persons organized under laws of jurisdictions other than the United States, Canada, Switzerland, Germany, Belgium, France and England and any State, province or territory thereof) not required to be taken in accordance with the provisions of this Section 13.19, provided that to the extent any representation or warranty would not be true because the foregoing actions were not taken, the respective representation of warranties shall be required to be true and correct in all material respects at such time as the respective action is required to be taken in accordance with the foregoing provisions of Section 9.11 and this Section 13.19.

13.20 Post-Closing Actions. Notwithstanding anything to the contrary contained in this Agreement or the other Credit Documents, the parties hereto acknowledge and agree that:

(a) Aleris and its Subsidiaries were not required to have filed (or cause to have filed) on or prior to the Restatement Effective Date amendments to financing statements (Form UCC-1) or any amendments to filings with the United States Patent and Trademark Office or the United States Copyright Office necessary to perfect the security interest purported to be created by the U.S. Security Agreement or the U.S. Pledge Agreement, as applicable. Not later than the 10th day after the Restatement Effective Date, Aleris and its Subsidiaries shall have filed (or cause to have filed) all of such amendments to financing statements (Form UCC-1) and any amendments to filings with the United States Patent and Trademark Office or the United States Copyright Office necessary to perfect the security interest purported to be created by the Security Documents.

(b) Aleris and its Subsidiaries shall be required to take the actions (if any) specified in Schedule XV as promptly as practicable, and in any event within the time

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periods set forth in Schedule XV. The provisions of Schedule XV shall be deemed incorporated by reference herein as fully as if set forth herein in its entirety.

All conditions precedent and representations contained in this Agreement and the other Credit Documents shall be deemed modified to the extent necessary to effect the foregoing (and to permit the taking of the actions described above within the time periods required above, rather than as elsewhere provided in the Credit Documents), provided that (x) to the extent any representation and warranty would not be true because the foregoing actions were not taken on the Restatement Effective Date, the respective representation and warranty shall be required to be true and correct in all material respects at the time the respective action is taken (or was required to be taken) in accordance with the foregoing provisions of this Section 13.20 and (y) all representations and warranties relating to the Security Documents shall be required to be true immediately after the actions required to be taken by this Section 13.20 have been taken (or were required to be taken). The acceptance of the benefits of each Credit Event shall constitute a representation, warranty and covenant by Aleris to each of the Lenders that the actions required pursuant to this Section 13.20 will be, or have been, taken within the relevant time periods referred to in this Section 13.20 and that, at such time, all representations and warranties contained in this Agreement and the other Credit Documents shall then be true and correct without any modification pursuant to this Section 13.20, and the parties hereto acknowledge and agree that the failure to take any of the actions required above, within the relevant time periods required above, shall give rise to an immediate Event of Default pursuant to this Agreement.

13.21 The PATRIOT Act. Each Lender subject to the USA PATRIOT ACT (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001)) (the “PATRIOT Act”) hereby notifies the Borrowers that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrowers and the other Credit Parties and other information that will allow such Lender to identify the Borrowers and the other Credit Parties in accordance with the PATRIOT Act.

13.22 Judgment Currency. (a) The Credit Parties’ obligations hereunder and under the other Credit Documents to make payments in any currency (the “Obligation Currency”) shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by any Agent or the respective Lender of the full amount of the Obligation Currency expressed to be payable to the such Agent or such Lender under this Agreement or the other Credit Documents. If for the purpose of obtaining or enforcing judgment against any Credit Party in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the “Judgment Currency”) an amount due in the Obligation Currency, the conversion shall be made at the rate of exchange (as quoted by the Administrative Agent or if the Administrative Agent does not quote a rate of exchange on such currency, by a known dealer in such currency designated by the Administrative Agent) determined, in each case, as of the day on which the judgment is given (such day being hereinafter referred to as the “Judgment Currency Conversion Date”).

(b) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, each

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Borrower covenants and agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate or exchange prevailing on the Judgment Currency Conversion Date.

(c) For purposes of determining any rate of exchange for this Section, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency.

13.23 Abstract Acknowledgment of Indebtedness and Joint Creditorship. (a) Notwithstanding any other provision of this Agreement, each Borrower hereby irrevocably and unconditionally agrees and covenants with the Collateral Agent by way of an abstract acknowledgment of indebtedness (abstraktes Schuldversprechen) that it owes to the Collateral Agent as creditor in its own right and not as a representative of the other Secured Creditors, sums equal to, and in the currency of, each amount payable by such Borrower to each of the Secured Creditors under each of the Secured Debt Agreements as and when that amount falls due for payment under the relevant Secured Debt Agreement or would have fallen due but for any discharge resulting from failure of another Secured Creditor to take appropriate steps, in insolvency proceedings affecting such Borrower, to preserve its entitlement to be paid that amount.

(b) Each Borrower undertakes to pay to the Collateral Agent upon first written demand the amount payable by such Borrower to each of the Secured Creditors under each of the Secured Debt Agreements as such amount has become due and payable.

(c) The Collateral Agent has the independent right to demand and receive full or partial payment of the amounts payable by each Borrower under this Section 13.23, irrespective of any discharge of such Borrower’s obligation to pay those amounts to the other Secured Creditors resulting from failure by them to take appropriate steps, in insolvency proceedings affecting such Borrower, to preserve their entitlement to be paid those amounts.

(d) Any amount due and payable by a Borrower to the Collateral Agent under this Section 13.23 shall be decreased to the extent that the other Secured Creditors have received (and are able to retain) payment in full of the corresponding amount under the other provisions of the Secured Debt Agreements and any amount due and payable by a Borrower to the other Secured Creditors under those provisions shall be decreased to the extent that the Collateral Agent has received (and is able to retain) payment in full of the corresponding amount under this Section 13.23; provided that no Borrower may consider its obligations towards a Secured Creditor to be so discharged by virtue of any set-off, counterclaim or similar defense that it may invoke vis-à-vis the Collateral Agent.

(e) The rights of the Secured Creditors (other than the Collateral Agent) to receive payment of amounts payable by each Borrower under the Secured Debt Agreements are several and are separate and independent from, and without prejudice to, the rights of the Collateral Agent to receive payment under this Section 13.23.

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(f) In addition, but without prejudice to the foregoing, the Collateral Agent shall be the joint creditor (together with the relevant Secured Creditor) of all obligations of each Borrower towards each of the Secured Creditors under the Secured Debt Agreements.

13.24 Special Appointment of Collateral Agent for German Security. (a) (i) Each Lender that is or will become party to this Agreement hereby appoints the Collateral Agent as trustee (Treuhaender) and administrator for the purpose of holding on trust (Treuhand), administering, enforcing and releasing the German Security (as defined below) for the Secured Creditors, (ii) the Collateral Agent accepts its appointment as a trustee and administrator of the German Security on the terms and subject to the conditions set out in this Agreement and (iii) the Lenders, the Collateral Agent and all other parties to this Agreement agree that, in relation to the German Security, no Lender shall exercise any independent power to enforce any German Security or take any other action in relation to the enforcement of the German Security, or make or receive any declarations in relation thereto.

(b) The Collateral Agent shall hold and administer any German Security which is security assigned, transferred or pledged under German law to it as a trustee for the benefit of the Secured Creditors, where “German Security” means the assets which are the subject of a security document which is governed by German law.

(c) Each Lender hereby instructs the Collateral Agent (with the right of sub delegation) to enter into any documents evidencing German Security and to make and accept all declarations and take all actions as it considers necessary or useful in connection with any German Security on behalf of the Secured Creditors. The Collateral Agent shall further be entitled to rescind, release, amend and/or execute new and different documents securing the German Security.

(d) The Lenders and the Collateral Agent agree that all rights and claims constituted by the abstract acknowledgment of indebtedness pursuant to Section 13.24 of this Agreement and all proceeds held by the Collateral Agent pursuant to or in connection with such abstract acknowledgment of indebtedness are held by the Collateral Agent with effect from the date of such abstract acknowledgment of indebtedness in trust for the Secured Creditors and will be administered in accordance with this Agreement and the other Secured Debt Agreements. The Secured Creditors and the Collateral Agent agree further that the respective Credit Party’s obligations under such abstract acknowledgment of indebtedness shall not increase the total amount of the Secured Obligations (as defined in the respective agreement governing German Security) and shall not result in any additional liability of any of the Credit Parties or otherwise prejudice the rights of any of the Credit Parties. Accordingly, payment of the obligations under such abstract acknowledgment of indebtedness shall, to the same extent, discharge the corresponding Secured Obligations and vice versa.

13.25 Conflicting Provisions in Security Documents. In the event that any provisions of this Agreement conflict with any Security Document, the provisions of this Agreement shall govern.

13.26 Continuing Effect. This Agreement shall amend and restate in its entirety the Existing ABL Credit Agreement, and all obligations of the Borrowers thereunder and under

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the Credit Documents as in effect immediately prior to the Restatement Effective Date (the “Existing Credit Documents”) shall be deemed replaced and extended as obligations under this Agreement and the Credit Documents and be governed hereby and thereby without novation.

SECTION 14. U.S. Borrower Guaranty.

14.01 Guaranty. In order to induce the Administrative Agent, the Collateral Agent, the Issuing Lenders and the Lenders to enter into this Agreement and to extend credit hereunder, and to induce the other Guaranteed Creditors to enter into Interest Rate Protection Agreements, Other Hedging Agreements and Treasury Services Agreements and in recognition of the direct benefits to be received by each U.S. Borrower from the proceeds of the Loans, the issuance of the Letters of Credit and the entering into of such Interest Rate Protection Agreements, Other Hedging Agreements and Treasury Services Agreements, each U.S. Borrower hereby agrees with the Guaranteed Creditors as follows: each U.S. Borrower hereby jointly and severally, unconditionally and irrevocably guarantees the full and prompt payment when due, whether upon maturity, acceleration or otherwise, of any and all of the Relevant ABL Guaranteed Obligations to the Guaranteed Creditors. If any or all of the Relevant ABL Guaranteed Obligations to the Guaranteed Creditors becomes due and payable hereunder, each U.S. Borrower, jointly and severally, unconditionally and irrevocably, promises to pay such indebtedness to the Administrative Agent and/or the other Guaranteed Creditors, or order, on demand, together with any and all expenses which may be incurred by the Administrative Agent and the other Guaranteed Creditors in collecting any of the Relevant ABL Guaranteed Obligations.

14.02 Reinstatement. If a claim is ever made upon any Guaranteed Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Relevant ABL Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including any Guaranteed Party), then and in such event each U.S. Borrower agrees that any such judgment, decree, order, settlement or compromise shall be binding upon such U.S. Borrower, notwithstanding any revocation of this U.S. Borrower Guaranty or other instrument evidencing any liability of any other Guaranteed Party, and such U.S. Borrower shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee.

14.03 Bankruptcy. Additionally, each U.S. Borrower jointly and severally, unconditionally and irrevocably guarantees the payment of any and all of the Relevant ABL Guaranteed Obligations to the Guaranteed Creditors whether or not due or payable by the Borrowers upon the occurrence of any of the events specified in Section 11.05, and irrevocably and unconditionally promises to pay such indebtedness to the Guaranteed Creditors, or order, on demand, in lawful money of the United States.

14.04 Nature of Liability. The liability of each U.S. Borrower hereunder is primary, absolute and unconditional, exclusive and independent of any security for or other guaranty of the Relevant ABL Guaranteed Obligations, whether executed by any other guarantor

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or by any other party, and the liability of each U.S. Borrower hereunder shall not be affected or impaired by (a) any direction as to application of payment by any Guaranteed Party or by any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Relevant ABL Guaranteed Obligations, or (c) any payment on or in reduction of any such other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by any Guaranteed Party, or (e) any payment made to any Guaranteed Creditor on the Relevant ABL Guaranteed Obligations which any such Guaranteed Creditor repays to any Guaranteed Party pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each U.S. Borrower waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, or (f) any action or inaction by the Guaranteed Creditors as contemplated in Section 14.06, or (g) any invalidity, irregularity or enforceability of all or any part of the Relevant ABL Guaranteed Obligations or of any security therefor. To the extent more than one U.S. Borrower guarantees the same Relevant ABL Guaranteed Obligations hereunder, the liabilities of such U.S. Borrower with respect thereto shall be joint and several.

14.05 Independent Obligation. The obligations of each U.S. Borrower hereunder are independent of the obligations of any other guarantor, any other party or any Guaranteed Party, and a separate action or actions may be brought and prosecuted against each U.S. Borrower whether or not action is brought against any other guarantor, any other party or any Guaranteed Party and whether or not any other guarantor, any other party or any Guaranteed Party be joined in any such action or actions. Each U.S. Borrower waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by any Guaranteed Party or other circumstance which operates to toll any statute of limitations as to any Guaranteed Party shall operate to toll the statute of limitations as to each U.S. Borrower.

14.06 Authorization. Each U.S. Borrower authorizes the Guaranteed Creditors without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to:

(a) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter, any of the Relevant ABL Guaranteed Obligations (including any increase or decrease in the principal amount thereof or the rate of interest or fees thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and this U.S. Borrower Guaranty shall apply to the Relevant ABL Guaranteed Obligations as so changed, extended, renewed or altered;

(b) take and hold security for the payment of the Relevant ABL Guaranteed Obligations and sell, exchange, release, impair, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Relevant ABL Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset there against;

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(c) exercise or refrain from exercising any rights against any Guaranteed Party or others or otherwise act or refrain from acting;

(d) release or substitute any one or more endorsers, guarantors, any Guaranteed Party or other obligors;

(e) settle or compromise any of the Relevant ABL Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of any Guaranteed Party to its creditors other than the Guaranteed Creditors;

(f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of any Guaranteed Party to the Guaranteed Creditors regardless of what liability or liabilities of such Guaranteed Party remain unpaid;

(g) consent to or waive any breach of, or any act, omission or default under, this Agreement, any other Credit Document, any other Secured Debt Agreement or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify or supplement this Agreement, any other Credit Document, or any other Secured Debt Agreement or any of such other instruments or agreements; and/or

(h) take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of such Borrower from its liabilities under this U.S. Borrower Guaranty.

14.07 Reliance. It is not necessary for any Guaranteed Creditor to inquire into the capacity or powers of any U.S. Borrower or any of its respective Subsidiaries or the officers, directors, partners or agents acting or purporting to act on their behalf, and any Relevant ABL Guaranteed Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

14.08 Waiver. (a) Each U.S. Borrower waives any right (except as shall be required by applicable statute and cannot be waived) to require any Guaranteed Creditor to (i) proceed against any Guaranteed Party, any other guarantor or any other party, (ii) proceed against or exhaust any security held from any Guaranteed Party, any other guarantor or any other party or (iii) pursue any other remedy in any Guaranteed Creditor’s power whatsoever. Each U.S. Borrower waives any defense based on or arising out of any defense of any Guaranteed Party, any other guarantor or any other party, other than payment of the Relevant ABL Guaranteed Obligations to the extent of such payment, based on or arising out of the disability of any Guaranteed Party, any U.S. Borrower, any other guarantor or any other party, or the validity, legality or unenforceability of the Relevant ABL Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Guaranteed Party other than payment of the Relevant ABL Guaranteed Obligations to the extent of such payment. The Guaranteed Creditors may, at their election, foreclose on any security held by the Administrative Agent, the Collateral Agent or any other Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the

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extent such sale is permitted by applicable law), or exercise any other right or remedy the Guaranteed Creditors may have against any Guaranteed Party or any other party, or any security, without affecting or impairing in any way the liability of any U.S. Borrower hereunder except to the extent the Relevant ABL Guaranteed Obligations have been paid. Each U.S. Borrower waives any defense arising out of any such election by the Guaranteed Creditors, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of such U.S. Borrower against any Guaranteed Party or any other party or any security.

(b) Each U.S. Borrower waives all presentments, demands for performance, protests and notices, including without limitation notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this U.S. Borrower Guaranty, and notices of the existence, creation or incurring of new or additional Relevant ABL Guaranteed Obligations. Each U.S. Borrower assumes all responsibility for being and keeping itself informed of each Guaranteed Party’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Relevant ABL Guaranteed Obligations and the nature, scope and extent of the risks which such U.S. Borrower assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any of the other Guaranteed Creditors shall have any duty to advise such U.S. Borrower of information known to them regarding such circumstances or risks.

(c) Each U.S. Borrower hereby acknowledges and affirms that it understands that to the extent any Relevant ABL Guaranteed Obligations are secured by Real Property located in the State of California, such U.S. Borrower shall be liable for the full amount of the liability hereunder notwithstanding foreclosure on such Real Property by trustee sale or any other reason impairing such U.S. Borrower’s or any Guaranteed Creditor’s right to proceed against any Borrower or any other guarantor of the Relevant ABL Guaranteed Obligations.

(d) Each U.S. Borrower hereby waives, to the fullest extent permitted by applicable law, all rights and benefits under Sections 580a, 580b, 580d and 726 of the California Code of Civil Procedure. Each U.S. Borrower hereby further waives, to the fullest extent permitted by applicable law, without limiting the generality of the foregoing or any other provision hereof, all rights and benefits which might otherwise be available to such U.S. Borrower under Sections 2809, 2810, 2815, 2819, 2821, 2839, 2845, 2846, 2847, 2848, 2849, 2850, 2899 and 3433 of the California Civil Code.

(e) Until all Relevant ABL Guaranteed Obligations have been paid in full in cash, each U.S. Borrower agrees that it will not exercise its rights of subrogation and reimbursement and any other rights and defenses available to such U.S. Borrower by reason of Sections 2787 to 2855, inclusive, of the California Civil Code, including, without limitation, (1) any defenses such U.S. Borrower may have to this U.S. Borrower Guaranty by reason of an election of remedies by the Guaranteed Creditors and (2) any rights or defenses such U.S. Borrower may have by reason of protection afforded to a Borrower pursuant to the antideficiency or other laws of California limiting or discharging such Borrower’s indebtedness, including, without limitation, Sections 580a, 580b, 580d and 726 of the California Code of Civil Procedure. In furtherance of such provisions, such U.S. Borrower hereby waives all rights and defenses arising out of an election of remedies of the Guaranteed Creditors, even though that election of

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remedies, such as a nonjudicial foreclosure destroys such U.S. Borrower’s rights of subrogation and reimbursement against a Borrower by the operation of Section 580d of the California Code of Civil Procedure or otherwise.

(f) Each U.S. Borrower warrants and agrees that each of the waivers set forth above is made with full knowledge of its significance and consequences and that if any of such waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective only to the maximum extent permitted by law.

14.09 Maximum Liability. It is the desire and intent of each U.S. Borrower and the Guaranteed Creditors that this U.S. Borrower Guaranty shall be enforced against each U.S. Borrower to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. If, however, and to the extent that, the obligations of any U.S. Borrower under this U.S. Borrower Guaranty shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers), then the amount of each U.S. Borrower obligations under this U.S. Borrower Guaranty shall be deemed to be reduced and such U.S. Borrower shall pay the maximum amount of the Relevant ABL Guaranteed Obligations which would be permissible under applicable law.

SECTION 15. Nature of U.S. Borrower Obligations; Limitation on Canadian Borrower Obligations and European Borrower Obligations.

15.01 Nature of U.S. Borrower Obligations and Canadian Borrower Obligations. Notwithstanding anything to the contrary contained elsewhere in this Agreement, it is understood and agreed by the various parties to this Agreement that

(i) all U.S. Borrower Obligations to repay principal of, interest on, and all other amounts with respect to, all U.S./European Revolving Loans, Letter of Credit Outstandings and all other U.S. Borrower Obligations pursuant to this Agreement and under any U.S. Borrower Revolving Note (including, without limitation, all fees, indemnities, taxes and other U.S. Borrower Obligations in connection therewith or in connection with the related Commitments) shall constitute the joint and several obligations of each of the U.S. Borrowers. In addition to the direct (and joint and several) obligations of the U.S. Borrowers with respect to U.S. Borrower Obligations as described above, all such U.S. Borrower Obligations shall be guaranteed pursuant to, and in accordance with the terms of, the U.S. Borrower Guaranty and the U.S. Subsidiaries Guaranty; and

(ii) all Canadian Borrower Obligations to repay principal of, interest on, and all other amounts with respect to, all Canadian Revolving Loans and all other Canadian Borrower Obligations pursuant to this Agreement and under any Canadian Revolving Note (including, without limitation, all fees, indemnities, taxes and other Canadian Borrower Obligations in connection therewith or in connection with the related Commitments) shall constitute the joint and several obligations of each of the Canadian Borrowers. In addition to the direct (and joint and several) obligations of the Canadian Borrowers with respect to Canadian Borrower Obligations as described above, all such

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Canadian Borrower Obligations shall be guaranteed pursuant to, and in accordance with the terms of, the Canadian Subsidiaries Guaranty, the Canadian Parent Guaranty and the U.S. Subsidiaries Guaranty.

15.02 Independent Obligation. The obligations of each U.S. Borrower with respect to the U.S. Borrower Obligations are independent of the obligations of each other U.S. Borrower or any Guarantor under its guaranty of such U.S. Borrower Obligations, and a separate action or actions may be brought and prosecuted against each U.S. Borrower, whether or not any other U.S. Borrower or any such Guarantor is joined in any such action or actions. Each U.S. Borrower waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by any U.S. Borrower or other circumstance which operates to toll any statute of limitations as to any U.S. Borrower shall, to the fullest extent permitted by law, operate to toll the statute of limitations as to each U.S. Borrower.

15.03 Authorization. Each of the U.S. Borrowers authorizes the Administrative Agent and the Lenders without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to:

(a) exercise or refrain from exercising any rights against any other U.S. Borrower or any Guarantor or others or otherwise act or refrain from acting;

(b) release or substitute any other U.S. Borrower, endorsers, Guarantors or other obligors;

(c) settle or compromise any of the U.S. Borrower Obligations of any other U.S. Borrower or any other Credit Party, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of any U.S. Borrower to its creditors other than the Lenders;

(d) apply any sums paid by any other U.S. Borrower or any other Person, howsoever realized or otherwise received to or for the account of such U.S. Borrower to any liability or liabilities of such other U.S. Borrower or other Person regardless of what liability or liabilities of such other Borrower or other Person remain unpaid; and/or

(e) consent to or waive any breach of, or act, omission or default under, this Agreement or any of the instruments or agreements referred to herein, or otherwise, by any other Borrower or any other Person.

15.04 Reliance. It is not necessary for the Administrative Agent or any other Lender to inquire into the capacity or powers of any U.S. Borrower or any of its Subsidiaries or the officers, directors, members, partners or agents acting or purporting to act on its behalf, and any U.S. Borrower Obligations made or created in reliance upon the professed exercise of such powers shall constitute the joint and several obligations of the U.S. Borrowers hereunder.

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15.05 Contribution; Subrogation. No U.S. Borrower shall have any rights of contribution or subrogation with respect to any other U.S. Borrower as a result of payments made by it hereunder, in each case unless and until the Total Commitment has been terminated and all U.S. Borrower Obligations have been paid in full.

15.06 Waiver. Each U.S. Borrower waives any right to require the Administrative Agent or the other Lenders to (i) proceed against any other U.S. Borrower, any Guarantor or any other party, (ii) proceed against or exhaust any security held from any U.S. Borrower, any Guarantor or any other party or (iii) pursue any other remedy in the Administrative Agent’s or the Lenders’ power whatsoever. Each U.S. Borrower waives any defense based on or arising out of suretyship or any impairment of security held from any U.S. Borrower, any Guarantor or any other party or on or arising out of any defense of any other U.S. Borrower, any Guarantor or any other party other than payment in full in cash of the U.S. Borrower Obligations, including, without limitation, any defense based on or arising out of the disability of any other U.S. Borrower, any Guarantor or any other party, or the unenforceability of the U.S. Borrower Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any other U.S. Borrower, in each case other than as a result of the payment in full in cash of the U.S. Borrower Obligations.

15.07 Limitation on Canadian Borrower Obligations and European Borrower Obligations. Notwithstanding anything to the contrary herein or in any other Credit Document (including provisions that may override any other provision), in no event shall the Canadian Borrowers or any other Canadian Subsidiary of any Borrower, the European Borrower, any other European Distribution Subsidiary of the European Borrower, any other Foreign Subsidiary of Aleris or any Domestic Subsidiary of a Foreign Subsidiary of Aleris guarantee or be deemed to have guaranteed or become liable or obligated on a joint and several basis or otherwise for, or to have pledged any of its assets to secure, any Obligation of a U.S. Credit Party under this Agreement or any of the other Credit Documents. All provisions contained in any Credit Document shall be interpreted consistently with this Section 15.07 to the extent possible, and where such other provisions conflict with the provisions of this Section 15.07, the provisions of this Section 15.07 shall govern.

15.08 Limited Recourse Against Corus Aluminium Inc. Notwithstanding the fact that, as the general partner of Corus LP, Corus Aluminium Inc. is jointly and severally liable with Corus LP for all of Corus LP’s obligations and liabilities provided for herein and under the other Credit Documents, any recourse against Corus Aluminium Inc. pursuant to this Agreement or any other Credit Document, including without limitation the Canadian Security Agreements, shall be limited exclusively to the assets of Corus LP and the assets of Corus Aluminium Inc. held or owned by it as general partner for and on behalf of Corus LP and there shall be no recourse against other assets of Corus Aluminium Inc.

15.09 Maximum Liability. It is the desire and intent of (i) each U.S. Borrower and the U.S./European Lenders and (ii) each Canadian Borrower and the Canadian Lenders, that, in each case, their respective joint and several liability shall be enforced against each U.S. Borrower or Canadian Borrower, as applicable, to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. If, however, and to the extent that, the obligations of any U.S. Borrower or Canadian Borrower under any Credit

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Document shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers), then the amount of each U.S. Borrower’s obligations (in the case of any invalidity or unenforceability with respect to a U.S. Borrower’s obligations) or each Canadian Borrower’s obligations (in the case of any invalidity or unenforceability with respect to a Canadian Borrower’s obligations) under the Credit Documents shall be deemed to be reduced and such U.S. Borrower or Canadian Borrower, as applicable, shall pay the maximum amount of the ABL Obligations which would be permissible under applicable law.

SECTION 16. U.S./European Revolving Loans; Intra-Lender Issues.

16.01 Specified Foreign Currency Participations. Notwithstanding anything to the contrary contained herein, all U.S./European Revolving Loans which are denominated in a Specified Foreign Currency (each, a “Specified Foreign Currency Loan”) shall be made solely by the U.S./European Lenders (including DBNY) who are not Participating Specified Foreign Currency Lenders (as defined below). Each U.S./European Lender acceptable to DBNY that does not have Specified Foreign Currency Funding Capacity (a “Participating Specified Foreign Currency Lender”) shall irrevocably and unconditionally purchase and acquire and shall be deemed to irrevocably and unconditionally purchase and acquire from DBNY, and DBNY shall sell and be deemed to sell to each such Participating Specified Foreign Currency Lender, without recourse or any representation or warranty whatsoever, an undivided interest and participation (a “Specified Foreign Currency Participation”) in each U.S./European Revolving Loan which is a Specified Foreign Currency Loan funded by DBNY in an amount equal to such Participating Specified Foreign Currency Lender’s U.S./European Percentage of the Borrowing that includes such U.S./European Revolving Loan. Such purchase and sale of a Specified Foreign Currency Participation shall be deemed to occur automatically upon the making of a Specified Foreign Currency Loan by DBNY, without any further notice to any Participating Specified Foreign Currency Lender. The purchase price payable by each Participating Specified Foreign Currency Lender to DBNY for each Specified Foreign Currency Participation purchased by it from DBNY shall be equal to 100% of the principal amount of such Specified Foreign Currency Participation (i.e., the product of (i) the amount of the Borrowing that includes the relevant U.S./European Revolving Loan and (ii) such Participating Specified Foreign Currency Lender’s U.S./European Percentage), and such purchase price shall be payable by each Participating Specified Foreign Currency Lender to DBNY in accordance with the settlement procedure set forth in Section 16.02 below. DBNY and the Administrative Agent shall record on their books the amount of the U.S./European Revolving Loans made by DBNY and each Participating Specified Foreign Currency Lender’s Specified Foreign Currency Participation and Funded Specified Foreign Currency Participation therein, all payments in respect thereof and interest accrued thereon and all payments made by and to each Participating Specified Foreign Currency Lender pursuant to this Section 16.01.

16.02 Settlement Procedures for Specified Foreign Currency Participations. Each Participating Specified Foreign Currency Lender’s Specified Foreign Currency Participation in the Specified Foreign Currency Loans shall be in an amount equal to its U.S./European Percentage of all such Specified Foreign Currency Loans. However, in order to facilitate the administration of the Specified Foreign Currency Loans made by DBNY and the Specified Foreign Currency Participations, settlement among DBNY and the Participating

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Specified Foreign Currency Lenders with regard to the Participating Specified Foreign Currency Lenders’ Specified Foreign Currency Participations shall take place in accordance with the following provisions:

(i) DBNY and the Participating Specified Foreign Currency Lenders shall settle (a “Specified Foreign Currency Participation Settlement”) by payments in respect of the Specified Foreign Currency Participations as follows: So long as any Specified Foreign Currency Loans are outstanding, Specified Foreign Currency Participation Settlements shall be effected upon the request of DBNY through the Administrative Agent on such Business Days as requested by DBNY and as the Administrative Agent shall specify by a notice by telecopy, telephone or similar form of notice to each Participating Specified Foreign Currency Lender requesting such Specified Foreign Currency Participation Settlement (each such date on which a Specified Foreign Currency Participation Settlement occurs herein called a “Specified Foreign Currency Participation Settlement Date”), such notice to be delivered no later than 2:00 p.m. (New York time) at least one Business Day prior to the requested Specified Foreign Currency Participation Settlement Date; provided that DBNY shall have the option but not the obligation to request a Specified Foreign Currency Participation Settlement Date and, in any event, shall not request a Specified Foreign Currency Participation Settlement Date prior to the occurrence of an Event of Default; provided further, that if (x) such Event of Default is cured or waived in writing in accordance with the terms hereof, (y) no ABL Obligations have yet been declared due and payable under Article 11 and (z) the Administrative Agent has actual knowledge of such cure or waiver, all prior to the Administrative Agent’s giving notice to the Participating Specified Foreign Currency Lenders of the first Specified Foreign Currency Participation Settlement Date under this Agreement, then the Administrative Agent shall not give notice to the Participating Specified Foreign Currency Lenders of a Specified Foreign Currency Participation Settlement Date based upon such cured or waived Event of Default. If on any Specified Foreign Currency Participation Settlement Date the total principal amount of the Specified Foreign Currency Loans made or deemed made by DBNY during the period ending on (but excluding) such Specified Foreign Currency Participation Settlement Date and commencing on (and including) the immediately preceding Specified Foreign Currency Participation Settlement Date (or the Restatement Effective Date in the case of the period ending on the first Specified Foreign Currency Participation Settlement Date) (each such period herein called a “Specified Foreign Currency Participation Settlement Period”) is greater than the principal amount of Specified Foreign Currency Loans repaid during such Specified Foreign Currency Participation Settlement Period to DBNY, each Participating Specified Foreign Currency Lender shall pay to DBNY (through the Administrative Agent), no later than 11:00 a.m. (New York time) on such Specified Foreign Currency Participation Settlement Date, an amount equal to such Participating Specified Foreign Currency Lender’s ratable share of the amount of such excess. If in any Specified Foreign Currency Participation Settlement Period the outstanding principal amount of the Specified Foreign Currency Loans repaid to DBNY in such period exceeds the total principal amount of the Specified Foreign Currency Loans made or deemed made by DBNY during such period, DBNY shall pay to each Participating Specified Foreign Currency Lender (through the Administrative Agent) on such Specified Foreign Currency Participation Settlement Date an amount equal to such Participating Specified

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Foreign Currency Lender’s ratable share of such excess. Specified Foreign Currency Participation Settlements in respect of Specified Foreign Currency Loans shall be made in the respective Available Currency in which such Specified Foreign Currency Loan was funded on the Specified Foreign Currency Participation Settlement Date for such Specified Foreign Currency Loans.

(ii) If any Participating Specified Foreign Currency Lender fails to pay to DBNY on any Specified Foreign Currency Participation Settlement Date the full amount required to be paid by such Participating Specified Foreign Currency Lender to DBNY on such Specified Foreign Currency Participation Settlement Date in respect of such Participating Specified Foreign Currency Lender’s Specified Foreign Currency Participation (such Participating Specified Foreign Currency Lender’s “Specified Foreign Currency Participation Settlement Amount”) with DBNY, DBNY shall be entitled to recover such unpaid amount from such Participating Specified Foreign Currency Lender, together with interest thereon (in the same respective currency or currencies as the relevant Specified Foreign Currency Loans) at the Base Rate plus 2.00%. Without limiting DBNY’s rights to recover from any Participating Specified Foreign Currency Lender any unpaid Specified Foreign Currency Participation Settlement Amount payable by such Participating Specified Foreign Currency Lender to DBNY, the Administrative Agent shall also be entitled to withhold from amounts otherwise payable to such Participating Specified Foreign Currency Lender an amount equal to such Participating Specified Foreign Currency Lender’s unpaid Specified Foreign Currency Participation Settlement Amount owing to DBNY and apply such withheld amount to the payment of any unpaid Specified Foreign Currency Participation Settlement Amount owing by such Participating Specified Foreign Currency Lender to DBNY.

If any Specified Foreign Currency Loans convert to U.S. Dollars pursuant to Section 2.14, a Specified Foreign Currency Participation Settlement Date shall be deemed to automatically occur on the date of such conversion and DBNY shall receive an amount expressed in the respective Available Currency immediately prior to such conversion.

16.03 Obligations Irrevocable. The obligations of each Participating Specified Foreign Currency Lender to purchase from DBNY a participation in each Specified Foreign Currency Loan made by DBNY and to make payments to DBNY with respect to such participation, in each case as provided herein, shall be irrevocable and not subject to any qualification or exception whatsoever, including any of the following circumstances:

(i) any lack of validity or enforceability of this Agreement or any of the other Credit Documents or of any Loans, against the Borrowers or any other Credit Party;

(ii) the existence of any claim, setoff, defense or other right which the Borrowers or any other Credit Party may have at any time against the Administrative Agent, any Participating Specified Foreign Currency Lender, or any other Person, whether in connection with this Agreement, any Specified Foreign Currency Loans, the transactions contemplated herein or any unrelated transactions;

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(iii) any application or misapplication of any proceeds of any Specified Foreign Currency Loans;

(iv) the surrender or impairment of any security for any Specified Foreign Currency Loans;

(v) the occurrence of any Default or Event of Default;

(vi) the commencement or pendency of any events specified in Section 11.05, in respect of the Borrowers or any of its Subsidiaries or any other Person; or

(vii) the failure to satisfy the applicable conditions precedent set forth in Section 6 or 7.

16.04 Recovery or Avoidance of Payments. In the event any payment by or on behalf of any Borrower or any other Credit Party received by the Administrative Agent with respect to any Specified Foreign Currency Loan made by DBNY is thereafter set aside, avoided or recovered from the Administrative Agent in connection with any insolvency proceeding or due to any mistake of law or fact, each Participating Specified Foreign Currency Lender shall, upon written demand by the Administrative Agent, pay to DBNY (through the Administrative Agent) such Participating Specified Foreign Currency Lender’s U.S./European Percentage of such amount set aside, avoided or recovered, together with interest at the rate and in the currency required to be paid by DBNY or the Administrative Agent upon the amount required to be repaid by it.

16.05 Indemnification by Lenders. Each Participating Specified Foreign Currency Lender agrees to indemnify DBNY (to the extent not reimbursed by the Borrowers and without limiting the obligations of the Borrowers hereunder or under any other Credit Document) ratably for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including attorneys’ fees) or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against DBNY in any way relating to or arising out of any Specified Foreign Currency Loans or any action taken or omitted by DBNY in connection therewith; provided that no Participating Specified Foreign Currency Lender shall be liable for any of the foregoing to the extent it arises from the gross negligence or willful misconduct of DBNY (as determined by a court of competent jurisdiction in a final non-appealable judgment). Without limiting the foregoing, each Participating Specified Foreign Currency Lender agrees to reimburse DBNY promptly upon demand for such Participating Specified Foreign Currency Lender’s ratable share of any costs or expenses payable by the Borrowers to DBNY in respect of the Specified Foreign Currency Loans to the extent that DBNY is not promptly reimbursed for such costs and expenses by the Borrowers. The agreement contained in this Section 16.05 shall survive payment in full of all Specified Foreign Currency Loans.

16.06 Specified Foreign Currency Loan Participation Fee. In consideration for each Participating Specified Foreign Currency Lender’s participation in the Specified Foreign Currency Loans made by DBNY, DBNY agrees to pay to the Administrative Agent for the account of each Participating Specified Foreign Currency Lender, as and when DBNY receives

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payment of interest on its Specified Foreign Currency Loans, a fee (the “Specified Foreign Currency Participation Fee”) at a rate per annum equal to the Applicable Margin on such Specified Foreign Currency Loans minus 0.25% on the Unfunded Specified Foreign Currency Participation of such Participating Specified Foreign Currency Lender in such Specified Foreign Currency Loans of DBNY. The Specified Foreign Currency Participation Fee in respect of any unfunded Specified Foreign Currency Participation in a Specified Foreign Currency Loan shall be payable to the Administrative Agent in the Available Currency in which the respective Specified Foreign Currency Loan was funded when interest on such Specified Foreign Currency Loan is received by DBNY. If DBNY does not receive payment in full of such interest, the Specified Foreign Currency Participation Fee in respect of the unfunded Specified Foreign Currency Participation in such Specified Foreign Currency Loans shall be reduced proportionately. Any amounts payable under this Section 16.06 by the Administrative Agent to the Participating Specified Foreign Currency Lenders shall be paid in the Available Currency in which the respective Specified Foreign Currency Loan was funded (or, if different, the currency in which such interest payments are actually received).

*     *     *

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written.

ALERIS INTERNATIONAL, INC.
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Executive Vice President and Chief Financial Officer
AURORA ACQUISITION MERGER SUB, INC.
By:	/s/ Clive Bode
	Name:	Clive Bode
	Title:	Vice President

ALCHEM ALUMINUM, INC.

ALCHEM ALUMINUM SHELBYVILLE, INC.

ALERIS, INC.

ALERIS OHIO MANAGEMENT, INC.

ALSCO HOLDINGS, INC.

ALSCO METALS CORPORATION

ALUMITECH OF CLEVELAND, INC.

ALUMITECH OF WABASH, INC.

ALUMITECH OF WEST VIRGINIA, INC.

ALUMITECH, INC.

AWT PROPERTIES, INC.

CA LEWISPORT, LLC

CI HOLDINGS, LLC

COMMONWEALTH ALUMINUM CONCAST, INC.

COMMONWEALTH ALUMINUM LEWISPORT, LLC

COMMONWEALTH ALUMINUM METALS, LLC

COMMONWEALTH ALUMINUM SALES CORPORATION

Amended and Restated ABL Credit Agreement

COMMONWEALTH ALUMINUM TUBE ENTERPRISES, LLC

COMMONWEALTH ALUMINUM, LLC

COMMONWEALTH FINANCING CORP.

COMMONWEALTH INDUSTRIES, INC.

ETS SCHAEFER CORPORATION
GULF REDUCTION CORPORATION
IMCO INTERNATIONAL, INC.
IMCO INVESTMENT COMPANY
IMCO RECYCLING OF CALIFORNIA, INC.
IMCO RECYCLING OF IDAHO, INC.
IMCO RECYCLING OF ILLINOIS INC.
IMCO RECYCLING OF INDIANA INC.
IMCO RECYCLING OF MICHIGAN L.L.C.
IMCO RECYCLING OF OHIO INC.
IMCO RECYCLING OF UTAH INC.
IMCO RECYCLING SERVICES COMPANY
IMSAMET, INC.
ALERIS BLANKING AND RIM PRODUCTS, INC. (f/k/a/ INDIANA ALUMINUM INC.)
INTERAMERICAN ZINC, INC.
METALCHEM, INC.
MIDWEST ZINC CORPORATION
ROCK CREEK ALUMINUM, INC.
SILVER FOX HOLDING COMPANY
U.S. ZINC CORPORATION
U.S. ZINC EXPORT CORPORATION
WESTERN ZINC CORPORATION
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Director

Amended and Restated ABL Credit Agreement

IMCO INDIANA PARTNERSHIP L.P.
By: IMCO International, Inc., its General Partner
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	President
IMCO INVESTMENT COMPANY
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	President
IMCO MANAGEMENT PARTNERSHIP, L.P. By: Aleris International, Inc., its General Partner
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Executive VP and CFO

Amended and Restated ABL Credit Agreement

CORUS S.E.C./CORUS L.P.,     acting and represented by its general partner,     CORUS ALUMINIUM INC.
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Director

Amended and Restated ABL Credit Agreement

ALERIS SWITZERLAND GMBH
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Managing Officer

Amended and Restated ABL Credit Agreement

BANK OF MONTREAL,
By:	/s/ Ben Ciallella
	Name:	Ben Ciallella
	Title:	Vice President

Amended and Restated ABL Credit Agreement

DEUTSCHE BANK AG NEW YORK BRANCH, Individually and as Administrative Agent
By:	/s/ Carin Keegan
	Name:	Carin Keegan
	Title:	Vice President
By:	/s/ Scottye Lindsey
	Name:	Scottye Lindsey
	Title:	Director

Amended and Restated ABL Credit Agreement

DEUTSCHE BANK AG, CANADA BRANCH, Individually and as Canadian Administrative Agent
By:	/s/ ILLEGIBLE
	Name:
	Title:	Vice President
By:	/s/ Marcellus Leung
	Name:	Marcellus Leung
	Title:	Assistant Vice President

Amended and Restated ABL Credit Agreement

The CIT Group/Business Credit, Inc.,
By:	/s/ Debra Putzer
	Name:	Debra Putzer
	Title:	Senior Vice President

Amended and Restated ABL Credit Agreement

NATIONAL CITY BUSINESS CREDIT, INC., Individually and as Co-Documentation Agent
By:	/s/ Anthony Alexander
	Name:	Anthony Alexander
	Title:	Vice President

Amended and Restated ABL Credit Agreement

PNC BANK, NATIONAL ASSOCIATION, Individually and as Co-Documentation Agent
By:	/s/ Timothy Culver
	Name:	Timothy Culver
	Title:	Vice President

Amended and Restated ABL Credit Agreement

COMMERZBANK AG, New York and Grand Cayman Branches
By:	/s/ Graham A. Warning
	Name:	Graham A. Warning
	Title:	Assistant Vice President
By:	/s/ John Marlatt
	Name:	John Marlatt
	Title:	Senior Vice President

Amended and Restated ABL Credit Agreement

Citicorp North America Inc.,
By:	/s/ Keith R. Gerding
	Name:	Keith R. Gerding
	Title:	Director & Vice President

Amended and Restated ABL Credit Agreement

LASALLE BUSINESS CREDIT, LLC,
By:	/s/ Mitchell J. Tarvid
	Name:	Mitchell J. Tarvid
	Title:	First Vice President

Amended and Restated ABL Credit Agreement

HSBC Business Credit (USA) Inc.,
By:	/s/ Matthew W. Rickert
	Name:	Matthew W. Rickert
	Title:	Vice President

Amended and Restated ABL Credit Agreement

BAYERISCHE LANDESBANK, New York Branch
By:	/s/ Christopher Dowd
	Name:	Christopher Dowd
	Title:	Vice President
By:	/s/ Dorma M. Quilty
	Name:	Dorma M. Quilty
	Title:	Vice President

Amended and Restated ABL Credit Agreement

[NAME OF INSTITUTION],
By:	/s/ Jeremy Harrison
	Name:	Jeremy Harrison
	Title:	Vice President - ABL
		Lloyds TSB Commercial Finance LTD 1251 Avenue of the Americas, 39th Floor New York, New York 10020

Amended and Restated ABL Credit Agreement

Wells Fargo Bank, N.A., as a Lender
By:	/s/ Bruce McGrath
	Name:	Bruce McGrath
	Title:	Senior Vice President

Amended and Restated ABL Credit Agreement

REGIONS BANK,
By:	/s/ Wendy B. Nelson
	Name:	Wendy B. Nelson
	Title:	Attorney-in-Fact

Amended and Restated ABL Credit Agreement

Key Bank National Association,
By:	/s/ Alex Strazzella
	Name: Alex Strazzella
	Title:   Senior Vice President

Amended and Restated ABL Credit Agreement

BURDALE FINANCIAL LIMITED
By:	/s/ Brian Gitlin
	Name: Brian Gitlin
	Title:   Director
By:	/s/ Nigel Hogg
	Name: Nigel Hogg
	Title:   Director

Amended and Restated ABL Credit Agreement

FORTIS CAPITAL CORP.
By:	/s/ John Crawford
	Name: John Crawford
	Title:   Managing Director

By:	/s/ Michiel van der Voort
	Name: Michiel van der Voort
	Title:   Managing Director

Amended and Restated ABL Credit Agreement

Union Bank of California, N.A.,
By:	/s/ Brent Housteau
	Name: Brent Housteau
	Title:   Vice President

Amended and Restated ABL Credit Agreement

UPS Capital Corporation,
By:	/s/ John P. Holloway
	Name: John P. Holloway
	Title:   Director of Portfolio Management

Amended and Restated ABL Credit Agreement

WACHOVIA BANK, NATIONAL ASSOCIATION,
By:	/s/ J. Patrick Moody
	Name: J. Patrick Moody
	Title:   Vice President

Amended and Restated ABL Credit Agreement

Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc.,
By:	/s/ Richard Holston
	Name: Richard Holston
	Title:   Vice President

Amended and Restated ABL Credit Agreement

ING CAPITAL LLC,     As a Lender,
By:	/s/ William C. Beddingfield
	Name: William C. Beddingfield
	Title:   Managing Director

Amended and Restated ABL Credit Agreement

RBC Royal Bank of Canada
By:	/s/ Aboudy Asha
	Name: Aboudy Asha
	Title:   Manager, Underwriting
By:	/s/ Stuart Coulter
	Name: Stuart Coulter
	Title:   Sr. Portfolio Manager

Amended and Restated ABL Credit Agreement

JPMORGAN CHASE BANK, N.A., Individually and as Lender
By:	/s/ Michael F. McCullough
	Name: Michael F. McCullough
	Title:   Senior Vice President

Amended and Restated ABL Credit Agreement

FIFTH THIRD BANK
By:	/s/ Roy C. Lanctot
	Name: Roy C. Lanctot
	Title:   Vice President

Amended and Restated ABL Credit Agreement

Allied Irish Banks, p.l.c.
By:	/s/ Martin Chin
	Name:	Martin Chin
	Title:	Senior Vice President
By:	/s/ John F. Farrace
	Name:	John F. Farrace
	Title:	Co-Head Leverage Finance Director of Corporate Banking North America

Amended and Restated ABL Credit Agreement

ISRAEL DISCOUNT BANK OF NEW YORK,
By:	/s/ Rahum Williams
	Name: Rahum Williams
	Title:   Vice President
By:	/s/ Roy Grossman
	Name: Roy Grossman
	Title:   Senior Vice President

Amended and Restated ABL Credit Agreement

General Electric Capital Corporation,
By:	/s/ Mark E. Blankstein
	Name: Mark E. Blankstein
	Title: Duly Authorized Signatory

Amended and Restated ABL Credit Agreement

EX-10.2

Exhibit 10.2

EXECUTION COPY

AMENDED AND RESTATED TERM LOAN AGREEMENT

among

ALERIS INTERNATIONAL, INC.,

AURORA ACQUISITION MERGER SUB, INC.

(to be merged with and into Aleris International, Inc.),

ALERIS DEUTSCHLAND HOLDING GMBH,

VARIOUS LENDERS,

DEUTSCHE BANK AG NEW YORK BRANCH,

as ADMINISTRATIVE AGENT,

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as SYNDICATION AGENT,

and

PNC BANK, NATIONAL ASSOCIATION,

NATIONAL CITY BUSINESS CREDIT, INC.

and

KEY BANK NATIONAL ASSOCIATION

as CO-DOCUMENTATION AGENTS

Dated as of August 1, 2006

and amended and restated as of December 19, 2006

GOLDMAN SACHS CREDIT PARTNERS L.P.

and

DEUTSCHE BANK SECURITIES INC.

as JOINT LEAD ARRANGERS and

JOINT BOOK RUNNING MANAGERS

EXECUTION COPY

SECTION 1.   Defined Terms		2
SECTION 2.   Amount and Terms of Credit		56
2.01	The Commitments	56
2.02	Minimum Amount of Each Borrowing; Limitation on Euro Rate Loans	56
2.03	Notice of Borrowing	57
2.04	Disbursement of Funds	57
2.05	Notes	58
2.06	Conversions	59
2.07	Pro Rata Borrowings	60
2.08	Interest	60
2.09	Interest Periods for Euro Rate Loans	61
2.10	Increased Costs, Illegality, etc.	62
2.11	Compensation	64
2.12	Change of Lending Office	65
2.13	Replacement of Lenders	66
2.14	Special Provisions Applicable to Lenders Upon the Occurrence of a Conversion Event	67
SECTION 3.   Fees		67
3.01	Fees	67
3.02	Commitments	67
3.03	Mandatory Reduction of Commitments	67
SECTION 4.   Prepayments; Payments; Taxes		68
4.01	Voluntary Prepayments	68
4.02	Mandatory Repayments	69
4.03	Payments and Computations	74
4.04	Net Payments	75
SECTION 5.   Conditions Precedent to Loans on the Restatement Effective Date		78
5.01	Execution of Agreement; Notes	79
5.02	Opinions of Counsel	79
5.03	Corporate Documents; Proceedings; etc.	79
5.04	Consummation of the Merger	80
5.05	Equity Financing, New Notes, Revolving Loans, etc.	80
5.06	Refinancing; Excess Availability	80
5.07	Adverse Change	81
5.08	Credit Document Acknowledgement; Security Document Amendments; Pledge Agreements; Luxco Guaranty, etc.	81
5.09	Mortgage; Title Insurance; Landlord Waivers; etc.	84
5.10	Intercreditor Agreement	85

5.11	Financial Statements; Projections	85
5.12	Solvency Certificate; Insurance Certificates	86
5.13	Fees, etc.	86
5.14	Merger Agreement Representations and Warranties	86
5.15	No Default; Representations and Warranties	86
5.16	Notice of Borrowing	86
SECTION 6.   Representations and Warranties		87
6.01	Organizational Status	87
6.02	Power and Authority	87
6.03	No Violation	87
6.04	Approvals	88
6.05	Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; No Material Adverse Effect	88
6.06	Litigation	90
6.07	True and Complete Disclosure	90
6.08	Use of Proceeds; Margin Regulations	90
6.09	Tax Returns and Payments	90
6.10	Compliance with ERISA	90
6.11	The Security Documents	91
6.12	Properties	92
6.13	Subsidiaries; etc.	92
6.14	Compliance with Statutes, etc.	93
6.15	Investment Company Act	93
6.16	Environmental Matters	93
6.17	Employment and Labor Relations	93
6.18	Intellectual Property, etc.	94
6.19	Indebtedness	94
6.20	Insurance	94
6.21	Senior Indebtedness	94
SECTION 7.   Affirmative Covenants		94
7.01	Information Covenants	94
7.02	Notice of Material Events	97
7.03	Existence; Franchises	98
7.04	Performance of Obligations	98
7.05	Maintenance of Properties	98
7.06	Books and Records; Inspection Rights	98
7.07	Compliance with Laws.	99
7.08	Use of Proceeds	99
7.09	Insurance	99
7.10	New Subsidiaries; Additional Security; Further Assurances; etc.	99
7.11	Designated Senior Indebtedness	102
SECTION 8.   Negative Covenants		102

8.01	Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock	102
8.02	Limitations on Liens	109
8.03	Merger, Consolidation or Sale of All or Substantially All Assets	109
8.04	Limitation on Restricted Payments	111
8.05	Limitations on Transactions with Affiliates	118
8.06	Limitations on Asset Sales	120
8.07	Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries	122
8.08	Limitations on Guarantees of Indebtedness by Restricted Subsidiaries	124
8.09	Limitations on Sale and Lease-Back Transactions	124
8.10	Amendments to Subordination Provisions	125
8.11	Business of Aleris and Restricted Subsidiaries	125
8.12	Changes to Legal Names, Organizational Identification Numbers, Jurisdiction or Type or Organization	125
8.13	Negative Covenants of Non U.S. Credit Parties	126
SECTION 9.   Events of Default		126
9.01	Payments	126
9.02	Representations, etc.	126
9.03	Covenants	126
9.04	Default Under Other Agreements	126
9.05	Bankruptcy, etc.	127
9.06	Judgments	127
9.07	Guaranties	128
9.08	Security Documents	128
9.09	Additional Agreements	128
9.10	Change of Control	128
SECTION 10.   The Administrative Agent and Collateral Agent		129
10.01	Appointment	129
10.02	Nature of Duties	129
10.03	Lack of Reliance on the Administrative Agent	130
10.04	Certain Rights of the Administrative Agent	130
10.05	Reliance	130
10.06	Indemnification	131
10.07	The Administrative Agent in its Individual Capacity	131
10.08	Holders	131
10.09	Resignation by the Administrative Agent	132
10.10	Collateral Matters	132
10.11	Amendments to Guaranties and Security Documents on the Restatement Effective Date	133
10.12	Delivery of Information	134
SECTION 11.   Miscellaneous		134

11.01	Payment of Expenses, etc.	134
11.02	Right of Setoff	135
11.03	Notices	136
11.04	Benefit of Agreement; Assignments; Participations	137
11.05	No Waiver; Remedies Cumulative	139
11.06	Payments Pro Rata	139
11.07	Calculations; Computations	140
11.08	GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL	140
11.09	Counterparts	142
11.10	Effectiveness	142
11.11	Headings Descriptive	142
11.12	Amendment or Waiver; etc.	143
11.13	Survival	145
11.14	Domicile of Loans	145
11.15	Register	145
11.16	Confidentiality	145
11.17	INTERCREDITOR AGREEMENT	146
11.18	Aleris as Agent for the German Borrowers	147
11.19	Special Provisions Regarding Pledges of Equity Interests in, and Promissory Notes Owed by, Persons Not Organized in the United States	148
11.20	Post-Closing Actions	148
11.21	The PATRIOT Act	149
11.22	Judgment Currency	149
11.23	Pledges of Bank Accounts Under General Terms and Conditions	150
11.24	Abstract Acknowledgment of Indebtedness and Joint Creditorship	150
11.25	Special Appointment of Collateral Agent for German Security	151
11.26	Absence of Back-to-Back Financing	152
11.27	Conflicting Provisions in Security Documents	154
SECTION 12. U.S. Borrower Guaranty		154
12.01	Guaranty	154
12.02	Reinstatement	154
12.03	Bankruptcy	155
12.04	Nature of Liability	155
12.05	Independent Obligation	155
12.06	Authorization	155
12.07	Reliance	156
12.08	Waiver	156
12.09	Maximum Liability	158
SECTION 13. Limitation on German Borrower Obligations		158

SCHEDULES

SCHEDULE I — Commitments

SCHEDULE II	—	Lender Addresses
SCHEDULE III	—	Real Property
SCHEDULE IV	—	Certain Tax Matters
SCHEDULE V	—	Subsidiaries
SCHEDULE VI	—	Existing Indebtedness
SCHEDULE VII	—	Insurance
SCHEDULE VIII	—	Existing Liens
SCHEDULE IX	—	Existing Investments
SCHEDULE X	—	Designated Assets
SCHEDULE XI	—	Post-Closing Actions
SCHEDULE XII	—	Unrestricted Subsidiaries
SCHEDULE XIII	—	Aleris’ Website for Electronic Delivery
SCHEDULE XIV	—	Labor Matters
SCHEDULE XV	—	Immaterial Subsidiaries
SCHEDULE XVI	—	Local Law Pledge Agreements

EXHIBITS

EXHIBIT A-1	—	Notice of Borrowing
EXHIBIT A-2	—	Notice of Conversion/Continuation
EXHIBIT B-1	—	U.S. Term Note
EXHIBIT B-2	—	German Term Note
EXHIBIT C	—	Section 4.04(b)(ii) Certificate
EXHIBIT D-1	—	Opinion of Fried, Frank, Harris, Shriver & Jacobson
EXHIBIT D-2	—	Opinion of Fried, Frank, Harris, Shriver & Jacobson
EXHIBIT E	—	Officers’ Certificate
EXHIBIT F-1	—	U.S. Pledge Agreement
EXHIBIT F-2	—	European Parent Pledge Agreement
EXHIBIT F-3	—	Credit Document Acknowledgment and Amendment
EXHIBIT G-1	—	U.S. Subsidiaries Guaranty
EXHIBIT G-2	—	European Subsidiaries Guaranty
EXHIBIT G-3	—	European Parent Guaranty
EXHIBIT H	—	U.S. Security Agreement
EXHIBIT I	—	Solvency Certificate
EXHIBIT J	—	Compliance Certificate
EXHIBIT K	—	[Intentionally Omitted]
EXHIBIT L	—	Term Creditor Mortgage
EXHIBIT M	—	Intercreditor Agreement
EXHIBIT N	—	Certification for presentation to the Tax Office for purposes of Section 8a of Germany’s Corporation Tax Law
EXHIBIT O	—	Joinder Agreement

EXECUTION COPY

AMENDED AND RESTATED TERM LOAN AGREEMENT, dated as of August 1, 2006 and amended and restated as of December 19, 2006, among AURORA ACQUISITION MERGER SUB, INC., a Delaware corporation (“Merger Sub”) to be merged with and into ALERIS INTERNATIONAL, INC., a Delaware corporation (“Aleris”), Aleris, ALERIS DEUTSCHLAND HOLDING GMBH, a company with limited liability formed under the laws of Germany (the “German Borrower” and, together with the U.S. Borrower (as defined below), collectively, the “Borrowers” and each, a “Borrower”), the Lenders party hereto from time to time, PNC BANK, NATIONAL ASSOCIATION, NATIONAL CITY BUSINESS CREDIT and KEY BANK NATIONAL ASSOCIATION, as co-documentation agents, GOLDMAN SACHS CREDIT PARTNERS L.P., as syndication agent and DEUTSCHE BANK AG NEW YORK BRANCH, as administrative agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H :

WHEREAS, the Borrowers, the Existing Lenders and the Administrative Agent are parties to a Term Loan Agreement, dated as of August 1, 2006 (as the same has been amended, modified or supplemented to, but not including the Restatement Effective Date, the “Existing Term Loan Agreement”);

WHEREAS, the Borrowers have requested that the Existing Term Loan Agreement be amended and restated in its entirety and, subject to and upon the terms and conditions set forth herein, the Borrowers have requested the credit facilities more fully provided pursuant to the terms of this Agreement, namely (i) the facility evidenced by the German Commitments (and the loans made pursuant thereto), which loans shall be made to the German Borrower and (ii) the facility evidenced by the U.S. Commitments (and the loans made pursuant thereto), which loans shall be made to the U.S. Borrower; and

WHEREAS, the loans to the German Borrower hereunder shall be guaranteed by the U.S. Credit Parties, the European Parent Guarantors and Subsidiaries of the German Borrower (but shall not be guaranteed by the Swiss CE and the Distribution Subsidiaries); and

WHEREAS, all obligations of the U.S. Credit Parties hereunder (whether as borrowers or guarantors) shall be secured pursuant to the relevant U.S. Security Documents executed and delivered by the U.S. Credit Parties, with the intent being that (x) First Priority security interests be granted to secure the Term Obligations in all Term Priority Collateral of the U.S. Credit Parties and (y) second priority security interests be granted to secure the Term Obligations in all ABL Priority Collateral of the U.S. Credit Parties; and

WHEREAS, all obligations of the European Credit Parties (whether as borrowers or guarantors) shall be secured by First Priority security interest in all Collateral provided by the German Borrower and certain European Subsidiary Guarantors; and

WHEREAS, Collateral consisting of all Equity Interests in the European Parent Guarantors and any Collateral provided by them pursuant to the Security Documents entered into and delivered by them will be shared (with the creditors pursuant to the ABL Credit Agreement

and any refinancing thereof as permitted pursuant to the Intercreditor Agreement) on the basis provided in the Intercreditor Agreement; and

WHEREAS, the ABL Credit Agreement is being entered into substantially concurrently with the amendment and restatement of this Agreement, and all Collateral provided by the U.S. Credit Parties is intended to provide the ABL Secured Parties pursuant to the ABL Credit Agreement with second priority security interests in the Term Priority Collateral, and with First Priority security interests in the ABL Priority Collateral, granted pursuant to the relevant security documents securing the ABL Obligations; and

WHEREAS, a portion of the loans made available pursuant to the ABL Credit Agreement shall be borrowed directly by the Swiss CE, which, as of the Restatement Effective Date, shall be a sister subsidiary of the German Borrower (with each of the German Borrower and the Swiss CE being owned by a common parent which is a European Parent Guarantor), and the ABL Obligations may be secured by assets of the Swiss CE and the Distribution Subsidiaries, which assets shall not secure the Term Obligations; and

WHEREAS, this Agreement (and all Lenders from time to time party hereto) shall be subject to the terms and conditions of the Intercreditor Agreement, which more fully describes the sharing arrangements referenced above (and which in the event of any conflict with this Agreement, including the above description, shall be binding); and

WHEREAS, subject to the terms and conditions of this Agreement and the other Credit Documents, and subject to the terms of the Intercreditor Agreement, the Lenders are willing, subject to and upon the terms and conditions set forth herein, to amend and restate the Existing Term Loan Agreement, and to make available to the Borrowers the respective credit facilities provided for herein;

NOW, THEREFORE, IT IS AGREED:

SECTION 1. Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“ABL Collateral Agent” shall mean the “Collateral Agent” as defined in the ABL Credit Agreement.

“ABL Credit Agreement” shall mean the amended and restated credit agreement, dated as of August 1, 2006 and amended and restated as of the date hereof, by and among Aleris, each other U.S. Borrower party thereto, Corus S.E.C./Corus L.P., acting and represented by its general partner Corus Aluminum Inc., Aleris Switzerland GmbH, each other Subsidiary of Aleris party thereto, the lenders party thereto from time to time, Deutsche Bank AG New York Branch, as Administrative Agent, and Deutsche Bank AG, Canada Branch, as Canadian Administrative Agent, as it may be amended (including any amendment and restatement thereof), extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions, provided that any increase in amount is permitted under Section 8.01) from time to time, including one or more credit facilities, credit agreements, loan agreements, indentures, commercial paper facilities or

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similar agreements extending the maturity of, refinancing, refunding, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder or adding Subsidiaries of Aleris as additional borrowers or guarantors thereunder; provided that any increase in amount is permitted under Section 8.01 and the incurrence of such obligations by any additional borrowers is permitted under Sections 8.01 and 8.02) all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether by the same or any other agent, lender or group of lenders, or other investors and whether involving the same or different group of Aleris and its Subsidiaries as principal obligors or guarantors; provided that, in the event it is secured by any Collateral securing the obligations under the Credit Documents, the parties to any such credit facilities, credit agreements, loan agreements, indentures, commercial paper facilities or similar agreements (or any agent on their behalf) shall have executed the Intercreditor Agreement or the joinder agreement in respect thereof.

“ABL Obligations” shall mean the ABL Obligations under (and as defined in) the ABL Credit Agreement.

“ABL Priority Collateral” shall mean and shall include all “ABL Priority Collateral” as defined in the Intercreditor Agreement.

“ABL Secured Parties” shall have the meaning provided in the ABL Credit Agreement.

“ABL Security Documents” shall mean “Security Documents” as defined in the ABL Credit Agreement.

“Account” shall mean an “account” (as such term is defined in Article 9 of the UCC), and any and all supporting obligations (as such term is defined in Article 9 of the UCC) in respect thereof.

“Acquired Indebtedness” shall mean, with respect to any specified Person, (a) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of such specified Person, and (b) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Additional Interest” shall mean all liquidated damages then owing pursuant to the Registration Rights Agreement.

“Additional Security Document” shall mean each additional security agreement, pledge, mortgage or other document granting a lien in the Collateral delivered pursuant to Section 7.10 (as amended, modified or supplemented from time to time).

“Adjustment Date” shall mean the first day of each Fiscal Quarter of Aleris.

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“Administrative Agent” shall mean DBNY, in its capacity as Administrative Agent for the Lenders hereunder, and shall include any successor to the Administrative Agent appointed pursuant to Section 10.09.

“Affected Loans” shall have the meaning provided in Section 4.02(i).

“Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise; provided, however, that neither the Administrative Agent nor any Lender nor any Affiliate thereof shall, as a result of its acting as such, be considered an Affiliate of Aleris or any Subsidiary thereof.

“Affiliate Transaction” has the meaning provided in Section 8.05.

“Agents” shall mean the Administrative Agent, the Collateral Agent, the Syndication Agent, the Co-Documentation Agents and the Joint Lead Arrangers.

“Agreement” shall mean this Amended and Restated Credit Agreement, as modified, supplemented, amended, restated (including any amendment and restatement hereof), extended or renewed from time to time.

“Aleris” shall have the meaning provided in the first paragraph of this Agreement.

“Applicable Excess Cash Flow Repayment Percentage” shall mean 50%; provided, however, that (i) if the Consolidated Leverage Ratio of Aleris and its Subsidiaries as of the last day of the applicable Excess Cash Flow Payment Period is equal to or less than 2.75:1.00 but greater than 2.25:1.00, then the Applicable Excess Cash Flow Repayment Percentage instead shall be 25%, and (ii) if the Consolidated Leverage Ratio of Aleris and its Subsidiaries as of the last day of the applicable Excess Cash Flow Payment Period is equal to or less than 2.25:1.00, then the Applicable Excess Cash Flow Repayment Percentage shall be 0%.

“Applicable Margin” shall mean (x) if prior to the date a certificate is delivered pursuant to Section 7.01(c) in respect of the Fiscal Quarter ending March 31, 2007, a percentage per annum equal to (I) in the case of U.S. Loans maintained as (A) Base Rate Loans, 1.375% and (B) Eurodollar Loans, 2.375% and (II) in the case of German Loans maintained as Euro Rate Loans, 2.50% and (y) if on or after the date a certificate is delivered pursuant to Section 7.01(c) in respect of the Fiscal Quarter ending March 31, 2007, the percentage per annum set forth below opposite the respective Level (i.e., Level 1 or Level 2, as the case may be) of the Consolidated Leverage Ratio indicated to have been achieved as set forth in the most recent certificate delivered pursuant to Section 7.01(c):

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Level	Consolidated Leverage Ratio	U.S. Loans maintained as Eurodollar Loans	U.S. Loans maintained as Base Rate Loans	German Loans maintained as Euro Rate Loans
2	Greater than or equal to 4.00:1.00	2.375%	1.375%	2.50%
1	Less than 4.00:1.00	2.125%	1.125%	2.25%

The Applicable Margins as so determined shall become effective as of the first Business Day immediately following the date a certificate is delivered pursuant to Section 7.01(c); provided that if an Event of Default shall have occurred and be continuing at the time any reduction in the Applicable Margin would otherwise be implemented, no reduction shall be implemented until the date on which such Event of Default shall have been cured or waived.

“Asset Sale” shall mean (a) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of Aleris or any Restricted Subsidiary (each referred to in this definition as a “disposition”), and (b) the issuance or sale of Equity Interests of any Restricted Subsidiary, whether in a single transaction or a series of related transactions, in each case, other than:

(i) a disposition of cash, Cash Equivalents or Investment Grade Securities or excess, damaged, obsolete or worn out assets in the ordinary course of business or any disposition of inventory or goods held for sale in the ordinary course of business;

(ii) the disposition of all or substantially all of the assets of Aleris in a manner permitted pursuant to Section 8.03 or any disposition that constitutes a Change of Control;

(iii) the making of any Permitted Investment or the making of any Restricted Payment that is not prohibited by Section 8.04;

(iv) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary, in each case that do not or would not upon issuance constitute Fixed Assets, in any transaction or series of transactions with an aggregate fair market value of less than $25,000,000;

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(v) any disposition of Fixed Assets in any transaction or series of transactions with an applicable fair market value of less than $10,000,000;

(vi) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to Aleris or by Aleris or a Restricted Subsidiary to a Restricted Subsidiary;

(vii) to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(viii) the lease, assignment, license, sub-license or sub-lease of any real or personal property in the ordinary course of business;

(ix) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(x) foreclosures on assets;

(xi) sales of accounts receivable, or participations therein, in connection with any Receivables Facility; and

(xii) the unwinding of any Hedging Obligations.

“Assignment and Assumption Agreement” shall mean an Assignment and Assumption Agreement in form and substance reasonably satisfactory to the Administrative Agent.

“Attributable Debt” in respect of a Sale and Lease-Back Transaction shall mean, as at the time of determination, the present value (discounted at the cash interest rate borne by the Loans, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Lease-Back Transaction (including any period for which such lease has been extended); provided, however, that if such Sale and Lease-Back Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capitalized Lease Obligation”.

“Available Currency” shall mean (i) with respect to U.S. Loans, U.S. Dollars and (ii) with respect to German Loans, Euros.

“Bank Certificate” shall have the meaning provided in Section 11.26(a).

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor thereto.

“Base Rate” shall mean, at any time, the higher of (i) the Prime Lending Rate at such time and (ii) 1/2 of 1% in excess of the overnight Federal Funds Rate at such time.

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“Base Rate Loan” shall mean each Loan designated or deemed designated as such by the U.S. Borrower at the time of the incurrence thereof or conversion thereto.

“Borrowers” shall have the meaning provided in the first paragraph of this Agreement. Unless the context otherwise requires, each reference in this Agreement to “each Borrower” or “the respective Borrower” shall be deemed to be a reference to (x) the U.S. Borrower or (y) the German Borrower, as the case may be.

“Borrowing” shall mean the borrowing of one Type of Loan of a single Tranche by either the U.S. Borrower or the German Borrower, from all the Lenders having Commitments of the respective Tranche on the Restatement Effective Date (or resulting from a conversion or conversions on a given date) having in the case of Euro Rate Loans the same Interest Period, provided that Base Rate Loans incurred pursuant to Section 2.10(b) shall be considered part of the related Borrowing of Euro Rate Loans.

“Business Day” shall mean (i) for all purposes other than as covered by clause (ii) below, any day except Saturday, Sunday and any day which shall be in New York City a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close, and (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on or with respect to, Euro Rate Loans, any day which is a Business Day described in clause (i) and which is also (A) in the case of Eurodollar Loans, a day for trading by and between banks in deposits in U.S. Dollars in the London interbank market and (B) in relation to any transaction in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open.

“Capital Expenditures” shall mean, for any period, the aggregate of (a) all expenditures (whether paid in cash or accrued as liabilities) by Aleris and the Restricted Subsidiaries during such period that, in conformity with GAAP, are or are required to be included as additions during such period to property, plant or equipment reflected in the consolidated balance sheet of Aleris and the Restricted Subsidiaries and (b) the value of all assets under Capitalized Lease Obligations incurred by Aleris and its Restricted Subsidiaries during such period; provided that the term “Capital Expenditures” shall not include:

(i) expenditures made in connection with the replacement, substitution, restoration or repair of assets to the extent financed with (x) insurance proceeds paid on account of the loss of or damage to the assets being replaced, restored or repaired or (y) awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced,

(ii) the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment to the extent that the gross amount of such purchase price is reduced by the credit granted by the seller of such equipment for the equipment being traded in at such time,

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(iii) the purchase of plant, property or equipment to the extent financed with the proceeds of Asset Sales that are not applied to prepay Loans pursuant to Section 4.02(c),

(iv) expenditures that constitute Consolidated Lease Expense,

(v) expenditures that are accounted for as capital expenditures by Aleris or any Restricted Subsidiary and that actually are paid for by a Person other than Aleris or any Restricted Subsidiary and for which neither a Borrower nor any Restricted Subsidiary has provided or is required to provide or incur, directly or indirectly, any consideration or obligation to such Person or any other Person (whether before, during or after such period),

(vi) the book value of any asset owned by a Borrower or any Restricted Subsidiary prior to or during such period to the extent that such book value is included as a capital expenditure during such period as a result of such Person reusing or beginning to reuse such asset during such period without a corresponding expenditure actually having been made in such period, provided that (x) any expenditure necessary in order to permit such asset to be reused shall be included as a Capital Expenditure during the period in which such expenditure actually is made and (y) such book value shall have been included in Capital Expenditures when such asset was originally acquired, or

(vii) expenditures that constitute acquisitions of Persons or business units permitted hereunder.

“Capital Stock” shall mean (a) in the case of a corporation, corporate stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Capitalized Lease Obligation” shall mean, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

“Cash Equivalents” shall mean, as to any Person, (i) securities issued or directly and fully guaranteed or insured by the United States or any agency, instrumentality or sponsored corporation thereof and backed by the full faith and credit of the United States, and in each case having maturities of not more than 24 months from the date of acquisition, (ii) U.S. Dollar denominated time deposits, certificates of deposit, overnight bank deposits and bankers’ acceptances having maturities within one year from the date of acquisition thereof issued by any Lender or any commercial bank of recognized standing, having capital and surplus in excess of $250,000,000, (iii) repurchase obligations for underlying securities of the types described in clauses (i) and (ii) above and entered into with any commercial bank meeting the qualifications specified in clause (ii) above, (iv) other investment instruments having maturities within 180

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days from the date of acquisition thereof offered or sponsored by financial institutions having capital and surplus in excess of $500,000,000, (v) readily marketable direct obligations issued by any state of the United States or any political subdivision thereof having maturities within 180 days from the date of acquisition thereof and having, at the time of acquisition thereof, one of the two highest rating categories obtainable from either Moody’s or S&P (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), (vi) commercial paper rated, at the time of acquisition thereof, at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), in each case maturing within one year after the date of acquisition, (vii) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (i) through (vi) above, (viii) in the case of any Foreign Subsidiary of Aleris, (x) certificates of deposit or bankers’ acceptances of any bank organized under the laws of Canada, Japan or any country that is a member of the European economic and monetary union pursuant to the Treaty whose short term commercial paper, at the time of acquisition thereof, is rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), or, if no such commercial paper rating is available, a long-term debt rating, at the time of acquisition thereof, of at least A or the equivalent thereof by S&P or at least A-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), in each case maturing not more than one year from the date of acquisition by such Foreign Subsidiary, (y) overnight deposits and demand deposit accounts maintained with any bank that such Foreign Subsidiary regularly transacts business and (z) securities of the type and maturity described in clause (i) above but issued by the principal Governmental Authority in which such Foreign Subsidiary is organized so long as such security has the highest rating available from either S&P or Moody’s, (ix) Indebtedness or Preferred Stock issued by Persons with a rating of “A” or higher from S&P or “A2” or higher from Moody’s with maturities of one year or less from the date of acquisition, (x) U.S. Dollars and (xi) Canadian dollars, Japanese yen, pounds sterling, Euros or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as the same has been amended and may hereafter be amended from time to time, 42 U.S.C. § 9601 et seq.

“Change of Control” shall mean the occurrence of any of the following:

(i) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of Aleris and its Subsidiaries, taken as a whole, to any person other than a Permitted Holder;

(ii) Aleris becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b) under the Exchange Act,

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or any successor provision), other than the Permitted Holders, in a single transaction or in a series of related transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more of the total voting power of the Voting Stock of Aleris or any of its direct or indirect parent companies; or

(iii) a “change of control” or similar event shall occur as provided in the ABL Credit Agreement and/or any permitted refinancing thereof, and/or as provided in the documentation relating to the New Senior Notes or the New Senior Subordinated Notes or, in each case, any Refinancing Indebtedness relating thereto.

“Code” shall mean the U.S. Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder. Section references to the Code are to the Code as in effect at the date of this Agreement and any subsequent provisions of the Code amendatory thereof, supplemental thereto or substituted therefor.

“Co-Documentation Agents” shall mean each of PNC Bank, National Association, National City Business Credit Inc. and Key Bank National Association, in their respective capacities as Co-Documentation Agents, and any successors thereto.

“Co-Investors” shall mean Persons (and their Affiliates) who, on the Restatement Effective Date, are limited partners of TPG Partners IV, L.P. or TPG Partners V, L.P.

“Collateral” shall mean, collectively, the Term Priority Collateral and the ABL Priority Collateral.

“Collateral Access Agreement” shall mean a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person (other than Aleris or any other Credit Party) in possession of, having a Lien upon, or having rights or interests in the books, Equipment or Inventory of any Borrower or any Subsidiary of a Borrower, in each case, in form and substance reasonably satisfactory to the Collateral Agent.

“Collateral Agent” shall mean DBNY, in its capacity as Collateral Agent for the Lenders hereunder, and shall include any successor to the Collateral Agent appointed pursuant to Section 10.09.

“Commitment” shall mean any of the commitments of any Lender, i.e., whether the U.S. Commitment or the German Commitment.

“Company Material Adverse Effect” shall mean a material adverse effect on (i) the business, results of operations or condition (financial or otherwise) of Aleris and its Subsidiaries taken as a whole or (ii) the ability of Aleris to timely consummate the transactions contemplated by the Merger Agreement, provided, that, a Company Material Adverse Effect shall not be deemed to include effects to the extent resulting from (A) changes in general economic conditions, (B) general changes or developments in the industries in which Aleris or its Subsidiaries operate, (C) changes in securities markets generally, (D) any act of war or terrorism (other than any of the foregoing that causes any damage or destruction to or renders unusable any facility or property of Aleris or any of its Subsidiaries), (E) changes, after the date

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hereof, in generally accepted accounting principles or interpretations thereof, (F) changes, after the date hereof, in Laws (as defined in the Merger Agreement), rules or regulations of general applicability or interpretations thereof by courts or Governmental Entities (as defined in the Merger Agreement), (G) the announcement of the Merger Agreement and the transactions contemplated thereby or (H) changes in the market price of the Shares (as defined in the Merger Agreement), unless in the case of the foregoing clauses (A), (B), (E) and (F), such changes referred to therein have a disproportionate effect on Aleris and its Subsidiaries, taken as a whole, when compared to other companies operating in the same industries in which Aleris or its Subsidiaries operate.

“Confidential Information Memorandum” shall mean the Confidential Information Memorandum of Aleris, dated November 2006.

“Consolidated Depreciation and Amortization Expense” shall mean with respect to any Person for any period, the total amount of depreciation and amortization expense, including the amortization of deferred financing fees and other related non-cash charges of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

“Consolidated EBITDA” shall mean, with respect to any Person for any period, the Consolidated Net Income of such Person for such period,

(a) increased by (without duplication): (i) provision for taxes based on income or profits, plus franchise or similar taxes, of such Person for such period deducted in computing Consolidated Net Income, plus (ii) consolidated Fixed Charges of such Person for such period to the extent the same was deducted in computing Consolidated Net Income, plus (iii) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent deducted in computing Consolidated Net Income, plus (iv) any expenses or charges related to any Equity Offering, Permitted Investment, acquisition, disposition, recapitalization or the incurrence of Indebtedness permitted to be incurred hereunder including a refinancing thereof (whether or not successful) and any amendment or modification to the terms of any such transactions, including such fees, expenses or charges related to the Corus Transaction and the Transaction, in each case, deducted in computing Consolidated Net Income, plus (v) the amount of any restructuring charge or reserve deducted in such period in computing Consolidated Net Income, including any one-time costs incurred in connection with (x) acquisitions after the Restatement Effective Date or (y) the closing of any production or manufacturing facilities after the Restatement Effective Date, plus (vi) any write offs, write downs or other non-cash charges reducing Consolidated Net Income for such period, excluding any such charge that represents an accrual or reserve for a cash expenditure for a future period, plus (vii) the amount of any minority interest expense deducted in computing Consolidated Net Income, plus (viii) the amount of management, monitoring, consulting and advisory fees and related expenses paid (or any accruals related to such fees or related expenses) during such period to the Sponsor and the Co-Investors to the extent permitted under Section 8.05, plus (ix)(A) the amount of cost savings projected by Aleris in good faith to be realized as a result of actions taken or expected to be taken during such period (calculated on a pro forma basis as though such cost savings had been

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realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (x) such cost savings are reasonably identifiable and factually supportable, (y) such actions are taken within 36 months after the Restatement Effective Date and (z) the aggregate amount of cost savings added pursuant to this clause (A) shall not exceed $40,000,000 for any four consecutive quarter period (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definition of “Fixed Charge Coverage Ratio”) and (B) the amount of (i) cost savings or (ii) increases in Consolidated EBITDA, in each case projected by Aleris in good faith to be realized as the result of the replacement of or modification to contractual arrangements with unaffiliated third parties (calculated on a pro forma basis as though such cost savings or increases in Consolidated EBITDA had been realized on the first day of such period) and, in the case of cost savings, net of the amount of actual benefits realized during such period from such action; provided that such contractual arrangements were entered into with a Person that was acquired by Aleris or its Restricted Subsidiaries within 12 months of any such replacement or modification, plus (x) any costs or expenses incurred by Aleris or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or stockholders agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of Aleris or net cash proceeds of issuance of Equity Interests of Aleris (other than Disqualified Stock that is Preferred Stock) in each case, solely to the extent that such cash proceeds are excluded from the calculation set forth in Section 8.04(a)(iii);

(b) decreased by (without duplication) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any gains that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period (other than such cash charges that have been added back to Consolidated Net Income in computing Consolidated EBITDA in accordance with this definition); and

(c) increased or decreased, as applicable, by (without duplication) (i) any net gain or loss resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards #133, (ii) any net gain or loss resulting in such period from currency translation gains or losses related to currency re-measurements of Indebtedness and (iii) the amount of gain or loss resulting in such period from a sale of receivables and related assets to a Receivables Subsidiary in connection with a Receivables Facility.

“Consolidated Interest Expense” shall mean, with respect to any Person for any period, the sum, without duplication, of (a) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including (i) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (ii) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers’ acceptances, (iii) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark-to-market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (iv) the interest component of Capitalized Lease Obligations and (v) net payments, if any, pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding

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(A) Additional Interest, (B) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses, (C) any expensing of bridge, commitment and other financing fees and (D) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Facility, plus (b) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, less (c) interest income for such period. For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

“Consolidated Lease Expense” shall mean for any period, all rental expenses of Aleris and its Restricted Subsidiaries during such period under operating leases for real or personal property (including in connection with Sale and Lease-Back Transactions permitted hereunder), excluding real estate taxes, insurance costs and common area maintenance charges and net of sublease income, other than (a) obligations under vehicle leases entered into in the ordinary course of business, (b) all such rental expenses associated with assets acquired pursuant to an acquisition of a Person or business unit to the extent such rental expenses relate to operating leases in effect at the time of (and immediately prior to) such acquisition and related to periods prior to such acquisition and (c) all Capitalized Lease Obligations, all as determined on a consolidated basis in accordance with GAAP.

“Consolidated Leverage Ratio”, with respect to any Person as of any date of determination, shall mean the ratio of (a) Consolidated Total Indebtedness of such Person as of the end of the most recent Fiscal Quarter for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (b) the aggregate amount of Consolidated EBITDA of such Person for the period of the most recently ended four full consecutive quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and Consolidated EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio”.

“Consolidated Net Income” shall mean, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided that, without duplication:

(a) any net after-tax extraordinary gains or losses or any non-recurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses (including, but not limited to, any expenses relating to severance, relocation, one-time compensation charges and the Transactions and any expenses directly attributable to the implementation of cost-saving initiatives) shall be excluded,

(b) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period, whether effected through a cumulative effect adjustment or a retroactive application in each case in accordance with GAAP,

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(c) any net after-tax income (loss) from disposed or discontinued operations and any net after-tax gains or losses on disposal of disposed or discontinued operations shall be excluded,

(d) any net after-tax gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions or the sale or other disposition of any Capital Stock of any Person other than in the ordinary course of business, as determined in good faith by Aleris, shall be excluded,

(e) the Net Income for such period of any Person that is not a Subsidiary of Aleris, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of such Person shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period (subject in the case of dividends, distributions or other payments made to a Restricted Subsidiary to the limitations contained in clause (f) below),

(f) solely for the purpose of determining the amount available for Restricted Payments under Section 8.04(a)(iii)(A), the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded if the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination wholly permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived; provided that Consolidated Net Income of Aleris will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) to Aleris or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein,

(g) any increase in amortization or depreciation or other non-cash charges resulting from the application of purchase accounting in relation to the Corus Transaction, the Transaction or any acquisition that is consummated after the Restatement Effective Date, net of taxes, shall be excluded,

(h) any net after-tax income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments shall be excluded,

(i) any impairment charge or asset write-off, in each case pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded, and

(j) any non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights to officers, directors or employees shall be excluded.

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Notwithstanding the foregoing, for the purpose of Section 8.04 only (other than clause (a)(iii)(D) thereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by Aleris and the Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from Aleris and the Restricted Subsidiaries, any repayments to Aleris or a Restricted Subsidiary of loans and advances that constitute Restricted Investments, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under Section 8.04(a)(iii)(D).

“Consolidated Secured Debt Ratio” as of any date of determination shall mean the ratio of (a) Consolidated Total Indebtedness of Aleris and the Restricted Subsidiaries that is secured by Liens as of the end of the most recent Fiscal Quarter for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (b) the aggregate amount of Consolidated EBITDA of Aleris and the Restricted Subsidiaries for the most recently ended consecutive four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and Consolidated EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio”.

“Consolidated Total Indebtedness” shall mean, as at any date of determination, an amount equal to the sum of (a) the aggregate amount of all outstanding Indebtedness of Aleris and the Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, obligations in respect of Capitalized Lease Obligations, Attributable Debt in respect of Sale and Lease-Back Transactions and debt obligations evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (and excluding (x) any undrawn letters of credit and (y) all obligations relating to Receivables Facilities) and (b) the aggregate amount of all outstanding Disqualified Stock of Aleris and all Disqualified Stock and Preferred Stock of the Restricted Subsidiaries (excluding items eliminated in consolidation), with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences and Maximum Fixed Repurchase Prices, in each case determined on a consolidated basis in accordance with GAAP. For purposes of this definition, the “Maximum Fixed Repurchase Price” of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to this Agreement, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock, such fair market value shall be determined reasonably and in good faith by Aleris.

“Consolidated Working Capital” shall mean, at any date, the excess of (a) the sum of all amounts (other than cash and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of Aleris and its Restricted Subsidiaries at such date over (b) the sum of all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current

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liabilities” (or any like caption) on a consolidated balance sheet of Aleris and its Restricted Subsidiaries on such date, including deferred revenue but excluding, without duplication, (i) the current portion of any Funded Debt, (ii) the current portion of interest and (iii) the current portion of current and deferred income taxes.

“Contingent Obligations” shall mean, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (the “primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

“Conversion Event” shall mean (i) the occurrence of any Event of Default with respect to either Borrower pursuant to Section 9.05, (ii) the declaration of the termination of any Commitment, or the acceleration of the maturity of any Loans, in each case pursuant to the penultimate paragraph of Section 9 or (iii) the failure of either Borrower to pay any principal of, or interest on, Loans of any Tranche on or before the tenth Business Day following the Final Maturity Date.

“Converted German Loan” shall have the meaning provided in Section 2.01(b).

“Converted U.S. Loan” shall have the meaning provided in Section 2.01(a).

“Corus Acquired Business” shall mean the business acquired pursuant to the Corus Acquisitions.

“Corus Acquisitions” shall mean, the acquisition consummated on August 1, 2006 by Aleris and its Subsidiaries of (i) all of the limited partnership interests in Corus L.P., a limited partnership organized under the laws of Quebec and all of the shares of Corus Aluminium Inc., a corporation organized under the laws of Quebec and each of their respective Subsidiaries and (ii) all of the beneficial interest in the entire share capital of Corus Hylite BV, Corus Aluminium Rolled Products BV, Corus Aluminium NV, Corus Aluminium GmbH, Corus Aluminium Corp. and Hoogovens Aluminium Europe Inc. and each of their respective Subsidiaries.

“Corus Transaction” shall mean, collectively, (i) the entering into of the Existing Term Loan Agreement and the related documentation and the incurrence of Loans on the Original Effective Date, (ii) the refinancing of certain existing Indebtedness of Aleris and the Corus Acquired Business on the Original Effective Date, (iii) the consummation of the Corus Acquisitions, (iv) the incurrence of the Existing Senior Bridge Loans on the Original Effective Date, (v) the incurrence of the revolving loans and the issuance of letters of credit under the Existing ABL Credit Agreement on the Original Effective Date, (vi) all intercompany loans, equity contributions, repayments of intercompany loans, dividends, distributions and other

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intercompany Investments related to the foregoing and (vii) the payment of all fees and expenses in connection with the foregoing.

“Credit Document Acknowledgement and Amendment” shall mean the Credit Document Acknowledgement and Amendment in the form of Exhibit F-3, as amended, modified, restated or supplemented from time to time.

“Credit Documents” shall mean this Agreement and, after the execution and delivery thereof pursuant to the terms of this Agreement, each Note, each Guaranty and each Security Document.

“Credit Party” shall mean each Borrower and each Guarantor.

“DBNY” shall mean Deutsche Bank AG New York Branch, in its individual capacity, and any successor corporation thereto by merger, consolidation or otherwise.

“Decree” shall have the meaning provided in Section 11.26(a).

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

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default is in effect.

“Derivative Transaction” shall mean (a) an interest-rate transaction, including an interest-rate swap, basis swap, forward rate agreement, interest rate option (including a cap, collar, and floor), and any other instrument linked to interest rates that gives rise to similar credit risks (including when-issued securities and forward deposits accepted), (b) an exchange-rate transaction, including a cross-currency interest-rate swap, a forward foreign-exchange contract, a currency option, and any other instrument linked to exchange rates that gives rise to similar credit risks, (c) an equity derivative transaction, including an equity-linked swap, an equity-linked option, a forward equity-linked contract, and any other instrument linked to equities that gives rise to similar credit risk and (d) a commodity (including precious metal) derivative transaction, including a commodity-linked swap, a commodity-linked option, a forward commodity-linked contract, and any other instrument linked to commodities that gives rise to similar credit risks; 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 Aleris or its Subsidiaries shall be a Derivative Transaction.

“Designated Non-cash Consideration” shall mean the fair market value of non-cash consideration received by Aleris or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an officers’ certificate, setting forth the basis of such valuation, executed by an executive vice president and the principal financial officer of Aleris (or a parent company thereof), less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.

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“Designated Preferred Stock” shall mean Preferred Stock of Aleris or any parent company thereof (in each case other than Disqualified Stock) that is issued for cash (other than to Aleris or a Restricted Subsidiary) and is so designated as Designated Preferred Stock pursuant to an officers’ certificate executed by an executive vice president and the principal financial officer of Aleris or the applicable parent company thereof, as the case may be, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in Section 8.04(a)(iii).

“Disqualified Lender” shall mean any Person designated by Aleris in writing to the Administrative Agent in accordance with that certain letter agreement dated as of August 7, 2006 between Holdings, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc. and DBNY.

“Disqualified Stock” shall mean, with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable (other than solely for Capital Stock that is not Disqualified Stock), other than as a result of a change of control or asset sale, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, other than as a result of a change of control or asset sale, in whole or in part, in each case prior to the date that is 91 days after the earlier of the Final Maturity Date and the date the Loans are no longer outstanding; provided that if such Capital Stock is issued to any plan for the benefit of employees of Aleris or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by Aleris or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or any obligation under any such plan.

“Distribution Subsidiary” shall mean each Subsidiary of the Swiss CE.

“Documents” shall mean the Credit Documents and the Merger Documents.

“Dollar Denominated Loan” shall mean all Loans incurred in U.S. Dollars (and all Loans converted into U.S. Dollars pursuant to Section 2.14, after the conversion thereof).

“Dollar Equivalent” shall mean, in the case of any Euro Denominated Loan, the amount of U.S. Dollars which could be purchased with the amount of Euros involved in such computation at (x) the spot exchange rate as shown in the Wall Street Journal on the date which is one Business Day prior to any such determination (or on such other basis as is satisfactory to the Administrative Agent) or (y) if the provisions of the foregoing clause (x) are not applicable, the “official” exchange rate (if applicable) or the spot exchange rate for Euros calculated by the Administrative Agent (each such exchange rate, the “Spot Exchange Rate”); provided that notwithstanding anything to the contrary contained in this definition, at any time that a Default or an Event of Default then exists, the Administrative Agent may revalue the Dollar Equivalent of any amounts outstanding under the Credit Documents in Euros in its reasonable discretion using the Spot Exchange Rates therefor.

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“Domestic Subsidiary” shall mean each Subsidiary of Aleris incorporated or organized in the United States or any State or territory thereof.

“Eligible Transferee” shall mean and include a commercial bank, an insurance company, a finance company, a financial institution, any fund that invests in loans or any other “accredited investor” as defined in Regulation D of the Securities Act) (but excluding natural persons), but in any event excluding the Permitted Holders and their Affiliates and Holdings and its Subsidiaries; provided, however, that, unless otherwise agreed by Aleris, during the existence of an Event of Default, no Person (other than a Lender) shall be an “Eligible Transferee” if the assignment of any Loans to such Person would cause such Person to have Loans in excess of 25% of the aggregate outstanding Loans at such time.

“Environmental Claims” shall mean any and all administrative, regulatory or judicial actions, suits, written demands, demand letters, directives, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, “Claims”), including, without limitation, (a) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials.

“Environmental Law” shall mean any federal, state, provincial, foreign, multi-national or local statute, law, rule, regulation, ordinance, code, directive, guidance or policy having the effect of law, and rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment or Hazardous Materials, including, without limitation, CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq.; and any state and local or foreign counterparts or equivalents, in each case as amended from time to time.

“Equipment” shall mean “equipment” (as such term is defined in Article 9 of the UCC) and includes machinery, machine tools, motors, furniture, furnishings, fixtures, vehicles (including motor vehicles), computer hardware, tools, parts, and goods (other than consumer goods, farm products, or Inventory), wherever located, including all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing.

“Equity Financing” shall have the meaning provided in Section 5.05.

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“Equity Interests” shall mean Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.

“Equity Offering” shall mean any public or private sale of common stock or Preferred Stock of Aleris or any of its direct or indirect parent companies (excluding Disqualified Stock), other than (a) public offerings with respect to Aleris’ or any direct or indirect parent company’s common stock registered on Form S-4 or Form S-8, (b) any such public or private sale that constitutes an Excluded Contribution and (c) an issuance to Aleris or any Subsidiary of Aleris.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that together with Aleris is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) 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; (c) 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; (d) the incurrence by Aleris or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by Aleris or any ERISA Affiliate from the PBGC or a plan administrator of any notice of an intent to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by Aleris or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by Aleris or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from Aleris or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is insolvent or in reorganization, within the meaning of Title IV of ERISA.

“Euro Denominated Loan” shall mean each German Loan denominated in Euros at the time of the incurrence thereof (unless and until converted into Dollar Denominated Loans pursuant to Section 2.14).

“Euro LIBOR” shall mean, with respect to each Borrowing of Euro Denominated Loans, (i) the rate per annum for deposits in Euros as determined by the Administrative Agent for a period corresponding to the duration of the relevant Interest Period which appears on Reuters Page EURIBOR-01 (or any successor page) at approximately 11:00 a.m. (Brussels time) on the date which is two Business Days prior to the commencement of such Interest Period or (ii) if such rate is not shown on Reuters Page EURIBOR-01 (or any successor page), the average offered quotation to prime banks in the Euro-zone interbank market by the Administrative Agent for Euro deposits of amounts comparable to the principal amount of the Euro Denominated Loan

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to be made by the Administrative Agent as part of such Borrowing (or, if the Administrative Agent is not a Lender with respect thereto, taking the average principal amount of Euro Denominated Loans then being made by the various Lenders pursuant thereto) with maturities comparable to the Interest Period to be applicable to such Loan (rounded upward to the next whole multiple of 1/16 of 1%), determined as of 11:00 a.m. (Brussels time) on the date which is two Business Days prior to the commencement of such Interest Period; provided that in the event the Administrative Agent has made any determination pursuant to Section 2.10(a)(i) in respect of Euro Denominated Loans, or in the circumstances described in clause (i) to the proviso to Section 2.10(b) in respect of Euro Denominated Loans, Euro LIBOR determined pursuant to this definition shall instead be the rate determined by the Administrative Agent as the all-in-cost of funds for the Administrative Agent (or such other Lenders) to fund a Borrowing of Euro Denominated Loans with maturities comparable to the Interest Period applicable thereto.

“Euro Rate” shall mean and include each of the Eurodollar Rate and Euro LIBOR.

“Euro Rate Loan” shall mean and include each Eurodollar Loan and each Euro Denominated Loan.

“Eurodollar Loans” shall mean each Dollar Denominated Loan designated as such by the U.S. Borrower at the time of the incurrence thereof or conversion thereto.

“Eurodollar Rate” shall mean the rate per annum obtained by dividing (i)(a) the per annum rate that appears on page 3750 of the Dow Jones Markets Screen (or any successor page) for U.S. Dollar deposits with maturities comparable to the Interest Period applicable to the Eurodollar Loan subject to the respective Borrowing commencing two Business Days thereafter as of 10:00 a.m. (New York time) on the date which is two Business Days prior to the commencement of the respective Interest Period or (b) if such a rate does not appear on page 3750 of the Dow Jones Markets Screen (or any successor page), the offered quotation to first-class banks in the New York interbank Eurodollar market by the Administrative Agent for U.S. Dollar deposits of amounts in immediately available funds comparable to the outstanding principal amount of the applicable Eurodollar Loan for which the Eurodollar Rate is being determined with maturities comparable to the Interest Period applicable to such Eurodollar Loan commencing two Business Days thereafter as of 10:00 a.m. (New York time) on the applicable Interest Determination Date, in each case (and rounded upward to the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves required by applicable law) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D).

“European Credit Party” shall mean the German Borrower, each European Parent Guarantor and each European Subsidiary Guarantor.

“European Manufacturing Subsidiaries” shall mean each of the Subsidiaries of Aleris organized in any country which is a member state of the European Community established pursuant to the Treaty or any other jurisdiction reasonably satisfactory to the Administrative Agent, designated by Aleris in writing to the Administrative Agent as a “European

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Manufacturing Subsidiary”; provided that in no event shall such term include the Swiss CE or any of its Subsidiaries. On the Restatement Effective Date, the European Manufacturing Subsidiaries consist of the Subsidiaries designated as such on Schedule V.

“European Parent Guarantor” shall mean each of (i) the direct parent of each of the Swiss CE and German Borrower and (ii) the direct or indirect parent of the entity described in preceding clause (i) which is not a U.S. Credit Party. On the Restatement Effective Date, the European Parent Guarantors are Dutch Aluminum CV and IMCO Recycling Holding BV.

“European Parent Guaranty” shall mean the European Parent Guaranty in the form of Exhibit G-3 (as amended, modified or supplemented from time to time).

“European Parent Pledge Agreement” shall mean each European Parent Pledge Agreement in the form of Exhibit F-2 or such other pledge agreement in form and substance reasonably satisfactory to the Administrative Agent (as amended, modified or supplemented from time to time).

“European Security Agreement” shall mean each security agreement or document delivered by a European Credit Party pursuant to the Existing Term Loan Agreement (as amended, modified or supplemented from time to time).

“European Security Documents” shall mean each European Security Agreement and each Additional Security Document covering assets of the European Credit Parties.

“European Subsidiaries Guaranty” shall mean the European Subsidiaries Guaranty in the form of Exhibit G-2 (as amended, modified or supplemented from time to time).

“European Subsidiary” shall mean any Subsidiary of the German Borrower that is incorporated or organized under the laws of any country which is a member state of the European Community established pursuant to the Treaty.

“European Subsidiary Guarantor” shall mean (i) on the Restatement Effective Date, the Subsidiaries of the German Borrower designated as European Subsidiary Guarantors on Schedule V hereto and (ii) from and after the Restatement Effective Date, any Foreign Subsidiary of Aleris that is a Wholly-Owned Subsidiary (other than the Swiss CE and its Subsidiaries, the German Borrower and the European Parent Guarantors) that becomes a European Subsidiary Guarantor pursuant to Section 7.10, in each case until such time as the respective European Subsidiary Guarantor is released from all of its obligations under its European Subsidiaries Guaranty in accordance with the terms and provisions thereof.

“Euros” and the designation “€” shall mean the currency introduced on January 1, 1999 at the start of the third stage of European economic and monetary union pursuant to the Treaty.

“Event of Default” shall have the meaning provided in Section 9.

“Excess Cash Flow” shall mean, for any Fiscal Year, an amount equal to the excess of:

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(a) the sum, without duplication, of: (i) Consolidated Net Income for such period, (ii) an amount equal to the amount of all non-cash charges to the extent deducted in arriving at such Consolidated Net Income, (iii) decreases in Consolidated Working Capital and long-term account receivables for such period (other than any such decreases arising from acquisitions or dispositions by Aleris and its Restricted Subsidiaries completed during such period), (iv) an amount equal to the aggregate net non-cash loss on the sale, lease, transfer or other disposition of assets by Aleris and its Restricted Subsidiaries during such period (other than sales in the ordinary course of business) to the extent deducted in arriving at such Consolidated Net Income; and (v) the amount of all cash payments during such period that are associated with any income and withholding taxes that reduced Excess Cash Flow in a previous period pursuant to clause (b)(xiii) below; over

(b) the sum, without duplication, of: (i) an amount equal to the amount of all non-cash credits included in arriving at such Consolidated Net Income and cash charges included in clauses (a) through (j) of the definition of Consolidated Net Income, (ii) without duplication of amounts deducted pursuant to clause (xi) below in prior periods, the amount of Capital Expenditures made in cash during such period, except to the extent that such Capital Expenditures were financed with the proceeds of Indebtedness of Aleris or its Restricted Subsidiaries, (iii) the aggregate amount of all principal payments of Indebtedness of Aleris and its Restricted Subsidiaries (including (x) the principal component of payments in respect of Capitalized Lease Obligations and (y) the amount of any prepayment of Loans pursuant to Section 4.01, 4.02(c) or (d) made with the proceeds of an Asset Sale or Recovery Event to the extent such Asset Sale or Recovery Event resulted in an increase to Consolidated Net Income and not in excess of the amount of such increase, but excluding all other prepayments of the Loans and (z) prepayments of loans under the ABL Credit Agreement to the extent there is an equivalent permanent reductions in commitments thereunder) made during such period (other than in respect of any revolving credit facility to the extent there is not an equivalent permanent reduction in commitments thereunder), except to the extent financed with the proceeds of other long-term Indebtedness of Aleris or its Restricted Subsidiaries, (iv) an amount equal to the aggregate net non-cash gain on the sale, lease, transfer or other disposition of assets by Aleris and its Restricted Subsidiaries during such period (other than sales in the ordinary course of business) to the extent included in arriving at such Consolidated Net Income, (v) increases in Consolidated Working Capital and long-term account receivables for such period (other than any such increases arising from acquisitions of a Person or business unit by Aleris and its Restricted Subsidiaries during such period), (vi) cash payments by Aleris and its Restricted Subsidiaries during such period in respect of long-term liabilities of Aleris and its Restricted Subsidiaries other than Indebtedness, (vii) without duplication of amounts deducted pursuant to clause (xi) below in prior periods, the amount of Investments and acquisitions made during such period to the extent permitted hereunder, to the extent that such Investments and acquisitions were financed with internally generated cash flow of Aleris and its Restricted Subsidiaries, (viii) the amount of Restricted Payments made during such period to the extent permitted under Section 8.04(b)(xvi), to the extent that such Restricted Payments were financed with internally generated cash flow of Aleris and its Restricted Subsidiaries, (ix) the aggregate amount of expenditures actually made by Aleris and the Restricted Subsidiaries in cash

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during such period (including expenditures for the payment of financing fees) to the extent that such expenditures are not expensed during such period, (x) the aggregate amount of any premium, make-whole or penalty payments actually paid in cash by Aleris and its Restricted Subsidiaries during such period that are required to be made in connection with any prepayment of Indebtedness, (xi) without duplication of amounts deducted from Excess Cash Flow in prior periods, the aggregate consideration required to be paid in cash by the Borrower or any of its Restricted Subsidiaries pursuant to binding contracts (the “Contract Consideration”) entered into prior to or during such period relating to acquisitions or Capital Expenditures to be consummated or made during the period of four consecutive Fiscal Quarters following the end of such period, provided that to the extent the aggregate amount of internally generated cash actually utilized to finance such acquisitions or Capital Expenditures during such period of four consecutive fiscal quarters is less than the Contract Consideration, the amount of such shortfall shall be added to the calculation of Excess Cash Flow at the end of such period of four consecutive Fiscal Quarters, (xii) the amount of cash taxes paid in such period to the extent they exceed the amount of tax expense deducted in determining Consolidated Net Income for such period and (xiii) an amount equal to the income and withholding taxes (as estimated in good faith by senior financial or senior accounting officer of Aleris giving effect to the overall tax position of Aleris and its Subsidiaries) payable in the period following the period for which Excess Cash Flow is determined in respect of that amount of Excess Cash Flow that is attributable to the actual repatriation to Aleris or any of its Subsidiaries of undistributed earnings of Foreign Subsidiaries of Aleris to enable Aleris to prepay the Loans as required under Section 4.02(e) in respect of Excess Cash Flow for such period.

“Excess Cash Flow Payment Date” shall mean the date occurring 105 days after the last day of each Fiscal Year (commencing with the Fiscal Year ending December 31, 2007).

“Excess Cash Flow Payment Period” shall mean, with respect to the repayment required on each Excess Cash Flow Payment Date, the immediately preceding Fiscal Year.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Contribution” shall mean net cash proceeds, marketable securities or Qualified Proceeds received by Aleris from (a) contributions to its common equity capital, and (b) the sale (other than to a Subsidiary of Aleris or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of Aleris) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of Aleris, in each case designated as Excluded Contributions pursuant to an officers’ certificate executed by an executive vice president and the principal financial officer of Aleris on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in Section 8.04(a)(iii).

“Existing ABL Credit Agreement” shall mean the Credit Agreement, dated as of August 1, 2006, by and among Aleris, each other U.S. borrower party thereto, Corus S.E.C./Corus L.P., acting and represented by its general partner Corus Aluminium Inc., Aleris

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Switzerland GmbH, each other Subsidiary of Aleris party thereto, the lenders party thereto, Deutsche Bank AG New York Branch, as administrative agent and Deutsche Bank AG, Canada Branch, as Canadian administrative agent.

“Existing German Loan” shall mean each “German Loan” under, and as defined in, the Existing Term Loan Agreement as of the Restatement Effective Date.

“Existing Indebtedness” shall have the meaning provided in Section 6.19.

“Existing Lender” shall mean each “Lender” under, and as defined in, the Existing Term Loan Agreement as of the Restatement Effective Date.

“Existing Loans” shall mean each “Loan” under, and as defined in, the Existing Term Loan Agreement as of the Restatement Effective Date.

“Existing Mortgage Policy” shall mean each mortgagee title insurance policy issued in connection with the Existing Term Creditor Mortgages.

“Existing Senior Bridge Loan Agreement” shall mean the Bridge Loan Credit Agreement dated August 1, 2006 among Aleris and the lenders party thereto as in effect on the Restatement Effective Date.

“Existing Senior Bridge Loans” shall mean the loans made under the Senior Bridge Loan Agreement.

“Existing Term Creditor Mortgages” shall mean the mortgages, debentures or deeds of trust delivered pursuant to the Existing Term Loan Agreement.

“Existing Term Loan Agreement” shall have the meaning provided in the recitals.

“Existing U.S. Loan” shall mean a “U.S. Loan” under, and as defined in, the Existing Term Loan Agreement as of the Restatement Effective Date.

“Existing U.S. Mortgaged Properties” shall have the meaning provided in Section 5.09.

“Federal Funds Rate” shall mean, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent.

“Fees” shall mean all amounts payable pursuant to or referred to in Section 3.01.

“Final Maturity Date” shall mean December 19, 2013.

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“Financial Officer” of any Person shall mean the chief financial officer, controller or treasurer of such Person.

“First Priority” shall mean, with respect to any Lien purported to be created on any Collateral pursuant to any Security Document, that such Lien is prior in right to any other Lien thereon, other than Permitted Collateral Liens.

“Fiscal Quarter” shall mean a fiscal quarter of any Fiscal Year.

“Fiscal Year” shall mean the fiscal year of Aleris and its Subsidiaries ending on December 31 of each calendar year.

“Fixed Assets” shall mean at any time (i) all of the Term Priority Collateral at such time, (ii) Equity Interests of any Person and (iii) all other Material Real Property and other property, plant, equipment and intellectual property of Aleris and its Restricted Subsidiaries, in each case with a fair market value in excess of $2,500,000 at such time.

“Fixed Charge Coverage Ratio” shall mean, with respect to any Person for any period, the ratio of Consolidated EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that Aleris or any Restricted Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than Indebtedness incurred under any revolving credit facility that has been permanently repaid and has not been replaced) or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishing of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four Fiscal Quarter period (the “reference period”).

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, consolidations and disposed operations (as determined in accordance with GAAP) that have been made by Aleris or any Restricted Subsidiary during the reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and disposed operations (and the change in any associated fixed charges and the change in Consolidated EBITDA resulting therefrom) had occurred on the first day of the reference period. If since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into Aleris or any Restricted Subsidiary since the beginning of such period) shall have made any Investment, acquisition, disposition, merger, consolidation or disposed operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or disposed operation had occurred at the beginning of the reference period.

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For purposes of this definition, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Aleris. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of Aleris to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as Aleris may designate.

“Fixed Charges” shall mean, with respect to any Person for any period, the sum of (a) Consolidated Interest Expense of such Person for such period, (b) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock made during such period, and (c) all cash dividend payments (excluding items eliminated in consolidation) on any series of Disqualified Stock made during such period.

“Foreign Lender” shall mean a Lender to the U.S. Borrower that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code).

“Foreign Pension Plan” shall mean a material registered pension plan which is subject to applicable pension legislation other than ERISA or the Code, which Aleris or a Subsidiary of Aleris sponsors or maintains, or to which it makes or is obligated to make contributions with respect to which any liability is borne, outside the 50 states of the United States.

“Foreign Plan” shall mean each Foreign Pension Plan, and each material deferred compensation or other retirement or superannuation plan, fund, program, agreement, commitment or arrangement whether oral or written, funded or unfunded, sponsored, established, maintained or contributed to, or required to be contributed to, or with respect to which any liability is borne, outside the fifty states of the United States of America, by Aleris or any of its Subsidiaries, which plan, fund, agreement, commitment or arrangement provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment and which plan is not subject to ERISA or the Code.

“Foreign Subsidiary” shall mean each Subsidiary of Aleris that is incorporated or organized under the laws of any jurisdiction other than the United States or any State or territory thereof.

“Foreign Subsidiary Total Assets” shall mean the total amount of all assets of Foreign Subsidiaries of Aleris and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP as shown on the most recent balance sheet of Aleris.

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“Funded Debt” shall mean all Indebtedness of Aleris and its Restricted Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including Indebtedness in respect of the Loans.

“GAAP” shall mean generally accepted accounting principles in the United States as in effect from time to time; provided that determinations in accordance with GAAP for purposes of Section 8, including defined terms as used therein, are subject (to the extent provided therein) to Section 11.07(a).

“German Borrower” shall have the meaning provided in the first paragraph of this Agreement.

“German Borrower Obligations” shall mean all amounts owing to the Administrative Agent, the Collateral Agent or any Lender by the German Borrower pursuant to the terms of this Agreement or any other Credit Document.

“German Borrowing Party” means a Borrower subject to corporation income tax or income tax in the Federal Republic of Germany or a company which is deemed to be a borrower according to paragraph 5 of section 8a of the German Corporation Tax Act (Körperschaftssteuergesetz).

“German Commitment” shall mean, for each Lender, the amount set forth opposite such Lender’s name in Schedule I directly below the column entitled “German Commitment,” as the same may be (x) reduced from time to time or terminated pursuant to Sections 3.02, 3.03 and/or 9, as applicable, or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 2.13 or 11.04(b).

“German Lender” shall mean each Lender which has a German Commitment or which has any outstanding German Loans. Unless the context otherwise requires, each reference in this Agreement to a Lender includes each German Lender and shall include references to any Affiliate of any such Lender which is acting as a German Lender.

“German Loan” shall have the meaning provided in Section 2.01(b).

“German Security” shall have the meaning provided in Section 11.25(b).

“German Term Note” shall have the meaning provided in Section 2.05(a).

“Governmental Authority” shall mean any federal (including the federal government of Canada), state, local, provincial, foreign, multi-national or other governmental or administrative body, instrumentality, department, board, or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.

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“Guaranteed Creditors” shall mean and include (x) the Administrative Agent, the Collateral Agent and each Lender and (y) each Other Creditor.

“Guaranteed Party” shall mean (x) the German Borrower and (y) each Subsidiary of Aleris party to a Secured Hedging Agreement.

“Guarantor” shall mean Aleris, each U.S. Subsidiary Guarantor, each European Parent Guarantor, each European Subsidiary Guarantor, the VAW-IMCO Guarantor and the Luxco Guarantor.

“Guaranty” shall mean the U.S. Borrower Guaranty, the U.S. Subsidiaries Guaranty, each European Parent Guaranty, each European Subsidiaries Guaranty, the VAW-IMCO Guaranty and the Luxco Guaranty.

“Hazardous Materials” shall mean (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation and dielectric fluid containing levels of polychlorinated biphenyls; (b) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous substances,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” under any applicable Environmental Law; and (c) any other chemical, material or substance, the exposure to, or Release of which is prohibited, limited or regulated by any Governmental Authority under any applicable Environmental Law.

“Hedge Agreement” shall mean any agreement with respect to any Derivative Transaction between Aleris or any Subsidiary and any other Person.

“Hedging Obligations” shall mean, with respect to any Person, the obligations of such Person under currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements and other agreements or arrangements, in each case designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

“Holdings” shall mean Aurora Acquisition Holdings, Inc., a Delaware corporation.

“IFRS” shall mean the body of pronouncements issued by the International Accounting Standards Board (IASB), including International Financial Reporting Standards and interpretations approved by the IASB, International Accounting Standards and Standing Interpretations Committee interpretations approved by the predecessor International Accounting Standards Committee and adapted for use in the European Union.

“Immaterial Subsidiary” shall mean, at any date of determination, any Restricted Subsidiary designated as such in writing by Aleris that (i) contributed 2.5% or less of Consolidated EBITDA of Aleris and its Restricted Subsidiaries for the period of four Fiscal Quarters most recently ended more than 45 days prior to the date of determination and (ii) had consolidated assets representing 2.5% or less of Total Assets on the last day of the most recent

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Fiscal Quarter ended more than 45 days prior to the date of determination. The Immaterial Subsidiaries as of the Restatement Effective Date are listed on Schedule XV.

“incur” has the meaning set forth in Section 8.01.

“incurrence” has the meaning set forth in Section 8.01.

“Indebtedness” shall mean, with respect to any Person, (a) any indebtedness (including principal and premium) of such Person, whether or not contingent (i) in respect of borrowed money, (ii) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without double counting, reimbursement agreements in respect thereof), (iii) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except any such balance that constitutes a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business, or (iv) representing any Hedging Obligations, if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; (b) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (a) of another Person (whether or not such items would appear upon the balance sheet of such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; (c) to the extent not otherwise included, the obligations of the type referred to in clause (a) of another Person secured by a Lien on any asset owned by such Person, whether or not such obligations are assumed by such Person and whether or not such obligations would appear upon the balance sheet of such Person; provided that the amount of such Indebtedness will be the lesser of the fair market value of such asset at the date of determination and the amount of Indebtedness so secured; and (d) Attributable Debt in respect of Sale and Lease-Back Transactions; provided, however, that notwithstanding the foregoing, Indebtedness will be deemed not to include (A) Contingent Obligations incurred in the ordinary course of business and (B) obligations under, or in respect of, Receivables Facilities.

“Independent Financial Advisor” shall mean an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of Aleris, qualified to perform the task for which it has been engaged and that is independent of Aleris and its Affiliates.

“Indirect Section 4.04 Indemnitee” shall mean each Section 4.04 Indemnitee that is not a Lender or the Administrative Agent.

“Initial Lien” shall have the meaning provided in Section 8.02.

“Intercreditor Agreement” shall have the meaning provided in Section 5.10.

“Interest Determination Date” shall mean, with respect to any Euro Rate Loan for any Interest Period, the second Business Day prior to the commencement of such Interest Period.

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“Interest Period” shall mean as to any Borrowing of Euro Rate Loans, the interest period applicable to such Borrowing of Euro Rate Loans selected pursuant to, and otherwise subject to the provisions of, Section 2.09.

“Interest Rate Protection Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement or other similar agreement or arrangement.

“Inventory” shall mean “inventory” (as such term is defined in Article 9 of the UCC).

“Investment Grade Securities” shall mean (a) securities issued or directly and fully guaranteed or insured by the government of the United States of America or any agency or instrumentality thereof (other than Cash Equivalents), (b) debt securities or debt instruments with a rating of BBB- or higher by S&P or Baa3 or higher by Moody’s or the equivalent of such rating by such rating organization, or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any other nationally recognized securities rating agency, but excluding any debt securities or instruments constituting loans or advances among Aleris and its subsidiaries, (c) investments in any fund that invests exclusively in investments of the type described in clauses (a) and (b), which fund may also hold immaterial amounts of cash pending investment or distribution and (d) corresponding instruments in countries other than the United States of America customarily utilized for high quality investments.

“Investments” shall mean, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (including by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others, but excluding accounts receivable, trade credit, advances to customers, commission, travel and similar advances to officers and employees, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 8.04, (a) “Investments” shall include the portion (proportionate to Aleris’ equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of Aleris at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, Aleris shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (i) Aleris’ “Investment” in such Subsidiary at the time of such redesignation, less (ii) the portion (proportionate to Aleris’ equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation, and (b) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by Aleris.

“Joinder Agreement” shall have the meaning provided in Section 7.10.

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“Joint Book Running Managers” shall mean Deutsche Bank Securities Inc. and Goldman Sachs Credit Partners L.P.

“Joint Lead Arrangers” shall mean Deutsche Bank Securities Inc. and Goldman Sachs Credit Partners L.P. in their capacities as Joint Lead Arrangers, and any successors thereto.

“Judgment Currency” shall have the meaning provided in Section 11.22(a).

“Judgment Currency Conversion Date” shall have the meaning provided in Section 11.22(a).

“Leaseholds” of any Person shall mean all the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures.

“Lender” shall mean each financial institution listed on Schedule I, as well as any Person that becomes a “Lender” hereunder pursuant to Section 2.13 or 11.04(b).

“Lender Default” shall mean (i) the refusal (which has not been retracted) or the failure of a Lender to make available its portion of any Borrowing, (ii) a Lender having notified in writing any Credit Party and/or the Administrative Agent that such Lender does not intend to comply with its obligations under Section 2.01 or (iii) for purposes of Section 2.13 or 4.01(b) only, the commencement of insolvency proceedings with respect to a Lender or the takeover by any Governmental Authority of the assets or management of a Lender.

“Lien” shall mean, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the UCC (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease be deemed to constitute a Lien.

“Loan” shall mean each U.S. Loan and each German Loan.

“Local GAAP” shall mean with respect to any Foreign Subsidiary of Aleris generally accepted accounting principles in the jurisdiction of organization of such Subsidiary as in effect from time to time or, at the option of such Foreign Subsidiary, IFRS.

“Local Law Pledge Agreement” shall have the meaning provided in Section 5.08(h).

“LTIBR” shall mean any interest bearing receivables as defined in marginal notes 20 and 37 of the Decree of the Federal Ministry of Finance (Bundesministerium für Finanzen) IV A “ – S 2742a – 20/04 dated 15 July 2004, Federal Tax Gazette I 2004, 593 (“Decree of 15 July 2004”) together with marginal note 1 of the Decree of the Federal Ministry of Finance IV B 7 – S 2742a – 31/05 dated 22 July 2005, Federal Tax Gazette I 2005, 829 (“Decree of 22 July 2005”), or as defined in any future administrative pronouncement of the German tax authorities

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which overrule the definition contained in marginal notes 20 and 37 of the Decree of 15 July 2004 and marginal note 1 of the Decree of 22 July 2005.

“Luxco Guarantor” shall mean Aleris Luxembourg S.A.R.L.

“Luxco Guaranty” shall mean the Guaranty by the Luxco Guarantor in favor of the Administrative Agent guaranteeing all of the obligations of the Borrowers, which Guaranty shall be in form and substance reasonably satisfactory to the Administrative Agent (as the same may be amended, modified, or supplemented from time to time).

“Luxco Pledge Agreement” shall mean the Pledge Agreement by the Luxco Guarantor in favor of the Collateral Agent, which pledge agreement shall be in form and substance reasonably satisfactory to the Administrative Agent (as the same may be amended, modified, or supplemented from time to time).

“Management Services Agreement” shall mean the agreement among Aleris and the Sponsor dated as of the Restatement Effective Date, pursuant to which the Sponsor agrees to provide certain advisory services to Aleris in exchange for certain fees.

“Management Stockholders” shall mean the members of management of Aleris (or its direct parent) who are holders of Equity Interests of Aleris (or any of its direct or indirect parent companies) on the Restatement Effective Date.

“Mandatory Cost” shall mean the cost imputed to each Lender of compliance with any reserve asset requirements of the European Central Bank.

“Margin Stock” shall have the meaning provided in Regulation U.

“Material Adverse Effect” shall mean a material adverse effect on (a) the financial condition, results of operations or business of Aleris and its Subsidiaries taken as a whole, (b) Aleris and its Subsidiaries’ collective ability to pay the Term Obligations in accordance with the terms thereof or (c) the rights of, or remedies available to the Administrative Agent, the Collateral Agent and the Lenders under, this Agreement and the other Credit Documents.

“Material Indebtedness” shall mean Indebtedness (other than the Loans), or obligations in respect of one or more Hedge Agreements, of any one or more of Aleris and its Subsidiaries in an aggregate principal amount exceeding $40,000,000. For purposes of determining Material Indebtedness, the “obligations” of Aleris or any Subsidiary in respect of any Hedge Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Aleris or such Subsidiary would be required to pay if such Hedge Agreement were terminated at such time.

“Material Real Property” shall mean any Real Property owned in fee by Aleris or any of its Subsidiaries the fair market value of which (as determined in good faith by Aleris) is equal to or greater than $2,500,000.

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“Merger” shall mean the merger of Merger Sub with and into Aleris pursuant to the Merger Agreement, with Aleris as the Surviving Corporation (as defined in the Merger Agreement) of the merger.

“Merger Agreement” shall mean the Agreement and Plan of Merger, dated as of August 7, 2006, among Holdings, Merger Sub and Aleris, as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof.

“Merger Documents” shall mean the Merger Agreement, and each other agreement, document or instrument related to any of the foregoing.

“Merger Sub” shall have the meaning provided in the first paragraph of this Agreement.

“Minimum Borrowing Amount” shall mean (i) in the case of U.S. Dollar Denominated Loans (excluding Dollar Denominated Loans maintained as Base Rate Loans), $1,000,000 (ii) in the case of Loans maintained from time to time as Base Rate Loans, $1,000,000 and (iii) in the case of Euro Denominated Loans, €1,000,000.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgage” shall mean each Existing Term Creditor Mortgage, each Term Creditor Mortgage with such modifications as local counsel to the Collateral Agent may deem reasonably necessary or appropriate in order to create and perfect the mortgage liens intended to be created thereby under the local law of the jurisdiction in which the relevant Real Property is located.

“Mortgage Policy” shall mean a Lender’s title insurance policy (Form 1992).

“Mortgaged Property” shall mean any Real Property owned by Aleris or any other Credit Party which is required to be encumbered by a Mortgage.

“Multiemployer Plan” shall mean a multiemployer plan as defined in Section 3(37) or 4001(a)(3) of ERISA.

“NAIC” shall mean the National Association of Insurance Commissioners.

“Net Debt Proceeds” shall mean, with respect to any incurrence or issuance of Indebtedness for borrowed money, the cash proceeds (net of underwriting discounts and commissions and other reasonable fees, expenses and costs associated therewith including, without limitation, those of attorneys, accountants and other professionals) received by the respective Person from the respective incurrence of such Indebtedness for borrowed money.

“Net Income” shall mean, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

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“Net Insurance Proceeds” shall mean, with respect to any Recovery Event, the cash proceeds (net of costs incurred by Aleris or any of its Restricted Subsidiaries in good faith in connection with such Recovery Event) received by the applicable Person in connection with such Recovery Event, and shall be net of (i) any taxes paid or payable in connection with the applicable Recovery Event and taxes paid or payable as a result of any transactions effected or deemed effected in order to make the related required prepayment of the Term Obligations under Section 4.02(d), including, without limitation, in respect of proceeds received by any Foreign Subsidiary of Aleris, taxes that are or would be payable if such proceeds were repatriated to any direct or indirect parent of such Foreign Subsidiary which has made all or a portion of any required prepayment of the Term Obligations under Section 4.02(d) in respect of such proceeds, (ii) all appropriate amounts that must be set aside as a reserve in accordance with GAAP or Local GAAP, as applicable, against any liabilities associated with such Recovery Event, provided that, upon any termination of such reserve, all amounts not paid-out in connection therewith shall be deemed to be “Net Insurance Proceeds” of such Recovery Event and (iii) required payments of any Indebtedness (other than Indebtedness secured pursuant to the Security Documents) which is secured by the respective assets which were subject to such Recovery Event. Notwithstanding the foregoing, no Net Insurance Proceeds calculated in accordance with the foregoing shall constitute Net Insurance Proceeds for purposes of Section 4.02(d) (i) unless such Net Insurance Proceeds shall exceed $2,500,000 from any single Recovery Event and (ii) until the aggregate amount of all such Net Insurance Proceeds in any applicable Fiscal Year (together with any Net Sale Proceeds from Asset Sales in such Fiscal Year) exceed $35,000,000 (and thereafter only Net Insurance Proceeds in excess of such amount shall constitute Net Insurance Proceeds for purposes of Section 4.02(d).

“Net Sale Proceeds” shall mean, for any Asset Sale (including an Asset Swap), the gross cash proceeds (including any cash received by way of deferred payment pursuant to a promissory note, receivable or otherwise, but only as and when received) received by Aleris or any Restricted Subsidiary from such sale of assets, in each case net of (i) the costs of such Asset Sale incurred by Aleris or any of its Subsidiaries in good faith (including fees and commissions, attorneys’ and other professional fees, payments of unassumed liabilities relating to the assets sold and required payments of any Indebtedness (other than Indebtedness secured pursuant to the Security Documents) which is secured by the respective assets which were sold), (ii) taxes paid or payable as a result of such Asset Sale and taxes paid or payable as a result of any transactions effected or deemed effected in order to make the related required prepayment of the Term Obligations under Section 4.02(c), including in respect of any proceeds received by any Foreign Subsidiary of Aleris, taxes that are or would be payable if such proceeds were repatriated to any direct or indirect parent of such Foreign Subsidiary which has made all or a portion of any required prepayment of the Term Obligations under Section 4.02(c) in respect of such proceeds, (iii) all appropriate amounts that must be set aside as a reserve in accordance with GAAP or Local GAAP, as applicable, against any liabilities associated with the asset sold pursuant to such Asset Sale; provided that, upon any termination of such reserve, all amounts not paid-out in connection therewith shall be deemed “Net Sale Proceeds” of such Asset Sale and (iv) the amount of any payments to be made by Aleris or any Subsidiary as agreed between such Person and the purchaser of any assets sold pursuant to such sale in connection therewith; provided, further, that Net Sale Proceeds arising from any Asset Sale to a non-Wholly-Owned Subsidiary shall equal the amount of such Net Sale Proceeds calculated as provided above less the percentage thereof equal to the percentage of any Equity Interests of such non-Wholly-Owned

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Subsidiary owned by Aleris and its Subsidiaries. Notwithstanding the foregoing, no Net Sale Proceeds calculated in accordance with the foregoing shall constitute Net Sale Proceeds for purposes of Section 4.02(c) until the aggregate amount of all such Net Sale Proceeds in any applicable Fiscal Year (together with any Net Insurance Proceeds in such Fiscal Year from Recovery Events where the Net Insurance Proceeds exceed $2,500,000) exceed $35,000,000 (and thereafter only Net Sale Proceeds in excess of such amount shall constitute Net Sale Proceeds for purposes of Section 4.02(c)).

“New Note Documents” shall mean, collectively, the New Senior Subordinated Note Documents and the New Senior Note Documents.

“New Notes” shall mean, collectively, the New Senior Notes and the New Senior Subordinated Notes.

“New Senior Note Documents” shall mean and include each of the documents, instruments (including the New Senior Notes) and other agreements entered into by Aleris or any other U.S. Credit Party (including, without limitation, the New Senior Note Indenture and any documents in respect of any New Senior Notes issued upon the exchange offer as contemplated by the New Senior Note Indenture) relating to the issuance by Aleris of the New Senior Notes, as in effect on the Restatement Effective Date and as the same may be entered into, supplemented, amended or modified from time to time in accordance with the terms hereof and thereof.

“New Senior Note Indenture” shall mean an Indenture entered into by and between Aleris and LaSalle Bank National Association, as trustee thereunder, with respect to New Senior Notes as in effect on the Restatement Effective Date and as the same may be modified, amended or supplemented from time to time in accordance with the terms hereof and thereof.

“New Senior Notes” shall mean the 9% Senior Notes due 2014 in an initial aggregate amount of $600,000,000 and issued by Aleris under the New Senior Note Indenture and all New Senior Notes issued upon the exchange offer as contemplated in the New Senior Note Indenture, as in effect on the Restatement Effective Date and as the same may be issued, supplemented, amended or modified from time to time in accordance with the terms thereof and hereof.

“New Senior Subordinated Note Documents” shall mean and include each of the documents, instruments (including the New Senior Subordinated Notes) and other agreements entered into by Aleris or any other U.S. Credit Party (including, without limitation, the New Senior Subordinated Note Indenture and any documents in respect of any New Senior Subordinated Notes issued upon the exchange offer as contemplated by the New Senior Subordinated Note Indenture) relating to the issuance by Aleris of the New Senior Subordinated Notes, as in effect on the Restatement Effective Date and as the same may be entered into, supplemented, amended or modified from time to time in accordance with the terms hereof and thereof.

“New Senior Subordinated Note Indenture” shall mean an Indenture entered into by and between Aleris and LaSalle Bank National Association, as trustee thereunder, with

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respect to New Senior Subordinated Notes as in effect on the Restatement Effective Date and as the same may be modified, amended or supplemented from time to time in accordance with the terms hereof and thereof.

“New Senior Subordinated Notes” shall mean the 10% Senior Subordinated Notes due 2016 in an initial aggregate amount of $400,000,000 and issued by Aleris under the New Senior Subordinated Note Indenture and all New Senior Subordinated Notes issued upon the exchange offer as contemplated in the New Senior Subordinated Note Indenture, as in effect on the Restatement Effective Date and as the same may be issued, supplemented, amended or modified from time to time in accordance with the terms thereof and hereof.

“Non-Defaulting Lender” shall mean and include each Lender other than a Defaulting Lender.

“Note” shall mean each U.S. Term Note and each German Term Note.

“Notice of Borrowing” shall have the meaning provided in Section 2.03(a).

“Notice of Conversion/Continuation” shall have the meaning provided in Section 2.06.

“Notice Office” shall mean (i) for credit notices, the office of the Administrative Agent located at 60 Wall Street, MS NYC60-0208, New York, New York 10005, Attention: Marguerite Sutton (telephone: (212) 250-6150; facsimile: (212) 797-4655), and (ii) for operational notices, the office of the Administrative Agent located at 222 S. Riverside Plaza, Chicago, Illinois 60606-5808, Attention: Lianne Jaworski (telephone: (312) 537-4578; facsimile: (312) 537-1325), or such other office or person as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

“Obligation Currency” shall have the meaning provided in Section 11.22(a).

“Original Effective Date” shall mean August 1, 2006.

“Other Creditors” shall mean, collectively, each person (other than any Credit Party or any Subsidiary of Aleris) party to (or participating in) a Secured Hedging Agreement.

“Other Hedging Agreements” shall mean any foreign exchange contracts, currency swap agreements, commodity agreements or other similar arrangements, or arrangements designed to protect against fluctuations in currency values or commodity prices.

“Other Pari Passu Lien Obligations” shall mean (i) any Indebtedness constituting debt securities incurred pursuant to an indenture with an institutional trustee or loans incurred in the bank credit market (including institutional investor participation therein) and not constituting Indebtedness subordinated in right of payment to the Term Obligations, which Indebtedness and other obligations are secured on Term Loan Priority Collateral on an equal and ratable basis with the Term Obligations pursuant to intercreditor arrangements reasonably satisfactory to the Collateral Agent and (ii) all obligations with respect to such Indebtedness.

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“Participant” shall mean a Lender that acquires a participation following the occurrence of a Conversion Event pursuant to an agreement among the Lenders and the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent; provided, however, that a Lender shall be considered a Participant only in respect of its interest in the acquired participation.

“PATRIOT Act” shall have the meaning provided in Section 7.01(j).

“Payment Office” shall mean (i) in respect of Dollar Denominated Loans and other amounts owing in U.S. Dollars, 60 Wall Street, MS NYC60-0208, New York, NY 10005 or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto and (ii) in respect of Euro Denominated Loans and other amounts owing in Euros, to Deutsche Bank AG, Frankfurt, 0-11-18-DBAG (Mainzer), Mainzer Landstrabe 16, Frankfurt, Germany 60325 or, in each case, such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto or, in each case, such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

“Percentage” of any Lender at any time shall be that percentage which is equal to a fraction (expressed as a percentage) the numerator of which is the Commitment of such Lender at such time and the denominator of which is the Total Commitment at such time, provided that if any such determination is to be made after the Total Commitment (and the related Commitments of the Lenders) has terminated, the determination of such percentages shall be made immediately before giving effect to such termination.

“Permitted Asset Swap” shall mean the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between Aleris or any of its Restricted Subsidiaries and another Person that is not Aleris or any of its Restricted Subsidiaries; provided that any cash or Cash Equivalents received must be applied in accordance with Section 4.02(c).

“Permitted Collateral Liens” shall mean:

(a) Liens securing any Other Pari Passu Lien Obligations; provided, however, that, at the time of incurrence and after giving pro forma effect thereto, the Consolidated Secured Debt Ratio would be no greater than 3.00 to 1.00;

(b) Liens existing on the Restatement Effective Date;

(c) Liens described in clauses (a), (c), (d), (f), (h), (i), (l),(m), (o), (q) (but only with respect to clauses (g), (h), (i) and (r) (but only with respect to Section 8.01(b)(vi) and Section 8.01(b)(xix) referred to therein) referred to therein), (r) (but only with respect to Sections 8.01(b)(vi) and (b)(xxii)(A) referred to therein), (t), (u) and (aa) (to the extent constituting Secured Hedging Agreements), (bb) and (dd) of the definition of “Permitted Liens”; and

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(d) Liens on the Term Priority Collateral in favor of the Administrative Agent relating to the Administrative Agent’s administrative expenses with respect to the Term Priority Collateral.

“Permitted Debt” shall have the meaning provided in Section 8.01(b).

“Permitted Encumbrance” shall mean, collectively, (i) those Liens and other matters affecting title to any Mortgaged Property listed in the Mortgage Policies in respect thereof which, on the date of delivery of such Mortgage Policies to the Collateral Agent in accordance with the terms hereof, are reasonably acceptable by the Collateral Agent and (ii) zoning, building codes, land/use and other similar laws and municipal ordinances which are not violated in any material respect by the existing improvements and the present use by the mortgagor of the U.S. Mortgaged Property.

“Permitted Holders” shall mean each of the Sponsor, the Management Stockholders, the Co-Investors and any Subsequent Co-Investors; provided that, the Sponsor, the Co-Investors and the Management Stockholders, collectively, have beneficial ownership of at least 50% of the total voting power of the Voting Stock of Aleris or any of its direct or indirect parent companies. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control which has been waived by the Required Lenders in accordance with Section 11.12 will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

“Permitted Investments” shall mean:

(a) any Investment in Aleris or any Restricted Subsidiary;

(b) any Investment in cash and Cash Equivalents or Investment Grade Securities;

(c) (i) any Investment by Aleris or any Restricted Subsidiary of Aleris in a Person that is engaged in a Similar Business if as a result of such Investment (A) such Person becomes a Restricted Subsidiary of Aleris or (B) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, Aleris or a Restricted Subsidiary of Aleris, and (ii) any Investment held by such Person;

(d) any Investment in securities or other assets not constituting cash, Cash Equivalents or Investment Grade Securities and received in connection with an Asset Sale made pursuant to Section 8.06 or any other disposition of assets not constituting an Asset Sale;

(e) any Investment existing on the Restatement Effective Date or made pursuant to legally binding written commitments in existence on the Restatement Effective Date and described on Schedule IX;

(f) loans and advances to, and guarantees of Indebtedness of, employees of Aleris (or any of its direct or indirect parent companies) or a Restricted Subsidiary not in excess of $8,000,000 outstanding at any one time, in the aggregate;

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(g) any Investment acquired by Aleris or any Restricted Subsidiary (i)(x) in exchange for any other Investment or accounts receivable held by Aleris or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the Person in which such other Investment is made or which is the obligor with respect to such accounts receivable or (y) in good faith settlement of delinquent obligations of, and other disputes with, customers, trade debtors, licensors, licensees and suppliers arising in the ordinary course; or (ii) as a result of a foreclosure by Aleris or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(h) Hedging Obligations permitted under Section 8.01(b)(xii);

(i) loans and advances to officers, directors and employees of Aleris (or any of its direct or indirect parent companies) or a Restricted Subsidiary for business-related travel expenses, moving expenses and other similar expenses, in each case incurred in the ordinary course of business or consistent with past practice or to fund such Person’s purchase of Equity Interests of Aleris or any direct or indirect parent company thereof under compensation plans approved by the Board of Directors of Aleris in good faith;

(j) Investments the payment for which consists of Equity Interests of Aleris, or any of its direct or indirect parent companies (exclusive of Disqualified Stock); provided that such Equity Interests will not increase the amount available for Restricted Payments under Section 8.04(a)(iii);

(k) guarantees of Indebtedness permitted under Section 8.01 and performance guarantees in the ordinary course of business and the creation of liens on the assets of Aleris or any of its Restricted Subsidiaries in compliance with Section 8.02;

(l) any transaction to the extent it constitutes an Investment that is permitted and made in accordance with the provisions of Section 8.05(b) (other than any transaction set forth in clauses (ii), (vi) and (xi) of Section 8.05(b));

(m) Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment or the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(n) Investments in a Similar Business having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (n) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities), not to exceed the greater of (i) $100,000,000 and (ii) 3.0% of Total Assets at the time of each Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(o) Investments relating to a Receivables Facility; provided that in the case of Receivables Facilities established after the Restatement Effective Date, such Investments are necessary or advisable (in the good faith determination of Aleris) to effect such Receivables Facility;

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(p) additional Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (p) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities), not to exceed the greater of (i) $125,000,000 and (ii) 4.0% of Total Assets (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value); and

(q) Investments in joint ventures having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (q) that are at that time outstanding, not to exceed the greater of (x) $100,000,000 and (y) 3.0% of Total Assets (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value).

“Permitted Liens” shall mean, with respect to any Person:

(a) Liens to secure Indebtedness incurred under Sections 8.01(b)(i) or (b)(ii); provided that neither the German Borrower nor any of its Subsidiaries (other than Transitory European Subsidiaries) may (except as provided in the Intercreditor Agreement) grant Liens securing the ABL Obligations;

(b) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits, prepayments or cash pledges to secure bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred in the ordinary course of business;

(c) Liens imposed by law, such as landlords’, carriers’, warehousemen’s and mechanics’ Liens and other similar Liens, in each case, for sums not yet overdue for a period of more than 30 days or are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(d) Liens for taxes, assessments or other governmental charges or claims not yet overdue for a period of more than 30 days or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(e) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

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(f) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties, in each case, which were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(g) Liens existing on the Restatement Effective Date and described on Schedule VIII;

(h) Liens on property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided that such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, that such Liens may not extend to any other property owned by Aleris or any Restricted Subsidiary;

(i) Liens on property at the time Aleris or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into Aleris or any Restricted Subsidiary; provided that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition; provided, further, that the Liens may not extend to any other property owned by Aleris or any Restricted Subsidiary;

(j) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to Aleris or another Restricted Subsidiary permitted to be incurred in accordance with Section 8.01;

(k) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(l) leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of Aleris or any of the Restricted Subsidiaries and do not secure any Indebtedness;

(m) Liens arising from financing statement filings under the UCC or similar state laws regarding (i) operating leases entered into by Aleris and its Restricted Subsidiaries in the ordinary course of business and (ii) goods consigned or entrusted to or bailed with a Person in connection with the processing, reprocessing, recycling or tolling of such goods;

(n) Liens in favor of any Credit Party;

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(o) Liens on inventory or equipment of Aleris or any Restricted Subsidiary granted in the ordinary course of business to Aleris’ client at which such inventory or equipment is located;

(p) Liens on accounts receivable and related assets incurred in connection with a Receivables Facility;

(q) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in clauses (a), (g), (h), (i), (r) and (aa) of this definition; provided that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (a), (g), (h), (i), (r) and (aa) of this definition at the time the original Lien became a Permitted Lien pursuant this Agreement, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(r) Liens securing Indebtedness permitted to be incurred pursuant to Section 8.01(b)(vi), (b)(xix), (b)(xx), (b)(xxii)(A) and (b)(xxiii); provided that (A) Liens securing Indebtedness permitted to be incurred pursuant to Section 8.01(b)(vi) do not at any time encumber any property other than the property financed by such Indebtedness and the proceeds and the products thereof, (B) Liens securing Indebtedness permitted to be incurred pursuant to Section 8.01(b)(xix) are solely on acquired property or the assets of the acquired entity, as the case may be and (C) Liens securing Indebtedness permitted to be incurred pursuant to Section 8.01(b)(xx) extend only to the assets of Foreign Subsidiaries;

(s) deposits in the ordinary course of business to secure liability to insurance carriers;

(t) Liens securing judgments for the payment of money not constituting an Event of Default under Section 9.06, so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

(u) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation or exportation of goods in the ordinary course of business;

(v) Liens (i) of a collection bank arising under Section 4-210 of the UCC on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business and (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including

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the right of set-off) and which are within the general parameters customary in the banking industry;

(w) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of Aleris or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of Aleris and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of Aleris or any of its Restricted Subsidiaries in the ordinary course of business;

(x) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

(y) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 8.01; provided that such Liens do not extend to any assets other than those assets that are the subject of such repurchase agreement;

(z) other Liens securing obligations incurred in the ordinary course of business which obligations do not exceed $50,000,000;

(aa) Liens securing Hedging Obligations; and

(bb) Liens incurred to secure obligations in respect of any Indebtedness permitted to be incurred pursuant to Section 8.01; provided that, at the time of incurrence and after giving pro forma effect thereto, the Consolidated Secured Debt Ratio would be no greater than 3.00 to 1.00.

“Person” shall mean any individual, partnership, joint venture, firm, corporation, association, limited liability company, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which a Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA but in all cases other than a Foreign Plan or Foreign Pension Plan.

“Pledge Agreement Collateral” shall mean all “Collateral”, “Charged Assets”, “Shares”, “Pledged Shares” or any similar term, in each case, as defined in the U.S. Pledge Agreement.

“Pledge Agreements” shall mean the U.S. Pledge Agreement, the European Parent Pledge Agreement and the Local Law Pledge Agreements.

“Pledgee” shall have the meaning provided in the U.S. Pledge Agreement.

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“Preferred Stock” shall mean any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.

“Prime Lending Rate” shall mean the rate which the Administrative Agent publicly announces from time to time as its prime lending rate through its office in New York City, the Prime Lending Rate to change when and as such prime lending rate changes. The Prime Lending Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer by the Administrative Agent, which may make commercial loans or other loans at rates of interest at, above or below the Prime Lending Rate.

“Projections” shall mean the projections for the seven Fiscal Years ended after the Restatement Effective Date (prepared on an annual basis) that were prepared by or on behalf of Aleris in connection with the Transaction and delivered to the Joint Lead Arrangers and the Lenders prior to the Restatement Effective Date.

“Qualified Proceeds” shall mean assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business; provided that the fair market value of any such assets or Capital Stock shall be determined by Aleris in good faith.

“Qualified Public Offering” shall mean any public or private sale of common stock or Preferred Stock of Aleris or any direct or indirect parent of Aleris pursuant to an effective registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act (other than a registration on Form S-8 or any successor form).

“Quarterly Payment Date” shall mean the last Business Day of each March, June, September and December occurring after the Restatement Effective Date.

“Real Property” shall mean all land, improvements and fixtures of any Person, including all the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds.

“Receivables Facility” shall mean one or more receivables financing facilities, as amended, supplemented, modified, extended, renewed, restated, refunded, replaced or refinanced from time to time, the Indebtedness of which is non-recourse (except for standard representations, warranties, covenants and indemnities made in connection with such facilities) to Aleris and its Restricted Subsidiaries pursuant to which Aleris or any of its Restricted Subsidiaries sells its accounts receivable to either (a) a Person that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

“Receivables Fees” shall mean distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Facility.

“Receivables Subsidiary” shall mean any Subsidiary formed solely for the purpose of engaging, and that engages only, in one or more Receivables Facilities.

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“Record” shall mean information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.

“Recovery Event” shall mean the receipt by Aleris or any of its Subsidiaries of any cash insurance proceeds or condemnation awards payable (i) by reason of theft, loss, physical destruction, damage, taking or any other similar event with respect to any property or assets of Aleris or any of its Subsidiaries and (ii) under any policy of insurance required to be maintained under Section 7.09 (other than business interruption insurance and insurance proceeds relating to loss of rental payments).

“Refinancing” shall mean the refinancing transactions described in Section 5.06.

“Refinancing Indebtedness” shall have the meaning provided in Section 8.01(b)(xv).

“Refunding Capital Stock” shall have the meaning provided in Section 8.04(b)(ii).

“Register” shall have the meaning provided in Section 11.15.

“Registration Rights Agreement” shall mean the Registration Rights Agreement relating to the New Senior Notes and the New Senior Subordinated Notes, dated as of the Restatement Effective Date, among Aleris, each U.S. Subsidiary Guarantor and Deutsche Bank Securities Inc.

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

“Regulation T” shall mean Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Regulation X” shall mean Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Related Business Assets” shall mean assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by Aleris or a Restricted Subsidiary in exchange for assets transferred by Aleris or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.

“Related Pass Through Entity” shall mean, with respect to an Indirect Section 4.04 Indemnitee, the pass through entity for tax purposes which such Indirect Section 4.04 Indemnitee, by virtue of being a partner or member thereof, is an Indirect

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Section 4.04 Indemnitee; provided that such entity shall be a Related Pass Through Entity only if it is a Lender or the Administrative Agent.

“Release” shall mean actively or passively disposing, discharging, injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring, seeping or migrating, into or upon any land or water or air, or otherwise entering into the environment.

“Relevant Term Loan Guaranteed Obligations” shall mean, in the case of the U.S. Borrower Guaranty provided by the U.S. Borrower, (a) the principal and interest on each Note issued by the German Borrower to each Lender, and all Loans made to the German Borrower under this Agreement, together with all the other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code or any other stay under any other applicable bankruptcy law, would become due) and liabilities (including, without limitation, indemnities, fees and interest thereon) of the German Borrower to any Guaranteed Creditor now existing or hereafter incurred under, arising out of or in connection with this Agreement and each other Credit Document and (b) all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code or any other applicable bankruptcy law, would become due) and liabilities of each other Guaranteed Party owing under any Secured Hedging Agreement entered into by such Guaranteed Party with an Other Creditor, whether now in existence or hereafter arising.

“Remedial Action” shall mean all actions to (a) clean up, remove, remediate, contain, treat, monitor or investigate Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a Release or threatened Release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment, or (d) perform any pre-remedial, restoration or reclamation studies, investigations, or post-remedial, restoration or reclamation operation and maintenance activities.

“Replaced Lender” shall have the meaning provided in Section 2.13.

“Replacement Lender” shall have the meaning provided in Section 2.13.

“Required Lenders” shall mean Non-Defaulting Lenders the sum of whose outstanding Loans represent at least a majority of the sum of the Loans of Non-Defaulting Lenders at such time.

“Requirements 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.

“Responsible Officer” of any Person shall mean the chief executive officer, the president, any vice president, the chief operating officer or any Financial Officer of such Person and any other officer or similar official thereof responsible for the administration of the obligations of such Person in respect of this Agreement, and, as to any document delivered on the Restatement Effective Date (but subject to the express requirements set forth in Section 5),

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shall include any secretary or assistant secretary of a Credit Party. Any document delivered hereunder that is signed by a Responsible Officer of a Credit Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Credit Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Credit Party.

“Restatement Effective Date” shall have the meaning provided in Section 11.10.

“Restricted” shall mean, when referring to cash or Cash Equivalents of Aleris or any of its Subsidiaries, that such cash or Cash Equivalents (i) appear (or would be required to appear) as “restricted” on a consolidated balance sheet of Aleris or of any such Subsidiary, (ii) are subject to any Lien (other than Liens permitted pursuant to clauses (a), (d), (r) (with respect Indebtedness pursuant to Section 8.01(b)(xx)) and (v) of the definition of “Permitted Liens”) in favor of any Person other than the Collateral Agent for the benefit of the Secured Creditors or (iii) are not otherwise generally available for use by Aleris or any of its Subsidiaries.

“Restricted Investment” shall mean an Investment other than a Permitted Investment.

“Restricted Payments” shall have the meaning provided in Section 8.04(a).

“Restricted Subsidiary” shall mean, at any time, any direct or indirect Subsidiary of Aleris (including any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided that upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary”.

“Retired Capital Stock” shall have the meaning provided in Section 8.04(b)(ii).

“Returns” shall have the meaning provided in Section 6.09.

“Revolving Loans” shall mean the Revolving Loans under (and as defined in) the ABL Credit Agreement.

“S&P” shall mean Standard & Poor’s Rating Services, a division of McGraw-Hill, Inc., or any successor thereto.

“Sale and Lease-Back Transaction” shall mean any arrangement with any Person providing for the leasing by Aleris or any Restricted Subsidiary of any real or tangible personal property, which property has been or is to be sold or transferred by Aleris or such Restricted Subsidiary to such Person in contemplation of such leasing.

“Sample” shall have the meaning provided in Section 11.26(a).

“Scheduled German Term Loan Repayment” shall have the meaning provided in Section 4.02(a)(ii).

“Scheduled German Term Loan Repayment Date” shall have the meaning provided in Section 4.02(a)(ii).

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“Scheduled Term Loan Repayment” shall mean a Scheduled U.S. Term Loan Repayment or a Scheduled German Term Loan Repayment, as the context requires.

“Scheduled Term Loan Repayment Date” shall mean a Scheduled U.S. Term Loan Repayment Date or a Scheduled German Term Loan Repayment Date, as the context requires.

“Scheduled U.S. Term Loan Repayment” shall have the meaning provided in Section 4.02(a)(i).

“Scheduled U.S. Term Loan Repayment Date” shall have the meaning provided in Section 4.02(a)(i).

“Section 4.04 Indemnitee” shall mean a Lender or the Administrative Agent (and, in the case of a Lender or Administrative Agent that is a flow-through entity for tax purposes, each member or partner of such Lender or Administrative Agent, as the case may be). For this purpose, the term “Lender” shall include any Participant.

“Section 4.04(b)(ii) Certificate” shall have the meaning provided in Section 4.04(b)(ii).

“Secured Creditors” shall mean the Term Secured Parties.

“Secured Debt Agreement” shall mean and include (x) this Agreement, (y) the other Credit Documents and (z) the Secured Hedging Agreements entered into with any Other Creditors.

“Secured Hedging Agreement” shall mean each Interest Rate Protection Agreement and/or Other Hedging Agreements provided that (i) such Interest Rate Protection Agreement and/or Other Hedging Agreement expressly states that (x) it constitutes a “Secured Hedging Agreement” for purposes of this Agreement and the other Credit Documents and (y) does not constitute a “Secured Hedging Agreement” for purposes of the ABL Credit Agreement, the ABL Security Documents or any guaranties relating to the ABL Credit Agreement, (ii) Aleris and the other parties thereto shall have delivered to the Collateral Agent a written notice specifying that such Interest Rate Protection Agreement and/or Other Hedging Agreement (x) constitutes a “Secured Hedging Agreement” for purposes of this Agreement and the other Credit Documents, (y) does not constitute a “Secured Hedging Agreement” for purposes of the ABL Credit Agreement, the ABL Security Documents or any guaranties relating to the ABL Credit Agreement and (z) in the case of Aleris, that such Interest Rate Protection Agreement and/or Other Hedging Agreement and the obligations of Aleris and its Subsidiaries thereunder have been, and will be, incurred in compliance with this Agreement and (iii) such Other Creditor has entered into an intercreditor agreement with respect to the relevant Interest Rate Protection Agreement or Other Hedging Agreement on terms reasonably satisfactory to the Collateral Agent.

“Secured Indebtedness” shall mean any Indebtedness secured by a Lien.

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“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Security Agreement” shall mean the U.S. Security Agreement and each European Security Document.

“Security Agreement Collateral” shall mean all “Collateral” as defined in the respective Security Agreement.

“Security Document Amendment” shall have the meaning provided in Section 5.08(b).

“Security Documents” shall mean and include each Pledge Agreement, each Security Agreement, each Mortgage, the Intercreditor Agreement and each other Additional Security Document.

“Significant Event of Default” shall mean any Event of Default under Section 9.01 or 9.05.

“Significant Subsidiary” shall mean any Restricted Subsidiary of Aleris that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the date hereof.

“Similar Business” shall mean any business conducted by Aleris and its Restricted Subsidiaries on the Restatement Effective Date or any business that is similar, reasonably related, incidental or ancillary thereto.

“Specified European Manufacturing Subsidiary” shall mean Corus Aluminium NV, Corus Aluminium Walzprodukte GmbH, Corus Aluminium Profiltechnik Bonn GmbH, Corus Aluminium Profiltechnik GmbH, Corus Aluminium Profiltechnik Bitterfeld GmbH and VAW-IMCO and any other Subsidiary of Aleris which shall be reasonably satisfactory to the Administrative Agent.

“Sponsor” shall mean Texas Pacific Group and its Affiliates excluding any portfolio companies thereof.

“Subordinated Indebtedness” shall mean (a) with respect to Aleris, any Indebtedness of Aleris that is by its terms subordinated in right of payment to the Term Obligations, and (b) with respect to any Guarantor, any Indebtedness of such Guarantor that is by its terms subordinated in right of payment to the Guaranty of such Guarantor.

“Subsequent Co-Investors” shall mean any Person (other than the Sponsor and the Co-Investors) and its Affiliates who, in connection with the acquisition of Equity Interests of Aleris (or any of its direct or indirect parent companies) after the Restatement Effective Date, is part of a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) in which any of the Sponsor, the Co-Investors or the Management Stockholders is a member.

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“Subsidiary” shall mean, as to any Person, with respect to any Person, (a) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of that Person or a combination thereof and (b) any partnership, joint venture, limited liability company or similar entity of which (i) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and (ii) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity. Notwithstanding the foregoing (and except for the purposes of the definition of Unrestricted Subsidiary contained herein) unless the context otherwise requires, an Unrestricted Subsidiary of Aleris shall be deemed not to be a Subsidiary of Aleris or any of its other Subsidiaries for the purposes of this Agreement; provided that, for purposes of Sections 6.06, 6.09, 6.10, 6.13, 7.04 and 7.07 only, references to Subsidiaries shall be deemed also to be references to Unrestricted Subsidiaries.

“Successor Borrower” shall have the meaning provided in Section 8.03(a)(i).

“Successor Person” shall have the meaning provided in Section 8.03(c)(i).

“Sum” shall have the meaning provided in Section 4.02(f).

“Supermajority Lenders” shall mean Non-Defaulting Lenders the sum of whose outstanding Loans represent at least 66-2/3% of the sum of the Loans of Non-Defaulting Lenders at such time.

“Swiss CE” shall mean Aleris Switzerland GmbH.

“Syndication Agent” shall mean Goldman Sachs Credit Partners L.P., in its capacity as Syndication Agent, and any successor thereto.

“Taxes” shall mean any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to payments made by any Credit Party under any Credit Document (but excluding any tax imposed on or measured by the net income or net profits (or any franchise or similar tax imposed in lieu of a net income or net profits tax and any branch profits tax imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrowers or any other Credit Party is located) of a Section 4.04 Indemnitee pursuant to the laws of the country or national jurisdiction (or any political subdivision thereof) in which such Section 4.04 Indemnitee is organized or the country or national jurisdiction (or any political subdivision thereof) in which the principal office or applicable lending office of such Section 4.04 Indemnitee is located), and all interest, penalties or similar liabilities with respect to such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges.

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“Term Creditor Mortgage” shall mean a mortgage substantially in the form of Exhibit L with such modifications thereto as any local counsel of the Collateral Agent may deem necessary or appropriate in order to create and perfect the mortgage liens intended to be created thereby under the local law of the jurisdiction in which the relevant property is located.

“Term Obligations” shall mean all obligations (including guaranty obligations) of every nature of each Credit Party from time to time owed to the Agents (including former Agents), the Lenders or any of them, under any Credit Document, whether for principal, premium, interest (including interest accruing after the filing of a petition in bankruptcy or a similar proceeding with respect to such Credit Party) fees, expenses, indemnification (including, without limitation, pursuant to Section 11.01) or otherwise.

“Term Priority Collateral” shall have the meaning provided in the Intercreditor Agreement.

“Term Secured Parties” shall mean (i) the Lenders and Agents and (ii) the Other Creditors.

“Test Period” shall mean each period of four consecutive Fiscal Quarters then last ended (in each case taken as one accounting period).

“Total Assets” shall mean the total amount of all assets of Aleris and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP as shown on the most recent balance sheet of Aleris.

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

“Total German Commitment” at any time shall mean the sum of the German Commitments of each of the Lenders at such time.

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

“Tranche” shall mean the respective facility and commitments utilized in making Loans hereunder, with there being two separate Tranches, i.e., U.S. Loans and German Loans.

“Transaction” shall mean, collectively, (i) the entering into of the Credit Documents and the incurrence of Loans on the Restatement Effective Date, (ii) the Refinancing, (iii) the consummation of the Merger, (iv) the issuance of the New Notes on the Restatement Effective Date, (v) the incurrence of the Revolving Loans and the issuance of letters of credit under the ABL Credit Agreement on the Restatement Effective Date, (vi) the consummation of the Equity Financing, (vii) all intercompany loans, equity contributions, repayments of intercompany loans, dividends, distributions and other intercompany Investments related to the foregoing and (viii) the payment of all fees and expenses in connection with the foregoing.

“Transitory European Subsidiary” shall mean each Subsidiary of Aleris acquired pursuant to an Investment or other acquisition permitted pursuant to Section 8.04 which has

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guaranteed the ABL Obligations and secured its guaranty with a pledge of the Accounts owed by it and/or sold Accounts to the Swiss CE.

“Treaty” shall mean the Treaty establishing the European Community being the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1986, the Maastricht Treaty (which was signed at Maastricht on February 7, 1992) and the Treaty of Amsterdam (which was signed in Amsterdam on October 2, 1997).

“Type” shall mean the type of Loan determined with regard to the interest option applicable thereto, i.e., whether a Base Rate Loan, a Eurodollar Loan or a Euro Denominated Loan.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or the priority of the Liens of the Collateral Agent in any Collateral is governed by the Uniform Commercial Code as in effect in a United States jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

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

“Unrestricted Subsidiary” shall mean (a) any Subsidiary of Aleris that at the time of determination is an Unrestricted Subsidiary (as designated by Aleris, as provided below) and (b) any Subsidiary of an Unrestricted Subsidiary.

Aleris may designate any Subsidiary of Aleris (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, Aleris or any Subsidiary of Aleris (other than any Subsidiary of the Subsidiary to be so designated) or of the German Borrower; provided that (i) any Unrestricted Subsidiary must be an entity of which shares of the Capital Stock or other Equity Interests (including partnership interests) entitled to cast at least a majority of the votes that may be cast by all shares of Capital Stock or Equity Interests having ordinary voting power for the election of directors or other governing body are owned, directly or indirectly, by Aleris, (ii) such designation complies with Section 8.04 and (iii) each of (A) the Subsidiary to be so designated and (B) its subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of Aleris or any Restricted Subsidiary.

Aleris may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation no Default or Event of Default shall have occurred and be continuing and either (x) Aleris could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described in the first paragraph of Section 8.01 or (y) the Fixed Charge Coverage Ratio for Aleris and its Restricted Subsidiaries would be greater than such ratio for Aleris and its Restricted Subsidiaries

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immediately prior to such designation, in each case on a pro forma basis taking into account such designation.

Any such designation by Aleris shall be notified by Aleris to the Administrative Agent by promptly delivering to the Administrative Agent a copy of any applicable board resolution giving effect to such designation and an officers’ certificate certifying that such designation complied with the foregoing provisions. Notwithstanding the foregoing, as of the Restatement Effective Date, all of the Subsidiaries of Aleris will be Restricted Subsidiaries.

“U.S. Borrower” shall mean, collectively, (i) prior to the Merger, Merger Sub (with respect to any U.S. Loans made on the Restatement Effective Date) and (ii) Aleris (prior to the Merger, with respect to each Converted U.S. Loan and following the Merger, with respect to all U.S. Loans).

“U.S. Borrower Guaranty” shall mean the guaranty of the U.S. Borrower pursuant to Section 12.

“U.S. Commitment” shall mean, for each Lender, the amount set forth opposite such Lender’s name in Schedule I directly below the column entitled “U.S. Commitment,” as the same may be (x) reduced from time to time or terminated pursuant to Sections 3.02, 3.03 and/or 9, as applicable, or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 2.13 or 11.04(b).

“U.S. Credit Party” shall mean the U.S. Borrower and each U.S. Subsidiary Guarantor.

“U.S. Dollars” and the sign “$” shall each mean freely transferable lawful money of the United States.

“U.S. Lender” shall mean each Lender which has a U.S. Commitment or which has any outstanding U.S. Loans.

“U.S. Loan” shall have the meaning provided in Section 2.01(a).

“U.S. Mortgaged Property” shall mean each Real Property located in the United States or any State or territory thereof with respect to which a Mortgage is required to be delivered pursuant to the terms of this Agreement.

“U.S. Pledge Agreement” shall have the meaning provided in Section 5.08(a).

“U.S. Security Agreement” shall shall have the meaning provided in Section 5.08(c).

“U.S. Security Documents” shall mean the U.S. Pledge Agreement, the U.S. Security Agreement, the Intercreditor Agreement and each Mortgage and such Additional Security Document covering the assets of a U.S. Credit Party.

“U.S. Subsidiaries Guaranty” shall have the meaning provided in Section 5.08(b).

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“U.S. Subsidiary Guarantor” shall mean each Wholly-Owned Domestic Subsidiary of Aleris which executes and delivers a U.S. Subsidiaries Guaranty, in each case, unless and until such time as the respective U.S. Subsidiary Guarantor is released from all of its obligations under the U.S. Subsidiaries Guaranty in accordance with terms and provisions thereof (it being understood that no Domestic Subsidiary of Aleris which is also a Subsidiary of a Foreign Subsidiary of Aleris shall be a U.S. Subsidiary Guarantor).

“U.S. Term Note” shall have the meaning provided in Section 2.05(a).

“VAW-IMCO” shall mean VAW-IMCO GUSS Und Recycling GmbH, a company with limited liability organized under the laws of Germany.

“VAW-IMCO Guaranty” shall mean the guaranty entered into by VAW-IMCO, on the Original Effective Date guaranteeing all of the obligations of the German Borrower as more fully provided therein.

“Voting Stock” of any Person as of any date shall mean the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors of such Person.

“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

“Wholly-Owned Domestic Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person which is also a Domestic Subsidiary of such Person.

“Wholly-Owned European Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person which is also a European Subsidiary.

“Wholly-Owned Foreign Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person which is also a Foreign Subsidiary of such Person.

“Wholly-Owned Subsidiary” shall mean, as to any Person, (i) any corporation 100% of whose Equity Interests (other than director’s qualifying shares and/or other nominal amounts of shares required by applicable law to be held by Persons other than such Person) is at the time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such time, provided that Corus Aluminum GmbH, VAW-IMCO or any other Subsidiary of Aleris which is organized in Germany which owns real property shall constitute a “Wholly-Owned Subsidiary” for all purposes of the Credit Documents so long as no more than 5.1% of the Equity Interests of such Subsidiary are owned by a Person other than Aleris or a Wholly-Owned Subsidiary of Aleris so long as (i) the holder of such Equity Interests is reasonably satisfactory to the Administrative Agent and (ii) all of the economic interests attributable to the Equity Interests in such Subsidiary are owned directly or indirectly by Aleris and its Subsidiaries.

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“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 2. Amount and Terms of Credit.

2.01 The Commitments. (a) Subject to and upon the terms and conditions set forth herein, each Lender with a U.S. Commitment severally agrees (A) that, on the Restatement Effective Date, each Existing U.S. Loan made by such Existing Lender to the U.S. Borrower shall convert into a new term loan owing by the U.S. Borrower (each a “Converted U.S. Loan”) and (B) to make, on the Restatement Effective Date, a term loan or term loans to the U.S. Borrower (together with each Converted U.S. Loan, each, a “U.S. Loan”), which U.S. Loans (i) shall be denominated in U.S. Dollars; (ii) shall, at the option of the U.S. Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided that except as otherwise specifically provided in Section 2.10(b), all U.S. Loans comprising the same Borrowing shall at all times be of the same Type; (iii) in the case of the Converted U.S. Loans, shall not exceed in aggregate principal amount for any Lender at the time of the conversion thereof the amount of its U.S. Commitment; and (iv) shall not be made (and shall not be required to be made) by any U.S. Lender in any instance where the incurrence thereof would cause (x) the U.S. Loans (including any Converted U.S. Loans) of such U.S. Lender to exceed the amount of its U.S. Commitment and (y) the aggregate amount of U.S. Loans (including any Converted U.S. Loans) to exceed the Total U.S. Commitment. Once repaid, U.S. Loans borrowed hereunder may not be reborrowed.

(b) Subject to and upon the terms and conditions set forth herein, each Lender with a German Commitment severally agrees (A) that, on the Restatement Effective Date, each Existing German Loan made by such Existing Lender to the German Borrower shall convert into a new term loan owing by the German Borrower (each a “Converted German Loan”) and (B) to make, on the Restatement Effective Date, a term loan or term loans to the German Borrower (together with each Converted German Loan, each, a “German Loan”), which German Loans (i) shall (subject to Section 2.14) be denominated in Euros; (ii) shall be incurred and maintained as Euro Rate Loans; (iii) in the case of the Converted German Loans, shall not exceed in aggregate principal amount for any Lender at the time of conversion thereof the amount of its German Commitment; and (iv) shall not be made (and shall not be required to be made) by any German Lender in any instance where the incurrence thereof would cause the Dollar Equivalent (x) of the German Loans (including any Converted German Loans) of such German Lender to exceed the amount of its German Commitment and (y) of the aggregate amount of German Loans (including any Converted German Loans) to exceed the Total German Commitment. Once repaid, German Loans borrowed hereunder may not be reborrowed.

2.02 Minimum Amount of Each Borrowing; Limitation on Euro Rate Loans. The aggregate principal amount of each Borrowing of Loans under a respective Tranche of Loans shall not be less than the Minimum Borrowing Amount applicable to such Tranche of Loans. More than one Borrowing may occur on the same date, but at no time shall there be outstanding more than 15 Borrowings of Euro Rate Loans in the aggregate for all Tranches of Loans.

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2.03 Notice of Borrowing. (a) If a Borrower desires to incur (x) Euro Rate Loans hereunder, such Borrower shall give the Administrative Agent at the Notice Office no later than 2:00 p.m. (New York time) at least three Business Days’ prior notice of each Euro Rate Loan to be incurred hereunder and (y) Base Rate Loans hereunder, such Borrower shall give the Administrative Agent prior notice at the Notice Office no later than 2:00 p.m. (New York time) at least one Business Day prior notice of each Base Rate Loan is to be incurred hereunder. Each such notice (each a “Notice of Borrowing”), except as otherwise expressly provided in Section 2.10, shall be irrevocable and shall be in writing, or by telephone promptly confirmed in writing, in the form of Exhibit A-1, appropriately completed to specify: (i) the aggregate principal amount of the Loans to be made pursuant to such Borrowing (stated in the applicable Available Currency), (ii) the date of such Borrowing (which shall be a Business Day), (iii) whether the respective Borrowing shall consist of U.S. Loans or German Loans, (iv) in the case of Dollar Denominated Loans, whether the Dollar Denominated Loans being made pursuant to such Borrowing are to be initially maintained as Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be initially applicable thereto, and (v) in the case of Euro Denominated Loans, the Interest Period to be initially applicable thereto.

(b) Without in any way limiting the obligation of any Borrower to confirm in writing any telephonic notice of any Borrowing or prepayment of Loans, the Administrative Agent may act without liability upon the basis of telephonic notice of such Borrowing or prepayment, as the case may be, believed by the Administrative Agent in good faith to be from the president, the chief executive officer or a Financial Officer of such Borrower, or from any other authorized officer of such Borrower designated in writing by such Borrower to the Administrative Agent as being authorized to give such notices, prior to receipt of written confirmation. In each such case, such Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of such telephonic notice of such Borrowing or prepayment of Loans, as the case may be, absent manifest error.

2.04 Disbursement of Funds. No later than 1:00 p.m. (New York time) on the date specified in each Notice of Borrowing, each Lender with a Commitment under the relevant Tranche of Loans will make available its pro rata portion (determined in accordance with Section 2.07) of each such Borrowing requested to be made on such date. All such amounts will be made available in the relevant Available Currency, and in immediately available funds at the Payment Office, and the Administrative Agent will make such amounts available to the respective Borrower or Borrowers. Unless the Administrative Agent shall have been notified by any Lender prior to the Restatement Effective Date that such Lender does not intend to make available to the Administrative Agent such Lender’s portion of any Borrowing to be made on the Restatement Effective Date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing and the Administrative Agent may (but shall not be obligated to), in reliance upon such assumption, make available to the relevant Borrower or Borrowers a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the relevant Borrower or Borrowers and such Borrower or Borrowers shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent also shall be

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entitled to recover on demand from such Lender or the relevant Borrower or Borrowers, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to such Borrower or Borrowers until the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if recovered from such Lender, the overnight Federal Funds Rate (or in the case of Euro Denominated Loans, the cost to the Administrative Agent of acquiring overnight funds in Euros) for the first three days and at the interest rate otherwise applicable to such Loans for each day thereafter, and (ii) if recovered from the relevant Borrower or Borrowers, the rate of interest applicable to the respective Borrowing, as determined pursuant to Section 2.08. Nothing in this Section 2.04 shall be deemed to relieve any Lender from its obligation to make Loans hereunder or to prejudice any rights which any Borrower may have against any Lender as a result of any failure by such Lender to make Loans hereunder.

2.05 Notes. (a) Each Borrower’s obligation to pay the principal of, and interest on, the Loans made by each Lender shall be evidenced in the Register maintained by the Administrative Agent pursuant to Section 11.15 and shall, if requested by such Lender, also be evidenced (i) in the case of U.S. Loans, by a promissory note duly executed and delivered by each U.S. Borrower substantially in the form of Exhibit B-1, with blanks appropriately completed in conformity herewith (each a “U.S. Term Note” and, collectively, the “U.S. Term Notes”) and (ii) in the case of German Loans, by a promissory note duly executed and delivered by each German Borrower substantially in the form of Exhibit B-2, with blanks appropriately completed in conformity herewith (each, a “German Term Note” and, collectively, the “German Term Notes”).

(b) The U.S. Term Note issued to each Lender that has a U.S. Commitment or outstanding U.S. Loans shall (i) be executed by the U.S. Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Restatement Effective Date (or, if issued after the Restatement Effective Date, be dated the date of the issuance thereof), (iii) be in a stated principal amount (expressed in U.S. Dollars) equal to the U.S. Loans of such Lender at such time and be payable in the outstanding principal amount of the U.S. Loans evidenced thereby from time to time, (iv) mature on the Final Maturity Date, (v) bear interest as provided in the appropriate clause of Section 2.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be entitled to the benefits of this Agreement and the other Credit Documents.

(c) The German Term Note issued to each Lender that has a German Commitment or outstanding German Loans shall (i) be executed by the German Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Restatement Effective Date (or, if issued after the Restatement Effective Date, be dated the date of the issuance thereof), (iii) be in a stated principal amount (expressed in Euros) equal to the principal amount of the German Loans of such Lender at such time and be payable in the outstanding principal amount of the German Loans evidenced thereby from time to time, (iv) with respect to each German Loan evidenced thereby, be payable (subject to Section 2.14) in Euros, provided that the obligations with respect to each German Loan evidenced thereby shall be subject to conversion into Dollar Denominated Loans as provided in (and in the circumstances contemplated by) Section 2.14, (v) mature on the Final Maturity Date, (vi) bear interest as provided in the appropriate clause of

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Section 2.08, (vii) be subject to voluntary prepayment as provided in Section 4.01, and mandatory repayment as provided in Section 4.02, and (viii) be entitled to the benefits of this Agreement and the other Credit Documents.

(d) Each Lender will note on its internal records the amount of each Loan made by it and each payment in respect thereof and prior to any transfer of any of its Notes will endorse on the reverse side thereof the outstanding principal amount of Loans evidenced thereby. Failure to make any such notation or any error in such notation shall not affect any Borrower’s obligations in respect of such Loans.

(e) Notwithstanding anything to the contrary contained above in this Section 2.05 or elsewhere in this Agreement, Notes shall only be delivered to Lenders which at any time specifically request the delivery of such Notes. No failure of any Lender to request or obtain a Note evidencing its Loans to any Borrower shall affect or in any manner impair the obligations of the applicable Borrower to pay the Loans (and all related Term Obligations) incurred by such Borrower which would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to the various Credit Documents. Any Lender which does not have a Note evidencing its outstanding Loans shall in no event be required to make the notations otherwise described in preceding clause (d). At any time when any Lender requests the delivery of a Note to evidence any of its Loans, the applicable Borrower shall promptly execute and deliver to the relevant Lender, at such Borrower’s expense, the requested Note in the appropriate amount or amounts to evidence such Loans.

2.06 Conversions. Each Borrower shall have the option to convert, on any Business Day, all or a portion equal to at least the Minimum Borrowing Amount of the outstanding principal amount of Dollar Denominated Loans made pursuant to one or more Borrowings (so long as of the same Tranche) of one or more Types of Dollar Denominated Loans into a Borrowing (of the same Tranche) of another Type of Dollar Denominated Loan, provided that (i) except as otherwise provided in Section 2.10(b), Eurodollar Loans may be converted into Base Rate Loans only on the last day of an Interest Period applicable to the Loans being converted and no such partial conversion of Eurodollar Loans shall reduce the outstanding principal amount of such Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii) Loans maintained as Base Rate Loans may not be converted into Eurodollar Loans if any Event of Default is in existence on the date of the conversion and the Administrative Agent, at the request of the Required Lenders, so notifies the relevant Borrower, and (iii) no conversion pursuant to this Section 2.06 shall result in a greater number of Borrowings of Eurodollar Loans than is permitted under Section 2.02. Each such conversion shall be effected by the respective Borrower by giving the Administrative Agent at the Notice Office prior to 2:00 p.m. (New York time) at least three Business Days’ prior notice (each a “Notice of Conversion/Continuation”) in the form of Exhibit A-2, appropriately completed to specify the Loans to be so converted, the Borrowing or Borrowings pursuant to which such Loans were incurred and, if to be converted into Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall give each Lender prompt notice of any such proposed conversion affecting any of its Loans. Upon any such conversion the proceeds thereof will be deemed to be applied directly on the day of such conversion to prepay the outstanding principal amount of the Loans being converted.

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2.07 Pro Rata Borrowings. All Borrowings of Loans under each Tranche shall be incurred from the Lenders pro rata on the basis of their Commitments under such Tranche. It is understood that no Lender shall be responsible for any default by any other Lender of its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans hereunder.

2.08 Interest. (a) The U.S. Borrower agrees to pay (in the case of U.S. Loans) and the German Borrower agrees to pay (in the case of a conversion of any German Loan into a Dollar Denominated Loan pursuant to Section 2.14) interest in respect of the unpaid principal amount of each Base Rate Loan (including any German Loan converted into a Dollar Denominated Loan pursuant to Section 2.14) from the date of Borrowing thereof (or, in the case of a conversion of any German Loan into a Dollar Denominated Loan pursuant to Section 2.14, from the date of the conversion of such Loan) until the earlier of (i) the maturity thereof (whether by acceleration or otherwise) and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 2.06 or 2.09, as applicable, at a rate per annum which shall be equal to the sum of the relevant Applicable Margin as in effect from time to time plus the Base Rate as in effect from time to time.

(b) The U.S. Borrower agrees to pay (in the case of U.S. Loans) and the German Borrower agrees to pay (in the case of German Loans) interest in respect of the unpaid principal amount of each Euro Rate Loan from the date of Borrowing thereof until the earlier of (i) the maturity thereof (whether by acceleration or otherwise) and (ii) in the case of Eurodollar Loans, the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section 2.06 or 2.09, as applicable, at a rate per annum which shall, during each Interest Period applicable thereto, be equal to the sum of the relevant Applicable Margin as in effect from time to time during such Interest Period plus the relevant Euro Rate for such Interest Period plus in the case of Euro Denominated Loans, any Mandatory Costs.

(c) To the extent permitted by law, overdue principal and overdue interest in respect of each Loan and any other overdue amount payable hereunder and under any other Credit Document shall, in each case, bear interest at a rate per annum (1) in the case of overdue principal of, and interest or other overdue amounts owing with respect to, Euro Denominated Loans, equal to 2% plus the Applicable Margin for Euro Rate Loans plus the relevant Euro Rate for such successive periods not exceeding one month as the Administrative Agent may determine from time to time in respect of amounts comparable to the amount not paid plus any Mandatory Costs and (2) in all other cases, equal to the greater of (x) the rate which is 2% in excess of the rate then borne by such Loans and (y) the rate which is 2% in excess of the rate otherwise applicable to Base Rate Loans of the respective Tranche of Loans from time to time. Interest that accrues under this Section 2.08(c) shall be payable on demand.

(d) Accrued (and theretofore unpaid) interest shall be payable (i) in respect of each Base Rate Loan, (x) quarterly in arrears on each Quarterly Payment Date, (y) on the date of any repayment or prepayment in full of all outstanding Base Rate Loans of the respective Tranche of Loans being so repaid or prepaid, and (z) at maturity (whether by acceleration or otherwise) and, after such maturity, on demand, and (ii) in respect of each Euro Rate Loan, (x) on the last day of each Interest Period applicable thereto and, in the case of an Interest Period

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in excess of three months, on each date occurring at three month intervals after the first day of such Interest Period, (y) on the date of any repayment or prepayment (on the amount repaid or prepaid), and (z) at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.

(e) Upon each Interest Determination Date, the Administrative Agent shall determine the relevant Euro Rate for each Interest Period applicable to the relevant Euro Rate Loans and shall promptly notify Aleris and the Lenders thereof. Each such determination shall, absent manifest error, be final and conclusive and binding on all parties hereto.

2.09 Interest Periods for Euro Rate Loans. At the time any Borrower gives any Notice of Borrowing or Notice of Conversion/Continuation in respect of the making of, or conversion into, any Euro Rate Loan (such notice shall be given (x) in the case of the initial Interest Period applicable thereto or prior to 12:00 Noon, on the same date of the making of, or conversion into, such Euro Rate Loan, and (y) in the case of any subsequent Interest Period, no later than 12:00 noon (New York time) on the third Business Day prior to the expiration of an Interest Period applicable to such Euro Rate Loan), such Borrower shall have the right to elect the Interest Period applicable to such Euro Rate Loan, which Interest Period shall, at the option of such Borrower be a one, two, three or six month (or, if agreed by all Lenders with Commitments and/or Loans under the relevant Tranche, nine or twelve month) period, provided that (in each case):

(i) all Euro Rate Loans comprising a Borrowing shall at all times have the same Interest Period;

(ii) the initial Interest Period for any Euro Rate Loan shall commence on the date of Borrowing of such Euro Rate Loan (including the date of any conversion thereto from a Base Rate Loan) and each Interest Period occurring thereafter in respect of such Euro Rate Loan shall commence on the day on which the next preceding Interest Period applicable thereto expires;

(iii) if any Interest Period for a Euro Rate Loan begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month;

(iv) if any Interest Period for a Euro Rate Loan would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided, however, that if any Interest Period for a Euro Rate Loan would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day;

(v) no Interest Period for any Borrowing of Eurodollar Loans may be selected at any time when any Event of Default is then in existence and the Administrative Agent, at the request of the Required Lenders, has notified the relevant Borrower of same; and

(vi) no Interest Period in respect of any Borrowing of any Tranche of Euro Rate Loans shall be selected which extends beyond the Final Maturity Date.

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If by 12:00 Noon (New York time) on the third Business Day prior to the expiration of any Interest Period applicable to a Borrowing of Euro Rate Loans, any Borrower has failed to elect, or is not permitted to elect, a new Interest Period to be applicable to such Euro Rate Loans as provided above, such Borrower shall be deemed to have elected, (x) if Eurodollar Loans to convert such Eurodollar Loans into Base Rate Loans and (y) if Euro Denominated Loans, to select a one-month Interest Period for such Euro Denominated Loans, in any case, effective as of the expiration date of such current Interest Period.

Notwithstanding the foregoing, the German Borrower may split a Borrowing of German Loans into two or more Borrowings at the end of the Interest Period applicable thereto and may combine Borrowings of German Loans (with Interest Periods ending on the same date) into a single Borrowing of a German Loan at the end of the Interest Period applicable thereto, in each case by appropriate notice in the respective Notice of Conversion/Continuation and so long as the resultant Borrowings comply with all provisions of this Agreement (including Section 2.02).

2.10 Increased Costs, Illegality, etc. (a) In the event that any Lender shall have determined in good faith (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto but, with respect to clauses (i) and (iv) below, may be made only by the Administrative Agent):

(i) on any Interest Determination Date that, by reason of any changes arising after the Restatement Effective Date affecting the applicable interbank market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of the relevant Euro Rate; or

(ii) at any time, that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Euro Rate Loan because of any change since the Restatement Effective Date in any applicable law or governmental rule, regulation, order, guideline or request (whether or not having the force of law) or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, order, guideline or request, such as, but not limited to (A) a change in the basis of taxation of payment to any Lender of the principal of or interest on the Loans or the Notes or any other amounts payable hereunder (except for changes in taxes that are determined by reference to the net income or net profits or franchise taxes imposed in lieu thereof of such Lender or, in the case of a Lender that is a flow-through entity for tax purposes, a member or a partner of such Lender, pursuant to the laws of the country or national jurisdiction (or any political subdivision thereof) in which it is organized or in which its principal office or applicable lending office is located) and (B) a change in official reserve requirements, but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the relevant Euro Rate (provided that increased costs or reductions in the amounts received or receivable with respect to Taxes shall be dealt with exclusively pursuant to Section 4.04); or

(iii) at any time, that the making or continuance of any Euro Rate Loan has been made (x) unlawful by any change since the Restatement Effective Date in any

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applicable law or governmental rule, regulation or order or (y) impossible by compliance by any Lender in good faith with any governmental request (whether or not having force of law) made after the Restatement Effective Date; or

(iv) if applicable, at any time that Euros are not available in sufficient amounts, as determined in good faith by the Administrative Agent, acting reasonably, to fund any Euro Denominated Loans requested pursuant to Section 2.01;

then, and in any such event, such Lender (or the Administrative Agent, in the case of clauses (i) or (iv) above) shall promptly give notice (by telephone promptly confirmed in writing) to the affected Borrower and, except in the case of clauses (i) and (iv) above, to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (w) in the case of clause (i) above, (A) in the event Eurodollar Loans are so affected, Eurodollar Loans shall no longer be available until such time as the Administrative Agent notifies the U.S. Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or Notice of Conversion/Continuation given by the U.S. Borrower with respect to Eurodollar Loans which have not yet been incurred (including by way of conversion) shall be deemed rescinded by such U.S. Borrower, and (B) in the event that any Euro Denominated Loan is so affected, Euro LIBOR shall be determined on the basis provided in the proviso to the definition of Euro LIBOR, (x) in the case of clause (ii) above, the affected Borrower agrees to pay to such Lender, upon such Lender’s written request therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its reasonable discretion shall determine) as shall be required to compensate such Lender for such increased costs or reductions in amounts received or receivable hereunder (a written notice as to the additional amount or amounts owed to such Lender, showing in reasonable detail the basis for and the calculation thereof, submitted to the Borrower by such Lender shall, absent manifest error, be final and conclusive and binding on all the parties hereto), (y) in the case of clause (iii) above, the affected Borrower shall take one of the actions specified in Section 2.10(b) as promptly as possible and, in any event, within the time period required by law and (z) in the case of clause (iv) above, Euro Denominated Loans (exclusive of any such Euro Denominated Loans that have theretofore been funded), shall no longer be available until such time as the Administrative Agent notifies the German Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or notice pursuant to Section 2.03 given by the respective German Borrower with respect to such Euro Denominated Loans which have not been incurred shall be deemed rescinded by the German Borrower. Each of the Administrative Agent and each Lender agrees that if it gives notice to any Borrower of any of the events described in clause (i), (ii), (iii) or (iv) above, it shall promptly notify such Borrower and, in the case of any such Lender, the Administrative Agent, promptly after it actually becomes aware that such event has ceased to exist.

(b) At any time that any Euro Rate Loan is affected by the circumstances described in Section 2.10(a)(ii), the affected Borrower may, and in the case of a Euro Rate Loan affected by the circumstances described in Section 2.10(a)(iii), the affected Borrower shall, either (x) if the affected Euro Rate Loan is then being made initially or pursuant to a conversion, cancel such Borrowing (or the conversion thereof) by giving the Administrative Agent

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telephonic notice (confirmed in writing) on the same date on which such Borrower was notified by the affected Lender or the Administrative Agent pursuant to Section 2.10(a)(ii) or (iii), or (y) if the affected Euro Rate Loan is then outstanding, upon at least three Business Days’ written notice to the Administrative Agent, (A) in the case of a Eurodollar Loan, require the affected Lender to convert such Eurodollar Loan into a Base Rate Loan and (B) in the case of any Euro Denominated Loan, repay such affected Euro Denominated Loan in full in accordance with the applicable requirements of Section 4.01; provided that, if the circumstances described in Section 2.10(a)(iii) apply to any Euro Denominated Loan, the Borrowers may, in lieu of taking the actions described above, maintain such Euro Denominated Loan outstanding, in which case, Euro LIBOR shall be determined on the basis provided in the proviso to the definition of Euro LIBOR unless the maintenance of such Euro Denominated Loan outstanding on such basis would not stop the conditions described in Section 2.10(a)(iii) from existing (in which case the actions described above, without giving effect to this proviso, shall be required to be taken).

(c) If any Lender reasonably determines that after the Restatement Effective Date the introduction of or any change in any applicable law or governmental rule, regulation, order, guideline, directive or request (whether or not having the force of law) concerning capital adequacy, or any change in interpretation or administration thereof by the NAIC or any Governmental Authority, central bank or comparable agency charged with the administration thereof, will have the effect of increasing the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender based on the existence of such Lender’s Commitments hereunder or its obligations hereunder, then each affected Borrower agrees to pay to such Lender, upon its written demand therefor, such additional amounts as shall be required to compensate such Lender or such other corporation for the increased cost to such Lender or such other corporation or the reduction in the rate of return to such Lender or such other corporation as a result of such increase of capital. In determining such additional amounts, each Lender shall act reasonably and in good faith and shall use averaging and attribution methods which are reasonable, provided that such Lender’s determination of compensation owing under this Section 2.10(c) shall, absent manifest error, be final and conclusive and binding on all the parties hereto. Each Lender, upon determining that any additional amounts will be payable pursuant to this Section 2.10(c), will give prompt written notice thereof to each affected Borrower, which notice shall show in reasonable detail the basis for calculation of such additional amounts.

(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 (x) the affected Borrower or Borrowers shall not be required to compensate a Lender pursuant to this Section 2.10 for any increased costs or reduction incurred more than 180 days prior to the date on which such Lender notifies such Borrower or Borrowers of the change in law described in Section 2.10(a)(ii) or 2.10(c) giving rise to such increased costs or reduction and of such Lender’s intention to claim compensation therefor and (y) if such 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.

2.11 Compensation. Each Borrower agrees to compensate each Lender, upon its written request (which request shall set forth in reasonable detail the basis for requesting such compensation), for all losses, expenses and liabilities (including, without limitation, any loss,

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expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund its Euro Rate Loans but excluding loss of anticipated profits and Mandatory Costs) which such Lender may sustain: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of, or conversion from or into, Euro Rate Loans does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn by the applicable Borrower or Borrowers or deemed withdrawn pursuant to Section 2.10(a)); (ii) if any prepayment or repayment (including any prepayment or repayment made pursuant to Section 4.01, Section 4.02 or as a result of an acceleration of the Loans pursuant to Section 9) or conversion of any of its Euro Rate Loans occurs on a date which is not the last day of an Interest Period with respect thereto; (iii) if any prepayment of any of its Euro Rate Loans is not made on any date specified in a notice of prepayment given by any Borrower; or (iv) as a consequence of (x) any other default by any Borrower to repay Euro Rate Loans when required by the terms of this Agreement or any Note held by such Lender or (y) any election made pursuant to Section 2.10(b). Any Lender’s or the Administrative Agent’s determination of compensation owing to it under this Section 2.11 shall, absent manifest error, be final and conclusive and binding on all the parties hereto.

2.12 Change of Lending Office. (a) Each Lender may at any time or from time to time designate, by written notice to the Administrative Agent to the extent not already reflected on Schedule II, one or more lending offices (which, for this purpose, may include Affiliates of the respective Lender) for the various Loans made by such Lender; provided that, for designations made after the Restatement Effective Date (unless such designation is made after the occurrence of a Conversion Event) to the extent such designation shall result in increased costs under Section 2.10 or 4.04 in excess of those which would be charged in the absence of the designation of a different lending office (including a different Affiliate of the respective Lender), then the Borrowers shall not be obligated to pay such excess increased costs (although the Borrowers, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay the costs which would apply in the absence of such designation and any subsequent increased costs of the type described above resulting from changes after the date of the respective designation). Each lending office and Affiliate of any Lender designated as provided above shall, for all purposes of this Agreement, be treated in the same manner as the respective Lender (and shall be entitled to all indemnities and similar provisions in respect of its acting as such hereunder).

(b) Each Lender agrees that on the occurrence of any event giving rise to the operation of Section 2.10(a)(ii) or (iii), Section 2.10(c) or Section 4.04 with respect to such Lender, it will, if requested by any Borrower, use reasonable efforts to designate another lending office for any Loans affected by such event, provided that such designation is made on such terms that would not subject such Lender to any material unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender in any material respect, with the object of avoiding or mitigating the consequence of the event giving rise to the operation of such Section. The applicable Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation. Nothing in this Section 2.12(b) shall affect or postpone any of the obligations of the Borrowers or the right of any Lender provided in Sections 2.10 and 4.04.

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2.13 Replacement of Lenders. (x) If any Lender becomes a Defaulting Lender or otherwise defaults in its obligations to make Loans, (y) upon the occurrence of an event giving rise to the operation of Section 2.10(a)(ii) or (iii), Section 2.10(c) or Section 4.04 with respect to any Lender which results in such Lender charging to any Borrower increased costs or (z) in the case of a refusal by a Lender to consent to certain proposed changes or waivers with respect to this Agreement which have been approved by the Required Lenders as (and to the extent) provided in Section 11.12(d) but which require the consent of each Lender or each directly affected Lender, Aleris shall have the right either (A) to replace such Lender with one or more other Eligible Transferees, none of whom shall constitute a Defaulting Lender at the time of such replacement (collectively, the “Replacement Lender”) and each of whom shall be reasonably acceptable to the Administrative Agent or (B) to replace only (a) the Commitment (and sub-commitments and outstandings pursuant thereto) of the Replaced Lender with an identical Commitment provided by the Replacement Lender or (b) in the case of a replacement as provided in Section 11.12(d) where the consent of the respective Lender is required with respect to less than all Tranches of its Loans or Commitments, the Commitments, sub-commitments and/or outstanding Loans of such Lender in respect of each Tranche where the consent of such Lender would otherwise be individually required, with identical Commitments, sub-commitments and/or Loans of the applicable Tranche provided by the Replacement Lender (each such Lender which is replaced by a Replacement Lender or whose Commitment (or any portion thereof) or Loans (or any portion thereof) is replaced (either pursuant to preceding clause (A) or (B)) is referred to herein as a “Replaced Lender”); provided that:

(i) at the time of any replacement pursuant to this Section 2.13, the Replacement Lender shall enter into one or more Assignment and Assumption Agreements pursuant to Section 11.04(b) (and with all fees payable pursuant to said Section 11.04(b) to be paid by the Replacement Lender) pursuant to which the Replacement Lender shall acquire all of the Commitments and all then outstanding Loans (or, in the case of the replacement of less than all the Tranches of Commitments and outstanding Loans of the relevant Replaced Lender, all the Commitments and/or all then outstanding Loans relating to the Tranche or Tranches with respect to which such Lender is being replaced) of the Replaced Lender and, in connection therewith, shall pay to (w) the Replaced Lender in respect thereof an amount equal to the sum of (A) an amount equal to (in the relevant currency or currencies) the aggregate principal of, and all accrued and unpaid interest on, all then outstanding Loans of the respective Replaced Lender under each Tranche with respect to which such Replaced Lender is being replaced and (B) an amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender (but only with respect to the relevant Tranche or Tranches, in the case of the replacement of less than all Tranches then held by the relevant Replaced Lender) pursuant to Section 3.01; and

(ii) all obligations of the Borrowers due and owing to the Replaced Lender at such time (other than those specifically described in clause (i) of this Section 2.13 in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Lender concurrently with such replacement.

Upon receipt by the Replaced Lender of all amounts required to be paid to it pursuant to this Section 2.13, the Administrative Agent shall be entitled (but not obligated) and

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authorized to execute an Assignment and Assumption Agreement on behalf of such Replaced Lender, and any such Assignment and Assumption Agreement so executed by the Administrative Agent and the Replacement Lender shall be effective for purposes of this Section 2.13 and Section 11.04. Upon the execution of the respective Assignment and Assumption Agreement, the payment of amounts referred to in clauses (i) and (ii) of this Section 2.13, if so requested by the Replacement Lender, delivery to the Replacement Lender of the appropriate Note or Notes executed by the relevant Borrowers and the satisfaction of the other applicable conditions in Section 11.04(b), the Replacement Lender shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender hereunder, except with respect to indemnification provisions under this Agreement (including, without limitation, Sections 2.10, 2.11, 4.04, 11.06 and 11.01), which shall survive as to such Replaced Lender.

2.14 Special Provisions Applicable to Lenders Upon the Occurrence of a Conversion Event. On the date of the occurrence of a Conversion Event, automatically (and without the taking of any action) (x) all then outstanding Euro Denominated Loans shall be automatically converted into Loans of the German Borrower (of the same Tranche) maintained in U.S. Dollars (in an amount equal to the Dollar Equivalent of the aggregate principal amount of the respective Loans on the date such Conversion Event first occurred, which Loans (i) shall continue to be owed by the German Borrower and (ii) shall at all times thereafter be deemed to be Base Rate Loans), and (y) all principal, accrued and unpaid interest and other amounts owing with respect to such Euro Denominated Loans shall be payable in U.S. Dollars, taking the Dollar Equivalent of such principal, accrued and unpaid interest and other amounts. The occurrence of any conversion of Euro Denominated Loans to Base Rate Loans as provided above in this Section 2.14 shall be deemed to constitute, for purposes of Section 2.11, a prepayment of Loans before the last day of any Interest Period relating thereto.

SECTION 3. Fees.

3.01 Fees. Each Borrower agrees to pay to the Administrative Agent such fees as may be agreed to in writing from time to time by Aleris or any of its Subsidiaries and the Administrative Agent.

3.02 Commitments. Upon at least three Business Days’ prior written notice to the Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), Aleris shall have the right, at any time or from time to time, without premium or penalty, to terminate the Total Commitment in whole. Each reduction to the Total Commitment pursuant to this Section 3.02 shall apply to proportionately and permanently reduce the Commitment of each Lender (based on its respective Percentage).

3.03 Mandatory Reduction of Commitments. (a) The Total Commitment (i.e., the Total U.S. Commitment and the Total German Commitment) shall terminate in its entirety on June 30, 2007, unless the Restatement Effective Date has occurred on or prior to such date.

(b) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Commitment (i.e., the Total U.S. Commitment and the Total German Commitment) shall terminate in its entirety on the Restatement Effective Date (after giving effect to the incurrence of Loans on such date).

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(c) Each reduction to, or termination of, the Total U.S. Commitment and the Total German Commitment pursuant to this Section 3.03 as provided above shall be applied to proportionately reduce or terminate, as the case may be, the U.S. Commitment and the German Commitment, as the case may be, of each Lender with such a Commitment.

SECTION 4. Prepayments; Payments; Taxes.

4.01 Voluntary Prepayments. (a) Each Borrower shall have the right to prepay the Loans made to such Borrower, without premium or penalty, in whole or in part at any time and from time to time on the following terms and conditions: (i) such Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) (x) prior to 10:00 a.m. (New York time) at the Notice Office on the date of such prepayment in the case of Base Rate Loans and (y) prior to 12:00 noon (New York time) at the Notice Office at least three Business Days before the date of such prepayment of its intent to prepay Euro Rate Loans, which notice (in each case) shall specify whether U.S. Loans or German Loans shall be prepaid, the amount of such prepayment and the Types of Loans to be prepaid and, in the case of Euro Rate Loans, the specific Borrowing or Borrowings pursuant to which such Euro Rate Loans were made, and which notice the Administrative Agent shall promptly transmit to each of the Lenders; (ii) each partial prepayment of Loans pursuant to this Section 4.01(a) shall be in an aggregate principal amount of at least $1,000,000, in the case of U.S. Loans, and €1,000,000, in the case of German Loans (or, in each case, such lesser amount as is acceptable to the Administrative Agent), provided that (x) if any partial prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the outstanding principal amount of Eurodollar Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto, then such Borrowing may not be continued as a Borrowing of Eurodollar Loans (and same shall automatically be converted into a Borrowing of Base Rate Loans) and any election of an Interest Period with respect thereto given by such Borrower shall have no force or effect and (y) in the case of partial prepayments of any Borrowing of Euro Rate Loans, the German Borrower shall use reasonable efforts to allocate such prepayments in a manner so that Borrowings do not remain outstanding in amounts less than the Minimum Borrowing Amount applicable thereto (and, to the extent such Borrowings would remain outstanding in amounts which are less than the Minimum Borrowing Amount applicable thereto, in the case of Euro Rate Loans, the German Borrower shall repay any Borrowings which are less than the Minimum Borrowing Amount applicable thereto at the end of the then current Interest Period), unless at such time the German Borrower combines separate Borrowings into one Borrowing, which such Borrowing shall be greater than or equal to the Minimum Borrowing Amount; (iii) each prepayment pursuant to this Section 4.01(a) in respect of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans; and (iv) each voluntary prepayment of Loans pursuant to this Section 4.01(a) shall be applied to reduce the then remaining Scheduled Term Loan Repayments of the relevant Tranche in a manner to be determined by the relevant Borrower at the time that it delivers a (and as specified in the applicable) notice of prepayment pursuant to this Section 4.01(a) (i.e., in direct order of maturity, in inverse order of maturity or pro rata based upon the then remaining principal amount of each such Scheduled Term Loan Repayment after giving effect to all prior reductions thereto), although if the applicable Borrower fails to so specify the manner of application in any such notice, such voluntary prepayment shall be applied (1) first, to reduce the Scheduled Term Loan Repayments (if any) with respect to the relevant Tranche which are due on the four Scheduled Term Loan Repayment Dates immediately

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following the date of such prepayment and (2) second, to the extent in excess thereof to reduce the then remaining Scheduled Term Loan Repayments of the relevant Tranche on a pro rata basis based upon the then remaining principal amount of each such Scheduled Term Loan Repayment of the relevant Tranche after giving effect to all prior reductions thereto.

(b) In the event of (i) a refusal by a Lender to consent to certain proposed changes or waivers with respect to this Agreement which have been approved by the Required Lenders as (and to the extent) provided in Section 11.12(d) but which require the consent of each Lender or each directly affected Lender or (ii) any Lender becoming a Defaulting Lender, any Borrower may, upon five Business Days’ prior written notice to the Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders) repay all Loans, together with accrued and unpaid interest, Fees, and other amounts owing to such Lender (or owing to such Lender with respect to each Tranche which gives rise to the need to obtain such Lender’s individual consent) so long as (x) the consents, if any, required under Section 11.12(d) in connection with the repayment pursuant to this Section 4.01(b) have been obtained and (y) the repayment of such Lender’s Loans is otherwise made in accordance with, and subject to the requirements of, said Section 11.12(d) to the extent applicable.

4.02 Mandatory Repayments. (a) (i) On each date set forth below (each, a “Scheduled U.S. Term Loan Repayment Date”), the U.S. Borrower shall be required to repay that principal amount of U.S. Loans, to the extent then outstanding, as is set forth opposite each such date below (each such repayment, as the same may be reduced as provided in Section 4.01(a), 4.01(b) or 4.02(f), a “Scheduled U.S. Term Loan Repayment”):

Scheduled U.S. Term Loan Repayment Date	Amount
March 31, 2007	$	2,062,500
June 30, 2007	$	2,062,500
September 30, 2007	$	2,062,500
December 31, 2007	$	2,062,500
March 31, 2008	$	2,062,500
June 30, 2008	$	2,062,500
September 30, 2008	$	2,062,500
December 31, 2008	$	2,062,500
March 31, 2009	$	2,062,500
June 30, 2009	$	2,062,500
September 30, 2009	$	2,062,500

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Scheduled U.S. Term Loan Repayment Date	Amount
December 31, 2009	$	2,062,500
March 31, 2010	$	2,062,500
June 30, 2010	$	2,062,500
September 30, 2010	$	2,062,500
December 31, 2010	$	2,062,500
March 31, 2011	$	2,062,500
June 30, 2011	$	2,062,500
September 30, 2011	$	2,062,500
December 31, 2011	$	2,062,500
March 31, 2012	$	2,062,500
June 30, 2012	$	2,062,500
September 30, 2012	$	2,062,500
December 31, 2012	$	2,062,500
March 31, 2013	$	2,062,500
June 30, 2013	$	2,062,500
September 30, 2013	$	2,062,500
Final Maturity Date	$	769,312,500

(ii) On each date set forth below (each, a “Scheduled German Term Loan Repayment Date”), the German Borrower shall be required to repay that principal amount of German Loans, to the extent then outstanding, as is set forth opposite each such date below (each such repayment, as the same may be reduced as provided in Section 4.01(a), 4.01(b) or 4.02(f), a “Scheduled German Term Loan Repayment”):

Scheduled German Term Loan Repayment Date	Amount
March 31, 2007	€	757,500
June 30, 2007	€	757,500

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Scheduled German Term Loan Repayment Date	Amount
September 30, 2007	€	757,500
December 31, 2007	€	757,500
March 31, 2008	€	757,500
June 30, 2008	€	757,500
September 30, 2008	€	757,500
December 31, 2008	€	757,500
March 31, 2009	€	757,500
June 30, 2009	€	757,500
September 30, 2009	€	757,500
December 31, 2009	€	757,500
March 31, 2010	€	757,500
June 30, 2010	€	757,500
September 30, 2010	€	757,500
December 31, 2010	€	757,500
March 31, 2011	€	757,500
June 30, 2011	€	757,500
September 30, 2011	€	757,500
December 31, 2011	€	757,500
March 31, 2012	€	757,500
June 30, 2012	€	757,500
September 30, 2012	€	757,500
December 31, 2012	€	757,500
March 31, 2013	€	757,500

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Scheduled German Term Loan Repayment Date	Amount
June 30, 2013	€	757,500
September 30, 2013	€	757,500
Final Maturity Date	€	282,547,500

(b) In addition to any other mandatory repayments pursuant to this Section 4.02, no later than the fifth Business Day following each date on or after the Restatement Effective Date upon which Aleris or any of its Subsidiaries receives any cash proceeds from any issuance or incurrence by Aleris or any of its Subsidiaries of Indebtedness for borrowed money (other than Indebtedness for borrowed money permitted to be incurred pursuant to Section 8.01), an amount equal to 100% of the Net Debt Proceeds of the respective issuance or incurrence of Indebtedness shall be applied on such date in accordance with the requirements of Sections 4.02(f) and (g).

(c) In addition to any other mandatory repayments pursuant to this Section 4.02, no later than the tenth Business Day following each date on or after the Restatement Effective Date upon which Aleris or any of its Subsidiaries receives any Net Sale Proceeds from any Asset Sale (except to the extent that the assets sold consist of (x) ABL Priority Collateral or ABL Exclusive Collateral, each as defined in the Intercreditor Agreement, (y) assets owned by the Swiss CE and its Subsidiaries or (z) assets located at the Carson Facility), an amount equal to 100% of the Net Sale Proceeds therefrom shall be applied on such date in accordance with the requirements of Sections 4.02(f) and (g); provided, however, (i) that so long as no Event of Default then exists, an amount equal to the Net Sale Proceeds therefrom shall not be required to be so applied on such date to the extent that Aleris has given written notice to the Administrative Agent within such ten Business Day period stating that such Net Sale Proceeds shall be used to purchase assets, used, or to be used, in the businesses permitted pursuant to Section 8.12 within 15 months following the receipt thereof (or, if within 15 months following receipt thereof, Aleris or any of its Subsidiaries enters into a legally binding commitment to reinvest such Net Sale Proceeds, within 180 days following the expiration date of such 15-month period), and (ii) if all or any portion of such Net Sale Proceeds not required to be so applied as provided above in this Section 4.02(c) are not so reinvested within such time period (or such earlier date, if any, as Aleris or the relevant Subsidiary determines not to reinvest the Net Sale Proceeds from such Asset Sale as set forth above), an amount equal to such remaining portion shall be applied on the last day of such period (or such earlier date, as the case may be) as provided above in this Section 4.02(c) without regard to the preceding proviso.

(d) In addition to any other mandatory repayments pursuant to this Section 4.02, no later than the tenth Business Day following each date on or after the Restatement Effective Date upon which Aleris or any of its Subsidiaries receives any cash proceeds from any Recovery Event (except to the extent that the cash proceeds are received in respect of assets constituting (x) ABL Priority Collateral or ABL Exclusive Collateral, each as defined in the Intercreditor Agreement, or (y) assets owned by the Swiss CE and its Subsidiaries), an amount equal to 100% of the Net Insurance Proceeds from such Recovery Event shall be applied on such date in accordance with the requirements of Sections 4.02(f) and

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(g); provided, however, that so long as no Event of Default then exists, such Net Insurance Proceeds shall not be required to be so applied on such date to the extent that Aleris has given written notice to the Administrative Agent within such ten Business Day period stating that such Net Insurance Proceeds shall be used to replace or restore properties or assets in respect of which such Net Insurance Proceeds were paid within 15 months following the date of the receipt of such Net Insurance Proceeds (or, if within 15 months following the receipt thereof, Aleris or any of its Subsidiaries enters into a legally binding commitment to reinvest such Net Insurance Proceeds, within 180 days of the date following the expiration date of such 15-month period), and provided further, that if all or any portion of such Net Insurance Proceeds not required to be so applied pursuant to the preceding proviso are not so used within the time period specified therein (or such earlier date, if any, as Aleris or the relevant Subsidiary determines not to reinvest the Net Insurance Proceeds relating to such Recovery Event as set forth above), an amount equal to such remaining portion shall be applied on the last day of such period (or such earlier date, as the case may be) as provided above in this Section 4.02(d) without regard to the preceding proviso.

(e) In addition to any other mandatory repayments pursuant to this Section 4.02, no later than the Excess Cash Flow Payment Date, the Borrowers shall prepay outstanding Loans in an aggregate principal amount equal to Applicable Excess Cash Flow Repayment Percentage of Excess Cash Flow for the Fiscal Year then ended.

(f) Each amount required to be applied pursuant to Sections 4.02(a), (b), (c), (d) and (e) in accordance with this Section 4.02(f) shall be applied as a mandatory repayment of Loans, with each such repayment to be applied to U.S. Loans and German Loans on a pro rata basis, provided that if at the time of a repayment of the Loans pursuant to Section 4.02(b), (c) or (d), the sum (the “Sum”) of (1) the Excess Availability under and as defined in the ABL Credit Agreement as in effect on the Restatement Effective Date and (2) the cash and Cash Equivalents of Aleris and its Subsidiaries (other cash and Cash Equivalents which are Restricted or on deposit in an Exempted Deposit Account (as defined in the ABL Credit Agreement as in effect on the Restatement Effective Date)) is less than $100,000,000, such repayment shall be applied first to the repayment of outstandings under the ABL Credit Agreement in such amount as may be required to cause the Sum to equal $100,000,000 and thereafter to the repayment of the Loans as provided above, provided, further, that each amount required to be applied pursuant to Sections 4.02(c) and (d) shall (I) if sourced from Net Sale Proceeds or Net Insurance Proceeds received by the U.S. Borrower or any of its Domestic Subsidiaries from the sale or condemnation of assets owned by the U.S. Borrower or any of its Subsidiaries, be applied (x) first, to repay principal of U.S. Loans until all U.S. Loans are paid in full and (y) second, to repay principal of German Loans and (II) if sourced from Net Sale Proceeds or Net Insurance Proceeds received by the German Borrower or any of its Subsidiaries from the sale or condemnation of assets owned by the German Borrower or any of its Domestic Subsidiaries, be applied (x) first, to repay principal of German Loans until all German Loans are paid in full and (y) second, to repay principal of U.S. Loans. The amount of each principal repayment of Loans of any Tranche made as required by Sections 4.02(b), (c), (d) and (e) shall be applied to reduce the Scheduled Term Loan Repayments (if any) of the applicable Tranche in direct order of their maturity.

(g) With respect to each repayment of Loans required by this Section 4.02, the applicable Borrower or Borrowers may designate the Types of Loans of the applicable Tranche

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which are to be repaid and, in the case of Euro Rate Loans, the specific Borrowing or Borrowings of the applicable Tranche pursuant to which such Euro Rate Loans were made, provided that subject to Section 2.11 and clause (i) of this Section 4.02, each repayment of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans. In the absence of a designation by the Borrowers as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion.

(h) Notwithstanding anything in this Section 4.02 to the contrary, it is understood and agreed that none of Sections 4.02(a) through (e), inclusive, shall require that amounts received by any Foreign Subsidiary or Foreign Subsidiaries or a Domestic Subsidiary which is a Subsidiary of a Foreign Subsidiary be used to repay Term Obligations owed by any U.S. Credit Parties.

(i) Notwithstanding the foregoing provisions of this Section 4.02 (other than clause (a) of this Section 4.02, which clause shall not have the benefits of this sentence), if at any time the mandatory repayment of Loans of a given Tranche pursuant to this Section 4.02 would result in the applicable Borrower’s incurring breakage costs under Section 2.11 as a result of Euro Rate Loans being repaid other than on the last day of an Interest Period applicable thereto (any such Euro Rate Loans, “Affected Loans”), such Borrower may elect, by written notice to the Administrative Agent, to have the provisions of the following sentence be applicable so long as no Default or Event of Default then exists. At the time that any Affected Loans are otherwise required to be prepaid, the applicable Borrower may elect to deposit 100% (or such lesser percentage elected by such Borrower as not being repaid) of the principal amounts that otherwise would have been paid in respect of such Affected Loans with the Administrative Agent to be held as security for the obligations of the such Borrower hereunder pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to the Administrative Agent and shall provide for investments of such deposits in Cash Equivalents, with such cash collateral to be released upon the request of such Borrower from such cash collateral account (and applied to repay the principal amount of such Borrower’s Euro Rate Loans) upon each occurrence thereafter of the last day of an Interest Period applicable to the Euro Rate Loans of such Borrower (or such earlier date or dates as shall be requested by such Borrower, with the amount to be so released and applied on the last day of each Interest Period to be the amount of such Euro Rate Loans to which such Interest Period applies (or, if less, the amount remaining in such cash collateral account); provided that (i) interest in respect of such Affected Loans shall continue to accrue thereon at the rate provided hereunder until such Affected Loans have been repaid in full and (ii) at any time while an Event of Default has occurred and is continuing or upon written notice from the Required Lenders, the Required Lenders may direct the Administrative Agent (in which case the Administrative Agent shall, and is hereby authorized by the Borrowers to, follow said directions) to apply any or all proceeds then on deposit in such collateral account to the payment of such Affected Loans. All risk of loss in respect of investments made as contemplated in this clause (i) shall be on the applicable Borrower. Under no circumstances shall the Administrative Agent be liable or accountable to the Borrowers or any other Person for any decrease in the value of the cash collateral account or for any loss resulting from the sale of any investment so made.

4.03 Payments and Computations. Except as otherwise specifically provided herein, all payments under this Agreement and under any Note shall be made to the

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Administrative Agent for the account of the Lender or Lenders entitled thereto not later than 1:00 p.m. (New York time) on the date when due and shall be made in (x) U.S. Dollars in immediately available funds at the Payment Office of the Administrative Agent in respect of any obligation of the Borrowers under this Agreement except as otherwise provided in the immediately following clause (y) and (y) subject to Section 2.14, Euros in immediately available funds at the Payment Office of the Administrative Agent, if such payment is made in respect of (i) principal of or interest on Euro Denominated Loans or (ii) any increased costs, indemnities or other amounts owing with respect to Euro Denominated Loans (or Commitments relating thereto) at any time prior to the occurrence of a Conversion Event. Nothing in the succeeding clauses of this Section 4.03 shall affect or alter the Borrowers’ obligations to the Administrative Agent, the Collateral Agent and the Lenders with respect to all payments otherwise required to be made by the Borrowers in accordance with the terms of this Agreement and the other Credit Documents. Whenever any payment to be made hereunder or under any Note shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable at the applicable rate during such extension.

4.04 Net Payments. (a) All payments made by or on behalf of any Credit Party under any Credit Document (including, in the case of the U.S. Borrower, in its capacity as a guarantor pursuant to Section 12) in each case will be made without setoff, counterclaim or other defense. Except as provided in Section 4.04(b), all such payments will be made free and clear of, and without deduction or withholding for, any Taxes. If any Taxes are levied or imposed with respect to such payment, the relevant Borrower (and any Credit Party making the respective payment or which has guaranteed the obligations of the relevant Borrower) agrees to pay the full amount of such Taxes to the appropriate taxing authority, and shall pay to the applicable Section 4.04 Indemnitee such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any other Credit Document, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such other Credit Document (including, for the avoidance of doubt, withholding and deductions applicable to additional amounts payable under this Section 4.04). The respective Borrowers will furnish to the Administrative Agent as soon as practicable after the date the payment of any Taxes is due pursuant to applicable law certified copies of tax receipts or other evidence reasonably satisfactory to the Administrative Agent evidencing such payment by such Borrowers or the respective Credit Party. The U.S. Borrower and the German Borrower (and any Credit Party making the respective payment or which has guaranteed the obligations of the respective Borrower), as applicable, agree to indemnify and hold harmless each Section 4.04 Indemnitee and reimburse such Section 4.04 Indemnitee upon its written request (which shall set forth the basis and calculation of such amount) for the amount of any Taxes so levied or imposed and paid by such Section 4.04 Indemnitee. Notwithstanding anything to the contrary in this Section 4.04(a), (i) any payments required to be made pursuant to this Section 4.04(a) to an Indirect Section 4.04 Indemnitee shall be made to the Related Pass Through Entity and (ii) any request for reimbursement pursuant to this Section 4.04(a) that is to be made by an Indirect Section 4.04 Indemnitee shall be made by the Related Pass Through Entity.

(b) The Administrative Agent and each Lender that is a Lender to the U.S. Borrower and is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) agrees to deliver to Aleris and the Administrative Agent on or prior to the

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Restatement Effective Date or, in the case of a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 2.13 or 11.04(b) (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer and is in compliance with the provisions of this paragraph), on the date of such assignment or transfer to such Lender, (i) two accurate and complete original signed copies of U.S. Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption from withholding under an income tax treaty) (or successor forms) certifying to such Lender’s entitlement as of such date to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement and under any Note, or (ii) if the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver forms described in clause (i) above, (x) a certificate substantially in the form of Exhibit C (any such certificate, a “Section 4.04(b)(ii) Certificate”) and (y) two accurate and complete original signed copies of U.S. Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption) (or successor form) certifying to such Lender’s entitlement as of such date to a complete exemption from United States withholding tax with respect to payments of interest to be made under this Agreement and under any Note or (iii) in the case of the Administrative Agent and each such Lender, if a Lender or the Administrative Agent is a foreign intermediary or flow-through entity for U.S. federal income tax purposes, two accurate and complete signed copies of Internal Revenue Service Form W-8IMY (and all necessary attachments) establishing a complete exemption from United States withholding tax with respect to payments made to the Administrative Agent or the applicable Lender, as the case may be, under this Agreement and under any Note. In addition, the Administrative Agent and each Lender to the U.S. Borrower agrees that from time to time after the Restatement Effective Date, when a lapse in time or change in circumstances or law renders the previous certification obsolete, invalid or inaccurate in any material respect, the Administrative Agent or such Lender will deliver to Aleris and the Administrative Agent two new accurate and complete original signed copies of U.S. Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits of any income tax treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and a Section 4.04(b)(ii) Certificate, or Form W-8IMY (with respect to foreign intermediary or flow through entity), as the case may be, and such other forms and necessary attachments as may be required in order to confirm or establish the entitlement of such Person to a continued exemption from United States withholding tax with respect to payments under this Agreement and any Note, or the Administrative Agent and/or such Lender shall immediately notify Aleris and the Administrative Agent of its inability to deliver any such form or Section 4.04(b)(ii) Certificate, in which case the Administrative Agent and/or such Lender shall not be required to deliver any such new form or Section 4.04(b)(ii) Certificate pursuant to this Section 4.04(b). Notwithstanding the foregoing, with respect to payments made by any Credit Party under any Credit Document to or for the benefit of a Participant, such Participant shall be required to provide forms and/or certificates pursuant to the preceding sentences of this Section 4.04(b) only to the extent that such Participant is legally entitled to do so. The Administrative Agent and each Lender that is a Lender to the U.S. Borrower and is a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. federal income tax purposes (other than an Administrative Agent or Lender that may be treated as an exempt recipient based on the indicators described in U.S. Treasury Regulation Section 1.6049-4(c)(1)(ii) except to the extent required by Treasury Regulation Section 1.1441-1(d)(4) (and any successor provision)) agrees to deliver (with respect to itself only) to Aleris and the Administrative Agent, on or prior to the

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Restatement Effective Date or, in the case of such an Administrative Agent appointed after the Restatement Effective Date pursuant to Section 10.09 or a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 2.13 or 11.04(b) (unless the respective Lender was already a Lender to the U.S. Borrower hereunder immediately prior to such assignment or transfer and is in compliance with the provisions of this paragraph), on the date of such assignment or transfer to such Lender, two accurate and complete original signed copies of U.S. Internal Revenue Service Form W-9 (or successor forms) certifying to such Person’s entitlement as of such date to a complete exemption from United States backup withholding tax with respect to payments to be made under this Agreement and under any other Credit Document. Notwithstanding anything to the contrary contained in Section 4.04(a), but subject to Section 11.04(b) and the immediately succeeding sentence, (x) the U.S. Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold taxes imposed by the United States federal government (or any political subdivision or taxing authority thereof or therein) from interest, Fees or other amounts payable hereunder for the account of the Administrative Agent and/or any Lender, as the case may be, to the extent that the Administrative Agent and/or such Lender, as the case may be, has not provided to the U.S. Borrower U.S. Internal Revenue Service Forms that establish a complete exemption from deduction or withholding and (y) no Borrower shall be obligated pursuant to Section 4.04(a) to gross-up payments to be made to the Administrative Agent and/or a Lender (other than a Participant following the occurrence of a Conversion Event), as the case may be, in respect of withholdings, income or similar taxes imposed by the United States if (I) the Administrative Agent and/or such Lender, as the case may be, has not provided to such Borrower the U.S. Internal Revenue Service Forms required to be provided to such Borrower pursuant to this Section 4.04(b) or (II) in the case of a payment, other than interest, to the Administrative Agent and/or a Lender (other than a Participant following the occurrence of a Conversion Event), as the case may be, described in clause (ii) above, to the extent that such forms do not establish a complete exemption from withholding of such taxes. Notwithstanding anything to the contrary contained in the preceding sentence or elsewhere in this Section 4.04 and except as set forth in Section 11.04(b), the U.S. Borrower and the German Borrower (and any Credit Party making the respective payment or which has guaranteed the obligations of the respective Borrower) agree to pay any additional amounts and to indemnify each Lender in the manner set forth in Section 4.04(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any amounts deducted or withheld by it as described in the immediately preceding sentence as a result of any changes after the Restatement Effective Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of income or similar taxes provided, however, that (x) this sentence shall not apply to the portion of such amounts required to be deducted or withheld by such Borrower or Borrowers to the extent such Borrower or Borrowers would have been required to pay additional amounts pursuant to Section 4.04(a) irrespective of such change in such applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof and (y) this sentence shall not be read to permit the Administrative Agent and/or a Lender to a U.S. Borrower to refuse to deliver any Form W-8ECI, Form W-8BEN, Form W-8IMY, or Section 4.04(b)(ii) Certificate, as the case may be, except where, as a result of such change in law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of income or

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similar taxes, the Administrative Agent and/or such Lender is unable to deliver such form or certificate as described above.

(c) Each Lender of German Loans agrees to use reasonable efforts (consistent with legal and regulatory restrictions and subject to overall policy considerations of such Lender) to file any certificate or document or to furnish to the German Borrower any information, in each case, as reasonably requested by the German Borrower that may be necessary to establish any available exemption from, or reduction in the amount of, any Taxes; provided, however, that nothing in this Section 4.04(c) shall require a Lender to disclose any confidential information (including, without limitation, its tax returns or its calculations).

(d) If a Borrower pays any additional amount under this Section 4.04 to a Section 4.04 Indemnitee, and such Section 4.04 Indemnitee determines in its reasonable discretion that it has actually received or realized in connection therewith any refund or any reduction of, or credit against (including, for the avoidance of doubt, any foreign tax credit), its tax liabilities in or with respect to the taxable year in which the additional amount is paid (a “Tax Benefit”), such Section 4.04 Indemnitee shall pay to such Borrower an amount (not to exceed additional amounts paid by such Borrower under this Section 4.04 with respect to Taxes giving rise to such Tax Benefit) that the Section 4.04 Indemnitee shall, in its reasonable sole discretion, determine is equal to the net benefit, after tax, which was obtained by such Section 4.04 Indemnitee in such year as a consequence of such Tax Benefit; provided, however, that (i) any Section 4.04 Indemnitee may determine, in its sole discretion consistent with the policies of such Section 4.04 Indemnitee, whether to seek a Tax Benefit; (ii) any taxes that are imposed on a Section 4.04 Indemnitee as a result of a disallowance or reduction (including through the expiration of any tax credit carryover or carryback of such Section 4.04 Indemnitee that otherwise would not have expired) of any Tax Benefit with respect to which such Section 4.04 Indemnitee has made a payment to such Borrower pursuant to this Section 4.04(d) shall be treated as a Tax for which such Borrower is obligated to indemnify such Section 4.04 Indemnitee pursuant to this Section 4.04 without any exclusions or defenses; (iii) nothing in this Section 4.04(d) shall require any Section 4.04 Indemnitee to disclose any confidential information to any Borrower (including, without limitation, its tax returns or its calculations); and (iv) no Section 4.04 Indemnitee shall be required to pay any amounts pursuant to this Section 4.04(d) at any time that a Default or an Event of Default exists.

(e) If a Borrower determines in good faith that a reasonable basis exists for contesting any Taxes for which additional amounts have been paid under this Section 4.04 to a Section 4.04 Indemnitee, such Section 4.04 Indemnitee shall cooperate with such Borrower in challenging such Taxes, at such Borrower’s expense, if so requested by such Borrower in writing.

SECTION 5. Conditions Precedent to Loans on the Restatement Effective Date. The obligation of each Lender to make Loans on the Restatement Effective Date (including by way of the conversion of the Existing Loans on the Restatement Effective Date as contemplated in Sections 2.01(a) and (b)) is subject at the time of the making of such Loans to the satisfaction of the following conditions (unless waived in accordance with Section 11.12):

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5.01 Execution of Agreement; Notes. On or prior to the Restatement Effective Date, (i) this Agreement shall have been executed and delivered as provided in Section 11.10 and (ii) there shall have been delivered to the Administrative Agent for the account of each of the Lenders that has requested same the appropriate U.S. Term Note and/or German Term Note, in each case executed by the appropriate Borrower or Borrowers and in the amount, maturity and as otherwise provided herein.

5.02 Opinions of Counsel. On the Restatement Effective Date, the Joint Lead Arrangers shall have received (i) from Fried, Frank, Harris, Shriver & Jacobson LLP, special counsel to the Credit Parties, an opinion addressed to the Administrative Agent and the Collateral Agent and each of the Lenders and dated the Restatement Effective Date covering the matters set forth in Exhibit D-1, (ii) from Fried, Frank, Harris, Shriver & Jacobson LLP, special German counsel to the Credit Parties organized under the laws of Germany or any province thereof, opinions addressed to the Administrative Agent and the Collateral Agent and each of the Lenders and dated the Restatement Effective Date covering the matters set forth in Exhibit D-2, (iii) from local counsel in each state, province or other jurisdiction in which Mortgaged Properties are located and/or Credit Parties are organized, an opinion in form and substance reasonably satisfactory to the Collateral Agent addressed to the Collateral Agent and each of the Lenders and dated the Restatement Effective Date covering such matters incident to the transactions contemplated herein as the Collateral Agent may reasonably request including but not limited to (x) the enforceability of each Mortgage and (y) the perfection of the security interests granted pursuant to the relevant Security Documents and (iv) from foreign counsel to the Credit Parties in such jurisdictions as may be reasonably requested by the Administrative Agent, opinions which shall (x) be addressed to the Administrative Agent, the Collateral Agent, and each of the Lenders and be dated the Restatement Effective Date, (y) cover various matters regarding the execution, delivery and performance of the Local Law Pledge Agreements and European Security Documents and the perfection and/or such other matters incident to the transactions contemplated herein as the Joint Lead Arrangers may reasonably request and (z) be in form, scope and substance reasonably satisfactory to the Joint Lead Arrangers.

5.03 Corporate Documents; Proceedings; etc. (a) On the Restatement Effective Date, the Joint Lead Arrangers shall have received a certificate from each Credit Party, dated the Restatement Effective Date, signed by the chairman of the board, the chief executive officer, the president, the chief financial officer or any vice president of such Credit Party, and attested to by the secretary or any assistant secretary of such Credit Party, substantially in the form of Exhibit E with appropriate insertions, together with copies of the certificate or articles of incorporation and by-laws (or equivalent organizational documents), as applicable, of such Credit Party and the resolutions of such Credit Party referred to in such certificate, and each of the foregoing shall be in form and substance reasonably acceptable to the Joint Lead Arrangers.

(b) On the Restatement Effective Date, the Joint Lead Arrangers shall have received all corporate, partnership, limited liability company and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement and the other Credit Documents shall be reasonably satisfactory in form and substance to the Joint Lead Arrangers, and the Joint Lead Arrangers shall have received all information and copies of all documents and papers, including records of corporate proceedings, governmental approvals, good standing certificates and bring-down telegrams or facsimiles, if any, which the

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Joint Lead Arrangers may have reasonably requested in connection therewith, such documents and papers where appropriate to be certified by proper corporate, partnership, limited liability company or governmental authorities.

(c) On the Restatement Effective Date, the Joint Lead Arrangers shall have received a certificate, dated the Restatement Effective Date and signed on behalf of Aleris by the chairman of the board, the chief executive officer, the chief financial officer, the president or any vice president of Aleris, certifying on behalf of Aleris that all of the conditions in Sections 5.04, 5.05, 5.06, 5.07 and 5.14 have been satisfied on such date.

5.04 Consummation of the Merger. On the Restatement Effective Date, the Merger shall have been (or simultaneously with the initial funding of the Loans shall be) consummated in all material respects in accordance with the Merger Documents. On the Restatement Effective Date, (i) the Joint Lead Arrangers shall have received true and correct copies of all Merger Documents, certified as such by an appropriate officer of Aleris, (ii) each of the conditions precedent to the consummation of the Merger as set forth in the Merger Documents as originally in effect shall have been satisfied in all material respects, and not waived in a manner that is materially adverse to the Lenders except with the prior written consent of the Joint Lead Arrangers, (iii) the Merger Documents shall not have been amended in any way materially adverse to the Lenders without the prior written consent of the Joint Lead Arrangers, and (iv) all Merger Documents shall be in full force and effect.

5.05 Equity Financing, New Notes, Revolving Loans, etc. On or prior to the Restatement Effective Date, the Borrowers shall received gross cash proceeds from (x) the issuance of the New Notes in an aggregate amount equal to $1,000,000,000 (or its equivalent in any other applicable currency), (y) the incurrence of Revolving Loans pursuant to the ABL Credit Agreement in such aggregate amount as is needed, after giving effect to all other available sources of funds, to make the payments owing on the Restatement Effective Date to effect the Transaction and (z) cash equity financing from the Permitted Holders in an aggregate amount of $852,000,000 (the “Equity Financing”).

5.06 Refinancing; Excess Availability. (a) On the Restatement Effective Date and prior to or concurrently with the incurrence of the Loans hereunder:

(i) (w) proceeds from (1) U.S. Loans in excess of $158,323,200 and (2) German Loans in excess of €77,609,000 shall be utilized to repay outstanding Existing U.S. Loans and Existing German Loans, as applicable, that are not Converted U.S. Loans and Converted German Loans, as applicable, (x) the Interest Period applicable to each Borrowing of Existing Loans existing on the Restatement Effective Date immediately prior to the conversion of the Existing Loans pursuant to Section 2.01 and maintained as Euro Rate Loans under the Existing Term Loan Agreement shall, simultaneously with the occurrence of the Restatement Effective Date, be broken, (y) the Administrative Agent shall (and is hereby authorized to) take all appropriate actions to ensure that all Lenders with outstanding Loans (after giving effect to the conversion of Existing Loans and the incurrence of new Loans pursuant to Section 2.01) under the relevant Tranche or Tranches participate in each outstanding borrowing of Loans under the relevant Tranche or Tranches pro rata on the basis of their respective Commitments

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under the relevant Tranche or Tranches on the Restatement Effective Date and with the relevant Borrowers under the relevant Tranche being obligated to pay to the respective Lenders any costs of the type referred to in Section 2.11 incurred in connection with the conversion of Existing Loans pursuant to Section 2.01 and/or the actions taken pursuant to this Section 5.06(a) and (z) all accrued interest on all outstanding extensions of credit pursuant to the Existing Term Loan Agreement, and all regularly accruing fees owing pursuant to the Existing Term Loan Agreement, shall be repaid in full on, and through, the Restatement Effective Date (whether or not same would otherwise be then due and payable pursuant to the Existing Term Loan Agreement);

(ii) all loans, interest and other amounts owing pursuant to the Existing Senior Bridge Loan Agreement shall have been repaid or otherwise satisfied in full and the Existing Senior Bridge Loan Agreement and all guarantees with respect thereto shall have been terminated and be of no further force and effect; and

(iii) the Administrative Agent shall have received evidence in form, scope and substance reasonably satisfactory to it, that the matters set forth in this Section 5.06(a) have been satisfied on such date.

(b) On the Restatement Effective Date, Excess Availability (as defined in the ABL Credit Agreement) shall be at least $200,000,000.

5.07 Adverse Change. Since December 31, 2005, there shall not have occurred a Company Material Adverse Effect.

5.08 Credit Document Acknowledgement; Security Document Amendments; Pledge Agreements; Luxco Guaranty, etc. (a) On the Restatement Effective Date, each U.S. Credit Party shall have duly authorized, executed and delivered the Amended and Restated U.S. Pledge Agreement in the form of Exhibit F-1 (as amended, modified or supplemented from time to time, the “U.S. Pledge Agreement”) and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral, if any, referred to therein and then owned by such U.S. Credit Party, (x) endorsed in blank in the case of promissory notes constituting Pledge Agreement Collateral and (y) together with executed and undated endorsements for transfer in the case of equity interests constituting certificated Pledge Agreement Collateral, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect (or maintain the perfection of) the security interests purported to be created (or maintained) by the U.S. Pledge Agreement have been taken and the U.S. Pledge Agreement shall be in full force and effect.

(b) On the Restatement Effective Date, each U.S. Subsidiary Guarantor that is not a Borrower shall have duly authorized, executed and delivered the Amended and Restated U.S. Subsidiaries Guaranty in the form of Exhibit G-1 (as amended, modified or supplemented from time to time, the “U.S. Subsidiaries Guaranty”), guaranteeing all of the obligations of the Borrowers as more fully provided therein, and the U.S. Subsidiaries Guaranty shall be in full force and effect.

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(c) On the Restatement Effective Date, each U.S. Credit Party shall have duly authorized, executed and delivered the Amended and Restated U.S. Security Agreement in the form of Exhibit H (as amended, modified or supplemented from time to time, the “U.S. Security Agreement”) covering all of such U.S. Credit Party’s Security Agreement Collateral (as defined in the U.S. Security Agreement), together with:

(i) proper financing statements (Form UCC-1 or the equivalent) (or amendments thereto) for filing under the UCC or other appropriate filing offices of each jurisdiction as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect (or maintain the perfection of) the security interests purported to be created (or maintained) by the U.S. Security Agreement;

(ii) certified copies of requests for information or copies (Form UCC-11), or equivalent reports as of a recent date, listing all effective financing statements that name Aleris or any of its Domestic Subsidiaries as debtor and that are filed in the jurisdictions referred to in clause (i) above and in such other jurisdictions in which Collateral is located on the Restatement Effective Date, together with copies of such other financing statements that name Aleris or any of its Domestic Subsidiaries as debtor (none of which shall cover any of the Collateral except (x) to the extent evidencing Permitted Liens or (y) those in respect of which the Collateral Agent shall have received termination statements (Form UCC-3) or such other termination statements as shall be required by local law fully executed for filing); and

(iii) all other documents or filings necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect (or maintain the perfection of) and protect the security interests purported to be created (or maintained) by the U.S. Security Agreement,

and the U.S. Security Agreement shall be in full force and effect

(d) On the Restatement Effective Date, each Credit Party, the Administrative Agent and the Collateral Agent shall have duly authorized, executed and delivered the Credit Document Acknowledgement and Amendment in the form of Exhibit F-3, and the Credit Document Acknowledgement shall be in full force and effect.

(e) On the Restatement Effective Date, with respect to any Security Documents (other than the U.S. Pledge Agreement and the U.S. Security Agreement), if the Administrative Agent reasonably determines (based on advice of local counsel and taking into account the relative costs and benefits associated therewith) that it would be in the interests of the Lenders that the respective Credit Party authorize, execute and deliver one or more amendments to any such Security Document (or amended and restated agreements), then the respective Credit Party shall (i) so authorize, execute and deliver one or more such amendments (or amended and restated agreements) (each, a “Security Document Amendment”) and (ii) take such actions as may be necessary or, in the reasonable opinion of the Collateral Agent, advisable under local law (as advised by local counsel) to create, maintain, effect, perfect, preserve, maintain and protect the security interests granted (or purported to be granted) by each such Security Document. Each Security Document Amendment shall (i) be prepared by local counsel reasonably satisfactory to the Administrative Agent, (ii) be in form and substance reasonably

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satisfactory to the Administrative Agent and (iii) be in full force and effect on the Restatement Effective Date.

(f) On the Restatement Effective Date, Dutch Aluminum C.V. shall have duly authorized, executed and delivered a European Parent Pledge Agreement and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral, if any, referred to therein and then owned by such European Parent Guarantor, (x) endorsed in blank in the case of promissory notes constituting Pledge Agreement Collateral and (y) together with executed and undated endorsements for transfer in the case of equity interests constituting certificated Pledge Agreement Collateral, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests purported to be created by such European Parent Pledge Agreement have been taken and such European Parent Pledge Agreement shall be in full force and effect.

(g) On the Restatement Effective Date, the Luxco Guarantor shall have (i) duly authorized, executed and delivered the Luxco Guaranty, guaranteeing all of the obligations of the U.S. Borrower as more fully provided therein, and the Luxco Guaranty shall be in full force and effect and (ii) duly authorized, executed and delivered the Luxco Pledge Agreement and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral, if any, referred to therein and then owned by such Luxco Guarantor, (x) endorsed in blank in the case of promissory notes constituting Pledge Agreement Collateral and (y) together with executed and undated endorsements for transfer in the case of equity interests constituting certificated Pledge Agreement Collateral, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests purported to be created by the Luxco Pledge Agreement have been taken and the Luxco Pledge Agreement shall be in full force and effect.

(h) On the Restatement Effective Date, with respect to any Credit Party which is pledging promissory notes or equity interests in one or more Persons organized under the laws of a different jurisdiction from the jurisdiction of organization of the respective Credit Party, if the Collateral Agent reasonably determines (based on advice of local counsel and taking into account the relative costs and benefits associated therewith) that it would be in the interests of the Lenders that the respective Credit Party authorize, execute and deliver one or more additional pledge agreements governed by the laws of the jurisdiction or jurisdictions in which the Person or Persons whose promissory notes or equity interests are being pledged is (or are) organized, then the respective Credit Party shall (i) so authorize, execute and deliver one or more such additional pledge agreements (each, as amended, modified, restated and/or supplemented from time to time, a “Local Law Pledge Agreement” and, collectively, the “Local Law Pledge Agreements”) and (ii) take such actions as may be necessary or, in the reasonable opinion of the Collateral Agent, advisable under local law (as advised by local counsel) to create, maintain, effect, perfect, preserve, maintain and protect the security interests granted (or purported to be granted) by each such Local Law Pledge Agreement. Each Local Law Pledge Agreement shall (i) be prepared by local counsel reasonably satisfactory to the Collateral Agent, (ii) be in form and substance reasonably satisfactory to the Collateral Agent and (iii) be in full force and effect on the Restatement Effective Date, it being understood and agreed, however, in the case of any Local Law Pledge Agreement entered into by Aleris or any of the other U.S. Credit Parties, the respective Credit Party shall not be required to pledge more than 65% of the total combined

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voting power of all classes of equity interests entitled to vote of any “first-tier” Foreign Subsidiary that is a corporation (or treated as such for U.S. federal tax purposes) in support of its obligations (x) as a Borrower under the Credit Agreement (in the case of the U.S. Borrower) or (y) under its guaranty in respect of the Term Obligations of the U.S. Borrower (in the case of the other U.S. Credit Parties) (it being understood and agreed that 100% of the non-voting equity interests, if any, of each such “first-tier” Foreign Subsidiary shall be required to be pledged in support of such obligations and no stock or assets of any such Subsidiaries of any such “first-tier” Foreign Subsidiary shall be required to be pledged in support of such obligations). Schedule XVI sets forth a list of all Local Law Pledge Agreements to be executed and delivered on the Restatement Effective Date.

5.09 Mortgage; Title Insurance; Landlord Waivers; etc. On the Restatement Effective Date, the Collateral Agent shall have received:

(i) fully executed counterparts of amendments to (or amendments and restatements of) each of the Term Creditor Mortgages, in form and substance reasonably satisfactory to the Collateral Agent which Existing Term Creditor Mortgages (as amended or amended and restated, as the case may be) shall cover each Real Property (located in the United States or any State or territory thereof) owned by Aleris or any of the other Credit Parties and designated as an “Existing U.S. Mortgaged Property” on Schedule III hereto, together with evidence that counterparts of such Existing Term Creditor Mortgages (as amended or amended and restated, as the case may be) have been delivered to the title insurance company insuring the Lien of each such Term Creditor Mortgage for recording in the county where such Real Property is located, to effectively create (or maintain) a valid and enforceable first priority mortgage lien, subject only to Liens permitted pursuant to Section 8.02, on the Existing U.S. Mortgaged Property described therein, in each case in favor of the Collateral Agent (or such other trustee as may be required or desired under local law) for the benefit of the Secured Creditors;

(ii) such consents, approvals, amendments, supplements, estoppels, tenant subordination agreements or other instruments as shall be reasonably deemed necessary by the Administrative Agent in order for the owner or holder of the fee interest constituting such Existing U.S. Mortgaged Property to grant the Lien contemplated by the Existing Creditor Mortgage with respect to such Existing U.S. Mortgaged Property; provided, that notwithstanding the foregoing, the conditions set forth in this clause shall be considered satisfied even if the Borrowers do not deliver such items by the Restatement Effective Date, so long as the Borrowers have used commercially reasonable efforts to obtain and deliver such items by the Restatement Effective Date;

(iii) date-down endorsements to each Existing Mortgage Policy, issued by Chicago Title Insurance Company and insuring the Collateral Agent that the Existing Term Creditor Mortgage on each such Existing U.S. Mortgaged Property will continue to be a valid and enforceable first priority mortgage lien on such Existing U.S. Mortgaged Property, free and clear of all defects and encumbrances except Liens permitted pursuant to Section 8.02 and (y) with respect to each Term Creditor Mortgage located in a jurisdiction where date-down endorsements are not available, a Mortgage Policy relating to each such Term Creditor Mortgage, issued by Chicago Title Insurance Company, in an

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insured amount reasonably satisfactory to the Collateral Agent and insuring the Collateral Agent that the Term Creditor Mortgage on each such U.S. Mortgaged Property is a valid and enforceable first priority mortgage lien on such U.S. Mortgaged Property, free and clear of all defects and encumbrances other than Liens permitted pursuant to Section 8.02. Each such Mortgage Policy and endorsement shall in addition be in form and substance reasonably satisfactory to the Collateral Agent and, with respect to any new Mortgage Policy, shall include, to the extent available in the applicable jurisdiction, supplemental endorsements (including, without limitation, endorsements relating to future advances under this Agreement and the Notes and Loans, usury, first loss, last dollar, tax parcel, subdivision, zoning, contiguity, variable rate, doing business, public road access, survey, environmental lien, mortgage tax and so-called comprehensive coverage over covenants and restrictions and for any other matters that the Collateral Agent in its discretion may reasonably request) and shall not include the “standard” title exceptions, a survey exception or an exception for mechanics’ liens, and shall provide for affirmative insurance and such reinsurance as the Collateral Agent in its discretion may reasonably request;

(iv) such affidavits, certificates, information (including financial data) and instruments of indemnification (including, without limitation, a so-called “gap” indemnification) as shall be required to induce the title company to issue the date-down endorsements referred to in subsection (iii) above;

(v) evidence reasonably acceptable to the Administrative Agent of payment by Aleris and its Subsidiaries of all new Mortgage Policy premiums and date-down endorsement premiums in respect of such new Mortgage Policies and date-down endorsements, search and examination charges, and related charges, mortgage recording taxes, fees, charges, costs and expenses required for the recording of such Existing Term Creditor Mortgages and amendments and issuance of such new Mortgage Policies and date-down endorsements; and

(vi) fully executed Collateral Access Agreements in respect of those Leaseholds of Aleris or any of its Subsidiaries designated as “Leaseholds Subject to Collateral Access Agreements” on Schedule V; provided, that notwithstanding the foregoing, the conditions set forth in this clause shall be considered satisfied even if the Borrowers do not deliver such items by the Restatement Effective Date, so long as the Borrowers have used commercially reasonable efforts to obtain and deliver such items by the Restatement Effective Date.

5.10 Intercreditor Agreement. On the Restatement Effective Date, each Credit Party, the Collateral Agent (for and on behalf of the Term Secured Parties) and the ABL Collateral Agent (for and on behalf of the ABL Secured Parties) shall have duly authorized, executed and delivered the Amended and Restated Intercreditor Agreement in the form of Exhibit M (as amended, modified, restated and/or supplemented from time to time, the “Intercreditor Agreement”), and the Intercreditor Agreement shall be in full force and effect.

5.11 Financial Statements; Projections. On or prior to the Restatement Effective Date, the Joint Lead Arrangers shall have received true and correct copies of the

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historical and pro forma consolidated financial statements and the Projections referred to in Section 6.05.

5.12 Solvency Certificate; Insurance Certificates. On the Restatement Effective Date, the Joint Lead Arrangers shall have received:

(i) a solvency certificate from the chief financial officer of Aleris in the form of Exhibit I; and

(ii) certificates of insurance complying with the requirements of Section 7.09 for the business and properties of Aleris and its Subsidiaries, in form and substance reasonably satisfactory to the Joint Lead Arrangers.

5.13 Fees, etc. On the Restatement Effective Date, all costs, fees, expenses (including, without limitation, reasonable and invoiced legal fees and expenses) and other compensation contemplated hereby, payable to the Agents and the Lenders or otherwise payable in respect of the Transaction shall have been paid by the Borrowers to the extent due and invoiced.

5.14 Merger Agreement Representations and Warranties. The representations and warranties contained in Article III of the Merger Agreement shall be true and correct in all material respects, but solely to the extent that (i) they are material to the interests of the Lenders and (ii) Parent (as defined in the Merger Agreement) has the right to terminate its obligations under the Merger Agreement as a result of any breach thereof.

5.15 No Default; Representations and Warranties. On the Restatement Effective Date (both before and after giving effect to the Loans to be incurred on such date), there shall exist no Default or Event of Default (other than a Default or Event of Default pursuant to Section 9.02 with respect to the representations enumerated in the parenthetical to clause (ii) below) and (ii) all representations and warranties contained herein and in the other Credit Documents (except the representations contained in Sections 6.03(i) and (ii), 6.04, 6.05, 6.06, 6.07 6.08, 6.09, 6.10, 6.12, 6.13, 6.14, 6.16, 6.17, 6.18, 6.19, 6.20 and 6.21) shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on the date of such Credit Event (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

5.16 Notice of Borrowing. Prior to the making of the Loans (excluding the conversion of Existing Loans), the Administrative Agent shall have received a Notice of Borrowing meeting the requirements of Section 2.03(a).

The acceptance of the benefits of the proceeds of the Loans on the Restatement Effective Date shall constitute a representation and warranty by Aleris and the German Borrower to the Administrative Agent and each of the Lenders that all the conditions specified in this Section 5 are satisfied as of that time. All of the Notes, certificates, legal opinions and other documents and papers referred to in this Section 5 unless otherwise specified, shall be delivered to the Administrative Agent at the Notice Office for the account of each of the Lenders and, except for the Notes, in sufficient counterparts or copies for each of the Lenders and shall be in

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form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders.

SECTION 6. Representations and Warranties. In order to induce the Lenders to enter into this Agreement and to make the Loans as provided herein, each Borrower (with respect to itself and its Subsidiaries) makes the following representations and warranties, in each case after giving effect to the Transaction, all of which shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans, with the incurrence of the Loans on the Restatement Effective Date being deemed to constitute a representation and warranty that the matters specified in this Section 6 are true and correct in all material respects on and as of the Restatement Effective Date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

6.01 Organizational Status. Each of Aleris and each of its Subsidiaries (i) is a duly organized and validly existing corporation, partnership or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization, (ii) has the corporate, partnership or limited liability company power and authority, as the case may be, to own its property and assets and to transact the business in which it is engaged and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its property or the conduct of its business requires such qualifications except for failures to be so qualified which, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

6.02 Power and Authority. Each Credit Party has the corporate, partnership or limited liability company power and authority, as the case may be, to execute, deliver and perform the terms and provisions of each of the Credit Documents to which it is party and has taken all necessary corporate, partnership or limited liability company action, as the case may be, to authorize the execution, delivery and performance by it of each of such Credit Documents to which it is a party. Each Credit Party has duly executed and delivered each of the Credit Documents to which it is party, and each of such Credit Documents constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

6.03 No Violation. Neither the execution, delivery or performance by any Credit Party of the Credit Documents to which it is a party, nor compliance by it with the terms and provisions thereof, (i) will contravene any material applicable law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental instrumentality in any material respect, (ii) will conflict with or result in any breach of any of the material terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Security Documents and the ABL Security Documents) upon any of the property or assets of any Credit Party or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, in

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each case to which any Credit Party or any of its Subsidiaries is a party or by which it or any its property or assets is bound or to which it may be subject, or (iii) will violate any provision of the certificate or articles of incorporation, certificate of formation, limited liability company agreement or by-laws (or equivalent organizational documents), as applicable, of any Credit Party or any of its Subsidiaries; except, in each case other than with respect to the creation of Liens referred to in clause (ii) above), to the extent that any such contravention, conflict or violation would not reasonably be expected to result in a Material Adverse Effect.

6.04 Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for (w) those that have otherwise been obtained or made on or prior to the Restatement Effective Date and which remain in full force and effect on the Restatement Effective Date, (x) filings which are necessary to perfect the security interests created under the Security Documents, which filings will be made within 21 days following the Restatement Effective Date, (y) filings in connection with consummating the Merger and filings as may be required under the Exchange Act and applicable stock exchange rules in connection therewith and (z) other than with respect to the Credit Documents, those the failure to obtain which would not reasonably be expected to have a Material Adverse Effect) or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to be obtained or made by, or on behalf of, any Credit Party to authorize, or is required to be obtained or made by, or on behalf of, any Credit Party in connection with, (i) the execution, delivery and performance of any Document or (ii) the legality, validity, binding effect or enforceability of any Document.

6.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; No Material Adverse Effect. (a) (I) The audited aggregated IFRS accounts of the Corus Acquired Business with reconciliation to GAAP for the fiscal years of the Corus Acquired Business ended December 31, 2004 and December 31, 2005 and the unaudited aggregated IFRS accounts of the Corus Acquired Business prepared on a comparable basis for the periods of the Corus Acquired Business ended (x) between December 31, 2004 and March 31, 2005 and (y) ended between December 31, 2005 and March 31, 2006 with reconciliation to GAAP, in each case for such periods furnished to the Lenders prior to the Restatement Effective Date, present fairly in all material respects the consolidated financial position of the Corus Acquired Business at the date of said financial statements and the consolidated results for the respective periods covered thereby, (II) the audited consolidated balance sheets of Aleris for its fiscal years ended December 31, 2003, December 31, 2004 and December 31, 2005 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of Aleris for such periods furnished to the Lenders prior to the Restatement Effective Date, present fairly in all material respects the consolidated financial position of Aleris at the date of said financial statements and the consolidated results for the respective periods covered thereby, and (III) the unaudited consolidated balance sheet of Aleris for its fiscal quarter ended September 30, 2006 and the related consolidated statements of income and cash flows and of Aleris for the three-month period ended on such date, furnished to the Lenders prior to the Restatement Effective Date, present fairly in all material respects the consolidated financial condition of Aleris and its Subsidiaries at the date of said financial statements and the results for the period covered thereby, subject to normal year-end adjustments and the absence of footnotes. All such financial statements have been prepared in accordance with IFRS or GAAP, as applicable, consistently applied except to the extent provided in the notes to said financial statements and

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subject, in the case of the unaudited financial statements, to normal year-end audit adjustments (all of which, when taken as a whole, would not be materially adverse) and the absence of footnotes.

(b) Aleris has heretofore furnished to the Joint Lead Arrangers and to the Lenders its pro forma consolidated balance sheet as of September 30, 2006, prepared giving effect to the Transaction as if the same had occurred on such date. Such pro forma consolidated balance sheet (i) has been prepared in good faith based on the same assumptions used to prepare the pro forma financial statements included in the Confidential Information Memorandum (which assumptions are believed by Aleris to be reasonable as of the Restatement Effective Date), (ii) subject to the assumptions and qualifications described in the Confidential Information Memorandum, accurately reflects all adjustments necessary to give effect to the Transaction and (iii) presents fairly, in all material respects, the pro forma financial position of the U.S. Borrower and the Subsidiaries as of September 30, 2006 as if the Transaction had occurred on such date.

(c) On and as of the Restatement Effective Date and after giving effect to the Transaction and to all Indebtedness (including, without limitation, the Loans, the New Notes and the Revolving Loans) being issued, incurred or assumed and Liens created by the Credit Parties in connection therewith, (i) the sum of the assets, at a fair valuation, of each of Aleris and its Subsidiaries taken as a whole, Aleris individually, the German Borrower individually and the German Borrower and its Subsidiaries taken as a whole, as the case may be, will exceed its or their respective debts, (ii) Aleris and its Subsidiaries taken as a whole, Aleris taken individually, the German Borrower taken individually and the German Borrower and its Subsidiaries taken as a whole, as the case may be, has or have not incurred and does or do not intend to incur, and does or do not believe that it or they will incur, debts beyond its or their respective ability to pay such debts as such debts mature, and (iii) Aleris and its Subsidiaries taken as a whole, Aleris individually, the German Borrower individually and the German Borrower and its Subsidiaries taken as a whole, as the case may be, will have sufficient capital with which to conduct its or their respective businesses. For purposes of this Section 6.05(c), “debt” shall mean any liability on a claim, and “claim” shall mean (a) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (b) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

(d) The Projections most recently delivered to the Administrative Agent and the Lenders prior to the Restatement Effective Date have been prepared in good faith and are based on assumptions which were believed by management of Aleris to be reasonable when made (it being understood that actual results may vary materially from the Projections).

(e) Since December 31, 2005, there has been no change in the financial condition, results of operations or business of Aleris and its Subsidiaries, which individually or in the aggregate has had, or reasonably would be expected to have, a Material Adverse Effect.

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6.06 Litigation. There are no actions, suits or proceedings pending or, to the knowledge of Aleris or any Borrower, threatened in writing (i) with respect to the Transaction or any Credit Document or (ii) that has had, or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

6.07 True and Complete Disclosure. All factual information (other than the Projections, the pro forma financial statements and estimates and information of a general economic nature) (taken as a whole) furnished by or on behalf of Aleris or the Borrowers in writing to the Administrative Agent or any Lender (including, without limitation, all such factual information furnished by or on behalf of Aleris and its Subsidiaries contained in the Confidential Information Memorandum distributed to the Lenders prior to the Restatement Effective Date) for purposes of or in connection with the Transaction, this Agreement, and the other Credit Documents is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of Aleris or the Borrowers in writing to the Administrative Agent or any Lender will be true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided.

6.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the Loans will be used by the Borrowers to finance, in part, the cash payments required in connection with the Merger and the Refinancing and to pay the fees and expenses incurred in connection with the Transaction.

(b) No part of the proceeds of the Loans will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. Neither the making of any Loan nor the use of the proceeds thereof nor the occurrence of any other Credit Event will violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

6.09 Tax Returns and Payments. Except as set forth in Schedule IV, each of the Borrowers and each of their Subsidiaries has (i) timely filed or caused to be timely filed with the appropriate taxing authority all returns, statements, forms and reports for taxes (the “Returns”) required to be filed by, or with respect to the income, properties or operations of, the Borrowers and/or any of their Subsidiaries and (ii) has paid, or has caused to be paid, all taxes and assessments payable by them, except for (a) taxes contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP and (b) to the extent the failure to have complied with either of clause (i) or (ii) above, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

6.10 Compliance with ERISA. (a) No ERISA Event has occurred in the five year period prior to the date on which this representation is made or deemed made and is continuing or is reasonably likely to occur that, when taken together with all other such ERISA Events for which liability has occurred and is continuing, would reasonably be expected to result in a Material Adverse Effect. Except as would not reasonably be expected to have a Material Adverse Effect or as set forth on Schedule XIV, the present value of all accumulated benefit

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obligations under all Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plans, in the aggregate.

(b) (i) Each Foreign Plan has been established, registered, qualified, invested and administered in substantial compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities; (ii) all contributions required to be made with respect to a Foreign Plan have been made in accordance with applicable laws and the terms of such plan; (iii) neither Aleris nor any of its Subsidiaries has incurred any obligation in connection with the termination of, or withdrawal from, any Foreign Plan; (iv) all Foreign Plans which are funded or insured plans are funded or insured at least to the extent required by any applicable laws; and (v) there are no outstanding disputes pending or, to the best knowledge of Borrowers, threatened, concerning the assets of any Foreign Plan (other than individual claims for the payment of benefits), and no facts exist which would reasonably be expected to give rise to such a dispute, except (with respect to any matter specified in clauses (b)(i) through (v) above, either individually or in the aggregate) such as would not reasonably be expected to have a Material Adverse Effect.

6.11 The Security Documents. (a) The security interests created under each Pledge Agreement in favor of the Collateral Agent, as Pledgee, for the benefit of the Secured Creditors, constitute perfected security interests in the Pledge Agreement Collateral described therein, superior to and prior to the rights of all third Persons (other than those in favor of the ABL Collateral Agent under the ABL Security Documents), and subject to no security interests of any other Person other than Liens permitted pursuant to Section 8.02.

(b) If any Mortgage (including any amendments thereto or amendments and restatements thereof) is executed and delivered in accordance with Sections 8.12 and/or 5.09, upon the proper filing of each such Mortgage in the appropriate filing office, each such Mortgage will create, as security for the obligations purported to be secured thereby, a valid and enforceable perfected security interest in and charge and mortgage lien on the respective Mortgaged Property in favor of the Collateral Agent (or such other trustee as may be required or desired under local law) for the benefit of the Secured Creditors, superior and prior to the rights of all third Persons and subject to no other Liens (other than Liens permitted pursuant to Section 8.02 related thereto).

(c) The provisions of each U.S. Security Agreement are effective to create in favor of the Collateral Agent for the benefit of the Secured Creditors, a legal, valid and enforceable security interest in all right, title and interest of the Credit Parties in the Security Agreement Collateral described therein, and, upon the proper filing of UCC financing statements, registrations, recordings and other actions required by the U.S. Security Documents (including, without limitation, the recordation of (x) grants of security interest in United States Patents and United States Trademarks, in each case in the United States Patent and Trademark Office and (y) grants of security interest in United States Copyrights with the United States Copyright Office), necessary or appropriate to create, preserve and perfect the security interest granted to the extent contemplated by the U.S. Security Documents (which filings, registrations,

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recordings and other actions have been accomplished), the Collateral Agent, for the benefit of the Secured Creditors, will have a fully perfected security interest in all right, title and interest in all of the Security Agreement Collateral described therein, to the extent that such Security Agreement Collateral consists of the type of property in which a security interest may be perfected by possession or control (within the meaning of the UCC as in effect on the Restatement Effective Date in the State of New York), by filing a financing statement under the UCC as enacted in any relevant jurisdiction or by a filing of a grant of security interest in the United States Patent and Trademark Office or in the United States Copyright Office, in each case, subject to the exceptions contained in the relevant Credit Document, superior to and prior to the rights of all third Persons, and subject to no other Liens other than Liens permitted pursuant to Section 8.02.

(d) The provisions of each European Security Agreement are effective to create in favor of the Collateral Agent for the benefit of the Secured Creditors, a legal, valid and enforceable security interest in all right, title and interest of the Credit Parties in the Security Agreement Collateral described therein, and, upon the registrations, recordings and other actions necessary or appropriate to create, preserve and perfect the security interest granted to the extent contemplated by the European Security Documents (which filings, registrations, recordings and other actions have been accomplished), the Collateral Agent, for the benefit of the Secured Creditors, will have a fully perfected security interest in all right, title and interest in all of the Security Agreement Collateral described therein, superior to and prior to the rights of all third Persons, and subject to no other Liens other than Liens permitted pursuant to Section 8.02.

6.12 Properties. All Real Property owned or leased by Aleris or any of its Subsidiaries as of the Restatement Effective Date, and the nature of the interest therein, is correctly set forth in Schedule III. Each of Aleris and each of its Subsidiaries has good and indefeasible title to all Material Real Properties (and to all buildings, fixtures and improvements located thereon) owned by it, except for defects in title that do not materially interfere with its ability to conduct its business as currently conducted or to utilize such Material Property for its intended purposes and except where the failure to have such title would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. All Material Real Properties are free and clear of all Liens, other than Liens permitted pursuant to Section 8.02.

6.13 Subsidiaries; etc. (a) Aleris has no Subsidiaries other than those Subsidiaries listed on Schedule V (which Schedule identifies the direct owners of each such Subsidiary on the Restatement Effective Date and their percentage ownership therein).

(b) Each direct and indirect parent of the German Borrower (which is not a U.S. Credit Party) is, and at all times shall be, a European Parent Guarantor with no material assets other than the Pledged Collateral (as defined in the European Parent Pledge Agreement), except that the Equity Interests of the top European Parent Guarantor may be owned by one or more U.S. Credit Parties.

(c) Schedule V also sets forth, as of the Restatement Effective Date, (A) the exact legal name of each Credit Party and the type of organization of such Credit Party and (B) in the case of U.S. Credit Parties, whether or not such Credit Party is a registered organization (within the meaning of the UCC), the jurisdiction of organization of such Credit

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Party, the location (within the meaning of the UCC) of such Credit Party, and the organizational identification number (if any) of such Credit Party.

6.14 Compliance with Statutes, etc. Each of Aleris and each of its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property, except such noncompliances as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

6.15 Investment Company Act. Neither Aleris nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

6.16 Environmental Matters. (a) Subject to subclause (b) hereof, (i) each of Aleris and each of its Subsidiaries is in compliance with all applicable Environmental Laws and the requirements of any permits issued under such Environmental Laws; (ii) there are no pending or, to the knowledge of Aleris or the German Borrower, threatened (in writing) Environmental Claims against Aleris or any of its Subsidiaries (including any such claim arising out of the ownership, lease or operation by Aleris or any of its Subsidiaries of any Real Property formerly owned, leased or operated by Aleris or any of its Subsidiaries); and (iii) there are no facts, circumstances, conditions or occurrences (“Conditions”) with respect to the business or operations of Aleris or any of its Subsidiaries), or any Real Property owned, leased or operated by Aleris or any of its Subsidiaries (including any Real Property formerly owned, leased or operated by Aleris or any of its Subsidiaries) that would be reasonably expected to form the basis of an Environmental Claim against Aleris or any of its Subsidiaries or any restriction on the use or transferability of any Real Property owned, leased or operated by Aleris or any of its Subsidiaries.

(b) Notwithstanding anything to the contrary in this Section 6.16, the representations and warranties made in this Section 6.16 shall be untrue only if the effect of any or all Conditions, Environmental Claims and noncompliances of the types described above would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

6.17 Employment and Labor Relations. Neither Aleris nor any of its Subsidiaries is engaged in any unfair labor practice that would reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against Aleris or any of its Subsidiaries or, to the knowledge of Aleris or the German Borrower, threatened in writing against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against Aleris or any of its Subsidiaries or, to the knowledge of Aleris or the German Borrower, threatened in writing against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against Aleris or any of its Subsidiaries or, to the knowledge of Aleris or the German Borrower, threatened against Aleris or any of its Subsidiaries, (iii) no equal employment opportunity charges or other claims of employment discrimination are pending or, to Aleris’ knowledge, threatened in writing against Aleris or any of its Subsidiaries and (iv) no wage and hour department investigation has been made of Aleris

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or any of its Subsidiaries, except (with respect to any matter specified in clauses (i) – (iv) above, either individually or in the aggregate) such as would not reasonably be expected to have a Material Adverse Effect.

6.18 Intellectual Property, etc. Each of Aleris and each of its Subsidiaries owns or has the right to use all the patents, trademarks, domain names, service marks, trade names, copyrights, licenses, franchises, inventions, trade secrets, proprietary information and know-how of any type, whether or not written (including, but not limited to, rights in computer programs and databases) and formulas, or rights with respect to the foregoing, and has obtained licenses and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others which, or the failure to own or have which, as the case may be, would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

6.19 Indebtedness. Schedule VI sets forth a true and complete list of all Indebtedness (including Contingent Obligations) of Aleris and its Subsidiaries as of the Restatement Effective Date (but excluding the Term Obligations, any Existing Senior Unsecured Notes, the New Notes and the ABL Loans, the “Existing Indebtedness”) and which is to remain outstanding after giving effect to the Transaction, in each case showing the aggregate principal amount thereof and the name of the respective borrower and any Credit Party or any of its Subsidiaries which directly or indirectly guarantees such Indebtedness.

6.20 Insurance. Schedule VII sets forth a true and complete listing of all insurance maintained by Aleris and its Subsidiaries as of the Restatement Effective Date, with the amounts insured (and any deductibles) set forth therein.

6.21 Senior Indebtedness. The Term Obligations constitute “Senior Indebtedness” and “Designated Senior Indebtedness” under and as defined in the New Senior Subordinated Note Documents.

SECTION 7. Affirmative Covenants. Each Borrower hereby covenants and agrees that on and after the Restatement Effective Date and until the Total Commitment has terminated and the Loans and Notes (in each case together with interest thereon), Fees and all other Term Obligations (other than indemnities described in Section 11.13 (and similar indemnities described in the other Credit Documents, in each case) which are not then due and payable) incurred hereunder and thereunder, are paid in full:

7.01 Information Covenants. Aleris will furnish to the Administrative Agent (which will promptly furnish such information to the Lenders):

(a) Annual Financial Statements. Within ninety days after the end of each Fiscal Year, the audited consolidated balance sheet of Aleris and its Subsidiaries and related statements of income, stockholders’ equity and cash flows as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent public accountants of recognized national standing and reasonably acceptable to the Administrative Agent (without a “going concern” or like qualification or exception or

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exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly, in all material respects, the financial condition and results of operations of Aleris and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP.

(b) Quarterly Financial Statements. Within forty-five days after the end of each of the first three Fiscal Quarters of each Fiscal Year, the consolidated balance sheet of Aleris and its Subsidiaries and related statements of income, stockholders’ equity and cash flows as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, all certified by a Financial Officer of Aleris as presenting fairly, in all material respects, the financial condition and results of operations of Aleris and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes.

(c) Officer’s Certificates. Concurrently with any delivery of financial statements under Sections 7.01(a) and (b) (or, if earlier, the filing of the 10-Q Report or the 10-K Report), a certificate of a Financial Officer of Aleris in substantially the form of Exhibit J (i) certifying that no Event of Default or Default has occurred and, if an Event of Default or Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto and (ii) setting forth, in the case of the financial statements delivered under Section 7.01(a), (x) Aleris’ calculation of Excess Cash Flow for such Fiscal Year and (y) a list of names of all Immaterial Subsidiaries (if any) and including a certification that each Subsidiary set forth on such list individually qualifies as an Immaterial Subsidiary and that all Subsidiaries listed as Immaterial Subsidiaries in the aggregate comprise less than 5% of Total Assets of Aleris and its Subsidiaries at the end of the period to which such financial statements relate and represented (on a contribution basis) less than 5% of Consolidated EBITDA for the period to which such financial statements relate.

(d) Accountants’ Certificate. Concurrently with any delivery of financial statements under Section 7.01(a), a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default or Event of Default (which certificate may be limited to the extent required by accounting rules or guidelines and may be subject to such conditions and qualifications as are customary).

(e) Consolidating Statements. Concurrently with any delivery of consolidated financial statements under Sections 7.01(a) or (b), the related unaudited consolidating financial statements reflecting the adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such consolidated financial statements

(f) Budgets. Within ninety days after the beginning of each Fiscal Year, a consolidated budget of Aleris and its Subsidiaries in reasonable detail for such Fiscal Year (including a projected consolidated balance sheet and the related consolidated statements of projected cash flows and projected income as of the end of and for such

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Fiscal Year), including a summary of the underlying material assumptions with respect thereto (collectively, the “Budget”), which Budget shall be accompanied by the statement of a Financial Officer of Aleris to the effect that, to the best of his knowledge, the Budget is a reasonable estimate for the period covered thereby.

(g) Collateral. As soon as practicable upon the reasonable request of the Administrative Agent, certify that there have been no changes to Annexes A through D, inclusive, and F through I, inclusive, in each case of the U.S. Security Agreement, Annexes A through G of the U.S. Pledge Agreement and the corresponding Annexes and Schedules to the European Security Documents, in each case since the Restatement Effective Date or, if later, since the date of the most recent certificate delivered pursuant to this Section 7.01(g), or if there have been any such changes, a list in reasonable detail of such changes (but, in each case with respect to this clause (ii), only to the extent that such changes are required to be reported to the Collateral Agent pursuant to the terms of such Security Documents) and whether Aleris and the other Credit Parties have otherwise taken all actions required to be taken by them pursuant to such Security Documents in connection with any such changes.

(h) Other Reports and Filings. Promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials publicly filed by Aleris or any Subsidiary with the Securities and Exchange Commission, or with any national securities exchange, or, after an initial public offering of shares of Equity Interests of Aleris, distributed by Aleris to its shareholders generally, as the case may be.

(i) Management Letters. Promptly, a copy of any final “management letter” received from Aleris’ independent public accountants to the extent such independent public accountants have consented to the delivery of such management letter to the Administrative Agent upon the request of Aleris.

(j) PATRIOT Act Information. Promptly following the Administrative Agent’s request therefor, all documentation and other information that the Administrative Agent reasonably requests on its behalf or on behalf of any Lender in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including USA PATRIOT ACT (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001)) (the “PATRIOT Act”).

(k) Other Information. As promptly as reasonably practicable from time to time following the Administrative Agent’s request therefor, such other information regarding the operations, business affairs and financial condition of Aleris or any of its Subsidiaries, or compliance with the terms of any Credit Document, as the Administrative Agent may reasonably request (on behalf of itself or any Lender).

Notwithstanding the foregoing, the obligations in Sections 7.01(a) or (b) may be satisfied with respect to financial information of Aleris and its Subsidiaries by furnishing (A) the applicable financial statements of Holdings (or any direct or indirect parent of Holdings) or (B) Aleris’ or Holdings’ (or any direct or indirect parent thereof), as applicable, Form 10-K or 10-Q, as

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applicable, filed with the Securities and Exchange Commission; provided that, with respect to each of clauses (A) and (B), (i) to the extent such information relates to Holdings (or a parent thereof), such information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to Holdings (or such parent), on the one hand, and the information relating to Aleris and its Subsidiaries on a standalone basis, on the other hand and (ii) to the extent such information is in lieu of information required to be provided under Section 7.01(a), such materials are accompanied by a report and opinion of Ernst & Young LLP or other independent public accountants of recognized national standing and reasonably acceptable to the Administrative Agent, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit.

Documents required to be delivered pursuant to Sections 7.01(a), (b) or (h) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which Aleris posts such documents, or provides a link thereto on Aleris’ website on the Internet or (ii) on which such documents are posted on Aleris’ behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that (1) upon written request by the Administrative Agent, Aleris shall deliver paper copies of such documents to the Administrative Agent for further distribution to each Lender until a written request to cease delivering paper copies is given by the Administrative Agent and (2) Aleris shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance Aleris shall be required to provide paper copies of the compliance certificates required by Section 7.01(c) to the Administrative Agent.

The financial statements required to be delivered pursuant to Section 7.01(b) with respect to the first Fiscal Quarter after the Restatement Effective Date shall not be required to contain all purchase accounting adjustments relating to the Transaction to the extent it is not practicable to include any such adjustments in such financial statements.

7.02 Notice of Material Events. Aleris will furnish to the Administrative Agent written notice of the following promptly after any Responsible Officer of Aleris obtains knowledge thereof:

(a) the occurrence of any Event of Default or Default;

(b) the filing or commencement of, or any written threat or notice of intention of any person to file or commence, any action, suit or proceeding, whether at law or in equity or by or before any Governmental Authority or in arbitration, against Aleris or any of its Subsidiaries as to which an adverse determination is reasonably probable and which, if adversely determined, would reasonably be expected to have a Material Adverse Effect;

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(c) any loss, damage, or destruction to the Collateral in the amount of $25,000,000 or more, whether or not covered by insurance;

(d) any and all default notices received under or with respect to any leased location or public warehouse where any material Collateral is located;

(e) the occurrence of any ERISA Event that, together with all other ERISA Events that have occurred and are continuing, would reasonably be expected to have a Material Adverse Effect; and

(f) any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section 7.02 shall be accompanied by a statement of a Responsible Officer of Aleris setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

7.03 Existence; Franchises. Aleris will, and will cause each of its Subsidiaries to, do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits (except as such would otherwise reasonably expire, be abandoned or permitted to lapse in the ordinary course of business), necessary or desirable in the normal conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except (i) other than with respect to a Borrower’s existence, to the extent such failure to do so would not reasonably be expected to have a Material Adverse Effect or (ii) pursuant to a transaction permitted by Section 8.03.

7.04 Performance of Obligations. Aleris will, and will cause each of its Subsidiaries to, pay or discharge all material tax liabilities, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Credit Party or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest would not reasonably be expected to result in a Material Adverse Effect.

7.05 Maintenance of Properties. Aleris will, and will cause each of its Subsidiaries to (i) at all times maintain and preserve all material property necessary to the normal conduct of its business in good repair, working order and condition, ordinary wear and tear excepted and casualty or condemnation excepted and (ii) make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto as necessary in accordance with prudent industry practice in order that the business carried on in connection therewith, if any, may be properly conducted at all times, except, in each case, where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

7.06 Books and Records; Inspection Rights. Aleris will, and will cause each of its Subsidiaries to, (i) keep proper books of record and account in accordance with GAAP in

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which full, true and correct entries are made of all dealings and transactions in relation to its business and activities and (ii) permit any representatives designated by the Administrative Agent (including employees of the Administrative Agent or any consultants, accountants, lawyers and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, including environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times during normal business hours and as often as reasonably requested.

7.07 Compliance with Laws. Aleris will, and will cause each of its Subsidiaries to, comply in all material respects with all Requirements of Law applicable to it or its property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

7.08 Use of Proceeds. The Borrowers will use the proceeds of the Loans only as provided in Section 6.08.

7.09 Insurance. (a) Aleris will, and will cause each of its Subsidiaries to, maintain, with financially sound and reputable insurance companies insurance in such amounts and against such risks, as are customarily maintained by similarly situated companies engaged in the same or similar businesses operating in the same or similar locations (after giving effect to any self-insurance reasonable and customary for similarly situated companies). Aleris will furnish to the Administrative Agent, upon request, information in reasonable detail as to the insurance so maintained.

(b) Aleris will, and will cause each of the other Credit Parties to, at all times keep the Collateral insured in favor of the Collateral Agent, and all policies or certificates (or certified copies thereof) with respect to such insurance (i) shall be endorsed to the Collateral Agent’s reasonable satisfaction for the benefit of the Collateral Agent (including, without limitation, by naming the Collateral Agent as loss payee and/or additional insured) and (ii) shall state that such insurance policies shall not be canceled without at least 30 days’ prior written notice thereof by the respective insurer to the Collateral Agent (or at least 10 days’ prior written notice in the case of non-payment of premium).

(c) If Aleris or any of its Subsidiaries shall fail to maintain insurance in accordance with this Section 7.09, or if Aleris or any of its Subsidiaries shall fail to so endorse all policies or certificates with respect thereto, the Administrative Agent shall have the right, upon 10 days’ prior notice to Aleris (but shall be under no obligation), to procure such insurance and Aleris agrees to reimburse the Administrative Agent for all reasonable costs and expenses of procuring and maintaining such insurance.

7.10 New Subsidiaries; Additional Security; Further Assurances; etc. (a) Subject to applicable law and the provisions of this Section 7.10, Aleris shall, and shall cause each of the Credit Parties to, cause (i) each of its Wholly-Owned Subsidiaries (other than (1) any Immaterial Subsidiary (except as otherwise provided in paragraph (e) of this Section 7.10), (2) any Unrestricted Subsidiary, (3) any Subsidiary organized under the laws of Canada and (4) any Subsidiary of the Swiss CE) formed or acquired after the date of this Agreement in accordance

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with the terms of this Agreement or that is required to become a Guarantor pursuant to Section 8.08 and (ii) any such Subsidiary that was an Immaterial Subsidiary but, as of the end of the most recently ended Fiscal Quarter has ceased to qualify as an Immaterial Subsidiary, to become a Guarantor as promptly thereafter as reasonably practicable by executing a Joinder Agreement in substantially the form set forth as Exhibit O hereto (the “Joinder Agreement”). Upon execution and delivery thereof, each party to a Joinder Agreement (i) shall automatically become a Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Credit Documents and (ii) will simultaneously therewith or as soon as practicable thereafter grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders and each other Secured Creditor at such time party to or benefiting from the Intercreditor Agreement or the Security Documents, any property of such Credit Party which constitutes Collateral, on such terms as may be required pursuant to the terms of the Security Documents and in such priority as may be required pursuant to the terms of the Intercreditor Agreement, in each case to the extent required by the terms of this Section 7.10 and subject to any limitations set forth in the Security Documents.

(b) Aleris will, and will cause each of the Credit Parties to, cause (i) 100% (or such lesser percentage held by Aleris or such other Credit Party) of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries, other than any Domestic Subsidiary taxed as a partnership for federal income tax purposes that holds Equity Interests of a Foreign Subsidiary whose Equity Interests are pledged pursuant to clause (ii) below or any Domestic Subsidiary which is a Subsidiary of any Foreign Subsidiary, (ii) 65% (or such lesser percentage held by Aleris or such other Credit Party) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% (or such lesser percentage held by Aleris or such other Credit Party) of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary directly owned by Aleris or any of the Credit Parties which is a Domestic Subsidiary and (iii) 100% (or such lesser percentage held by Aleris or such other Credit Party) of the issued and outstanding Equity Interests of each of its Foreign Subsidiaries held by a European Credit Party, to be subject at all times to a first priority perfected Lien in favor of the Administrative Agent pursuant to the terms and conditions of the Credit Documents or other security documents as the Administrative Agent shall reasonably request; provided, however this paragraph (b) shall not require Aleris or any of its Subsidiaries to grant a security interest in (i) any Equity Interests of a Subsidiary to the extent a pledge of such Equity Interests in favor of the Administrative Agent or to secure any debt securities of Aleris or any of its Subsidiaries that would be entitled to such a security interest would require separate financial statements of a Subsidiary to be filed with the Securities and Exchange Commission (or any other government agency) under Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act (or any successor thereto) or any other law, rule or regulation, (ii) the Equity Interests of any Unrestricted Subsidiary or (iii) any interests in joint ventures and non-Wholly Owned Subsidiaries to the extent the same cannot be pledged without the consent of one or more third parties.

(c) Without limiting the foregoing, Aleris will, and will cause each of the Credit Parties to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture

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filings, mortgages, deeds of trust and other documents and such other actions or deliveries of the type required by Section 5, including opinions of counsel, as applicable), which may be required by law or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Credit Documents and to ensure perfection and priority of the Liens created or intended to be created by the Security Documents, all at the expense of the Credit Parties; provided that, in no event will Aleris or any of its Subsidiaries be required to take any action, other than using its commercially reasonable efforts, to obtain consents from third parties with respect to its compliance with this Section 7.10(c).

(d) Subject to the limitations set forth or referred to in this Section 7.10, if any material assets (including any real property or improvements thereto or any interest therein) are acquired by Aleris or any Credit Party after the Restatement Effective Date (other than assets constituting Collateral under the Security Documents that become subject to the Lien in favor of the Administrative Agent upon acquisition thereof), Aleris will notify the Administrative Agent and the Lenders thereof, and, if requested by the Administrative Agent or the Required Lenders, Aleris will cause such assets to be subjected to a Lien securing the Term Obligations of such Credit Party and will take, and cause the Credit Parties to 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 7.10, all at the expense of the Credit Parties.

(e) If, at any time and from time to time after the Restatement Effective Date, Subsidiaries that are not Credit Parties because they are Immaterial Subsidiaries comprise in the aggregate more than 5.0% of Total Assets as of the end of the most recently ended Fiscal Quarter or more than 5.0% of Consolidated EBITDA of Aleris and the Restricted Subsidiaries for the most recently ended Test Period, then Aleris shall, not later than 45 days after the date by which financial statements for such Fiscal Quarter are required to be delivered pursuant to this Agreement, cause one or more such Subsidiaries to become additional Credit Parties (notwithstanding that such Subsidiaries are, individually, Immaterial Subsidiaries) such that the foregoing condition ceases to be true.

(f) Notwithstanding anything to the contrary in this Section 7.10, real property required to be mortgaged under this Section 7.10 shall be limited to real property that is owned in fee by a Credit Party having a fair market value at the time of the acquisition thereof of $2,500,000 or more (provided that the cost of perfecting such Lien is not unreasonable in relation to the benefits to the Lenders of the security afforded thereby in the Administrative Agent’s reasonable judgment after consultation with Aleris).

(g) Notwithstanding anything to the contrary contained in this Agreement, neither Aleris nor any Subsidiary of Aleris shall be required to:

(i) execute and deliver any Joinder Agreement, Guaranty or any other document or grant a Lien in any Equity Interests or other property held by it if such action (w) is restricted or prohibited by general statutory limitations, financial assistance, corporate benefit, fraudulent preference, “thin capitalization” rules or similar principles, (x) would result in adverse tax consequences, (v) is not within the legal capacity of Aleris or such Subsidiary or would conflict with the fiduciary duties of its directors or contravene any legal prohibition or result in

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personal or criminal liability on the part of any officer or (z) for reasons of cost, legal limitations or other matters is unreasonably burdensome in relation to the benefits to the Secured Creditors of Aleris or such Subsidiary’s guaranty or security;

(ii) pledge as Collateral any assets excluded therefrom pursuant to the relevant Security Documents; or

(iii) to the extent it is a Foreign Subsidiary (other than the Luxco Guarantor) or a Domestic Subsidiary of a Foreign Subsidiary, guarantee the Term Obligations of any U.S. Credit Party.

(h) If the Administrative Agent, the Collateral Agent or the Required Lenders reasonably determine that they are required by law or regulation to have appraisals prepared in respect of any Real Property of Aleris and its Subsidiaries constituting Collateral, the Administrative Agent or the Collateral Agent will, at the expense of Aleris, obtain appraisals which satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of the Financial Institution Reform, Recovery and Enforcement Act of 1989, as amended, and which shall otherwise be in form and substance reasonably satisfactory to the Administrative Agent.

7.11 Designated Senior Indebtedness. Aleris hereby designates the Term Obligations to be Designated Senior Indebtedness under the New Senior Subordinated Note Indenture.

SECTION 8. Negative Covenants. Each Borrower hereby covenants and agrees that on and after the Restatement Effective Date and until the Total Commitment and the Loans and Notes (in each case, together with interest thereon), Fees and all other Term Obligations (other than any indemnities described in Section 11.13 and similar indemnities in the other Credit Documents, in each case which are not then due and payable) incurred hereunder and thereunder, are paid in full:

8.01 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) Aleris will not and will not permit any Restricted Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness), and Aleris will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided that Aleris may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for Aleris and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been

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incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred at the beginning of such four quarter period; provided that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not U.S. Subsidiary Guarantors shall not exceed $125,000,000 at any one time outstanding.

(b) The limitations set forth in paragraph (a) of this Section 8.01 shall not apply to any of the following items (collectively, “Permitted Debt”):

(i) Indebtedness incurred pursuant to the ABL Credit Agreement by Aleris or any Restricted Subsidiary (other than the German Borrower and its Subsidiaries); provided that immediately after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (i) and then outstanding does not exceed $50,000,000 plus the greater of (A) $850,000,000 and (B) the sum of (x) 85% of the net book value of the accounts receivable of Aleris and its Restricted Subsidiaries and (y) the lesser of 75% of the net book value or 85% of the net orderly liquidation value of the inventory of Aleris and its Restricted Subsidiaries;

(ii) the Term Obligations;

(iii) the incurrence by Aleris and any U.S. Subsidiary Guarantor of Indebtedness represented by the New Senior Notes issued on the Restatement Effective Date and the guarantees thereof and the exchange notes and related exchange guarantees to be issued in exchange for the New Senior Notes pursuant to the Registration Rights Agreement (other than any Additional Senior Notes (as defined in the New Senior Notes Indenture));

(iv) the incurrence by the Borrowers and any U.S. Subsidiary Guarantor of Indebtedness represented by the New Senior Subordinated Notes issued on the Restatement Effective Date (including any guarantees thereof) and the exchange notes and related exchange guarantees to be issued in exchange for the New Senior Subordinated Notes pursuant to the Registration Rights Agreement (other than any Additional Senior Subordinated Notes (as defined in the New Senior Subordinated Notes Indenture));

(v) Indebtedness existing on the date hereof and set forth in Schedule VI;

(vi) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by Aleris or any of the Restricted Subsidiaries, to finance the development, construction, purchase, lease (other than the lease, pursuant to Sale and Lease-Back Transactions, of property (real or personal), equipment or other fixed or capital assets owned by Aleris or any Restricted Subsidiary as of the Restatement Effective Date or acquired by Aleris or any Restricted Subsidiary after the Restatement Effective Date in exchange for, or with the proceeds of the sale of, such assets owned by Aleris or any Restricted Subsidiary as of the Restatement Effective Date), repairs, additions or improvement of property (real or personal), equipment or other fixed or

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capital assets that are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and any Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (vi) ; provided that the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (vi) (including any such Refinancing Indebtedness) does not exceed the greater of (x) $175,000,000 and (y) 5.5% of Total Assets at any one time outstanding;

(vii) Indebtedness incurred by Aleris or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within thirty days following such drawing or incurrence;

(viii) Indebtedness arising from agreements of Aleris or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary for the purpose of financing such acquisition; provided that (A) such Indebtedness is not reflected on the balance sheet of Aleris or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by Aleris and the Restricted Subsidiaries in connection with such disposition;

(ix) Indebtedness of Aleris to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor is subordinated in right of payment to the Term Obligations; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Aleris or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;

(x) Indebtedness of a Restricted Subsidiary to Aleris or another Restricted Subsidiary; provided that if a Credit Party incurs such Indebtedness to a Restricted Subsidiary that is not a Credit Party such Indebtedness is subordinated in right of payment to the obligations of such Credit Party hereunder or under its Guaranty, as applicable; provided, further, that any subsequent issuance or transfer of Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to Aleris or

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another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;

(xi) shares of Preferred Stock of a Restricted Subsidiary issued to Aleris or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to Aleris or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of such shares of Preferred Stock;

(xii) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting: (A) interest rate risk with respect to any Indebtedness that is permitted under this Agreement to be outstanding, (B) exchange rate risk with respect to any currency exchange or (C) commodity pricing risk with respect to any commodity;

(xiii) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by Aleris or any Restricted Subsidiary in the ordinary course of business;

(xiv) (A) any guarantee by Aleris or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary, so long as the incurrence of such Indebtedness by such Restricted Subsidiary is permitted under the terms of this Agreement or (B) any guarantee by a Restricted Subsidiary of Indebtedness of Aleris permitted to be incurred under the terms of this Agreement; provided that such guarantee is incurred in accordance with Section 8.08;

(xv) the incurrence by Aleris or any Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock that serves to extend, replace, refund, refinance, renew or defease any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under paragraph (a) of this Section 8.01 and clauses (iii), (iv) and (v) above, this clause (xv) and clauses (xvi) and (xxii)(B) of this paragraph (b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so extend, replace, refund, refinance, renew or defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased, (B) to the extent such Refinancing Indebtedness extends, replaces, refunds, refinances, renews or defeases (1) Indebtedness subordinated to the Obligations or the Guaranty of any Guarantor, such Refinancing Indebtedness is subordinated to the Obligations or such Guaranty at least to the same extent as the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased or (2) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or

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Preferred Stock, respectively, and (C) shall not include (1) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of Aleris, (2) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or (3) Indebtedness, Disqualified Stock or Preferred Stock of Aleris or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

(xvi) Indebtedness, Disqualified Stock or Preferred Stock (x) of Aleris or any of its Restricted Subsidiaries incurred to finance the acquisition of any Person or assets or (y) of Persons that are acquired by Aleris or any Restricted Subsidiary or merged into Aleris or a Restricted Subsidiary, in each case in accordance with the terms of this Agreement; provided that either (A) after giving effect to such acquisition or merger, either (1) Aleris would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in paragraph (a) of this Section 8.01; or (2) the Fixed Charge Coverage Ratio of Aleris and the Restricted Subsidiaries on a consolidated basis is greater than such ratio immediately prior to such acquisition or merger; or (B) such Indebtedness, Disqualified Stock or Preferred Stock (1) is not Secured Indebtedness and is Subordinated Indebtedness with subordination terms no more favorable to the holders thereof than the subordination terms set forth in the indenture governing the New Senior Subordinated Notes as in effect on the Restatement Effective Date, (2) is not incurred while a Default exists and no Default or Event of Default shall result therefrom, (3) does not mature (and is not mandatorily redeemable in the case of Disqualified Stock or Preferred Stock) and does not require any payment of principal prior to Final Maturity Date, (4) is incurred by Aleris or a U.S. Subsidiary Guarantor and (5) in the case of clause (y) above only, is not incurred in contemplation of such acquisition or merger;

(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its incurrence;

(xviii) Indebtedness of Aleris or any Restricted Subsidiary supported by a letter of credit issued pursuant to the ABL Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;

(xix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred to finance or assumed in connection with an acquisition consummated in accordance with the terms of this Agreement and any Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (xix) which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (xix) and then outstanding (including any such Refinancing Indebtedness), does not exceed $50,000,000 (it being understood that any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause

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(xix) shall cease to be deemed incurred or outstanding for purposes of this clause (xix) but shall be deemed incurred pursuant to paragraph (a) of this Section 8.01 from and after the first date on which Aleris or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock pursuant to paragraph (a) of this Section 8.01 without reliance on this clause (xix));

(xx) Indebtedness incurred by a Foreign Subsidiary which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this clause (xx) and then outstanding, does not exceed the greater of (x) $75,000,000 and (y) 4.0% of Foreign Subsidiary Total Assets (it being understood that any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (xx) shall cease to be deemed incurred or outstanding for purposes of this clause (xx) but shall be deemed incurred pursuant to paragraph (a) of this Section 8.01 from and after the first date on which Aleris or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock pursuant to paragraph (a) of this Section 8.01 without reliance on this clause (xx));

(xxi) Indebtedness issued by Aleris or any Restricted Subsidiary to current or former employees, directors, managers and consultants thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Aleris or any direct or indirect parent company of Aleris to the extent described in Section 8.04(b)(iv);

(xxii) Indebtedness, Disqualified Stock and Preferred Stock of Aleris or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (xxii) and then outstanding, does not at any one time outstanding exceed the sum of (A) $150,000,000 (it being understood that any Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (xxii)(A) shall cease to be deemed incurred or outstanding for purposes of this clause (xxii)(A) but shall be deemed incurred pursuant to paragraph (a) of this Section 8.01 from and after the first date on which Aleris or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock pursuant to paragraph (a) of this Section 8.01 without reliance on this clause (xxii)(A)), plus (B) 100% of the net cash proceeds received by Aleris since after the Restatement Effective Date from the issue or sale of Equity Interests of Aleris or cash contributed to the capital of Aleris (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to Aleris or any of its subsidiaries) as determined in accordance with Sections 8.04(a)(iii)(B) and (a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other investments, payments or exchanges pursuant to Section 8.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof); and

(xxiii) Attributable Debt incurred by Aleris or any Restricted Subsidiary pursuant to Sale and Lease-Back Transactions of property (real or personal), equipment or other fixed or capital assets owned by Aleris or any Restricted Subsidiary as of the Restatement

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Effective Date or acquired by Aleris or any Restricted Subsidiary after the Restatement Effective Date in exchange for, or with the proceeds of the sale of, such assets owned by Aleris or any Restricted Subsidiary as of the Restatement Effective Date and any Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (xxiii); provided that the aggregate amount of Attributable Debt incurred under this clause (xxiii) (including any such Refinancing Indebtedness) does not exceed $50,000,000.

(c) Notwithstanding the foregoing, Indebtedness of the German Borrower and its Subsidiaries permitted pursuant to Section 8.01(a) and clauses (vi), (xvi), (xix), (xx), (xxii) and (xxiii) of Section 8.01(b) shall not exceed $50,000,000 at any time outstanding.

(d) Notwithstanding anything to the contrary contained in this Agreement, Investments specified in clause (a) of the definition of “Permitted Investments” and intercompany loans permitted in clauses (ix) and (x) of Section 8.01(b) among Aleris and its Restricted Subsidiaries (collectively, the “Intercompany Investments”) shall be subject to the restrictions that the aggregate principal amount of all Intercompany Investments made by the U.S. Credit Parties and their Domestic Subsidiaries to Foreign Subsidiaries (other than the Luxco Guarantor) shall not exceed $50,000,000 in any Fiscal Year (determined without regard to any write-downs or write-offs thereof).

(e) For purposes of determining compliance with this Section 8.01, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xxiii) of paragraph (b) of this Section 8.01 or is entitled to be incurred pursuant to paragraph (a) of this Section 8.01, Aleris, in its sole discretion, shall classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and shall only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in one or more of the above clauses; provided that all Indebtedness outstanding under the ABL Credit Agreement and the term loan facility provided for herein on the Restatement Effective Date shall be deemed to have been incurred on such date in reliance on the exception in clauses (i) and (ii) of the definition of “Permitted Debt”.

(f) The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness, Disqualified Stock or Preferred Stock shall not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 8.01.

(g) For purposes of determining compliance with any U.S. Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed or incurred (as determined by Aleris), in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. Dollar-denominated restriction to be exceeded if calculated at the relevant currency

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exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased.

(h) The principal amount of any Indebtedness incurred to extend, replace, refund, refinance, renew or defease other Indebtedness, if incurred in a different currency from the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance.

8.02 Limitations on Liens. Aleris will not and will not permit any of the Credit Parties to, directly or indirectly, create, incur, assume or suffer to exist any Lien (the “Initial Lien”) that secures obligations under any Indebtedness on any asset or property of Aleris or any Credit Party now owned or hereafter acquired, or any income or profits therefrom, or assign or convey any right to receive income therefrom, except:

(a) in the case of the Fixed Assets, any Initial Lien if (i) such Initial Lien expressly ranks junior to the first priority security interest intended to be created in favor of the Collateral Agent for the benefit of the Term Secured Parties pursuant to the Security Documents (provided that the terms of such junior interest shall be no more favorable to the beneficiaries thereof than the terms contained in the Intercreditor Agreement) or (ii) such Initial Lien is a Permitted Collateral Lien; and

(b) in the case of any other asset or property, any Initial Lien if (i) such Initial Lien expressly ranks junior to the second priority security interest intended to be created in favor of the Collateral Agent for the benefit of the Term Secured Parties pursuant to the Security Documents (provided that the terms of such junior interest shall be no more favorable to the beneficiaries thereof than the terms contained in the Intercreditor Agreement with respect to junior liens) or (ii) such Initial Lien is a Permitted Lien.

8.03 Merger, Consolidation or Sale of All or Substantially All Assets. (a) No Borrower shall consolidate or merge with or into or wind up into (whether or not such Borrower is the surviving entity), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(i) such Borrower is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than such Borrower) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is (x) in the case of the U.S. Borrower, a corporation organized or existing under the laws of the United States of America, any state thereof, the District of Columbia, or any territory thereof and (y) in the case of the German Borrower, a company with limited liability organized or existing under the laws of Germany (such Borrower or such Person, as the case may be, being herein called the “Successor Borrower”);

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(ii) the relevant Successor Borrower, if other than the relevant Borrower, expressly assumes all the obligations of such Borrower under this Agreement and the other Credit Documents pursuant to supplements to the Credit Documents or other documents or instruments in form reasonably satisfactory to the Administrative Agent;

(iii) immediately after such transaction, no Default or Event of Default exists;

(iv) in the case of any such transaction involving Aleris, immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable Test Period, (A) Aleris (or the relevant Successor Borrower) would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 8.01(a) or (B) the Fixed Charge Coverage Ratio for Aleris (or the relevant Successor Borrower) and the Restricted Subsidiaries on a consolidated basis would be greater than such ratio for Aleris and the Restricted Subsidiaries immediately prior to such transaction;

(v) each Guarantor which has guaranteed the obligations of the relevant Borrower, unless it is the other party to the transactions described above (in which case clause (i)(B) of paragraph (c) of this Section 8.03 shall apply) shall have by supplement to the Credit Documents confirmed that its Guaranty of the Term Obligations shall apply to such Person’s obligations under the Credit Documents and the Loans; and

(vi) Aleris shall have delivered to the Administrative Agent an officers’ certificate and an opinion of counsel, each stating that such consolidation, merger or transfer and such supplements to the Credit Documents, if any, comply with this Agreement and the other Credit Documents.

(b) The relevant Successor Borrower shall succeed to, and be substituted for, the relevant Borrower under this Agreement and the other Credit Documents and, except in the case of a lease transaction, the relevant predecessor Borrower will be released from its obligations hereunder and thereunder. Notwithstanding clauses (iii) and (iv) of paragraph (a) of this Section 8.03, (i) any Restricted Subsidiary (other than the German Borrower) may consolidate with, merge into or transfer all or part of its properties and assets to, Aleris, and (ii) Aleris may merge with an Affiliate of Aleris incorporated solely for the purpose of reincorporating Aleris in another state of the United States of America so long as the amount of Indebtedness of Aleris and the Restricted Subsidiaries is not increased thereby.

(c) Subject to Section 11.12(b), Aleris shall not permit any Guarantor to consolidate or merge with or into or wind up into (whether or not such Guarantor is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(i) (A) such Guarantor is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is (x) in the case of a U.S. Subsidiary Guarantor, a corporation organized or existing under the laws of the United States of America, any state thereof, the District of

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Columbia, or any territory thereof, (y) in the case of the Luxco Guarantor, a company with limited liability organized or existing under the laws of Luxembourg and (z) in the case of a European Credit Party, a company organized or existing under the laws of jurisdiction of the predecessor European Credit Party (each such Guarantor or each such Person, as the case may be, being herein called the “Successor Person”), (B) the Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under such Guarantor’s Guaranty and the other Credit Documents, pursuant to a Joinder Agreement and supplements to the Credit Documents or other documents or instruments in form reasonably satisfactory to the Administrative Agent, (C) immediately after such transaction, no Default or Event of Default exists and (D) Aleris shall have delivered to the Administrative Agent an officers’ certificate and an opinion of counsel, each stating that such consolidation, merger or transfer and such Joinder Agreement and supplements, if any, comply with this Agreement and the other Credit Documents; or

(ii) the transaction is made in compliance with Section 4.02(c).

(d) The Successor Person shall succeed to, and be substituted for, such Guarantor under such Guarantor’s Guaranty and the other Credit Documents and, except in the case of a lease transaction, such Guarantor will be released from its obligations thereunder. Notwithstanding the foregoing, (i) any U.S. Subsidiary Guarantor may merge into or transfer all or part of its properties and assets to another U.S. Subsidiary Guarantor or the U.S. Borrower and (ii) any European Subsidiary Guarantor may merge into or transfer all or part of its properties and assets to another European Subsidiary Guarantor or the German Borrower.

(e) Notwithstanding the foregoing, the Merger shall be permitted without compliance with this Section 8.03.

(f) For purposes of this Section 8.03, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of Aleris which properties and assets, if held by Aleris instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of Aleris and its Subsidiaries on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of Aleris.

8.04 Limitation on Restricted Payments. (a) Aleris shall not and shall not permit any Restricted Subsidiary to, directly or indirectly (w) declare or pay any dividend or make any distribution on account of Aleris’ or any Restricted Subsidiary’s Equity Interests, including any dividend or distribution payable in connection with any merger or consolidation, other than (A) dividends or distributions by Aleris payable in Equity Interests (other than Disqualified Stock) of Aleris or in options, warrants or other rights to purchase such Equity Interests (other than Disqualified Stock) or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly-Owned Subsidiary of Aleris, Aleris or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities, (x) purchase, redeem, defease or otherwise acquire or retire for value any Equity

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Interests of Aleris or any direct or indirect parent of Aleris, including in connection with any merger or consolidation, (y) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value in each case, prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness other than (A) Indebtedness permitted under clauses (ix) and (x) of Section 8.01(b) or (B) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition or (z) make any Restricted Investment (all such payments and other actions set forth in clauses (w) through (z) above being collectively referred to as “Restricted Payments”), unless, at the time of such Restricted Payment:

(i) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

(ii) immediately after giving effect to such transaction on a pro forma basis, Aleris could incur $1.00 of additional Indebtedness under Section 8.01(a); and

(iii) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Aleris and the Restricted Subsidiaries after the Restatement Effective Date pursuant to paragraph (a) of this Section 8.04 or clauses (i), (ii) (with respect to the payment of dividends on Refunding Capital Stock pursuant to clause (B) thereof only), (vi)(C), (viii) and (xii) of paragraph (b) of this Section 8.04 (and excluding, for the avoidance of doubt, all other Restricted Payments made pursuant to paragraph (b) of this Section 8.04), is less than the sum, without duplication, of:

(A) 50% of the Consolidated Net Income of Aleris for the period (taken as one accounting period) from the first day of the Fiscal Quarter in which the Restatement Effective Date occurs to the end of the most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit, plus

(B) 100% of the aggregate net cash proceeds and the fair market value, as determined in good faith by Aleris, of marketable securities or other property received by Aleris after the Restatement Effective Date (less the amount of such net cash proceeds to the extent such amount has been relied upon to permit the incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock pursuant to Section 8.01(b)(xxiii)(B)) from the issue or sale of (x) (1) Equity Interests of Aleris, including Retired Capital Stock, but excluding cash proceeds and the fair market value, as determined in good faith by Aleris, of marketable securities or other property received from the sale of (I) Equity Interests to any future, present or former employees, directors, managers or consultants of Aleris, any direct or indirect parent company of Aleris or any of Aleris’ Subsidiaries after the Restatement Effective Date to the extent such amounts have been applied to Restricted Payments made in accordance with clause (iv) of paragraph (b) of this Section 8.04 and (II) Designated Preferred Stock, and (2) to the extent actually contributed to Aleris, Equity Interests of Aleris’ direct or indirect parent

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companies (excluding contributions of the proceeds from the sale of Designated Preferred Stock of such companies or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with clause (iv) of paragraph (b) of this Section 8.04) or (y) debt securities of Aleris that have been converted into or exchanged for such Equity Interests of Aleris; provided that this clause (B) shall not include the proceeds from (I) Refunding Capital Stock, (II) Equity Interests of Aleris or debt securities of Aleris that have been converted into or exchanged for Equity Interests of Aleris sold to a Restricted Subsidiary or Aleris, as the case may be, (III) Disqualified Stock or debt securities that have been converted into or exchanged for Disqualified Stock or (IV) Excluded Contributions, plus

(C) 100% of the aggregate amount of cash and the fair market value, as determined in good faith by Aleris, of marketable securities or other property contributed to the capital of Aleris after the Restatement Effective Date (less the amount of such net cash proceeds to the extent such amount has been relied upon to permit the incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock pursuant to Section 8.01(b)(xxii)(B)) (other than by a Restricted Subsidiary and other than by any Excluded Contributions), plus

(D) to the extent not already included in Consolidated Net Income, 100% of the aggregate amount received in cash and the fair market value, as determined in good faith by Aleris, of marketable securities or other property received after the Restatement Effective Date by means of (1) the sale or other disposition (other than to Aleris or a Restricted Subsidiary) of Restricted Investments made by Aleris or any Restricted Subsidiary and repurchases and redemptions of such Restricted Investments from Aleris or any Restricted Subsidiary and repayments to Aleris or a Restricted Subsidiary of loans or advances that constitute Restricted Investments or (2) the sale (other than to Aleris or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary or a distribution from an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary was made by Aleris or a Restricted Subsidiary pursuant to clauses (ix) or (xiii) of paragraph (b) of this Section 8.04 or to the extent such Investment constituted a Permitted Investment) or a dividend from an Unrestricted Subsidiary, plus

(E) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary after the Restatement Effective Date, the fair market value of the Investment in such Unrestricted Subsidiary, as determined by Aleris in good faith or if, in the case of an Unrestricted Subsidiary, such fair market value may exceed $100,000,000, in writing by an Independent Financial Advisor, at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary, other than an Unrestricted Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made by Aleris or a Restricted Subsidiary pursuant to clauses (ix) or (xiii) of paragraph (b) of this Section 8.04 or to the extent such Investment constituted a Permitted Investment.

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(b) The provisions of paragraph (a) of this Section 8.04 shall not prohibit:

(i) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Agreement;

(ii) (A) the redemption, repurchase, retirement or other acquisition of any Equity Interests (“Retired Capital Stock”) or Subordinated Indebtedness of Aleris or any Equity Interests of any direct or indirect parent company of Aleris, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary) of, Equity Interests of Aleris (in each case, other than any Disqualified Stock) (“Refunding Capital Stock”) and (B) if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (vi) of this paragraph (b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of Aleris) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that was declarable and payable on such Retired Capital Stock immediately prior to such retirement;

(iii) the defeasance, redemption, repurchase or other acquisition or retirement of (a) Subordinated Indebtedness of Aleris or a Restricted Subsidiary made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of such Person or (b) Disqualified Stock of Aleris or a Restricted Subsidiary made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of such Person that, in each case, is incurred in compliance with Section 8.01 so long as (A) the principal amount of such new Indebtedness or the liquidation preference of such new Disqualified Stock does not exceed the principal amount (or accreted value, if applicable) of the Subordinated Indebtedness or the liquidation preference of such new Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired for value, plus the amount of any reasonable premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness or the liquidation preference of such new Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness or Disqualified Stock, (B) such Indebtedness is subordinated to the Term Obligations at least to the same extent as such Subordinated Indebtedness so defeased, redeemed, repurchased, acquired or retired, (C) such Indebtedness or Disqualified Stock has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired and (D) such Indebtedness or Disqualified Stock has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, acquired or retired;

(iv) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of Aleris or any of its direct or indirect parent companies held by any future, present or

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former employee, director, manager or consultant of Aleris, any of its Subsidiaries or any of its direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement; provided that the aggregate Restricted Payments made under this clause (iv) do not exceed in any calendar year $15,000,000 (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $30,000,000 in any calendar year); provided, further, that such amount in any calendar year may be increased by an amount not to exceed (A) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of Aleris and, to the extent contributed to Aleris, Equity Interests of any of Aleris’ direct or indirect parent companies, in each case to members of management, directors, managers or consultants of Aleris, any of its Subsidiaries or any of its direct or indirect parent companies that occurs after the Restatement Effective Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (iii) of paragraph (a) of this Section 8.04, plus (B) the cash proceeds of key man life insurance policies received by Aleris and the Restricted Subsidiaries after the Restatement Effective Date, less (C) the amount of any Restricted Payments previously made pursuant to clauses (A) and (B) of this clause (iv); and provided, further, that cancellation of Indebtedness owing to Aleris from members of management, directors, managers or consultants of Aleris, any of its direct or indirect parent companies, or any Restricted Subsidiary in connection with a repurchase of Equity Interests of Aleris or any of its direct or indirect parent companies shall not be deemed to constitute a Restricted Payment for purposes of this Section 8.04 or any other provision of this Agreement;

(v) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of Aleris or any Restricted Subsidiary issued in accordance with Section 8.01 to the extent such dividends are included in the definition of “Fixed Charges”;

(vi) the declaration and payment of dividends (A) to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by Aleris after the Restatement Effective Date, (B) to a direct or indirect parent company of Aleris, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of such parent company issued after the Restatement Effective Date; provided that the amount of dividends paid pursuant to this clause (B) shall not exceed the aggregate amount of cash actually contributed to Aleris from the sale of such Designated Preferred Stock, or (C) on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (ii) of this paragraph (b); provided, however, in the case of each of (A), (B) and (C) of this clause (vi), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or the declaration of such dividends on Refunding Capital Stock that is Preferred Stock, after giving effect to such issuance or declaration on a pro forma basis, Aleris and the Restricted Subsidiaries on a consolidated basis would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

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(vii) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(viii) the declaration and payment of dividends on Aleris’ common stock following the first public offering of Aleris’ common stock or the common stock of any of its direct or indirect parent companies after the Restatement Effective Date, of up to 6% per annum of the net proceeds received by or contributed to Aleris in or from any such public offering, other than public offerings with respect to Aleris’ common stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

(ix) Restricted Payments that are made with Excluded Contributions;

(x) the declaration and payment of dividends by Aleris to, or the making of loans to, its direct parent company in amounts required for Aleris’ direct or indirect parent companies to pay (A) franchise taxes and other fees, taxes and expenses required to maintain their corporate existence, (B) federal, state and local income taxes, to the extent such income taxes are attributable to the income of Aleris and the Restricted Subsidiaries and, to the extent of the amount actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries, (C) customary salary, bonus and other benefits payable to officers and employees of any direct or indirect parent company of Aleris to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Aleris and the Restricted Subsidiaries, (D) general corporate overhead expenses of any direct or indirect parent company of Aleris to the extent such expenses are attributable to the ownership or operation of Aleris and the Restricted Subsidiaries, and (E) reasonable fees and expenses incurred in connection with any unsuccessful debt or equity offering by such direct or indirect parent company of Aleris;

(xi) any Restricted Payments used to fund the Transaction and the fees and expenses related thereto, including those owed to Affiliates, in each case to the extent permitted under Section 8.05;

(xii) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness in connection with events similar to those set forth in Sections 1017 and 1018 of the New Senior Subordinated Note Indenture; provided that, prior to such repurchase, redemption or other acquisition, Aleris (or a third party to the extent permitted by this Agreement) shall have prepaid the Loans to the extent required by Section 4.02(c);

(xiii) Investments in Unrestricted Subsidiaries having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (xiii) that are at the time outstanding, without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities, not to exceed the greater of (x) $50,000,000 and (y) 1.5% of Total Assets at the time of such

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Investment (with the fair market value of each Investment being measured at the time such Investment is made and without giving effect to subsequent changes in value);

(xiv) distributions or payments of Receivables Fees;

(xv) the distribution, as a dividend or otherwise (and the declaration of such dividend), of shares of Equity Interests of, or Indebtedness owed to Aleris or a Restricted Subsidiary by, any Unrestricted Subsidiary; and

(xvi) other Restricted Payments in an amount which, when taken together with all other Restricted Payments made pursuant to this clause (xvi), does not exceed the greater of (x) $100,000,000 and (y) 3.0% of Total Assets;

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (xv) and (xvi) of this paragraph (b), no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) Notwithstanding anything to the contrary herein, Aleris will not, and will not permit any Restricted Subsidiary to, directly or indirectly, make any (i) Restricted Payment covered in clauses (w) through (y) of the definition of Restricted Payments set forth in paragraph (a) of this Section 8.04 to the holders of Equity Interests of Aleris or any of its direct or indirect parent companies (which shall include the Sponsor and the Co-Investors) other than to Aleris’ and its Restricted Subsidiaries’ future, present or former employees, directors, managers or consultants of Aleris, any of its Subsidiaries or any of its direct or indirect parent companies with respect to Equity Interests held by them in such capacities and other than a Restricted Payment made pursuant to clause (x) of paragraph (b) of this Section 8.04 or (ii) Investment in the Sponsor, the Co-Investors, any Permitted Holders who are members of a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) with the Sponsor or any Co-Investor or any Person or group who becomes a Permitted Holder following a Change of Control as provided for in the definition of “Permitted Holders” (other than in Aleris and its Restricted Subsidiaries and members of management of Aleris (or its direct parent)), in each case during any period beginning on the date on which Aleris makes an election to pay interest on the New Senior Notes by increasing the principal amount of the outstanding New Senior Notes or by issuing additional New Senior Notes pursuant to the New Senior Note Indenture (or an election under any similar provision set forth in any instrument governing any Indebtedness refinancing, refunding, extending, renewing or replacing the New Senior Note) with respect to any interest period relating thereto and ending on the first date after such interest period on which Aleris makes a payment of interest in cash on the New Senior Notes pursuant to the New Senior Note Indenture (or pursuant to any such other instrument) with respect to a subsequent interest period relating thereto on the New Senior Notes pursuant to the New Senior Note Indenture with respect to a subsequent interest period.

(d) Aleris shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the penultimate paragraph of the definition of “Unrestricted Subsidiary”. For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by Aleris and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an

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amount determined as set forth in the last sentence of the definition of “Investment”. Such designation shall be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to paragraph (a) of this Section 8.04 or under clauses (ix), (xiii) or (xvi) of paragraph (b) of this Section 8.04, or pursuant to the definition of “Permitted Investments”, and if such Subsidiary otherwise meets the definition of an “Unrestricted Subsidiary”.

8.05 Limitations on Transactions with Affiliates. (a) Aleris shall not, and shall not permit any Restricted Subsidiary to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Aleris (each of the foregoing, an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $10,000,000, unless (i) such Affiliate Transaction is on terms that are not materially less favorable to Aleris or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by Aleris or such Restricted Subsidiary with an unrelated Person and (ii) Aleris delivers to the Administrative Agent with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $30,000,000, a board resolution adopted by the majority of the members of the board of directors of Aleris approving such Affiliate Transaction and set forth in an officers’ certificate certifying that such Affiliate Transaction complies with clause (i) above.

(b) The limitations set forth in paragraph (a) of this Section 8.05 shall not apply to:

(i) transactions between or among Aleris or any of the Restricted Subsidiaries;

(ii) Restricted Payments that are permitted by the provisions of Section 8.04 and the definition of “Permitted Investments”;

(iii) the payment of management, consulting, monitoring and advisory fees and related expenses to the Sponsor and any Co-Investors and any termination or other fee payable to the Sponsor or any Co-Investors upon a change of control or initial public equity offering of Aleris or any direct or indirect parent company thereof pursuant to the Management Services Agreement as in effect on the Restatement Effective Date;

(iv) the payment of reasonable and customary fees paid to, and indemnities provided on behalf of, officers, directors, managers, employees or consultants of Aleris, any of its direct or indirect parent companies or any Restricted Subsidiary;

(v) payments by Aleris or any Restricted Subsidiary to the Sponsor or any Co-Investors for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are approved by a majority of the members of the board of directors of Aleris in good faith;

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(vi) transactions in which Aleris or any Restricted Subsidiary, as the case may be, delivers to the Administrative Agent a letter from an Independent Financial Advisor stating that such transaction is fair to Aleris or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (i) of paragraph (a) of this Section 8.05;

(vii) payments or loans (or cancellations of loans) to employees or consultants of Aleris, any of its direct or indirect parent companies or any Restricted Subsidiary and employment agreements, employee benefit plans, stock option plans and other compensatory or severance arrangements with such employees or consultants that are, in each case, approved by Aleris in good faith;

(viii) any agreement, instrument or arrangement as in effect as of the Restatement Effective Date, or any amendment thereto (so long as any such amendment is not disadvantageous to the Lenders in any material respect as compared to the applicable agreement as in effect on the Restatement Effective Date as reasonably determined by Aleris in good faith);

(ix) the existence of, or the performance by any Borrower or any of the Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement or its equivalent (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Restatement Effective Date and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by Aleris or any Restricted Subsidiary of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Restatement Effective Date shall only be permitted by this clause (ix) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or new agreement are not otherwise more disadvantageous to the Lenders in any material respect than the terms of the original agreement in effect on the Restatement Effective Date as reasonably determined in good faith by Aleris;

(x) the Transaction and the payment of all fees and expenses related to the Transaction as disclosed in the offering memorandum relating to the New Senior Notes;

(xi) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Agreement that are fair to Aleris and the Restricted Subsidiaries, in the reasonable determination of the board of directors or the senior management of Aleris, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(xii) the issuance of Equity Interests (other than Disqualified Stock) of Aleris to any Permitted Holder or to any director, manager, officer, employee or consultant of Aleris or any direct or indirect parent company thereof;

(xiii) sales of accounts receivable, or participations therein, in connection with any Receivables Facility; and

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(xiv) investments by the Sponsor and Co-Investors in securities of Aleris or any of its Restricted Subsidiaries so long as (A) the investment is being offered generally to other investors on the same or more favorable terms and (B) the investment constitutes less than 5.0% of the proposed or outstanding issue amount of such class of securities; and

(xv) licenses, sublicenses, leases or subleases granted by Aleris and its Subsidiaries to other Persons not materially interfering with the conduct of the business of Aleris and its Subsidiaries, in each case so long as no such grant otherwise restricts any Credit Party’s right to grant a Lien on such assets or property in favor of the Collateral Agent (or the Collateral Agent’s rights and remedies with respect, or access, thereto).

8.06 Limitations on Asset Sales. (a) Aleris shall not, and shall not permit any Restricted Subsidiary to, cause, make or suffer to exist an Asset Sale, unless:

(i) Aleris or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (as determined in good faith by Aleris) of the assets sold or otherwise disposed of (notwithstanding the foregoing, the consideration received by Aleris from the sale of the Saginaw, Michigan facility on terms materially consistent with the terms, as in effect as of October 6, 2003, set forth in Exhibit 5 to the Long Term Agreement as in effect as of October 6, 2003 between General Motors Corporation and Alchem Aluminum Inc., dated as of February 26, 1999, shall, in each case, be deemed to be fair market value for purposes of this paragraph);

(ii) except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by Aleris or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents (provided that the amount of (A) any liabilities (as shown on Aleris’ or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of Aleris or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the Term Obligations, that are assumed by the transferee of any such assets (or a third party on behalf of the transferee) and for which Aleris or such Restricted Subsidiary has been validly released by all creditors in writing, (B) any securities, notes or other obligations or assets received by Aleris or such Restricted Subsidiary from such transferee that are converted by Aleris or such Restricted Subsidiary into cash (to the extent of the cash received) within 180 days following the closing of such Asset Sale and (C) any Designated Non-cash Consideration received by Aleris or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (C) that has not previously been converted to cash, not to exceed the greater of (x) $100,000,000 and (y) 3.0% of Total Assets at the time of receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value, shall be deemed to be cash for purposes of this provision and for no other purpose); and

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(iii) an amount equal to 100% of the Net Sale Proceeds of such Asset Sale (less, in the case of the sale of Equity Interests of a Person, the amount allocable to the inventory and related assets of such Person, as determined by Aleris in good faith) is applied in accordance with Section 4.02(c).

(b) Notwithstanding anything to the contrary contained above, in no event shall any of the Equity Interests of (A) the German Borrower (1) fail to be subject to the Lien of the Secured Creditors as provided in this Agreement or (2) be sold, transferred, issued or otherwise disposed of (x) to any Person that is not a European Parent Guarantor or (y) pursuant to a sale, transfer or other disposition which would after giving effect thereto, result in the German Borrower not constituting a Wholly-Owned Subsidiary of Aleris , (B) any Subsidiary of the German Borrower (other than any Subsidiary substantially all of the assets of which are Accounts and related assets and/or substantially all of whose business activities relate to sales and distribution activities) be sold, transferred or otherwise disposed of to any Subsidiary of Aleris other than the German Borrower or a Subsidiary thereof or (C) the Swiss CE or any Subsidiary thereof be sold, transferred or otherwise disposed of to any Subsidiary of Aleris other than (x) in the case of the Swiss CE, a European Parent Guarantor or (y) in the case of a Subsidiary of the Swiss CE, to the Swiss CE or a Subsidiary thereof.

(c) Notwithstanding anything to the contrary contained in this Agreement, Aleris shall not, and shall not permit any Restricted Subsidiary to, cause, make or suffer to exist (i) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of Aleris or any Restricted Subsidiary to Aleris or any other Restricted Subsidiary (each referred to in this definition as a “disposition”), and (ii) the issuance or sale of Equity Interests of any Restricted Subsidiary to Aleris or any other Restricted Subsidiary, whether in a single transaction or a series of related transactions, in each case other than dispositions (t) among the U.S. Credit Parties, (u) among the German Borrower and its Wholly-Owned Subsidiaries, (v) among Wholly-Owned Foreign Subsidiaries (that are not Credit Parties) of Aleris, (w) by any Subsidiary of Aleris to any U.S. Credit Party, (x) by any Foreign Subsidiary of Aleris that is not a Credit Party to any Wholly-Owned Foreign Subsidiary of Aleris, (y) by any U.S. Credit Party to any Wholly-Owned European Subsidiary of Aleris that is a Credit Party, and (z) by any U.S. Credit Party to any Wholly-Owned Foreign Subsidiary (that is not a Credit Party) of Aleris, so long as, (I) in the case of any transfer from one Credit Party to another Credit Party, any security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the relevant Security Documents in the assets so transferred shall (A) remain in full force and effect and perfected and enforceable (to at least the same extent as in effect immediately prior to such transfer) or (B) be replaced by security interests granted to the relevant Collateral Agent for the benefit of the relevant Secured Creditors pursuant to the relevant Security Documents, which new security interests shall be in full force and effect and perfected and enforceable (to at least the same extent as in effect immediately prior to such transfer) and (II) in the case of any transfer pursuant to preceding clauses (y) and (z), the aggregate value of all assets transferred or sold (other than sales or transfer of assets located at 2211 East Carson Street, Long Beach, California or located, or previously located, at State Board 7, Hannibal, Ohio) shall not exceed $50,000,000 since the Restatement Effective Date.

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Notwithstanding anything to the contrary contained herein, the Equity Interests of any of the Subsidiaries of Corus Aluminium NV in existence on the Restatement Effective Date (each, such Subsidiary, a “European Sales Office”) may be transferred to Aleris Switzerland GmbH so long as (i) the respective European Sales Office owns no assets other than de minimis assets and (ii) the respective European Sales Office has no operations other than the solicitation of sales of finished aluminum product to end-use customers by and on behalf of Aleris Switzerland GmbH or the Specified European Manufacturing Subsidiaries, as permitted pursuant to this Agreement.

To the extent the Required Lenders waive the provisions of this Section 8.06 with respect to the sale of any Collateral, or any Collateral is sold as permitted by this Section 8.06 (other than to Aleris or a Subsidiary thereof which is a Credit Party), such Collateral shall be sold free and clear of the Liens created by the Security Documents, and the Administrative Agent and the Collateral Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

8.07 Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries. (a) Aleris shall not, and shall not permit any Restricted Subsidiary that is not a Credit Party to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any such Restricted Subsidiary to:

(i) (A) pay dividends or make any other distributions to Aleris or any Restricted Subsidiary on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or (B) pay any Indebtedness owed to Aleris or any Restricted Subsidiary;

(ii) make loans or advances to Aleris or any Restricted Subsidiary; or

(iii) sell, lease or transfer any of its properties or assets to Aleris or any Restricted Subsidiary.

(b) The limitations set forth in paragraph (a) of this Section 8.07 shall not apply (in each case) to such encumbrances or restrictions existing under or by reason of:

(i) contractual encumbrances or restrictions in effect on the Restatement Effective Date, including pursuant to the Credit Documents, the ABL Credit Agreement and the related documentation (including security documents and intercreditor agreements) and Hedging Obligations;

(ii) the New Note Documents and the New Notes and the subsidiary guarantees of the New Notes issued thereunder;

(iii) purchase money obligations for property acquired in the ordinary course of business and Capitalized Lease Obligations that impose restrictions of the nature discussed in clause (iii) of paragraph (a) of this Section 8.07 on the property so acquired;

(iv) applicable law or any applicable rule, regulation or order;

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(v) any agreement or other instrument of a Person acquired by Aleris or any Restricted Subsidiary in existence at the time of such acquisition (but not created in connection therewith or in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired;

(vi) contracts for the sale of assets, including customary restrictions with respect to a subsidiary pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(vii) Secured Indebtedness otherwise permitted to be incurred pursuant to Sections 8.01 and 8.02 that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(viii) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(ix) other Indebtedness, Disqualified Stock or Preferred Stock of Restricted Subsidiaries permitted to be incurred after the Restatement Effective Date pursuant to Section 8.01;

(x) customary provisions in joint venture agreements, asset sale agreements, sale and leaseback agreements and other similar agreements;

(xi) customary provisions contained in leases and other agreements entered into in the ordinary course of business;

(xii) restrictions created in connection with any Receivables Facility; provided that in the case of Receivables Facilities established after the Restatement Effective Date, such restrictions are necessary or advisable, in the good faith determination of Aleris, to effect such Receivables Facility;

(xiii) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which Aleris or any of its Restricted Subsidiaries is a party entered into in the ordinary course of business; provided that such agreement prohibits the encumbrance of solely the property or assets of Aleris or such Restricted Subsidiary that are the subject of such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of Aleris or such Restricted Subsidiary or the assets or property of any other Restricted Subsidiary; and

(xiv) any encumbrances or restrictions of the type referred to in clauses (i), (ii) and (iii) of paragraph (a) of this Section 8.07 imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (i) through (xiii) of this paragraph (b); provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Aleris, not materially more restrictive with respect to

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such encumbrance and other restrictions than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing; provided, further, that with respect to contracts, instruments or obligations existing on the Restatement Effective Date, any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive with respect to such encumbrances and other restrictions than those contained in such contracts, instruments or obligations as in effect on the Restatement Effective Date.

8.08 Limitations on Guarantees of Indebtedness by Restricted Subsidiaries. Aleris will not permit any of its Wholly-Owned Subsidiaries that are Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities), other than a Guarantor or a Foreign Subsidiary which is not a Credit Party, to guarantee the payment of any Indebtedness of Aleris or any other Guarantor unless:

(a) such Restricted Subsidiary within thirty days executes and delivers a Joinder Agreement providing for a Guaranty by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of Aleris or any Guarantor, that is by its express terms subordinated in right of payment to the Term Obligations or the Guaranty of such Restricted Subsidiary, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Guaranty substantially to the same extent as such Indebtedness is subordinated to the Term Obligations;

(b) such Restricted Subsidiary waives and will not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against Aleris or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Guaranty; and

(c) such Restricted Subsidiary shall deliver to the Administrative Agent an opinion of counsel to the effect that (i) such Guaranty has been duly executed and authorized and (ii) such Guaranty constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity;

provided that this Section 8.08 shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.

8.09 Limitations on Sale and Lease-Back Transactions. Aleris will not, and will not permit any Restricted Subsidiary to, enter into any Sale and Lease-Back Transaction with respect to any property unless:

(a) Aleris or such Restricted Subsidiary would be entitled to (i) incur Indebtedness in an amount equal to the Attributable Debt with respect to such Sale and

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Lease-Back Transaction pursuant to Section 8.01 and (ii) create a Lien on such property securing such Attributable Debt without securing the Term Obligations pursuant to Section 8.02;

(b) the consideration received by Aleris or any Restricted Subsidiary in connection with such Sale and Lease-Back Transaction is at least equal to the fair market value (as determined in good faith by Aleris) of such property; and

(c) Aleris applies the proceeds of such transaction in compliance with Section 4.02(c).

8.10 Amendments to Subordination Provisions. Without the consent of the Required Lenders, Aleris will not amend, modify or alter the New Senior Subordinated Note Indenture in any way to:

(a) increase the rate of or change the time for payment of interest on any New Senior Subordinated Notes;

(b) increase the principal of, advance the final maturity date of or shorten the Weighted Average Life to Maturity of any New Senior Subordinated Notes;

(c) alter the redemption provisions or increase the price or terms at which Aleris is required to offer to purchase any New Senior Subordinated Notes; or

(d) amend the provisions of the New Senior Subordinated Note Indenture that relate to subordination.

8.11 Business of Aleris and Restricted Subsidiaries. Aleris will not, and will not permit any Restricted Subsidiary to, engage to any material extent in any material line of business substantially different from those lines of business conducted by Aleris and the Restricted Subsidiaries on the Restatement Effective Date or businesses reasonably related or ancillary thereto.

8.12 Changes to Legal Names, Organizational Identification Numbers, Jurisdiction or Type or Organization. Aleris will not, and will not permit any of the other Credit Parties to, change its legal name until (i) it shall have given to the Administrative Agent and the Collateral Agent not less than 15 days prior written notice of its intention so to do, clearly describing such new name and providing other information in connection therewith as the Collateral Agent may reasonably request, and (ii) with respect to such new name, it shall have taken all action reasonably requested by the Administrative Agent and Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted pursuant to the applicable Security Documents at all times fully perfected and in full force and effect. In addition, to the extent that any Credit Party does not have an organizational identification number on the Restatement Effective Date and later obtains one, or if there is any change in the organizational identification number of any Credit Party, Aleris or such other Credit Party shall promptly notify the Collateral Agent of such new or changed organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interests of the Collateral Agent in the Collateral intended to be granted pursuant to the applicable Security Documents fully perfected and in full

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force and effect. Furthermore, Aleris will not, and will not permit any of the other Credit Parties to, change its jurisdiction of organization or its type of organization until (x) it shall have given to the Collateral Agent not less than 15 days prior written notice of its intention so to do, clearly describing such new jurisdiction of organization and/or type of organization and providing such other information in connection therewith as the Collateral Agent may reasonably request (although no change pursuant to this Section 8.12 shall be permitted to the extent that it involves (i) except as otherwise permitted under Section 8.03, a U.S. Credit Party ceasing to be organized in the United States or (ii) the German Borrower ceasing to be organized in Germany and (y) with respect to such new jurisdiction and/or type of organization, it shall have taken all actions reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted pursuant to the Security Documents at all times fully perfected and in full force and effect.

8.13 Negative Covenants of Non U.S. Credit Parties. The parties hereto agree that the covenants and agreements made pursuant to this Section 8 by the German Borrower (but, for the avoidance of doubt, not the covenants and agreements of the U.S. Borrower in respect of the German Borrower and its Subsidiaries) are made solely in support of the Loans to the German Borrower and shall be solely for the benefit of the Lenders in their capacity as Lenders to the German Borrower.

SECTION 9. Events of Default. Upon the occurrence of any of the following specified events (each an “Event of Default”):

9.01 Payments. Any Borrower shall (i) fail to pay any principal of any 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 by acceleration thereof or otherwise or (ii) fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in preceding clause (i)) payable under this Agreement or any other Credit Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period 30 days; or

9.02 Representations, etc. Any representation or warranty made or deemed made by or on behalf of any Credit Party herein or in any other Credit Document or any amendment or modification thereof or waiver thereunder, or in any report or other certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any Credit Document, shall prove to have been materially incorrect when made or deemed made; or

9.03 Covenants. Failure by any Credit Party for 60 days after receipt of written notice given by the Administrative Agent or the Required Lenders to comply with any of its other agreements in this Agreement or any Credit Document; or

9.04 Default Under Other Agreements. (i) Aleris or any Subsidiary of Aleris shall fail to make any payment beyond the applicable grace period (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) with respect to any Material Indebtedness, or (ii) any event or condition occurs (other than with respect to Material Indebtedness constituting Derivative Transactions, termination events or equivalent events

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pursuant to the terms of the related Hedge Agreements in accordance with the terms thereof and not as a result of any default thereunder by Aleris or any Subsidiary of Aleris that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with the giving of notice, if required) the holder or holders of any such Material Indebtedness or any trustee or agent on its or their behalf to cause any such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that (x) this Section 9.04 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 if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness and (y) notwithstanding the foregoing, any requirement for Aleris or any Subsidiary of Aleris to make a Special Mandatory Redemption under, and as defined in, the New Senior Note Indenture or any failure by Aleris or any Subsidiary of Aleris to make such a Special Mandatory Redemption shall not constitute an Event of Default to the extent that such requirement and/or failure does not constitute an event of default under the New Senior Note Indenture or any other Material Indebtedness; or

9.05 Bankruptcy, etc. (a) An involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Borrower or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a 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 any Borrower or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) or for a substantial part of its assets, and, in any such case of clause (i) or (ii), such proceeding or petition shall continue undismissed and unstayed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered; or

(b) Any Borrower or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a 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 Section 9.05(a), (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Borrower or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a 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 or (v) make a general assignment for the benefit of creditors; or

9.06 Judgments. Failure by any Borrower or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $40,000,000, which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, and in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed; or

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9.07 Guaranties. Any Guaranty of any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) or Aleris shall for any reason cease to be in full force and effect or be declared null and void or any Responsible Officer of any Guarantor that is a Significant Subsidiary (or the Responsible Officers of any group of Subsidiaries that together would constitute a Significant Subsidiary) or Aleris, as the case may be, denies that it has any further liability under its Guaranty or gives notice to such effect, other than by reason of the termination of this Agreement or the release of any such Guaranty in accordance with this Agreement; or

9.08 Security Documents. After the execution and delivery thereof, unless all of the Collateral has been released from the Liens in accordance with the provisions of the Security Documents, any Security Document shall for any reason cease to be in full force and effect or the assertion by any Borrower or any Restricted Subsidiary, in any pleading in any court of competent jurisdiction, that any security interest thereunder is invalid or unenforceable and, in the case of any such Restricted Subsidiary, the failure by Aleris to cause such Restricted Subsidiary to rescind such assertions within 30 days after Aleris has actual knowledge of such assertions; or

9.09 Additional Agreements. The failure by any Borrower or any Restricted Subsidiary to comply for 60 days after receipt of written notice given by the Administrative Agent or the Required Lenders with its other agreements contained in the Security Documents, except for a failure that would not materially affect the value of the Collateral, or the remedies with respect thereto, in each case taken as a whole; or

9.10 Change of Control. A Change of Control shall occur;

then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent, upon the written request of the Required Lenders, shall by written notice to Aleris, take any or all of the following actions, without prejudice to the rights of the Administrative Agent, any Lender or the holder of any Note to enforce its claims against any Credit Party (provided that, if an Event of Default specified in Section 9.05 shall occur with respect to any Borrower, the result which would occur upon the giving of written notice by the Administrative Agent as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Total Commitment terminated, whereupon all Commitments of each Lender shall forthwith terminate immediately; (ii) declare the principal of and any accrued interest in respect of all Loans and the Notes evidencing such Loans and all other Term Obligations owing with respect thereto hereunder and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party; and (iii) enforce, as Collateral Agent, all of the Liens and security interests created pursuant to the Security Documents securing Term Obligations owing to the Lenders.

In the event of any Event of Default specified in Section 9.04, such Event of Default and all consequences thereof (excluding any resulting payment default) shall be annulled, waived and rescinded automatically and without any action by the Administrative Agent or the Lenders if, within 20 days after such Event of Default arose, (i) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged, (ii) the holders thereof have rescinded or

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waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (iii) the default that is the basis for such Event of Default has been cured.

Solely for the purposes of determining whether an Event of Default has occurred under Section 9.04, any reference in any such paragraph to any Subsidiary shall be deemed not to include any Immaterial Subsidiary affected by any event or circumstance referred to in such Section; provided that if it is necessary to exclude more than one Subsidiary from Section 9.04 pursuant to this paragraph in order to avoid an Event of Default thereunder, all excluded Subsidiaries shall be considered to be a single consolidated Subsidiary for purposes of determining whether the condition specified above is satisfied.

SECTION 10. The Administrative Agent and Collateral Agent.

10.01 Appointment. The Lenders hereby irrevocably designate and appoint DBNY as Administrative Agent (for purposes of this Section 10 and Section 11.01 (and all guarantees of obligations pursuant to said Sections, and for purposes of the Security Documents), the term “Administrative Agent” will include DBNY (and any successor Collateral Agent or Collateral Agents)) in its capacity as Collateral Agent pursuant to the Security Documents. Each Lender hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, the Administrative Agent to take such action on its behalf under the provisions of this Agreement, the other Credit Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder by or through its officers, directors, agents, employees or affiliates (it being understood and agreed, for avoidance of doubt and without limiting the generality of the foregoing, that the Administrative Agent shall be permitted to designate one of its affiliates to perform the duties to be performed by the Administrative Agent hereunder with respect to Loans and Letters of Credit denominated in Euros and the provisions of this Section 10 shall apply to any such affiliate mutatis mutandis).

10.02 Nature of Duties. (a) The Administrative Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and in the other Credit Documents. Neither the Administrative Agent nor any of its officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by their gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have by reason of this Agreement or any other Credit Document a fiduciary relationship in respect of any Lender or the holder of any Note; and nothing in this Agreement or in any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein or therein.

(b) Notwithstanding any other provision of this Agreement or any provision of any other Credit Document, the Syndication Agent, the Co-Documentation Agents, the Joint

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Lead Arrangers and the Joint Book Running Managers are named as such for recognition purposes only, and in their respective capacities as such shall have no powers, duties, responsibilities or liabilities with respect to this Agreement or the other Credit Documents or the transactions contemplated hereby and thereby; it being understood and agreed that the Syndication Agent, the Co-Documentation Agents, the Joint Lead Arrangers and the Joint Book Running Managers shall each be entitled to all indemnification and reimbursement rights in favor of the Administrative Agent (to the same extent as provided for the Administrative Agent) as, and to the extent, provided for under Sections 10.06 and 11.01 (which provisions shall be deemed incorporated by reference herein). Without limitation of the foregoing, neither the Syndication Agent, the Co-Documentation Agents, the Joint Lead Arrangers nor the Joint Book Running Managers shall, solely by reason of this Agreement or any other Credit Documents, have any fiduciary relationship in respect of any Lender or any other Person.

10.03 Lack of Reliance on the Administrative Agent. Independently and without reliance upon the Administrative Agent, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of Aleris and its Subsidiaries in connection with the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and (ii) its own appraisal of the creditworthiness of Aleris and its Subsidiaries and, except as expressly provided in this Agreement, the Administrative Agent shall not have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter. The Administrative Agent shall not be responsible to any Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of Aleris or any of its Subsidiaries or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the financial condition of Aleris or any of its Subsidiaries or the existence or possible existence of any Default or Event of Default.

10.04 Certain Rights of the Administrative Agent. If the Administrative Agent requests instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, the Administrative Agent shall be entitled to refrain from such act or taking such action unless and until the Administrative Agent shall have received instructions from the Required Lenders; and the Administrative Agent shall not incur liability to any Lender by reason of so refraining. Without limiting the foregoing, neither any Lender nor the holder of any Note shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders.

10.05 Reliance. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone

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message signed, sent or made by any Person that the Administrative Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by the Administrative Agent.

10.06 Indemnification. To the extent the Administrative Agent (or any affiliate thereof) is not reimbursed and indemnified by the Borrowers, the Lenders will reimburse and indemnify the Administrative Agent (and any affiliate thereof) in proportion to their respective “percentage” as used in determining the Required Lenders (determined as if there were no Defaulting Lenders) for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by the Administrative Agent (or any affiliate thereof) in performing its duties hereunder or under any other Credit Document (including, without limitation, any account control agreements entered into pursuant to any Security Agreement) or in any way relating to or arising out of this Agreement or any other Credit Document (including, without limitation, any account control agreements entered into pursuant to any Security Agreement); provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent’s (or such affiliate’s) gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

10.07 The Administrative Agent in its Individual Capacity. With respect to its obligation to make Loans under this Agreement, the Administrative Agent shall have the rights and powers specified herein for a “Lender” and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term “Lender,” “Required Lenders,” “holders of Notes” or any similar terms shall, unless the context clearly indicates otherwise, include the Administrative Agent in its respective individual capacity. The Administrative Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, investment banking, trust or other business with, or provide debt financing, equity capital or other services (including financial advisory services) to any Credit Party or any Affiliate of any Credit Party (or any Person engaged in a similar business with any Credit Party or any Affiliate thereof) as if they were not performing the duties specified herein, and may accept fees and other consideration from any Credit Party or any Affiliate of any Credit Party for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

10.08 Holders. The Borrowers and the Administrative Agent shall deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, together with the relevant Assignment and Assumption Agreement shall have been filed with the Administrative Agent. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor.

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10.09 Resignation by the Administrative Agent. (a) The Administrative Agent may resign from the performance of all its respective functions and duties hereunder and/or under the other Credit Documents at any time by giving 20 Business Days’ prior written notice to the Lenders and, unless an Event of Default under Section 9.05 then exists, Aleris. Such resignation shall take effect upon the appointment of a successor Administrative Agent or Collateral Agent, as applicable, pursuant to clauses (b) and (c) below or as otherwise provided below.

(b) Upon any such notice of resignation by the Administrative Agent, the Required Lenders shall appoint a successor Administrative Agent or Collateral Agent, as applicable, hereunder or thereunder who shall be a commercial bank or trust company reasonably acceptable to Aleris, which acceptance shall not be unreasonably withheld or delayed (provided that Aleris’ approval shall not be required if an Event of Default then exists).

(c) If a successor Administrative Agent shall not have been so appointed within such 20 Business Day period, the resigning Administrative Agent, on behalf of the Lenders and with the consent of Aleris (which consent shall not be unreasonably withheld or delayed, provided that Aleris’ consent shall not be required if an Event of Default then exists), shall then appoint a successor Administrative Agent who shall serve as Administrative Agent until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided in clause (b) above.

(d) If no successor Administrative Agent has been appointed pursuant to clause (b) or (c) above by the 45th Business Day after the date on which such notice of resignation was given by the resigning Administrative Agent, the Administrative Agent’s resignation shall become effective and the Required Lenders shall thereafter perform all the duties of the Administrative Agent hereunder and/or under any other Credit Document until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided in clause (b) above.

(e) Upon the resignation of the Administrative Agent pursuant to this Section 10.09, the Administrative Agent shall remain indemnified to the extent provided in this Agreement and the other Credit Documents and the provisions of this Section 10 shall continue in effect for the benefit of such Administrative Agent for all of its actions and inactions while serving as the Administrative Agent.

10.10 Collateral Matters. (a) Each Lender authorizes and directs the Collateral Agent to enter into the Security Documents for the benefit of the Lenders and the other Secured Creditors. Each Lender hereby agrees, and each holder of any Note by the acceptance thereof will be deemed to agree, that, except as otherwise set forth herein, any action taken by the Required Lenders in accordance with the provisions of this Agreement or the Security Documents, and the exercise by the Lenders (or any authorized sub-group thereof) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. The Collateral Agent is hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to an Event of Default, to take any action with respect to any Collateral or Security Documents which may be necessary to perfect and maintain

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perfected the security interest in and liens upon the Collateral granted pursuant to the Security Documents.

(b) The Lenders hereby authorize the Collateral Agent to release any Lien granted to or held by the Collateral Agent upon any Collateral (i) upon termination of the Commitments and payment and satisfaction of all of the Term Obligations at any time arising under or in respect of this Agreement or the Credit Documents or the transactions contemplated hereby or thereby, (ii) constituting property being sold or otherwise disposed of (to Persons other than any Credit Party) upon the sale or other disposition thereof in compliance with Section 8.06, (iii) upon the request of the Borrowers, so long as the fair market value of any Collateral released in any Fiscal Year pursuant to this Section 10.10(b)(iii) does not exceed $5,000,000, (iv) if approved, authorized or ratified in writing by the Required Lenders (or all of the Lenders hereunder, to the extent required by Section 11.12), (v) as otherwise may be expressly provided in the relevant Security Documents or (vi) to the extent the property constituting such Collateral is owned by any Guarantor, upon the release of the Guarantor from its obligations under its Guaranty in accordance with the terms of this Agreement. Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Collateral Agent’s authority to release particular types or items of Collateral pursuant to this Section 10.10(b).

(c) The Collateral Agent shall have no obligation whatsoever to the Lenders or to any other Person to assure that the Collateral exists or is owned by any Credit Party or is cared for, protected or insured or that the Liens granted to the Collateral Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 10.10 or in any of the Security Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given the Collateral Agent’s own interest in the Collateral as one of the Lenders and that the Collateral Agent shall have no duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

(d) In no event will the Collateral Agent be replaced hereunder (or under any of the other Credit Documents) unless agreed to by the Administrative Agent and the Collateral Agent.

(e) Each Lender authorizes and directs the Collateral Agent and the Administrative Agent to enter into the intercreditor agreements and related documents in respect of (i) Secured Hedging Agreements and (ii) Other Pari Passu Lien Obligations.

10.11 Amendments to Guaranties and Security Documents on the Restatement Effective Date. By their execution and delivery hereof, the Lenders party hereto hereby authorize and direct the Administrative Agent and the Collateral Agent to enter into the Credit Document Acknowledgment and Amendment in substantially the form of Exhibit F-3 hereto.

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10.12 Delivery of Information. The Administrative Agent shall not be required to deliver to any Lender originals or copies of any documents, instruments, notices, communications or other information received by the Administrative Agent from any Credit Party, any Subsidiary, the Required Lenders, any Lender or any other Person under or in connection with this Agreement or any other Credit Document except (i) as specifically provided in this Agreement or any other Credit Document and (ii) as specifically requested from time to time in writing by any Lender with respect to a specific document, instrument, notice or other written communication received by and in the possession of the Administrative Agent at the time of receipt of such request and then only in accordance with such specific request.

SECTION 11. Miscellaneous.

11.01 Payment of Expenses, etc. The U.S. Credit Parties hereby jointly and severally agree to: (i) pay all reasonable documented out-of-pocket costs and expenses of the Administrative Agent and its Affiliates (including, without limitation, the reasonable fees and disbursements of White & Case LLP and the Administrative Agent’s other counsel and consultants) in connection with the preparation, execution, delivery and administration of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and any amendment, waiver or consent relating hereto or thereto, and of the Administrative Agent and its Affiliates in connection with its or their syndication efforts with respect to this Agreement; (ii) pay all reasonable documented out-of-pocket costs and expenses of the Administrative Agent and, after the occurrence of an Event of Default, each of the Lenders in connection with the enforcement of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work-out” or pursuant to any insolvency or bankruptcy proceedings (including, in each case without limitation, the reasonable fees and disbursements of counsel and consultants for the Administrative Agent and, after the occurrence of an Event of Default, no more than one outside law firm retained by the Lenders); (iii) pay and hold the Administrative Agent and each of the Lenders harmless from and against any and all present and future stamp, documentary transfer, sales and use, value added, excise and other similar taxes with respect to the foregoing matters, the performance of any obligation under this Agreement or any other Credit Document or any payment thereunder, and save the Administrative Agent and each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to the Administrative Agent or such Lender) to pay such taxes; and (iv) indemnify the Administrative Agent and each Lender, and each of their respective officers, directors, employees, representatives, agents, Affiliates, trustees and investment advisors (each, an “Indemnitee”, and collectively, the “Indemnitees”) from and hold each of them harmless against any and all liabilities, obligations (including Remedial Actions), losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements (including reasonable attorneys’ and consultants’ fees and disbursements) incurred by, imposed on or assessed against any of them as a result of, or arising out of, or in any way related to, or by reason of, (a) any investigation, litigation or other proceeding (whether or not any Indemnitee is a party thereto and whether or not such investigation, litigation or other proceeding is brought by or on behalf of any Credit Party) related to the entering into and/or performance of this Agreement or any other Credit Document or the proceeds of any Loans hereunder or the consummation of the Transaction or any other transactions contemplated herein or in any other

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Credit Document or the exercise of any of their rights or remedies provided herein or in the other Credit Documents (but excluding any losses, liabilities, claims, damages or expenses to the extent (w) incurred by reason of the gross negligence, bad faith or willful misconduct of the applicable Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision), (x) brought solely by an Affiliate of such Indemnitee, (y) resulting from a breach of the Credit Documents by such Indemnitee or (z) relating solely to disputes among Indemnitees and not involving the Sponsor, the Borrowers or any of their Affiliates) or (b) the actual or alleged presence of Hazardous Materials in the air, surface water or groundwater or on the surface or subsurface of any Real Property at any time owned, leased or operated by Aleris or any of its Subsidiaries, the generation, storage, transportation, handling or disposal of Hazardous Materials by Aleris or any of its Subsidiaries at any location, whether or not owned, leased or operated by Aleris or any of its Subsidiaries, the non-compliance by Aleris or any of its Subsidiaries with any Environmental Law (including applicable permits thereunder) applicable to any Real Property, or any Environmental Claim asserted against Aleris, any of its Subsidiaries or any Real Property at any time owned, leased or operated by Aleris or any of its Subsidiaries, including, in each case, without limitation, the reasonable fees and disbursements of counsel for the Administrative Agent and no more than one outside law firm retained by the Lenders and other consultants incurred in connection with any such investigation, litigation or other proceeding (but excluding any losses, liabilities, claims, damages or expenses to the extent (v) incurred by reason of the gross negligence, bad faith or willful misconduct of the applicable Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision), (w) brought solely by an Affiliate of such Indemnitee, (x) resulting from a breach of the Credit Documents by such Indemnitee, (y) relating solely to disputes among Indemnitees and not involving the Sponsor, the Borrowers or any of their Affiliates or (z) resulting solely from acts or omissions by Persons other than Aleris and its Subsidiaries with respect to the applicable Real Property after the Administrative Agent sells the respective Real Property pursuant to a foreclosure or has accepted a deed in lieu of foreclosure. To the extent that the undertaking to indemnify, pay or hold harmless the Administrative Agent or any Lender set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, the Borrowers shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law. No party to this Agreement shall be responsible or liable to any other party to this Agreement (or any such party’s Affiliates, officers, directors, employees, representatives, Agents or investment advisors) for (and each such party hereby waives) any indirect, special, punitive or consequential damages (including, without limitation, any loss of profits, business or anticipated savings) which may be alleged as a result of the Credit Documents or the transactions contemplated hereby and thereby.

11.02 Right of Setoff. (a) In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default, the Administrative Agent and each Lender is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Credit Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by the Administrative Agent or such Lender (including, without limitation, by Affiliates, branches and agencies of the Administrative Agent or such Lender wherever located) to or for the credit or the account of Aleris or any of its Subsidiaries against and on account of the Term Obligations and liabilities of

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the Credit Parties to the Administrative Agent or such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Term Obligations purchased by such Lender pursuant to Section 11.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not the Administrative Agent or such Lender shall have made any demand hereunder and although said Term Obligations, liabilities or claims, or any of them, shall be contingent or unmatured, provided, however, that none of the Administrative Agent or any Lender may offset amounts owed by it to the European Credit Parties (or any of their Subsidiaries) against amounts owed to such Person by the U.S. Credit Parties (except in respect of the U.S. Credit Parties’ guaranties of the European Credit Parties).

(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME THAT THE LOANS OR ANY OTHER TERM OBLIGATION SHALL BE SECURED BY REAL PROPERTY LOCATED IN CALIFORNIA, NO LENDER OR THE ADMINISTRATIVE AGENT SHALL EXERCISE A RIGHT OF SETOFF, LIEN OR COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY NOTE UNLESS IT IS TAKEN WITH THE CONSENT OF THE REQUIRED LENDERS OR, TO THE EXTENT REQUIRED BY SECTION 11.12 OF THIS AGREEMENT, ALL OF THE LENDERS, OR APPROVED IN WRITING BY THE ADMINISTRATIVE AGENT, IF SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE 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 COLLATERAL AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE ENFORCEABILITY OF THE NOTES AND OTHER TERM OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY LENDER OR THE ADMINISTRATIVE AGENT OF ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE REQUIRED LENDERS OR THE ADMINISTRATIVE AGENT SHALL BE NULL AND VOID. THIS SUBSECTION (b) SHALL BE SOLELY FOR THE BENEFIT OF EACH OF THE LENDERS AND THE ADMINISTRATIVE AGENT HEREUNDER.

11.03 Notices. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, telecopier or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party, to such Credit Party c/o Aleris at 25825 Science Park Drive, Suite 400, Beachwood, OH 41122, Attention: General Counsel, Telephone No.: (216) 910-3400, Telecopier: (216) 910-3650, at the address specified opposite its signature below or in the other relevant Credit Documents; if to any Lender, at its address specified on Schedule II; and if to the Administrative Agent, at the Notice Office. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Administrative Agent and Aleris shall not be effective until received by the Administrative Agent or Aleris, as the case may be. Each party hereto may

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change its information for notices and other communications hereunder by providing notice of such change to each other party hereto in accordance with this Section 11.03.

11.04 Benefit of Agreement; Assignments; Participations. (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns permitted hereby of the parties hereto; provided, however, that no Borrower may assign or transfer any of its rights, obligations or interest hereunder without the prior written consent of all of the Lenders and no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 11.04 (or as provided in Section 2.13). Any Lender may grant participations in its rights hereunder, 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, (C) the applicable 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, (D) the participant shall not constitute a “Lender” hereunder, (E) 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 this Agreement and (F) no Lender shall transfer or grant any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend or postpone the final scheduled maturity or any date fixed for any scheduled repayment of principal of, or interest on, the Loans that are being participated in by such participant, (ii) reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that waivers or modifications of conditions, precedent, covenants, Defaults or Events of Default or of a mandatory prepayment or mandatory reduction in the Total Commitment shall not constitute a change in the terms of such participation, and that an increase in any Commitment (or the available portion thereof) or Loan shall be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof), (iii) consent to the assignment or transfer by any Borrower of any of its rights and obligations under this Agreement or (iv) release all or substantially all of the Collateral under all of the Security Documents (except as expressly provided in the Credit Documents) supporting the Loans hereunder in which such participant is participating. In the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrowers hereunder shall be determined as if such Lender had not sold such participation, provided, further that following a Conversion Event each Participant shall be entitled to receive from relevant Borrowers any incremental costs and indemnities (including, without limitation, pursuant to Section 2.10, 2.11 and 4.04) directly from the Borrowers to the same extent as if it were the direct Lender as to which its interests were assigned after the occurrence of a Conversion Event as opposed to a participant therein, which incremental costs shall be calculated without regard to Section 2.12. A participant shall not be entitled to receive any greater payment under Section 2.10, 2.11 or 4.04 than what the applicable Lender would have been entitled to receive with respect to the participation sold to such participant. A participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 4.04 unless the relevant Borrower is

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notified of the participation sold to such participant and such participant agrees, for the benefit of such Borrower, to comply with Section 4.04 as though it were a Lender.

(b) Subject to clause (c) below, any Lender (or any Lender together with one or more other Lenders) may (x) assign all or a portion of its outstanding Term Obligations hereunder to (i)(A) its parent company and/or any Affiliate of such Lender which is at least 50% owned by such Lender or its parent company or (B) to one or more other Lenders or any Affiliate of any such other Lender which is at least 50% owned by such other Lender or its parent company (provided that any fund that invests in loans and is managed or advised by the same investment advisor of another fund which is a Lender (or by an Affiliate of such investment advisor) shall be treated as an Affiliate of such other Lender for the purposes of this sub-clause (x)(i)(B)), or (ii) in the case of any Lender that is a fund that invests in loans, any other fund that invests in loans and is managed or advised by the same investment advisor of any Lender or by an Affiliate of such investment advisor or (y) assign all, or if less than all, a portion equal to at least $1,000,000 (taking the Dollar Equivalent of any amounts denominated in Euros), in each case in the aggregate for the assigning Lender or assigning Lenders of such outstanding Term Obligations hereunder to one or more Eligible Transferees (treating any funds that invest in loans and are managed or advised by the same investment advisor or by an Affiliate of such investment advisor as a single Eligible Transferee), each of which Eligible Transferees shall become a party to this Agreement as a Lender by execution of an Assignment and Assumption Agreement, provided that (i) at such time, Schedule I shall be deemed modified to reflect the outstanding Loans, as the case may be, of such new Lender and of the existing Lenders, (ii) upon the surrender of the relevant Notes by the assigning Lender (or, upon such assigning Lender’s indemnifying the respective Borrower or Borrowers for any lost Note pursuant to a customary indemnification agreement) new Notes will be issued, at the relevant Borrower’s expense, to such new Lender and to the assigning Lender upon the request of such new Lender or assigning Lender, such new Notes to be in conformity with the requirements of Section 2.05 (with appropriate modifications) to the extent needed to reflect the revised outstanding Loans, as the case may be, (iii) so long as no Significant Event of Default with respect to Aleris then exists the consent of Aleris in each case shall be required in connection with any such assignment pursuant to clause (y) above (each of which consents shall not be unreasonably withheld or delayed), (iv) the consent of the Administrative Agent shall be required in connection with any assignment pursuant to clause (y) above (which consent shall not be unreasonably withheld or delayed), (v) the Administrative Agent shall receive at the time of each such assignment, from the assigning or assignee Lender, the payment of a non-refundable assignment fee of $3,500, (vi) no such transfer or assignment will be effective until recorded by the Administrative Agent on the Register pursuant to Section 11.15 and (vii) unless a Significant Event of Default with respect to Aleris has occurred and is continuing, no Lender may assign its Loans to a Disqualified Lender. To the extent of any assignment pursuant to this Section 11.04(b), the assigning Lender shall be relieved of its obligations hereunder with respect to its assigned outstanding Loans. At the time of each assignment pursuant to this Section 11.04(b) to a Person which is not already a Lender hereunder (other than a German Lender solely in its capacity as a Lender to the German Borrower), the respective assignee Lender shall, to the extent legally entitled to do so, provide to Aleris the appropriate Internal Revenue Service Forms and necessary attachments (and, if applicable, a Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that prior to the occurrence of a Conversion Event (but not with respect to assignments effected thereafter) an assignment of all or any portion of a Lender’s outstanding Term Obligations pursuant to Section

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2.13 or this Section 11.04(b) would, at the time of such assignment, result in amounts payable under Section 2.10 or 4.04 that exceed the respective amounts that would be payable by the Borrowers at such time to the respective assigning Lender under such Sections in the absence of such assignment, then the Borrowers shall not be obligated to pay such excess amount (although the Borrowers, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay any other excess amounts or increased costs of the type described above resulting from changes in any applicable law, treaty, governmental rule, regulation, guidelines or order, or in the interpretation thereof, after the date of the respective assignment; provided, however, that the preceding clause shall not apply to the portion of such excess amounts or increased costs required to be paid by the Borrowers to the extent the Borrowers would have been required to pay additional amounts pursuant to Section 2.10 or 4.04 irrespective of such change in such applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof). Any assignment or transfer by a Lender of its rights or obligations under this Agreement that does not comply with this Section 11.04 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 11.04(a).

(c) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank and, with prior notification to the Administrative Agent (but without the consent of the Administrative Agent or Aleris), any Lender which is a fund may pledge all or any portion of its Loans and Notes to its trustee or to a collateral agent providing credit or credit support to such Lender in support of its obligations to such trustee, such collateral agent or a holder of such obligations, as the case may be. No pledge pursuant to this clause (c) shall release the transferor Lender from any of its obligations hereunder or substitute any such pledgee for such Lender as a party hereto.

11.05 No Waiver; Remedies Cumulative. No failure or delay on the part of the Administrative Agent, the Collateral Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between any Borrower or any other Credit Party and the Administrative Agent, the Collateral Agent or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights, powers and remedies herein or in any other Credit Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which the Administrative Agent, the Collateral Agent or any Lender would otherwise have. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent, the Collateral Agent or any Lender to any other or further action in any circumstances without notice or demand.

11.06 Payments Pro Rata. (a) Except as otherwise provided in this Agreement, the Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of any Borrower in respect of any Term Obligations hereunder, the Administrative Agent shall distribute such payment to the Lenders entitled thereto (other than any Lender that has consented in writing to waive its pro rata share of any such payment) pro rata based upon their

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respective shares, if any, of the Term Obligations with respect to which such payment was received.

(b) Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise), which is applicable to the payment of the principal of, or interest on, the Loans, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Term Obligation then owed and due to such Lender bears to the total of such Term Obligations then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Term Obligations of the respective Credit Party to such Lenders in such amount as shall result in a proportional participation by all the Lenders in such amount; provided that if all or any portion of such excess amount is thereafter recovered from such Lenders, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

(c) Notwithstanding anything to the contrary contained herein, the provisions of the preceding Sections 11.06(a) and (b) shall be subject to the express provisions of this Agreement which require, or permit, differing payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.

11.07 Calculations; Computations. (a) The financial statements to be furnished to the Lenders pursuant hereto shall be made and prepared in accordance with GAAP consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by Aleris to the Lenders); provided that (i) if at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Credit Document, and either Aleris or the Required Lenders shall so request, the Administrative Agent, the Lenders and Aleris shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Administrative Agent or the Required Lenders); provided that, until so amended, (A) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (B) Aleris shall provide to the Administrative Agent and the Lenders financial statements and any other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP and (ii) to the extent expressly provided herein, certain calculations shall be made on a pro forma basis.

(b) All computations of interest and other Fees hereunder shall be made on the basis of a year of 360 days (or in the case of Base Rate Loans (and other amounts owing hereunder or under any other Credit Document to which the Base Rate is applicable) 365 or 366 days, as the case may be) for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or Fees are payable.

11.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER

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AND THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN CERTAIN OF THE OTHER CREDIT DOCUMENTS, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS RULES AND PRINCIPLES THEREUNDER). ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, EACH BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE GERMAN BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS ALERIS, WITH OFFICES ON THE DATE HEREOF AT THE ADDRESS SPECIFIED OPPOSITE ITS SIGNATURE BELOW, AS ITS AUTHORIZED DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH AUTHORIZED DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE GERMAN BORROWER AGREES TO DESIGNATE A NEW AUTHORIZED DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT. EACH BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER ANY BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER ANY BORROWER. EACH BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY BORROWER IN ANY OTHER JURISDICTION.

(b) EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF

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VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

11.09 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with Aleris and the Administrative Agent.

11.10 Effectiveness. This Agreement (as amended and restated) shall become effective on the date (the “Restatement Effective Date”) on which (i) each Borrower, the Administrative Agent, each Lender (which shall include the Required Lenders (determined immediately before the occurrence of the Restatement Effective Date and without giving effect thereto)) shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered the same (including by way of facsimile transmission) to the Administrative Agent at the Notice Office (or, in the case of the Lenders, shall have given to the Administrative Agent telephonic (confirmed in writing), written or telex notice (actually received) at such Notice Office that the same has been signed and mailed to it); it being understood that any Existing Lender which does not execute a counterpart hereof shall be replaced in accordance with the provisions of Section 11.12(d) and (ii) the conditions contained in Section 5 are met to the reasonable satisfaction of the Administrative Agent. Unless the Administrative Agent has received actual notice from any Lender that the conditions contained in Section 5 have not been met to its satisfaction, upon the satisfaction of the condition described in clause (i) of the immediately preceding sentence and upon the Administrative Agent’s good faith determination that the conditions described in clause (ii) of the immediately preceding sentence have been met, then the Restatement Effective Date shall have been deemed to have occurred, regardless of any subsequent determination that one or more of the conditions thereto had not been met (although the occurrence of the Restatement Effective Date shall not release the Borrowers from any liability for failure to satisfy one or more of the applicable conditions contained in Section 5). The Administrative Agent will give each Lender prompt written notice of the occurrence of the Restatement Effective Date.

11.11 Headings Descriptive. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

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11.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed or waived unless such change or waiver is in writing signed by the respective Credit Parties party hereto or thereto and the Required Lenders (although additional parties may be added to (and annexes may be modified to reflect such additions), and Subsidiaries of Aleris may be released from this Agreement, the Guaranties and the Security Documents in accordance with the provisions hereof and thereof without the consent of the other Credit Parties party thereto or the Required Lenders), provided that no such change or waiver, shall, without the consent of each Lender (other than a Defaulting Lender) (with Term Obligations being directly affected in the case of following clause (i)), (i) extend or postpone the final scheduled maturity or any date fixed for any scheduled repayment of principal of any Loan or Note or extend the duration of any Interest Period for a Euro Rate Loan beyond six months, or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with the waiver of applicability of any post-default increase in interest rates), or reduce the principal amount thereof, (ii) release all or substantially all of the Collateral (except as expressly provided in the Credit Documents) under all the Security Documents, (iii) amend, modify or waive any provision of this Section 11.12(a) (except for technical amendments with respect to additional extensions of credit pursuant to this Agreement which afford the protections to such additional extensions of credit of the type provided to the Commitments on the Restatement Effective Date), (iv) reduce the percentage specified in the definition of Required Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the extensions of Commitments are included on the Restatement Effective Date), or (v) consent to the assignment or transfer by any Borrower of any of its rights and obligations under this Agreement; provided further, that no such change or waiver shall (1) increase the Commitments of any Lender over the amount thereof then in effect without the consent of such Lender (it being understood that waivers or modifications of conditions precedent, covenants, Defaults or Events of Default or of a mandatory prepayment or mandatory reduction in the Total Commitment shall not constitute an increase of the Commitment of any Lender, and that an increase in the available portion of any Commitment of any Lender shall not constitute an increase of the Commitment of such Lender), (2) without the consent of the Administrative Agent, amend, modify or waive any provision of Section 10 or any other provision of this Agreement as same relates to the rights or obligations of the Administrative Agent, (3) without the consent of the Collateral Agent, amend, modify or waive any provision relating to the rights or obligations of the Collateral Agent, (4) without the consent of the Syndication Agent, the Co-Documentation Agents or the Joint Lead Arrangers, amend, modify or waive any provision relating to the rights or obligations of the Syndication Agent, the Co-Documentation Agents or the Joint Lead Arrangers, as the case may be, or (5) without the consent of the Supermajority Lenders of the affected Tranche, amend, modify or waive any provision of this Agreement in a manner which would have a disproportionate effect on such Tranche (except for technical amendments with respect to additional extensions of credit pursuant to this Agreement which afford the protections to such additional extensions of credit of the type provided to the Commitments on the Restatement Effective Date).

(b) Notwithstanding anything to the contrary in this Section 11.12, (i) a Guarantor shall automatically be released from its obligations hereunder and its Guaranty shall be automatically released upon the consummation of any transaction permitted hereunder as a result of which such Guarantor ceases to be a Subsidiary of Aleris and (ii) so long as no Event of

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Default has occurred and is continuing and a Responsible Officer of Aleris certifies in an officer’s certificate to the Administrative Agent that a Guarantor (A) is an Immaterial Subsidiary, and such release of the Guarantor would not result in any Immaterial Subsidiary being required pursuant to Section 7.10(e) to become a Credit Party hereunder (except to the extent that on and as of the date of such release, one or more other Immaterial Subsidiaries become Guarantors hereunder and the provisions of Section 7.10(e) are satisfied upon giving effect to all such additions and releases), or (B) is a Restricted Subsidiary which has been redesignated as an Unrestricted Subsidiary in accordance with Section 8.04(d), then in the case of each of clauses (A) and (B), the Administrative Agent shall promptly release such Guarantor from its obligations hereunder and its Guaranty upon receipt of such officer’s certificate from Aleris. In connection with any such release, the Administrative Agent shall execute and deliver to any Guarantor, at such Guarantor’s expense, all documents that such Guarantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to the preceding sentence of this Section 11.12(b) shall be without recourse to or warranty by the Administrative Agent.

(c) Notwithstanding anything to the contrary in this Section 11.12, guarantees, collateral security documents and related documents executed by Foreign Subsidiaries in connection with this Agreement may be in a form reasonably determined by the Collateral Agent and may be amended and waived with the consent of the Collateral Agent at the request of Aleris without the need to obtain the consent of any other Lenders if such amendment or waiver is delivered in order (i) to reflect local law or advice of local counsel, (ii) to cure ambiguities or defects or (iii) to cause such guarantee, collateral security document or other document to be consistent with this Agreement and the other Credit Documents.

(d) If, in connection with any proposed change or waiver of any of the provisions of this Agreement as contemplated by clauses (i) through (v), inclusive, of the first proviso to Section 11.12(a), the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained, then Aleris shall have the right, so long as all non-consenting Lenders whose individual consent is required are treated as described in either clauses (A) or (B) below, to either (A) replace each such non-consenting Lender or Lenders (or, at the option of Aleris, if the respective Lender’s consent is required with respect to less than all Tranches of Loans, to replace only the respective Tranche of Loans of the respective non-consenting Lender which gave rise to the need to obtain such Lender’s individual consent) with one or more Replacement Lenders pursuant to Section 2.13 so long as at the time of such replacement, each such Replacement Lender consents to the proposed change or waiver or (B) repay each Tranche of outstanding Loans of such Lender which gives rise to the need to obtain such Lender’s consent, in accordance with Section 4.01(b), provided that, unless the Loans that are repaid pursuant to preceding clause (B) are immediately replaced in full at such time through the addition of new Lenders or outstanding Loans of existing Lenders (who have consented thereto), then in the case of any action pursuant to preceding clause (B) the Required Lenders (determined after giving effect to the proposed action) shall specifically consent thereto, provided further, that in any event Aleris shall not have the right to replace a Lender or repay its Loans solely as a result of the exercise of such Lender’s rights (and the withholding of any required consent by such Lender) pursuant to the second proviso to Section 11.12(a).

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11.13 Survival. All indemnities set forth herein including, without limitation, in Sections 2.10, 2.11, 4.04, 10.06 and 11.01 shall survive the execution, delivery and termination of this Agreement and the Notes and the making and repayment of the Term Obligations.

11.14 Domicile of Loans. Each Lender may transfer and carry its Loans at, to or for the account of any office, Subsidiary or Affiliate of such Lender. Notwithstanding anything to the contrary contained herein, to the extent that a transfer of Loans pursuant to this Section 11.14 would, at the time of such transfer, result in amounts payable under Section 2.10, 2.11 or 4.04 that exceed the amounts that would be payable by Borrowers under such sections to the relevant Lender prior to such transfer, then the Borrowers shall not be obligated to pay such increased costs (although the Borrowers shall be obligated to pay any other excess amounts of the type described above resulting from changes in any applicable law, treaty, governmental rule, regulation, guidelines or order, or in the interpretation thereof, after the date of the respective transfer).

11.15 Register. Each Borrower hereby designates the Administrative Agent to serve as its agent, solely for purposes of this Section 11.15, to maintain a register (the “Register”) on which it will record the Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders, the amount of any principal or interest due and payable with respect to such Loans and each repayment in respect of the principal amount, and related interest amounts of the Loans of each Lender. Failure to make any such recordation, or any error in such recordation, shall not affect the Borrowers’ obligations in respect of such Loans. With respect to any Lender, the transfer of the Commitments of such Lender and the rights to the principal of, and interest on, any Loan made pursuant to such Commitments shall not be effective until such transfer is recorded on the Register maintained by the Administrative Agent with respect to ownership of such Commitments and Loans and prior to such recordation all amounts owing to the transferor with respect to such Commitments and for Loans shall remain owing to the transferor. The registration of assignment or transfer of all or part of any Commitments and Loans shall be recorded by the Administrative Agent on the Register only upon the acceptance by the Administrative Agent of a properly executed and delivered Assignment and Assumption Agreement pursuant to Section 11.04(b). Coincident with the delivery of such an Assignment and Assumption Agreement to the Administrative Agent for acceptance and registration of assignment or transfer of all or part of a Loan, or as soon thereafter as practicable, the assigning or transferor Lender shall surrender the Note (if any) evidencing such Loan, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender at the request of any such Lender. The Borrowers jointly and severally agree to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this Section 11.15.

11.16 Confidentiality. (a) Each Lender agrees that it will not disclose without the prior written consent of Aleris (other than to Affiliates of such Lender, its employees, auditors, advisors or counsel or to another Lender if such Lender or such Lender’s holding or parent company in its reasonable discretion determines that any such party should have access to such information, provided that such Persons shall be subject to the provisions of this Section 11.16 to the same extent as such Lender) any information with respect to the Transaction, the

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Permitted Holders, Aleris or any of its Subsidiaries which is now or in the future furnished pursuant to this Agreement or any other Credit Document (other than information that is available to such Lender on a nonconfidential basis prior to such disclosure), provided that any Lender may disclose any such information (i) as is or has become generally available to the public other than by virtue of a breach of this Section 11.16(a) by the respective Lender, (ii) as may be required in any report, statement or testimony required to be submitted to any municipal, state or Federal regulatory body having jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar regulatory organizations (whether in the United States or elsewhere) or their successors, (iii) as may be required with respect to any summons or subpoena or in connection with any litigation, (iv) in order to comply with any law, order, regulation or ruling applicable to such Lender, (v) to the Administrative Agent or the Collateral Agent, (vi) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or to any such contractual counterparty’s professional advisor), so long as such contractual counterparty (or such professional advisor) agrees to be bound by the provisions of this Section 11.16, and (vii) to any pledgee under Section 11.04(c) or any prospective or actual transferee or participant in connection with any contemplated transfer or participation of any of the Notes or Commitments or any interest therein by such Lender, provided that such prospective transferee or participant agrees to be bound by the confidentiality provisions contained in, or provisions no less restrictive than, this Section 11.16. Any person required to maintain the confidentiality of information as provided in this Section 11.16 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 its own confidential information.

(b) Each Borrower hereby acknowledges and agrees that each Lender may share with any of its Affiliates, and such Affiliates may share with such Lender, any information related to Aleris or any of its Subsidiaries (including, without limitation, any non-public customer information regarding the creditworthiness of Aleris and its Subsidiaries), if such Lender or such Lender’s holding or parent company in its reasonable discretion determines that any such party should have access to such information provided such Persons shall be subject to the provisions of this Section 11.16 to the same extent as such Lender.

11.17 INTERCREDITOR AGREEMENT. (a) EACH LENDER PARTY HERETO UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT (X) IT IS THE INTENTION OF THE PARTIES HERETO THAT THE TERM OBLIGATIONS ARE INTENDED TO CONSTITUTE A DISTINCT AND SEPARATE CLASS FROM THE ABL OBLIGATIONS, (Y) AS BETWEEN THE SECURED CREDITORS, IT IS THE INTENTION OF THE PARTIES HERETO THAT THE TERM OBLIGATIONS (INCLUDING ALL POST-PETITION INTEREST WITH RESPECT THERETO) (1) HAVE A FIRST PRIORITY SECURITY INTEREST, AND THAT THE ABL OBLIGATIONS HAVE A SECOND PRIORITY SECURITY INTEREST, IN ALL COLLATERAL OF THE U.S. CREDIT PARTIES CONSTITUTING TERM PRIORITY COLLATERAL AND (2) HAVE NO SECURITY INTEREST, AND THAT THE ABL OBLIGATIONS HAVE A FIRST PRIORITY SECURITY INTEREST, IN ALL COLLATERAL OF THE CANADIAN CREDIT PARTIES AND THE SWISS CE AND ITS SUBSIDIARIES AND (Z) AS BETWEEN THE SECURED CREDITORS, IT IS THE INTENTION OF THE PARTIES HERETO THAT THE ABL OBLIGATIONS (INCLUDING ALL POST-PETITION INTEREST WITH RESPECT

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THERETO) (1) HAVE A FIRST PRIORITY SECURITY INTEREST, AND THAT THE TERM OBLIGATIONS HAVE A SECOND PRIORITY SECURITY INTEREST, IN ALL COLLATERAL OF THE U.S. CREDIT PARTIES CONSTITUTING ABL PRIORITY COLLATERAL AND (2) HAVE A SECURITY INTEREST, AND THAT THE ABL OBLIGATIONS HAVE NO SECURITY INTEREST, IN ALL COLLATERAL OF THE GERMAN BORROWER AND ITS SUBSIDIARIES (EXCEPT FOR ASSETS SOLD PURSUANT TO THE RECEIVABLES PURCHASE AGREEMENTS AND ASSETS OF TRANSITORY EUROPEAN SUBSIDIARIES). EACH LENDER FURTHER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT THE PROVISIONS SETTING FORTH THE PRIORITIES AS BETWEEN THE HOLDERS OF ABL OBLIGATIONS ON THE ONE HAND, AND THE HOLDERS OF TERM OBLIGATIONS, ON THE OTHER HAND, ARE SET FORTH IN THE INTERCREDITOR AGREEMENT.

(b) EACH LENDER AUTHORIZES AND INSTRUCTS THE COLLATERAL AGENT AND THE ADMINISTRATIVE AGENT TO ENTER INTO THE SECURITY DOCUMENTS AND THE INTERCREDITOR AGREEMENT ON BEHALF OF THE LENDERS, AND TO TAKE ALL ACTIONS (AND EXECUTE ALL DOCUMENTS) REQUIRED (OR DEEMED ADVISABLE) BY IT IN ACCORDANCE WITH THE TERMS OF THE SECURITY DOCUMENTS AND THE INTERCREDITOR AGREEMENT.

(c) THE PROVISIONS OF THIS SECTION 11.17 ARE NOT INTENDED TO SUMMARIZE ALL RELEVANT PROVISIONS OF THE INTERCREDITOR AGREEMENT. REFERENCE MUST BE MADE TO THE INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND ALL TERMS AND CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND NEITHER THE ADMINISTRATIVE AGENT NOR THE COLLATERAL AGENT OR ANY OF ITS RESPECTIVE AFFILIATES MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE INTERCREDITOR AGREEMENT. EACH LENDER IS FURTHER AWARE THAT THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT ARE ALSO ACTING IN AN AGENCY CAPACITY PURSUANT TO THE ABL CREDIT AGREEMENT, AND EACH LENDER HEREBY IRREVOCABLY WAIVES ANY OBJECTION THERETO OR CAUSE OF ACTION ARISING THEREFROM.

11.18 Aleris as Agent for the German Borrowers. The German Borrower hereby irrevocably appoints Aleris as its agent and attorney-in-fact for all purposes under this Agreement and each other Credit Document, which appointment shall remain in full force and effect unless and until the Administrative Agent shall have received prior written notice signed by the German Borrower that such appointment has been revoked. The German Borrower hereby irrevocably appoints and authorizes Aleris (i) to provide the Administrative Agent with all notices with respect to Loans obtained for the benefit of the German Borrower and all other notices and instructions under this Agreement or any other Credit Document and (ii) to take such action as Aleris deems appropriate on its behalf to obtain Loans and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement and the other Credit Documents.

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11.19 Special Provisions Regarding Pledges of Equity Interests in, and Promissory Notes Owed by, Persons Not Organized in the United States. The parties hereto acknowledge and agree that the provisions of the various Security Documents executed and delivered by the Credit Parties require that, among other things, all promissory notes executed by, and Equity Interests in, various Persons owned by the applicable Credit Party be pledged, and delivered for pledge, pursuant to the Security Documents. The parties hereto further acknowledge and agree that each Credit Party shall be required to take all actions under the laws of the jurisdiction in which such Credit Party is organized to create and perfect all security interests granted pursuant to the various Security Documents and to take all actions under the laws of the United States, Germany, Canada, Switzerland, Belgium, France and England and any State, province or territory thereof to perfect the security interests in the Equity Interests of, and promissory notes issued by, any Person organized under the laws of said jurisdictions (in each case, to the extent said Equity Interests, or promissory notes are owned by any Credit Party). Except as provided in the immediately preceding sentence, to the extent any Security Document requires or provides for the pledge of promissory notes issued by, or Equity Interests in, any Person organized under the laws of a jurisdiction other than those specified in the immediately preceding sentence, it is acknowledged that, as of the Restatement Effective Date, no actions have been required to be taken to perfect, under local law of the jurisdiction of the Person who issued the respective promissory notes or whose Equity Interests are pledged, under the Security Documents. Aleris hereby agrees that, following any request by the Administrative Agent or Required Lenders to do so, Aleris shall, and shall cause its Subsidiaries to, take such actions under the local law of any jurisdiction with respect to which such actions have not already been taken as are determined by the Administrative Agent or Required Lenders to be necessary or desirable in order to fully perfect, preserve or protect the security interests granted pursuant to the various Security Documents under the laws of such jurisdictions. If requested to do so pursuant to this Section 11.19, all such actions shall be taken in accordance with the provisions of this Section 11.19 and Section 7.10 and within the time periods set forth therein. All conditions and representations contained in this Agreement and the other Credit Documents shall be deemed modified to the extent necessary to effect the foregoing and so that same are not violated by reason of the failure to take actions under local law (but only with respect to Equity Interests and promissory notes issued by, Persons organized under laws of jurisdictions other than the United States, Germany, Canada, Switzerland, Belgium, France and England and any State, province or territory thereof) not required to be taken in accordance with the provisions of this Section 11.19, provided that to the extent any representation or warranty would not be true because the foregoing actions were not taken, the respective representation of warranties shall be required to be true and correct in all material respects at such time as the respective action is required to be taken in accordance with the foregoing provisions of Section 7.10 and this Section 11.19.

11.20 Post-Closing Actions. Notwithstanding anything to the contrary contained in this Agreement or the other Credit Documents, the parties hereto acknowledge and agree that:

(a) Aleris and its Subsidiaries were not required to have filed (or cause to have filed) on or prior to the Restatement Effective Date amendments to financing statements (Form UCC-1) or any amendments to filings with the United States Patent and Trademark Office or the United States Copyright Office necessary to perfect the security interest purported to be created by the U.S. Security Agreement or the U.S. Pledge

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Agreement, as applicable. Not later than the 10th day after the Restatement Effective Date, Aleris and its Subsidiaries shall have filed (or cause to have filed) all of such amendments to financing statements (Form UCC-1) and any amendments to filings with the United States Patent and Trademark Office or the United States Copyright Office necessary to perfect the security interest purported to be created by the Security Documents.

(b) Aleris and its Subsidiaries shall be required to take the actions (if any) specified in Schedule XI as promptly as practicable, and in any event within the time periods set forth in Schedule XI. The provisions of Schedule XI shall be deemed incorporated by reference herein as fully as if set forth herein in its entirety.

All conditions precedent and representations contained in this Agreement and the other Credit Documents shall be deemed modified to the extent necessary to effect the foregoing (and to permit the taking of the actions described above within the time periods required above, rather than as elsewhere provided in the Credit Documents), provided that (x) to the extent any representation and warranty would not be true because the foregoing actions were not taken on the Restatement Effective Date, the respective representation and warranty shall be required to be true and correct in all material respects at the time the respective action is taken (or was required to be taken) in accordance with the foregoing provisions of this Section 11.20 and (y) all representations and warranties relating to the Security Documents shall be required to be true immediately after the actions required to be taken by this Section 11.20 have been taken (or were required to be taken). The acceptance of the benefits of each Credit Event shall constitute a representation, warranty and covenant by Aleris to each of the Lenders that the actions required pursuant to this Section 11.20 will be, or have been, taken within the relevant time periods referred to in this Section 11.20 and that, at such time, all representations and warranties contained in this Agreement and the other Credit Documents shall then be true and correct without any modification pursuant to this Section 11.20, and the parties hereto acknowledge and agree that the failure to take any of the actions required above, within the relevant time periods required above, shall give rise to an immediate Event of Default pursuant to this Agreement.

11.21 The PATRIOT Act. Each Lender subject to the PATRIOT Act hereby notifies the Borrowers that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrowers and the other Credit Parties and other information that will allow such Lender to identify the Borrowers and the other Credit Parties in accordance with the PATRIOT Act.

11.22 Judgment Currency. (a) The Credit Parties’ obligations hereunder and under the other Credit Documents to make payments in any currency (the “Obligation Currency”) shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by any Agent or the respective Lender of the full amount of the Obligation Currency expressed to be payable to the such Agent or such Lender under this Agreement or the other Credit Documents. If for the purpose of obtaining or enforcing judgment against any Credit Party in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the “Judgment Currency”) an

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amount due in the Obligation Currency, the conversion shall be made at the rate of exchange (as quoted by the Administrative Agent or if the Administrative Agent does not quote a rate of exchange on such currency, by a known dealer in such currency designated by the Administrative Agent) determined, in each case, as of the day on which the judgment is given (such day being hereinafter referred to as the “Judgment Currency Conversion Date”).

(b) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, each Borrower covenants and agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency Conversion Date.

(c) For purposes of determining any rate of exchange for this Section, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency.

11.23 Pledges of Bank Accounts Under General Terms and Conditions. Security created by any general terms and conditions of business of a Secured Creditor over LTIBR owing to a Credit Party shall not secure directly or indirectly any loans made to any German Borrowing Party (other than the relevant Credit Party itself) under the Credit Documents, but will nonetheless be valid as security for all other obligations secured under such general terms and conditions of business.

11.24 Abstract Acknowledgment of Indebtedness and Joint Creditorship. (a) Notwithstanding any other provision of this Agreement, each Borrower hereby irrevocably and unconditionally agrees and covenants with the Collateral Agent by way of an abstract acknowledgment of indebtedness (abstraktes Schuldversprechen) that it owes to the Collateral Agent as creditor in its own right and not as a representative of the other Secured Creditors, sums equal to, and in the currency of, each amount payable by such Borrower to each of the Secured Creditors under each of the Secured Debt Agreements as and when that amount falls due for payment under the relevant Secured Debt Agreement or would have fallen due but for any discharge resulting from failure of another Secured Creditor to take appropriate steps, in insolvency proceedings affecting such Borrower, to preserve its entitlement to be paid that amount.

(b) Each Borrower undertakes to pay to the Collateral Agent upon first written demand the amount payable by such Borrower to each of the Secured Creditors under each of the Secured Debt Agreements as such amount has become due and payable.

(c) The Collateral Agent has the independent right to demand and receive full or partial payment of the amounts payable by each Borrower under this Section 11.24, irrespective of any discharge of such Borrower’s obligation to pay those amounts to the other Secured Creditors resulting from failure by them to take appropriate steps, in insolvency proceedings affecting such Borrower, to preserve their entitlement to be paid those amounts.

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(d) Any amount due and payable by a Borrower to the Collateral Agent under this Section 11.24 shall be decreased to the extent that the other Secured Creditors have received (and are able to retain) payment in full of the corresponding amount under the other provisions of the Secured Debt Agreements and any amount due and payable by a Borrower to the other Secured Creditors under those provisions shall be decreased to the extent that the Collateral Agent has received (and is able to retain) payment in full of the corresponding amount under this Section 11.24; provided that no Borrower may consider its obligations towards a Secured Creditor to be so discharged by virtue of any set-off, counterclaim or similar defense that it may invoke vis-à-vis the Collateral Agent.

(e) The rights of the Secured Creditors (other than the Collateral Agent) to receive payment of amounts payable by each Borrower under the Secured Debt Agreements are several and are separate and independent from, and without prejudice to, the rights of the Collateral Agent to receive payment under this Section 11.24.

(f) In addition, but without prejudice to the foregoing, the Collateral Agent shall be the joint creditor (together with the relevant Secured Creditor) of all obligations of each Borrower towards each of the Secured Creditors under the Secured Debt Agreements.

11.25 Special Appointment of Collateral Agent for German Security. (a) (i) Each Lender that is or will become party to this Agreement hereby appoints the Collateral Agent as trustee (Treuhaender) and administrator for the purpose of holding on trust (Treuhand), administering, enforcing and releasing the German Security (as defined below) for the Secured Creditors, (ii) the Collateral Agent accepts its appointment as a trustee and administrator of the German Security on the terms and subject to the conditions set out in this Agreement and (iii) the Lenders, the Collateral Agent and all other parties to this Agreement agree that, in relation to the German Security, no Lender shall exercise any independent power to enforce any German Security or take any other action in relation to the enforcement of the German Security, or make or receive any declarations in relation thereto.

(b) The Collateral Agent shall hold and administer any German Security which is security assigned, transferred or pledged under German law to it as a trustee for the benefit of the Secured Creditors, where “German Security” means the assets which are the subject of a security document which is governed by German law.

(c) Each Lender hereby instructs the Collateral Agent (with the right of sub-delegation) to enter into any documents evidencing German Security and to make and accept all declarations and take all actions as it considers necessary or useful in connection with any German Security on behalf of the Secured Creditors. The Collateral Agent shall further be entitled to rescind, release, amend and/or execute new and different documents securing the German Security.

(d) The Lenders and the Collateral Agent agree that all rights and claims constituted by the abstract acknowledgment of indebtedness pursuant to Section 11.25 of this Agreement and all proceeds held by the Collateral Agent pursuant to or in connection with such abstract acknowledgment of indebtedness are held by the Collateral Agent with effect from the date of such abstract acknowledgment of indebtedness in trust for the Secured Creditors and will

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be administered in accordance with this Agreement and the Credit Documents. The Secured Creditors and the Collateral Agent agree further that the respective Credit Party’s obligations under such abstract acknowledgment of indebtedness shall not increase the total amount of the Secured Obligations (as defined in the applicable agreement governing German Security) and shall not result in any additional liability of any of the Credit Parties or otherwise prejudice the rights of any of the Credit Parties. Accordingly, payment of the obligations under such abstract acknowledgment of indebtedness shall, to the same extent, discharge the corresponding Secured Obligations and vice versa.

11.26 Absence of Back-to-Back Financing. (a) For the purposes of providing evidence to the German tax authorities of the absence of any detrimental recourse situation in connection with the tax guidelines issued by the German Federal Ministry of Finance (Bundesfinanzministerium) on 15 July 2004 (IV A2 – S2742a – 20/04) and on 22 July 2005 (IV B7 – S2742a – 31/05) (together, the “Decree”) in relation to section 8a of the German Corporation Tax Act (Körperschaftssteuergesetz), the Collateral Agent agrees subject to compliance by the Borrowers with the provisions of clauses (b) and (e) below, to deliver on behalf of each Lender to Aleris acting in this respect as recipient on behalf of each German Borrowing Party no later than 40 Business Days after (i) the Restatement Effective Date, (ii) each accession of a German Borrowing Party to this Agreement as a Borrower and (iii) no later than 40 Business Days after any amendment to this Agreement or any Security Document which may impact adversely on the tax position of Aleris and its Subsidiaries pursuant to section 8a as referred to above, a completed bank certificates substantially in the form of Exhibit N (the “Bank Certificate”) in the form set out in the sample confirmation attached to the letter (Bescheinigung im Sinner der Rdnr. 5 des BMF-Schreibens vom 22. Juli 2005 (BStBI I 2005 S. 829) issued by the German Federal Ministry of Finance (Bundesministerium der Finanzen) on 20 October 2005 (the “Sample”). For purposes of enabling the Collateral Agent to issue the Bank Certificate on behalf of each Lender, Aleris will provide the Collateral Agent with a list of guarantees, Security Documents and restrictions as required in the Sample on (x) the Restatement Effective Date, (y) the date of accession of a German Borrowing Party and (z) the date of any amendment to this Agreement or any Security Document as set out in clause (iii) above.

(b) Each Borrower undertakes to inform the Collateral Agent without undue delay if it becomes aware of any incorrectness or incompleteness of a Bank Certificate given or to be given from time to time by the Collateral Agent pursuant to paragraph a) above.

(c) The delivery of a Bank Certificate shall not prejudice the rights of the Collateral Agent or the Lenders under this Agreement or any other Credit Document. In the event of any inconsistencies between the terms of a Bank Certificate and the terms of an individual Security Document, the terms of the relevant Security Document shall prevail. A Bank Certificate shall under no circumstances constitute a waiver or release of any Security Document.

(d) Each Borrower confirms to the Collateral Agent and each Lender that:

(i) each Bank Certificate is given by the Collateral Agent for the purpose of delivery to the competent tax authorities of the German Borrowing Parties to assist the

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German Borrowing Parties in the administration of their tax affairs and not for any other purpose,

(ii) the Collateral Agent and the Lenders are not responsible for examining the Credit Parties’ tax position and that the Bank Certificates do not guarantee the achievement of a specific result or conclusion for tax purposes,

(iii) each Bank Certificate is addressed to and is solely for the benefit of the German Borrowing Parties in relation to this Agreement, and

(iv) no Bank Certificate creates third party rights of any kind.

(e) It is the common understanding of the parties that no party is providing any legal and/or tax advice to any other party with respect to this Agreement, in particular with respect to the application of section 8a of the German Corporation Tax Act (Körperschaftssteuergesetz) and the interpretation of the Decree, and that it is the responsibility of each party, in particular each Borrower, to consult its own legal and tax advisers.

(f) Any costs and expenses incurred by the Collateral Agent or any Lender in connection with the provision of a Bank Certificate will be borne by the Borrowers. Neither the Collateral Agent nor any Lender shall be liable as a result of the delivery of a Bank Certificate. Each Borrower agrees to indemnify the Collateral Agent and each Lender with respect to any potential claims that might be made against the Collateral Agent or any Lender with respect to any Bank Certificate by any third party, the Borrowers being in this case jointly and severally liable to the Collateral Agent and each Lender for such indemnification. No Borrower will raise any claims against the Collateral Agent or any Lender based on, or in connection with, a (correct/complete or incorrect/incomplete) Bank Certificate.

(g) For the avoidance of doubt:

(i) None of the Collateral Agent nor any Lender shall be obliged to disclose to any other person any confidential information regarding its business or any other information relating to its tax affairs or tax computations (including, without limitation, its tax returns or its calculations) as a result of the operation of this Section 11.27.

(ii) None of the Collateral Agent nor any Lender shall be obliged to deliver any information or make any statements pursuant to this Section 11.27 if by doing so it would contravene the terms of any applicable law or any notice, direction or requirement of any governmental or regulatory authority (whether or not having the force of law).

(iii) Each German Borrowing Party may disclose the existence and contents of a Bank Certificate to its professional advisers, its Affiliates, as required by applicable law or regulation and to any tax, regulatory or other governmental authority asserting jurisdiction over it.

(h) If at any time after the delivery of a Bank Certificate, a German Borrowing Party receives a request by the tax authorities to have the Bank Certificate updated or issued by all the Lenders:

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(i) the Collateral Agent agrees to deliver to Aleris such updated Bank Certificate; or

(ii) the Lenders agree to issue such Bank Certificate.

Each Borrower releases the Collateral Agent from its general obligation to maintain confidentiality in connection with the requirements of this Section 11.

11.27 Conflicting Provisions in Security Documents. In the event that any provisions of this Agreement conflict with any Security Document, the provisions of this Agreement shall govern.

11.28 Continuing Effect. This Agreement shall amend and restate in its entirety the Existing Term Loan Agreement, and all obligations of the Borrower thereunder and under the Credit Documents as in effect immediately prior to the Restatement Effective Date (the “Existing Credit Documents”) shall be deemed replaced and extended as obligations under this Agreement and the Credit Documents and be governed hereby and thereby without novation.

SECTION 12. U.S. Borrower Guaranty.

12.01 Guaranty. In order to induce the Administrative Agent, the Collateral Agent, and the Lenders to enter into this Agreement and to extend credit hereunder, and to induce the other Guaranteed Creditors to enter into Interest Rate Protection Agreements and Other Hedging Agreements and in recognition of the direct benefits to be received by the U.S. Borrower from the proceeds of the German Loans and the entering into of such Interest Rate Protection Agreements and Other Hedging Agreements, the U.S. Borrower hereby agrees with the Guaranteed Creditors as follows: the U.S. Borrower hereby unconditionally and irrevocably guarantees the full and prompt payment when due, whether upon maturity, acceleration or otherwise, of any and all of the Relevant Term Loan Guaranteed Obligations to the Guaranteed Creditors. If any or all of the Relevant Term Loan Guaranteed Obligations to the Guaranteed Creditors becomes due and payable hereunder, the U.S. Borrower, unconditionally and irrevocably, promises to pay such indebtedness to the Administrative Agent and/or the other Guaranteed Creditors, or order, on demand, together with any and all expenses which may be incurred by the Administrative Agent and the other Guaranteed Creditors in collecting any of the Relevant Term Loan Guaranteed Obligations.

12.02 Reinstatement. If a claim is ever made upon any Guaranteed Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Relevant Term Loan Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including any Guaranteed Party), then and in such event the U.S. Borrower agrees that any such judgment, decree, order, settlement or compromise shall be binding upon the U.S. Borrower, notwithstanding any revocation of this U.S. Borrower Guaranty or other instrument evidencing any liability of any Guaranteed Party, and the U.S. Borrower shall be and remain liable to the

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aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee.

12.03 Bankruptcy. Additionally, the U.S. Borrower unconditionally and irrevocably guarantees the payment of any and all of the Relevant Term Loan Guaranteed Obligations to the Guaranteed Creditors whether or not due or payable by the German Borrower upon the occurrence of any of the events specified in Section 9.05, and irrevocably and unconditionally promises to pay such indebtedness to the Guaranteed Creditors, or order, on demand, in lawful money of the United States.

12.04 Nature of Liability. The liability of the U.S. Borrower hereunder is primary, absolute and unconditional, exclusive and independent of any security for or other guaranty of the Relevant Term Loan Guaranteed Obligations, whether executed by any other guarantor or by any other party, and the liability of the U.S. Borrower hereunder shall not be affected or impaired by (a) any direction as to application of payment by any Guaranteed Party or by any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Relevant Term Loan Guaranteed Obligations, or (c) any payment on or in reduction of any such other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by any Guaranteed Party, or (e) any payment made to any Guaranteed Creditor on the Relevant Term Loan Guaranteed Obligations which any such Guaranteed Creditor repays to any Guaranteed Party pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and the U.S. Borrower waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, or (f) any action or inaction by the Guaranteed Creditors as contemplated in Section 12.06, or (g) any invalidity, irregularity or enforceability of all or any part of the Relevant Term Loan Guaranteed Obligations or of any security therefor.

12.05 Independent Obligation. The obligations of the U.S. Borrower hereunder are independent of the obligations of any other guarantor, any other party or any Guaranteed Party, and a separate action or actions may be brought and prosecuted against the U.S. Borrower whether or not action is brought against any other guarantor, any other party or any Guaranteed Party and whether or not any other guarantor, any other party or any Guaranteed Party be joined in any such action or actions. The U.S. Borrower waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by any Guaranteed Party or other circumstance which operates to toll any statute of limitations as to any Guaranteed Party shall operate to toll the statute of limitations as to the U.S. Borrower.

12.06 Authorization. The U.S. Borrower authorizes the Guaranteed Creditors without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to:

(a) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter, any of the Relevant Term Loan Guaranteed Obligations (including any increase or decrease in the principal amount thereof or the rate of interest or fees thereon), any security therefor, or any liability

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incurred directly or indirectly in respect thereof, and this U.S. Borrower Guaranty shall apply to the Relevant Term Loan Guaranteed Obligations as so changed, extended, renewed or altered;

(b) take and hold security for the payment of the Relevant Term Loan Guaranteed Obligations and sell, exchange, release, impair, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Relevant Term Loan Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset there against;

(c) exercise or refrain from exercising any rights against any Guaranteed Party or others or otherwise act or refrain from acting;

(d) release or substitute any one or more endorsers, guarantors, any Guaranteed Party or other obligors;

(e) settle or compromise any of the Relevant Term Loan Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of any Guaranteed Party to its creditors other than the Guaranteed Creditors;

(f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of any Guaranteed Party to the Guaranteed Creditors regardless of what liability or liabilities of any Guaranteed Party remain unpaid;

(g) consent to or waive any breach of, or any act, omission or default under, this Agreement, any other Credit Document, or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify or supplement this Agreement, any other Credit Document, or any of such other instruments or agreements; and/or

(h) take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of the U.S. Borrower from its liabilities under this U.S. Borrower Guaranty.

12.07 Reliance. It is not necessary for any Guaranteed Creditor to inquire into the capacity or powers of the U.S. Borrower or any of its Subsidiaries or the officers, directors, partners or agents acting or purporting to act on their behalf, and any Relevant Term Loan Guaranteed Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

12.08 Waiver. (a) The U.S. Borrower waives any right (except as shall be required by applicable statute and cannot be waived) to require any Guaranteed Creditor to (i) proceed against any Guaranteed Party, any other guarantor or any other party, (ii) proceed against or exhaust any security held from any Guaranteed Party, any other guarantor or any other party or (iii) pursue any other remedy in any Guaranteed Creditor’s power whatsoever. The U.S. Borrower waives any defense based on or arising out of any defense of any Guaranteed Party,

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any other guarantor or any other party, other than payment of the Relevant Term Loan Guaranteed Obligations to the extent of such payment, based on or arising out of the disability of any Guaranteed Party, the U.S. Borrower, any other guarantor or any other party, or the validity, legality or unenforceability of the Relevant Term Loan Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Guaranteed Party other than payment of the Relevant Term Loan Guaranteed Obligations to the extent of such payment. The Guaranteed Creditors may, at their election, foreclose on any security held by the Administrative Agent, the Collateral Agent or any other Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Guaranteed Creditors may have against any Guaranteed Party or any other party, or any security, without affecting or impairing in any way the liability of the U.S. Borrower hereunder except to the extent the Relevant Term Loan Guaranteed Obligations have been paid. The U.S. Borrower waives any defense arising out of any such election by the Guaranteed Creditors, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of the U.S. Borrower against any Guaranteed Party or any other party or any security.

(b) The U.S. Borrower waives all presentments, demands for performance, protests and notices, including without limitation notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this U.S. Borrower Guaranty, and notices of the existence, creation or incurring of new or additional Relevant Term Loan Guaranteed Obligations. The U.S. Borrower assumes all responsibility for being and keeping itself informed of any Guaranteed Party’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Relevant Term Loan Guaranteed Obligations and the nature, scope and extent of the risks which the U.S. Borrower assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any of the other Guaranteed Creditors shall have any duty to advise the U.S. Borrower of information known to them regarding such circumstances or risks.

(c) The U.S. Borrower hereby acknowledges and affirms that it understands that to the extent any Relevant Term Loan Guaranteed Obligations are secured by Real Property located in the State of California, the Guaranteeing Party shall be liable for the full amount of the liability hereunder notwithstanding foreclosure on such Real Property by trustee sale or any other reason impairing the German Borrower’s or any Guaranteed Creditor’s right to proceed against the U.S. Borrower or any other guarantor of the Relevant Term Loan Guaranteed Obligations.

(d) The U.S. Borrower hereby waives, to the fullest extent permitted by applicable law, all rights and benefits under Sections 580a, 580b, 580d and 726 of the California Code of Civil Procedure. The U.S. Borrower hereby further waives, to the fullest extent permitted by applicable law, without limiting the generality of the foregoing or any other provision hereof, all rights and benefits which might otherwise be available to the U.S. Borrower under Sections 2809, 2810, 2815, 2819, 2821, 2839, 2845, 2846, 2847, 2848, 2849, 2850, 2899 and 3433 of the California Civil Code.

(e) Until all Relevant Term Loan Guaranteed Obligations have been paid in full in cash, the U.S. Borrower waives its rights of subrogation and reimbursement and any other

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rights and defenses available to the U.S. Borrower by reason of Sections 2787 to 2855, inclusive, of the California Civil Code, including, without limitation, (1) any defenses the U.S. Borrower may have to this U.S. Borrower Guaranty by reason of an election of remedies by the Guaranteed Creditors and (2) any rights or defenses the U.S. Borrower may have by reason of protection afforded to the German Borrower pursuant to the antideficiency or other laws of California limiting or discharging the German Borrower’s indebtedness, including, without limitation, Sections 580a, 580b, 580d and 726 of the California Code of Civil Procedure. In furtherance of such provisions, the U.S. Borrower hereby waives all rights and defenses arising out of an election of remedies of the Guaranteed Creditors, even though that election of remedies, such as a nonjudicial foreclosure destroys the U.S. Borrower’s rights of subrogation and reimbursement against the German Borrower by the operation of Section 580d of the California Code of Civil Procedure or otherwise.

(f) The U.S. Borrower warrants and agrees that each of the waivers set forth above is made with full knowledge of its significance and consequences and that if any of such waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective only to the maximum extent permitted by law.

12.09 Maximum Liability. It is the desire and intent of the U.S. Borrower and the Guaranteed Creditors that this U.S. Borrower Guaranty shall be enforced against the U.S. Borrower to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. If, however, and to the extent that, the obligations of the U.S. Borrower under this U.S. Borrower Guaranty shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers), then the amount of the U.S. Borrower’s obligations under this U.S. Borrower Guaranty shall be deemed to be reduced and the U.S. Borrower shall pay the maximum amount of the Relevant Term Loan Guaranteed Obligations which would be permissible under applicable law.

SECTION 13. Limitation on German Borrower Obligations. Notwithstanding anything to the contrary herein or in any other Credit Document (including provisions that may override any other provision), in no event shall the German Borrower, the European Parent Guarantors or any other Foreign Subsidiary of Aleris or any Domestic Subsidiary of a Foreign Subsidiary of Aleris guarantee or be deemed to have guaranteed or become liable or obligated on a joint and several basis or otherwise for, or to have pledged any of its assets to secure, any Term Obligation of any U.S. Credit Party under this Agreement or any of the other Credit Documents. All provisions contained in any Credit Document shall be interpreted consistently with this Section 13 to the extent possible, and where such other provisions conflict with the provisions of this Section 13, the provisions of this Section 13 shall govern.

*     *     *

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EXECUTION COPY

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written.

ALERIS INTERNATIONAL, INC.
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Executive Vice President and Chief Financial Officer
AURORA ACQUISITION MERGER SUB, INC.
By:	/s/ Clive Bode
	Name:	Clive Bode
	Title:	Vice President
ALERIS DEUTSCHLAND HOLDING GMBH
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Geschaeftsfueres

Amended and Restated Term Loan Agreement

EXECUTION COPY

DEUTSCHE BANK AG NEW YORK BRANCH, Individually and as Administrative Agent
By:	/s/ Paul O’Leary
	Name:	Paul O’Leary
	Title:	Vice President
By:	/s/ Marguerite Sutton
	Name:	Marguerite Sutton
	Title:	Director

Amended and Restated Term Loan Agreement

EX-10.3

Exhibit 10.3

FIRST AMENDMENT TO CREDIT AGREEMENT

FIRST AMENDMENT (this “Amendment”), dated as of March 16, 2007, among Aleris International, Inc., a Delaware corporation (the “U.S. Borrower”), Aleris Deutschland Holding GmbH, a company with limited liability formed under the laws of Germany (the “German Borrower” and together with the U.S. Borrower, the “Borrowers” and each a “Borrower”), the lenders from time to time party to the Credit Agreement referred to below (the “Lenders”) and Deutsche Bank AG New York Branch, as Administrative Agent (in such capacity, the “Administrative Agent”). All capitalized terms used herein and not otherwise defined herein shall have the respective meanings provided such terms in the Credit Agreement.

W I T N E S S E T H:

WHEREAS, the Borrowers, the Lenders, the Administrative Agent, Goldman Sachs Credit Partners L.P., as syndication agent, and PNC Bank, National Association, National City Business Credit and Key Bank National Association, as co-documentation agents are parties to a Term Loan Agreement, dated as of August 1, 2006 and amended and restated as of December 19, 2006 (the “Credit Agreement”); and

WHEREAS, subject to the terms and conditions of this Amendment, the parties hereto wish to amend or otherwise modify certain provisions of the Credit Agreement as herein provided;

NOW, THEREFORE, IT IS AGREED:

I. Amendments to Credit Agreement.

1.The definition of “Applicable Margin” appearing in Section 1 of the Credit Agreement is hereby amended by deleting the grid contained therein in its entirety and inserting the following text in lieu thereof:

Level	Consolidated Leverage Ratio	U.S. Loans maintained as Eurodollar Loans	U.S. Loans maintained as Base Rate Loans	German Loans maintained as Euro Rate Loans
2	Greater than or equal to 4.00:1.00	2.000%	1.000%	2.125%
1	Less than 4.00:1.00	1.750%	0.750%	1.875%

2.Section 1 of the Credit Agreement is hereby further amended by inserting in the appropriate alphabetical order the following new definitions:

“First Amendment” shall mean the First Amendment to Credit Agreement, dated as of March 16, 2007 among the Borrower, the Lenders and the Administrative Agent.

“First Amendment Effective Date” shall have the meaning provided in the First Amendment.

“Repricing Transaction” shall mean (1) the incurrence by the U.S. Borrower or any of its Subsidiaries of any term loan Indebtedness (including, without limitation, any new or additional term loans under this Agreement, whether incurred directly or by way of the conversion of U.S. Loans and/or German Loans, as the case may be into a new tranche of replacement term loans under this Agreement, but in any event excluding any incurrence of Indebtedness under revolving credit facilities, letter of credit, bankers’ acceptance or other ancillary facilities, swinglines, overdrafts or other short term credit facilities) that is secured or is broadly marketed or syndicated to banks and other institutional investors in financings similar to the facilities provided for in this Agreement (i) having an “effective” interest rate margin or weighted average yield for the respective Type of such Indebtedness that is less than the applicable rate for or weighted average yield for U.S. Loans and/or German Loans, as the case may be of the respective Type (with the comparative determinations to be made by the Administrative Agent in consultation with the U.S. Borrower consistent with generally accepted financial practices, after giving effect to margin, upfront or similar fee or “original issue discount” shared with all lenders or holders of such Indebtedness but excluding the effect of any arrangement, structuring, syndication or other fees payable in connection therewith that are not shared with all lenders or holders of such Indebtedness and without taking into account any fluctuations in the Eurodollar Rate, the Euro LIBOR or comparable LIBOR rate or the Base Rate or any component thereof) and (ii) the proceeds of which are used to prepay (or, in the case of a conversion, deemed to prepay or replace), in whole or in part, outstanding principal of U.S. Loans and/or German Loans, as the case may be and/or (2) any effective reduction in the Applicable Margins for either Tranche of Loans (e.g., by way of amendment, waiver or otherwise), in each case other than as a result of the First Amendment. Any such determination by the Administrative Agent as contemplated by preceding clauses (1) and (2) shall be conclusive and binding on all Lenders holding Loans.

3.Section 3.01 of the Credit Agreement is hereby amended by (i) redesignating the existing text of said Section as clause (a) of said Section and (ii) inserting the following new clause (b) immediately following clause (a) of said Section:

“(b)If any Repricing Transaction is consummated prior to the first anniversary of the First Amendment Effective Date, the Borrowers agree to pay to the Administrative Agent, concurrently with the effectiveness of such Repricing Transaction for the ratable account of each Lender with outstanding Loans, a fee in an amount equal to 1.0% of (x) in the case of a Repricing Transaction of the type described in clause (1) of the definition thereof, the aggregate principal amount of all Loans prepaid (or converted) in connection with such Repricing Transaction and (y) in the case of a Repricing Transaction of the type described in clause (2) of the definition thereof, the aggregate principal amount of all Loans outstanding on such date that are subject to an effective pricing reduction pursuant to such Repricing Transaction.”.

II. Miscellaneous Provisions.

1.In order to induce the Lenders to enter into this Amendment, each Credit Party hereby represents and warrants that:

(a)no Default or Event of Default exists as of the First Amendment Effective Date, both before and after giving effect to this Amendment; and

(b)all of the representations and warranties contained in the Credit Agreement or the other Credit Documents are true and correct in all material respects on the First Amendment Effective Date both before and after giving effect to this Amendment, with the same effect as though such representations and warranties had been made on and as of the First Amendment Effective Date (it being understood that any representation or warranty made as of a specific date shall be true and correct in all material respects as of such specific date);

2.This Amendment is limited as specified and shall not constitute a modification, acceptance, consent to deviation from or waiver of any other provision of the Credit Agreement or any other Credit Document.

3.This Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts shall be lodged with the U.S. Borrower and the Administrative Agent.

4.THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

5.This Amendment shall become effective on the date (the “First Amendment Effective Date”) when the Borrowers and each Lender (or, to the extent the Required Lenders shall have approved this Amendment as provided in Section 11.12(d) of the Credit Agreement and any non-approving Lenders have been replaced by Aleris pursuant to Section 2.13(z) of the Credit Agreement, the Borrowers, the Required Lenders and each Replacement Lender) shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of facsimile transmission) the same to White & Case LLP, 1155 Avenue of the Americas, New York, NY 10036 Attention: Yanni Guo (facsimile number 212-354-8113);

6.From and after the First Amendment Effective Date, all references in the Credit Agreement and each of the other Credit Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as modified hereby.

* * *

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Amendment as of the date first above written.

ALERIS INTERNATIONAL, INC.
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Executive VP & CFO

ALERIS DEUTSCHLAND HOLDING GMBH
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Geschaeftsfuerer

DEUTSCHE BANK AG NEW YORK BRANCH, Individually and as Administrative Agent
By:	/s/ Marguerite Sutton
	Name: Marguerite Sutton
	Title: Director

By:	/s/ Susan LeFevre
	Name: Susan LeFevre
	Title: Director

EX-10.4

Exhibit 10.4

EXECUTION COPY

AMENDED AND RESTATED U.S. SECURITY AGREEMENT

among

ALERIS INTERNATIONAL, INC.,

CERTAIN SUBSIDIARIES OF ALERIS INTERNATIONAL, INC.,

and

DEUTSCHE BANK AG NEW YORK BRANCH,

as COLLATERAL AGENT

______________________

Dated as of August 1, 2006

and amended and restated as of December 19, 2006

______________________

ARTICLE I  SECURITY INTERESTS		2
	1.1. Grant of Security Interests	2
	1.2. Power of Attorney	5
ARTICLE II  GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS		5
	2.1. Necessary Filings	6
	2.2. No Liens	6
	2.3. Other Financing Statements	6
	2.4. Chief Executive Office, Location of Inventory and Included Equipment	6
	2.5. Legal Names; Type of Organization (and Whether a Registered Organization and/or a Transmitting Utility); Jurisdiction of Organization; Location; Organizational Identification Numbers; Changes Thereto; etc.	6
	2.6. Certain Significant Transactions	7
	2.7. As-Extracted Collateral; Timber-to-be-Cut	7
	2.8. Collateral in the Possession of a Bailee	7
	2.9. Recourse	8
ARTICLE III   SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL		8
	3.1. Additional Representations and Warranties	8
	3.2. Maintenance of Records	8
	3.3. Direction to Account Debtors; Contracting Parties; etc	9
	3.4. Modification of Terms; etc	9
	3.5. Collection	9
	3.6. Instruments	10
	3.7. Assignors Remain Liable Under Accounts	10
	3.8. Assignors Remain Liable Under Contracts	10
	3.9. Deposit Accounts; Etc	11
	3.10. Letter-of-Credit Rights	11
	3.11. Commercial Tort Claims	12
	3.12. Chattel Paper	12
	3.13. Further Actions	12
	3.14. Overriding Provisions with respect to ABL Priority Collateral	12
ARTICLE IV  SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES		13
	4.1. Additional Representations and Warranties	13
	4.2. Licenses and Assignments	13
	4.3. Infringements	13
	4.4. Preservation of Marks and Domain Names	13
	4.5. Maintenance of Registration	14
	4.6. Future Registered Marks and Domain Names	14
	4.7. Remedies	14
ARTICLE V  SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS		15
	5.1. Additional Representations and Warranties	15
	5.2. Licenses and Assignments	15
	5.3. Infringements	15
	5.4. Maintenance of Patents or Copyrights	15
	5.5. Prosecution of Patent or Copyright Applications	16
	5.6. Other Patents and Copyrights	16
	5.7. Remedies	16
ARTICLE VI  PROVISIONS CONCERNING ALL COLLATERAL		16
	6.1. Protection of Collateral Agent’s Security	16
	6.2. Warehouse Receipts Non-Negotiable	17
	6.3. Additional Information	17
	6.4. Further Actions	17
	6.5. Financing Statements	17
ARTICLE VII  REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT		18
	7.1. Remedies; Obtaining the Collateral Upon Default	18
	7.2. Remedies; Disposition of the Collateral	19
	7.3. Waiver of Claims	20
	7.4. Application of Proceeds	20
	7.5. Remedies Cumulative	25
	7.6. Discontinuance of Proceedings	25
ARTICLE VIII  INDEMNITY		25
	8.1. Indemnity	25
	8.2. Indemnity Obligations Secured by Collateral; Survival	27
ARTICLE IX  DEFINITIONS		27
ARTICLE X  MISCELLANEOUS		36
	10.1. Notices	36
	10.2. Waiver; Amendment	37
	10.3. Obligations Absolute	37
	10.4. Successors and Assigns	38
	10.5. Headings Descriptive	38
	10.6. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL	38
	10.7. Assignors’ Duties	39
	10.8. Termination; Release	39
	10.9. Counterparts	41
	10.10. Severability	41
	10.11. The Collateral Agent and the other Secured Creditors	41
	10.12. Additional Assignors	41
	10.13. Amendment and Restatement	41
	10.14. Calculation of Obligations under Secured Hedging Agreements	41

ANNEX A	Schedule of Chief Executive Offices; Inventory and Equipment Locations in Alabama, Arizona, Florida and Mississippi
ANNEX B	Schedule of Legal Names, Type of Organization (And Whether A Registered Organization And/Or A Transmitting Utility), Jurisdiction of Organization, Location and Organizational Identification Numbers
ANNEX C	Description of Certain Significant Transactions Occurring Within One Year Prior To The Date of The U.S. Security Agreement
ANNEX D	Schedule of Deposit Accounts
ANNEX E	Form of Control Agreement Regarding Deposit Accounts
ANNEX F	Description of Commercial Tort Claims
ANNEX G	Schedule of Marks and Applications; Internet Domain Name Registration
ANNEX H	Schedule of Patents
ANNEX I	Schedule of Copyrights
ANNEX J	Form of Grant of Security Interest in United States Trademarks
ANNEX K	Form of Grant of Security Interest in United States Patents
ANNEX L	Form of Grant of Security Interest in United States Copyrights
ANNEX M	The Collateral Agent

AMENDED AND RESTATED U.S. SECURITY AGREEMENT

AMENDED AND RESTATED U.S. SECURITY AGREEMENT, dated as of August 1, 2006 and amended and restated as of December 19, 2006, made by each of the undersigned assignors (each, an “Assignor” and, together with any other entity that becomes an assignor hereunder pursuant to Section 10.12 hereof, the “Assignors”) in favor of DEUTSCHE BANK AG, NEW YORK BRANCH, as administrative agent (together with any successor administrative agent, the “Administrative Agent”) and as collateral agent (together with any successor Collateral Agent, the “Collateral Agent”), for the benefit of the Secured Creditors (as defined below). Certain capitalized terms as used herein are defined in Article IX hereof. Except as otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.

WITNESSETH:

WHEREAS, Aurora Acquisition Merger Sub, Inc., Aleris International, Inc., a Delaware corporation (“Aleris”), each other Subsidiary of Aleris party thereto from time to time, the lenders party thereto from time to time, (the “Lenders”), the Administrative Agent and Deutsche Bank AG, Canada Branch, as Canadian administrative agent (together with any successor Canadian administrative agent, the “Canadian Administrative Agent” and together with the Lenders, each Issuing Lender, the Administrative Agent and the Collateral Agent are herein called the “Lender Creditors”) have entered into an Amended and Restated Credit Agreement, dated as of August 1, 2006 and amended and restated as of December 19, 2006, providing for the making and continuation of Loans to the Borrowers and the issuance of, and participation in, Letters of Credit for the account of the Borrowers, all as contemplated therein (as used herein, the term “Credit Agreement” means the Credit Agreement described above in this paragraph, as the same may be amended, modified, extended, renewed, replaced, restated, supplemented or refinanced from time to time, and including any agreement extending the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any portion of, the indebtedness under such agreement or any successor agreement, whether or not with the same agent, trustee, representative, lenders or holders; provided that, with respect to any agreement providing for the refinancing or replacement of indebtedness under the Credit Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder if (i) either (A) all obligations under the Credit Agreement being refinanced or replaced shall be paid in full at the time of such refinancing or replacement, and all commitments and letters of credit issued pursuant to the refinanced or replaced Credit Agreement shall have terminated in accordance with their terms or, with respect to certain Letters of Credit, been continued, with the consent of the respective issuer thereof, under such refinancing or replacement indebtedness or (B) the Required Lenders shall have consented in writing to the refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit Agreement, and (ii) a notice to the effect that the refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall be delivered by Aleris to the Collateral Agent);

WHEREAS, each Borrower and/or one or more of their respective Subsidiaries (i) have entered into, or guaranteed the obligations of, or (ii) may at any time after the Restatement Effective Date and from time to time enter into one or more Secured Hedging Agreements with one or more Persons other than the Borrowers and their Subsidiaries (the “Other Creditors”);

WHEREAS, each Borrower, one or more of their respective Subsidiaries and any Lender (and/or one or more of its banking affiliates) reasonably acceptable to the Administrative Agent, in each case designated to the Administrative Agent in writing by Aleris as a provider of Treasury Services (as defined below), (collectively, the “Treasury Services Creditors” and, together with the Lender Creditors and the Other Creditors, the “Secured Creditors”) in the future may enter into, a credit arrangement providing for treasury, depositary or cash management services (including without limitation, overnight overdraft services) to Aleris and such Subsidiaries by the Treasury Services Creditors, and automated clearinghouse transfers of funds to the Treasury Services Creditors, in each case pursuant to uncommitted lines of credit (collectively, “Treasury Services,” and with any written agreement evidencing such credit arrangements (to the extent expressly stated therein that the liabilities and indebtedness thereunder are “Obligations” for the purposes of this Agreement (or more generally, for purposes of the various agreements guaranteeing or securing the Credit Agreement), as amended, modified, supplemented, replaced or refinanced from time to time, herein called the “Treasury Services Agreements);

WHEREAS, pursuant to the U.S. Borrower Guaranty, each of the U.S. Borrowers has guaranteed to the Secured Creditors the payment when due of all of its Relevant Guaranteed Obligations as described therein;

WHEREAS, pursuant to the U.S. Subsidiaries Guaranty, each U.S. Subsidiary Guarantor has jointly and severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations (as defined in the U.S. Subsidiaries Guaranty);

WHEREAS, the Intercreditor Agreement governs the relative rights and priorities of the Secured Creditors and the Term Secured Parties in respect of the Term Priority Collateral and the ABL Priority Collateral (and with respect to certain other matters as described therein);

WHEREAS, it is a condition precedent to (i) the making and/or continuation of Loans to the Borrowers, and the issuance of, and participation in, Letters of Credit for the respective accounts of the Borrowers under the Credit Agreement, (ii) the Other Creditors entering into Secured Hedging Agreements and (iii) the extension of the Treasury Services by Treasury Services Creditors, that each Assignor shall have executed and delivered to the Administrative Agent this Agreement; and

WHEREAS, each Assignor will obtain benefits from the incurrence and/or continuation of Loans by the Borrowers, and the issuance of, and participation in, Letters of Credit for the respective accounts of, the Borrowers under the Credit Agreement, the entering into by the Borrowers and/or one or more of their respective Subsidiaries of Secured Hedging Agreements and the extension of Treasury Services to Aleris and its Subsidiaries, and, accordingly, each Assignor desires to enter into this Agreement in order to (i) satisfy the condition described in the preceding paragraph and (ii) induce (x) the Lenders to make and/or continue Loans to the Borrowers and issue, and/or participate in, Letters of Credit for the respective accounts of the Borrowers, (y) the Other Creditors to enter into Secured Hedging Agreements with the Borrowers and/or one or more of their respective Subsidiaries and (z) the Treasury Services Creditors to enter into Treasury Services Agreements;

NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Secured Creditors and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Creditors as follows:

ARTICLE I

SECURITY INTERESTS

1.1.Grant of Security Interests. (a) Subject to the terms of the Intercreditor Agreement with respect to rights and remedies between the Collateral Agent and the Term Collateral Agent, as security for the prompt and complete payment when due of all of its Obligations, each Assignor does hereby assign and transfer unto the Collateral Agent, and does hereby pledge and grant to the Collateral Agent, for the benefit of the Secured Creditors, a continuing security interest in all of the right, title and interest of such Assignor in, to and under all of the following personal property and fixtures (and all rights therein) of such Assignor, or in which or to which such Assignor has any rights, in each case whether now existing or hereafter from time to time acquired:

(i) each and every Account;

(ii) all cash;

(iii) the Cash Collateral Account and all monies, securities, Instruments and other investments deposited or required to be deposited in the Cash Collateral Account;

(iv) all Chattel Paper (including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper);

(v) all Commercial Tort Claims;

(vi) all Software and computer programs of such Assignor and all related licensing rights, documentation, drawings, specifications and schematics and all intellectual property rights therein and all other proprietary information of such Assignor, including but not limited to Trade Secret Rights, customer lists and all recorded data of any kind or nature, regardless of the medium or recording;

(vii) all Contracts, together with all Contract Rights arising thereunder;

(viii) all Copyrights;

(ix) all Deposit Accounts and all other demand, deposit, time, savings, cash management, passbook and similar accounts maintained by such Assignor with any Person and all monies, securities, Instruments and other investments deposited or required to be deposited in any of the foregoing (in each case, excluding Exempted Deposit Accounts);

(x) all Documents;

(xi) all Equipment;

(xii) all General Intangibles;

(xiii) all Goods;

(xiv) all Instruments;

(xv) all Inventory;

(xvi) all Investment Property;

(xvii) all Letter-of-Credit Rights (whether or not the respective letter of credit is evidenced by a writing);

(xviii) all Marks and any renewals thereof, the goodwill of the business of such Assignor symbolized by the Marks and all causes of action arising prior to or after the date hereof for infringement of any of the Marks or unfair competition regarding the same;

(xix) all Patents, together with all causes of action arising prior to or after the date hereof for infringement of any of the Patents or unfair competition regarding the same;

(xx) all Permits;

(xxi) all Supporting Obligations; and

(xxii) all Proceeds and products of any and all of the foregoing (all of the above, the “Collateral”);

provided that (x) no Voting Equity Interests (which shall include, for this purpose, the Convertible Preferred Equity Certificates issued by Aleris Luxembourg S.à.r.l.) of any Foreign Corporation which represents more than 65% of the total combined voting power of all classes of Voting Equity Interests of the respective Foreign Corporation (with all Voting Equity Interests of the respective Foreign Corporation in excess of said 65% limit being herein called “Excess Foreign Corporation Equity Interests”) shall secure any direct Obligations of any U.S. Borrower (or guarantees of such Obligations by the respective Assignor) and such Excess Foreign Corporation Equity Interests shall secure Obligations of the respective Assignor only as a guarantor of the Obligations of the Canadian Borrowers and their Subsidiaries and the European Borrower and its Subsidiaries, and (y) each Assignor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each Foreign Corporation at any time and from time to time acquired by such Assignor, which Non-Voting Equity Interests shall not be subject to the limitations described in preceding clause (x).

(b)Notwithstanding anything herein to the contrary, in no event shall the Collateral include and no Assignor shall be deemed to have granted a security interest in, (x) Excluded Equipment or (y) any of its right, title or interest in any license, contract or agreement to which such Assignor is a party, to the extent, but only to the extent (and only for so long as) that such license, contract or agreement or applicable law prohibits the assignment of, or granting of a security interest in, such license, contract or agreement and such prohibitions are not rendered invalid by Section 9-406 or Section 9-408 of the UCC, it being understood and agreed, however, any such excluded license, contract or agreement shall otherwise be subject to the security interests created by this Agreement (and shall become “Collateral” for all purposes of this Agreement) upon the receipt by such Assignor of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein.

(c)The security interest of the Collateral Agent under this Agreement extends to all Collateral which any Assignor may acquire, or with respect to which any Assignor may obtain rights, at any time during the term of this Agreement.

(d)Notwithstanding anything to the contrary contained in this Section 1.1 or elsewhere in this Agreement, each Assignor and the Collateral Agent (on behalf of the Secured Creditors) acknowledges and agrees that:

(x)the security interest granted pursuant to this Agreement (including pursuant to this Section 1.1) to the Collateral Agent for the benefit of the Secured Creditors (i) in the ABL Priority Collateral, shall be a First Priority Lien and (ii) in the Term Priority Collateral, shall be a Second Priority Lien, fully junior, subordinated and subject to the security interest granted to the Term Collateral Agent for the benefit of the Term Creditors in the Term Priority Collateral on the terms and conditions set forth in the Term Credit Documents and the Intercreditor Agreement and all other rights and benefits afforded hereunder to the Secured Creditors with respect to the Term Priority Collateral are expressly subject to the terms and conditions of the Intercreditor Agreement; and

(y)the Term Secured Parties’ security interests in the Collateral constitute security interests separate and apart (and of a different class and claim) from the Secured Creditors’ security interests in the Collateral.

(e)NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIENS AND SECURITY INTERESTS GRANTED TO THE ABL COLLATERAL AGENT PURSUANT TO THIS AGREEMENT IN ANY TERM PRIORITY COLLATERAL AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE ABL COLLATERAL AGENT WITH RESPECT TO ANY TERM PRIORITY COLLATERAL HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE AMENDED AND RESTATED INTERCREDITOR AGREEMENT, DATED AS OF AUGUST 1, 2006 AND AMENDED AND RESTATED AS OF DECEMBER 19, 2006 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”), AMONG AURORA ACQUISITION MERGER SUB, INC., ALERIS INTERNATIONAL, INC., A DELAWARE CORPORATION (THE “COMPANY”), THE OTHER GRANTORS FROM TIME TO TIME PARTY THERETO, DEUTSCHE BANK AG NEW YORK BRANCH, (“DBNY”) AS ABL ADMINISTRATIVE AGENT AND COLLATERAL AGENT, DBNY, AS TERM ADMINISTRATIVE AGENT AND COLLATERAL AGENT, AND CERTAIN OTHER PERSONS PARTY OR THAT MAY BECOME PARTY THERETO FROM TIME TO TIME. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.

1.2.Power of Attorney. Each Assignor hereby constitutes and appoints the Collateral Agent its true and lawful attorney, irrevocably, with full power after the occurrence of and during the continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys due or to become due to such Assignor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Collateral Agent may deem to be necessary or advisable to protect the interests of the Secured Creditors, which appointment as attorney is coupled with an interest.

ARTICLE II

GENERAL REPRESENTATIONS, WARRANTIESAND COVENANTS

Each Assignor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows:

2.1.Necessary Filings. All filings, registrations, recordings and other actions necessary or appropriate to create, preserve and perfect the security interest granted by such Assignor to the Collateral Agent hereby in respect of the Collateral have been accomplished, in each case, within the time frames required by this Agreement, and the security interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral creates a valid and, together with all such filings, registrations, recordings and other actions, a perfected security interest therein prior to the rights of all other Persons therein and subject to no other Liens (other than Permitted Liens) and is entitled to all the rights, priorities and benefits afforded by the Uniform Commercial Code or other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each case to the extent that the Collateral consists of the type of property in which a security interest may be perfected by possession or control (within the meaning of the UCC as in effect on the Restatement Effective Date in the State of New York), by filing a financing statement under the Uniform Commercial Code as enacted in any relevant jurisdiction or by a filing of a Grant of Security Interest in the respective form attached hereto in the United States Patent and Trademark Office or in the United States Copyright Office. Upon the actions taken under this Section 2.1, such security interest will be prior to all other Liens of all other Persons (other than Liens permitted pursuant to Sections 10.01(i), (ii) and (iii) of the Credit Agreement), and enforceable as such as against all other Persons.

2.2.No Liens. Such Assignor is, and as to all Collateral acquired by it from time to time after the Restatement Effective Date such Assignor will be, the owner of all Collateral free from any Lien or other right, title or interest of any Person (other than Permitted Liens), and such Assignor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the interests of the Collateral Agent.

2.3.Other Financing Statements. As of the Restatement Effective Date, there is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Permitted Liens), and so long as the Termination Date has not occurred, such Assignor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by such Assignor or in connection with Permitted Liens.

2.4.Chief Executive Office, Location of Inventory and Included Equipment. On the Restatement Effective Date, and during the four calendar month period preceding this Agreement, no Assignor has maintained its chief executive office or held Inventory and Equipment in Alabama, Arizona, Florida or Mississippi other than as provided in Annex A hereto.

2.5.Legal Names; Type of Organization (and Whether a Registered Organization and/or a Transmitting Utility); Jurisdiction of Organization; Location; Organizational Identification Numbers; Changes Thereto; etc. The exact legal name of each Assignor, the type of organization of such Assignor, whether or not such Assignor is a Registered Organization, the jurisdiction of organization of such Assignor, such Assignor’s Location, the organizational identification number (if any) of such Assignor, and whether or not such Assignor is a Transmitting Utility, is listed on Annex B hereto for such Assignor. Such Assignor shall not change its legal name, its type of organization or its organizational identification number (if any) from that used on Annex B hereto, except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Debt Agreements and so long as same do not involve such Assignor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 15 days’ prior written notice of each change to the information listed on Annex B (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex B which shall correct all information contained therein for such Assignor, and (ii) in connection with the respective such change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, to the extent that such Assignor does not have an organizational identification number on the Restatement Effective Date and later obtains one, such Assignor shall promptly thereafter notify the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.

2.6.Certain Significant Transactions. During the one year period preceding the Restatement Effective Date, no Person shall have merged or consolidated with or into any Assignor, and no Person shall have liquidated into, or transferred all or substantially all of its assets to, any Assignor, in each case except as described in Annex C hereto. With respect to any transactions so described in Annex C hereto, the respective Assignor shall have furnished such information with respect to the Person (and the assets of the Person and locations thereof) which merged with or into or consolidated with such Assignor, or was liquidated into or transferred all or substantially all of its assets to such Assignor, and shall have furnished to the Collateral Agent such UCC lien searches as may have been requested with respect to such Person and its assets, to establish that no security interest (excluding Permitted Liens) continues perfected on the Restatement Effective Date with respect to any Person described above (or the assets transferred to the respective Assignor by such Person), including without limitation pursuant to Section 9-316(a)(3) of the UCC.

2.7.As-Extracted Collateral; Timber-to-be-Cut. On the Restatement Effective Date, such Assignor does not own, or expect to acquire, any property which constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut. If at any time after the date of this Agreement such Assignor owns, acquires or obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such Assignor shall furnish the Collateral Agent with prompt written notice thereof (which notice shall describe in reasonable detail the As-Extracted Collateral or Timber-to-be-Cut and the locations thereof) and shall take all actions as may be deemed reasonably necessary or desirable by the Collateral Agent to perfect the security interest of the Collateral Agent therein.

2.8.Collateral in the Possession of a Bailee. Subject to the provisions of the Intercreditor Agreement, if any Inventory or other Goods are at any time in the possession of a bailee, (other than pursuant to tolling arrangements entered into in the ordinary course of business) such Assignor shall promptly notify the Collateral Agent thereof and, if requested by the Collateral Agent, shall use its reasonable best efforts to promptly obtain an acknowledgment from such bailee, in form and substance reasonably satisfactory to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions of the Collateral Agent, without the further consent of such Assignor. The Collateral Agent agrees with such Assignor that the Collateral Agent shall not give any such instructions unless a Noticed Event of Default has occurred and is continuing or would occur after taking into account any action by the respective Assignor with respect to any such bailee.

2.9.Recourse. This Agreement is made with full recourse to each Assignor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Assignor contained herein, in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith.

ARTICLE III

SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL

3.1.Additional Representations and Warranties. As of the time when each of its Accounts arises, each Assignor shall be deemed to have represented and warranted that each such Account, and all records, papers and documents relating thereto (if any) are genuine and what they purport to be, and that all papers and documents (if any) relating thereto (i) will, to the knowledge of such Assignor, represent the genuine, legal, valid and binding obligation of the account debtor evidencing indebtedness unpaid and owed by the respective account debtor arising out of the performance of labor or services or the sale or lease and delivery of the merchandise listed therein, or both, (ii) will be the only original writings evidencing and embodying such obligation of the account debtor named therein (other than copies created for general accounting purposes), (iii) will, to the knowledge of such Assignor, evidence true and valid obligations, enforceable in accordance with their respective terms, and (iv) will be in compliance and will conform in all material respects with all applicable federal, state and local laws and applicable laws of any relevant foreign jurisdiction.

3.2.Maintenance of Records. Each Assignor will keep and maintain at its own cost and expense accurate records of its Accounts and Contracts, including, but not limited to, originals of all documentation (including each Contract) with respect thereto, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith, and such Assignor will make the same available on such Assignor’s premises to the Collateral Agent for inspection, at such Assignor’s own cost and expense, at any and all reasonable times upon prior notice to such Assignor and otherwise in accordance with the Credit Agreement. Upon the occurrence and during the continuance of a Noticed Event of Default and at the request of the Collateral Agent, such Assignor shall, at its own cost and expense, deliver all tangible evidence of its Accounts and Contract Rights (including, without limitation, all documents evidencing the Accounts and all Contracts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Assignor). Upon the occurrence and during the continuance of a Noticed Event of Default and if the Collateral Agent so directs, such Assignor shall legend, in form and manner satisfactory to the Collateral Agent, the Accounts and the Contracts, as well as books, records and documents (if any) of such Assignor evidencing or pertaining to such Accounts and Contracts with an appropriate reference to the fact that such Accounts and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein.

3.3.Direction to Account Debtors; Contracting Parties; etc. Upon the occurrence and during the continuance of a Noticed Event of Default, if the Collateral Agent so directs, subject to the provisions of the Intercreditor Agreement, any Assignor, such Assignor agrees (x) to cause all payments on account of the Accounts and Contracts to be made directly to the Cash Collateral Account, (y) that the Collateral Agent may, at its option, directly notify the obligors with respect to any Accounts and/or under any Contracts to make payments with respect thereto as provided in the preceding clause (x), and (z) that the Collateral Agent may enforce collection of any such Accounts and Contracts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as such Assignor. Without notice to or assent by any Assignor, the Collateral Agent may, upon the occurrence and during the continuance of a Noticed Event of Default, subject to the provisions of the Intercreditor Agreement, apply any or all amounts then in, or thereafter deposited in, the Cash Collateral Account toward the payment of the Obligations in the manner provided in Section 7.4 of this Agreement. The reasonable costs and expenses of collection (including reasonable attorneys’ fees), whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the relevant Assignor, provided that (x) the failure by the Collateral Agent to so notify such Assignor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 3.3 and (y) no such notice shall be required if an Event of Default of the type described in Section 11.05 of the Credit Agreement has occurred and is continuing.

3.4.Modification of Terms; etc. Except in accordance with such Assignor’s ordinary course of business and consistent with reasonable business judgment or as permitted by Section 3.5, no Assignor shall rescind or cancel any indebtedness evidenced by any Account or under any Contract, or modify any material term thereof or make any material adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Account or Contract, or interest therein, without the prior written consent of the Collateral Agent. No Assignor will do anything to impair the rights of the Collateral Agent in the Accounts or Contracts.

3.5.Collection. Each Assignor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Accounts or obligor under any Contract, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Account or Contract, and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account or under such Contract. Except as otherwise directed by the Collateral Agent after the occurrence and during the continuation of an Event of Default, any Assignor may allow in the ordinary course of business as adjustments to amounts owing under its Accounts and Contracts (i) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Assignor finds appropriate in accordance with reasonable business judgment and (ii) a refund or credit due as a result of returned or damaged merchandise or improperly performed services or for other reasons which such Assignor finds appropriate in accordance with reasonable business judgment. The reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees) of collection, whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor.

3.6.Instruments. Subject to the terms of the Intercreditor Agreement, if any Assignor owns or acquires any Instrument in excess of $1,000,000 constituting Collateral (other than (x) checks and other payment instruments received and collected in the ordinary course of business and (y) any Instrument subject to pledge pursuant to the U.S. Pledge Agreement), such Assignor will within 20 Business Days notify the Collateral Agent thereof, and upon request by the Collateral Agent will promptly deliver such Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent.

3.7.Assignors Remain Liable Under Accounts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Accounts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with the terms of any agreement giving rise to such Accounts. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Account pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.

3.8.Assignors Remain Liable Under Contracts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Contracts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with and pursuant to the terms and provisions of each Contract. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Contract pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any performance by any party under any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.

3.9.Deposit Accounts; Etc.  (a) Annex D hereto accurately sets forth, as of the Effective Date, for each Assignor, each Deposit Account maintained by such Assignor (including a description thereof and the respective account number), the name of the respective bank with which such Deposit Account is maintained, and the jurisdiction of the respective bank with respect to such Deposit Account. For each Deposit Account (other than (i) the Cash Collateral Account or any other Deposit Account maintained with the Collateral Agent, (ii) Exempted Deposit Accounts and (iii) Exempted Disbursement Accounts) the respective Assignor shall, subject to the provisions of the Intercreditor Agreement and Section 3.14 hereof, cause the bank with which the Deposit Account is maintained to execute and deliver to the Collateral Agent, within 45 days after the Restatement Effective Date or, if later, at the time of the establishment of the respective Deposit Account, a “control agreement” in substantially the form of Annex E hereto (appropriately completed), with such changes thereto as may be reasonably acceptable to the Collateral Agent, or such other form as may be reasonably acceptable to the Collateral Agent. If any bank with which a Deposit Account which is required to be subject to a “control agreement” hereunder is maintained refuses to, or does not, enter into such a “control agreement”, then the respective Assignor shall promptly (and in any event within 45 days after the date of this Agreement or, if later, 30 days (or such longer period as may be agreed by the Administrative Agent in its sole discretion) after the establishment of such account) close the respective Deposit Account and transfer all balances therein to the Cash Collateral Account or another Deposit Account meeting the requirements of this Section 3.9. If any bank with which a Deposit Account which is required to be subject to a “control agreement” hereunder is maintained refuses to subordinate all its claims with respect to such Deposit Account to the Collateral Agent’s security interest therein on terms reasonably satisfactory to the Collateral Agent, then the Collateral Agent, at its option, may (x) require that such Deposit Account be terminated in accordance with the immediately preceding sentence or (y) agree to a “control agreement” without such subordination, provided that in such event the Collateral Agent may at any time, at its option, subsequently require that such Deposit Account be terminated (within 45 days after notice from the Collateral Agent) in accordance with the requirements of the immediately preceding sentence.

(b)After the date of this Agreement, no Assignor shall establish any new demand, time, savings, passbook or similar account, except for Deposit Accounts established and maintained with banks and meeting the requirements of preceding clause (a). At the time any such Deposit Account is established, the appropriate “control agreement” shall be entered into in accordance with the requirements of preceding clause (a) and the respective Assignor shall furnish to the Collateral Agent a supplement to Annex D hereto containing the relevant information with respect to the respective Deposit Account and the bank with which same is established.

3.10.Letter-of-Credit Rights. If any Assignor is at any time a beneficiary under a letter of credit with a stated amount of $5,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent, such Assignor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, use its reasonable best efforts to (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under such letter of credit or (ii) arrange for the Collateral Agent, subject to the provisions of the Intercreditor Agreement, to become the transferee beneficiary of such letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be applied as provided in this Agreement and the Intercreditor Agreement after the occurrence and during the continuance of a Noticed Event of Default.

3.11.Commercial Tort Claims. All Commercial Tort Claims of each Assignor in existence on the date of this Agreement are described in Annex F hereto. If any Assignor shall at any time after the date of this Agreement acquire a Commercial Tort Claim in an amount (taking the greater of the aggregate claimed damages thereunder or the reasonably estimated value thereof) of $1,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof in a writing signed by such Assignor and describing the details thereof and shall grant to the Collateral Agent in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement and the Intercreditor Agreement, with such writing to be in form and substance reasonably satisfactory to the Collateral Agent.

3.12.Chattel Paper. Upon the reasonable request of the Collateral Agent made at any time or from time to time, each Assignor shall promptly furnish to the Collateral Agent a list of all Electronic Chattel Paper held or owned by such Assignor. Furthermore, if requested by the Collateral Agent, each Assignor shall promptly take all actions which are reasonably practicable so that the Collateral Agent, subject to the provisions of the Intercreditor Agreement, has “control” of all Electronic Chattel Paper in accordance with the requirements of Section 9-105 of the UCC. Each Assignor will promptly (and in any event within 10 days) following any request by the Collateral Agent during the occurrence of any Noticed Event of Default, subject to the provisions of the Intercreditor Agreement, deliver all of its Tangible Chattel Paper to the Collateral Agent.

3.13.Further Actions. Each Assignor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps, including any and all actions as may be necessary or required under the Federal Assignment of Claims Act, relating to its Accounts, Contracts, Instruments and other property or rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require.

3.14.Overriding Provisions with respect to Term Priority Collateral. Notwithstanding anything to the contrary contained above in this Article III, or elsewhere in this Agreement or any other U.S. Security Agreement, to the extent the provisions of this Agreement (or any other Security Documents) require the delivery of, or control over, Term Priority Collateral to be granted to the Collateral Agent at any time prior to the Term Credit Documents Obligations Termination Date, then delivery of such Term Priority Collateral (or control with respect thereto) shall instead be granted to the Term Collateral Agent, to be held in accordance with the Term Credit Documents and the Intercreditor Agreement. Furthermore, at all times prior to the Term Credit Document Obligations Termination Date, the Collateral Agent is authorized by the parties hereto to effect transfers of Term Priority Collateral at any time in its possession (and any “control” or similar agreements with respect to Term Priority Collateral) to the Term Collateral Agent.

ARTICLE IV

SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES

4.1.Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of the registered Marks and Domain Names listed in Annex G hereto for such Assignor and that said listed Marks and Domain Names include all trademark registrations and applications for registration of marks in the United States Patent and Trademark Office and all Domain Names that such Assignor owns in connection with its business as of the Effective Date. Except as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect each Assignor represents and warrants that it owns, is licensed to use or otherwise has the right to use, all trademarks, service marks, trade names, trade dresses and other business and source identifiers that it uses. Each Assignor further warrants that it has no knowledge of any third party claim received by it that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any trademark, service mark or trade name of any other Person other than as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Assignor represents and warrants that it is the true and lawful owner of all U.S. trademark registrations and applications and Domain Name registrations listed in Annex G hereto and that said registrations are valid, subsisting, have not been canceled and that such Assignor is not aware of any third-party claim that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said applications will not mature into registrations. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of a Noticed Event of Default, any document which may be required by the United States Patent and Trademark Office or similar registrar in order to effect an absolute assignment of all right, title and interest in each Mark and/or Domain Name, and record the same.

4.2.Licenses and Assignments. Except as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Mark or Domain Name absent prior written approval of the Collateral Agent.

4.3.Infringements. Each Assignor agrees, promptly upon learning thereof, to notify the Collateral Agent in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any party who such Assignor believes is, or may be, infringing or diluting or otherwise violating any of such Assignor’s rights in and to any Mark in any manner that could reasonably be expected to have a Material Adverse Effect, or with respect to any party claiming that such Assignor’s use of any Mark material to such Assignor’s business violates in any material respect any property right of that party. Each Assignor further agrees to take appropriate actions in accordance with reasonable business practices against any Person infringing any Mark or Domain Name in any manner that could reasonably be expected to have a Material Adverse Effect.

4.4.Preservation of Marks and Domain Names. Each Assignor agrees to take all actions as are reasonably necessary to preserve the protection and registration of the Marks as trademarks or service marks under the laws of the United States (other than any such Marks which are no longer used or useful in its business or operations).

4.5.Maintenance of Registration. Each Assignor shall, at its own expense, diligently process all documents required in accordance with reasonable business practices to maintain all Mark and/or Domain Name registrations, including but not limited to affidavits of use and applications for renewals of registration in the United States Patent and Trademark Office for all of its material registered Marks, and shall pay all fees and disbursements in connection therewith and shall not abandon any such filing of affidavit of use or any such application of renewal prior to the exhaustion of all administrative and judicial remedies without prior written consent of the Collateral Agent (other than with respect to registrations and applications deemed by such Assignor in its reasonable business judgment to be no longer prudent to pursue).

4.6.Future Registered Marks and Domain Names. If any Mark registration is issued hereafter to any Assignor as a result of any application now or hereafter pending before the United States Patent and Trademark Office or any Domain Name is registered by Assignor, within 30 days of issuance, such Assignor shall deliver to the Collateral Agent a notification concerning the issuance of the registration, and a grant of a security interest in such Mark and/or Domain Name, to the Collateral Agent and at the expense of such Assignor, confirming the grant of a security interest in such Mark and/or Domain Name to the Collateral Agent hereunder, the form of such security to be substantially in the form of Annex J hereto or in such other form as may be reasonably satisfactory to the Collateral Agent.

4.7.Remedies. Subject to the terms of the Intercreditor Agreement, if a Noticed Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title and interest of such Assignor in and to each of the Marks and Domain Names, together with all trademark rights and rights of protection to the same, vested in the Collateral Agent for the benefit of the Secured Creditors, in which event such rights, title and interest shall immediately vest, in the Collateral Agent for the benefit of the Secured Creditors, and the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged and notarized and record said absolute assignment with the applicable agency or registrar; (ii) take and use or sell the Marks or Domain Names and the goodwill of such Assignor’s business symbolized by the Marks or Domain Names and the right to carry on the business and use the assets of such Assignor in connection with which the Marks or Domain Names have been used; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from using the Marks or Domain Names in any manner whatsoever, directly or indirectly, and such Assignor shall execute such further documents that the Collateral Agent may reasonably request to further confirm this and to transfer ownership of the Marks or Domain Names and registrations and any pending trademark applications in the United States Patent and Trademark Office or applicable Domain Name registrar to the Collateral Agent.

ARTICLE V

SPECIAL PROVISIONS CONCERNING

PATENTS, COPYRIGHTS AND TRADE SECRETS

5.1.Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of all rights in (i) all Trade Secret Rights, (ii) the Patents listed in Annex H hereto for such Assignor and that said Patents include all the United States patents and applications for United States patents that such Assignor owns as of the Restatement Effective Date and (iii) the Copyrights listed in Annex I hereto for such Assignor and that said Copyrights include all the United States copyrights registered with the United States Copyright Office and applications for United States copyrights that such Assignor owns as of the Restatement Effective Date. Each Assignor further warrants that it has no knowledge of any third party claim that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any patent or copyright of any other Person or such Assignor has misappropriated any trade secret or proprietary information which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Noticed Event of Default, any document which may be required by the United States Patent and Trademark Office or the United States Copyright Office in order to effect an absolute assignment of all right, title and interest in each Patent or Copyright, and to record the same.

5.2.Licenses and Assignments. Except as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Patent or Copyright absent prior written approval of the Collateral Agent.

5.3.Infringements. Each Assignor agrees, promptly upon learning thereof, to furnish the Collateral Agent in writing with all pertinent information available to such Assignor with respect to any infringement, contributing infringement or active inducement to infringe or other violation of such Assignor’s rights in any Patent or Copyright or to any claim that the practice by any Assignor of any patent or use of any copyrighted work violates any property right of a third party, or with respect to any misappropriation of any Trade Secret Right or any claim that practice of any trade secret violates any property right of a third party, in each case, in any manner which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor further agrees, absent direction of the Collateral Agent to the contrary, to take appropriate action, in accordance with its reasonable business judgment against, any Person infringing any Patent or Copyright or any Person misappropriating any Trade Secret Right, in each case to the extent that such infringement or misappropriation, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.4.Maintenance of Patents or Copyrights. At its own expense, each Assignor shall make timely payment of all post-issuance fees required to maintain in force its rights under each Patent or Copyright, absent prior written consent of the Collateral Agent (other than any such Patents or Copyrights which are no longer used or are deemed by such Assignor in its reasonable business judgment to no longer be useful in its business or operations).

5.5.Prosecution of Patent or Copyright Applications. At its own expense, each Assignor shall diligently prosecute all material applications for (i) United States Patents listed in Annex H hereto and (ii) Copyrights listed on Annex I hereto, in each case for such Assignor and shall not abandon any such application prior to exhaustion of all administrative and judicial remedies (other than applications that are deemed by such Assignor in its reasonable business judgment to no longer be necessary in the conduct of the Assignor’s business), absent written consent of the Collateral Agent.

5.6.Other Patents and Copyrights. Within 30 days of the acquisition or issuance of a United States Patent, registration of a Copyright, or acquisition of a registered Copyright, or of filing of an application for a United States Patent or Copyright, the relevant Assignor shall deliver to the Collateral Agent notification describing the acquisition, issuance, filing or registration of said Copyright or Patent, as the case may be, with a grant of a security interest as to such Patent or Copyright, as the case may be, to the Collateral Agent and at the expense of such Assignor, confirming the grant of a security interest, the form of such grant of a security interest to be substantially in the form of Annex K or Annex L hereto, as appropriate, or in such other form as may be reasonably satisfactory to the Collateral Agent.

5.7.Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may, subject to the provisions of the Intercreditor Agreement, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title, and interest of such Assignor in each of the Patents and Copyrights vested in the Collateral Agent for the benefit of the Secured Creditors, in which event such right, title, and interest shall immediately vest in the Collateral Agent for the benefit of the Secured Creditors, in which case the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 5.1 hereof to execute, cause to be acknowledged and notarized and to record said absolute assignment with the applicable agency; (ii) take and practice or sell the Patents and Copyrights; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and such Assignor shall execute such further documents as the Collateral Agent may reasonably request further to confirm this and to transfer ownership of the Patents and Copyrights to the Collateral Agent for the benefit of the Secured Creditors.

ARTICLE VI

PROVISIONS CONCERNING ALL COLLATERAL

6.1.Protection of Collateral Agent’s Security. Except as otherwise permitted by the Secured Debt Agreements and the Intercreditor Agreement, each Assignor will do nothing to impair the rights of the Collateral Agent in the Collateral. Each Assignor will at all times maintain insurance, at such Assignor’s own expense to the extent and in the manner provided in the Secured Debt Agreements. Except to the extent otherwise permitted to be retained by such Assignor or applied by such Assignor pursuant to the terms of the Secured Debt Agreements, the Collateral Agent shall, subject to the provisions of the Intercreditor Agreement, at the time any proceeds of such insurance are distributed to the Secured Creditors, apply such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Assignor to pay the Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Assignor.

6.2.Warehouse Receipts Non-Negotiable. To the extent practicable, each Assignor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its Inventory, such Assignor shall request that such warehouse receipt or receipt in the nature thereof shall not be “negotiable” (as such term is used in Section 7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction or under other relevant law).

6.3.Additional Information. Each Assignor will, at its own expense, from time to time upon the reasonable request of the Collateral Agent, promptly (and in any event within 30 days after its receipt of the respective request) furnish to the Collateral Agent such information with respect to the Collateral (including the identity of the Collateral or such components thereof as may have been requested by the Collateral Agent, the value and location of such Collateral, etc.) as may be requested by the Collateral Agent. Without limiting the forgoing, each Assignor agrees that it shall promptly (and in any event within 30 days after its receipt of the respective request) furnish to the Collateral Agent such updated Annexes hereto as may from time to time be reasonably requested by the Collateral Agent.

6.4.Further Actions. Each Assignor will, at its own expense and upon the reasonable request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which the Collateral Agent deems reasonably appropriate or advisable to perfect, preserve or protect its security interest in the Collateral.

6.5.Financing Statements. Subject to the terms of the Intercreditor Agreement, each Assignor agrees to execute and deliver to the Collateral Agent such financing statements, in form reasonably acceptable to the Collateral Agent, as the Collateral Agent may from time to time reasonably request or as are reasonably necessary or desirable in the opinion of the Collateral Agent to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby. Each Assignor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Assignor hereby authorizes the Collateral Agent to file any such financing statements without the signature of such Assignor where permitted by law (and such authorization includes describing the Collateral as “all assets” of such Assignor).

ARTICLE VII

REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT

7.1.Remedies; Obtaining the Collateral Upon Default. Each Assignor agrees that, if any Event of Default shall have occurred and be continuing, then and in every such case, the Collateral Agent, in addition to any rights now or hereafter existing under applicable law and under the other provisions of this Agreement, shall have all rights as a secured creditor under any UCC, and such additional rights and remedies to which a secured creditor is entitled under the laws in effect in all relevant jurisdictions and, subject to the provisions of the Intercreditor Agreement, may:

(i)personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from such Assignor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon such Assignor’s premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of such Assignor;

(ii)subject to Section 3.3, instruct the obligor or obligors on any agreement, instrument or other obligation (including, without limitation, the Accounts and the Contracts) constituting the Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the Collateral Agent and may exercise any and all remedies of such Assignor in respect of such Collateral;

(iii)instruct all banks which have entered into a control agreement with the Collateral Agent to transfer all monies, securities and instruments held by such depositary bank to the Cash Collateral Account;

(iv)sell, assign or otherwise liquidate any or all of the Collateral or any part thereof in accordance with Section 7.2 hereof, or direct such Assignor to sell, assign or otherwise liquidate any or all of the Collateral or any part thereof, and, in each case, take possession of the proceeds of any such sale or liquidation;

(v)take possession of the Collateral or any part thereof, by directing such Assignor in writing to deliver the same to the Collateral Agent at any reasonable place or places designated by the Collateral Agent, in which event such Assignor shall at its own expense:

(x)forthwith cause the same to be moved to the place or places so designated by the Collateral Agent and there delivered to the Collateral Agent;

(y)store and keep any Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent as provided in Section 7.2 hereof; and

(z)while the Collateral shall be so stored and kept, provide such security and maintenance services as shall be reasonably necessary to protect the same and to preserve and maintain it in good condition;

(vi)so long as the relevant Event of Default is a Noticed Event of Default, license or sublicense, whether on an exclusive or nonexclusive basis, any Marks, Domain Names, Patents or Copyrights included in the Collateral for such term and on such conditions and in such manner as the Collateral Agent shall in its sole judgment determine;

(vii)apply any monies constituting Collateral or proceeds thereof in accordance with the provisions of Section 7.4; and

(viii)take any other action as specified in clauses (1) through (5), inclusive, of Section 9-607 of the UCC;

it being understood that each Assignor’s obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor of said obligation. By accepting the benefits of this Agreement and each other Security Document, the Secured Creditors expressly acknowledge and agree that this Agreement and each other Security Document may be enforced only by the action of the Collateral Agent acting upon the instructions of the Required Secured Creditors and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Creditors upon the terms of this Agreement and the other Security Documents and subject to the terms of the Intercreditor Agreement.

7.2.Remedies; Disposition of the Collateral. If any Event of Default shall have occurred and be continuing, then any Collateral repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and any other Collateral whether or not so repossessed by the Collateral Agent, may, subject to the provisions of the Intercreditor Agreement, be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as the Collateral Agent may, in compliance with any mandatory requirements of applicable law, determine to be commercially reasonable. Any of such Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair at the expense of the relevant Assignor which the Collateral Agent shall determine to be commercially reasonable. Any such sale, lease or other disposition may be effected by means of a public disposition or private disposition, effected in accordance with the applicable requirements (in each case if and to the extent applicable) of Sections 9-610 through 9-613 of the UCC and/or such other mandatory requirements of applicable law as may apply to the respective disposition. The Collateral Agent may, without notice or publication, adjourn any public or private disposition or cause the same to be adjourned from time to time by announcement at the time and place fixed for the disposition, and such disposition may be made at any time or place to which the disposition may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may bid for and become the purchaser (and may pay all or any portion of the purchase price by crediting Obligations against the purchase price) of the Collateral or any item thereof, offered for disposition in accordance with this Section 7.2 without accountability to the relevant Assignor. If, under applicable law, the Collateral Agent shall be permitted to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor only such notice of disposition as shall be required by such applicable law. Each Assignor agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make such disposition or dispositions of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Assignor’s expense.

7.3.Waiver of Claims. Except as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives, to the extent permitted by law:

(i)all damages occasioned by such taking of possession or any such disposition except any damages which are the direct result of the Collateral Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision);

(ii)all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agent’s rights hereunder; and

(iii)all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and each Assignor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws.

Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant Assignor therein and thereto, and shall be a perpetual bar both at law and in equity against such Assignor and against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such Assignor.

7.4.Application of Proceeds. (a) (I) Subject to the terms of the Intercreditor Agreement, all moneys collected by the Collateral Agent (or, to the extent the U.S. Pledge Agreement or any other Security Document requires proceeds of collateral thereunder, which constitutes ABL Priority Collateral, to be applied in accordance with the provisions of this Agreement, the Pledgee under the U.S. Pledge Agreement or the collateral agent or mortgagee under such other Security Document) upon any sale or other disposition of the ABL Priority Collateral, together with all other moneys received by the Collateral Agent hereunder but subject to the provisions of following clause (g), (or, to the extent the U.S. Pledge Agreement or any other Security Document requires proceeds of collateral thereunder, which constitutes ABL Priority Collateral, to be applied in accordance with the provisions of this Agreement, the Pledgee under the U.S. Pledge Agreement or the collateral agent or mortgagee under such other Security Document) with respect thereto, shall be applied as follows:

(i)first, to the payment of all amounts owing by the respective Assignor to the Collateral Agent and the Administrative Agent of the type described in clauses (iv), (v) and (vi) of the definition of “Obligations”;

(ii)second, to the extent proceeds remain after the application pursuant to preceding clause (i), to the payment of all amounts owing by the respective Assignor to any Agent of the type described in clauses (vi) and (vii) of the definition of “Obligations”;

(iii)third, subject to the provisions of following clauses (g) and (h), to the extent proceeds remain after the application pursuant to preceding clauses (i) and (ii), an amount equal to the outstanding Primary U.S. Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary U.S. Borrower Obligations or, if the proceeds are insufficient to pay in full all such Primary U.S. Borrower Obligations, its ProRata Share of the amount remaining to be distributed;

(iv)fourth, subject to the provisions of following clause (g), to the extent proceeds remain after the application pursuant to preceding clauses (i) through (iii), inclusive, an amount equal to the outstanding Primary Foreign Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary Foreign Borrower Obligations or, if the proceeds are insufficient to pay in full all such Primary Foreign Borrower Obligations, its ProRata Share of the amount remaining to be distributed;

(v)fifth, subject to the provisions of the following clause (g), to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iv), an amount equal to the outstanding Secondary U.S. Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary U.S. Borrower Obligations or, if the proceeds are insufficient to pay in full all such Secondary U.S. Borrower Obligations, its ProRata Share of the amount remaining to be distributed;

(vi)sixth, subject to the provisions of the following clause (g), to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (v), an amount equal to the outstanding Secondary Foreign Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary Foreign Borrower Obligations or, if the proceeds are insufficient to pay in full all such Secondary Foreign Borrower Obligations, its ProRata Share of the amount remaining to be distributed;

(vii)seventh, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (vi), inclusive, if the Term Credit Document Obligations Termination Date has not theretofore occurred, amounts equal to the Term Obligations shall be paid to the Term Collateral Agent for application to the Term Obligations in accordance with sub-clauses third and fourth of Section 5.2(a) of the Intercreditor Agreement; and

(viii)eighth, to the extent proceeds remain after the application pursuant to preceding clauses (i) through (vii), inclusive, and following the termination of this Agreement pursuant to Section 10.8(a) hereof, to the relevant Assignor or to whomever may be lawfully entitled to receive such surplus.

Notwithstanding anything to the contrary contained above, to the extent monies or proceeds to be applied pursuant to this Section 7.4 consist of proceeds received under any Canadian Security Document or European Security Document, such proceeds will be applied as follows:

(A) In the case of proceeds received under any Canadian Security Documents:

(i)first, to the payment of all amounts owing by the respective Canadian Credit Party or Assignor as guarantor of the obligations of the Canadian Credit Parties to the Collateral Agent and the Canadian Administrative Agent of the type described in clauses (iv), (v) and (vi) of the definition of “Obligations”;

(ii)second, to the extent proceeds remain after the application pursuant to the preceding clause (i), to the payment of all amounts owing by the respective Canadian Credit Party or Assignor as guarantor of the obligations of the Canadian Credit Parties to any Agent of the type described in clauses (vi) and (vii) of the definition of “Obligations”;

(iii)third, to the extent proceeds remain after the application pursuant to the receding clauses (i) and (ii), an amount equal to the outstanding Primary Canadian Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary Canadian Borrower Obligations or, if the proceeds are insufficient to pay in full all such Primary Canadian Borrower Obligations, its ProRata Share of the amount remaining to be distributed;

(iv)fourth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, an amount equal to the outstanding Secondary Canadian Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary Canadian Borrower Obligations or, if the proceeds are insufficient to pay in full all such Secondary Canadian Borrower Obligations, its ProRata Share of the amount remaining to be distributed; and

(v)fifth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iv), inclusive, and following the termination of this Agreement pursuant to Section 10.8(a) hereof, to the relevant Assignor or to whomever may be lawfully entitled to receive such surplus;

and (B) in the case of proceeds received under any European Security Document:

(i)first, to the payment of all amounts owing the respective European Credit Party or Assignor as guarantor of the obligations of the European Credit Parties to the Collateral Agent and the Administrative Agent of the type described in clauses (iv), (v) and (vi) of the definition of “Obligations”;

(ii)second, to the extent proceeds remain after the application pursuant to the preceding clause (i), to the payment of all amounts owing the respective European Credit Party or Assignor as guarantor of the obligations of the European Credit Parties to any Agent of the type described in clauses (vi) and (vii) of the definition of “Obligations”;

(iii)third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), an amount equal to the outstanding Primary European Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary European Borrower Obligations or, if the proceeds are insufficient to pay in full all such Primary European Borrower Obligations, its ProRata Share of the amount remaining to be distributed;

(iv)fourth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, an amount equal to the outstanding Secondary European Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary European Borrower Obligations or, if the proceeds are insufficient to pay in full all such Secondary European Borrower Obligations, its ProRata Share of the amount remaining to be distributed; and

(v)fifth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iv), inclusive, and following the termination of this Agreement pursuant to Section 10.8(a) hereof, to the relevant Assignor or to whomever may be lawfully entitled to receive such surplus.

(II) Subject to the terms of the Intercreditor Agreement, all moneys collected by the Collateral Agent (or, to the extent the U.S. Pledge Agreement or any other Security Document requires proceeds of collateral thereunder, which constitutes Term Priority Collateral, to be applied in accordance with the provisions of this Agreement, the Pledgee under the U.S. Pledge Agreement or the collateral agent or mortgagee under such other Security Document) upon any sale or other disposition of the Term Priority Collateral, together with all other moneys received by the Collateral Agent hereunder (or, to the extent the U.S. Pledge Agreement or any other Security Document requires proceeds of collateral thereunder, which constitutes Term Priority Collateral, to be applied in accordance with the provisions of this Agreement, the Pledgee under the U.S. Pledge Agreement or the collateral agent or mortgagee under such other Security Document) with respect thereto, shall be applied as follows:

(i)first, in accordance with sub-clauses second and third of Section 5.1(a) of the Intercreditor Agreement, to the Term Collateral Agent for application to Term Obligations until same have been repaid in full;

(ii)second, to the extent proceeds remain after the application pursuant to preceding clause (i), as otherwise provided in Section 7.4(a)(I).

(b)For purposes of this Agreement: (i) “Pro Rata Share” shall mean, when calculating a Secured Creditor’s portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor’s Primary U.S. Borrower Obligations, Primary Foreign Borrower Obligations, Primary Canadian Borrower Obligations, Primary European Borrower Obligations, Secondary U.S. Borrower Obligations, Secondary Foreign Borrower Obligations, Secondary Canadian Borrower Obligations, or Secondary European Borrower Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Primary U.S. Borrower Obligations, Primary Foreign Borrower Obligations, Primary Canadian Borrower Obligations, Primary European Borrower Obligations, Secondary U.S. Borrower Obligations, Secondary Foreign Borrower Obligations, Secondary Canadian Borrower Obligations, Secondary European Borrower Obligations, or as the case may be, (ii) “Primary Obligations” shall mean (x) with respect to the Credit Document Obligations, all unpaid principal (or, Face Amount, as applicable) of, premium, if any, fees and interest on, all Loans, all Unpaid Drawings, the Stated Amount of all outstanding Letters of Credit and all Fees, (y) in the case of the Other Obligations, all amounts due to an Other Creditor under each Secured Hedging Agreement (other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities) and (z) in the case of Treasury Services Obligations, all amounts due under each Treasury Services Agreement with an Treasury Services Creditor (other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities), (iii) “Secondary Obligations” shall mean all Obligations other than Primary Obligations, (iv) “Primary U.S. Borrower Obligations” shall mean all Primary Obligations which are also U.S. Borrower Obligations, (v) “Secondary U.S. Borrower Obligations” shall mean all Secondary Obligations which are also U.S. Borrower Obligations, (vi) “Primary Canadian Borrower Obligations” shall mean all Primary Obligations which are also Canadian Borrower Obligations, (vii) “Secondary Canadian Borrower Obligations” shall mean all Secondary Obligations which are also Canadian Borrower Obligations, (viii) “Primary European Borrower Obligations” shall mean all Primary Obligations which are also European Borrower Obligations, (ix) “Secondary European Borrower Obligations” shall mean all Secondary Obligations which are also European Borrower Obligations, (x) “Primary Foreign Borrower Obligations” shall mean all Primary Canadian Borrower Obligations and Primary European Borrower Obligations and (xi) “Secondary Foreign Borrower Obligations” shall mean all Secondary Canadian Borrower Obligations and Secondary European Borrower Obligations.

(c)When payments to Secured Creditors are based upon their respective Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall be applied (for purposes of making determinations under this Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to their Secondary Obligations. If any payment to any Secured Creditor of its ProRata Share of any distribution would result in overpayment to such Secured Creditor, such excess amount shall instead be distributed in respect of the unpaid Primary Obligations or Secondary Obligations, as the case may be, of the other Secured Creditors, with each Secured Creditor whose Primary Obligations or Secondary Obligations, as the case may be, have not been paid in full to receive an amount equal to such excess amount multiplied by a fraction the numerator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of such Secured Creditor and the denominator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of all Secured Creditors entitled to such distribution.

(d)Each of the Secured Creditors, by their acceptance of the benefits hereof and of the other Security Documents, agrees and acknowledges that if the Lender Creditors receive a distribution on account of undrawn amounts with respect to Letters of Credit issued under the Credit Agreement (which shall only occur after all Loans and Unpaid Drawings of the respective Tranche have been paid in full), such amounts shall be paid to the Administrative Agent under the Credit Agreement and held by it, for the equal and ratable benefit of the Lender Creditors, as cash security for the repayment of Obligations owing to the Lender Creditors as such. If any amounts are held as cash security pursuant to the immediately preceding sentence, then upon the termination of all outstanding Letters of Credit under the Credit Agreement, and after the application of all such cash security to the repayment of all Obligations owing to the Lender Creditors after giving effect to the termination of all such Letters of Credit, if there remains any excess cash, such excess cash shall be returned by the Administrative Agent to the Collateral Agent for distribution in accordance with Section 7.4(a) hereof.

(e)Subject to the terms of the Intercreditor Agreement, all payments required to be made hereunder shall be made (x) if to the Lender Creditors, to the Administrative Agent for the account of the Lender Creditors, (y) if to the Other Creditors or the Treasury Services Creditors, to the trustee, paying agent or other similar representative (each, a “Representative”) for the Other Creditors or the Treasury Secured Creditors, as applicable, or, in the absence of such a Representative, directly to the Other Creditors or the Treasury Secured Creditors, as applicable and (z) if to the Term Secured Parties, to the Term Collateral Agent for the account of the Term Secured Parties.

(f)For purposes of applying payments received in accordance with this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the Administrative Agent and (ii) the Representative or, in the absence of such a Representative, upon the Other Creditors and the Treasury Services Creditors, as applicable, for a determination (which the Administrative Agent, each Representative, the Other Creditors and the Treasury Services Creditors agree (or shall agree) to provide upon request of the Collateral Agent) of the outstanding Primary Obligations, Secondary Obligations and Tertiary Obligations (and Dollar Equivalents thereof) owed to the Lender Creditors, the Other Creditors or the Treasury Services Creditors as the case may be. Unless it has received written notice from a Lender Creditor, an Other Creditor or a Treasury Secured Creditor to the contrary, the Administrative Agent and each Representative, in furnishing information pursuant to the preceding sentence, and the Collateral Agent, in acting hereunder, shall be entitled to assume that no Tertiary Obligations are outstanding.

(g)Notwithstanding anything to the contrary contained above, to the extent monies or proceeds to be applied pursuant to this Section 7.4 consist of proceeds received from a sale or other disposition of Excess Exempted Foreign Entity Voting Stock, such proceeds will be applied as otherwise required above in this Section 7.4, but for this purpose treating the outstanding Primary Obligations, Secondary Obligations and Tertiary Obligations as only those obligations secured by the Excess Exempted Foreign Entity Voting Stock in accordance with the provisions of clause (x) to the proviso appearing at the end of Section 3.1 of the U.S. Pledge Agreement and Section 1.1 above. In determining whether any Excess Exempted Foreign Entity Voting Stock has been sold or otherwise disposed of, the Collateral Agent shall treat any sale or disposition of Voting Stock of any Exempted Foreign Entity as first being a sale of Voting Stock which is not Excess Exempted Foreign Entity Voting Stock until such time as the stock sold represents 65% of the total combined voting power of all classes of Voting Stock of the respective Exempted Foreign Entity and, after such threshold has been met, any further sales of Voting Stock of the respective Exempted Foreign Entity shall be treated as sales of Excess Exempted Foreign Entity Voting Stock.

(h)It is understood that the Assignors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Obligations.

(i)It is understood and agreed by all parties hereto that the Collateral Agent shall have no liability for any determinations made by it in this Section 7.4 (including, without limitation, as to whether given Collateral constitutes Term Priority Collateral or ABL Priority Collateral), in each case except to the extent resulting from the gross negligence or willful misconduct of the Collateral Agent (as determined by a court of competent jurisdiction in a final and non-appealable decision). The parties also agree that the Collateral Agent may (but shall not be required to), at any time and in its sole discretion, and with no liability resulting therefrom, petition a court of competent jurisdiction regarding any application of Collateral in accordance with the requirements hereof and of the Intercreditor Agreement, and the Collateral Agent shall be entitled to wait for, and may conclusively rely on, any such determination.

7.5.Remedies Cumulative. Subject to the terms of (and to the extent not inconsistent with) the Intercreditor Agreement, each and every right, power and remedy hereby specifically given to the Collateral Agent shall be in addition to every other right, power and remedy specifically given to the Collateral Agent under this Agreement, the other Secured Debt Agreements or now or hereafter existing at law, in equity or by statute and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning of the exercise of one shall not be deemed a waiver of the right to exercise any other or others. No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of any of the Obligations shall impair any such right, power or remedy or shall be construed to be a waiver of any Default or Event of Default or an acquiescence thereof. No notice to or demand on any Assignor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent to any other or further action in any circumstances without notice or demand. In the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may recover reasonable expenses, including reasonable attorneys’ fees, and the amounts thereof shall be included in such judgment.

7.6.Discontinuance of Proceedings. In case the Collateral Agent shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case the relevant Assignor, the Collateral Agent and each holder of any of the Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such proceeding had been instituted.

ARTICLE VIII

INDEMNITY

8.1.Indemnity. (a) Each Assignor jointly and severally agrees to indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor and their respective successors, assigns, employees, affiliates and agents (hereinafter in this Section 8.1 referred to individually as “Indemnitee,” and collectively as “Indemnitees”) harmless from any and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments and any and all costs, expenses or disbursements (including reasonable attorneys’ fees and expenses) (for the purposes of this Section 8.1 the foregoing are collectively called “expenses”) of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Agreement, any other Secured Debt Agreement or any other document executed in connection herewith or therewith or in any other way connected with the administration of the transactions contemplated hereby or thereby or the enforcement of any of the terms of, or the preservation of any rights under any thereof, or in any way relating to or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition, or use of the Collateral (including, without limitation, latent or other defects, whether or not discoverable), the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 8.1(a) for losses, damages or liabilities to the extent caused by the gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision); providedfurther that the Assignors shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to any necessary or advisable special counsel and up to one local counsel in each applicable local jurisdiction) for all Indemnitees unless, in the written opinion of outside counsel reasonably satisfactory to the Assignors and the Collateral Agent, representation of all such Indemnitees would be inappropriate due to the existence of an actual or potential conflict of interest. Each Assignor agrees that upon written notice by any Indemnitee of the assertion of such a liability, obligation, damage, injury, penalty, claim, demand, action, suit or judgment, the relevant Assignor shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify the relevant Assignor of any such assertion of which such Indemnitee has knowledge.

(b)Without limiting the application of Section 8.1(a) hereof, each Assignor agrees, jointly and severally, to pay or reimburse the Collateral Agent for any and all reasonable fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Collateral Agent’s Liens on, and security interest in, the Collateral, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices, payment or discharge of any taxes or Liens upon or in respect of the Collateral, premiums for insurance with respect to the Collateral and all other fees, costs and expenses in connection with protecting, maintaining or preserving the Collateral and the Collateral Agent’s interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Collateral.

(c)Without limiting the application of Section 8.1(a) or (b) hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any misrepresentation by any Assignor in this Agreement, any other Secured Debt Agreement or in any writing contemplated by or made or delivered pursuant to or in connection with this Agreement or any other Secured Debt Agreement.

(d)If and to the extent that the obligations of any Assignor under this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.

8.2.Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Collateral. The indemnity obligations of each Assignor contained in this Article VIII shall continue in full force and effect notwithstanding the full payment of all of the other Obligations and notwithstanding the full payment of all the Notes issued, and Loans made, under the Credit Agreement, the termination of all Letters of Credit (and the full payment of all Unpaid Drawings) issued under the Credit Agreement, the termination of all Secured Hedging Agreements entered into with the Other Creditors, the termination of all Treasury Services Agreements entered into with the Treasury Services Creditors and the payment of all other Obligations and notwithstanding the discharge thereof and the occurrence of the Termination Date.

ARTICLE IX

DEFINITIONS

The following terms shall have the meanings herein specified. Such definitions shall be equally applicable to the singular and plural forms of the terms defined.

“ABL Priority Collateral” shall have the meaning assigned that term in the Intercreditor Agreement.

“Account” shall mean any “account” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York, and in any event shall include but shall not be limited to, all rights to payment of any monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State. Without limiting the foregoing, the term “account” shall include all Health-Care-Insurance Receivables.

“Administrative Agent” shall have the meaning provided in the recitals of this Agreement.

“Aleris Canada” shall have the meaning provided in the recitals of this Agreement

“Agreement” shall mean this U.S. Security Agreement, as the same may be amended, modified, restated and/or supplemented from time to time in accordance with its terms.

“Aleris” shall have the meaning provided in the recitals of this Agreement.

“As-Extracted Collateral” shall mean “as-extracted collateral” as such term is defined in the Uniform Commercial Code as in effect on the Effective Date in the State of New York.

“Assignor” shall have the meaning provided in the first paragraph of this Agreement.

“Borrower” shall have the meaning provided in the recitals to this Agreement.

“Canadian Administrative Agent” shall have the meaning provided in the recitals of this Agreement.

“Canadian Borrowers” shall have the meaning provided in the recitals of this Agreement.

“Canadian Borrower Obligations” shall mean all Obligations of the Canadian Borrowers and any guarantees thereof (including by U.S. Credit Parties) pursuant to the Guaranties or pursuant to any other Credit Document.

“Cash Collateral Account” shall mean a non-interest bearing cash collateral account maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Creditors.

“Chattel Paper” shall mean “chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York. Without limiting the foregoing, the term “Chattel Paper” shall in any event include all Tangible Chattel Paper and all Electronic Chattel Paper.

“Class” shall have the meaning provided in Section 10.2 of this Agreement.

“Collateral” shall have the meaning provided in Section 1.1(a) of this Agreement.

“Collateral Agent” shall have the meaning provided in the first paragraph of this Agreement.

“Commercial Tort Claims” shall mean “commercial tort claims” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Contract Rights” shall mean all rights of any Assignor under each Contract, including, without limitation, (i) any and all rights to receive and demand payments under any or all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts.

“Contracts” shall mean all contracts between any Assignor and one or more additional parties (including, without limitation, any Interest Rate Protection Agreements, Currency Hedging Agreements, Treasury Services Agreements, licensing agreements and any partnership agreements, joint venture agreements and limited liability company agreements).

“Copyrights” shall mean any United States or foreign copyright now or hereafter owned by any Assignor, including any registrations of any copyrights, in the United States Copyright Office or any foreign equivalent office, as well as any application for a copyright registration now or hereafter made with the United States Copyright Office or any foreign equivalent office by any Assignor.

“Credit Agreement” shall have the meaning provided in the recitals of this Agreement.

“Credit Document Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“Deposit Accounts” shall mean all “deposit accounts” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Discharge of Term Obligations” shall have the meaning assigned that term in the Intercreditor Agreement.

“Documents” shall mean “documents” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Domain Names” shall mean all Internet domain names and associated URL addresses in or to which any Assignor now or hereafter has any right, title or interest.

“Electronic Chattel Paper” shall mean “electronic chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Equipment” shall mean any “equipment” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York, and in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned by any Assignor and any and all additions, substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.

“Excess Exempted Foreign Entity Voting Stock” shall have the meaning provided in the U.S. Pledge Agreement.

“Excess Foreign Corporation Equity Interests” shall have the meaning provided in Section 1.1(a).

“Excluded Equipment” shall mean at any date any Equipment of an Assignor which is subject to, or secured by, a Capital Lease Obligation or purchase money Indebtedness which is permitted under Section 10.04 of the Credit Agreement if and to the extent that (i) the express terms of a valid and enforceable restriction in favor of a Person who is not Aleris or one of its Subsidiaries contained in the agreements or documents granting or governing such Capital Lease Obligation or purchase money Indebtedness prohibits, or requires any consent or establishes any other conditions for, an assignment thereof, or a grant of a security interest therein, by an Assignor and (ii) such restriction relates only to the asset or assets acquired by an Assignor with the Proceeds of such Capital Lease Obligation or purchase money Indebtedness; provided that all Proceeds paid or payable to any Assignor from any sale, transfer or assignment or other voluntary or involuntary disposition of such Equipment and all rights to receive such Proceeds shall be included in the Collateral to the extent not otherwise required to be paid to the holder of the Capital Lease Obligation or purchase money Indebtedness secured by such Equipment.

“Exempted Foreign Entity” shall have the meaning provided in the U.S. Pledge Agreement.

“Existing U.S. Security Agreement” shall mean the U.S. Security Agreement, dated as of August 1, 2006, among certain of the Assignors, the Administrative Agent and Citicorp North America, Inc., as Collateral Agent.

“European Borrower” shall have the meaning provided in the recitals of this Agreement.

“European Borrower Obligations” shall mean all Obligations of the European Borrower and any guarantees thereof (including by U.S. Credit Parties) pursuant to the Guaranties or pursuant to any other Credit Document.

“Event of Default” shall mean (i) at any time when any Credit Document Obligations or Letters of Credit are outstanding or any Commitments under the Credit Agreement exist, any Event of Default under, and as defined in the Credit Agreement and (ii) at any time after all of the Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated and no further Commitments and Letters of Credit may be provided thereunder, any payment default on any of the Obligations after the expiration of any applicable grace period.

“Foreign Corporation” shall have the meaning provided in the U.S. Pledge Agreement.

“General Intangibles” shall mean “general intangibles” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Goods” shall mean “goods” as such term is defined in the Uniform Commercial Code as in effect on Restatement Effective Date in the State of New York.

“Health-Care-Insurance Receivable” shall mean any “health-care-insurance receivable” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Indemnitee” shall have the meaning provided in Section 8.1(a) of this Agreement.

“Instrument” shall mean “instruments” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Inventory” shall mean merchandise, inventory and goods, and all additions, substitutions and replacements thereof and all accessions thereto, wherever located, together with all goods, supplies, incidentals, packaging materials, labels, materials and any other items used or usable in manufacturing, processing, packaging or shipping same, in all stages of production from raw materials through work in process to finished goods, and all products and proceeds of whatever sort and wherever located any portion thereof which may be returned, rejected, reclaimed or repossessed by the Collateral Agent from any Assignor’s customers, and shall specifically include all “inventory” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Investment Property” shall mean “investment property” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Lender Creditors” shall have the meaning provided in the recitals of this Agreement.

“Lenders” shall have the meaning provided in the recitals of this Agreement.

“Letter-of-Credit Rights” shall mean “letter-of-credit rights” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date hereof in the State of New York.

“Location” of any Assignor, shall mean such Assignor’s “location” as determined pursuant to Section 9-307 of the UCC.

“Marks” shall mean all right, title and interest in and to any trademarks, service marks and trade names now owned or held or hereafter acquired by any Assignor, including any registration or application for registration of any trademarks and service marks now owned or held or hereafter acquired by any Assignor, which are registered or filed for registration in the United States Patent and Trademark Office or the equivalent thereof in any state of the United States or any equivalent foreign office or agency, as well as any unregistered trademarks and service marks owned by an Assignor and any trade dress including logos, designs, fictitious business names and other business identifiers owned by any Assignor; provided, however that the definition of Marks shall not include any intent-to-use trademark applications to the extent a grant of a security interest therein would invalidate such intent-to-use trademark application.

“Non-Voting Equity Interests” shall have the meaning provided in the U.S. Pledge Agreement.

“Noticed Event of Default” shall mean (i) an Event of Default under Section 11.01 or 11.05 of the Credit Agreement and (ii) any other Event of Default in respect of which the Administrative Agent has given Aleris notice that such Event of Default constitutes a “Noticed Event of Default”.

“Obligations” shall mean and include, as to any Assignor, all of the following:

(i)the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, unpaid principal (or, Face Amount, as applicable), premium, interest (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding), reimbursement obligations under Letters of Credit, fees, costs and indemnities) of such Assignor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Credit Documents to which such Assignor is a party (including, without limitation, in the event such Assignor is a Guarantor, all such obligations, liabilities and indebtedness of such Assignor under its Guaranty) (all such obligations, liabilities and indebtedness under this clause (i), except to the extent consisting of obligations or indebtedness with respect to Secured Hedging Agreements, being herein collectively called the “Credit Document Obligations”);

(ii)the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Assignor to the Other Creditors, now existing or hereafter incurred under, arising out of or in connection with any Secured Hedging Agreement, whether such Secured Hedging Agreement is now in existence or hereinafter arising (including, without limitation, in the case of a Assignor that is a Guarantor, all obligations, liabilities and indebtedness of such Assignor under its Guaranty in respect of the Secured Hedging Agreements), (all such obligations, liabilities and indebtedness under this clause (ii) being herein collectively called the “Other Obligations”);

(iii)the full and prompt payment when due (whether at the stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding at the rate provided for in the respective documentation, whether or not such interest is allowed in any such proceeding) owing by Aleris or any of its Subsidiaries to each Treasury Services Creditor with respect to Treasury Services, whether now in existence or hereafter arising in each case under any Treasury Services Agreement (all such obligations, liabilities and indebtedness described in this clause (iii) being herein collectively called the “Treasury Services Obligations”);

(iv)any and all sums advanced by the Collateral Agent in order to preserve the Collateral or preserve its security interest in the Collateral;

(v)in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of such Assignor referred to in clauses (i) through (iii) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Collateral Agent of its rights hereunder, together with reasonable attorneys’ fees and court costs;

(vi)all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 8.1 of this Agreement; and

(vii)all amounts owing to any Agent or any of its affiliates pursuant to any of the Credit Documents in its capacity as such;

it being acknowledged and agreed that the “Obligations” shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.

“Other Creditors” shall have the meaning provided in the recitals of this Agreement.

“Other Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“Patents” shall mean any patent in or to which any Assignor now or hereafter has any ownership right, title or interest therein, and any divisions and, continuations (including, but not limited to, continuations-in-parts), as well as any application for a patent now or hereafter made by any Assignor.

“Permits” shall mean, to the extent permitted to be assigned by the terms thereof or by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations of or from any governmental authority or agency.

“Person” shall mean any individual, partnership, joint venture, firm, corporation, association, limited liability company, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

“Primary Canadian Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Primary European Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Primary Foreign Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Primary Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Primary U.S. Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Pro Rata Share” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Proceeds” shall mean all “proceeds” as such term is defined in the Uniform Commercial Code as in effect in the State of New York on the Restatement Effective Date and, in any event, shall also include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or any Assignor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Assignor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.

“Registered Organization” shall have the meaning provided in the Uniform Commercial Code as in effect in the State of New York.

“Representative” shall have the meaning provided in Section 7.4(e) of this Agreement.

“Required Secured Creditors” shall mean (i) at any time when any Credit Document Obligations are outstanding or any Commitments under the Credit Agreement exist, the Required Lenders (or, to the extent provided in Section 13.12 of the Credit Agreement, each of the Lenders) and (ii) at any time after all of the Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated and no further Commitments may be provided thereunder, the holders of a majority of the Other Obligations and Treasury Services Obligations (taken as a whole).

“Requisite Creditors” shall have the meaning provided in Section 10.2 of this Agreement.

“Secondary Canadian Borrower Obligations shall have the meaning provided in Section 7.4(b) of this Agreement.

“Secondary European Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Secondary Foreign Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Secondary Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Secondary U.S. Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Secured Creditors shall have the meaning provided in the recitals of this Agreement.

“Secured Debt Agreements” shall mean and include this (i) Agreement, (ii) the other Credit Documents, (iii) the Secured Hedging Agreements entered into with an Other Creditor, (iv) the Treasury Services Agreements entered into with a Treasury Services Creditor and (v) any intercreditor agreement entered into by the Collateral Agent with an Other Creditor.

“Secured Hedging Agreement” shall mean each Interest Rate Protection Agreement and/or Other Hedging Agreements provided that (i) such Interest Rate Protection Agreement and/or Other Hedging Agreement expressly states that (x) it constitutes a “Secured Hedging Agreement” for purposes of the Credit Agreement and the other Credit Documents and (y) does not constitute a “Secured Hedging Agreement” for purposes of the Term Loan Agreement, the Term Security Documents or any guaranties relating to the Term Loan Agreement, (ii) Aleris and the other parties thereto shall have delivered to the Collateral Agent a written notice specifying that such Interest Rate Protection Agreement and/or Other Hedging Agreement (x) constitutes a “Secured Hedging Agreement” for purposes of the Credit Agreement and the other Credit Documents, (y) does not constitute a “Secured Hedging Agreement” for purposes of the Term Loan Agreement, the Term Security Documents or any guaranties relating to the Term Loan Agreement and (z) in the case of Aleris, that such Interest Rate Protection Agreement and/or Other Hedging Agreement and the obligations of Aleris and its Subsidiaries thereunder have been, and will be, incurred in compliance with the Credit Agreement, (iii) on the effective date of such Interest Rate Protection Agreement and/or Other Hedging Agreement and from time to time thereafter, at the request of the Collateral Agent, Aleris and the other parties thereto shall have notified the Administrative Agent in writing of the aggregate amount of exposure under such Interest Rate Protection Agreement and/or Other Hedging Agreement and (iv) such Other Creditor, if it is not a Lender or an affiliate thereof (even if such Lender subsequently ceases to be a Lender under the Credit Agreement for any reason), has entered into an intercreditor agreement with respect to the relevant Interest Rate Protection Agreement or Other Hedging Agreement on terms reasonably satisfactory to the Collateral Agent.

“Software” shall mean “software” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Subsidiary” shall mean, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time.

“Supporting Obligations” shall mean any “supporting obligation” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York, now or hereafter owned by any Assignor, or in which any Assignor has any rights, and, in any event, shall include, but shall not be limited to all of such Assignor’s rights in any Letter-of-Credit Right or secondary obligation that supports the payment or performance of, and all security for, any Collateral consisting of Accounts, Chattel Paper, Documents, General Intangibles, Instruments or Investment Properties.

“Tangible Chattel Paper” shall mean “tangible chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Term Agreement” shall have the meaning assigned that term in the Intercreditor Agreement.

“Term Collateral Agent” shall have the meaning assigned that term in the Intercreditor Agreement.

“Term Credit Document Obligations Termination Date” shall mean that date upon which the Discharge of Term Obligations shall have occurred.

“Term Documents” shall have the meaning assigned that term in the Intercreditor Agreement.

“Term Obligations” shall have the meaning assigned that term in the Intercreditor Agreement.

“Term Priority Collateral” shall have the meaning assigned that term in the Intercreditor Agreement.

“Term Secured Parties” shall have the meaning assigned that term in the Intercreditor Agreement.

“Termination Date” shall have the meaning provided in Section 10.8(a) of this Agreement.

“Timber-to-be-Cut” shall mean “timber-to-be-cut” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Trade Secret Rights” shall mean the rights of an Assignor in any Trade Secret it holds.

“Transmitting Utility” shall have the meaning given such term in Section 9-102(a)(80) of the UCC.

“Treasury Services” shall have the meaning provided in the recitals of this Agreement.

“Treasury Services Agreement” shall have the meaning provided in the recitals of this Agreement.

“Treasury Services Creditors” shall have the meaning provided in the recitals of this Agreement.

“Treasury Services Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.

“U.S. Borrower Obligations” shall mean all Obligations of the U.S. Borrowers (but not as a Guarantor of the Canadian Borrowers, any Canadian Subsidiary Guarantor, the European Borrower or any European Subsidiary Guarantor) and any guarantees of such Obligations pursuant to the Guaranties or pursuant to any other Credit Document.

“Vehicles” shall mean all cars, trucks, construction and earth moving equipment covered by a certificate of title law of any state (and where perfection of security interests therein cannot be effected by filings under the UCC).

“Voting Equity Interests” shall have the meaning provided in the U.S. Pledge Agreement.

ARTICLE X

MISCELLANEOUS

10.1.Notices. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Collateral Agent or any Assignor shall not be effective until received by the Collateral Agent or such Assignor, as the case may be. All notices and other communications shall be in writing and addressed as follows:

(a) if to any Assignor, c/o:

Aleris International, Inc.

25825 Science Park Drive, Suite 400

Beachwood, OH 44122

Attention: General Counsel

Telephone No.:   (216) 910-3400

 Telecopier No.:  (216) 910-3650

(b) if to the Collateral Agent or the Administrative Agent, at:

Deutsche Bank AG New York Branch

60 Wall Street

MS NYC60-0208

New York, NY 10005

Attention:  Marguerite Sutton

Telephone No.:   (212) 250-6150

Telecopier No.:  (212) 797-4655

(c)if to any Lender Creditor other than the Collateral Agent, at such address as such Lender Creditor shall have specified in the Credit Agreement;

(d)if to any Other Creditor, at such address as such Other Creditor shall have specified in writing to Aleris and the Collateral Agent;

(e)if to any Treasury Services Creditor, at such address as such Treasury Services Creditor shall have specified in writing to Aleris and the Collateral Agent;

or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.

10.2.Waiver; Amendment. None of the terms and conditions of this Agreement (or, to the extent any other Security Document requires waivers or amendments thereunder to occur in accordance with the provisions of this Agreement, such other Security Document) may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Assignor (or, to the extent any other Security Document requires waivers or amendments thereunder to occur in accordance with the provisions of this Agreement, the pledgor, transferor, mortgagor or other corresponding party under such other Security Document) directly affected thereby and the Collateral Agent (or, to the extent any other Security Document requires waivers or amendments thereunder to occur in accordance with the provisions of this Agreement, the collateral agent or mortgagee under such other Security Document) (with the written consent of the Required Secured Creditors) and subject to the terms of the Intercreditor Agreement; provided, that, (i) subject to the provisions of the Intercreditor Agreement, (x) additional Assignors may be added as parties hereto from time to time in accordance with Section 10.12 (or the corresponding section in such other Security Document) without the consent of any other Assignor or of the Secured Creditors, and (y) Assignors may be removed as parties hereto from time to time in accordance with Section 10.13 (or the corresponding section in such other Security Document), without the consent of any other Assignor or of the Secured Creditors, (ii) any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) also shall require the written consent of the Requisite Creditors of such affected Class and (iii) to the extent provided in an intercreditor agreement delivered pursuant to Section 6.19 of the Intercreditor Agreement (such intercreditor agreement, an “Other Intercreditor Agreement”), the consent of the Other Creditors to amendments, modifications and waivers described in the Other Intercreditor Agreement shall be required. For the purpose of this Agreement, the term “Class”shall mean each class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the Credit Document Obligations, (y) the Other Creditors as the holders of the Other Obligations or (z) the Treasury Secured Creditors as the holders of the Treasury Secured Obligations. For the purpose of this Agreement, the term “Requisite Creditors” of any Class shall mean each of (x) with respect to the Credit Document Obligations, the Required Lenders (or, to the extent provided in Section 13.12 of the Credit Agreement, each of the Lenders), (y) with respect to the Other Obligations, the holders of at least a majority of all Other Obligations outstanding from time to time and (z) with respect to the Treasury Secured Obligations, the holders of al least a majority of all the Treasury Secured Obligations outstanding from time to time.

10.3.Obligations Absolute. Subject to the terms of the Intercreditor Agreement, the obligations of each Assignor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of such Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or any other Secured Debt Agreement; or (c) any amendment to or modification of any Secured Debt Agreement or any security for any of the Obligations (in each case), whether or not such Assignor shall have notice or knowledge of any of the foregoing.

10.4.Successors and Assigns. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 10.8, (ii) be binding upon each Assignor, its successors and assigns, providedhowever, that no Assignor shall assign any of its rights or obligations hereunder without the prior written consent of the Collateral Agent (with the prior written consent of the Required Secured Creditors), and (iii) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other Secured Creditors and their respective successors, transferees and assigns. All agreements, statements, representations and warranties made by each Assignor herein or in any certificate or other instrument delivered by such Assignor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Secured Debt Agreements regardless of any investigation made by the Secured Creditors or on their behalf.

10.5.Headings Descriptive. The headings of the several sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

10.6.GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH ASSIGNOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH ASSIGNOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH ASSIGNOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS JURISDICTION OVER SUCH ASSIGNOR. EACH ASSIGNOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH ASSIGNOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 10.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY ASSIGNOR IN ANY OTHER JURISDICTION.

(b)EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c)EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

10.7.Assignors’ Duties. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Assignor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Assignor under or with respect to any Collateral.

10.8.Termination; Release. (a) After the Termination Date, this Agreement (or, to the extent any other Security Document requires termination or releases thereunder to occur in accordance with the provisions of this Agreement, such other Security Document) shall terminate (provided that all indemnities set forth herein including, without limitation in Section 8.1 hereof, shall survive such termination) and the Collateral Agent (or, to the extent any other Security Document requires termination or releases thereunder to occur in accordance with the provisions of this Agreement, the collateral agent or mortgagee under such other Security Document), at the request and expense of the respective Assignor (or, to the extent any other Security Document requires termination or releases thereunder to occur in accordance with the provisions of this Agreement, the pledgor, transferor, mortgagor or other corresponding party under such other Security Document), will, subject to the provisions of the Intercreditor Agreement, promptly execute and deliver to such Assignor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent or any of its sub-agents hereunder and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement. As used in this Agreement, “Termination Date” shall mean the date upon which the Total Commitment under the Credit Agreement has been terminated, no Letter of Credit or Note (as defined in the Credit Agreement) is outstanding (and all Loans and Unpaid Drawings have been paid in full), all Letters of Credit have been terminated, all Obligations under Secured Hedging Agreements and Treasury Services Agreements and all other Obligations (other than indemnities under the Debt Agreements which are not then due and payable) have been paid in full and all Secured Hedging Agreements have been terminated.

(b)In the event that any part of the Collateral (as defined in the Credit Agreement) is sold or otherwise disposed of (to a Person other than a Credit Party) (x) at any time prior to the time at which all Credit Document Obligations have been paid in full and all Commitments and Letters of Credit under the Credit Agreement have been terminated, in connection with a sale or disposition permitted by Section 10.02 of the Credit Agreement or is otherwise released at the direction of the Required Lenders (or all the Lenders if required by Section 13.12 of the Credit Agreement) or (y) at any time thereafter, to the extent permitted by the other Secured Debt Agreements, and in the case of clauses (x) and (y), and the proceeds of such sale or disposition (or from such release) are applied in accordance with the terms of the Credit Agreement or such other Secured Debt Agreement, as the case may be, to the extent required to be so applied, the Collateral Agent, at the request and expense of Aleris, will duly release from the security interest created hereby (or, to the extent any other Security Document requires releases thereunder to occur in accordance with the provisions of this Agreement, from the security interest created by such other Security Document) (and will execute and deliver such documentation, including termination or partial release statements and the like in connection therewith) and assign, transfer and deliver to Aleris, on behalf of the applicable Assignor, (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or otherwise disposed of, or released, and as may be in the possession of the Collateral Agent (or any of its sub-agents hereunder) and has not theretofore been released pursuant to this Agreement. Furthermore, upon the release of any Guarantor from any Guaranty in accordance with the provisions thereof or in accordance with Section 13.12(b) of the Credit Agreement, such Assignor (or, to the extent any other Security Document requires releases thereunder to occur in accordance with the provisions of this Agreement, the assignor, grantor or pledgor under such other Security Document) (and the Collateral at such time assigned by the respective Assignor, grantor, pledgor or assignor pursuant hereto or pursuant to such other Security Document) shall be released from this Agreement (or, to the extent any other Security Document requires releases thereunder to occur in accordance with the provisions of this Agreement, from such other Security Document).

(c)At any time that an Assignor desires that the Collateral Agent take any action to acknowledge or give effect to any release of Collateral pursuant to the foregoing Section 10.8(a) or (b), such Assignor shall deliver to the Collateral Agent (and the relevant sub-agent, if any, designated hereunder) a certificate signed by a principal executive officer of such Assignor stating that the release of the respective Collateral is permitted pursuant to such Section 10.8(a) or (b). At any time that any U.S. Borrower or the respective Assignor desires that a Subsidiary of such U.S. Borrower which has been released from the U.S. Subsidiaries Guaranty be released hereunder as provided in the penultimate sentence of Section 10.8(b), it shall deliver to the Collateral Agent a certificate signed by a principal executive officer of such U.S. Borrower and the respective Assignor stating that the release of the respective Assignor (and its Collateral) is permitted pursuant to such Section 10.8(b).

(d)The Collateral Agent shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with, or which the Collateral Agent believes to be in accordance with, this Section 10.8.

10.9.Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Collateral Agent.

10.10.Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

10.11.The Collateral Agent and the other Secured Creditors. The Collateral Agent will hold in accordance with this Agreement (and to the extent applicable, the Intercreditor Agreement) all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in Annex M hereto, the terms of which shall be deemed incorporated herein by reference as fully as if same were set forth herein in their entirety.

10.12.Additional Assignors. It is understood and agreed that any Subsidiary Guarantor that desires to become an Assignor hereunder, or is required to execute a counterpart of this Agreement after the Restatement Effective Date pursuant to the requirements of the Credit Agreement or any other Credit Document, shall become an Assignor hereunder by executing a counterpart hereof and delivering same to the Collateral Agent, or by executing a joinder agreement in form and substance satisfactory to the Collateral Agent, (y) delivering supplements to Annexes A through D, inclusive, and F through I, inclusive, hereto as are necessary to cause such Annexes to be complete and accurate with respect to such additional Assignor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Assignor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken to the reasonable satisfaction of the Collateral Agent.

10.13.Amendment and Restatement. This Agreement shall amend and restate in its entirety the Existing U.S. Security Agreement, and all obligations of the Assignors thereunder shall be deemed replaced and extended as obligations under this Agreement and be governed hereby without novation.

10.14.Calculation of Obligations under Secured Hedging Agreements. Any calculation of obligations outstanding under a Secured Hedging Agreement for purposes of this Agreement or any other Security Document shall be (i) for purposes of the definition of Required Secured Creditors (x) if prior to the termination of such Secured Hedging Agreement, the maximum aggregate amount (giving effect to any netting agreements) that Aleris and the Assignors would be required to pay if such Secured Hedging Agreement were terminated at such time, but in no event should such amount with respect to the Secured Hedging Agreement entered into on the Restatement Effective Date be deemed to be less than $35,000,000 and (y) if after the termination of such Secured Hedging Agreements, the amount which is actually due and payable by Aleris and the Assignors under such Secured Hedging Agreement at such time and (ii) for purposes of Section 7 of this Agreement, the amount which is actually due and payable by Aleris and the Assignors under such Secured Hedging Agreement at such time.

[Remainder of this page intentionally left blank; signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.

Each assignor’s address is as listed

on Annex C attached hereto

ALERIS INTERNATIONAL, INC.,
as an Assignor
By:	/s/ Michael Fridey
	Name:	Michael Fridey
	Title:	Executive Vice President and  Chief Financial Officer

AURORA ACQUISITION MERGER SUB,
INC., as an Assignor
By:	/s/ Clive Bode
	Name:	Clive Bode
	Title:	Vice President

ALCHEM ALUMINUM, INC., as an Assignor

ALCHEM ALUMINUM SHELBYVILLE

INC., as an Assignor

ALERIS, INC., as an Assignor

ALERIS OHIO MANAGEMENT, INC.,

as an Assignor

ALSCO HOLDINGS, INC.,

as an Assignor

ALSCO METALS CORPORATION,

as an Assignor

ALUMITECH OF CLEVELAND, INC.,

as an Assignor

ALUMITECH OF WABASH, INC.,

as an Assignor

ALUMITECH OF WEST VIRGINIA, INC.,

as an Assignor

ALUMITECH, INC., as an Assignor

AWT PROPERTIES, INC., as an Assignor

CA LEWISPORT, LLC, as an Assignor

CI HOLDINGS, LLC, as an Assignor

COMMONWEALTH ALUMINUM

CONCAST, INC., as an Assignor

COMMONWEALTH ALUMINUM

LEWISPORT, LLC, as an Assignor

COMMONWEALTH ALUMINUM METALS,

LLC, as an Assignor

COMMONWEALTH ALUMINUM SALES

CORPORATION, as an Assignor

COMMONWEALTH ALUMINUM TUBE,

ENTERPRISES, LLC, as an Assignor

COMMONWEALTH ALUMINUM, LLC,

as an Assignor

COMMONWEALTH FINANCING CORP.,

as an Assignor

COMMONWEALTH INDUSTRIES, INC.,

as an Assignor

ETS SCHAEFER CORPORATION,

as an Assignor

GULF REDUCTION CORPORATION,

as an Assignor

IMCO INTERNATIONAL, INC.,as an

Assignor

IMCO INVESTMENT COMPANY,

as an Assignor

IMCO RECYCLING OF CALIFORNIA, INC.,

as an Assignor

IMCO RECYCLING OF IDAHO INC.,

as an Assignor

IMCO RECYCLING OF ILLINOIS INC.,

as an Assignor

IMCO RECYCLING OF INDIANA INC.,

as an Assignor

IMCO RECYCLING OF MICHIGAN L.L.C.,

as an Assignor

IMCO RECYCLING OF OHIO INC.,

as an Assignor

IMCO RECYCLING OF UTAH INC.,

as an Assignor

IMCO RECYCLING SERVICES COMPANY,

as an Assignor

IMSAMET, INC., as an Assignor

ALERIS BLANKING AND RIM PRODUCTS,

INC. (f/k/a INDIANA ALUMINUM INC.),

as an Assignor

INTERAMERICAN ZINC, INC., as an

Assignor

METALCHEM, INC., as an Assignor

MIDWEST ZINC CORPORATION,

as an Assignor

ROCK CREEK ALUMINUM, INC.,

as an Assignor

SILVER FOX HOLDING COMPANY,

as an Assignor

U.S. ZINC CORPORATION,

as an Assignor

U.S. ZINC EXPORT CORPORATION,

as an Assignor

WESTERN ZINC CORPORATION,

as an Assignor

By:	/s/  Michael D. Fridey
	Name:	Michael D. Fridey
	Title:	Director

IMCO INDIANA PARTNERSHIP L.P.,
By: IMCO International, Inc. its General
Partner,
as an Assignor
By:	/s/  Michael D. Fridey
	Name:	Michael D. Fridey
	Title:	President

IMCO MANAGEMENT PARTNERSHIP, L.P.,
By: Aleris International, Inc. its General
Partner,
as an Assignor
By:	/s/  Michael D. Fridey
	Name:	Michael D. Fridey
	Title:	Executive Vice President and  Chief Financial Officer

CORUS ALUMINUM CORP., as an Assignor
HOOGOVENS ALUMINUM EUROPE INC.,
as an Assignor
By:	/s/  Michael D. Fridey
	Name:	Michael D. Fridey
	Title:	Director

Accepted and Agreed to:

DEUTSCHE BANK AG NEW YORK BRANCH,
As Collateral Agent
By:	/s/ Carin Keegan
Name:  Carin Keegan
Title:    Vice President

By:	/s/ Scottye Lindsey
Name:    Scottye Lindsey

 Title:     Director

Accepted and Agreed to:

DEUTSCHE BANK AG NEW YORK BRANCH,
As Administrative Agent
By:	/s/ Carin Keegan
Name:  Carin Keegan
Title:    Vice President

By:	/s/ Scottye Lindsey
Name:    Scottye Lindsey

 Title:     Director

EX-10.5

Exhibit 10.5

EXECUTION COPY

AMENDED AND RESTATED U.S. PLEDGE AGREEMENT

AMENDED AND RESTATED U.S. PLEDGE AGREEMENT, dated as of August 1, 2006 and amended and restated as of December 19, 2006 (as the same may be amended, restated, modified and/or supplemented from time to time, this “Agreement”) among each of the undersigned pledgors (each, a “Pledgor” and, together with any other entity that becomes a pledgor hereunder pursuant to Section 30 hereof, the “Pledgors”) and DEUTSCHE BANK AG NEW YORK BRANCH., as collateral agent (together with any successor collateral agent, the “Pledgee”), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.

WITNE SSETH:

WHEREAS, Aurora Acquisition Merger Sub, Inc., Aleris International, Inc., a Delaware corporation (“Aleris”), each Subsidiary of Aleris party thereto from time to time, the lenders party thereto from time to time, (the “Lenders”), Deutsche Bank AG New York Branch, as administrative agent (together with any successor administrative agent, the “Administrative Agent”), and Deutsche Bank AG, Canada Branch, as Canadian administrative agent (together with any successor Canadian administrative agent, the “Canadian Administrative Agent”) (the Lenders, each Issuing Lender, the Administrative Agent, the Canadian Administrative Agent and the Collateral Agent are herein called the “Lender Creditors”) have entered into an Amended and Restated Credit Agreement, dated as of August 1, 2006 and amended and restated as of the date hereof, providing for the making and continuation of Loans to the Borrowers and the issuance of, and participation in, Letters of Credit for the account of the Borrowers, all as contemplated therein (as used herein, the term “Credit Agreement” means the Amended and Restated Credit Agreement described above in this paragraph, as the same may be amended, modified, extended, renewed, replaced, restated, supplemented or refinanced from time to time, and including any agreement extending the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any portion of, the indebtedness under such agreement or any successor agreement, whether or not with the same agent, trustee, representative, lenders or holders; provided that, with respect to any agreement providing for the refinancing or replacement of indebtedness under the Credit Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder if (i) either (A) all obligations under the Credit Agreement being refinanced or replaced shall be paid in full at the time of such refinancing or replacement, and all commitments and letters of credit issued pursuant to the refinanced or replaced Credit Agreement shall have terminated in accordance with their terms or, with respect to certain Letters of Credit, been continued, with the consent of the respective issuer thereof, under such refinancing or replacement indebtedness or (B) the Required Lenders shall have consented in writing to the refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit Agreement, and (ii) a notice to the effect that the refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall be delivered by Aleris to the Collateral Agent);

WHEREAS, each Borrower and/or one or more of its Subsidiaries may at any time and from time to time enter into one or more Secured Hedging Agreements with one or more Persons other than the Borrowers or their Subsidiaries (the “Other Creditors”);

WHEREAS, each Borrower, one or more of their respective Subsidiaries and any bank (and/or one or more of its banking affiliates) reasonably acceptable to the Administrative Agent, in each case designated to the Administrative Agent in writing by Aleris as a provider of Treasury Services (as defined below), (collectively, the “Treasury Service Creditors” and, together with the Lender Creditors and the Other Creditors, the “Secured Creditors”) in the future may enter into, credit arrangements providing for treasury, depositary or cash management services (including without limitation, overnight overdraft services) to Aleris and such Subsidiaries by the Treasury Service Creditors, and automated clearinghouse transfers of funds to the Treasury Service Creditors, in each case pursuant to uncommitted lines of credit (collectively, “Treasury Services,” and with any written agreement evidencing such credit arrangements (to the extent expressly stated therein that the liabilities and indebtedness thereunder are “Obligations” for the purposes of this Agreement), as amended, modified, supplemented, replaced or refinanced from time to time, herein called a “Treasury Services Agreement”);

WHEREAS, pursuant to the U.S. Borrower Guaranty, each of the U.S. Borrowers has guaranteed to the Secured Creditors the payment when due of all of its Relevant Guaranteed Obligations as described therein;

WHEREAS, pursuant to the U.S. Subsidiaries Guaranty, each U.S. Subsidiary Guarantor has jointly and severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations (as defined in the U.S. Subsidiaries Guaranty);

WHEREAS, the Intercreditor Agreement governs the relative rights and priorities of the Secured Creditors and the Term Secured Parties in respect of the Term Priority Collateral and the ABL Priority Collateral;

WHEREAS, it is a condition precedent to (i) the making of Loans to the Borrowers, and the issuance, and participation in, Letters of Credit for the respective accounts of the Borrowers under the Credit Agreement, (ii) the Other Creditors entering into Secured Hedging Agreements and (iii) the maintenance and/or extension of the Treasury Services by Treasury Service Creditors that each Pledgor shall have executed and delivered to the Pledgee this Agreement;

WHEREAS, each Pledgor has obtained and will continue to obtain benefits from the incurrence of Loans by the Borrowers and the issuance of, and participation in, Letters of Credit for the respective accounts of the Borrowers under the Credit Agreement and the entering into by the Borrowers and/or one or more of their respective Subsidiaries of Secured Hedging Agreements and, accordingly each Pledgor, desires to execute this Agreement in order to (i) satisfy the condition described in the preceding paragraph and (ii) to induce (x) the Lenders to make Loans to the Borrowers and issue, and/or participate in, Letters of Credit for the respective accounts of the Borrowers and the Other Creditors to enter into Secured Hedging Agreements with the Borrowers and/or one or more of their respective Subsidiaries;

NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby makes the following representations and warranties to the Pledgee for the benefit of the Secured Creditors and hereby covenants and agrees with the Pledgee for the benefit of the Secured Creditors as follows:

1.SECURITY FOR OBLIGATIONS. Subject to the terms of the Intercreditor Agreement with respect to rights and remedies between the Collateral Agent and the Term Collateral Agent, this Agreement is made by each Pledgor for the benefit of the Secured Creditors to secure:

(i)the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, unpaid principal (or Face Amount, as applicable), premium, interest (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor or any Subsidiary thereof at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and reimbursement obligations under Letters of Credit, fees, costs and indemnities) of such Pledgor owing to the Secured Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Credit Documents to which such Pledgor is a party (including, in the event such Pledgor is a Guarantor, all such obligations, liabilities and indebtedness of such Pledgor under its Guaranty) and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations, liabilities and indebtedness under this clause (i), except to the extent consisting of obligations, liabilities or indebtedness with respect to Secured Hedging Agreements or Treasury Services Agreements, entitled to the benefits of this Agreement being herein, collectively, the “Credit Document Obligate”);

(ii)the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Pledgor to the Other Creditors now existing or hereafter incurred under, arising out of or in connection with any Secured Hedging Agreement, whether such Secured Hedging Agreement is now in existence or hereinafter arising (including, in the case of a Pledgor that is a Guarantor, all obligations, liabilities and indebtedness of such Pledgor under its Guaranty in respect of the Secured Hedging Agreements), and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained in each such Interest Rate Protection Agreement (all such obligations, liabilities and indebtedness under this clause (ii) being herein collectively called the “Other Obligations”);

(iii)the full and prompt payment when due (whether at the stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding at the rate provided for in the respective documentation, whether or not such interest is allowed in any such proceeding) owing by Aleris or any of its Subsidiaries to each Treasury Service Creditor with respect to Treasury Services, whether now in existence or hereafter arising in each case under any Treasury Services Agreement (all such obligations, liabilities and indebtedness described in this clause (iii) being herein collectively called the “Treasury Service Obligations”);

(iv)any and all sums advanced by the Pledgee in order to preserve the Collateral (as hereinafter defined) or preserve its security interest in the Collateral;

(v)in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of such Pledgor referred to in clauses (i) through (iii) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Pledgee of its rights hereunder, together with reasonable attorneys’ fees and court costs;

(vi)all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 11 of this Agreement; and

(vii)all amounts owing to any Agent or any of its affiliates pursuant to any of the Credit Documents in its capacity as such.

All such obligations, liabilities, indebtedness, sums and expenses set forth in clauses (i) through (vii) of this Section 1 being herein collectively called the “Obligations”, it being acknowledged and agreed that the “Obligations” shall, subject to the immediately succeeding sentence, include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.

NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIENS AND SECURITY INTERESTS GRANTED TO THE ABL COLLATERAL AGENT PURSUANT TO THIS AGREEMENT IN ANY TERM PRIORITY COLLATERAL AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE ABL COLLATERAL AGENT WITH RESPECT TO ANY TERM PRIORITY COLLATERAL HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE AMENDED AND RESTATED INTERCREDITOR AGREEMENT, DATED AS OF AUGUST 1, 2006 AND AMENDED AND RESTATED AS OF DECEMBER 19, 2006 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”), AMONG AURORA ACQUISITION MERGER SUB, INC., ALERIS INTERNATIONAL, INC., A DELAWARE CORPORATION (THE “COMPANY”), THE OTHER GRANTORS FROM TIME TO TIME PARTY THERETO, DEUTSCHE BANK AG NEW YORK BRANCH, (“DBNY”) AS ABL COLLATERAL AGENT AND TERM COLLATERAL AGENT, AND CERTAIN OTHER PERSONS PARTY OR THAT MAY BECOME PARTY THERETO FROM TIME TO TIME. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.

2.DEFINITIONS. (a) Unless otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement shall be used herein as therein defined. Reference to singular terms shall include the plural and vice versa.

(b)The following capitalized terms used herein shall have the definitions specified below:

“ABL Priority Collateral” shall have the meaning set forth in the Intercreditor Agreement.

“Administrative Agent” shall have the meaning set forth in the recitals hereto.

“Adverse Claim” shall have the meaning given such term in Section 8-102(a)(1) of the UCC.

“Agreement” shall have the meaning set forth in the recitals hereto.

 “Aleris”shall have the meaning set forth in the recitals hereto.

“Borrower” and “Borrowers” shall have the meaning set forth in the recitals hereto.

“Canadian Borrower” shall have the meaning set forth in the recitals hereto.

“Certificated Security” shall have the meaning given such term in Section 8-102(a)(4) of the UCC.

“Clearing Corporation” shall have the meaning given such term in Section 8-102(a)(5) of the UCC.

“Collateral” shall have the meaning set forth in Section 3.1 hereof.

“Collateral Accounts” shall mean any and all accounts established and maintained by the Pledgee in the name of any Pledgor to which Collateral may be credited.

“Credit Agreement” shall have the meaning set forth in the recitals hereto.

“Credit Document Obligations” shall have the meaning set forth in Section 1 hereof.

“Credit Documents” shall have the meaning provided in the Credit Agreement and shall include any documentation executed and delivered in connection with any replacement or refinancing of the Credit Agreement.

“Discharge of Term Obligations” shall have the meaning provided in the Intercreditor Agreement.

“Domestic Corporation” shall have the meaning set forth in the definition of “Stock”.

“Event of Default” shall mean (i) at any time when any Credit Document Obligations or Letters of Credit are outstanding or any Commitments under the Credit Agreement exist, any Event of Default under, and as defined in the Credit Agreement and (ii) at any time after all of the Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated and no further Commitments and Letters of Credit may be provided thereunder, any payment default on any of the Obligations after the expiration of any applicable grace period.

“Excess Foreign Corporation Voting Equity Interests” shall have the meaning provided in Section 3.1.

“Financial Asset” shall have the meaning given such term in Section 8-102(a)(9) of the UCC.

“Foreign Corporation” shall have the meaning set forth in the definition of “Stock”.

“Indemnitees” shall have the meaning set forth in Section 11 hereof.

“Instrument” shall have the meaning given such term in Section 9-102(a)(47) of the UCC.

“Investment Property” shall have the meaning given such term in Section 9-102(a)(49) of the UCC.

“Lender Creditors” shall have the meaning set forth in the recitals hereto.

“Lenders” shall have the meaning set forth in the recitals hereto.

“Limited Liability Company Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned by any Pledgor and represented by any Limited Liability Company Interest.

“Limited Liability Company Interests” shall mean the entire limited liability company interest at any time owned by any Pledgor in any limited liability company.

“Location” of any Pledgor shall mean such Pledgor’s “location” as determined pursuant to Section 9-307 of the UCC.

“Non-Voting Equity Interests” shall mean all Equity Interests of any Person which are not Voting Equity Interests.

“Noticed Event of Default” shall mean (i) an Event of Default under Section 11.01 or 11.05 of the Credit Agreement and (ii) any other Event of Default in respect of which the Pledgee has given Aleris notice that such Event of Default constitutes a “Noticed Event of Default”.

“Notes” shall mean (x) all intercompany notes at any time issued to each Pledgor and (y) all other promissory notes from time to time issued to, or held by, each Pledgor.

“Obligations” shall have the meaning set forth in Section 1 hereof.

“Other Creditors” shall have the meaning set forth in the recitals hereto.

“Other Obligations” shall have the meaning set forth in the recitals hereto.

“Partnership Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned by any Pledgor or represented by any Partnership Interest.

“Partnership Interest” shall mean the entire general partnership interest or limited partnership interest at any time owned by any Pledgor in any general partnership or limited partnership.

“Pledged Notes” shall mean all Notes at any time pledged or required to be pledged hereunder.

“Pledgee” shall have the meaning set forth in the first paragraph hereof.

“Pledgor” shall have the meaning set forth in the first paragraph hereof.

“Proceeds” shall have the meaning given such term in Section 9-102(a)(64) of the UCC.

“Registered Organization” shall have the meaning given such term in Section 9-102(a)(70) of the UCC.

“Required Secured Creditors” shall have the meaning provided in the U.S. Security Agreement.

“Secured Creditors” shall have the meaning set forth in the recitals hereto.

“Secured Debt Agreements” shall mean and include (w) this Agreement, (x) the other Credit Documents, (y) the Secured Hedging Agreements entered into with any Other Creditors and (z) the Treasury Services Agreements entered into with any Treasury Services Creditors.

“Secured Hedging Agreement” shall mean each Interest Rate Protection Agreement and/or Other Hedging Agreements provided that (i) such Interest Rate Protection Agreement and/or Other Hedging Agreement expressly states that (x) it constitutes a “Secured Hedging Agreement” for purposes of the Credit Agreement and the other Credit Documents and (y) does not constitute a “Secured Hedging Agreement” for purposes of the Term Security Documents or any guaranties relating to the Term Loan Agreement, (ii) Aleris and the other parties thereto shall have delivered to the Collateral Agent a written notice specifying that such Interest Rate Protection Agreement and/or Other Hedging Agreement (x) constitutes a “Secured Hedging Agreement” for purposes of the Credit Agreement and the other Credit Documents, (y) does not constitute a “Secured Hedging Agreement” for purposes of the Term Security Documents or any guaranties relating to the Term Loan Agreement and (z) in the case of Aleris, that such Interest Rate Protection Agreement and/or Other Hedging Agreement and the obligations of Aleris and its Subsidiaries thereunder have been, and will be, incurred in compliance with the Credit Agreement, (iii) on the effective date of such Interest Rate Protection Agreement and/or Other Hedging Agreement and from time to time thereafter, at the request of the Collateral Agent, Aleris and the other parties thereto shall have notified the Administrative Agent in writing of the aggregate amount of exposure under such Interest Rate Protection Agreement and/or Other Hedging Agreement and (iv) such Other Creditor, if it is not a Lender or an affiliate thereof (even if such Lender subsequently ceases to be a Lender under the Credit Agreement for any reason), has entered into an intercreditor agreement with respect to the relevant Interest Rate Protection Agreement or Other Hedging Agreement on terms reasonably satisfactory to the Collateral Agent.

“Securities Account” shall have the meaning given such term in Section 8-501(a) of the UCC.

“Securities Act” shall mean the Securities Act of 1933, as amended, as in effect from time to time.

“Securities Intermediary” shall have the meaning given such term in Section 8-102(14) of the UCC.

“Security” and “Securities” shall have the meaning given such term in Section 8-102(a)(15) of the UCC and shall in any event also include all Stock.

“Security Entitlement” shall have the meaning given such term in Section 8-102(a)(17) of the UCC.

“Stock” shall mean (x) with respect to corporations incorporated under the laws of the United States or any State or territory thereof or the District of Columbia (each, a “Domestic Corporation”), all of the issued and outstanding shares of capital stock of any Domestic Corporation at any time owned by any Pledgor and (y) with respect to corporations which are not Domestic Corporations (each, a “Foreign Corporation”), all of the issued and outstanding shares of capital stock or other Equity Interests of any Foreign Corporation at any time owned by any Pledgor.

“Termination Date” shall have the meaning set forth in Section 20 hereof.

“Term Collateral Agent” shall have the meaning set forth in the Intercreditor Agreement.

“Term Documents” shall have the meaning set forth in the Intercreditor Agreement.

“Term Obligations” shall have the meaning set forth in the Intercreditor Agreement.

“Term Pledge Agreement” shall have the meaning set forth in the Intercreditor Agreement.

“Term Secured Parties” shall have the meaning set forth in the Intercreditor Agreement.

“Transmitting Utility” has the meaning given such term in Section 9-102(a)(80) of the UCC.

“Term Priority Collateral” shall have the meaning set forth in the Intercreditor Agreement.

“TL Credit Document Obligations Termination Date” shall mean the date on which the Discharge of Term Obligations shall have occurred.

“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York from time to time; provided that all references herein to specific Sections or subsections of the UCC are references to such Sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of New York on the Effective Date; provided, further, that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or the priority of the Liens of the Pledgee in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“Uncertificated Security” shall have the meaning given such term in Section 8-102(a)(18) of the UCC.

“U.S. Borrower” shall have the meaning set forth in the recitals hereto.

“Voting Equity Interests” of any Person shall mean all classes of Equity Interests of such Person entitled to vote.

3.PLEDGE OF SECURITIES, ETC.

3.1Pledge. (i) To secure the Obligations now or hereafter owed or to be performed by such Pledgor (but subject to clause (x) of the proviso at the end of this Section 3.1 in the case of Voting Equity Interests of Foreign Corporations pledged hereunder), each Pledgor does hereby grant and pledge to the Pledgee for the benefit of the Secured Creditors, and does hereby create a continuing security interest (subject to those Liens permitted to exist with respect to the Collateral pursuant to the terms of all Secured Debt Agreements then in effect) in favor of the Pledgee for the benefit of the Secured Creditors in, all of its right, title and interest in and to the following, whether now existing or hereafter from time to time acquired (collectively, the “Collateral”):

(a)each of the Collateral Accounts (to the extent a security interest therein is not created pursuant to the U.S. Security Agreement), including any and all assets of whatever type or kind deposited by such Pledgor in any such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, monies, checks, drafts, Instruments, Securities or interests therein of any type or nature deposited or required by the Credit Agreement or any other Secured Debt Agreement to be deposited in such Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing;

(b)all Securities owned or held by such Pledgor from time to time and all options and warrants owned by such Pledgor from time to time to purchase Securities;

(c)all Notes owned or held by such Pledgor from time to time;

(d)all Limited Liability Company Interests owned by such Pledgor from time to time and all of its right, title and interest in each limited liability company to which each such Limited Liability Company Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Limited Liability Company Interests and applicable law:

(A)all its capital therein and its interest in all profits, income, surpluses, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests;

(B)all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;

(C)all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests;

(D)all present and future claims, if any, of such Pledgor against any such limited liability company for monies loaned or advanced, for services rendered or otherwise;

(E)all of such Pledgor’s rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any such limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any such Pledgor in respect of such Limited Liability Company Interests and any such limited liability company, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and

(F)all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;

(e)all Partnership Interests owned by such Pledgor from time to time and all of its right, title and interest in each partnership to which each such Partnership Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Partnership Interests and applicable law:

(A)all its capital therein and its interest in all profits, income, surpluses, losses, Partnership Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Partnership Interests;

(B)all other payments due or to become due to such Pledgor in respect of Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;

(C)all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests;

(D)all present and future claims, if any, of such Pledgor against any such partnership for monies loaned or advanced, for services rendered or otherwise;

(E)all of such Pledgor’s rights under any partnership agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Partnership Interests and any such partnership, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and

(F)all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;

(f)all Financial Assets and Investment Property owned by such Pledgor from time to time;

(g)all Security Entitlements owned by such Pledgor from time to time in any and all of the foregoing; and

(h)all Proceeds of any and all of the foregoing;

provided that (x) no Voting Equity Interests (which shall include, for this purpose, the Convertible Preferred Equity Certificates issued by Aleris Luxembourg S.à.r.l.) of any Foreign Corporation which represents more than 65% of the total combined voting power of all classes of Voting Equity Interests of the respective Foreign Corporation (with all Voting Equity Interests of the respective Foreign Corporation in excess of said 65% limit being herein called “Excess Foreign Corporation Equity Interests”), shall secure any direct Obligations of any U.S. Borrower or any of its Domestic Subsidiaries (or guarantees of such Obligations by the respective Pledgor) and such Excess Foreign Corporation Equity Interests shall secure Obligations of the respective Pledgor only as a guarantor of the Obligations of the Canadian Borrowers, the European Borrower and their Subsidiaries, (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each Foreign Corporation at any time and from time to time acquired by such Pledgor, which Non-Voting Equity Interests shall not be subject to the limitations described in preceding clause (x) and (z) notwithstanding anything to the contrary contained in this Section 3.1 or elsewhere in this Agreement, each Pledgor and the Pledgee (on behalf of the Secured Creditors) acknowledges and agrees that:

(i)the security interest granted pursuant to this Agreement (including pursuant to this Section 3.1) to the Pledgee for the benefit of the Secured Creditors (A) in the ABL Priority Collateral, shall be a First Priority Lien and (B) in the TL Priority Collateral, shall be a Second Priority Lien in the TL Priority Collateral fully junior, subordinated and subject to the security interest granted to the Term Collateral Agent for the benefit of the Term Secured Parties in the TL Priority Collateral on the terms and conditions set forth in the Term Documents and the Intercreditor Agreement and all other rights and benefits afforded hereunder to the Secured Creditors with respect to the TL Priority Collateral are expressly subject to the terms and conditions of the Intercreditor Agreement; and

(ii) the Secured Creditors’ security interests in the Collateral constitute security interests separate and apart (and of a different class and claim) from the Term Secured Parties’ security interests in the Collateral.

3.2Procedures. (a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by such Pledgor) be pledged pursuant to Section 3.1 of this Agreement and, in addition thereto (but subject to the terms of the Intercreditor Agreement), such Pledgor shall (to the extent provided below and not inconsistent with the terms of the Intercreditor Agreement) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 days after it obtains such Collateral) for the benefit of the Pledgee and the other Secured Creditors:

(i)with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall physically deliver such Certificated Security to the Pledgee, endorsed to the Pledgee or endorsed in blank;

(ii)with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall cause the issuer of such Uncertificated Security to duly authorize, execute, and deliver to the Pledgee, an agreement for the benefit of the Pledgee and the other Secured Creditors substantially in the form of Annex G hereto (appropriately completed to the satisfaction of the Pledgee and with such modifications, if any, as shall be satisfactory to the Pledgee) pursuant to which such issuer agrees to comply with any and all instructions originated by the Pledgee without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security (and any Partnership Interests and Limited Liability Company Interests issued by such issuer) originated by any other Person other than a court of competent jurisdiction;

(iii)with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), such Pledgor shall promptly notify the Pledgee thereof and shall promptly take (x) all actions required (i) to comply with the applicable rules of such Clearing Corporation or Securities Intermediary and (ii) to perfect the security interest of the Pledgee under applicable law (including, in any event, under Sections 9-314(a), (b) and (c), 9-106 and 8-106(d) of the UCC) and (y) such other actions as the Pledgee deems necessary or desirable to effect the foregoing;

(iv)with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), (1) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate and is a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate or is not a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(ii) hereof;

(v)with respect to any intercompany Note or any other Note evidencing a principal amount in excess of $1,000,000, physical delivery of such Note to the Pledgee, endorsed in blank, or, at the request of the Pledgee, endorsed to the Pledgee; and

(vi)with respect to cash proceeds from any of the Collateral described in Section 3.1 hereof which are required to be delivered to an held by the Collateral Agent pursuant to Section 6 hereof, (i) establishment by the Pledgee of a cash account in the name of such Pledgor over which the Pledgee shall (to the extent not inconsistent with the Intercreditor Agreement) have “control” within the meaning of the UCC and at any time any Event of Default is in existence no withdrawals or transfers may be made by any Person except with the prior written consent of the Pledgee (subject to the terms of the Intercreditor Agreement) and (ii) deposit of such cash in such cash account.

(b)In addition to the actions required to be taken pursuant to Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Collateral:

(i)with respect to all Collateral of such Pledgor whereby or with respect to which the Pledgee may obtain “control” thereof within the meaning of Section 8-106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of New York), such Pledgor shall take all actions (to the extent not inconsistent with the Intercreditor Agreement) as may be reasonably requested from time to time by the Pledgee so that “control” of such Collateral is obtained and at all times held by the Pledgee; and

(ii)each Pledgor shall from time to time cause appropriate financing statements (on appropriate forms) under the Uniform Commercial Code as in effect in the various relevant States, covering all Collateral hereunder (with the form of such financing statements to be reasonably satisfactory to the Pledgee), to be filed in the relevant filing offices so that at all times the Pledgee’s security interest in all Investment Property and other Collateral which can be perfected by the filing of such financing statements (in each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States, including, without limitation, Section 9-312(a) of the UCC) is so perfected.

3.3Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase, stock dividend, distribution or otherwise) any additional Collateral at any time or from time to time after the date hereof, such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, such Pledgor will, to the extent not inconsistent with the Intercreditor Agreement, thereafter take (or cause to be taken) all action (as promptly as practicable and, in any event, within 10 days after it obtains such Collateral) with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will to the extent not inconsistent with the terms of the Intercreditor Agreement, promptly thereafter deliver to the Pledgee (i) a certificate executed by an authorized officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Pledgee (for the benefit of the Secured Creditors) hereunder and (ii) supplements to Annexes A through F hereto as are necessary to cause such Annexes to be complete and accurate at such time. Without limiting the foregoing, (A) each Pledgor shall be required to pledge hereunder the Equity Interests of any Foreign Corporation at any time and from time to time after the date hereof acquired by such Pledgor, provided that (x) any such pledge of Voting Equity Interests of any Foreign Corporation shall be subject to the provisions of clause (x) of the proviso to Section 3.1 hereof and (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each Foreign Corporation at any time and from time to time acquired by such Pledgor and (B) each Pledgor shall be required to pledge hereunder any Notes at any time and from time to time after the date hereof acquired by such Pledgor, subject to the threshold described in Section 3.2(a)(v) above for the delivery of such Notes, providedthat any such pledge or Note shall be subject to the provisions of clause (z) of the proviso to Section 3.1 hereof.

3.4Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required in connection with the pledge of such Collateral.

3.5Certain Representations and Warranties Regarding the Collateral. Each Pledgor represents and warrants that as of the Effective Date: (i) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed on Schedule VIII-A to the Credit Agreement hereto; (ii) the Stock (and any warrants or options to purchase Stock) held by such Pledgor consists of the number and type of shares of the stock (or warrants or options to purchase any stock) of the corporations as described in Annex B hereto; (iii) such Stock referenced in clause (ii) of this paragraph constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex B hereto; (iv) the Pledged Notes held by such Pledgor consist of the promissory notes described in Annex C hereto where such Pledgor is listed as the lender; (v) the Limited Liability Company Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex D hereto; (vi) each such Limited Liability Company Interest referenced in clause (v) of this paragraph constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Annex D hereto; (vii) the Partnership Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex E hereto; (viii) each such Partnership Interest referenced in clause (vii) of this paragraph constitutes that percentage or portion of the entire partnership interest of the Partnership as set forth in Annex E hereto; (ix) the exact address of each chief executive office of such Pledgor is listed on Annex F hereto; (x) the Pledgor has complied with the respective procedure set forth in Section 3.2(a) hereof with respect to each item of Collateral described in Annexes B through E hereto; and (xi) on the date hereof, such Pledgor owns no other Securities, Stock, Pledged Notes, Limited Liability Company Interests or Partnership Interests.

3.6Overriding Provisions with respect to TL Priority Collateral. Notwithstanding anything to the contrary contained above in this Section 3, or elsewhere in this Agreement or any other Security Document, to the extent the provisions of this Agreement (or any other Security Documents) require the delivery of, or control over, TL Priority Collateral to be granted to the Pledgee at any time prior to the TL Credit Documents Obligations Termination Date, then delivery of such TL Priority Collateral (or control with respect thereto) shall instead be granted to the Term Collateral Agent, to be held in accordance with the Term Documents and the Intercreditor Agreement. Furthermore, at all times prior to the TL Credit Document Obligations Termination Date, the Collateral Agent is authorized by the parties hereto to effect transfers of TL Priority Collateral at any time in its possession (and any “control” or similar agreements with respect to TL Priority Collateral) to the Term Collateral Agent.

4.APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral, which may be held (in the discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee.

5.VOTING, ETC., WHILE NO NOTICED EVENT OF DEFAULT. Unless and until there shall have occurred and be continuing any Noticed Event of Default, each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; provided that, in each case, no vote shall be cast or any consent, waiver or ratification given or any action taken or omitted to be taken which would violate or result in a breach of any covenant contained in the Intercreditor Agreement or any Secured Debt Agreement, or which could reasonably be expected to have the effect of materially impairing the value of the Collateral or any part thereof or the position or interests of the Pledgee or any other Secured Creditor in the Collateral, unless permitted by the terms of the Secured Debt Agreements. All such rights of each Pledgor to vote and to give consents, waivers and ratifications shall cease in case a Noticed Event of Default has occurred and is continuing, and Section 7 hereof shall become applicable.

6.DIVIDENDS AND OTHER DISTRIBUTIONS. Subject to the terms of the Intercreditor Agreement, unless and until there shall have occurred and be continuing a Noticed Event of Default, all cash dividends, cash distributions, cash Proceeds and other cash amounts payable in respect of the Collateral shall be paid to the respective Pledgor. Subject to the terms of the Intercreditor Agreement, the Pledgee shall be entitled to receive directly, and to retain as part of the Collateral:

(i)all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (excluding cash dividends) paid or distributed by way of dividend or otherwise in respect of the Collateral;

(ii)all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (other than cash) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement;

(iii)all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (excluding cash) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate or other reorganization; and

(iv)all cash distributions in respect of the Collateral after a Noticed Event of Default.

Except as set forth in the Intercreditor Agreement, nothing contained in this Section 6 shall limit or restrict in any way the Pledgee’s right to receive the proceeds of the Collateral in any form in accordance with Section 3 of this Agreement. To the extent not inconsistent with the terms of the Intercreditor Agreement, all dividends, distributions or other payments which are received by any Pledgor contrary to the provisions of this Section 6 or Section 7 hereof shall be received in trust for the benefit of the Pledgee, shall be segregated from other property or funds of such Pledgor and shall be forthwith paid over to the Pledgee as Collateral in the same form as so received (with any necessary endorsement).

7.REMEDIES IN CASE OF A NOTICED EVENT OF DEFAULT. (a) If there shall have occurred and be continuing a Noticed Event of Default, then and in every such case, to the extent not inconsistent with the terms of the Intercreditor Agreement, the Pledgee shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement, any other Secured Debt Agreement or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Pledgee shall be entitled to exercise all the rights and remedies of a secured party under the UCC as in effect in any relevant jurisdiction and also shall be entitled, without limitation, to exercise the following rights, which each Pledgor hereby agrees to be commercially reasonable:

(i)to receive all amounts payable in respect of the Collateral otherwise payable under Section 6 hereof to the respective Pledgor;

(ii)to transfer all or any part of the Collateral into the Pledgee’s name or the name of its nominee or nominees;

(iii)to accelerate any Pledged Note which may be accelerated in accordance with its terms, and take any other lawful action to collect upon any Pledged Note (including, without limitation, to make any demand for payment thereon);

                                (iv)to vote (and exercise all rights and powers in respect of voting) all or any part of the Collateral (whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with full power of substitution to do so);

(v)at any time and from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or, notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise purchase or dispose (all of which are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price or prices and on such terms as the Pledgee in its absolute discretion may determine, provided at least 10 days’ written notice of the time and place of any such sale shall be given to the respective Pledgor. The Pledgee shall not be obligated to make any such sale of Collateral regardless of whether any such notice of sale has theretofore been given. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security or the Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Pledgee on behalf of the Secured Creditors may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Pledgee nor any other Secured Creditor shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto; and

(vi)to set off any and all Collateral against any and all Obligations, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Obligations.

(b)If there shall have occurred and be continuing a Noticed Event of Default, then and in every such case, the Pledgee shall be entitled to vote (and exercise all rights and powers in respect of voting) all or any part of the Collateral (whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with full power of substitution to do so).

8.REMEDIES, CUMULATIVE, ETC. Subject to the terms of (and to the extent not inconsistent with) the Intercreditor Agreement, each and every right, power and remedy of the Pledgee provided for in this Agreement or in any other Secured Debt Agreement, or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other Secured Creditor of any one or more of the rights, powers or remedies provided for in this Agreement or any other Secured Debt Agreement (including, without limitation, the Intercreditor Agreement) or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the part of the Pledgee or any other Secured Creditor to exercise any such right, power or remedy shall operate as a waiver thereof. No notice to or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Pledgee or any other Secured Creditor to any other or further action in any circumstances without notice or demand. The Secured Creditors agree that this Agreement may be enforced only by the action of the Pledgee, in each case, acting upon the instructions of the Required Secured Creditors, and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Pledgee for the benefit of the Secured Creditors upon the terms of this Agreement and the U.S. Security Agreement.

9.APPLICATION OF PROCEEDS. (a) Subject to the terms of the Intercreditor Agreement, all monies collected by the Pledgee upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies received by the Pledgee hereunder, shall be applied in the manner provided in the U.S. Security Agreement.

(b)It is understood and agreed that each Pledgor shall remain jointly and severally liable with respect to its Obligations to the extent of any deficiency between the amount of the proceeds of the Collateral pledged by it hereunder and the aggregate amount of such Obligations.

(c)It is understood and agreed by all parties hereto that the Pledgee shall have no liability for any determinations made by it in this Section 9 (including, without limitation, as to whether given Collateral constitutes TL Priority Collateral or ABL Priority Collateral), in each case except to the extent resulting from the gross negligence or willful misconduct of the Pledgee (as determined by a court of competent jurisdiction in a final and non-appealable decision). The parties also agree that the Pledgee may (but shall not be required to), at any time and in its sole discretion, and with no liability resulting therefrom, petition a court of competent jurisdiction regarding any application of Collateral in accordance with the requirements hereof and of the Intercreditor Agreement, and the Pledgee shall be entitled to wait for, and may conclusively rely on, any such determination.

10.PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Pledgee hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Pledgee or the officer making such sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Pledgee or such officer or be answerable in any way for the misapplication or nonapplication thereof.

11.INDEMNITY. Each Pledgor jointly and severally agrees (i) to indemnify, reimburse and hold harmless the Pledgee and each other Secured Creditor and their respective successors, assigns, employees, agents and affiliates (individually an “Indemnitee”, and collectively, the “Indemnitees”) from and against any and all obligations, damages, injuries, penalties, claims, demands, losses, judgments and liabilities (including, without limitation, liabilities for penalties) of whatsoever kind or nature, and (ii) to reimburse each Indemnitee for all reasonable costs, expenses and disbursements, including reasonable attorneys’ fees and expenses, in each case arising out of or resulting from this Agreement or the exercise by any Indemnitee of any right or remedy granted to it hereunder or under any other Secured Debt Agreement (but excluding any obligations, damages, injuries, penalties, claims, demands, losses, judgments and liabilities (including, without limitation, liabilities for penalties) or expenses of whatsoever kind or nature to the extent (x) incurred or arising by reason of gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision)) or (y) brought solely by an Affiliate of the Person to be indemnified); providedthat the Pledgors shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to and necessary or advisable special counsel and up to one local counsel in each applicable local jurisdiction) for all Indemnitees unless, in the written opinion of outside counsel reasonably satisfactory to the Pledgors and the Pledgee, representation of all such Indemnitees would be inappropriate due to the existence of an actual or potential conflict of interest. In no event shall the Pledgee hereunder be liable, in the absence of gross negligence or willful misconduct on its part (as determined by a court of competent jurisdiction in a final and non-appealable decision), for any matter or thing in connection with this Agreement other than to account for monies or other property actually received by it in accordance with the terms hereof. If and to the extent that the obligations of any Pledgor under this Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. The indemnity obligations of each Pledgor contained in this Section 11 shall continue in full force and effect notwithstanding the full payment of all the Notes issued under the Credit Agreement, the termination of all Secured Hedging Agreements, Treasury Services Agreements and Letters of Credit, and the payment of all other Obligations and notwithstanding the discharge thereof and the occurrence of the Termination Date.

12.PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a) Nothing herein shall be construed to make the Pledgee or any other Secured Creditor liable as a member of any limited liability company or as a partner of any partnership and neither the Pledgee nor any other Secured Creditor by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Pledgee shall become the absolute owner of Collateral consisting of a Limited Liability Company Interest or a Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Pledgee, any other Secured Creditor, any Pledgor and/or any other Person.

(b)Except as provided in the last sentence of paragraph (a) of this Section 12, the Pledgee, by accepting this Agreement, did not intend to become a member of any limited liability company or a partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor, any limited liability company, partnership and/or any other Person either before or after an Event of Default shall have occurred. The Pledgee shall have only those powers set forth herein and the Secured Creditors shall assume none of the duties, obligations or liabilities of a member of any limited liability company or as a partner of any partnership or any Pledgor except as provided in the last sentence of paragraph (a) of this Section 12.

(c)The Pledgee and the other Secured Creditors shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected.

(d)The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Pledgee or any other Secured Creditor to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral.

13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees that it will join with the Pledgee in executing and, at such Pledgor’s own expense, file and refile under the UCC or other applicable law such financing statements, continuation statements and other documents, in form reasonably acceptable to the Pledgee, in such offices as the Pledgee (acting on its own or on the instructions of the Required Secured Creditors) may reasonably deem necessary or appropriate and wherever required or permitted by law in order to perfect and preserve the Pledgee’s security interest in the Collateral hereunder and hereby authorizes the Pledgee to file financing statements and amendments thereto relative to all or any part of the Collateral (including, without limitation, financing statements which list the Collateral specifically and/or “all assets” as collateral) without the signature of such Pledgor where permitted by law, and agrees to do such further acts and things and to execute and deliver to the Pledgee such additional conveyances, assignments, agreements and instruments as the Pledgee may reasonably require or deem advisable to carry into effect the purposes of this Agreement or to further assure and confirm unto the Pledgee its rights, powers and remedies hereunder or thereunder.

(b)Each Pledgor hereby constitutes and appoints the Pledgee its true and lawful attorney-in-fact, irrevocably, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from time to time after the occurrence and during the continuance of a Noticed Event of Default, in the Pledgee’s discretion, to act, require, demand, receive and give acquittance for any and all monies and claims for monies due or to become due to such Pledgor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings and to execute any instrument which the Pledgee may deem necessary or advisable to accomplish the purposes of this Agreement, which appointment as attorney is coupled with an interest.

14.THE PLEDGEE AS COLLATERAL AGENT. Subject to the terms of the Intercreditor Agreement, the Pledgee will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood, acknowledged and agreed by each Secured Creditor that by accepting the benefits of this Agreement each such Secured Creditor acknowledges and agrees that the obligations of the Pledgee as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in Annex M to the Security Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Annex M to the Security Agreement, the terms of which shall be deemed incorporated herein by reference, mutatis mutandis, as fully as if the same were set forth herein and referencing this Agreement in its entirety.

15.TRANSFER BY THE PLEDGORS. Except as permitted (i) prior to the date all Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated, pursuant to the Credit Agreement, and (ii) thereafter, pursuant to the other Secured Debt Agreements, no Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein.

16.REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each Pledgor represents, warrants and covenants:

(i)it is the legal, beneficial and record owner of, and has good and marketable title to, all of its Collateral consisting of one or more Securities, Notes, Partnership Interests and Limited Liability Company Interests and that it has sufficient interest in all of its Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except the liens and security interests created by this Agreement or permitted under the Secured Debt Agreements);

(ii)it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement;

(iii)this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable against such Pledgor in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in equity or at law);

(iv)except to the extent already obtained or made and except for the filing of the UCC financing statements required to be filed on or about the date hereof in accordance with the U.S. Security Agreement, no consent of any other party (including, without limitation, any stockholder, partner, member or creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required to be obtained by such Pledgor in connection with (a) the execution, delivery or performance of this Agreement by such Pledgor, (b) the validity or enforceability of this Agreement against such Pledgor (except as set forth in clause (iii) above), (c) the perfection or enforceability of the Pledgee’s security interest in such Pledgor’s Collateral or (d) except for compliance with or as may be required by applicable securities laws, the exercise by the Pledgee of any of its rights or remedies provided herein;

(v)neither the execution, delivery or performance by such Pledgor of this Agreement, or any other Secured Debt Agreement to which it is a party, nor compliance by it with the terms and provisions hereof and thereof nor the consummation of the transactions contemplated therein: (i) will contravene in any material respect any provision of any material applicable law, statute, rule or regulation, or any applicable order, writ, injunction or decree of any court, arbitrator or governmental instrumentality, domestic or foreign, applicable to such Pledgor; (ii) will conflict or be inconsistent with or result in any breach of any of the material terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Security Documents) upon any of the properties or assets of such Pledgor or any of its Subsidiaries pursuant to the terms of any indenture, lease, mortgage, deed of trust, credit agreement, loan agreement or any other material agreement, contract or other instrument to which such Pledgor or any of its Subsidiaries is a party or is otherwise bound, or by which it or any of its properties or assets is bound or to which it may be subject; or (iii) will violate any provision of the certificate of incorporation, by-laws, certificate of partnership, partnership agreement, certificate of formation or limited liability company agreement (or equivalent organizational documents), as the case may be, of such Pledgor or any of its Subsidiaries;

(vi)all of such Pledgor’s Collateral (consisting of Securities, Limited Liability Company Interests and Partnership Interests) has been duly and validly issued, is fully paid and non-assessable and is subject to no options to purchase or similar rights;

(vii)to the knowledge of the Pledgor, each of such Pledgor’s Pledged Notes constitutes, or when executed by the obligor thereof will constitute, the legal, valid and binding obligation of such obligor, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in equity or at law);

(viii) the pledge, collateral assignment and delivery to the Pledgee of such Pledgor’s Collateral consisting of Certificated Securities and Pledged Notes pursuant to this Agreement creates a valid and perfected first priority security interest in such Certificated Securities and Pledged Notes, and the proceeds thereof, subject to no prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien or encumbrance on the property or assets of such Pledgor which would include the Securities and/or Pledged Notes (other than the liens and security interests permitted under the Secured Debt Agreements then in effect) and the Pledgee is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfect security interests in respect of such Collateral; and

(ix)“control” (as defined in Section 8-106 of the UCC) has been obtained by the Pledgee over all of such Pledgor’s Collateral consisting of Securities and/or Pledged Notes) with respect to which such “control” may be obtained pursuant to Section 8-106 of the UCC, except to the extent that the obligation of the applicable Pledgor to provide the Pledgee with “control” of such Collateral has not yet arisen under this Agreement; providedthat in the case of the Pledgee obtaining “control” over Collateral consisting of a Security Entitlement, such Pledgor shall have taken all steps in its control so that the Pledgee obtains “control” over such Security Entitlement.

(b)Each Pledgor covenants and agrees that it will defend the Pledgee’s right, title and security interest in and to such Pledgor’s Collateral and the proceeds thereof against the claims and demands of all persons whomsoever.

(c)Each Pledgor covenants and agrees that it will take no action which would violate any of the terms of any Secured Debt Agreement.

17.LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES THERETO; ETC. The exact legal name of each Pledgor, the type of organization of such Pledgor, whether or not such Pledgor is a Registered Organization, the jurisdiction of organization of such Pledgor, such Pledgor’s Location, the organizational identification number (if any) of such Pledgor, and whether or not such Pledgor is a Transmitting Utility, is listed on Annex A hereto for such Pledgor. No Pledgor shall change its legal name, its type of organization, or its organizational identification number (if any), except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Debt Agreements and so long as same do not involve any Pledgor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 15 days’ prior written notice of each change to the information listed on Annex A (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex A which shall correct all information contained therein for such Pledgor, and (ii) in connection with the respective change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, to the extent that any Pledgor does not have an organizational identification number on the date hereof and later obtains one, such Pledgor shall promptly thereafter deliver a notification of the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.

18.PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever (other than termination of this Agreement pursuant to Section 20 or, with respect to a specific Pledgor, release of such Pledgor pursuant to Section 32 hereof), including, without limitation:

(i)any renewal, extension, amendment or modification of, or addition or supplement to or deletion from any Secured Debt Agreement (other than this Agreement in accordance with its terms), or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof;

(ii)any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument including, without limitation, this Agreement (other than a waiver, consent or extension with respect to this Agreement in accordance with its terms);

(iii)any furnishing of any additional security to the Pledgee or its assignee or any acceptance thereof or any release of any security by the Pledgee or its assignee;

(iv)any limitation on any party’s liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; or

(v)any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any Pledgor or any Subsidiary of any Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing.

19.SALE OF COLLATERAL WITHOUT REGISTRATION. If at any time when the Pledgee shall determine to exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests pursuant to Section 7 hereof, and such Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Pledgee may, in its sole and absolute discretion, sell such Collateral or part thereof by private sale in such manner and under such circumstances as the Pledgee may deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Pledgee, in its sole and absolute discretion (i) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under such Securities Act, (ii) may approach and negotiate with a single possible purchaser to effect such sale, and (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In the event of any such sale, the Pledgee shall incur no responsibility or liability for selling all or any part of the Collateral at a price which the Pledgee, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until the registration as aforesaid.

20.TERMINATION; RELEASE. (a) On the Termination Date (as defined below), this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation in Section 11 hereof, shall survive such termination) and the Pledgee, at the request and expense of the respective Pledgor will, subject to the provisions of the Intercreditor Agreement, promptly execute and deliver to such Pledgor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Pledgee or any of its sub-agents hereunder and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any moneys at the time held by the Pledgee or any of its sub-agents hereunder and, with respect to any Collateral consisting of an Uncertificated Security, a Partnership Interest or a Limited Liability Company Interest (other than an Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), a termination of the agreement relating thereto executed and delivered by the issuer of such Uncertificated Security pursuant to Section 3.2(a)(ii) or by the respective partnership or limited liability company pursuant to Section 3.2(a)(iv)(2). As used in this Agreement, “Termination Date” shall mean the date upon which the Total Commitment under the Credit Agreement has been terminated, no Note (as defined in the Credit Agreement) is outstanding (and all Loans have been paid in full) and all Obligations under Secured Hedging Agreements and all other Obligations appearing therein (other than indemnities under the Secured Debt Agreements which are not then due and payable) have been paid in full and all Secured Hedging Agreement have been terminated.

(b)In the event that any part of the Collateral and all Obligations is sold or otherwise disposed of (to a Person other than a Credit Party) (x) at any time prior to the time at which all Credit Document Obligations have been paid in full and all Commitments and Letters of Credit under the Credit Agreement have been terminated in connection with a sale or disposition permitted by Section 10.02 of the Credit Agreement, or is otherwise released at the direction of the Required Lenders (or all the Lenders if required by Section 13.12 of the Credit Agreement) or (y) at any time thereafter, to the extent permitted by the other Secured Debt Agreements, and in the case of clauses (x) and (y), and the proceeds of such sale or disposition (or from such release) are applied in accordance with the terms of the Credit Agreement or such other Secured Debt Agreement, as the case may be, to the extent required to be so applied, the Pledgee, at the request and expense of Aleris, will duly release from the security interest created hereby (and will execute and deliver such documentation, including termination or partial release statements and the like in connection therewith) and assign, transfer and deliver Aleris, on behalf of the applicable Pledgor (without recourse and without any representation or warranty) such of the Collateral (as defined in the Credit Agreement) as is then being (or has been) so sold or otherwise disposed of, or released, and as may be in the possession of the Pledgee (or any of its sub-agents hereunder) and has not theretofore been released pursuant to this Agreement. Furthermore, upon the release of any Guarantor from any Guaranty in accordance with the provisions thereof or in accordance with Section 13.12(b) of the Credit Agreement, such Pledgor (and the Collateral at such time assigned by the respective Pledgor, grantor, pledgor or assignor pursuant hereto) shall be released from this Agreement.

(c)At any time that any Pledgor desires that the Pledgee take any action to acknowledge or give effect to any release of Collateral pursuant to the foregoing Section 20(a) or (b), such Pledgor shall deliver to the Pledgee (and the relevant sub-agent, if any, designated hereunder) a certificate signed by a principal executive officer of such Pledgor stating that the release of the respective Collateral is permitted pursuant to Section 20(a) or (b) hereof. If reasonably requested by the Pledgee (although the Pledgee shall have no obligation to make any such request), the respective Pledgor shall furnish appropriate legal opinions (from counsel, reasonably acceptable to the Pledgee) to the effect set forth in the immediately preceding sentence. At any time that the U.S. Borrower or the respective Pledgor desires that a Subsidiary of the U.S. Borrower which has been released from the U.S. Subsidiaries Guaranty be released hereunder as provided in the penultimate sentence of Section 20(b), it shall deliver to the Pledgee a certificate signed by a principal executive officer of the U.S. Borrower and the respective Pledgor stating that the release of the respective Pledgor (and its Collateral) is permitted pursuant to such Section 20(b).

(d)The Pledgee shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with, or which the Pledgee believes to be in accordance with, this Section 20.

21.NOTICES, ETC. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Pledgee or any Pledgor shall not be effective until received by the Pledgee or such Pledgor, as the case may be. All notices and other communications shall be in writing and addressed as follows:

(a)if to any Pledgor, c/o:

    Aleris International, Inc.,

                                    25825 Science Park Drive, Suite 400,

                                    Beachwood, OH 44122,

                                    Attention: General Counsel

                                    Telephone No.: (216) 910-3400

                                    Telecopier No.: (216) 910-3650

(b)if to the Pledgee or Administrative Agent, at:

                                     Deutsche Bank AG New York Branch

                                     60 Wall Street

                                     New York, NY 10005

                                     Attention: Marguerite Sutton

                                     Telephone No.: (212) 250-6150

                                     Telecopier No.: (212) 797-4655

(c)if to any Lender Creditor, either (x) to the Administrative Agent, at the address of the Administrative Agent specified in the Credit Agreement, or (y) at such address as such Lender Creditor shall have specified in the Credit Agreement;

(d)if to any Other Creditor, at such address as such Other Creditor shall have specified in writing to Aleris and the Pledgee;

(e)if to any Treasury Services Creditor, at such address as such Treasury Services Creditor shall have specified in writing to Aleris and the Collateral Agent;

or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.

22.WAIVER; AMENDMENT. Except as provided in Section 30 hereof, none of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever except in accordance with the requirements specified in the U.S. Security Agreement.

23.SUCCESSORS AND ASSIGNS. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 20, (ii) be binding upon each Pledgor, its successors and assigns; provided, however, that no Pledgor shall assign any of its rights or obligations hereunder without the prior written consent of the Pledgee (with the prior written consent of the Required Secured Creditors), and (iii) inure, together with the rights and remedies of the Pledgee hereunder, to the benefit of the Pledgee, the other Secured Creditors and their respective successors, transferees and assigns. All agreements, statements, representations and warranties made by each Pledgor herein or in any certificate or other instrument delivered by such Pledgor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Secured Debt Agreements regardless of any investigation made by the Secured Creditors or on their behalf.

24.HEADINGS DESCRIPTIVE. The headings of the several Sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

25.GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PLEDGOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH PLEDGOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PLEDGOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH PLEDGOR. EACH PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH PLEDGOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 21 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE PLEDGEE UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PLEDGOR IN ANY OTHER JURISDICTION.

(b)EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c)EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

26.PLEDGOR’S DUTIES. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Pledgor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Pledgee shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, except for the safekeeping of Collateral actually in Pledgor’s possession, nor shall the Pledgee be required or obligated in any manner to perform or fulfill any of the obligations of any Pledgor under or with respect to any Collateral.

27.COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with each Pledgor and the Pledgee.

28.SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

29.RECOURSE. This Agreement is made with full recourse to each Pledgor and pursuant to and upon all the representations, warranties, covenants and agreements on the part of such Pledgor contained herein and in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith.

30.ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of Aleris that is required to become a party to this Agreement after the date hereof pursuant to the requirements of the Credit Agreement or any other Credit Document, shall become a Pledgor hereunder by (x) executing a counterpart hereof, or a joinder agreement in form reasonably satisfactory to the Pledgee, and delivering the same to the Pledgee, (y) delivering supplements to Annexes A through F hereto as are necessary to cause such annexes to be complete and accurate with respect to such additional Pledgor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Pledgee and with all documents and actions required above to be taken to the reasonable satisfaction of the Pledgee.

31.LIMITED OBLIGATIONS. It is the desire and intent of each Pledgor and the Secured Creditors that this Agreement shall be enforced against each Pledgor to the fullest extent permissible under the laws applied in each jurisdiction in which enforcement is sought. Notwithstanding anything to the contrary contained herein, in furtherance of the foregoing, it is noted that the obligations of each Pledgor constituting a U.S. Subsidiary Guarantor have been limited as provided in the U.S. Subsidiaries Guaranty.

32.RESTATEMENT AND AMENDMENT. This Agreement shall amend and restate in its entirety the U.S. Pledge Agreement, dated as of August 1, 2006 among certain of the Guarantors and the Administrative Agent (the “Existing U.S. Pledge Agreement”)and all obligations of the Pledgors thereunder shall be deemed replaced and extended as obligations under this Agreement and be governed hereby without novation. In no event shall such amendment and restatement be construed as a termination of the obligations under the Existing U.S. Pledge Agreement.

* * * *

IN WITNESS WHEREOF, each Pledgor and the Pledge have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written.

Each assignor’s address is as listed

      on Annex A attached hereto

ALERIS INTERNATIONAL, INC.,
as a Pledgor
By:	/s/ Michael D. Fridey
	Name:	Michael D. Fridey
	Title:	Executive Vice President and  Chief Financial Officer

AURORA ACQUISITION MERGER SUB,
INC., as a Pledgor
By:	/s/ Clive Bode
	Name:	Clive Bode
	Title:	Vice President

ALCHEM ALUMINUM, INC.

as a Pledgor

ALCHEM ALUMINUM SHELBYVILLE

INC., as a Pledgor

ALERIS, INC., as a Pledgor

ALERIS OHIO MANAGEMENT, INC.,

as a Pledgor

ALSCO HOLDINGS, INC.,as a Pledgor

ALSCO METALS CORPORATION,

as a Pledgor

ALUMITECH OF CLEVELAND, INC.,

as a Pledgor

ALUMITECH OF WABASH, INC.,

as a Pledgor

ALUMITECH OF WEST VIRGINIA, INC.,

as a Pledgor

ALUMITECH, INC., as a Pledgor

AWT PROPERTIES, INC., as a Pledgor

CA LEWISPORT, LLC, as a Pledgor

CI HOLDINGS, LLC, as a Pledgor

COMMONWEALTH ALUMINUM

CONCAST, INC., as a Pledgor

COMMONWEALTH ALUMINUM

LEWISPORT, LLC, as a Pledgor

COMMONWEALTH ALUMINUM METALS,

LLC, as a Pledgor

COMMONWEALTH ALUMINUM SALES

CORPORATION, as a Pledgor

COMMONWEALTH ALUMINUM TUBE,

ENTERPRISES, LLC, as a Pledgor

COMMONWEALTH ALUMINUM, LLC,

as a Pledgor

COMMONWEALTH FINANCING CORP.,

as a Pledgor

COMMONWEALTH INDUSTRIES, INC.,

as a Pledgor

ETS SCHAEFER CORPORATION,

as a Pledgor

GULF REDUCTION CORPORATION,

as a Pledgor

IMCO INTERNATIONAL, INC.,

as a Pledgor

IMCO INVESTMENT COMPANY,

as a Pledgor

IMCO RECYCLING OF CALIFORNIA, INC.,

as a Pledgor

IMCO RECYCLING OF IDAHO INC.,

as a Pledgor

IMCO RECYCLING OF ILLINOIS INC.,

as a Pledgor

IMCO RECYCLING OF INDIANA INC.,

as a Pledgor

IMCO RECYCLING OF MICHIGAN L.L.C.,

as a Pledgor

IMCO RECYCLING OF OHIO INC.,

as a Pledgor

IMCO RECYCLING OF UTAH INC.,

as a Pledgor

IMCO RECYCLING SERVICES COMPANY,

as a Pledgor

IMSAMET, INC., as a Pledgor

ALERIS BLANKING AND RIM PRODUCTS,

INC. (f/k/a INDIANA ALUMINUM INC.),

as a Pledgor

INTERAMERICAN ZINC, INC.,

as a Pledgor

METALCHEM, INC., as a Pledgor

MIDWEST ZINC CORPORATION,

as a Pledgor

ROCK CREEK ALUMINUM, INC.,

as a Pledgor

SILVER FOX HOLDING COMPANY,

as a Pledgor

U.S. ZINC CORPORATION,

as a Pledgor

U.S. ZINC EXPORT CORPORATION,

as a Pledgor

WESTERN ZINC CORPORATION,

as a Pledgor

By:	/s/ Michael D. Fridey
	Name:	Michael D. Fridey
	Title:	Director

IMCO INDIANA PARTNERSHIP L.P.,
By: IMCO International, Inc. its General
Partner,
as a Pledgor
By:	/s/ Michael D. Fridey
	Name:	Michael D. Fridey
	Title:	President

IMCO MANAGEMENT PARTNERSHIP, L.P.,
By: Aleris International, Inc., its General
Partner,
as a Pledgor
By:	/s/ Michael D. Fridey
	Name:	Michael D. Fridey
	Title:	Executive Vice President and  Chief Financial Officer

CORUS ALUMINUM CORP., as a Pledgor
HOOGOVENS ALUMINUM EUROPE INC.,
as a Pledgor
By:	/s/ Michael D. Fridey
	Name:	Michael D. Fridey
	Title:	Director

Accepted and Agreed to:

DEUTSCHE BANK AG NEW YORK BRANCH,
As Collateral Agent and Pledgee
By:	/s/ Carin Keegan
Name:  Carin Keegan
Title:    Vice President

By:	/s/ Scottye Lindsey
Name:    Scottye Lindsey

 Title:     Director

Address:60 Wall Street

                New York, NY 10005

TABLE OF CONTENTS

				Page
1.	SECURITY FOR OBLIGATIONS			3
2.	DEFINITIONS			5
3.	PLEDGE OF SECURITIES, ETC.			10
		3.1	Pledge	10
		3.2	Procedures	13
		3.3	Subsequently Acquired Collateral	15
		3.4	Transfer Taxes	15
		3.5	Certain Representations and Warranties Regarding the Collateral	15
		3.6	Overriding Provisions with respect to TL Priority Collateral	16
4.	APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC.			16
5.	VOTING, ETC., WHILE NO NOTICED EVENT OF DEFAULT			16
6.	DIVIDENDS AND OTHER DISTRIBUTIONS			16
7.	REMEDIES IN CASE OF A NOTICED EVENT OF DEFAULT			17
8.	REMEDIES, CUMULATIVE, ETC.			18
9.	APPLICATION OF PROCEEDS			19
10.	PURCHASERS OF COLLATERAL			19
11.	INDEMNITY			19
12.	PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER			20
13.	FURTHER ASSURANCES; POWER-OF-ATTORNEY			21
14.	THE PLEDGEE AS COLLATERAL AGENT			21
15.	TRANSFER BY THE PLEDGORS			22
16.	REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS			22

Table of Contents

(continued)

		Page
17.	LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES THERETO; ETC.	24
18.	PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC.	24
19.	SALE OF COLLATERAL WITHOUT REGISTRATION	25
20.	TERMINATION; RELEASE	26
21.	NOTICES, ETC.	27
22.	WAIVER; AMENDMENT	28
23.	SUCCESSORS AND ASSIGNS	28
24.	HEADINGS DESCRIPTIVE	28
25.	GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL	28
26.	PLEDGOR’ S DUTIES	29
27.	COUNTERPARTS	29
28.	SEVERABILITY	30
29.	RECOURSE	30
30.	ADDITIONAL PLEDGORS	30
31.	LIMITED OBLIGATIONS	30

Table of Contents

(continued)

		Page
32.	RESTATEMENT AND AMENDMENT.	30

Table of Contents

(continued)

ANNEX A-	SCHEDULE OF LEGAL NAMES, TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY), JURISDICTION OF ORGANIZATION, LOCATION AND ORGANIZATIONAL IDENTIFICATION NUMBERS
ANNEX B-	SCHEDULE OF STOCK
ANNEX C -	SCHEDULE OF NOTES
ANNEX D -	SCHEDULE OF LIMITED LIABILITY COMPANY INTERESTS
ANNEX E -	SCHEDULE OF PARTNERSHIP INTERESTS
ANNEX F -	SCHEDULE OF CHIEF EXECUTIVE OFFICES
ANNEX G-	FORM OF AGREEMENT REGARDING UNCERTIFICATED SECURITIES, LIMITED LIABILITY COMPANY INTERESTS AND PARTNERSHIP INTERESTS

EX-10.6

Exhibit 10.6

EXECUTION COPY

AMENDED AND RESTATED U.S. SUBSIDIARIES GUARANTY

AMENDED AND RESTATED U.S. SUBSIDIARIES GUARANTY, dated as of August 1, 2006 and amended and restated as of December 19, 2006 (as amended, modified or supplemented from time to time, this “Guaranty”), made by each of the undersigned guarantors (each a “Guarantor” and, together with any other entity that becomes a guarantor hereunder pursuant to Section 22 hereof, collectively, the “Guarantors”) in favor of DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent (together with any successor administrative agent, the “Administrative Agent”), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.

WITNESSETH :

WHEREAS, Aurora Acquisition Merger Sub, Inc., Aleris International, Inc., a Delaware corporation (“Aleris”), each Subsidiary party thereto from time to time, the lenders party thereto from time to time (the “Lenders”), Deutsche Bank AG, Canada Branch, as the Canadian administrative agent (together with any successor Canadian administrative agent, the “Canadian Administrative Agent”), and the Administrative Agent, have entered into an Amended and Restated Credit Agreement, dated as of August 1, 2006 and amended and restated as of the date hereof providing among other things for the making of Loans to, and the issuance of, and participation in Letters of Credit for the respective accounts of, the Borrowers as contemplated therein (the Lenders, the Collateral Agent, the Issuing Lenders, the Canadian Administrative Agent and the Administrative Agent are herein called the “Lender Creditors”) (as used herein, the term “Credit Agreement” means the Amended and Restated Credit Agreement described above in this paragraph, as the same may be amended, modified, extended, renewed, replaced, restated, supplemented or refinanced from time to time, and including any agreement extending the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any portion of, the indebtedness under such agreement or any successor agreement, whether or not with the same agent, trustee, representative, lenders or holders; provided that, with respect to any agreement providing for the refinancing or replacement of indebtedness under the Credit Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder if (i) either (A) all obligations under the Credit Agreement being refinanced or replaced shall be paid in full at the time of such refinancing or replacement, and all commitments and letters of credit issued pursuant to the refinanced or replaced Credit Agreement shall have terminated in accordance with their terms or, with respect to certain Letters of Credit, been continued, with the consent of the respective issuer thereof, under such refinancing or replacement indebtedness or (B) the Required Lenders shall have consented in writing to the refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit Agreement, and (ii) a notice to the effect that the refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall be delivered by Aleris to the Collateral Agent);

WHEREAS, each Borrower and/or one or more of their respective Subsidiaries (i) have entered into, or guaranteed the obligations of, or (ii) may at any time after the Restatement Effective Date and from time to time enter into, one or more Secured Hedging Agreements with one or more Persons other than the Borrowers and their Subsidiaries (the “Other Creditors”);

WHEREAS, each Borrower, one or more of their respective Subsidiaries and any Lender (and/or one or more of its banking affiliates) reasonably acceptable to the Administrative Agent, in each case designated to the Administrative Agent in writing by Aleris as a provider of Treasury Services (as defined below), (collectively, the “Treasury Services Creditors” and, together with the Lender Creditors and the Other Creditors, the “Secured Creditors”) in the future may enter into, credit arrangements providing for treasury, depositary or cash management services (including without limitation, overnight overdraft services) to Aleris and such Subsidiaries by the Treasury Services Creditors, and automated clearinghouse transfers of funds to the Treasury Service Creditors, in each case pursuant to uncommitted lines of credit (collectively, “Treasury Services,” and with any written agreement evidencing such credit arrangements (to the extent expressly stated therein that the liabilities and indebtedness thereunder are “Guaranteed Obligations” for the purposes of this Agreement (or more generally, for purposes of the various agreements guaranteeing or securing the Credit Agreement)), as amended, modified, supplemented, replaced or refinanced from time to time, herein called the “Treasury Services Agreements”).

WHEREAS, each Guarantor is a direct or indirect Wholly-Owned Domestic Subsidiary of Aleris;

WHEREAS, it is a condition precedent to (i) the making of Loans to, and the issuance of, and participation in, Letters of Credit for the respective accounts of, the Borrowers under the Credit Agreement, (ii) the Other Creditors entering into Secured Hedging Agreements and (iii) the extension of the Treasury Services by Treasury Services Creditors, that each Guarantor shall have executed and delivered to the Administrative Agent this Guaranty;

WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans by the Borrowers, and the issuance of, and participation in, Letters of Credit for the account of, the Borrowers under the Credit Agreement, the entering into by the Borrowers and/or one or more of their respective Subsidiaries of Secured Hedging Agreements with the Other Creditors and the extension of Treasury Services to Aleris and its Subsidiaries and, accordingly, desires to execute this Guaranty in order to (i) satisfy the condition described in the preceding paragraph and (ii) induce (x) the Lenders to make Loans to the various Borrowers and issue, and/or participate in, Letters of Credit for the respective accounts of the various Borrowers, (y) the Other Creditors to enter into Secured Hedging Agreements with the Canadian Borrowers and/or one or more of their respective Subsidiaries and (z) the Treasury Services Creditors to enter into Treasury Services Agreements;

NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Guarantor, the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby makes the following representations and warranties to the Administrative Agent for the benefit of the Secured Creditors and hereby covenants and agrees with each other Guarantor and the Administrative Agent for the benefit of the Secured Creditors as follows:

1.GUARANTY. (a) Each Guarantor, jointly and severally, irrevocably, absolutely and unconditionally guarantees as a primary obligor and not merely as surety: (i) to the Lender Creditors the full and prompt payment when due (whether at the stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) of (x) the principal of (or, Face Amount of, as applicable), premium, if any, and interest on the Notes issued by, and the Loans made to, the Borrowers under the Credit Agreement, and all reimbursement obligations and Unpaid Drawings with respect to Letters of Credit and (y) all other obligations (including, without limitation, obligations which, but for the commencement of any insolvency proceeding, would become due), liabilities and indebtedness owing by each Borrower to the Lender Creditors under the Credit Agreement and each other Credit Document to which such Borrower is a party (including, without limitation, indemnities, Fees and interest thereon (including, without limitation, in each case, any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in the Credit Agreement, whether or not such interest is an allowed claim in any such proceeding)), whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and each such other Credit Document (all such principal (or, Face Amount, as applicable), premium, interest, reimbursement obligations, Unpaid Drawings, liabilities, indebtedness and other obligations under this clause (i), except to the extent consisting of obligations, liabilities or indebtedness with respect to Secured Hedging Agreements and Treasury Services Agreements being herein collectively called the “Credit Document Obligations”); (ii) to each Other Creditor the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 3 62(a) of the Bankruptcy Code, would become due), liabilities and indebtedness (including, in each case, any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in the respective Secured Hedging Agreements, whether or not such interest is an allowed claim in any such proceeding) owing by each Borrower and/or one or more of its Subsidiaries under any Secured Hedging Agreement, whether now in existence or hereafter arising, (all such obligations, liabilities and indebtedness described in this clause (ii) being herein collectively called the “Other Obligations”) and (iii) to each Treasury Services Creditor the full and prompt payment when due (whether at the stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding at the rate provided for in the respective documentation, whether or not such interest is allowed in any such proceeding) owing by Aleris or any of its Subsidiaries to the Treasury Services Creditors with respect to Treasury Services, whether now in existence or hereafter arising in each case under any Treasury Services Agreement (all such obligations, liabilities and indebtedness described in this clause (iii) being herein collectively called the “Treasury Services Obligations”, and together with the Credit Document Obligations and the Other Obligations are herein collectively called the “Guaranteed Obligations”). Each Guarantor understands, agrees and confirms that the Secured Creditors may enforce this Guaranty up to the full amount of the Guaranteed Obligations against such Guarantor without proceeding against any other Guarantor, the Borrowers, any other Guaranteed Party, against any security for the Guaranteed Obligations, or under any other guaranty covering all or a portion of the Guaranteed Obligations.

The following capitalized terms used herein shall have the definitions specified below:

“Guaranteed Party” shall mean (x) each Borrower and (y) each Subsidiary of Aleris party to a Secured Hedging Agreement.

“Secured Hedging Agreement” shall mean each Interest Rate Protection Agreement and/or Other Hedging Agreements provided that (i) such Interest Rate Protection Agreement and/or Other Hedging Agreement expressly states that (x) it constitutes a “Secured Hedging Agreement” for purposes of the Credit Agreement and the other Credit Documents and (y) does not constitute a “Secured Hedging Agreement” for purposes of the Term Security Documents or any guaranties relating to the Term Loan Agreement, (ii) Aleris and the other parties thereto shall have delivered to the Collateral Agent a written notice specifying that such Interest Rate Protection Agreement and/or Other Hedging Agreement (x) constitutes a “Secured Hedging Agreement” for purposes of the Credit Agreement and the other Credit Documents, (y) does not constitute a “Secured Hedging Agreement” for purposes of the Term Security Documents or any guaranties relating to the Term Loan Agreement and (z) in the case of Aleris, that such Interest Rate Protection Agreement and/or Other Hedging Agreement and the obligations of Aleris and its Subsidiaries thereunder have been, and will be, incurred in compliance with the Credit Agreement, (iii) on the effective date of such Interest Rate Protection Agreement and/or Other Hedging Agreement and from time to time thereafter, at the request of the Collateral Agent, Aleris and the other parties thereto shall have notified the Administrative Agent in writing of the aggregate amount of exposure under such Interest Rate Protection Agreement and/or Other Hedging Agreement and (iv) such Other Creditor, if it is not a Lender or an affiliate thereof (even if such Lender subsequently ceases to be a Lender under the Credit Agreement for any reason), has entered into an intercreditor agreement with respect to the relevant Interest Rate Protection Agreement or Other Hedging Agreement on terms reasonably satisfactory to the Collateral Agent.

(b)Additionally, each Guarantor, jointly and severally, unconditionally, absolutely and irrevocably, guarantees the payment of any and all Guaranteed Obligations whether or not due or payable by any Borrower or any such other Guaranteed Party upon the occurrence in respect of any Borrower or any such other Guaranteed Party of any of the events specified in Section 11.05 of the Credit Agreement, and unconditionally, absolutely and irrevocably, jointly and severally, promises to pay such Guaranteed Obligations to the Secured Creditors, or order, on demand. This Guaranty shall constitute a guaranty of payment, and not of collection.

2.LIABILITY OF GUARANTORS ABSOLUTE. The liability of each Guarantor hereunder is primary, absolute, joint and several, and unconditional and is exclusive and independent of any security for or other guaranty of the indebtedness of any Borrower or any other Guaranteed Party, whether executed by such Guarantor, any other Guarantor, any other guarantor or by any other party, and the liability of each Guarantor hereunder shall not be affected or impaired by any circumstance or occurrence whatsoever, including, without limitation: (a) any direction as to application of payment by any Borrower, any other Guaranteed Party or any other party, (b) any other continuing or other guaranty, undertaking or maximum liability of a Guarantor or of any other party as to the Guaranteed Obligations, (c) any payment on or in reduction of any such other guaranty or undertaking, (d) any dissolution, termination or increase, decrease or change in personnel by any Borrower or any other Guaranteed Party, (e) the failure of the Guarantor to receive any benefit from or as a result of its execution, delivery and performance of this Guaranty, (f) any payment made to any Secured Creditor on the indebtedness which any Secured Creditor repays any Borrower or any other Guaranteed Party pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each Guarantor waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, (g) any action or inaction by the Secured Creditors as contemplated in Section 5 hereof or (h) any invalidity, rescission, irregularity or unenforceability of all or any part of the Guaranteed Obligations or of any security therefore; provided that nothing in this Guaranty shall prevent the Guarantor from asserting the defense of payment of all or any portion of the Guaranteed Obligations.

3.OBLIGATIONS OF GUARANTORS INDEPENDENT. The obligations of each Guarantor hereunder are independent of the obligations of any other Guarantor, any other guarantor, any Borrower or any other Guaranteed Party, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against any other Guarantor, any other guarantor, any Borrower or any other Guaranteed Party and whether or not any other Guarantor, any other guarantor, any Borrower or any other Guaranteed Party be joined in any such action or actions. Each Guarantor waives, to the fullest extent permitted by law, the benefits of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by any Borrower or any other Guaranteed Party or other circumstance which operates to toll any statute of limitations as to any Borrower or any such other Guaranteed Party shall operate to toll the statute of limitations as to each Guarantor.

4.WAIVERS BY GUARANTORS. (a) To the fullest extent permitted under applicable law, each Guarantor hereby waives notice of acceptance of this Guaranty and notice of the existence, creation or incurrence of any new or additional liability to which it may apply, and waives promptness, diligence, presentment, demand of payment, demand for performance, protest, notice of dishonor or nonpayment of any such liabilities, suit or taking of other action by the Administrative Agent or any other Secured Creditor against, and any other notice to, any party liable thereon (including such Guarantor, any other Guarantor, any other guarantor, any Borrower or any other Guaranteed Party) and each Guarantor further hereby waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice or proof of reliance by any Secured Creditor upon this Guaranty, and the Guaranteed Obligations shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended, modified, supplemented or waived, in reliance upon this Guaranty.

(b)Each Guarantor waives any right to require the Secured Creditors to: (i) proceed against any Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; (ii) proceed against or exhaust any security held from any Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any other remedy in the Secured Creditors’ power whatsoever. Each Guarantor waives any defense based on or arising out of any defense of any Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party other than payment in full in cash of the Guaranteed Obligations, including, without limitation, any defense based on or arising out of the disability of any Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party, or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Borrower or any other Guaranteed Party other than payment in full in cash of the Guaranteed Obligations. The Secured Creditors may, at their election, foreclose on any collateral serving as security held by the Administrative Agent, the Collateral Agent or the other Secured Creditors by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Secured Creditors may have against any Borrower, any other Guaranteed Party or any other party, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Guaranteed Obligations have been paid in full in cash. Each Guarantor waives any defense arising out of any such election by the Secured Creditors, even though such election operates to impair or extinguish any right of reimbursement, contribution, indemnification or subrogation or other right or remedy of such Guarantor against any Borrower, any other Guaranteed Party, any other guarantor of the Guaranteed Obligations or any other party or any security.

(c)Each Guarantor has knowledge and assumes all responsibility for being and keeping itself informed of each Borrower’s, each other Guaranteed Party’s and each other Guarantor’s financial condition, affairs 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 which such Guarantor assumes and incurs hereunder, and has adequate means to obtain from each Borrower, each other Guaranteed Party and each other Guarantor on an ongoing basis information relating thereto and each Borrower’s, each other Guaranteed Party’s and each other Guarantor’s ability to pay and perform its respective Guaranteed Obligations, and agrees to assume the responsibility for keeping, and to keep, so informed for so long as this Guaranty is in effect. Each Guarantor acknowledges and agrees that (x) the Secured Creditors shall have no obligation to investigate the financial condition or affairs of any Borrower, any other Guaranteed Party or any other Guarantor for the benefit of such Guarantor nor to advise such Guarantor of any fact respecting, or any change in, the financial condition, assets or affairs of any Borrower, any other Guaranteed Party or any other Guarantor that might become known to any Secured Creditor at any time, whether or not such Secured Creditor knows or believes or has reason to know or believe that any such fact or change is unknown to such Guarantor, or might (or does) increase the risk of such Guarantor as guarantor hereunder, or might (or would) affect the willingness of such Guarantor to continue as a guarantor of the Guaranteed Obligations hereunder and (y) the Secured Creditors shall have no duty to advise any Guarantor of information known to them regarding any of the aforementioned circumstances or risks.

(d)Each Guarantor hereby acknowledges and affirms that it understands that to the extent the Guaranteed Obligations are secured by Real Property located in the State of California, such Guarantor shall be liable for the full amount of the liability hereunder notwithstanding foreclosure on such Real Property by trustee sale or any other reason impairing such Guarantor’s or any Secured Creditors’ right to proceed against any Borrower, any other Guaranteed Party or any other guarantor of the Guaranteed Obligations.

(e)Each Guarantor hereby waives (to the fullest extent permitted by applicable law) all rights and benefits under Section 580a, 580b, 580d and 726 of the California Code of Civil Procedure. Each Guarantor hereby further waives (to the fullest extent permitted by applicable law), without limiting the generality of the foregoing or any other provision hereof, all rights and benefits which might otherwise be available to such Guarantor under Sections 2809, 2810, 2815, 2819, 2821, 2839, 2845, 2848, 2849, 2850, 2899 and 3433 of the California Civil Code.

(f)Until the Guaranteed Obligations have been paid in full in cash, each Guarantor waives its rights of subrogation and reimbursement and any other rights and defenses available to such Guarantor by reason of Sections 2787 to 2855, inclusive, of the California Civil Code, including, without limitation, (1) any defenses such Guarantor may have to this Guaranty by reason of an election of remedies by the Secured Creditors and (2) any rights or defenses such Guarantor may have by reason of protection afforded to any Borrower or any other Guaranteed Party pursuant to the antideficiency or other laws of California limiting or discharging such Borrower’s or such other Guaranteed Party’s indebtedness, including, without limitation, Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure. In furtherance of such provisions, each Guarantor hereby waives all rights and defenses arising out of an election of remedies by the Secured Creditors, even though that election of remedies, such as a nonjudicial foreclosure, destroys such Guarantor’s rights of subrogation and reimbursement against any Borrower or any other Guaranteed Party by the operation of Section 580d of the California Code of Civil Procedure or otherwise.

(g)Each Guarantor hereby acknowledges and agrees that no Secured Creditor nor any other Person shall be under any obligation (a) to marshal any assets in favor of such Guarantor or in payment of any or all of the liabilities of any Guaranteed Party under the Secured Debt Agreements or the obligation of such Guarantor hereunder or (b) to pursue any other remedy that such Guarantor may or may not be able to pursue itself any right to which such Guarantor hereby waives.

(h)Each Guarantor warrants and agrees that each of the waivers set forth in Section 3 and in this Section 4 is made with full knowledge of its significance and consequences and that if any of such waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective only to the maximum extent permitted by applicable law.

5.RIGHTS OF SECURED CREDITORS. Subject to Sections 4 and 13, the Secured Creditors may (except as shall be required by applicable statute and cannot be waived) at any time and from time to time without the consent of, or notice to, any Guarantor, without incurring responsibility to such Guarantor, without impairing or releasing the obligations or liabilities of such Guarantor hereunder, upon or without any terms or conditions and in whole or in part:

(a)change the manner, place or terms of payment of, and/or change, increase or extend the time of payment of, renew, increase, accelerate or alter, any of the Guaranteed Obligations (including, without limitation, any increase or decrease in the rate of interest thereon or the principal amount thereof), any security therefor, or any liability incurred directly or indirectly in respect thereof, and the guaranty herein made shall apply to the Guaranteed Obligations as so changed, extended, increased, accelerated, renewed or altered;

(b)take and hold security for the payment of the Guaranteed Obligations and sell, exchange, release, surrender, impair, realize upon or otherwise deal with in any manner and in any order any property or other collateral by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset there against;

(c)exercise or refrain from exercising any rights against any Borrower, any other Guaranteed Party, any other Credit Party, any Subsidiary thereof, any other guarantor of any Borrower or others or otherwise act or refrain from acting;

(d)release or substitute any one or more endorsers, Guarantors, other guarantors, any Borrower, any other Guaranteed Party any other Credit Party or other obligors;

(e)settle or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of any Borrower or any other Guaranteed Party to creditors of such Borrower or such other Guaranteed Party other than the Secured Creditors;

(f)except as otherwise expressly required by the Security Documents, apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of any Borrower or any other Guaranteed Party to the Secured Creditors regardless of what liabilities of such Borrower or such other Guaranteed Party remain unpaid;

(g)consent to or waive any breach of, or any act, omission or default under, any of the Secured Debt Agreements or any of the instruments or agreements referred to therein, or otherwise amend, modify or supplement any of the Secured Debt Agreements or any of such other instruments or agreements;

(h)act or fail to act in any manner which may deprive such Guarantor of its right to subrogation against any Borrower or any other Guaranteed Party to recover full indemnity for any payments made pursuant to this Guaranty; and/or

(i)take any action or omit to take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of such Guarantor from its liabilities under this Guaranty (including, without limitation, any action or omission whatsoever that might otherwise vary the risk of such Guarantor or constitute a legal or equitable defense to or discharge of the liabilities of a guarantor or surety or that might otherwise limit recourse against such Guarantor); provided in each case that nothing in this Guaranty shall prevent the Guarantor from asserting the defense of payment of all or any portion of the Guaranteed Obligations.

No invalidity, illegality, irregularity or unenforceability of all or any part of the Guaranteed Obligations, the Secured Debt Agreements or any other agreement or instrument relating to the Guaranteed Obligations or of any security or guarantee therefor shall affect, impair or be a defense to this Guaranty, and this Guaranty shall be primary, absolute and unconditional notwithstanding the occurrence of any event or the existence of any other circumstances which might constitute a legal or equitable discharge of a surety or guarantor except payment in full in cash of the Guaranteed Obligations.

6.CONTINUING GUARANTY. This Guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon. No failure or delay on the part of any Secured Creditor in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein expressly specified are cumulative and not exclusive of any rights or remedies which any Secured Creditor would otherwise have. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Secured Creditor to any other or further action in any circumstances without notice or demand. It is not necessary for any Secured Creditor to inquire into the capacity or powers of any Borrower or any other Guaranteed Party or the officers, directors, partners or agents acting or purporting to act on its or their behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

7.SUBORDINATION OF INDEBTEDNESS HELD BY GUARANTORS.Any indebtedness of any Borrower or any other Guaranteed Party now or hereafter owing to any Guarantor is hereby subordinated to the Guaranteed Obligations of such Borrower or such other Guaranteed Party to the Secured Creditors, and such Guaranteed Obligations of such Borrower or such other Guaranteed Party to any Guarantor, if the Administrative Agent or the Collateral Agent, after the occurrence and during the continuance of an Event of Default, so requests, shall be collected, enforced and received by such Guarantor as trustee for the Secured Creditors and be paid over to the Secured Creditors on account of the Guaranteed Obligations of such Borrower or such other Guaranteed Parties to the Secured Creditors, but without affecting or impairing in any manner the liability of such Guarantor under the other provisions of this Guaranty. Prior to the transfer by any Guarantor of any note or negotiable instrument evidencing any indebtedness of any Borrower or any other Guaranteed Party to such Guarantor, such Guarantor shall mark such note or negotiable instrument with a legend that the same is subject to this subordination. Without limiting the generality of the foregoing, each Guarantor hereby agrees with the Secured Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been paid in full in cash; provided, that if any amount shall be paid to such Guarantor on account of such subrogation rights at any time prior to the irrevocable payment in full in cash of all the Guaranteed Obligations, such amount shall be held in trust for the benefit of the Secured Creditors and shall forthwith be paid to the Secured Creditors to be credited and applied upon the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Credit Documents or, if the Credit Documents do not provide for the application of such amount, to be held by the Secured Creditors as collateral security for any Guaranteed Obligations thereafter existing.

8.GUARANTY ENFORCEABLE BY ADMINISTRATIVE AGENT OR COLLATERAL AGENT. Notwithstanding anything to the contrary elsewhere in this Guaranty, the Secured Creditors agree (by their acceptance of the benefits of this Guaranty) that this Guaranty may be enforced only by the action of the Administrative Agent or the Collateral Agent, in each case acting upon the instructions of the Required Lenders (or, after the Credit Document Termination Date (as defined below), the holders of at least a majority of the outstanding Other Obligations) and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Guaranty or to realize upon the security to be granted by the Security Documents, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent or the Collateral Agent or, after all the Credit Document Obligations have been paid in full, by the holders of at least a majority of the outstanding Other Obligations, as the case may be, for the benefit of the Secured Creditors upon the terms of this Guaranty and the Security Documents. The Secured Creditors further agree that this Guaranty may not be enforced against any director, officer, employee, partner, member or stockholder of any Guarantor (except to the extent such partner, member or stockholder is also a Guarantor hereunder). It is expressly understood, acknowledged and agreed by each Secured Creditor that by accepting the benefits of this Agreement each such Secured Creditor acknowledges and agrees that the obligations of the Administrative Agent under this Agreement, are only those expressly set forth in this Agreement and in Annex M to the Security Agreement. The Administrative Agent shall act hereunder on the terms and conditions set forth herein and in Annex M to the Security Agreement, the terms of which shall be deemed incorporated herein by reference, mutatis mutandis, as fully as if the same were set forth herein (and referencing this Agreement) in its entirety. It is further understood and agreed that the agreement in this Section 8 is among and solely for the benefit of the Secured Creditors and that, if the Required Lenders (or, after the date on which all Credit Document Obligations have been paid in full, the holders of at least a majority of the outstanding Other Obligations and Treasury Services Obligations) so agree (without requiring the consent of any Guarantor), this Guaranty may be directly enforced by any Secured Creditor.

9.REPRESENTATIONS, WARRANTIES AND COVENANTS OF GUARANTORS. In order to induce the Lenders to make Loans to, and issue Letters of Credit for the respective accounts of, the Borrowers pursuant to the Credit Agreement, in order to induce the Other Creditors to execute, deliver and perform the Secured Hedging Agreements to which they are a party and in order to induce the Treasury Services Creditors to execute, deliver and perform the Treasury Services Agreements to which they are a party, each Guarantor represents, warrants and covenants that:

(a)Such Guarantor (i) is a duly organized and validly existing corporation, partnership or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization, (ii) has the corporate, partnership or limited liability company power and authority, as the case may be, to own its property and assets and to transact the business in which it is engaged and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its property or the conduct of its business requires such qualification except for failures to be so qualified which, either individually or in the aggregate, could not reasonably be expected to have, a Material Adverse Effect.

(b)Such Guarantor has the corporate, partnership or limited liability company power and authority, as the case may be, to execute, deliver and perform the terms and provisions of this Guaranty and each other Secured Debt Agreement to which it is a party and has taken all necessary corporate, partnership or limited liability company action, as the case may be, to authorize the execution, delivery and performance by it of this Guaranty and each such other Secured Debt Agreement. Such Guarantor has duly executed and delivered this Guaranty and each other Secured Debt Agreement to which it is a party, and this Guaranty and each such other Secured Debt Agreement constitutes the legal, valid and binding obligation of such Guarantor enforceable in accordance with its terms, except to the extent that the enforceability hereof or thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

(c)Neither the execution, delivery or performance by such Guarantor of this Guaranty or any other Secured Debt Agreement to which it is a party, nor compliance by it with the terms and provisions hereof and thereof, will (i) contravene any provision of any material applicable law, statute, rule or regulation or any applicable order, writ, injunction or decree of any court or governmental instrumentality in any material respect, (ii) conflict with or result in any breach of any of the material terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Security Documents) upon any of the property or assets of such Guarantor or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, credit agreement, or any other material agreement, contract or instrument to which such Guarantor or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject or (iii) violate any provision of the certificate or articles of incorporation or by-laws (or equivalent organizational documents) of such Guarantor or any of its Subsidiaries.

(d)No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for (x) those that have otherwise been obtained or made, (y) filings which are necessary to perfect the security interests created under the Security Documents and (z) other than with respect to the Secured Debt Agreements, those the failure to obtain which could not reasonably be expected to have a Material Adverse Effect), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Guaranty by such Guarantor or any other Document to which such Guarantor is a party or (ii) the legality, validity, binding effect or enforceability of any Document to which such Guarantor is a party.

(e)There are no actions, suits or proceedings pending or, to such Guarantor’s knowledge, threatened in writing (i) with respect to this Guaranty or any other Secured Debt Agreement to which such Guarantor is a party or (ii) with respect to such Guarantor or any of its Subsidiaries that, either individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect.

(f)Each Guarantor covenants and agrees that on and after the Restatement Effective Date and until the date upon which the Total Commitment under the Credit Agreement has been terminated, no Letter of Credit, Bankers’ Acceptance or Note (as defined in the Credit Agreement) is outstanding (and all Loans and Unpaid Drawings have been paid in full) and all Letters of Credit have been terminated (the “Credit Document Termination Date”), all Guaranteed Obligations then due and payable under Secured Hedging Agreements and Treasury Services Agreements and all other Guaranteed Obligations (other than indemnities under the Credit Documents which are not then due and payable) have been paid in full and the Secured Hedging Agreements have been terminated, such Guarantor will comply, and will cause each of its Subsidiaries to comply, with all of the applicable provisions, covenants and agreements contained in Sections 9 and 10 of the Credit Agreement, and will take, or will refrain from taking, as the case may be, all actions that are necessary to be taken or not taken so that it is not in violation of any provision, covenant or agreement contained in Section 9 or 10 of the Credit Agreement, and so that no Default or Event of Default is caused by the actions of such Guarantor or any of its Subsidiaries.

(g)An executed (or conformed) copy of each of the Secured Debt Agreements has been made available to a senior officer of such Guarantor and such officer is familiar with the contents thereof.

10.EXPENSES. The Guarantors hereby jointly and severally agree to pay all reasonable out-of-pocket costs and expenses of each Secured Creditor in connection with the enforcement of this Guaranty (including, without limitation, the fees and disbursements of counsel employed by each of the Secured Creditors) and of the Administrative Agent and Canadian Administrative Agent in connection with any amendment, waiver or consent relating hereto (including, without limitation, the reasonable fees and disbursements of counsel employed by each of the Agents).

11.BENEFIT AND BINDING EFFECT. This Guaranty shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the Secured Creditors and their successors and assigns.

12.AMENDMENTS; WAIVERS. Neither this Guaranty nor any provision hereof may be changed or waived except with the written consent of each Guarantor directly affected thereby (it being understood that the addition or release of any Guarantor hereunder shall not constitute a change or waiver affecting any Guarantor other than the Guarantor so added or released) and with the written consent of either (x) the Required Lenders (or, to the extent required by Section 13.12 of the Credit Agreement, with the written consent of each Lender) at all times prior to the Credit Document Termination Date or (y) the holders of at least a majority of the outstanding Other Obligations and Treasury Services Obligations (taken as a whole) at all times after the time at which all Credit Document Obligations have been paid in full; provided, that (i) any change, waiver, modification or variance affecting the rights and benefits of a single Class (as defined below) of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall also require the written consent of the Requisite Creditors (as defined below) of such Class of Secured Creditors (it being understood that the addition or release of any Guarantor hereunder in accordance with the terms hereof or the Credit Agreement or any increase in or addition of one or more classes of Guaranteed Obligations shall not constitute a change or waiver affecting any Guarantor other than the Guarantor so added or released and shall not require the consent of any Secured Creditor other than the Administrative Agent) and (ii) to the extent provided in an intercreditor agreement delivered pursuant to Section 6.19 of the Intercreditor Agreement (such intercreditor agreement, an “Other Intercreditor Agreement”), the consent of the Other Creditors to amendments, modifications and waivers described in the Other Intercreditor Agreement shall be required. For the purpose of this Guaranty, the term “Class” shall mean each class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the Credit Document Obligations, (y) the Other Creditors as the holders of the Other Obligations or (z) the Treasury Services Creditors as holders of the Treasury Services Obligations. For the purpose of this Guaranty, the term “Requisite Creditors” of any Class shall mean (x) with respect to the Credit Document Obligations, the Required Lenders (or, to the extent required by Section 13.12 of the Credit Agreement, each Lender), (y) with respect to the Other Obligations, the holders of at least a majority of all obligations outstanding from time to time under the Secured Hedging Agreements and (z) with respect to the Treasury Services Obligations, the holders of at least a majority of all Treasury Services Obligations outstanding from time to time.

13.SET OFF. In addition to any rights now or hereafter granted under applicable law (including, without limitation, Section 151 of the New York Debtor and Secured Creditor Law) and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default (such term to mean and include (i) at any time when any Credit Document Obligations or Letters of Credit are outstanding or any Commitments under the Credit Agreement exist, any Event of Default under, and as defined in the Credit Agreement and (ii) at any time after all of the Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated and no further Commitments and Letters of Credit may be provided thereunder, any payment default on any of the Obligations after the expiration of any applicable grace period), each Secured Creditor is hereby authorized, at any time or from time to time, without notice to any Guarantor or to any other Person, any such notice being expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Secured Creditor to or for the credit or the account of such Guarantor, against and on account of the obligations and liabilities of such Guarantor to such Secured Creditor under this Guaranty, irrespective of whether or not such Secured Creditor shall have made any demand hereunder and although said obligations, liabilities, deposits or claims, or any of them, shall be contingent or unmatured. Notwithstanding anything to the contrary contained in this Guaranty, at any time that the Guaranteed Obligations shall be secured by any Real Property located in the State of California, no Secured Creditor shall exercise any right of set-off, lien or counterclaim or take any court or administrative action or institute any proceedings to enforce any provision of this Guaranty without the prior consent of (x) at all times prior to the Credit Document Termination Date, the Administrative Agent or the Required Lenders or (to the extent required by Section 13.12 of the Credit Agreement, all of the Lenders), or (y) the holders of a majority of the Other Obligations at all times after the Credit Document Termination Date, 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 Collateral Agent pursuant to the Security Documents or the enforceability of the Guaranteed Obligations hereunder, and any attempted exercise by any Secured Creditor or the Administrative Agent of any such right without obtaining such consent of (x) at all times prior to the Credit Document Termination Date, the Required Lenders or the Administrative Agent or (y) the holders of a majority of the Other Obligations at all times after the Credit Document Termination Date, shall be null and void. It is understood and agreed that the foregoing sentence of this Section 13 is for the sole benefit of the Secured Creditors and may be amended, modified or waived in any respect by (x) at all times prior to the Credit Document Termination Date, the Required Lenders or (y) the holders of a majority of the Other Obligations at all times after the Credit Document Termination Date, (without any requirement of prior notice to or consent by any Credit Party or any other Person) and does not constitute a waiver of any rights against any Credit Party or against any Collateral.

14.NOTICE. All notices, requests, demands or other communications pursuant hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Administrative Agent or any Guarantor shall not be effective until received by the Administrative Agent or such Guarantor, as the case may be. All notices and other communications shall be in writing and addressed to such party at (i) in the case of any Lender Creditor, as provided in the Credit Agreement, (ii) in the case of any Guarantor, at: Aleris International, Inc., 25825 Science Park Drive, Suite 400, Beachwood, OH 44122, Attention: General Counsel, Telephone No.: (216) 910-3400, Telecopier No.: (216) 910-3650, and (iii) in the case of any Other Creditor or any Treasury Services Creditor, at such address as such Other Creditor shall have specified in writing to Aleris and the Administrative Agent; or in any case at such other address as any of the Persons listed above may hereafter notify the others in writing.

15.REINSTATEMENT. If claim is ever made upon any Secured Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including any Borrower or any other Guaranteed Party) then and in such event each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon such Guarantor, notwithstanding any revocation hereof or other instrument evidencing any liability of any Borrower or any other Guaranteed Party, and such Guarantor shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee.

16.CONSENT TO JURISDICTION; SERVICE OF PROCESS; AND WAIVER OF TRIAL BY JURY. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding with respect to this Guaranty or any other Credit Document to which any Guarantor is a party may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York in each case which are located within the City of New York, and, by execution and delivery of this Guaranty, each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby further irrevocably waives any claim that any such court lacks personal jurisdiction over it, and agrees not to plead or claim in any legal action or proceeding with respect to this Guaranty or any other Credit Document to which it is a party brought in any of the aforesaid courts that any such court lacks personal jurisdiction over such Guarantor. Each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such party at its address set forth in Section 14 hereof, such service to become effective 30 days after such mailing. Each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby irrevocably waives any objection to such service of process and further irrevocably waives and agrees not to plead or claim in any action or proceeding commenced hereunder or under any other Credit Document to which it is a party that such service of process was in any way invalid or ineffective. Nothing herein shall affect the right of any such party to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction.

(b)Each Guarantor and each Secured Party (by its acceptance of the benefits of this Guaranty) hereby irrevocably waives (to the fullest extent permitted by applicable law) any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Guaranty or any other Credit Document to which such Guarantor is a party brought in the courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that such action or proceeding brought in any such court has been brought in an inconvenient forum.

(c)EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

17.RELEASE OF LIABILITY OF GUARANTOR UPON SALE OR DISSOLUTION, ETC. In the event that all of the Equity Interests of a Guarantor are sold or otherwise disposed of or liquidated in compliance with the requirements of Section 10.02 of the Credit Agreement (or such sale, other disposition or liquidation has been approved in writing by the Required Lenders (or all the Lenders if required by Section 13.12 of the Credit Agreement) or is otherwise permitted pursuant to Section 13.12 of the Credit Agreement) and the proceeds of such sale, disposition or liquidation are applied in accordance with the provisions of the Credit Agreement, to the extent applicable, such Guarantor shall upon consummation of such sale or other disposition (except to the extent that such sale or disposition is to Aleris or another Subsidiary thereof) be released from this Guaranty automatically and without further action and this Guaranty shall, as to each such Guarantor, terminate, and have no further force or effect (it being understood and agreed that the sale of one or more Persons that own, directly or indirectly, all of the Equity Interests of any Guarantor shall be deemed to be a sale of such Guarantor for the purposes of this Section 17).

18.CONTRIBUTION. At any time a payment in respect of the Guaranteed Obligations is made under this Guaranty, the right of contribution of each Guarantor against each other Guarantor shall be determined as provided in the immediately following sentence, with the right of contribution of each Guarantor to be revised and restated as of each date on which a payment (a “Relevant Payment”) is made on the Guaranteed Obligations under this Guaranty. At any time that a Relevant Payment is made by a Guarantor that results in the aggregate payments made by such Guarantor in respect of the Guaranteed Obligations to and including the date of the Relevant Payment exceeding such Guarantor’s Contribution Percentage (as defined below) of the aggregate payments made by all Guarantors in respect of the Guaranteed Obligations to and including the date of the Relevant Payment (such excess, the “Aggregate Excess Amount”), each such Guarantor shall have a right of contribution against each other Guarantor who has made payments in respect of the Guaranteed Obligations to and including the date of the Relevant Payment in an aggregate amount less than such other Guarantor’s Contribution Percentage of the aggregate payments made to and including the date of the Relevant Payment by all Guarantors in respect of the Guaranteed Obligations (the aggregate amount of such deficit, the “Aggregate Deficit Amount”) in an amount equal to (x) a fraction the numerator of which is the Aggregate Excess Amount of such Guarantor and the denominator of which is the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate Deficit Amount of such other Guarantor. A Guarantor’s right of contribution pursuant to the preceding sentences shall arise at the time of each computation, subject to adjustment to the time of each computation; provided that no Guarantor may take any action to enforce such right until the Guaranteed Obligations have been paid in full in cash, it being expressly recognized and agreed by all parties hereto that any Guarantor’s right of contribution arising pursuant to this Section 18 against any other Guarantor shall be expressly junior and subordinate to such other Guarantor’s obligations and liabilities in respect of the Guaranteed Obligations and any other obligations owing under this Guaranty. As used in this Section 18: (i) each Guarantor’s “Contribution Percentage” shall mean the percentage obtained by dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the “Adjusted Net Worth” of each Guarantor shall mean the greater of (x) the Net Worth (as defined below) of such Guarantor and (y) zero; and (iii) the “Net Worth” of each Guarantor shall mean the amount by which the fair saleable value of such Guarantor’s assets on the date of any Relevant Payment exceeds its existing debts and other liabilities (including contingent liabilities, but without giving effect to any Guaranteed Obligations arising under this Guaranty on such date. Notwithstanding anything to the contrary contained above, any Guarantor that is released from this Guaranty pursuant to Section 17 hereof shall thereafter have no contribution obligations, or rights, pursuant to this Section 18, and at the time of any such release, if the released Guarantor had an Aggregate Excess Amount or an Aggregate Deficit Amount, same shall be deemed reduced to $0, and the contribution rights and obligations of the remaining Guarantors shall be recalculated on the respective date of release (as otherwise provided above) based on the payments made hereunder by the remaining Guarantors. All parties hereto recognize and agree that, except for any right of contribution arising pursuant to this Section 18, each Guarantor who makes any payment in respect of the Guaranteed Obligations shall have no right of contribution or subrogation against any other Guarantor in respect of such payment until all of the Guaranteed Obligations have been paid in full in cash. Each of the Guarantors recognizes and acknowledges that the rights to contribution arising hereunder shall constitute an asset in favor of the party entitled to such contribution. In this connection, each Guarantor has the right to waive its contribution right against any Guarantor to the extent that after giving effect to such waiver such Guarantor would remain solvent, in the determination of the Required Lenders.

19.LIMITATION ON GUARANTEED OBLIGATIONS. Each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby confirms that it is its intention that this Guaranty not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar Federal or state law. To effectuate the foregoing intention, each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby irrevocably agrees that the Guaranteed Obligations guaranteed by such Guarantor shall be limited to such amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws and after giving effect to any rights to contribution pursuant to any agreement providing for an equitable contribution among such Guarantor and the other Guarantors, result in the Guaranteed Obligations of such Guarantor in respect of such maximum amount not constituting a fraudulent transfer or conveyance.

20.COUNTERPARTS. This Guaranty may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Guarantors and the Administrative Agent.

21.PAYMENTS. All payments made by any Guarantor hereunder will be made without setoff, counterclaim or other defense and on the same basis as payments are made by the U.S. Borrowers under Sections 5.03 and 5.04 of the Credit Agreement.

22.ADDITIONAL GUARANTORS. It is understood and agreed that any Subsidiary of Aleris that is required to become a party to this Guaranty after the date hereof pursuant to the requirements of the Credit Agreement or any other Credit Document, shall become a Guarantor hereunder by (x) executing and delivering a counterpart hereof, or a joinder agreement in form satisfactory to the Administrative Agent, and delivering same to the Administrative Agent and (y) taking all actions as specified in this Guaranty as would have been taken by such Guarantor had it been an original party to this Guaranty, in each case with all documents required by the Credit Documents to be delivered to the Administrative Agent and with all documents and actions required by the Credit Documents to be taken to the reasonable satisfaction of the Administrative Agent.

23.HEADINGS DESCRIPTIVE. The headings of the several Sections of this Guaranty are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Guaranty.

24.VIRGINIA WAIVER. Guarantor waives all rights of Guarantor arising under Sections 49 - 25 and 49 - 26 of the Code of Virginia.

25.CALCULATION OF OBLIGATIONS UNDER SECURED HEDGING AGREEMENTS. Any calculation of obligations outstanding under a Secured Hedging Agreement for purposes of this Agreement shall be for purposes of the definition of Required Secured Creditors (x) if prior to the termination of such Secured Hedging Agreement, the maximum aggregate amount (giving effect to any netting agreements) that Aleris and the Guarantors would be required to pay if such Secured Hedging Agreement were terminated at such time, but in no event should such amount with respect to the Secured Hedging Agreement entered into on the Restatement Effective Date be deemed to be less than $35,000,000 and (y) if after the termination of such Secured Hedging Agreements, the amount which is actually due and payable by Aleris and the Guarantos under such Secured Hedging Agreement at such time.

26.AMENDMENT AND RESTATEMENT. This Guaranty shall amend and restate in its entirety the U.S. Subsidiaries Guaranty dated as of August 1, 2006 among certain of the Guarantors and the Administrative Agent (the “Existing U.S. Subsidiaries Guaranty”),and all obligations of the Guarantors thereunder shall be deemed replaced and extended as obligations under this Guaranty and be governed hereby without novation. In no event shall such amendment and restatement be construed as a termination of the obligations under the Existing U.S. Subsidiaries Guaranty.

**                *

IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to lie executed and delivered as of the datefirst above written.

ALCHEM ALUMINUM, INC., as,a Guarantor

ALCHEM ALUMINUM SHELBYVILLE

INC., as a Guarantor

ALERIS, INC., as a Guarantor

ALERIS OHIO MANAGEMENT, INC.,

as a Guarantor

ALSCO HOLDINGS, INC., as aGuarantor

ALSCO METALS CORPORATION

as a Guarantor

ALUMITECH OF CLEVELAND, INC.,

as a Guarantor

ALUMITECH OF WABASH, INC.,

as a Guarantor

ALUMITECH OF WESTVIRGINIA, INC.,

as a Guarantor

ALUMITECH, INC., as a Guarantor

AWT PROPERTIES, INC., as a Guarantor

CA LEWISPORT, LLC, asa Guarantor

CI HOLDINGS, LLC. as a Guarantor

COMMONWEALTH ALUMINUM

CONCAST, INC., as a Guarantor

COMMONWEALTH ALUMINUM

LEWISPORT, LLC, as a Guarantor

COMMONWEALTH ALUMINUM METALS,

LLC, as a Guarantor

COMMONWEALTH ALUMINUM SALES

CORPORATION, as a Guarantor

COMMONWEALTH ALUMINUM TUBE

ENTERPRISES, LLC, as a Guarantor

COMMONWEALTH ALUMINUM, LLC,

as a Guarantor

COMMONWEALTH FINANCING CORP.,

as a Guarantor

COMMONWEALTH INDUSTRIES, INC.,

as a Guarantor

ETS SCHAEFER CORPORATION,

as a Guarantor

GULF REDUCTION CORPORATION,

as aGuarantor

IMCO INTERNATIONAL, INC.,

as a Guarantor

IMCO INVESTMENT COMPANY,

as a Guarantor

IMCO RECYCLING OF CALIFORNIA, INC.,

as aGuarantor

IMCO RECYCLING OF IDAHO INC.,

as aGuarantor

IMCO RECYCLING OF ILLINOIS INC.,

as aGuarantor

IMCO RECYCLING OF INDIANA INC.,

as a Guarantor

IMCO RECYCLING OF MICHIGAN L.L.C.,

as a Guarantor

IMCO RECYCLING OF OHIO INC.,

as a Guarantor

IMCO RECYCLING OF UTAH INC.,

as a Guarantor

IMCO RECYCLING SERVICES COMPANY,

as a Guarantor

IMSAMET, INC., as a Guarantor

ALERIS BLANKING AND RIM PRODUCTS,

INC. (f/k/a INDIANA. ALUMINUM INC.),

as Guarantor

INTERAMERICAN ZINC, INC.,

as a Guarantor

METALCHEM, INC., as a Guarantor

MIDWEST ZINC CORPORATION,

as a Guarantor

ROCK CREEK ALUMINUM, INC.,

as a Guarantor

SILVER FOX HOLDING COMPANY,

as a Guarantor

U.S. ZINC CORPORATION,

as a Guarantor

U.S. ZINC EXPORT CORPORATION,

as a. Guarantor

WESTERN ZINC CORPORATION,

as a Guarantor

By:	/s/  Michael D. Friday
	Name:	Michael D. Friday
	Title:	Director

IMCO INDIANA PARTNERSHIP L.P.

By: IMCO International, Inc., its General

Partner,

as a Guarantor

By:	/s/  Michael D. Friday
	Name:	Michael D. Friday
	Title:	President

IMCO MANAGEMENT PARTNERSHIP, L.P.

By: Aleris International, Inc., its General

Partner,

as a Guarantor

By:	/s/  Michael D. Friday
	Name:	Michael D. Friday
	Title:	Chief Financial Officer

CORUS ALUMINUM CORP., as a Guarantor

HOOGOVENS ALUMINIUM EUROPE INC., as a Guarantor

By:	/s/  Michael D. Friday
	Name:	Michael D. Friday
	Title:	Director

Accepted and Agreed to:

DEUTSCHE BANK AG NEW YORK BRANCH,
As Administrative Agent
By:	/s/  Carin Keegan
Name:  Carin Keegan
Title:    Vice President

By:	/s/  Scottye Lindsey
Name:  Scottye Lindsey
Title:    Director

EX-10.7

Exhibit 10.7

EXECUTION COPY

AMENDED AND RESTATED U.S. SECURITY AGREEMENT

among

ALERIS INTERNATIONAL, INC.,

CERTAIN SUBSIDIARIES OF ALERIS INTERNATIONAL, INC.,

and

DEUTSCHE BANK AG NEW YORK BRANCH,

as COLLATERAL AGENT

_______________________________

Dated as of August 1, 2006

and amended and restated as of December 19, 2006

_______________________________

ARTICLE I. SECURITY INTERESTS		2
	1.1. Grant of Security Interests	2
	1.2. Power of Attorney	5
ARTICLE II. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS		5
	2.1. Necessary Filings	6
	2.2. No Liens	6
	2.3. Other Financing Statements	6
	2.4. Chief Executive Office, Location of Inventory and Included Equipment	6
	2.5. Legal Names; Type of Organization (and Whether a Registered Organization and/or a Transmitting Utility); Jurisdiction of Organization; Location; Organizational Identification Numbers; Changes Thereto; etc.	6
	2.6. Certain Significant Transactions	7
	2.7. As-Extracted Collateral; Timber-to-be-Cut	7
	2.8. Collateral in the Possession of a Bailee	7
	2.9. Recourse	8
ARTICLE III. SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL		8
	3.1. Additional Representations and Warranties	8
	3.2. Maintenance of Records	8
	3.3. Direction to Account Debtors; Contracting Parties; etc.	9
	3.4. Modification of Terms; etc.	9
	3.5. Collection	9
	3.6. Instruments	10
	3.7. Assignors Remain Liable Under Accounts	10
	3.8. Assignors Remain Liable Under Contracts	10
	3.9. Deposit Accounts; Etc.
	3.10. Letter-of-Credit Rights	11
	3.11. Commercial Tort Claims	12
	3.12. Chattel Paper	12
	3.13. Further Actions	12
	3.14. Overriding Provisions with respect to ABL Priority Collateral	12
ARTICLE IV. SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES		13
	4.1. Additional Representations and Warranties	13
	4.2. Licenses and Assignments	13
	4.3. Infringements	13
	4.4. Preservation of Marks and Domain Names	13
	4.5. Maintenance of Registration	14
	4.6. Future Registered Marks and Domain Names	14
	4.7. Remedies	14
ARTICLE V. SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS		15
	5.1. Additional Representations and Warranties	15
	5.2. Licenses and Assignments	15
	5.3. Infringements	15
	5.4. Maintenance of Patents or Copyrights	15
	5.5. Prosecution of Patent or Copyright Applications	16
	5.6. Other Patents and Copyrights	16
	5.7. Remedies	16
ARTICLE VI. PROVISIONS CONCERNING ALL COLLATERAL		16
	6.1. Protection of Collateral Agent’s Security	16
	6.2. Warehouse Receipts Non-Negotiable	17
	6.3. Additional Information	17
	6.4. Further Actions	17
	6.5. Financing Statements	17
ARTICLE VII. REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT		18
	7.1. Remedies; Obtaining the Collateral Upon Default	18
	7.2. Remedies; Disposition of the Collateral	19
	7.3. Waiver of Claims	20
	7.4. Application of Proceeds	20
	7.5. Remedies Cumulative	25
	7.6. Discontinuance of Proceedings	25
ARTICLE VIII. INDEMNITY		25
	8.1. Indemnity	25
	8.2. Indemnity Obligations Secured by Collateral; Survival	27
ARTICLE IX. DEFINITIONS		27
ARTICLE X. MISCELLANEOUS		36
	10.1. Notices	36
	10.2. Waiver; Amendment	37
	10.3. Obligations Absolute	37
	10.4. Successors and Assigns	38
	10.5. Headings Descriptive	38
	10.6. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL	38
	10.7. Assignors’ Duties	39
	10.8. Termination; Release	39
	10.9. Counterparts	41
	10.10. Severability	41
	10.11. The Collateral Agent and the other Secured Creditors	41
	10.12. Additional Assignors	41
	10.13. Amendment and Restatement	41
	10.14. Calculation of Obligations under Secured Hedging Agreements	41

ANNEX A	Schedule of Chief Executive Offices; Inventory and Equipment Locations in Alabama, Arizona, Florida and Mississippi
ANNEX B	Registered Organization And/Or A Transmitting Utility), Jurisdiction of Organization, Location and Organizational Identification Numbers
ANNEX C	Description of Certain Significant Transactions Occurring Within One Year Prior To The Date of The U.S. Security Agreement
ANNEX D	Schedule of Deposit Accounts
ANNEX E	Form of Control Agreement Regarding Deposit Accounts
ANNEX F	Description of Commercial Tort Claims
ANNEX G	Schedule of Marks and Applications; Internet Domain Name Registration
ANNEX H	Schedule of Patents
ANNEX I	Schedule of Copyrights
ANNEX J	Form of Grant of Security Interest in United States Trademarks
ANNEX K	Form of Grant of Security Interest in United States Patents
ANNEX L	Form of Grant of Security Interest in United States Copyrights
ANNEX M	The Collateral Agent

FORM OF AMENDED AND RESTATED U.S. SECURITY AGREEMENT

AMENDED AND RESTATED U.S. SECURITY AGREEMENT, dated as of August 1, 2006 and amended and restated as of December 19, 2006, made by each of the undersigned assignors (each, an “Assignor” and, together with any other entity that becomes an assignor hereunder pursuant to Section 10.12 hereof, the “Assignors”) in favor of DEUTSCHE BANK AG NEW YORK BRANCH, as administrative agent (together with any successor administrative agent, the “Administrative Agent”) and as collateral agent (together with any successor Collateral Agent, the “Collateral Agent”), for the benefit of the Secured Creditors (as defined below). Certain capitalized terms as used herein are defined in Article IX hereof. Except as otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.

WITNESSETH:

WHEREAS, Aurora Acquisition Merger Sub, Inc., Aleris International, Inc., a Delaware corporation (“Aleris” or the “U.S. Borrower”), Aleris Deutschland Holding GmbH, a company with limited liability formed under the laws of Germany (the “German Borrower” and, together with the U.S. Borrower, each a “Borrower” and, collectively, the “Borrowers”), the lenders party thereto from time to time (the “Lenders”), and Deutsche Bank AG New York Branch, as administrative agent (the “Administrative Agent”) (the Lenders, the Administrative Agent and the Collateral Agent are herein called the “Lender Creditors”) have entered into an Amended and Restated Term Loan Agreement, dated as of August 1, 2006 and amended and restated as of December 19, 2006, providing for the making of Loans to the Borrowers, all as contemplated therein (as used herein, the term “Credit Agreement” means the Amended and Restated Term Loan Agreement described above in this paragraph, as the same may be amended, modified, extended, renewed, replaced, restated, supplemented or refinanced from time to time, and including any agreement extending the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any portion of, the indebtedness under such agreement or any successor agreement, whether or not with the same agent, trustee, representative, lenders or holders; provided that, with respect to any agreement providing for the refinancing or replacement of indebtedness under the Credit Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder if (i) either (A) all obligations under the Credit Agreement being refinanced or replaced shall be paid in full at the time of such refinancing or replacement, and all commitments and letters of credit issued pursuant to the refinanced or replaced Credit Agreement shall have terminated in accordance with their terms or (B) the Required Lenders shall have consented in writing to the refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit Agreement, and (ii) a notice to the effect that the refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall be delivered by Aleris to the Collateral Agent);

WHEREAS, the U.S. Borrower and/or one or more of its Subsidiaries may at any time and from time to time enter into one or more Secured Hedging Agreements with one or more Persons other than the U.S. Borrow and its Subsidiaries (the “Other Creditors” and collectively, with the Lender Creditors, the “Secured Creditors”);

WHEREAS, pursuant to the U.S. Borrower Guaranty, the U.S. Borrower has guaranteed to the Secured Creditors the payment when due of all of its Relevant Guaranteed Obligations as described therein;

WHEREAS, pursuant to the U.S. Subsidiaries Guaranty, each U.S. Subsidiary Guarantor has jointly and severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations (as defined in the U.S. Subsidiaries Guaranty);

WHEREAS, the Intercreditor Agreement governs the relative rights and priorities of the Secured Creditors and the ABL Secured Parties in respect of the Term Priority Collateral and the ABL Priority Collateral (and with respect to certain other matters as described therein);

WHEREAS, it is a condition precedent to (i) the making and/or continuation of Loans to the Borrowers under the Credit Agreement and (ii) the Other Creditors entering into Secured Hedging Agreements, that each Assignor shall have executed and delivered to the Administrative Agent this Agreement; and

WHEREAS, each Assignor will obtain benefits from the incurrence and/or continuation of Loans by the Borrowers, and the entering into by the Borrowers and/or one or more of their respective Subsidiaries of the Secured Hedging Agreements, and, accordingly, each Assignor desires to enter into this Agreement in order to (i) satisfy the condition described in the preceding paragraph and (ii) induce (x) the Lenders to make and/or continue Loans to the Borrowers and (y) the Other Creditors to enter into Secured Hedging Agreements with the Borrowers and/or one or more of their respective Subsidiaries;

NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Secured Creditors and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Creditors as follows:

ARTICLE I

SECURITY INTERESTS

1.1.Grant of Security Interests. (a) Subject to the terms of the Intercreditor Agreement with respect to rights and remedies between the Collateral Agent and the ABL Collateral Agent, as security for the prompt and complete payment when due of all of its Obligations, each Assignor does hereby assign and transfer unto the Collateral Agent, and does hereby pledge and grant to the Collateral Agent, for the benefit of the Secured Creditors, a continuing security interest in all of the right, title and interest of such Assignor in, to and under all of the following personal property and fixtures (and all rights therein) of such Assignor, or in which or to which such Assignor has any rights, in each case whether now existing or hereafter from time to time acquired:

(i)	each and every Account;
(ii)	all cash;
(iii)	the Cash Collateral Account and all monies, securities, Instruments and other investments deposited or required to be deposited in the Cash Collateral Account;
(iv)	all Chattel Paper (including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper);
(v)	all Commercial Tort Claims;
(vi)	all Software and computer programs of such Assignor and all related licensing rights, documentation, drawings, specifications and schematics and all intellectual property rights therein and all other proprietary information of such Assignor, including but not limited to Trade Secret Rights, customer lists and all recorded data of any kind or nature, regardless of the medium or recording;
(vii)	all Contracts, together with all Contract Rights arising thereunder;
(viii)	all Copyrights;
(ix)	all Deposit Accounts and all other demand, deposit, time, savings, cash management, passbook and similar accounts maintained by such Assignor with any Person and all monies, securities, Instruments and other investments deposited or required to be deposited in any of the foregoing (in each case, excluding Exempted Deposit Accounts);
(x)	all Documents;
(xi)	all Equipment;
(xii)	all General Intangibles;
(xiii)	all Goods;
(xiv)	all Instruments;
(xv)	all Inventory;
(xvi)	all Investment Property;
(xvii)	all Letter-of-Credit Rights (whether or not the respective letter of credit is evidenced by a writing);
(xviii)	all Marks and any renewals thereof, the goodwill of the business of such Assignor symbolized by the Marks and all causes of action arising prior to or after the date hereof for infringement of any of the Marks or unfair competition regarding the same;
(xix)	all Patents, together with all causes of action arising prior to or after the date hereof for infringement of any of the Patents or unfair competition regarding the same;
(xx)	all Permits;
(xxi)	all Supporting Obligations; and
(xxii)	all Proceeds and products of any and all of the foregoing (all of the above, the “Collateral”);

provided that (x) no Voting Equity Interests (which shall include, for this purpose, the Convertible Preferred Equity Certificates issued by Aleris Luxembourg S.a. r.l.) of any Foreign Corporation which represents more than 65% of the total combined voting power of all classes of Voting Equity Interests of the respective Foreign Corporation (with all Voting Equity Interests of the respective Foreign Corporation in excess of said 65% limit being herein called “Excess Foreign Corporation Equity Interests”) shall secure any direct Obligations of any U.S. Borrower (or guarantees of such Obligations by the respective Assignor) and such Excess Foreign Corporation Equity Interests shall secure Obligations of the respective Assignor only as a guarantor of the Obligations of the German Borrower, and (y) each Assignor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each Foreign Corporation at any time and from time to time acquired by such Assignor, which Non-Voting Equity Interests shall not be subject to the limitations described in preceding clause (x).

(b)Notwithstanding anything herein to the contrary, in no event shall the Collateral include and no Assignor shall be deemed to have granted a security interest in, (x) Excluded Equipment or (y) any of its right, title or interest in any license, contract or agreement to which such Assignor is a party, to the extent, but only to the extent (and only for so long as) that such license, contract or agreement or applicable law prohibits the assignment of, or granting of a security interest in, such license, contract or agreement and such prohibitions are not rendered invalid by Section 9-406 or Section 9-408 of the UCC, it being understood and agreed, however, any such excluded license, contract or agreement shall otherwise be subject to the security interests created by this Agreement (and shall become “Collateral” for all purposes of this Agreement) upon the receipt by such Assignor of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein.

(c)The security interest of the Collateral Agent under this Agreement extends to all Collateral which any Assignor may acquire, or with respect to which any Assignor may obtain rights, at any time during the term of this Agreement.

(d)Notwithstanding anything to the contrary contained in this Section 1.1 or elsewhere in this Agreement, each Assignor and the Collateral Agent (on behalf of the Secured Creditors) acknowledges and agrees that:

(x) the security interest granted pursuant to this Agreement (including pursuant to this Section 1.1) to the Collateral Agent for the benefit of the Secured Creditors (i) in the Term Priority Collateral, shall be a First Priority Lien and (ii) in the ABL Priority Collateral, shall be a Second Priority Lien, fully junior, subordinated and subject to the security interest granted to the ABL Collateral Agent for the benefit of the ABL Creditors in the ABL Priority Collateral on the terms and conditions set forth in the ABL Documents and the Intercreditor Agreement and all other rights and benefits afforded hereunder to the Secured Creditors with respect to the ABL Priority Collateral are expressly subject to the terms and conditions of the Intercreditor Agreement; and

(y) the ABL Secured Parties’ security interests in the Collateral constitute security interests separate and apart (and of a different class and claim) from the Secured Creditors’ security interests in the Collateral.

(e)NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIENS AND SECURITY INTERESTS GRANTED TO THE TERM COLLATERAL AGENT PURSUANT TO THIS AGREEMENT IN ANY ABL PRIORITY COLLATERAL AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE TERM COLLATERAL AGENT WITH RESPECT TO ANY ABL PRIORITY COLLATERAL HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE AMENDED AND RESTATED INTERCREDITOR AGREEMENT DATED AS OF AUGUST 1, 2006 AND AMENDED AND RESTATED AS OF DECEMBER 19, 2006 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”), AMONG AURORA ACQUISITION MERGER SUB, INC, ALERIS INTERNATIONAL, INC., A DELAWARE CORPORATION (THE “COMPANY”), THE OTHER GRANTORS FROM TIME TO TIME PARTY THERETO, DEUTSCHE BANK AG NEW YORK BRANCH, (“DBNY”) AS ABL ADMINISTRATIVE AGENT AND AS ABL COLLATERAL AGENT, AND DBNY, AS TERM ADMINISTRATIVE AGENT AND TERM COLLATERAL AGENT, AND CERTAIN OTHER PERSONS PARTY OR THAT MAY BECOME PARTY THERETO FROM TIME TO TIME. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.

1.2.Power of Attorney. Each Assignor hereby constitutes and appoints the Collateral Agent its true and lawful attorney, irrevocably, with full power after the occurrence of and during the continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys due or to become due to such Assignor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Collateral Agent may deem to be necessary or advisable to protect the interests of the Secured Creditors, which appointment as attorney is coupled with an interest.

ARTICLE II

GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

Each Assignor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows:

2.1.Necessary Filings. All filings, registrations, recordings and other actions necessary or appropriate to create, preserve and perfect the security interest granted by such Assignor to the Collateral Agent hereby in respect of the Collateral have been accomplished, in each case, within the time frames required by this Agreement, and the security interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral creates a valid and, together with all such filings, registrations, recordings and other actions, a perfected security interest therein prior to the rights of all other Persons therein and subject to no other Liens (other than Permitted Liens) and is entitled to all the rights, priorities and benefits afforded by the Uniform Commercial Code or other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each case to the extent that the Collateral consists of the type of property in which a security interest may be perfected by possession or control (within the meaning of the UCC as in effect on the Restatement Effective Date in the State of New York), by filing a financing statement under the Uniform Commercial Code as enacted in any relevant jurisdiction or by a filing of a Grant of Security Interest in the respective form attached hereto in the United States Patent and Trademark Office or in the United States Copyright Office. Upon the actions taken under this Section 2.1, such security interest will be prior to all other Liens of all other Persons (other than Liens permitted pursuant to clauses (i), (ii), (v), (viii), (xi), (xii), (xiii) and (xviii) of Section 9.01 of the Credit Agreement), and enforceable as such as against all other Persons.

2.2.No Liens. Such Assignor is, and as to all Collateral acquired by it from time to time after the Restatement Effective Date such Assignor will be, the owner of all Collateral free from any Lien or other right, title or interest of any Person (other than Permitted Liens), and such Assignor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the interests of the Collateral Agent.

2.3.Other Financing Statements. As of the Restatement Effective Date, there is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Permitted Liens), and so long as the Termination Date has not occurred, such Assignor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by such Assignor or in connection with Permitted Liens.

2.4.Chief Executive Office, Location of Inventory and Included Equipment.On the Restatement Effective Date, and during the four calendar month period preceding this Agreement, no Assignor has maintained its chief executive office or held Inventory and Equipment in Alabama, Arizona, Florida or Mississippi other than as provided in Annex A hereto.

2.5.Legal Names; Type of Organization (and Whether a Registered Organization and/or a Transmitting Utility); Jurisdiction of Organization; Location; Organizational Identification Numbers; Changes Thereto; etc. The exact legal name of each Assignor, the type of organization of such Assignor, whether or not such Assignor is a Registered Organization, the jurisdiction of organization of such Assignor, such Assignor’s Location, the organizational identification number (if any) of such Assignor, and whether or not such Assignor is a Transmitting Utility, is listed on Annex B hereto for such Assignor. Such Assignor shall not change its legal name, its type of organization or its organizational identification number (if any) from that used on Annex B hereto, except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Debt Agreements and so long as same do not involve such Assignor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 15 days’ prior written notice of each change to the information listed on Annex B (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex B which shall correct all information contained therein for such Assignor, and (ii) in connection with the respective such change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, to the extent that such Assignor does not have an organizational identification number on the Restatement Effective Date and later obtains one, such Assignor shall promptly thereafter notify the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.

2.6.Certain Significant Transactions. During the one year period preceding the Restatement Effective Date, no Person shall have merged or consolidated with or into any Assignor, and no Person shall have liquidated into, or transferred all or substantially all of its assets to, any Assignor, in each case except as described in Annex C hereto. With respect to any transactions so described in Annex C hereto, the respective Assignor shall have furnished such information with respect to the Person (and the assets of the Person and locations thereof) which merged with or into or consolidated with such Assignor, or was liquidated into or transferred all or substantially all of its assets to such Assignor, and shall have furnished to the Collateral Agent such UCC lien searches as may have been requested with respect to such Person and its assets, to establish that no security interest (excluding Permitted Liens) continues perfected on the Restatement Effective Date with respect to any Person described above (or the assets transferred to the respective Assignor by such Person), including without limitation pursuant to Section 9- 316(a)(3) of the UCC.

2.7.As-Extracted Collateral; Timber-to-be-Cut. On the Restatement Effective Date, such Assignor does not own, or expect to acquire, any property which constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut. If at any time after the date of this Agreement such Assignor owns, acquires or obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such Assignor shall furnish the Collateral Agent with prompt written notice thereof (which notice shall describe in reasonable detail the As-Extracted Collateral or Timber-to-be-Cut and the locations thereof) and shall take all actions as may be deemed reasonably necessary or desirable by the Collateral Agent to perfect the security interest of the Collateral Agent therein.

2.8.Collateral in the Possession of a Bailee. Subject to the provisions of the Intercreditor Agreement, if any Inventory or other Goods are at any time in the possession of a bailee, (other than pursuant to tolling arrangements entered into in the ordinary course of business) such Assignor shall promptly notify the Collateral Agent thereof and, if requested by the Collateral Agent, shall use its reasonable best efforts to promptly obtain an acknowledgment from such bailee, in form and substance reasonably satisfactory to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions of the Collateral Agent, without the further consent of such Assignor. The Collateral Agent agrees with such Assignor that the Collateral Agent shall not give any such instructions unless a Noticed Event of Default has occurred and is continuing or would occur after taking into account any action by the respective Assignor with respect to any such bailee.

2.9.Recourse. This Agreement is made with full recourse to each Assignor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Assignor contained herein, in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith.

ARTICLE III

SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL

3.1.Additional Representations and Warranties. As of the time when each of its Accounts arises, each Assignor shall be deemed to have represented and warranted that each such Account, and all records, papers and documents relating thereto (if any) are genuine and what they purport to be, and that all papers and documents (if any) relating thereto (i) will, to the knowledge of such Assignor, represent the genuine, legal, valid and binding obligation of the account debtor evidencing indebtedness unpaid and owed by the respective account debtor arising out of the performance of labor or services or the sale or lease and delivery of the merchandise listed therein, or both, (ii) will be the only original writings evidencing and embodying such obligation of the account debtor named therein (other than copies created for general accounting purposes), (iii) will, to the knowledge of such Assignor, evidence true and valid obligations, enforceable in accordance with their respective terms, and (iv) will be in compliance and will conform in all material respects with all applicable federal, state and local laws and applicable laws of any relevant foreign jurisdiction.

3.2.Maintenance of Records. Each Assignor will keep and maintain at its own cost and expense accurate records of its Accounts and Contracts, including, but not limited to, originals of all documentation (including each Contract) with respect thereto, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith, and such Assignor will make the same available on such Assignor’s premises to the Collateral Agent for inspection, at such Assignor’s own cost and expense, at any and all reasonable times upon prior notice to such Assignor and otherwise in accordance with the Credit Agreement. Upon the occurrence and during the continuance of a Noticed Event of Default and at the request of the Collateral Agent, such Assignor shall, at its own cost and expense, deliver all tangible evidence of its Accounts and Contract Rights (including, without limitation, all documents evidencing the Accounts and all Contracts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Assignor). Upon the occurrence and during the continuance of a Noticed Event of Default and if the Collateral Agent so directs, such Assignor shall legend, in form and manner satisfactory to the Collateral Agent, the Accounts and the Contracts, as well as books, records and documents (if any) of such Assignor evidencing or pertaining to such Accounts and Contracts with an appropriate reference to the fact that such Accounts and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein.

3.3.Direction to Account Debtors; Contracting Parties; etc. Upon the occurrence and during the continuance of a Noticed Event of Default, if the Collateral Agent so directs, subject to the provisions of the Intercreditor Agreement, any Assignor, such Assignor agrees (x) to cause all payments on account of the Accounts and Contracts to be made directly to the Cash Collateral Account, (y) that the Collateral Agent may, at its option, directly notify the obligors with respect to any Accounts and/or under any Contracts to make payments with respect thereto as provided in the preceding clause (x), and (z) that the Collateral Agent may enforce collection of any such Accounts and Contracts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as such Assignor. Without notice to or assent by any Assignor, the Collateral Agent may, upon the occurrence and during the continuance of a Noticed Event of Default, subject to the provisions of the Intercreditor Agreement, apply any or all amounts then in, or thereafter deposited in, the Cash Collateral Account toward the payment of the Obligations in the manner provided in Section 7.4 of this Agreement. The reasonable costs and expenses of collection (including reasonable attorneys’ fees), whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the relevant Assignor, provided that (x) the failure by the Collateral Agent to so notify such Assignor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 3.3 and (y) no such notice shall be required if an Event of Default of the type described in Section 9.05 of the Credit Agreement has occurred and is continuing.

3.4.Modification of Terms; etc. Except in accordance with such Assignor’s ordinary course of business and consistent with reasonable business judgment or as permitted by Section 3.5, no Assignor shall rescind or cancel any indebtedness evidenced by any Account or under any Contract, or modify any material term thereof or make any material adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Account or Contract, or interest therein, without the prior written consent of the Collateral Agent. No Assignor will do anything to impair the rights of the Collateral Agent in the Accounts or Contracts.

3.5.Collection. Each Assignor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Accounts or obligor under any Contract, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Account or Contract, and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account or under such Contract. Except as otherwise directed by the Collateral Agent after the occurrence and during the continuation of an Event of Default, any Assignor may allow in the ordinary course of business as adjustments to amounts owing under its Accounts and Contracts (i) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Assignor finds appropriate in accordance with reasonable business judgment and (ii) a refund or credit due as a result of returned or damaged merchandise or improperly performed services or for other reasons which such Assignor finds appropriate in accordance with reasonable business judgment. The reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees) of collection, whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor.

3.6.Instruments. Subject to the terms of the Intercreditor Agreement, if any Assignor owns or acquires any Instrument in excess of $1,000,000 constituting Collateral (other than (x) checks and other payment instruments received and collected in the ordinary course of business and (y) any Instrument subject to pledge pursuant to the U.S. Pledge Agreement), such Assignor will within 20 Business Days notify the Collateral Agent thereof, and upon request by the Collateral Agent will promptly deliver such Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent.

3.7.Assignors Remain Liable Under Accounts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Accounts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with the terms of any agreement giving rise to such Accounts. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Account pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.

3.8.Assignors Remain Liable Under Contracts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Contracts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with and pursuant to the terms and provisions of each Contract. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Contract pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any performance by any party under any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.

3.9.Deposit Accounts; Etc. (a) Annex D hereto accurately sets forth, as of the Effective Date, for each Assignor, each Deposit Account maintained by such Assignor (including a description thereof and the respective account number), the name of the respective bank with which such Deposit Account is maintained, and the jurisdiction of the respective bank with respect to such Deposit Account. For each Deposit Account (other than (i) the Cash Collateral Account or any other Deposit Account maintained with the Collateral Agent, (ii) Exempted Deposit Accounts and (iii) Exempted Disbursement Accounts) the respective Assignor shall, subject to the provisions of the Intercreditor Agreement and Section 3.14 hereof, cause the bank with which the Deposit Account is maintained to execute and deliver to the Collateral Agent, within 45 days after the Restatement Effective Date or, if later, at the time of the establishment of the respective Deposit Account, a “control agreement” in substantially the form of Annex E hereto (appropriately completed), with such changes thereto as may be reasonably acceptable to the Collateral Agent, or such other form as may be reasonably acceptable to the Collateral Agent. If any bank with which a Deposit Account which is required to be subject to a “control agreement” hereunder is maintained refuses to, or does not, enter into such a “control agreement”, then the respective Assignor shall promptly (and in any event within 45 days after the date of this Agreement or, if later, 30 days (or such longer period as may be agreed by the Administrative Agent in its sole discretion) after the establishment of such account) close the respective Deposit Account and transfer all balances therein to the Cash Collateral Account or another Deposit Account meeting the requirements of this Section 3.9. If any bank with which a Deposit Account which is required to be subject to a “control agreement” hereunder is maintained refuses to subordinate all its claims with respect to such Deposit Account to the Collateral Agent’s security interest therein on terms reasonably satisfactory to the Collateral Agent, then the Collateral Agent, at its option, may (x) require that such Deposit Account be terminated in accordance with the immediately preceding sentence or (y) agree to a “control agreement” without such subordination, provided that in such event the Collateral Agent may at any time, at its option, subsequently require that such Deposit Account be terminated (within 45 days after notice from the Collateral Agent) in accordance with the requirements of the immediately preceding sentence.

(b)After the date of this Agreement, no Assignor shall establish any new demand, time, savings, passbook or similar account, except for Deposit Accounts established and maintained with banks and meeting the requirements of preceding clause (a). At the time any such Deposit Account is established, the appropriate “control agreement” shall be entered into in accordance with the requirements of preceding clause (a) and the respective Assignor shall furnish to the Collateral Agent a supplement to Annex D hereto containing the relevant information with respect to the respective Deposit Account and the bank with which same is established.

3.10.Letter-of-Credit Rights. If any Assignor is at any time a beneficiary under a letter of credit with a stated amount of $5,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent, such Assignor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, use its reasonable best efforts to (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under such letter of credit or (ii) arrange for the Collateral Agent, subject to the provisions of the Intercreditor Agreement, to become the transferee beneficiary of such letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be applied as provided in this Agreement and the Intercreditor Agreement after the occurrence and during the continuance of a Noticed Event of Default.

3.11.Commercial Tort Claims. All Commercial Tort Claims of each Assignor in existence on the date of this Agreement are described in Annex F hereto. If any Assignor shall at any time after the date of this Agreement acquire a Commercial Tort Claim in an amount (taking the greater of the aggregate claimed damages thereunder or the reasonably estimated value thereof) of $1,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof in a writing signed by such Assignor and describing the details thereof and shall grant to the Collateral Agent in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement and the Intercreditor Agreement, with such writing to be in form and substance reasonably satisfactory to the Collateral Agent.

3.12.Chattel Paper. Upon the reasonable request of the Collateral Agent made at any time or from time to time, each Assignor shall promptly furnish to the Collateral Agent a list of all Electronic Chattel Paper held or owned by such Assignor. Furthermore, if requested by the Collateral Agent, each Assignor shall promptly take all actions which are reasonably practicable so that the Collateral Agent, subject to the provisions of the Intercreditor Agreement, has “control” of all Electronic Chattel Paper in accordance with the requirements of Section 9-105 of the UCC. Each Assignor will promptly (and in any event within 10 days) following any request by the Collateral Agent during the occurrence of any Noticed Event of Default, subject to the provisions of the Intercreditor Agreement, deliver all of its Tangible Chattel Paper to the Collateral Agent.

3.13.Further Actions. Each Assignor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps, including any and all actions as may be necessary or required under the Federal Assignment of Claims Act, relating to its Accounts, Contracts, Instruments and other property or rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require.

3.14.Overriding Provisions with respect to ABL Priority Collateral. Notwithstanding anything to the contrary contained above in this Article III, or elsewhere in this Agreement or any other U.S. Security Agreement, to the extent the provisions of this Agreement (or any other Security Documents) require the delivery of, or control over, ABL Priority Collateral to be granted to the Collateral Agent at any time prior to the ABL Credit Documents Obligations Termination Date, then delivery of such ABL Priority Collateral (or control with respect thereto) shall instead be granted to the ABL Collateral Agent, to be held in accordance with the ABL Documents and the Intercreditor Agreement. Furthermore, at all times prior to the ABL Credit Document Obligations Termination Date, the Collateral Agent is authorized by the parties hereto to effect transfers of ABL Priority Collateral at any time in its possession (and any “control” or similar agreements with respect to ABL Priority Collateral) to the ABL Collateral Agent.

ARTICLE IV

SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES

4.1.Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of the registered Marks and Domain Names listed in Annex G hereto for such Assignor and that said listed Marks and Domain Names include all trademark registrations and applications for registration of marks in the United States Patent and Trademark Office and all Domain Names that such Assignor owns in connection with its business as of the Effective Date. Except as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each Assignor represents and warrants that it owns, is licensed to use or otherwise has the right to use, all trademarks, service marks, trade names, trade dresses and other business and source identifiers that it uses. Each Assignor further warrants that it has no knowledge of any third party claim received by it that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any trademark, service mark or trade name of any other Person other than as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Assignor represents and warrants that it is the true and lawful owner of all U.S. trademark registrations and applications and Domain Name registrations listed in Annex G hereto and that said registrations are valid, subsisting, have not been canceled and that such Assignor is not aware of any third-party claim that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said applications will not mature into registrations. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of a Noticed Event of Default, any document which may be required by the United States Patent and Trademark Office or similar registrar in order to effect an absolute assignment of all right, title and interest in each Mark and/or Domain Name, and record the same.

4.2.Licenses and Assignments. Except as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Mark or Domain Name absent prior written approval of the Collateral Agent.

4.3.Infringements. Each Assignor agrees, promptly upon learning thereof, to notify the Collateral Agent in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any party who such Assignor believes is, or may be, infringing or diluting or otherwise violating any of such Assignor’s rights in and to any Mark in any manner that could reasonably be expected to have a Material Adverse Effect, or with respect to any party claiming that such Assignor’s use of any Mark material to such Assignor’s business violates in any material respect any property right of that party. Each Assignor further agrees to take appropriate actions in accordance with reasonable business practices against any Person infringing any Mark or Domain Name in any manner that could reasonably be expected to have a Material Adverse Effect.

4.4.Preservation of Marks and Domain Names. Each Assignor agrees to take all actions as are reasonably necessary to preserve the protection and registration of the Marks as trademarks or service marks under the laws of the United States (other than any such Marks which are no longer used or useful in its business or operations).

4.5.Maintenance of Registration. Each Assignor shall, at its own expense, diligently process all documents required in accordance with reasonable business practices to maintain all Mark and/or Domain Name registrations, including but not limited to affidavits of use and applications for renewals of registration in the United States Patent and Trademark Office for all of its material registered Marks, and shall pay all fees and disbursements in connection therewith and shall not abandon any such filing of affidavit of use or any such application of renewal prior to the exhaustion of all administrative and judicial remedies without prior written consent of the Collateral Agent (other than with respect to registrations and applications deemed by such Assignor in its reasonable business judgment to be no longer prudent to pursue).

4.6.Future Registered Marks and Domain Names. If any Mark registration is issued hereafter to any Assignor as a result of any application now or hereafter pending before the United States Patent and Trademark Office or any Domain Name is registered by Assignor, within 30 days of issuance, such Assignor shall deliver to the Collateral Agent a notification concerning the issuance of the registration, and a grant of a security interest in such Mark and/or Domain Name, to the Collateral Agent and at the expense of such Assignor, confirming the grant of a security interest in such Mark and/or Domain Name to the Collateral Agent hereunder, the form of such security to be substantially in the form of Annex J hereto or in such other form as may be reasonably satisfactory to the Collateral Agent.

4.7.Remedies. Subject to the terms of the Intercreditor Agreement, if a Noticed Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title and interest of such Assignor in and to each of the Marks and Domain Names, together with all trademark rights and rights of protection to the same, vested in the Collateral Agent for the benefit of the Secured Creditors, in which event such rights, title and interest shall immediately vest, in the Collateral Agent for the benefit of the Secured Creditors, and the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged and notarized and record said absolute assignment with the applicable agency or registrar; (ii) take and use or sell the Marks or Domain Names and the goodwill of such Assignor’s business symbolized by the Marks or Domain Names and the right to carry on the business and use the assets of such Assignor in connection with which the Marks or Domain Names have been used; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from using the Marks or Domain Names in any manner whatsoever, directly or indirectly, and such Assignor shall execute such further documents that the Collateral Agent may reasonably request to further confirm this and to transfer ownership of the Marks or Domain Names and registrations and any pending trademark applications in the United States Patent and Trademark Office or applicable Domain Name registrar to the Collateral Agent.

ARTICLE V

SPECIAL PROVISIONS CONCERNING

PATENTS, COPYRIGHTS AND TRADE SECRETS

5.1.Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of all rights in (i) all Trade Secret Rights, (ii) the Patents listed in Annex H hereto for such Assignor and that said Patents include all the United States patents and applications for United States patents that such Assignor owns as of the Restatement Effective Date and (iii) the Copyrights listed in Annex I hereto for such Assignor and that said Copyrights include all the United States copyrights registered with the United States Copyright Office and applications for United States copyrights that such Assignor owns as of the Restatement Effective Date. Each Assignor further warrants that it has no knowledge of any third party claim that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any patent or copyright of any other Person or such Assignor has misappropriated any trade secret or proprietary information which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Noticed Event of Default, any document which may be required by the United States Patent and Trademark Office or the United States Copyright Office in order to effect an absolute assignment of all right, title and interest in each Patent or Copyright, and to record the same.

5.2.Licenses and Assignments. Except as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Patent or Copyright absent prior written approval of the Collateral Agent.

5.3.Infringements. Each Assignor agrees, promptly upon learning thereof, to furnish the Collateral Agent in writing with all pertinent information available to such Assignor with respect to any infringement, contributing infringement or active inducement to infringe or other violation of such Assignor’s rights in any Patent or Copyright or to any claim that the practice by any Assignor of any patent or use of any copyrighted work violates any property right of a third party, or with respect to any misappropriation of any Trade Secret Right or any claim that practice of any trade secret violates any property right of a third party, in each case, in any manner which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor further agrees, absent direction of the Collateral Agent to the contrary, to take appropriate action, in accordance with its reasonable business judgment against, any Person infringing any Patent or Copyright or any Person misappropriating any Trade Secret Right, in each case to the extent that such infringement or misappropriation, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.4.Maintenance of Patents or Copyrights. At its own expense, each Assignor shall make timely payment of all post-issuance fees required to maintain in force its rights under each Patent or Copyright, absent prior written consent of the Collateral Agent (other than any such Patents or Copyrights which are no longer used or are deemed by such Assignor in its reasonable business judgment to no longer be useful in its business or operations).

5.5.Prosecution of Patent or Copyright Applications. At its own expense, each Assignor shall diligently prosecute all material applications for (i) United States Patents listed in Annex H hereto and (ii) Copyrights listed on Annex I hereto, in each case for such Assignor and shall not abandon any such application prior to exhaustion of all administrative and judicial remedies (other than applications that are deemed by such Assignor in its reasonable business judgment to no longer be necessary in the conduct of the Assignor’s business), absent written consent of the Collateral Agent.

5.6.Other Patents and Copyrights. Within 30 days of the acquisition or issuance of a United States Patent, registration of a Copyright, or acquisition of a registered Copyright, or of filing of an application for a United States Patent or Copyright, the relevant Assignor shall deliver to the Collateral Agent notification describing the acquisition, issuance, filing or registration of said Copyright or Patent, as the case may be, with a grant of a security interest as to such Patent or Copyright, as the case may be, to the Collateral Agent and at the expense of such Assignor, confirming the grant of a security interest, the form of such grant of a security interest to be substantially in the form of Annex K or Annex L hereto, as appropriate, or in such other form as may be reasonably satisfactory to the Collateral Agent.

5.7.Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may, subject to the provisions of the Intercreditor Agreement, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title, and interest of such Assignor in each of the Patents and Copyrights vested in the Collateral Agent for the benefit of the Secured Creditors, in which event such right, title, and interest shall immediately vest in the Collateral Agent for the benefit of the Secured Creditors, in which case the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 5.1 hereof to execute, cause to be acknowledged and notarized and to record said absolute assignment with the applicable agency; (ii) take and practice or sell the Patents and Copyrights; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and such Assignor shall execute such further documents as the Collateral Agent may reasonably request further to confirm this and to transfer ownership of the Patents and Copyrights to the Collateral Agent for the benefit of the Secured Creditors.

ARTICLE VI

PROVISIONS CONCERNING ALL COLLATERAL

6.1.Protection of Collateral Agent’s Security. Except as otherwise permitted by the Secured Debt Agreements and the Intercreditor Agreement, each Assignor will do nothing to impair the rights of the Collateral Agent in the Collateral. Each Assignor will at all times maintain insurance, at such Assignor’s own expense to the extent and in the manner provided in the Secured Debt Agreements. Except to the extent otherwise permitted to be retained by such Assignor or applied by such Assignor pursuant to the terms of the Secured Debt Agreements, the Collateral Agent shall, subject to the provisions of the Intercreditor Agreement, at the time any proceeds of such insurance are distributed to the Secured Creditors, apply such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Assignor to pay the Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Assignor.

6.2.Warehouse Receipts Non-Negotiable. To the extent practicable, each Assignor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its Inventory, such Assignor shall request that such warehouse receipt or receipt in the nature thereof shall not be “negotiable” (as such term is used in Section 7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction or under other relevant law).

6.3.Additional Information. Each Assignor will, at its own expense, from time to time upon the reasonable request of the Collateral Agent, promptly (and in any event within 30 days after its receipt of the respective request) furnish to the Collateral Agent such information with respect to the Collateral (including the identity of the Collateral or such components thereof as may have been requested by the Collateral Agent, the value and location of such Collateral, etc.) as may be requested by the Collateral Agent. Without limiting the forgoing, each Assignor agrees that it shall promptly (and in any event within 30 days after its receipt of the respective request) furnish to the Collateral Agent such updated Annexes hereto as may from time to time be reasonably requested by the Collateral Agent.

6.4.Further Actions. Each Assignor will, at its own expense and upon the reasonable request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which the Collateral Agent deems reasonably appropriate or advisable to perfect, preserve or protect its security interest in the Collateral.

6.5.Financing Statements. Subject to the terms of the Intercreditor Agreement, each Assignor agrees to execute and deliver to the Collateral Agent such financing statements, in form reasonably acceptable to the Collateral Agent, as the Collateral Agent may from time to time reasonably request or as are reasonably necessary or desirable in the opinion of the Collateral Agent to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby. Each Assignor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Assignor hereby authorizes the Collateral Agent to file any such financing statements without the signature of such Assignor where permitted by law (and such authorization includes describing the Collateral as “all assets” of such Assignor).

ARTICLE VII

REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT

7.1.Remedies; Obtaining the Collateral Upon Default. Each Assignor agrees that, if any Event of Default shall have occurred and be continuing, then and in every such case, the Collateral Agent, in addition to any rights now or hereafter existing under applicable law and under the other provisions of this Agreement, shall have all rights as a secured creditor under any UCC, and such additional rights and remedies to which a secured creditor is entitled under the laws in effect in all relevant jurisdictions and, subject to the provisions of the Intercreditor Agreement, may:

(i)personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from such Assignor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon such Assignor’s premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of such Assignor;

(ii)subject to Section 3.3, instruct the obligor or obligors on any agreement, instrument or other obligation (including, without limitation, the Accounts and the Contracts) constituting the Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the Collateral Agent and may exercise any and all remedies of such Assignor in respect of such Collateral;

(iii)instruct all banks which have entered into a control agreement with the Collateral Agent to transfer all monies, securities and instruments held by such depositary bank to the Cash Collateral Account;

(iv)sell, assign or otherwise liquidate any or all of the Collateral or any part thereof in accordance with Section 7.2 hereof, or direct such Assignor to sell, assign or otherwise liquidate any or all of the Collateral or any part thereof, and, in each case, take possession of the proceeds of any such sale or liquidation;

(v)take possession of the Collateral or any part thereof, by directing such Assignor in writing to deliver the same to the Collateral Agent at any reasonable place or places designated by the Collateral Agent, in which event such Assignor shall at its own expense:

(x)forthwith cause the same to be moved to the place or places so designated by the Collateral Agent and there delivered to the Collateral Agent;

(y)store and keep any Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent as provided in Section 7.2 hereof; and

(z) while the Collateral shall be so stored and kept, provide such security and maintenance services as shall be reasonably necessary to protect the same and to preserve and maintain it in good condition;

(vi)so long as the relevant Event of Default is a Noticed Event of Default license or sublicense, whether on an exclusive or nonexclusive basis, any Marks, Domain Names, Patents or Copyrights included in the Collateral for such term and on such conditions and in such manner as the Collateral Agent shall in its sole judgment determine;

(vii)apply any monies constituting Collateral or proceeds thereof in accordance with the provisions of Section 7.4; and

(viii)take any other action as specified in clauses (1) through (5), inclusive, of Section 9-607 of the UCC;

it being understood that each Assignor’s obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor of said obligation. By accepting the benefits of this Agreement and each other Security Document, the Secured Creditors expressly acknowledge and agree that this Agreement and each other Security Document may be enforced only by the action of the Collateral Agent acting upon the instructions of the Required Secured Creditors and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Creditors upon the terms of this Agreement and the other Security Documents and subject to the terms of the Intercreditor Agreement.

7.2.Remedies; Disposition of the Collateral. If any Event of Default shall have occurred and be continuing, then any Collateral repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and any other Collateral whether or not so repossessed by the Collateral Agent, may, subject to the provisions of the Intercreditor Agreement, be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as the Collateral Agent may, in compliance with any mandatory requirements of applicable law, determine to be commercially reasonable. Any of such Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair at the expense of the relevant Assignor which the Collateral Agent shall determine to be commercially reasonable. Any such sale, lease or other disposition may be effected by means of a public disposition or private disposition, effected in accordance with the applicable requirements (in each case if and to the extent applicable) of Sections 9-610 through 9-613 of the UCC and/or such other mandatory requirements of applicable law as may apply to the respective disposition. The Collateral Agent may, without notice or publication, adjourn any public or private disposition or cause the same to be adjourned from time to time by announcement at the time and place fixed for the disposition, and such disposition may be made at any time or place to which the disposition may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may bid for and become the purchaser (and may pay all or any portion of the purchase price by crediting Obligations against the purchase price) of the Collateral or any item thereof, offered for disposition in accordance with this Section 7.2 without accountability to the relevant Assignor. If, under applicable law, the Collateral Agent shall be permitted to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor only such notice of disposition as shall be required by such applicable law. Each Assignor agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make such disposition or dispositions of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Assignor’s expense.

7.3.Waiver of Claims. Except as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives, to the extent permitted by law:

(i)all damages occasioned by such taking of possession or any such disposition except any damages which are the direct result of the Collateral Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision);

(ii)all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agent’s rights hereunder; and

(iii)all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and each Assignor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws.

Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant Assignor therein and thereto, and shall be a perpetual bar both at law and in equity against such Assignor and against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such Assignor.

7.4.Application of Proceeds. (a) (I) Subject to the terms of the Intercreditor Agreement, all moneys collected by the Collateral Agent (or, to the extent the U.S. Pledge Agreement or any other Security Document requires proceeds of collateral thereunder, which constitutes Term Priority Collateral, to be applied in accordance with the provisions of this Agreement, the Pledgee under the U.S. Pledge Agreement or the collateral agent or mortgagee under such other Security Document) upon any sale or other disposition of the Term Priority Collateral, together with all other moneys received by the Collateral Agent hereunder but subject to the provisions of following clauses (f) and (g), (or, to the extent the U.S. Pledge Agreement or any other Security Document requires proceeds of collateral thereunder, which constitutes Term Priority Collateral, to be applied in accordance with the provisions of this Agreement, the Pledgee under the U.S. Pledge Agreement or the collateral agent or mortgagee under such other Security Document) with respect thereto, shall be applied as follows:

(i)first, to the payment of all amounts owing by the respective Assignor the Collateral Agent and the Administrative Agent of the type described in clauses (iii), (iv) and (v) of the definition of “Obligations”;

(ii)second, to the extent proceeds remain after the application pursuant to preceding clause (i), to the payment of all amounts owing by the respective Assignor to any Agent of the type described in clauses (v) and (vi) of the definition of “Obligations”;

(iii)third, subject to the provisions of following clauses (f) and (g), to the extent proceeds remain after the application pursuant to preceding clauses (i) and (ii), an amount equal to the outstanding Primary U.S. Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(d) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary U.S. Borrower Obligations or, if the proceeds are insufficient to pay in full all such Primary U.S. Borrower Obligations, its ProRata Share of the amount remaining to be distributed;

(iv)fourth, subject to the provisions of following clauses (f) and (g), to the extent proceeds remain after the application pursuant to preceding clauses (i) through (iii), inclusive, an amount equal to the outstanding Primary German Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(d) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary German Borrower Obligations or, if the proceeds are insufficient to pay in full all such Primary German Borrower Obligations, its ProRata Share of the amount remaining to be distributed;

(v)fifth, subject to the provisions of the following clause (f), to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iv), an amount equal to the outstanding Secondary U.S. Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(d) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary U.S. Borrower Obligations or, if the proceeds are insufficient to pay in full all such Secondary U.S. Borrower Obligations, its ProRata Share of the amount remaining to be distributed;

(vi)sixth, subject to the provisions of the following clause (f), to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (v), an amount equal to the outstanding Secondary German Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(d) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary German Borrower Obligations or, if the proceeds are insufficient to pay in full all such Secondary German Borrower Obligations, its ProRata Share of the amount remaining to be distributed;

(vii)seventh, to the extent proceeds remain after the application pursuant to preceding clauses (i) through (vi), inclusive, if the ABL Credit Document Obligations Termination Date has not theretofore occurred, amounts equal to the ABL Obligations shall be paid to the ABL Collateral Agent for application to the ABL Obligations in accordance with sub-clauses fourth and fifth of Section 5.1(a) of the Intercreditor Agreement; and

(viii)eighth, to the extent proceeds remain after the application pursuant to preceding clauses (i) through (vii), inclusive, and following the termination of this Agreement pursuant to Section 10.8(a) hereof, to the relevant Assignor or to whomever may be lawfully entitled to receive such surplus.

Notwithstanding anything to the contrary contained above, to the extent monies or proceeds to be applied pursuant to this Section 7.4 consist of proceeds received under any European Security Document (other than as otherwise provided in the Intercreditor Agreement, in the case of Pari Passu Collateral as defined therein), such proceeds will be applied as follows:

(i)first, to the payment of all amounts owing by a European Credit Party or the respective Assignor owing to the Collateral Agent of the type described in clauses (iii), (iv) and (v) of the definition of “Obligations”;

(ii)second, to the extent proceeds remain after the application pursuant to the preceding clause (i), to the payment of all amounts owing by a European Credit Party or the respective Assignor(whether as direct obligor or as a guarantor) to any Agent of the type described in clauses (v) and (vi) of the definition of “Obligations”;

(iii)third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), an amount equal to the outstanding Primary German Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(d) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary German Borrower Obligations or, if the proceeds are insufficient to pay in full all such Primary German Borrower Obligations, its ProRata Share of the amount remaining to be distributed;

(iv)fourth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, an amount equal to the outstanding Secondary German Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(d) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary German Borrower Obligations or, if the proceeds are insufficient to pay in full all such Secondary German Borrower Obligations, its ProRataShare of the amount remaining to be distributed; and

(v)fifth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iv), inclusive, and following the termination of this Agreement pursuant to Section 10.8(a) hereof, to the relevant Assignor or to whomever may be lawfully entitled to receive such surplus.

(II) Subject to the terms of the Intercreditor Agreement, all moneys collected by the Collateral Agent (or, to the extent the U.S. Pledge Agreement or any other Security Document requires proceeds of collateral thereunder, which constitutes ABL Priority Collateral, to be applied in accordance with the provisions of this Agreement, the Pledgee under the U.S. Pledge Agreement or the collateral agent or mortgagee under such other Security Document) upon any sale or other disposition of the ABL Priority Collateral, together with all other moneys received by the Collateral Agent hereunder (or, to the extent the U.S. Pledge Agreement or any other Security Document requires proceeds of collateral thereunder, which constitutes ABL Priority Collateral, to be applied in accordance with the provisions of this Agreement, the Pledgee under the U.S. Pledge Agreement or the collateral agent or mortgagee under such other Security Document) with respect thereto, shall be applied as follows:

(vi)first, in accordance with sub-clauses first and second of Section 5.2(a) of the Intercreditor Agreement, to the ABL Collateral Agent for application to ABL Obligations until same have been repaid in full;

(vii)second, to the extent proceeds remain after the application pursuant to preceding clause (i), as otherwise provided in Section 7.4(a)(I).

(b)For purposes of this Agreement: (i) “Pro Rata Share” shall mean, when calculating a Secured Creditor’s portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor’s Primary U.S. Borrower Obligations, Primary German Borrower Obligations, Secondary U.S. Borrower Obligations or Secondary German Borrower Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Primary U.S. Borrower Obligations, Primary German Borrower Obligations, Secondary U.S. Borrower Obligations or Secondary German Borrower Obligations, as the case may be, (ii) “Primary Obligations” shall mean (x) in the case of the Credit Document Obligations, all unpaid principal of, premium, if any, fees and interest on, all Loans, (other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities) and (y) in the case of the Other Obligations, all amounts due to an Other Creditor under each Secured Hedging Agreement (other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities), (iii) “Secondary Obligations” shall mean all Obligations other than Primary Obligations, (iv) “Primary U.S. Borrower Obligations” shall mean all Primary Obligations which are also U.S. Borrower Obligations, (v) “Secondary U.S. Borrower Obligations” shall mean all Secondary Obligations which are also U.S. Borrower Obligations, (vi) “Primary German Borrower Obligations” shall mean all Primary Obligations which are also German Borrower Obligations and (vii) “Secondary German Borrower Obligations” shall mean all Secondary Obligations which are also German Borrower Obligations.

(c)When payments to Secured Creditors are based upon their respective ProRata Shares, the amounts received by such Secured Creditors hereunder shall be applied (for purposes of making determinations under this Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to their Secondary Obligations. If any payment to any Secured Creditor of its ProRata Share of any distribution would result in overpayment to such Secured Creditor, such excess amount shall instead be distributed in respect of the unpaid Primary Obligations or Secondary Obligations, as the case may be, of the other Secured Creditors, with each Secured Creditor whose Primary Obligations or Secondary Obligations, as the case may be, have not been paid in full to receive an amount equal to such excess amount multiplied by a fraction the numerator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of such Secured Creditor and the denominator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of all Secured Creditors entitled to such distribution.

(d)Subject to the terms of the Intercreditor Agreement, all payments required to be made hereunder shall be made (x) if to the Lender Creditors, to the Administrative Agent for the account of the Lender Creditors, (y) if to the Other Creditors, to the trustee, paying agent or other similar representative (each, a “Representative”) for the Other Creditors or, in the absence of such a Representative, directly to the Other Creditors and (z) if to the ABL Secured Parties, to the ABL Collateral Agent for the account of the ABL Secured Parties.

(e)For purposes of applying payments received in accordance with this Section 7.4, the Collateral Agent shall be entitled to rely upon the Administrative Agent for a determination of the outstanding Primary Obligations and Secondary Obligations (and Dollar Equivalents thereof) owed to the Secured Creditors. Unless it has received written notice from a Secured Creditor, to the contrary, the Administrative Agent, in furnishing information pursuant to the preceding sentence, and the Collateral Agent, in acting hereunder, shall be entitled to assume that no Secondary Obligations are outstanding.

(f)Notwithstanding anything to the contrary contained above, to the extent monies or proceeds to be applied pursuant to this Section 7.4 consist of proceeds received from a sale or other disposition of Excess Exempted Foreign Entity Voting Stock, such proceeds will be applied as otherwise required above in this Section 7.4, but for this purpose treating the outstanding Primary Obligations and Secondary Obligations as only those obligations secured by the Excess Exempted Foreign Entity Voting Stock in accordance with the provisions of clause (x) to the proviso appearing at the end of Section 3.1 of the U.S. Pledge Agreement and Section 1.1 above. In determining whether any Excess Exempted Foreign Entity Voting Stock has been sold or otherwise disposed of, the Collateral Agent shall treat any sale or disposition of Voting Stock of any Exempted Foreign Entity as first being a sale of Voting Stock which is not Excess Exempted Foreign Entity Voting Stock until such time as the stock sold represents 65% of the total combined voting power of all classes of Voting Stock of the respective Exempted Foreign Entity and, after such threshold has been met, any further sales of Voting Stock of the respective Exempted Foreign Entity shall be treated as sales of Excess Exempted Foreign Entity Voting Stock.

(g)It is understood that the Assignors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Obligations.

(h)It is understood and agreed by all parties hereto that the Collateral Agent shall have no liability for any determinations made by it in this Section 7.4 (including, without limitation, as to whether given Collateral constitutes ABL Priority Collateral or Term Priority Collateral), in each case except to the extent resulting from the gross negligence or willful misconduct of the Collateral Agent (as determined by a court of competent jurisdiction in a final and non-appealable decision). The parties also agree that the Collateral Agent may (but shall not be required to), at any time and in its sole discretion, and with no liability resulting therefrom, petition a court of competent jurisdiction regarding any application of Collateral in accordance with the requirements hereof and of the Intercreditor Agreement, and the Collateral Agent shall be entitled to wait for, and may conclusively rely on, any such determination.

7.5.Remedies Cumulative. Subject to the terms of (and to the extent not inconsistent with) the Intercreditor Agreement, each and every right, power and remedy hereby specifically given to the Collateral Agent shall be in addition to every other right, power and remedy specifically given to the Collateral Agent under this Agreement, the other Secured Debt Agreements or now or hereafter existing at law, in equity or by statute and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning of the exercise of one shall not be deemed a waiver of the right to exercise any other or others. No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of any of the Obligations shall impair any such right, power or remedy or shall be construed to be a waiver of any Default or Event of Default or an acquiescence thereof. No notice to or demand on any Assignor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent to any other or further action in any circumstances without notice or demand. In the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may recover reasonable expenses, including reasonable attorneys’ fees, and the amounts thereof shall be included in such judgment.

7.6.Discontinuance of Proceedings. In case the Collateral Agent shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case the relevant Assignor, the Collateral Agent and each holder of any of the Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such proceeding had been instituted.

ARTICLE VIII

INDEMNITY

8.1.Indemnity. (a) Each Assignor jointly and severally agrees to indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor and their respective successors, assigns, employees, affiliates and agents (hereinafter in this Section 8.1 referred to individually as “Indemnitee,” and collectively as “Indemnitees”) harmless from any and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments and any and all costs, expenses or disbursements (including reasonable attorneys’ fees and expenses) (for the purposes of this Section 8.1 the foregoing are collectively called “expenses”) of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Agreement, any other Secured Debt Agreement or any other document executed in connection herewith or therewith or in any other way connected with the administration of the transactions contemplated hereby or thereby or the enforcement of any of the terms of, or the preservation of any rights under any thereof, or in any way relating to or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition, or use of the Collateral (including, without limitation, latent or other defects, whether or not discoverable), the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; providedthat no Indemnitee shall be indemnified pursuant to this Section 8.1(a) for losses, damages or liabilities to the extent caused by the gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision); providedfurther that the Assignors shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to any necessary or advisable special counsel and up to one local counsel in each applicable local jurisdiction) for all Indemnitees unless, in the written opinion of outside counsel reasonably satisfactory to the Assignors and the Collateral Agent, representation of all such Indemnitees would be inappropriate due to the existence of an actual or potential conflict of interest. Each Assignor agrees that upon written notice by any Indemnitee of the assertion of such a liability, obligation, damage, injury, penalty, claim, demand, action, suit or judgment, the relevant Assignor shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify the relevant Assignor of any such assertion of which such Indemnitee has knowledge.

(b)Without limiting the application of Section 8.1(a) hereof, each Assignor agrees, jointly and severally, to pay or reimburse the Collateral Agent for any and all reasonable fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Collateral Agent’s Liens on, and security interest in, the Collateral, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices, payment or discharge of any taxes or Liens upon or in respect of the Collateral, premiums for insurance with respect to the Collateral and all other fees, costs and expenses in connection with protecting, maintaining or preserving the Collateral and the Collateral Agent’s interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Collateral.

(c)Without limiting the application of Section 8.1(a) or (b) hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any misrepresentation by any Assignor in this Agreement, any other Secured Debt Agreement or in any writing contemplated by or made or delivered pursuant to or in connection with this Agreement or any other Secured Debt Agreement.

(d)If and to the extent that the obligations of any Assignor under this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.

8.2.Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Collateral. The indemnity obligations of each Assignor contained in this Article VIII shall continue in full force and effect notwithstanding the full payment of all of the other Obligations and notwithstanding the full payment of all the Notes issued, and Loans made, under the Credit Agreement, the termination of all Secured Hedging Agreements entered into with the Other Creditors and the payment of all other Obligations and notwithstanding the discharge thereof and the occurrence of the Termination Date.

ARTICLE IX

DEFINITIONS

The following terms shall have the meanings herein specified. Such definitions shall be equally applicable to the singular and plural forms of the terms defined.

“ABL Collateral Agent” shall have the meaning assigned that term in the Intercreditor Agreement.

“ABL Credit Document Obligations Termination Date” shall mean that date upon which the Discharge of ABL Obligations shall have occurred.

“ABL Documents” shall have the meaning assigned that term in the Intercreditor Agreement.

“ABL Obligations” shall have the meaning assigned that term in the Intercreditor Agreement.

“ABL Priority Collateral” shall have the meaning assigned that term in the Intercreditor Agreement.

“ABL Secured Parties” shall have the meaning assigned that term in the Intercreditor Agreement.

“Account” shall mean any “account” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York, and in any event shall include but shall not be limited to, all rights to payment of any monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State. Without limiting the foregoing, the term “account” shall include all Health-Care-Insurance Receivables.

“Administrative Agent” shall have the meaning provided in the recitals of this Agreement.

“Agreement” shall mean this U.S. Security Agreement, as the same may be amended, modified, restated and/or supplemented from time to time in accordance with its terms.

“Aleris” shall have the meaning provided in the recitals of this Agreement.

“As-Extracted Collateral” shall mean “as-extracted collateral” as such term is defined in the Uniform Commercial Code as in effect on the Effective Date in the State of New York.

“Assignor” shall have the meaning provided in the first paragraph of this Agreement.

“Borrower” shall have the meaning provided in the recitals to this Agreement.

“Cash Collateral Account” shall mean a non-interest bearing cash collateral account maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Creditors.

“Chattel Paper” shall mean “chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York. Without limiting the foregoing, the term “Chattel Paper” shall in any event include all Tangible Chattel Paper and all Electronic Chattel Paper.

“Class” shall have the meaning provided in Section 10.2 of this Agreement.

“Collateral” shall have the meaning provided in Section 1.1(a) of this Agreement.

“Collateral Agent” shall have the meaning provided in the first paragraph of this Agreement.

“Commercial Tort Claims” shall mean “commercial tort claims” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Contract Rights” shall mean all rights of any Assignor under each Contract, including, without limitation, (i) any and all rights to receive and demand payments under any or all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts.

“Contracts” shall mean all contracts between any Assignor and one or more additional parties (including, without limitation, any Interest Rate Protection Agreements, Currency Hedging Agreements, licensing agreements and any partnership agreements, joint venture agreements and limited liability company agreements).

“Copyrights” shall mean any United States or foreign copyright now or hereafter owned by any Assignor, including any registrations of any copyrights, in the United States Copyright Office or any foreign equivalent office, as well as any application for a copyright registration now or hereafter made with the United States Copyright Office or any foreign equivalent office by any Assignor.

“Credit Agreement” shall have the meaning provided in the recitals of this Agreement.

“Credit Document Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“Deposit Accounts” shall mean all “deposit accounts” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Discharge of ABL Obligations” shall have the meaning assigned that term in the Intercreditor Agreement.

“Documents” shall mean “documents” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Domain Names” shall mean all Internet domain names and associated URL addresses in or to which any Assignor now or hereafter has any right, title or interest.

“Electronic Chattel Paper” shall mean “electronic chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Equipment” shall mean any “equipment” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York, and in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned by any Assignor and any and all additions, substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.

“Excess Exempted Foreign Entity Voting Stock” shall have the meaning provided in the U.S. Pledge Agreement.

“Excess Foreign Corporation Equity Interests” shall have the meaning provided in Section 1.1(a).

“Excluded Equipment” shall mean at any date any Equipment of an Assignor which is subject to, or secured by, a Capital Lease Obligation or purchase money Indebtedness which is permitted under Section 8.04 of the Credit Agreement if and to the extent that (i) the express terms of a valid and enforceable restriction in favor of a Person who is not Aleris or one of its Subsidiaries contained in the agreements or documents granting or governing such Capital Lease Obligation or purchase money Indebtedness prohibits, or requires any consent or establishes any other conditions for, an assignment thereof, or a grant of a security interest therein, by an Assignor and (ii) such restriction relates only to the asset or assets acquired by an Assignor with the Proceeds of such Capital Lease Obligation or purchase money Indebtedness; providedthat all Proceeds paid or payable to any Assignor from any sale, transfer or assignment or other voluntary or involuntary disposition of such Equipment and all rights to receive such Proceeds shall be included in the Collateral to the extent not otherwise required to be paid to the holder of the Capital Lease Obligation or purchase money Indebtedness secured by such Equipment.

“Exempted Foreign Entity” shall have the meaning provided in the U.S. Pledge Agreement.

“Existing U.S. Security Agreement” shall mean the U.S. Security Agreement, dated as of August 1, 2006, among certain of the Assignors, the Administrative Agent and Citicorp North America, Inc., as Collateral Agent.

“Event of Default” shall mean (i) at any time when any Credit Document Obligations are outstanding or any Commitments under the Credit Agreement exist, any Event of Default under, and as defined in the Credit Agreement and (ii) at any time after all of the Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated and no further Commitments may be provided thereunder, any event of default under any Secured Hedging Agreement or any payment default on any of the Obligations after the expiration of any applicable grace period.

“Foreign Corporation” shall have the meaning provided in the U.S. Pledge Agreement.

“General Intangibles” shall mean “general intangibles” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“German Borrower” shall have the meaning provided in the recitals of this Agreement.

“German Borrower Obligations” shall mean all Obligations of the European Borrower and any guarantees thereof (including by U.S. Credit Parties) pursuant to the Guaranties or pursuant to any other Credit Document.

“Goods” shall mean “goods” as such term is defined in the Uniform Commercial Code as in effect on Effective Date in the State of New York.

“Health-Care-Insurance Receivable” shall mean any “health-care-insurance receivable” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Indemnitee” shall have the meaning provided in Section 8.1(a) of this Agreement.

“Instrument” shall mean “instruments” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Inventory” shall mean merchandise, inventory and goods, and all additions, substitutions and replacements thereof and all accessions thereto, wherever located, together with all goods, supplies, incidentals, packaging materials, labels, materials and any other items used or usable in manufacturing, processing, packaging or shipping same, in all stages of production from raw materials through work in process to finished goods, and all products and proceeds of whatever sort and wherever located any portion thereof which may be returned, rejected, reclaimed or repossessed by the Collateral Agent from any Assignor’s customers, and shall specifically include all “inventory” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Investment Property” shall mean “investment property” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Lender Creditors” shall have the meaning provided in the recitals of this Agreement.

“Lenders” shall have the meaning provided in the recitals of this Agreement.

“Letter-of-Credit Rights” shall mean “letter-of-credit rights” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date hereof in the State of New York.

“Location” of any Assignor, shall mean such Assignor’s “location” as determined pursuant to Section 9-307 of the UCC.

“Marks” shall mean all right, title and interest in and to any trademarks, service marks and trade names now owned or held or hereafter acquired by any Assignor, including any registration or application for registration of any trademarks and service marks now owned or held or hereafter acquired by any Assignor, which are registered or filed for registration in the United States Patent and Trademark Office or the equivalent thereof in any state of the United States or any equivalent foreign office or agency, as well as any unregistered trademarks and service marks owned by an Assignor and any trade dress including logos, designs, fictitious business names and other business identifiers owned by any Assignor; provided, however that the definition of Marks shall not include any intent-to-use trademark applications to the extent a grant of a security interest therein would invalidate such intent to use the trademark application.

“Non-Voting Equity Interests” shall have the meaning provided in the U.S. Pledge Agreement.

“Noticed Event of Default” shall mean (i) an Event of Default under Section 9.01 or 9.05 of the Credit Agreement and (ii) any other Event of Default in respect of which the Administrative Agent has given Aleris notice that such Event of Default constitutes a “Noticed Event of Default”.

“Obligations” shall mean and include, as to any Assignor, all of the following:

(i)the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, unpaid principal, premium, interest (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding), fees, costs and indemnities) of such Assignor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Credit Documents to which such Assignor is a party (including, without limitation, in the event such Assignor is a Guarantor, all such obligations, liabilities and indebtedness of such Assignor under its Guaranty) (all such obligations, liabilities and indebtedness under this clause (i), except to the extent consisting of obligations or indebtedness with respect to Secured Hedging Agreements, being herein collectively called the “Credit Document Obligations”);

(ii)the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Assignor to the Other Creditors, now existing or hereafter incurred under, arising out of or in connection with any Secured Hedging Agreement, whether such Secured Hedging Agreement is now in existence or hereinafter arising (including, without limitation, in the case of a Assignor that is a Guarantor, all obligations, liabilities and indebtedness of such Assignor under its Guaranty in respect of the Secured Hedging Agreements), (all such obligations, liabilities and indebtedness under this clause (ii) being herein collectively called the “Other Obligations”);

(iii)any and all sums advanced by the Collateral Agent in order to preserve the Collateral or preserve its security interest in the Collateral;

(iv)in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of such Assignor referred to in clauses (i) and (ii) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Collateral Agent of its rights hereunder, together with reasonable attorneys’ fees and court costs;

(v)all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 8.1 of this Agreement; and

(vi)all amounts owing to any Agent or any of its affiliates pursuant to any of the Credit Documents in its capacity as such;

it being acknowledged and agreed that the “Obligations” shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.

“Other Creditors” shall have the meaning provided in the recitals to this Agreement.

“Other Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“Patents” shall mean any patent in or to which any Assignor now or hereafter has any right, title or interest therein and any divisions and continuations (including, but not limited to, continuations-in-parts), as well as any application for a patent now or hereafter made by any Assignor.

“Permits” shall mean, to the extent permitted to be assigned by the terms thereof or by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations of or from any governmental authority or agency.

“Person” shall mean any individual, partnership, joint venture, firm, corporation, association, limited liability company, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

“Primary German Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Primary Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Primary U.S. Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Pro Rata Share” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Proceeds” shall mean all “proceeds” as such term is defined in the Uniform Commercial Code as in effect in the State of New York on the Restatement Effective Date and, in any event, shall also include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or any Assignor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Assignor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.

“Registered Organization” shall have the meaning provided in the Uniform Commercial Code as in effect in the State of New York.

“Representative” shall have the meaning provided in Section 7.4(d) of this Agreement.

“Required Secured Creditors” shall mean (i) at any time when any Credit Document Obligations are outstanding or any Commitments under the Credit Agreement exist, the Required Lenders (or, to the extent provided in Section 11.12 of the Credit Agreement, each of the Lenders) and (ii) at any time after all of the Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated and no further Commitments may be provided thereunder, the holders of a majority of the Other Obligations.

“Requisite Creditors” shall have the meaning provided in Section 10.2 of this Agreement.

“Secondary German Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Secondary Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Secondary U.S. Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Secured Creditors” shall have the meaning provided in the recitals of this Agreement.

“Secured Debt Agreements” shall mean and include (i) this Agreement, (ii) the other Credit Documents, (iii) the Secured Hedging Agreements and (iv) the Secured Hedging Agreement Intercreditor Agreement entered into by the Collateral Agent with an Other Creditor.

“Secured Hedging Agreement” shall mean each Interest Rate Protection Agreement and/or Other Hedging Agreements provided that (i) such Interest Rate Protection Agreement and/or Other Hedging Agreement expressly states that (x) it constitutes a “Secured Hedging Agreement” for purposes of this Agreement and the other Credit Documents and (y) does not constitute a “Secured Hedging Agreement” for purposes of the ABL Credit Agreement, the ABL Security Documents or any guaranties relating to the ABL Credit Agreement, (ii) Aleris and the other parties thereto shall have delivered to the Collateral Agent a written notice specifying that such Interest Rate Protection Agreement and/or Other Hedging Agreement (x) constitutes a “Secured Hedging Agreement” for purposes of this Agreement and the other Credit Documents, (y) does not constitute a “Secured Hedging Agreement” for purposes of the ABL Credit Agreement, the ABL Security Documents or any guaranties relating to the ABL Credit Agreement and (z) in the case of Aleris, that such Interest Rate Protection Agreement and/or Other Hedging Agreement and the obligations of Aleris and its Subsidiaries thereunder have been, and will be, incurred in compliance with this Agreement and (iii) such Other Creditor has become party to the Secured Hedging Agreement Intercreditor Agreement with respect to the relevant Interest Rate Protection Agreement or Other Hedging Agreement on terms reasonably satisfactory to the Collateral Agent.

“Secured Hedging Agreement Intercreditor Agreement” shall have the meaning provided in Section 10.14 of this Agreement.

“Software” shall mean “software” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Subsidiary” shall mean, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time.

“Supporting Obligations” shall mean any “supporting obligation” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York, now or hereafter owned by any Assignor, or in which any Assignor has any rights, and, in any event, shall include, but shall not be limited to all of such Assignor’s rights in any Letter-of-Credit Right or secondary obligation that supports the payment or performance of, and all security for, any Collateral consisting of Accounts, Chattel Paper, Documents, General Intangibles, Instruments or Investment Properties.

“Tangible Chattel Paper” shall mean “tangible chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the Restatement Effective Date in the State of New York.

“Term Priority Collateral” shall have the meaning assigned that term in the Intercreditor Agreement.

“Termination Date” shall have the meaning provided in Section 10.8(a) of this Agreement.

“Timber-to-be-Cut” shall mean “timber-to-be-cut” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Trade Secret Rights” shall mean the rights of an Assignor in any Trade Secret it holds.

“Transmitting Utility” shall have the meaning given such term in Section 9-102(a)(80) of the UCC.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.

“U.S. Borrower Obligations” shall mean all Obligations of the U.S. Borrower (but not as a Guarantor of the German Borrower or any European Credit Party) and any guarantees of such Obligations pursuant to the Guaranties or pursuant to any other Credit Document.

“U.S. Borrower” shall have the meaning provided in the recitals of this Agreement.

“Vehicles” shall mean all cars, trucks, construction and earth moving equipment covered by a certificate of title law of any state (and where perfection of security interests therein cannot be effected by filings under the UCC).

“Voting Equity Interests” shall have the meaning provided in the U.S. Pledge Agreement.

ARTICLE X

MISCELLANEOUS

10.1.Notices. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Collateral Agent or any Assignor shall not be effective until received by the Collateral Agent or such Assignor, as the case may be. All notices and other communications shall be in writing and addressed as follows:

(a)if to any Assignor, c/o:

 Aleris International, Inc.,

 25825 Science Park Drive, Suite 400

            Beachwood, OH 44122

 Attention: General Counsel

            Telephone No.: (216) 910-3400

            Telecopier No.: (216) 910-3650

(b)if to the Collateral Agent or the Administrative Agent, at:

 Deutsche Bank AG New York Branch

 60 Wall Street

 New York, NY 10005

 MS NYC 60-0208

 Attention: Marguerite Sutton

 Telephone No.: (212) 250-6150

 Telecopier No.: (212) 797-4655

(c)        if to any Lender Creditor other than the Collateral Agent, at such address as such Lender Creditor shall have specified in the Credit Agreement

(d)        if to any Other Creditor, at such address as such Other Creditor shall have specified in writing to Aleris and the Collateral Agent;

or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.

10.2.Waiver; Amendment. None of the terms and conditions of this Agreement (or, to the extent any other Security Document requires waivers or amendments thereunder to occur in accordance with the provisions of this Agreement, such other Security Document) may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Assignor (or, to the extent any other Security Document requires waivers or amendments thereunder to occur in accordance with the provisions of this Agreement, the pledgor, transferor, mortgagor or other corresponding party under such other Security Document) directly affected thereby and the Collateral Agent (or, to the extent any other Security Document requires waivers or amendments thereunder to occur in accordance with the provisions of this Agreement, the collateral agent or mortgagee under such other Security Document) (with the written consent of the Required Secured Creditors) and subject to the terms of the Intercreditor Agreement; provided, that, (i) subject to the provisions of the Intercreditor Agreement, (x) additional Assignors may be added as parties hereto from time to time in accordance with Section 10.12 (or the corresponding section in such other Security Document) without the consent of any other Assignor or of the Secured Creditors, and (y) Assignors may be removed as parties hereto from time to time in accordance with Section 10.13 (or the corresponding section in such other Security Document), without the consent of any other Assignor or of the Secured Creditors, (ii) that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) also shall require the written consent of the Requisite Creditors of such affected Class and (iii) to the extent provided in the Secured Hedging Agreement Intercreditor Agreement, the consent of the Other Creditors to amendments, modifications and waivers described in the Secured Hedging Agreement Intercreditor Agreement shall be required. For the purpose of this Agreement, the term “Class” shall mean each class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the Credit Document Obligations, or (y) the Other Creditors as the holders of the Other Obligations. For the purpose of this Agreement, the term “Requisite Creditors” of any Class shall mean each of (x) with respect to the Credit Document Obligations, the Required Lenders (or, to the extent provided in Section 11.12 of the Credit Agreement, each of the Lenders), and (y) with respect to the Other Obligations, the holders of at least a majority of all Other Obligations outstanding from time to time.

10.3.Obligations Absolute. Subject to the terms of the Intercreditor Agreement, the obligations of each Assignor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of such Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or any other Secured Debt Agreement; or (c) any amendment to or modification of any Secured Debt Agreement or any security for any of the Obligations (in each case), whether or not such Assignor shall have notice or knowledge of any of the foregoing.

10.4.Successors and Assigns. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 10.8, (ii) be binding upon each Assignor, its successors and assigns, providedhowever, that no Assignor shall assign any of its rights or obligations hereunder without the prior written consent of the Collateral Agent (with the prior written consent of the Required Secured Creditors), and (iii) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other Secured Creditors and their respective successors, transferees and assigns. All agreements, statements, representations and warranties made by each Assignor herein or in any certificate or other instrument delivered by such Assignor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Secured Debt Agreements regardless of any investigation made by the Secured Creditors or on their behalf.

10.5.Headings Descriptive. The headings of the several sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

10.6.GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH ASSIGNOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH ASSIGNOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH ASSIGNOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS JURISDICTION OVER SUCH ASSIGNOR. EACH ASSIGNOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH ASSIGNOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 10.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY ASSIGNOR IN ANY OTHER JURISDICTION.

(b)EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c)EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

10.7.Assignors’ Duties. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Assignor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Assignor under or with respect to any Collateral.

10.8.Termination; Release. (a) After the Termination Date, this Agreement (or, to the extent any other Security Document requires termination or releases thereunder to occur in accordance with the provisions of this Agreement, such other Security Document) shall terminate (providedthat all indemnities set forth herein including, without limitation in Section 8.1 hereof, shall survive such termination) and the Collateral Agent (or, to the extent any other Security Document requires termination or releases thereunder to occur in accordance with the provisions of this Agreement, the collateral agent or mortgagee under such other Security Document), at the request and expense of the respective Assignor (or, to the extent any other Security Document requires termination or releases thereunder to occur in accordance with the provisions of this Agreement, the pledgor, transferor, mortgagor or other corresponding party under such other Security Document), will, subject to the provisions of the Intercreditor Agreement, promptly execute and deliver to such Assignor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent or any of its sub-agents hereunder and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement. As used in this Agreement, “Termination Date” shall mean the date upon which the Total Commitment under the Credit Agreement has been terminated, no Note (as defined in the Credit Agreement) is outstanding (and all Loans have been paid in full), all Obligations under Secured Hedging Agreements and all other Obligations (other than indemnities under the Credit Documents and the Secured Hedging Agreements which are not then due and payable) have been paid in full and all Secured Hedging Agreements have been terminated.

(b)In the event that any part of the Collateral (as defined in the Credit Agreement) is sold or otherwise disposed of (to a Person other than a Credit Party) (x) at any time prior to the time at which all Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated, in connection with a sale or disposition permitted by Section 8.06 of the Credit Agreement or is otherwise released at the direction of the Required Lenders (or all the Lenders if required by Section 11.12 of the Credit Agreement) or (y) at any time thereafter, to the extent permitted by the other Secured Debt Agreements, and in the case of clauses (x) and (y), and the proceeds of such sale or disposition (or from such release) are applied in accordance with the terms of the Credit Agreement or such other Secured Debt Agreement, as the case may be, to the extent required to be so applied, the Collateral Agent, at the request and expense of Aleris, will duly release from the security interest created hereby (or, to the extent any other Security Document requires releases thereunder to occur in accordance with the provisions of this Agreement, from the security interest created by such other Security Document) (and will execute and deliver such documentation, including termination or partial release statements and the like in connection therewith) and assign, transfer and deliver to Aleris, on behalf of the applicable Assignor (without recourse and without any representation or warranty) such of the Collateral (as defined in the Credit Agreement) as is then being (or has been) so sold or otherwise disposed of, or released, and as may be in the possession of the Collateral Agent (or any of its sub-agents hereunder) and has not theretofore been released pursuant to this Agreement. Furthermore, upon the release of any Guarantor from any Guaranty in accordance with the provisions thereof or in accordance with Section 11.12(b) of the Credit Agreement, such Assignor (or, to the extent any other Security Document requires releases thereunder to occur in accordance with the provisions of this Agreement, the assignor, grantor or pledgor under such other Security Document) (and the Collateral at such time assigned by the respective Assignor, grantor, pledgor or assignor pursuant hereto or pursuant to such other Security Document) shall be released from this Agreement (or, to the extent any other Security Document requires releases thereunder to occur in accordance with the provisions of this Agreement, from such other Security Document).

(c)At any time that an Assignor desires that the Collateral Agent take any action to acknowledge or give effect to any release of Collateral pursuant to the foregoing Section 10.8(a) or (b), such Assignor shall deliver to the Collateral Agent (and the relevant sub-agent, if any, designated hereunder) a certificate signed by a principal executive officer of such Assignor stating that the release of the respective Collateral is permitted pursuant to such Section 10.8(a) or (b). At any time that any U.S. Borrower or the respective Assignor desires that a Subsidiary of such U.S. Borrower which has been released from the U.S. Subsidiaries Guaranty be released hereunder as provided in the penultimate sentence of Section 10.8(b), it shall deliver to the Collateral Agent a certificate signed by a principal executive officer of such U.S. Borrower and the respective Assignor stating that the release of the respective Assignor (and its Collateral) is permitted pursuant to such Section 10.8(b).

(d)The Collateral Agent shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with, or which the Collateral Agent believes to be in accordance with, this Section 10.8.

10.9.Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Collateral Agent.

10.10.Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

10.11.The Collateral Agent and the other Secured Creditors. The Collateral Agent will hold in accordance with this Agreement (and to the extent applicable, the Intercreditor Agreement) all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in Annex M hereto, the terms of which shall be deemed incorporated herein by reference as fully as if same were set forth herein in their entirety.

10.12.Additional Assignors. It is understood and agreed that any Subsidiary Guarantor that desires to become an Assignor hereunder, or is required to execute a counterpart of this Agreement after the Restatement Effective Date pursuant to the requirements of the Credit Agreement or any other Credit Document, shall become an Assignor hereunder by executing a counterpart hereof and delivering same to the Collateral Agent, or by executing a joinder agreement in form and substance satisfactory to the Collateral Agent, (y) delivering supplements to Annexes A through D, inclusive, and F through I, inclusive, hereto as are necessary to cause such Annexes to be complete and accurate with respect to such additional Assignor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Assignor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken to the reasonable satisfaction of the Collateral Agent.

10.13.Amendment and Restatement. This Agreement shall amend and restate in its entirety the Existing U.S. Security Agreement, and all obligations of the Assignors thereunder shall be deemed replaced and extended as obligations under this Agreement and be governed hereby without novation.

10.14.Calculation of Obligations under Secured Hedging Agreements. Any calculation of obligations outstanding under a Secured Hedging Agreement for purposes of this Agreement or any other Security Document shall be determined pursuant to the terms of the Secured Hedging Agreement Intercreditor Agreement dated as of December 19, 2006 among Aleris, the other grantors party thereto from time to time, the secured hedge counterparties party thereto from time to time and the Collateral Agent and the Administrative Agent (as amended, modified or supplemented from time to time, the “Secured Hedging Agreement Intercreditor Agreement”).

[Remainder of this page intentionally left blank; signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.

ALERIS INTERNATIONAL, INC.,
as an Assignor
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Executive Vice President and  Chief Financial Officer

AURORA ACQUISITION MERGER SUB, INC., as an Assignor
By:	/s/ Clive Bode
	Name:	Clive Bode
	Title:	Vice President

ALCHEM ALUMINUM, INC.

as an Assignor

ALCHEM ALUMINUM SHELBYVILLE

INC., as an Assignor

ALERIS, INC., as an Assignor

ALERIS OHIO MANAGEMENT, INC.,

as an Assignor

ALSCO METALS CORPORATION,

as an Assignor

ALUMITECH OF CLEVELAND, INC.,

as an Assignor

ALUMITECH OF WABASH, INC.,

as an Assignor

ALUMITECH OF WEST VIRGINIA, INC.,

as an Assignor

ALUMITECH, INC., as an Assignor

AWT PROPERTIES, INC., as an Assignor

CA LEWISPORT, LLC, as an Assignor

CI HOLDINGS, LLC, as an Assignor

COMMONWEALTH ALUMINUM

CONCAST, INC., as an Assignor

COMMONWEALTH ALUMINUM

LEWISPORT, LLC, as an Assignor

COMMONWEALTH ALUMINUM

METALS, LLC, as an Assignor

COMMONWEALTH ALUMINUM SALES

CORPORATION, as an Assignor

COMMONWEALTH ALUMINUM TUBE

ENTERPRISES, LLC, as an Assignor

COMMONWEALTH ALUMINUM, LLC,

as an Assignor

COMMONWEALTH FINANCING CORP.,

as an Assignor

COMMONWEALTH INDUSTRIES, INC.,

as an Assignor

ETS SCHAEFER CORPORATION,

as an Assignor

GULF REDUCTION CORPORATION,

as an Assignor

IMCO INTERNATIONAL, INC.,

as an Assignor

IMCO INVESTMENT COMPANY,

as an Assignor

IMCO RECYCLING OF CALIFORNIA, INC.,

as an Assignor

IMCO RECYCLING OF IDAHO INC.,

as an Assignor

IMCO RECYCLING OF ILLINOIS INC.,

as an Assignor

IMCO RECYCLING OF INDIANA INC.,

as an Assignor

IMCO RECYCLING OF MICHIGAN L.L.C.,

as an Assignor

IMCO RECYCLING OF OHIO INC.,

as an Assignor

IMCO RECYCLING OF UTAH INC.,

as an Assignor

IMCO RECYCLING SERVICES COMPANY,

as an Assignor

IMSAMET, INC., as an Assignor

ALERIS BLANKING AND RIM PRODUCTS,

INC. (f/k/a INDIANA ALUMINUM INC.),

as an Assignor

INTERAMERICAN ZINC, INC.,

as an Assignor

METALCHEM, INC., as an Assignor

MIDWEST ZINC CORPORATION,

as an Assignor

ROCK CREEK ALUMINUM, INC.,

as an Assignor

SILVER FOX HOLDING COMPANY,

as an Assignor

U.S. ZINC CORPORATION,

as an Assignor

U.S. ZINC EXPORT CORPORATION,

as an Assignor

WESTERN ZINC CORPORATION,

as an Assignor

By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Director

IMCO INDIANA PARTNERSHIP L.P., as an Assignor
By: IMCO International, Inc. its General
Partner,
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	President

IMCO MANAGEMENT PARTNERSHIP L.P., as an Assignor
By: Aleris International, Inc. its General
Partner,
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Executive Vice President and  Chief Financial Officer

CORUS ALUMINUM CORP.,
as an Assignor
HOOGOVENS ALUMINUM EUROPE INC.,
as an Assignor
By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Director

Accepted and Agreed to:

DEUTSCHE BANK AG NEW YORK BRANCH,
As Collateral Agent
By:	/s/  Carin Keegan
Name:  Carin Keegan
Title:    Vice President

By:	/s/  Scottye Lindsey
Name:  Scottye Lindsey
Title:    Director

Accepted and Agreed to:

DEUTSCHE BANK AG NEW YORK BRANCH,
As Administrative Agent
By:	/s/  Carin Keegan
Name:  Carin Keegan
Title:    Vice President

By:	/s/   Scottye Lindsey
Name:  Scottye Lindsey
Title:    Director

EX-10.8

Exhibit 10.8

EXECUTION COPY

AMENDED AND RESTATED U.S. PLEDGE AGREEMENT

AMENDED AND RESTATED U.S. PLEDGE AGREEMENT, dated as of August 1, 2006 and amended and restated as of December 19, 2006 (as the same may be amended, restated, modified and/or supplemented from time to time, this “Agreement”) among each of the undersigned pledgors (each, a “Pledgor” and, together with any other entity that becomes a pledgor hereunder pursuant to Section 30 hereof, the “Pledgors”) and DEUTSCHE BANK AG NEW YORK BRANCH, as collateral agent (together with any successor collateral agent, the “Pledgee”), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.

W I T N E S S E T H :

WHEREAS, Aurora Acquisition Merger Sub, Inc., Aleris International, Inc., a Delaware corporation (“Aleris” or the “U.S. Borrower”), Aleris Deutschland Holding GmbH, a company with limited liability formed under the laws of Germany (the “German Borrower” and, together with the U.S. Borrower, each a “Borrower” and, collectively, the “Borrowers”), the lenders party thereto from time to time, (the “Lenders”), and the Administrative Agent (the Lenders, the Collateral Agent and the Administrative Agent are herein called the “Lender Creditors”) have entered into an Amended and Restated Term Loan Agreement, dated as of August 1, 2006 and amended and restated as of the date hereof, providing for the making of Loans to the Borrowers as contemplated therein (as used herein, the term “Credit Agreement” means the Amended and Restated Term Loan Agreement described above in this paragraph, as the same may be amended, modified, extended, renewed, replaced, restated, supplemented or refinanced from time to time, and including any agreement extending the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any portion of, the indebtedness under such agreement or any successor agreement, whether or not with the same agent, trustee, representative, lenders or holders; provided that, with respect to any agreement providing for the refinancing or replacement of indebtedness under the Credit Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder if (i) either (A) all obligations under the Credit Agreement being refinanced or replaced shall be paid in full at the time of such refinancing or replacement, and all commitments pursuant to the refinanced or replaced Credit Agreement shall have terminated in accordance with their terms or (B) the Required Lenders shall have consented in writing to the refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit Agreement, and (ii) a notice to the effect that the refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall be delivered by Aleris to the Collateral Agent);

WHEREAS, each Borrower and/or one or more of its Subsidiaries may at any time and from time to time enter into one or more Secured Hedging Agreements with one or more Persons other than the Borrowers or their Subsidiaries (the “Other Creditors” and collectively, with the Lender Creditors, the “Secured Creditors”);

WHEREAS, pursuant to the U.S. Borrower Guaranty, the U.S. Borrower has guaranteed to the Secured Creditors the payment when due of all of its Relevant Guaranteed Obligations as described therein;

WHEREAS, pursuant to the U.S. Subsidiaries Guaranty, each U.S. Subsidiary Guarantor has jointly and severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations (as defined in the U.S. Subsidiaries Guaranty);

WHEREAS, the Intercreditor Agreement governs the relative rights and priorities of the Secured Creditors and the ABL Secured Parties in respect of the ABL Priority Collateral and the Term Priority Collateral (and with respect to certain other matters as described therein);

WHEREAS, it is a condition precedent to (i) the making of Loans to the Borrowers under the Credit Agreement and (ii) the Other Creditors entering into Secured Hedging Agreements, that each Guarantor shall have executed and delivered to the Pledgee this Agreement; and

WHEREAS, each Pledgor has obtained and will continue to obtain benefits from the incurrence of Loans by the Borrowers under the Credit Agreement and the entering into by the Borrowers and/or one or more of their respective Subsidiaries of Secured Hedging Agreements and, accordingly each Pledgor, desires to execute this Agreement in order to (i) satisfy the condition described in the preceding paragraph and to (ii) induce (x) the Lenders to make Loans to the Borrowers and (y) the Other Creditors to enter into Secured Hedging Agreements with the Borrowers and/or one or more of their respective Subsidiaries;

NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby makes the following representations and warranties to the Pledgee for the benefit of the Secured Creditors and hereby covenants and agrees with the Pledgee for the benefit of the Secured Creditors as follows:

1.SECURITY FOR OBLIGATIONS. Subject to the terms of the Intercreditor Agreement with respect to rights and remedies between the Collateral Agent and the ABL Collateral Agent, this Agreement is made by each Pledgor for the benefit of the Secured Creditors to secure:

(i)the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, unpaid principal, premium, interest (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor or any Subsidiary thereof at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and fees, costs and indemnities) of such Pledgor owing to the Secured Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Credit Documents to which such Pledgor is a party (including, in the event such Pledgor is a Guarantor, all such obligations, liabilities and indebtedness of such Pledgor under its Guaranty) and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations, liabilities and indebtedness under this clause (i), except to the extent consisting of obligations, liabilities or indebtedness with respect to Secured Hedging Agreements, entitled to the benefits of this Agreement being herein collectively, the “Credit Document Obligations”);

(ii)the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Pledgor to the Other Creditors now existing or hereafter incurred under, arising out of or in connection with any Secured Hedging Agreement, whether such Secured Hedging Agreement is now in existence or hereinafter arising (including, in the case of a Pledgor that is a Guarantor, all obligations, liabilities and indebtedness of such Pledgor under its Guaranty in respect of the Secured Hedging Agreements), and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained in each such Interest Rate Protection Agreement (all such obligations, liabilities and indebtedness under this clause (ii) being herein collectively called the “Other Obligations”);

(iii)any and all sums advanced by the Pledgee in order to preserve the Collateral (as hereinafter defined) or preserve its security interest in the Collateral;

(iv)in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of such Pledgor referred to in clauses (i) and (ii) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Pledgee of its rights hereunder, together with reasonable attorneys’ fees and court costs;

(v)all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 11 of this Agreement; and

(vi)all amounts owing to any Agent or any of its affiliates pursuant to any of the Credit Documents in its capacity as such.

All such obligations, liabilities, indebtedness, sums and expenses set forth in clauses (i) through (vi) of this Section 1 being herein collectively called the “Obligations”, it being acknowledged and agreed that the “Obligations” shall, subject to the immediately succeeding sentence, include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.

NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIENS AND SECURITY INTERESTS GRANTED TO THE PLEDGEE PURSUANT TO THIS AGREEMENT IN ANY ABL PRIORITY COLLATERAL AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE PLEDGEE WITH RESPECT TO ANY ABL PRIORITY COLLATERAL HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE AMENDED AND RESTATED INTERCREDITOR AGREEMENT, DATED AS OF AUGUST 1, 2006 AND AMENDED AND RESTATED AS OF THE DATE HEREOF (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”), AMONG AURORA ACQUISITION MERGER SUB, INC., A DELAWARE CORPORATION, ALERIS INTERNATIONAL, INC., A DELAWARE CORPORATION (THE “COMPANY”), THE OTHER GRANTORS FROM TIME TO TIME PARTY THERETO, DEUTSCHE BANK AG NEW YORK BRANCH, (“DBNY”) AS ABL ADMINISTRATIVE AGENT, AND AS ABL COLLATERAL AGENT AND DBNY, AS TERM ADMINISTRATIVE AGENT AND AS TERM COLLATERAL AGENT, AND CERTAIN OTHER PERSONS PARTY OR THAT MAY BECOME PARTY THERETO FROM TIME TO TIME. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.

2.DEFINITIONS. (a) Unless otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement shall be used herein as therein defined. Reference to singular terms shall include the plural and vice versa.

(b)The following capitalized terms used herein shall have the definitions specified below:

“ABL Collateral Agent” shall have the meaning set forth in the Intercreditor Agreement.

“ABL Credit Document Obligations Termination Date” shall mean the date on which the Discharge of ABL Obligations (as defined in the Intercreditor Agreement) shall have occurred.

“ABL Documents” shall have the meaning set forth in the Intercreditor Agreement.

“ABL Obligations” shall have the meaning set forth in the Intercreditor Agreement.

“ABL Pledge Agreement” shall have the meaning set forth in the Intercreditor Agreement.

“ABL Priority Collateral” shall have the meaning set forth in the Intercreditor Agreement.

“ABL Secured Parties” shall have the meaning set forth in the Intercreditor Agreement.

“Administrative Agent” shall have the meaning set forth in the recitals hereto.

“Adverse Claim” shall have the meaning given such term in Section 8-102(a)(1) of the UCC.

“Agreement” shall have the meaning set forth in the recitals hereto.

“Aleris” shall have the meaning set forth in the recitals hereto.

“Borrower” and “Borrowers” shall have the meaning set forth in the recitals hereto.

“Certificated Security” shall have the meaning given such term in Section 8-102(a)(4) of the UCC.

“Clearing Corporation” shall have the meaning given such term in Section 8-102(a)(5) of the UCC.

“Collateral” shall have the meaning set forth in Section 3.1 hereof.

“Collateral Accounts” shall mean any and all accounts established and maintained by the Pledgee in the name of any Pledgor to which Collateral may be credited.

“Credit Agreement” shall have the meaning set forth in the recitals hereto.

“Credit Document Obligations” shall have the meaning set forth in Section 1 hereof.

“Credit Documents” shall have the meaning provided in the Credit Agreement and shall include any documentation executed and delivered in connection with any replacement or refinancing of the Credit Agreement.

“Discharge of Term Obligations” shall have the meaning provided in the Intercreditor Agreement.

“Domestic Corporation” shall have the meaning set forth in the definition of “Stock”.

“Event of Default” shall mean (i) at any time when any Credit Document Obligations or Letters of Credit are outstanding or any Commitments under the Credit Agreement exist, any Event of Default under, and as defined in the Credit Agreement and (ii) at any time after all of the Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated and no further Commitments and Letters of Credit may be provided thereunder, any event of default on any of the Obligations after the expiration of any applicable grace period.

“Excess Foreign Corporation Voting Equity Interests” shall have the meaning provided in Section 3.1.

“Financial Asset” shall have the meaning given such term in Section 8-102(a)(9) of the UCC.

“Foreign Corporation” shall have the meaning set forth in the definition of “Stock”.

“German Borrower” shall have the meaning set forth in the recitals hereto.

“Indemnitees” shall have the meaning set forth in Section 11 hereof.

“Instrument” shall have the meaning given such term in Section 9-102(a)(47) of the UCC.

“Investment Property” shall have the meaning given such term in Section 9-102(a)(49) of the UCC.

“Lender Creditors” shall have the meaning set forth in the recitals hereto.

“Lenders” shall have the meaning set forth in the recitals hereto.

“Limited Liability Company Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned by any Pledgor and represented by any Limited Liability Company Interest.

“Limited Liability Company Interests” shall mean the entire limited liability company interest at any time owned by any Pledgor in any limited liability company.

“Location” of any Pledgor shall mean such Pledgor’s “location” as determined pursuant to Section 9-307 of the UCC.

“Non-Voting Equity Interests” shall mean all Equity Interests of any Person which are not Voting Equity Interests.

“Noticed Event of Default” shall mean (i) an Event of Default under Section 9.01 or 9.05 of the Credit Agreement and (ii) any other Event of Default in respect of which the Pledgee has given Aleris notice that such Event of Default constitutes a “Noticed Event of Default”.

“Notes” shall mean (x) all intercompany notes at any time issued to each Pledgor and (y) all other promissory notes from time to time issued to, or held by, each Pledgor.

“Obligations” shall have the meaning set forth in Section 1 hereof.

“Other Creditors” shall have the meaning set forth in the recitals hereto.

“Other Obligations” shall have the meaning set forth in the recitals hereto.

“Partnership Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned by any Pledgor and represented by any Partnership Interest.

“Partnership Interest” shall mean the entire general partnership interest or limited partnership interest at any time owned by any Pledgor in any general partnership or limited partnership.

“Pledged Notes” shall mean all Notes at any time pledged or required to be pledged hereunder.

“Pledgee” shall have the meaning set forth in the first paragraph hereof.

“Pledgor” shall have the meaning set forth in the first paragraph hereof.

“Proceeds” shall have the meaning given such term in Section 9-102(a)(64) of the UCC.

“Registered Organization” shall have the meaning given such term in Section 9-102(a)(70) of the UCC.

“Required Secured Creditors” shall have the meaning provided in the U.S. Security Agreement.

“Secured Creditors” shall have the meaning set forth in the recitals hereto.

“Secured Debt Agreements” shall mean and includes (i) this Agreement, (ii) the other Credit Documents, (iii) the Secured Hedging Agreements and (iv) the Secured Hedging Intercreditor Agreement entered into by the Pledgee with an Other Creditor.

“Secured Hedging Agreement” shall mean each Interest Rate Protection Agreement and/or Other Hedging Agreement; provided that (i) such Interest Rate Protection Agreement and/or Other Hedging Agreement expressly states that (x) it constitutes a “Secured Hedging Agreement” for purposes of the Credit Agreement and the other Credit Documents and (y) does not constitute a “Secured Hedging Agreement” for purposes of the ABL Credit Agreement, the ABL Security Documents or any guaranties relating to the ABL Credit Agreement, (ii) Aleris and the other parties thereto shall have delivered to the Collateral Agent a written notice specifying that such Interest Rate Protection Agreement and/or Other Hedging Agreement (x) constitutes a “Secured Hedging Agreement” for purposes of the Credit Agreement and the other Credit Documents, (y) does not constitute a “Secured Hedging Agreement” for purposes of the ABL Credit Agreement, the ABL Security Documents or any guaranties relating to the ABL Credit Agreement and (z) in the case of Aleris, that such Interest Rate Protection Agreement and/or Other Hedging Agreement and the obligations of Aleris and its Subsidiaries thereunder have been, and will be, incurred in compliance with the Credit Agreement and (iii) such Other Creditor, if it is not a Lender or an affiliate thereof (even if such Lender subsequently ceases to be a Lender under this Agreement for any reason), has entered has become party to the Secured Hedging Intercreditor Agreement with respect to the relevant Interest Rate Protection Agreement or Other Hedging Agreement on terms reasonably satisfactory to the Collateral Agent.

“Secured Hedging Intercreditor Agreement” shall mean that certain Secured Hedging Intercreditor Agreement dated as of December 19, 2006 among Aleris, the other grantors party thereto from time to time, the secured hedge counterparties party thereto from time to time and the Collateral Agent and the Administrative Agent.

“Securities Account” shall have the meaning given such term in Section 8-501 (a) of the UCC.

“Securities Act” shall mean the Securities Act of 1933, as amended, as in effect from time to time.

“Securities Intermediary” shall have the meaning given such term in Section 8-102(14) of the UCC.

“Security” and “Securities” shall have the meaning given such term in Section 8-102(a)(15) of the UCC and shall in any event also include all Stock.

“Security Entitlement” shall have the meaning given such term in Section 8-102(a)(17) of the UCC.

“Stock” shall mean (x) with respect to corporations incorporated under the laws of the United States or any State or territory thereof or the District of Columbia (each, a “Domestic Corporation”), all of the issued and outstanding shares of capital stock of any Domestic Corporation at any time owned by any Pledgor and (y) with respect to corporations which are not Domestic Corporations (each, a “Foreign Corporation”), all of the issued and outstanding shares of capital stock or other Equity Interests of any Foreign Corporation at any time owned by any Pledgor.

“Termination Date” shall have the meaning set forth in Section 20 hereof.

“Transmitting Utility” has the meaning given such term in Section 9-102(a)(80) of the UCC.

“Term Priority Collateral” shall have the meaning set forth in the Intercreditor Agreement.

“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York from time to time; provided that all references herein to specific Sections or subsections of the UCC are references to such Sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of New York on the Effective Date; provided, further, that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or the priority of the Liens of the Pledgee in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“Uncertificated Security” shall have the meaning given such term in Section 8-102(a)(18) of the UCC.

“U.S. Borrower” shall have the meaning set forth in the recitals hereto.

“Voting Equity Interests” of any Person shall mean all classes of Equity Interests of such Person entitled to vote.

3.PLEDGE OF SECURITIES, ETC.

3.1.Pledge. (i) To secure the Obligations now or hereafter owed or to be performed by such Pledgor (but subject to clause (x) of the proviso at the end of this Section 3.1 in the case of Voting Equity Interests of Foreign Corporations pledged hereunder), each Pledgor does hereby grant and pledge to the Pledgee for the benefit of the Secured Creditors, and does hereby create a continuing security interest (subject to those Liens permitted to exist with respect to the Collateral pursuant to the terms of all Secured Debt Agreements then in effect) in favor of the Pledgee for the benefit of the Secured Creditors in, all of its right, title and interest in and to the following, whether now existing or hereafter from time to time acquired (collectively, the “Collateral”):

(a)each of the Collateral Accounts (to the extent a security interest therein is not created pursuant to the U.S. Security Agreement), including any and all assets of whatever type or kind deposited by such Pledgor in any such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, monies, checks, drafts, Instruments, Securities or interests therein of any type or nature deposited or required by the Credit Agreement or any other Secured Debt Agreement to be deposited in such Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing;

(b)all Securities owned or held by such Pledgor from time to time and all options and warrants owned by such Pledgor from time to time to purchase Securities;

(c)all Notes owned or held by such Pledgor from time to time;

(d)all Limited Liability Company Interests owned by such Pledgor from time to time and all of its right, title and interest in each limited liability company to which each such Limited Liability Company Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Limited Liability Company Interests and applicable law:

(A)all its capital therein and its interest in all profits, income, surpluses, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests;

(B)all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;

(C)all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests;

(D)all present and future claims, if any, of such Pledgor against any such limited liability company for monies loaned or advanced, for services rendered or otherwise;

(E)all of such Pledgor’s rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any such limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any such Pledgor in respect of such Limited Liability Company Interests and any such limited liability company, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and

(F)all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;

(e)all Partnership Interests owned by such Pledgor from time to time and all of its right, title and interest in each partnership to which each such Partnership Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Partnership Interests and applicable law:

(A)all its capital therein and its interest in all profits, income, surpluses, losses, Partnership Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Partnership Interests;

(B)all other payments due or to become due to such Pledgor in respect of Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;

(C)all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests;

(D)all present and future claims, if any, of such Pledgor against any such partnership for monies loaned or advanced, for services rendered or otherwise;

(E)all of such Pledgor’s rights under any partnership agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Partnership Interests and any such partnership, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and

(F)all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;

(f)all Financial Assets and Investment Property owned by such Pledgor from time to time;

(g)all Security Entitlements owned by such Pledgor from time to time in any and all of the foregoing; and

(h)all Proceeds of any and all of the foregoing;

provided that (x) no Voting Equity Interests (which shall include, for this purpose, the Convertible Preferred Equity Certificates issued by Aleris Luxembourg S.à.r.l.) of any Foreign Corporation which represents more than 65% of the total combined voting power of all classes of Voting Equity Interests of the respective Foreign Corporation (with all Voting Equity Interests of the respective Foreign Corporation in excess of said 65% limit being herein called “Excess Foreign Corporation Equity Interests”), shall secure any direct Obligations of the U.S. Borrower or any of its Domestic Subsidiaries (or guarantees of such Obligations by the respective Pledgor) and such Excess Foreign Corporation Equity Interests shall secure Obligations of the respective Pledgor only as a guarantor of the Obligations of the German Borrower and its Subsidiaries, (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each Foreign Corporation at any time and from time to time acquired by such Pledgor, which Non-Voting Equity Interests shall not be subject to the limitations described in preceding clause (x) and (z) notwithstanding anything to the contrary contained in this Section 3.1 or elsewhere in this Agreement, each Pledgor and the Pledgee (on behalf of the Secured Creditors) acknowledges and agrees that:

(i)the security interest granted pursuant to this Agreement (including pursuant to this Section 3.1) to the Pledgee for the benefit of the Secured Creditors (A) in the Term Priority Collateral, shall be a First Priority Lien and (B) in the ABL Priority Collateral, shall be a second priority Lien in the ABL Priority Collateral fully junior, subordinated and subject to the security interest granted to the ABL Collateral Agent for the benefit of the ABL Secured Parties in the ABL Priority Collateral on the terms and conditions set forth in the ABL Documents and the Intercreditor Agreement and all other rights and benefits afforded hereunder to the Secured Creditors with respect to the ABL Priority Collateral are expressly subject to the terms and conditions of the Intercreditor Agreement; and

(ii)the Secured Creditors’ security interests in the Collateral constitute security interests separate and apart (and of a different class and claim) from the ABL Secured Parties’ security interests in the Collateral.

3.2.Procedures. (a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by such Pledgor) be pledged pursuant to Section 3.1 of this Agreement and, in addition thereto (but subject to the terms of the Intercreditor Agreement), such Pledgor shall (to the extent provided below and not inconsistent with the terms of the Intercreditor Agreement) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 days after it obtains such Collateral) for the benefit of the Pledgee and the other Secured Creditors:

(i)with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall physically deliver such Certificated Security to the Pledgee, endorsed to the Pledgee or endorsed in blank;

(ii)with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall cause the issuer of such Uncertificated Security to duly authorize, execute, and deliver to the Pledgee, an agreement for the benefit of the Pledgee and the other Secured Creditors substantially in the form of Annex G hereto (appropriately completed to the satisfaction of the Pledgee and with such modifications, if any, as shall be satisfactory to the Pledgee) pursuant to which such issuer agrees to comply with any and all instructions originated by the Pledgee without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security (and any Partnership Interests and Limited Liability Company Interests issued by such issuer) originated by any other Person other than a court of competent jurisdiction;

(iii)with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), such Pledgor shall promptly notify the Pledgee thereof and shall promptly take (x) all actions required (i) to comply with the applicable rules of such Clearing Corporation or Securities Intermediary and (ii) to perfect the security interest of the Pledgee under applicable law (including, in any event, under Sections 9-314(a), (b) and (c), 9-106 and 8-106(d) of the UCC) and (y) such other actions as the Pledgee deems necessary or desirable to effect the foregoing;

(iv)with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), (1) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate and is a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate or is not a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(ii) hereof;

(v)with respect to any intercompany Note or any other Note evidencing a principal amount in excess of $1,000,000, physical delivery of such Note to the Pledgee, endorsed in blank, or, at the request of the Pledgee, endorsed to the Pledgee; and

(vi)with respect to cash proceeds from any of the Collateral described in Section 3.1 hereof which are required to be delivered to an held by the Collateral Agent pursuant to Section 6 hereof, (i) establishment by the Pledgee of a cash account in the name of such Pledgor over which the Pledgee shall (to the extent not inconsistent with the Intercreditor Agreement) have “control” within the meaning of the UCC and at any time any Event of Default is in existence no withdrawals or transfers may be made by any Person except with the prior written consent of the Pledgee (subject to the terms of the Intercreditor Agreement) and (ii) deposit of such cash in such cash account.

(b)In addition to the actions required to be taken pursuant to Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Collateral:

(i)with respect to all Collateral of such Pledgor whereby or with respect to which the Pledgee may obtain “control” thereof within the meaning of Section 8-106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of New York), such Pledgor shall take all actions (to the extent not inconsistent with the Intercreditor Agreement) as may be reasonably requested from time to time by the Pledgee so that “control” of such Collateral is obtained and at all times held by the Pledgee; and

(ii)each Pledgor shall from time to time cause appropriate financing statements (on appropriate forms) under the Uniform Commercial Code as in effect in the various relevant States, covering all Collateral hereunder (with the form of such financing statements to be reasonably satisfactory to the Pledgee), to be filed in the relevant filing offices so that at all times the Pledgee’s security interest in all Investment Property and other Collateral which can be perfected by the filing of such financing statements (in each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States, including, without limitation, Section 9-312(a) of the UCC) is so perfected.

3.3.Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase, stock dividend, distribution or otherwise) any additional Collateral at any time or from time to time after the date hereof, such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, such Pledgor will, to the extent not inconsistent with the Intercreditor Agreement, thereafter take (or cause to be taken) all action (as promptly as practicable and, in any event, within 10 days after it obtains such Collateral) with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will to the extent not inconsistent with the terms of the Intercreditor Agreement, promptly thereafter deliver to the Pledgee (i) a certificate executed by an authorized officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Pledgee (for the benefit of the Secured Creditors) hereunder and (ii) supplements to Annexes A through F hereto as are necessary to cause such Annexes to be complete and accurate at such time. Without limiting the foregoing, (A) each Pledgor shall be required to pledge hereunder the Equity Interests of any Foreign Corporation at any time and from time to time after the date hereof acquired by such Pledgor, provided that (x) any such pledge of Voting Equity Interests of any Foreign Corporation shall be subject to the provisions of clause (x) of the proviso to Section 3.1 hereof and (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each Foreign Corporation at any time and from time to time acquired by such Pledgor and (B) each Pledgor shall be required to pledge hereunder any Notes at any time and from time to time after the date hereof acquired by such Pledgor, subject to the threshold described in Section 3.2(a)(v) above for the delivery of such Notes, provided that any such pledge or Note shall be subject to the provisions of clause (z) of the proviso to Section 3.1 hereof.

3.4.Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required in connection with the pledge of such Collateral.

3.5.Certain Representations and Warranties Regarding the Collateral. Each Pledgor represents and warrants that as of the Effective Date: (i) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed on Schedule V to the Credit Agreement hereto; (ii) the Stock (and any warrants or options to purchase Stock) held by such Pledgor consists of the number and type of shares of the stock (or warrants or options to purchase any stock) of the corporations as described in Annex B hereto; (iii) such Stock referenced in clause (ii) of this paragraph constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex B hereto; (iv) the Pledged Notes held by such Pledgor consist of the promissory notes described in Annex C hereto where such Pledgor is listed as the lender; (v) the Limited Liability Company Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex D hereto; (vi) each such Limited Liability Company Interest referenced in clause (v) of this paragraph constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Annex D hereto; (vii) the Partnership Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex E hereto; (viii) each such Partnership Interest referenced in clause (vii) of this paragraph constitutes that percentage or portion of the entire partnership interest of the Partnership as set forth in Annex E hereto; (ix) the exact address of each chief executive office of such Pledgor is listed on Annex F hereto; (x) the Pledgor has complied with the respective procedure set forth in Section 3.2(a) hereof with respect to each item of Collateral described in Annexes B through E hereto; and (xi) on the date hereof, such Pledgor owns no other Securities, Stock, Pledged Notes, Limited Liability Company Interests or Partnership Interests.

3.6.Overriding Provisions with respect to ABL Priority Collateral. Notwithstanding anything to the contrary contained above in this Section 3, or elsewhere in this Agreement or any other Security Document, to the extent the provisions of this Agreement (or any other Security Documents) require the delivery of, or control over, ABL Priority Collateral to be granted to the Pledgee at any time prior to the ABL Credit Documents Obligations Termination Date, then delivery of such ABL Priority Collateral (or control with respect thereto) shall instead be granted to the ABL Collateral Agent, to be held in accordance with the ABL Documents and the Intercreditor Agreement. Furthermore, at all times prior to the ABL Credit Document Obligations Termination Date, the Collateral Agent is authorized by the parties hereto to effect transfers of ABL Priority Collateral at any time in its possession (and any “control” or similar agreements with respect to ABL Priority Collateral) to the ABL Collateral Agent.

4.APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral, which may be held (in the discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee.

5.VOTING, ETC., WHILE NO NOTICED EVENT OF DEFAULT. Unless and until there shall have occurred and be continuing any Noticed Event of Default, each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; provided that, in each case, no vote shall be cast or any consent, waiver or ratification given or any action taken or omitted to be taken which would violate or result in a breach of any covenant contained in the Intercreditor Agreement or any Secured Debt Agreement, or which could reasonably be expected to have the effect of materially impairing the value of the Collateral or any part thereof or the position or interests of the Pledgee or any other Secured Creditor in the Collateral, unless permitted by the terms of the Secured Debt Agreements. All such rights of each Pledgor to vote and to give consents, waivers and ratifications shall cease in case a Noticed Event of Default has occurred and is continuing, and Section 7 hereof shall become applicable.

6.DIVIDENDS AND OTHER DISTRIBUTIONS. Subject to the terms of the Intercreditor Agreement, unless and until there shall have occurred and be continuing a Noticed Event of Default, all cash dividends, cash distributions, cash Proceeds and other cash amounts payable in respect of the Collateral shall be paid to the respective Pledgor. Subject to the terms of the Intercreditor Agreement, the Pledgee shall be entitled to receive directly, and to retain as part of the Collateral:

(i)all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (excluding cash dividends) paid or distributed by way of dividend or otherwise in respect of the Collateral;

(ii)all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (other than cash) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement;

(iii)all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (excluding cash) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate or other reorganization; and

(iv)all cash distributions in respect of the Collateral after a Noticed Event of Default.

Except as set forth in the Intercreditor Agreement, nothing contained in this Section 6 shall limit or restrict in any way the Pledgee’s right to receive the proceeds of the Collateral in any form in accordance with Section 3 of this Agreement. To the extent not inconsistent with the terms of the Intercreditor Agreement, all dividends, distributions or other payments which are received by any Pledgor contrary to the provisions of this Section 6 or Section 7 hereof shall be received in trust for the benefit of the Pledgee, shall be segregated from other property or funds of such Pledgor and shall be forthwith paid over to the Pledgee as Collateral in the same form as so received (with any necessary endorsement).

7.REMEDIES IN CASE OF A NOTICED EVENT OF DEFAULT. (a) If there shall have occurred and be continuing a Noticed Event of Default, then and in every such case, to the extent not inconsistent with the terms of the Intercreditor Agreement, the Pledgee shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement, any other Secured Debt Agreement or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Pledgee shall be entitled to exercise all the rights and remedies of a secured party under the UCC as in effect in any relevant jurisdiction and also shall be entitled, without limitation, to exercise the following rights, which each Pledgor hereby agrees to be commercially reasonable:

(i)to receive all amounts payable in respect of the Collateral otherwise payable under Section 6 hereof to the respective Pledgor;

(ii)to transfer all or any part of the Collateral into the Pledgee’s name or the name of its nominee or nominees;

(iii)to accelerate any Pledged Note which may be accelerated in accordance with its terms, and take any other lawful action to collect upon any Pledged Note (including, without limitation, to make any demand for payment thereon);

(iv)to vote (and exercise all rights and powers in respect of voting) all or any part of the Collateral (whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with full power of substitution to do so);

(v)at any time and from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or, notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise purchase or dispose (all of which are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price or prices and on such terms as the Pledgee in its absolute discretion may determine, provided at least 10 days’ written notice of the time and place of any such sale shall be given to the respective Pledgor. The Pledgee shall not be obligated to make any such sale of Collateral regardless of whether any such notice of sale has theretofore been given. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security or the Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Pledgee on behalf of the Secured Creditors may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Pledgee nor any other Secured Creditor shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto; and

(vi)to set off any and all Collateral against any and all Obligations, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Obligations.

(b)If there shall have occurred and be continuing a Noticed Event of Default, then and in every such case, the Pledgee shall be entitled to vote (and exercise all rights and powers in respect of voting) all or any part of the Collateral (whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with full power of substitution to do so).

8.REMEDIES, CUMULATIVE, ETC. Subject to the terms of (and to the extent not inconsistent with) the Intercreditor Agreement, each and every right, power and remedy of the Pledgee provided for in this Agreement or in any other Secured Debt Agreement, or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other Secured Creditor of any one or more of the rights, powers or remedies provided for in this Agreement or any other Secured Debt Agreement (including, without limitation, the Intercreditor Agreement) or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the part of the Pledgee or any other Secured Creditor to exercise any such right, power or remedy shall operate as a waiver thereof. No notice to or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Pledgee or any other Secured Creditor to any other or further action in any circumstances without notice or demand. The Secured Creditors agree that this Agreement may be enforced only by the action of the Pledgee, in each case, acting upon the instructions of the Required Secured Creditors, and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Pledgee for the benefit of the Secured Creditors upon the terms of this Agreement and the U.S. Security Agreement.

9.APPLICATION OF PROCEEDS. (a) Subject to the terms of the Intercreditor Agreement, all monies collected by the Pledgee upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies received by the Pledgee hereunder, shall be applied in the manner provided in the U.S. Security Agreement.

(b)It is understood and agreed that each Pledgor shall remain jointly and severally liable with respect to its Obligations to the extent of any deficiency between the amount of the proceeds of the Collateral pledged by it hereunder and the aggregate amount of such Obligations.

(c)It is understood and agreed by all parties hereto that the Pledgee shall have no liability for any determinations made by it in this Section 9 (including, without limitation, as to whether given Collateral constitutes ABL Priority Collateral or Term Priority Collateral), in each case except to the extent resulting from the gross negligence or willful misconduct of the Pledgee (as determined by a court of competent jurisdiction in a final and non-appealable decision). The parties also agree that the Pledgee may (but shall not be required to), at any time and in its sole discretion, and with no liability resulting therefrom, petition a court of competent jurisdiction regarding any application of Collateral in accordance with the requirements hereof and of the Intercreditor Agreement, and the Pledgee shall be entitled to wait for, and may conclusively rely on, any such determination.

10.PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Pledgee hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Pledgee or the officer making such sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Pledgee or such officer or be answerable in any way for the misapplication or nonapplication thereof.

11.INDEMNITY. Each Pledgor jointly and severally agrees (i) to indemnify, reimburse and hold harmless the Pledgee and each other Secured Creditor and their respective successors, assigns, employees, agents and affiliates (individually an “Indemnitee”, and collectively, the “Indemnitees”) from and against any and all obligations, damages, injuries, penalties, claims, demands, losses, judgments and liabilities (including, without limitation, liabilities for penalties) of whatsoever kind or nature, and (ii) to reimburse each Indemnitee for all reasonable costs, expenses and disbursements, including reasonable attorneys’ fees and expenses, in each case arising out of or resulting from this Agreement or the exercise by any Indemnitee of any right or remedy granted to it hereunder or under any other Secured Debt Agreement (but excluding any obligations, damages, injuries, penalties, claims, demands, losses, judgments and liabilities (including, without limitation, liabilities for penalties) or expenses of whatsoever kind or nature to the extent (x) incurred or arising by reason of gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision)) or (y) brought solely by an Affiliate of the Person to be indemnified); provided that the Pledgors shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to and necessary or advisable special counsel and up to one local counsel in each applicable local jurisdiction) for all Indemnitees unless, in the written opinion of outside counsel reasonably satisfactory to the Pledgors and the Pledgee, representation of all such Indemnitees would be inappropriate due to the existence of an actual or potential conflict of interest. In no event shall the Pledgee hereunder be liable, in the absence of gross negligence or willful misconduct on its part (as determined by a court of competent jurisdiction in a final and non-appealable decision), for any matter or thing in connection with this Agreement other than to account for monies or other property actually received by it in accordance with the terms hereof. If and to the extent that the obligations of any Pledgor under this Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. The indemnity obligations of each Pledgor contained in this Section 11 shall continue in full force and effect notwithstanding the full payment of all the Notes issued under the Credit Agreement, the termination of all Secured Hedging Agreements and the payment of all other Obligations and notwithstanding the discharge thereof and the occurrence of the Termination Date.

12.PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a) Nothing herein shall be construed to make the Pledgee or any other Secured Creditor liable as a member of any limited liability company or as a partner of any partnership and neither the Pledgee nor any other Secured Creditor by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Pledgee shall become the absolute owner of Collateral consisting of a Limited Liability Company Interest or a Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Pledgee, any other Secured Creditor, any Pledgor and/or any other Person.

(b)Except as provided in the last sentence of paragraph (a) of this Section 12, the Pledgee, by accepting this Agreement, did not intend to become a member of any limited liability company or a partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor, any limited liability company, partnership and/or any other Person either before or after an Event of Default shall have occurred. The Pledgee shall have only those powers set forth herein and the Secured Creditors shall assume none of the duties, obligations or liabilities of a member of any limited liability company or as a partner of any partnership or any Pledgor except as provided in the last sentence of paragraph (a) of this Section 12.

(c)The Pledgee and the other Secured Creditors shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected.

(d)The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Pledgee or any other Secured Creditor to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral.

13.FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees that it will join with the Pledgee in executing and, at such Pledgor’s own expense, file and refile under the UCC or other applicable law such financing statements, continuation statements and other documents, in form reasonably acceptable to the Pledgee, in such offices as the Pledgee (acting on its own or on the instructions of the Required Secured Creditors) may reasonably deem necessary or appropriate and wherever required or permitted by law in order to perfect and preserve the Pledgee’s security interest in the Collateral hereunder and hereby authorizes the Pledgee to file financing statements and amendments thereto relative to all or any part of the Collateral (including, without limitation, financing statements which list the Collateral specifically and/or “all assets” as collateral) without the signature of such Pledgor where permitted by law, and agrees to do such further acts and things and to execute and deliver to the Pledgee such additional conveyances, assignments, agreements and instruments as the Pledgee may reasonably require or deem advisable to carry into effect the purposes of this Agreement or to further assure and confirm unto the Pledgee its rights, powers and remedies hereunder or thereunder.

(b)Each Pledgor hereby constitutes and appoints the Pledgee its true and lawful attorney-in-fact, irrevocably, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from time to time after the occurrence and during the continuance of a Noticed Event of Default, in the Pledgee’s discretion, to act, require, demand, receive and give acquittance for any and all monies and claims for monies due or to become due to such Pledgor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings and to execute any instrument which the Pledgee may deem necessary or advisable to accomplish the purposes of this Agreement, which appointment as attorney is coupled with an interest.

14.THE PLEDGEE AS COLLATERAL AGENT. Subject to the terms of the Intercreditor Agreement, the Pledgee will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood, acknowledged and agreed by each Secured Creditor that by accepting the benefits of this Agreement each such Secured Creditor acknowledges and agrees that the obligations of the Pledgee as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in Annex M to the Security Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Annex M to the Security Agreement, the terms of which shall be deemed incorporated herein by reference, mutatis mutandis, as fully as if the same were set forth herein and referencing this Agreement in its entirety.

15.TRANSFER BY THE PLEDGORS. Except as permitted (i) prior to the date all Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated, pursuant to the Credit Agreement, and (ii) thereafter, pursuant to the other Secured Debt Agreements, no Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein.

16.REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each Pledgor represents, warrants and covenants:

(i)it is the legal, beneficial and record owner of, and has good and marketable title to, all of its Collateral consisting of one or more Securities, Notes, Partnership Interests and Limited Liability Company Interests and that it has sufficient interest in all of its Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except the liens and security interests created by this Agreement or permitted under the Secured Debt Agreements);

(ii)it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement;

(iii)this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable against such Pledgor in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in equity or at law);

(iv)except to the extent already obtained or made and except for the filing of the UCC financing statements required to be filed on or about the date hereof in accordance with the U.S. Security Agreement, no consent of any other party (including, without limitation, any stockholder, partner, member or creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required to be obtained by such Pledgor in connection with (a) the execution, delivery or performance of this Agreement by such Pledgor, (b) the validity or enforceability of this Agreement against such Pledgor (except as set forth in clause (iii) above), (c) the perfection or enforceability of the Pledgee’s security interest in such Pledgor’s Collateral or (d) except for compliance with or as may be required by applicable securities laws, the exercise by the Pledgee of any of its rights or remedies provided herein;

(v)neither the execution, delivery or performance by such Pledgor of this Agreement, or any other Secured Debt Agreement to which it is a party, nor compliance by it with the terms and provisions hereof nor the consummation of the transactions contemplated therein: (i) will contravene in any material respect any provision of any material applicable law, statute, rule or regulation, or any applicable order, writ, injunction or decree of any court, arbitrator or governmental instrumentality, domestic or foreign, applicable to such Pledgor; (ii) will conflict or be inconsistent with or result in any breach of any of the material terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Security Documents) upon any of the properties or assets of such Pledgor or any of its Subsidiaries pursuant to the terms of any indenture, lease, mortgage, deed of trust, credit agreement, loan agreement or any other material agreement, contract or other instrument to which such Pledgor or any of its Subsidiaries is a party or is otherwise bound, or by which it or any of its properties or assets is bound or to which it may be subject; or (iii) will violate any provision of the certificate of incorporation, by-laws, certificate of partnership, partnership agreement, certificate of formation or limited liability company agreement (or equivalent organizational documents), as the case may be, of such Pledgor or any of its Subsidiaries;

(vi)all of such Pledgor’s Collateral (consisting of Securities, Limited Liability Company Interests and Partnership Interests) has been duly and validly issued, is fully paid and non-assessable and is subject to no options to purchase or similar rights;

(vii)to the knowledge of the Pledgor, each of such Pledgor’s Pledged Notes constitutes, or when executed by the obligor thereof will constitute, the legal, valid and binding obligation of such obligor, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in equity or at law);

(viii)the pledge, collateral assignment and delivery to the Pledgee of such Pledgor’s Collateral consisting of Certificated Securities and Pledged Notes pursuant to this Agreement creates a valid and perfected first priority security interest in such Certificated Securities and Pledged Notes, and the proceeds thereof, subject to no prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien or encumbrance on the property or assets of such Pledgor which would include the Securities and/or Pledged Notes (other than the liens and security interests permitted under the Secured Debt Agreements then in effect) and the Pledgee is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfect security interests in respect of such Collateral; and

(ix)“control” (as defined in Section 8-106 of the UCC) has been obtained by the Pledgee over all of such Pledgor’s Collateral consisting of Securities and/or Pledged Notes with respect to which such “control” may be obtained pursuant to Section 8-106 of the UCC, except to the extent that the obligation of the applicable Pledgor to provide the Pledgee with “control” of such Collateral has not yet arisen under this Agreement; provided that in the case of the Pledgee obtaining “control” over Collateral consisting of a Security Entitlement, such Pledgor shall have taken all steps in its control so that the Pledgee obtains “control” over such Security Entitlement.

(b)Each Pledgor covenants and agrees that it will defend the Pledgee’s right, title and security interest in and to such Pledgor’s Collateral and the proceeds thereof against the claims and demands of all persons whomsoever.

(c)Each Pledgor covenants and agrees that it will take no action which would violate any of the terms of any Secured Debt Agreement.

17.LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES THERETO; ETC. The exact legal name of each Pledgor, the type of organization of such Pledgor, whether or not such Pledgor is a Registered Organization, the jurisdiction of organization of such Pledgor, such Pledgor’s Location, the organizational identification number (if any) of such Pledgor, and whether or not such Pledgor is a Transmitting Utility, is listed on Annex A hereto for such Pledgor. No Pledgor shall change its legal name, its type of organization, or its organizational identification number (if any), except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Debt Agreements and so long as same do not involve any Pledgor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 15 days’ prior written notice of each change to the information listed on Annex A (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex A which shall correct all information contained therein for such Pledgor, and (ii) in connection with the respective change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, to the extent that any Pledgor does not have an organizational identification number on the date hereof and later obtains one, such Pledgor shall promptly thereafter deliver a notification of the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.

18.PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever (other than termination of this Agreement pursuant to Section 20 or, with respect to a specific Pledgor, release of such Pledgor pursuant to Section 32 hereof), including, without limitation:

(i)any renewal, extension, amendment or modification of, or addition or supplement to or deletion from any Secured Debt Agreement (other than this Agreement in accordance with its terms), or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof;

(ii)any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument including, without limitation, this Agreement (other than a waiver, consent or extension with respect to this Agreement in accordance with its terms);

(iii)any furnishing of any additional security to the Pledgee or its assignee or any acceptance thereof or any release of any security by the Pledgee or its assignee;

(iv)any limitation on any party’s liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; or

(v)any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any Pledgor or any Subsidiary of any Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing.

19.SALE OF COLLATERAL WITHOUT REGISTRATION. If at any time when the Pledgee shall determine to exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests pursuant to Section 7 hereof, and such Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Pledgee may, in its sole and absolute discretion, sell such Collateral or part thereof by private sale in such manner and under such circumstances as the Pledgee may deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Pledgee, in its sole and absolute discretion (i) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under such Securities Act, (ii) may approach and negotiate with a single possible purchaser to effect such sale, and (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In the event of any such sale, the Pledgee shall incur no responsibility or liability for selling all or any part of the Collateral at a price which the Pledgee, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until the registration as aforesaid.

20.TERMINATION; RELEASE. (a) On the Termination Date (as defined below), this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation in Section 11 hereof, shall survive such termination) and the Pledgee, at the request and expense of the respective Pledgor will, subject to the provisions of the Intercreditor Agreement, promptly execute and deliver to such Pledgor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Pledgee or any of its sub-agents hereunder and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any moneys at the time held by the Pledgee or any of its sub-agents hereunder and, with respect to any Collateral consisting of an Uncertificated Security, a Partnership Interest or a Limited Liability Company Interest (other than an Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), a termination of the agreement relating thereto executed and delivered by the issuer of such Uncertificated Security pursuant to Section 3.2(a)(ii) or by the respective partnership or limited liability company pursuant to Section 3.2(a)(iv)(2). As used in this Agreement, “Termination Date” shall mean the date upon which the Total Commitment under the Credit Agreement has been terminated, no Note (as defined in the Credit Agreement) is outstanding (and all Loans have been paid in full) and all Obligations under Secured Hedging Agreements and all other Obligations appearing therein (other than indemnities under the Secured Debt Agreements which are not then due and payable) have been paid in full and the Secured Hedging Agreements have been terminated.

(b)In the event that any part of the Collateral and all Obligations is sold or otherwise disposed of (to a Person other than a Credit Party) (x) at any time prior to the time at which all Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated, in connection with a sale or disposition permitted by Section 8.06 of the Credit Agreement or is otherwise released at the direction of the Required Lenders (or all the Lenders if required by Section 11.12 of the Credit Agreement) or (y) at any time thereafter, to the extent permitted by the other Secured Debt Agreements, and in the case of clauses (x) and (y), and the proceeds of such sale or disposition (or from such release) are applied in accordance with the terms of the Credit Agreement or such other Secured Debt Agreement, as the case may be, to the extent required to be so applied, the Pledgee, at the request and expense of Aleris, will duly release from the security interest created hereby (and will execute and deliver such documentation, including termination or partial release statements and the like in connection therewith) and assign, transfer and deliver to Aleris, on behalf of the applicable Pledgor (without recourse and without any representation or warranty) such of the Collateral (as defined in the Credit Agreement) as is then being (or has been) so sold or otherwise disposed of, or released, and as may be in the possession of the Pledgee (or any of its sub-agents hereunder) and has not theretofore been released pursuant to this Agreement. Furthermore, upon the release of any Guarantor from any Guaranty in accordance with the provisions thereof or in accordance with Section 11.12(b) of the Credit Agreement, such Pledgor (and the Collateral at such time assigned by the respective Pledgor, grantor, pledgor or assignor pursuant hereto) shall be released from this Agreement.

(c)At any time that any Pledgor desires that the Pledgee take any action to acknowledge or give effect to any release of Collateral pursuant to the foregoing Section 20(a) or (b), such Pledgor shall deliver to the Pledgee (and the relevant sub-agent, if any, designated hereunder) a certificate signed by a principal executive officer of such Pledgor stating that the release of the respective Collateral is permitted pursuant to Section 20(a) or (b) hereof. If reasonably requested by the Pledgee (although the Pledgee shall have no obligation to make any such request), the respective Pledgor shall furnish appropriate legal opinions (from counsel, reasonably acceptable to the Pledgee) to the effect set forth in the immediately preceding sentence. At any time that the U.S. Borrower or the respective Pledgor desires that a Subsidiary of the U.S. Borrower which has been released from the U.S. Subsidiaries Guaranty be released hereunder as provided in the penultimate sentence of Section 20(b), it shall deliver to the Pledgee a certificate signed by a principal executive officer of the U.S. Borrower and the respective Pledgor stating that the release of the respective Pledgor (and its Collateral) is permitted pursuant to such Section 20(b).

(d)The Pledgee shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with, or which the Pledgee believes to be in accordance with, this Section 20.

21.NOTICES, ETC. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Pledgee or any Pledgor shall not be effective until received by the Pledgee or such Pledgor, as the case may be. All notices and other communications shall be in writing and addressed as follows:

(a)if to any Pledgor, c/o:

      Aleris International, Inc.,

      25825 Science Park Drive, Suite 400,

      Beachwood, OH 44122,

      Attention: General Counsel

      Telephone No.: (216) 910-3400

      Telecopier No.: (216) 910-3650

(b)if to the Pledgee or Administrative Agent, at:

      Deutsche Bank AG New York Branch

      60 Wall Street

      New York, NY 10005

      Attention: Marguerite Sutton

      Telephone No.: (212) 250-6150

      Telecopier No.: (212) 797-4655

(c)if to any Lender Creditor, either (x) to the Administrative Agent, at the address of the Administrative Agent specified in the Credit Agreement, or (y) at such address as such Lender Creditor shall have specified in the Credit Agreement;

(d)if to any Other Creditor, at such address as such Other Creditor shall have specified in writing to Aleris and the Pledgee;

or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.

22.WAIVER; AMENDMENT. Except as provided in Section 30 hereof, none of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever except in accordance with the requirements specified in the U.S. Security Agreement.

23.SUCCESSORS AND ASSIGNS. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 20, (ii) be binding upon each Pledgor, its successors and assigns; provided, however, that no Pledgor shall assign any of its rights or obligations hereunder without the prior written consent of the Pledgee (with the prior written consent of the Required Secured Creditors), and (iii) inure, together with the rights and remedies of the Pledgee hereunder, to the benefit of the Pledgee, the other Secured Creditors and their respective successors, transferees and assigns. All agreements, statements, representations and warranties made by each Pledgor herein or in any certificate or other instrument delivered by such Pledgor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Secured Debt Agreements regardless of any investigation made by the Secured Creditors or on their behalf.

24.HEADINGS DESCRIPTIVE. The headings of the several Sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

25.GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PLEDGOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH PLEDGOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PLEDGOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH PLEDGOR. EACH PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH PLEDGOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 21 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE PLEDGEE UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PLEDGOR IN ANY OTHER JURISDICTION.

(b)EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c)EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

26.PLEDGOR’S DUTIES. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Pledgor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Pledgee shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, except for the safekeeping of Collateral actually in Pledgor’s possession, nor shall the Pledgee be required or obligated in any manner to perform or fulfill any of the obligations of any Pledgor under or with respect to any Collateral.

27.COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with each Pledgor and the Pledgee.

28.SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

29.RECOURSE. This Agreement is made with full recourse to each Pledgor and pursuant to and upon all the representations, warranties, covenants and agreements on the part of such Pledgor contained herein and in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith.

30.ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of Aleris that is required to become a party to this Agreement after the date hereof pursuant to the requirements of the Credit Agreement or any other Credit Document, shall become a Pledgor hereunder by (x) executing a counterpart hereof, or a joinder agreement in form reasonably satisfactory to the Pledgee, and delivering the same to the Pledgee, (y) delivering supplements to Annexes A through F hereto as are necessary to cause such annexes to be complete and accurate with respect to such additional Pledgor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Pledgee and with all documents and actions required above to be taken to the reasonable satisfaction of the Pledgee.

31.LIMITED OBLIGATIONS. It is the desire and intent of each Pledgor and the Secured Creditors that this Agreement shall be enforced against each Pledgor to the fullest extent permissible under the laws applied in each jurisdiction in which enforcement is sought. Notwithstanding anything to the contrary contained herein, in furtherance of the foregoing, it is noted that the obligations of each Pledgor constituting a U.S. Subsidiary Guarantor have been limited as provided in the U.S. Subsidiaries Guaranty.

32.RESTATEMENT AND AMENDMENT. This Agreement shall amend and restate in its entirety the U.S. Pledge Agreement, dated as of August 1, 2006 among certain of the Guarantors and the Administrative Agent (the “Existing U.S. Pledge Agreement”) and all obligations of the Pledgors thereunder shall be deemed replaced and extended as obligations under this Agreement and be governed hereby without novation. In no event shall such amendment and restatement be construed as a termination of the obligations under the Existing U.S. Pledge Agreement.

****

IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written.

ALERIS INTERNATIONAL, INC.,        as a Pledgor
By:	/s/  Michael D. Friday
	Name:  Michael D. Friday
	Title:    Executive Vice President and              Chief  Financial Officer

AURORA ACQUISITION MERGER SUB, INC.,        as a Pledgor
By:	/s/  Clive Bode
	Name:  Clive Bode
	Title:     Vice President

ALCHEM ALUMINUM, INC.,

as a Pledgor

ALCHEM ALUMINUM SHELBYVILLE INC.,

as a Pledgor

ALERIS, INC., as a Pledgor

ALERIS OHIO MANAGEMENT, INC.,

as a Pledgor

ALSCO HOLDINGS, INC., as a Pledgor

ALSCO METALS CORPORATION,

as a Pledgor

ALUMITECH OF CLEVELAND, INC.,

as a Pledgor

ALUMITECH OF WABASH, INC.,

as a Pledgor

ALUMITECH OF WEST VIRGINIA, INC.,

as a Pledgor

ALUMITECH, INC., as a Pledgor

AWT PROPERTIES, INC., as a Pledgor

CA LEWISPORT, LLC, as a Pledgor

CI HOLDINGS, LLC, as a Pledgor

COMMONWEALTH ALUMINUM

CONCAST, INC., as a Pledgor

COMMONWEALTH ALUMINUM

LEWISPORT, LLC, as a Pledgor

COMMONWEALTH ALUMINUM METALS,

LLC, as a Pledgor

COMMONWEALTH ALUMINUM SALES

CORPORATION, as a Pledgor

COMMONWEALTH ALUMINUM TUBE

ENTERPRISES, LLC, as a Pledgor

COMMONWEALTH ALUMINUM, LLC,

as a Pledgor

COMMONWEALTH FINANCING CORP.,

as a Pledgor

COMMONWEALTH INDUSTRIES, INC.,

as a Pledgor

ETS SCHAEFER CORPORATION,

as a Pledgor

GULF REDUCTION CORPORATION,

as a Pledgor

IMCO INTERNATIONAL, INC.,

as a Pledgor

IMCO INVESTMENT COMPANY,

as a Pledgor

IMCO RECYCLING OF CALIFORNIA, INC.,

as a Pledgor

IMCO RECYCLING OF IDAHO INC.,

as a Pledgor

IMCO RECYCLING OF ILLINOIS INC.,

as a Pledgor

IMCO RECYCLING OF INDIANA INC.,

as a Pledgor

IMCO RECYCLING OF MICHIGAN L.L.C.,

as a Pledgor

IMCO RECYCLING OF OHIO INC.,

as a Pledgor

IMCO RECYCLING OF UTAH INC.,

as a Pledgor

IMCO RECYCLING SERVICES COMPANY,

as a Pledgor

IMSAMET, INC., as a Pledgor

ALERIS BLANKING AND RIM PRODUCTS,

INC. (f/k/a INDIANA ALUMINUM INC.),

as a Pledgor

INTERAMERICAN ZINC, INC.,

as a Pledgor

METALCHEM, INC., as a Pledgor

MIDWEST ZINC CORPORATION,

as a Pledgor

ROCK CREEK ALUMINUM, INC.,

as a Pledgor

SILVER FOX HOLDING COMPANY,

as a Pledgor

U.S. ZINC CORPORATION,

as a Pledgor

U.S. ZINC EXPORT CORPORATION,

as a Pledgor

WESTERN ZINC CORPORATION,

as a Pledgor

By:	/s/  Michael D. Friday
	Name:  Michael D. Friday
	Title:    Director

IMCO INDIANA PARTNERSHIP L.P.        By: IMCO International, Inc., its        General Partner,        as a Pledgor
By:	/s/  Michael D. Friday
	Name:  Michael D. Friday
	Title:    President

IMCO MANAGEMENT PARTNERSHIP, L.P.        By: Aleris International, Inc.,        its General Partner,        as a Pledgor
By:	/s/  Michael D. Friday
	Name:  Michael D. Friday
	Title:    Executive Vice President and               Chief Financial Officer

CORUS ALUMINIUM CORP., as a Pledgor        HOOGOVENS ALUMINIUM EUROPE INC.,        as a Pledgor
By:	/s/  Michael D. Friday
	Name:  Michael D. Friday
	Title:    Director

Accepted and Agreed to:

DEUTSCHE BANK AG NEW YORK BRANCH,

As Collateral Agent and Pledgee

By:	/s/  Carin Keegan
	Name: Carin Keegan
	Title:   Vice President

By:	/s/  Scottye Lindsey
	Name:  Scottye Lindsey
	Title:    Director

Address:   60 Wall Street

                  New York, NY 10005

TABLE OF CONTENTS

			Page
1.	SECURITY FOR OBLIGATIONS		2
2.	DEFINITIONS		4
3.	PLEDGE OF SECURITIES, ETC.		9
	3.1.	Pledge	9
	3.2.	Procedures	12
	3.3.	Subsequently Acquired Collateral	14
	3.4.	Transfer Taxes	14
	3.5.	Certain Representations and Warranties Regarding the Collateral	14
	3.6.	Overriding Provisions with respect to ABL Priority Collateral	15
4.	APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC		15
5.	VOTING, ETC., WHILE NO NOTICED EVENT OF DEFAULT		15
6.	DIVIDENDS AND OTHER DISTRIBUTIONS		15
7.	REMEDIES IN CASE OF A NOTICED EVENT OF DEFAULT		16
8.	REMEDIES, CUMULATIVE, ETC		17
9.	APPLICATION OF PROCEEDS		18
10.	PURCHASERS OF COLLATERAL		18
11.	INDEMNITY		18
12.	PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER		19
13.	FURTHER ASSURANCES; POWER-OF-ATTORNEY		20
14.	THE PLEDGEE AS COLLATERAL AGENT		20
15.	TRANSFER BY THE PLEDGORS		21
16.	REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS		21
17.	LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES THERETO; ETC.		23
18.	PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC.		24
19.	SALE OF COLLATERAL WITHOUT REGISTRATION		24
20.	TERMINATION; RELEASE		25
21.	NOTICES, ETC		26
22.	WAIVER; AMENDMENT		27
23.	SUCCESSORS AND ASSIGNS		27
24.	HEADINGS DESCRIPTIVE		27
25.	GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL		27
26.	PLEDGOR’S DUTIES		28
27.	COUNTERPARTS		29
28.	SEVERABILITY		29
29.	RECOURSE		29
30.	ADDITIONAL PLEDGORS		29
31.	LIMITED OBLIGATIONS		29
32.	RESTATEMENT AND AMENDMENT		29

ANNEX A - -	SCHEDULE OF LEGAL NAMES, TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY), JURISDICTION OF ORGANIZATION, LOCATION AND ORGANIZATIONAL IDENTIFICATION NUMBERS
ANNEX B - -	SCHEDULE OF STOCK
ANNEX C - -	SCHEDULE OF NOTES
ANNEX D - -	SCHEDULE OF LIMITED LIABILITY COMPANY INTERESTS
ANNEX E - -	SCHEDULE OF PARTNERSHIP INTERESTS
ANNEX F - -	SCHEDULE OF CHIEF EXECUTIVE OFFICES
ANNEX G - -	FORM OF AGREEMENT REGARDING UNCERTIFICATED SECURITIES, LIMITED LIABILITY COMPANY INTERESTS AND PARTNERSHIP INTERESTS

EX-10.9

Exhibit 10.9

EXECUTION COPY

AMENDED AND RESTATED U.S. SUBSIDIARIES GUARANTY

AMENDED AND RESTATED U.S. SUBSIDIARIES GUARANTY, dated as of August 1, 2006 and amended and restated as of December 19, 2006 (as amended, modified or supplemented from time to time, this “Guaranty”), made by each of the undersigned guarantors (each a “Guarantor” and, together with any other entity that becomes a guarantor hereunder pursuant to Section 22 hereof, collectively, the “Guarantors”) in favor of DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent (together with any successor administrative agent, the “Administrative Agent”), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.

WITNESSETH :

WHEREAS, Aurora Acquisition Merger Sub, Inc., Aleris International, Inc., a Delaware corporation (“Aleris” or the “U.S. Borrower”), Aleris Deutschland Holdings GmbH, a company with limited liability formed under the laws of Germany (the “German Borrower” and, together with the U.S. Borrower, collectively, the “Borrowers” and each, a “Borrower”), the lenders party thereto from time to time (the “Lenders”), and the Administrative Agent, have entered into an Amended and Restated Term Loan Agreement, dated as of August 1, 2006 and amended and restated as of the date hereof, providing among other things for the making of Loans to the Borrowers as contemplated therein (the Lenders and the Administrative Agent are herein called the “Lender Creditors”) (as used herein, the term “Credit Agreement” means the Amended and Restated Term Loan Agreement described above in this paragraph, as the same may be amended, modified, extended, renewed, replaced, restated, supplemented or refinanced from time to time, and including any agreement extending the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any portion of, the indebtedness under such agreement or any successor agreement, whether or not with the same agent, trustee, representative, lenders or holders; provided that, with respect to any agreement providing for the refinancing or replacement of indebtedness under the Credit Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder if (i) either (A) all obligations under the Credit Agreement being refinanced or replaced shall be paid in full at the time of such refinancing or replacement, and all commitments issued pursuant to the refinanced or replaced Credit Agreement shall have terminated in accordance with their terms, or (B) the Required Lenders shall have consented in writing to the refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit Agreement, and (ii) a notice to the effect that the refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall be delivered by Aleris to the Collateral Agent);

WHEREAS, the U.S. Borrower and/or one or more of its Subsidiaries may at any time and from time to time enter into one or more Secured Hedging Agreements with one or more Persons other than the Borrowers and their Subsidiaries (the “Other Creditors” and collectively, with the Lender Creditors, the “Secured Creditors”);

WHEREAS, each Guarantor is a direct or indirect Wholly-Owned Domestic Subsidiary of Aleris;

WHEREAS, it is a condition precedent to (i) the making of Loans to the Borrowers under the Credit Agreement and (ii) the Other Creditors entering into Secured Hedging Agreements, that each Guarantor shall have executed and delivered to the Administrative Agent this Guaranty; and

WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans by the Borrowers under the Credit Agreement and the entering into by the Borrowers and/or one or more of their Subsidiaries of Secured Hedging Agreements with the Other Creditors, accordingly, desires to execute this Guaranty in order to (i) satisfy the condition described in the preceding paragraph and (ii) induce (x) the Lenders to make Loans to the Borrowers and (y) the Other Creditors to enter into Secured Hedging Agreements with the Borrowers and/or one or more of their Subsidiaries;

NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Guarantor, the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby makes the following representations and warranties to the Administrative Agent for the benefit of the Secured Creditors and hereby covenants and agrees with each other Guarantor and the Administrative Agent for the benefit of the Secured Creditors as follows:

1. GUARANTY. (a) Each Guarantor, jointly and severally, irrevocably, absolutely and unconditionally guarantees as a primary obligor and not merely as surety (i) to the Lender Creditors the full and prompt payment when due (whether at the stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) of (x) the principal of, premium, if any, and interest on the Notes issued by, and the Loans made to, the Borrowers under the Credit Agreement and (y) all other obligations (including, without limitation, obligations which, but for the commencement of any insolvency proceeding, would become due), liabilities and indebtedness owing by each Borrower to the Lender Creditors under the Credit Agreement and each other Credit Document to which such Borrower is a party (including, without limitation, indemnities, Fees and interest thereon (including, without limitation, in each case, any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in the Credit Agreement, whether or not such interest is an allowed claim in any such proceeding)), whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and each such other Credit Document (all such principal, premium, interest, liabilities, indebtedness and other obligations under this clause (i), except to the extent consisting of obligations, liabilities or indebtedness with respect to Secured Hedging Agreements are herein collectively called the “Credit Document Obligations”) and (ii) to each Other Creditor the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the commencement of any insolvency proceeding, would become due), liabilities and indebtedness (including, in each case, any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in the respective Secured Hedging Agreements, whether or not such interest is an allowed claim in any such proceeding) owing by the Borrowers and their Subsidiaries under any Secured Hedging Agreement, whether now in existence or hereafter arising, (all such obligations, liabilities and indebtedness described in this clause (ii) being herein collectively called the “Other Obligations” and together with the Credit Document Obligations, the “Guaranteed Obligations”). Each Guarantor understands, agrees and confirms that the Secured Creditors may enforce this Guaranty up to the full amount of the Guaranteed Obligations against such Guarantor without proceeding against any other Guarantor, the Borrowers, any other Guaranteed Party, against any security for the Guaranteed Obligations, or under any other guaranty covering all or a portion of the Guaranteed Obligations.

The following capitalized terms used herein shall have the definitions specified below:

“Guaranteed Party” shall mean (x) each Borrower and (y) each Subsidiary of Aleris party to a Secured Hedging Agreement.

“Secured Debt Agreements” shall mean and include (i) this Agreement, (ii) the other Credit Documents, (iii) the Secured Hedging Agreements and (iv) the Secured Hedging Agreement Intercreditor Agreement entered into by the Collateral Agent with an Other Creditor.

“Secured Hedging Agreement” shall mean each Interest Rate Protection Agreement and/or Other Hedging Agreements provided that (i) such Interest Rate Protection Agreement and/or Other Hedging Agreement expressly states that (x) it constitutes a “Secured Hedging Agreement” for purposes of this Agreement and the other Credit Documents and (y) does not constitute a “Secured Hedging Agreement” for purposes of the ABL Credit Agreement, the ABL Security Documents or any guaranties relating to the ABL Credit Agreement, (ii) Aleris and the other parties thereto shall have delivered to the Collateral Agent a written notice specifying that such Interest Rate Protection Agreement and/or Other Hedging Agreement (x) constitutes a “Secured Hedging Agreement” for purposes of this Agreement and the other Credit Documents, (y) does not constitute a “Secured Hedging Agreement” for purposes of the ABL Credit Agreement, the ABL Security Documents or any guaranties relating to the ABL Credit Agreement and (z) in the case of Aleris, that such Interest Rate Protection Agreement and/or Other Hedging Agreement and the obligations of Aleris and its Subsidiaries thereunder have been, and will be, incurred in compliance with this Agreement and (iii) such Other Creditor has become party to the Secured Hedging Agreement Intercreditor Agreement with respect to the relevant Interest Rate Protection Agreement or Other Hedging Agreement on terms reasonably satisfactory to the Collateral Agent.

“Secured Hedging Agreement Intercreditor Agreement” shall mean that certain Secured Hedging Agreement Intercreditor Agreement dated as of December 19, 2006 among Aleris, the other grantors party thereto from time to time, the secured hedge counterparties party thereto from time to time and the Collateral Agent and the Administrative Agent (as amended, modified or supplemented from time to time).

(b)Additionally, each Guarantor, jointly and severally, unconditionally, absolutely and irrevocably, guarantees the payment of any and all Guaranteed Obligations whether or not due or payable by any Borrower or any such other Guaranteed Party upon the occurrence in respect of any Borrower or any such other Guaranteed Party of any of the events specified in Section 9.05 of the Credit Agreement, and unconditionally, absolutely and irrevocably, jointly and severally, promises to pay such Guaranteed Obligations to the Secured Creditors, or order, on demand. This Guaranty shall constitute a guaranty of payment, and not of collection.

2. LIABILITY OF GUARANTORS ABSOLUTE. The liability of each Guarantor hereunder is primary, absolute, joint and several, and unconditional and is exclusive and independent of any security for or other guaranty of the indebtedness of any Borrower or any other Guaranteed Party, whether executed by such Guarantor, any other Guarantor, any other guarantor or by any other party, and the liability of each Guarantor hereunder shall not be affected or impaired by any circumstance or occurrence whatsoever, including, without limitation: (a) any direction as to application of payment by any Borrower, any other Guaranteed Party or any other party, (b) any other continuing or other guaranty, undertaking or maximum liability of a Guarantor or of any other party as to the Guaranteed Obligations, (c) any payment on or in reduction of any such other guaranty or undertaking, (d) any dissolution, termination or increase, decrease or change in personnel by any Borrower or any other Guaranteed Party, (e) the failure of the Guarantor to receive any benefit from or as a result of its execution, delivery and performance of this Guaranty, (f) any payment made to any Secured Creditor on the indebtedness which any Secured Creditor repays any Borrower or any other Guaranteed Party pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each Guarantor waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, (g) any action or inaction by the Secured Creditors as contemplated in Section 5 hereof or (h) any invalidity, rescission, irregularity or unenforceability of all or any part of the Guaranteed Obligations or of any security therefore; provided that nothing in this Guaranty shall prevent the Guarantor from asserting the defense of payment of all or any portion of the Guaranteed Obligations.

3. OBLIGATIONS OF GUARANTORS INDEPENDENT. The obligations of each Guarantor hereunder are independent of the obligations of any other Guarantor, any other guarantor, any Borrower or any other Guaranteed Party, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against any other Guarantor, any other guarantor, any Borrower or any other Guaranteed Party and whether or not any other Guarantor, any other guarantor, any Borrower or any other Guaranteed Party be joined in any such action or actions. Each Guarantor waives, to the fullest extent permitted by law, the benefits of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by any Borrower or any Guaranteed Party or other circumstance which operates to toll any statute of limitations as to any Borrower or any such other Guaranteed Party shall operate to toll the statute of limitations as to each Guarantor.

4. WAIVERS BY GUARANTORS. (a) To the fullest extent permitted under applicable law, each Guarantor hereby waives notice of acceptance of this Guaranty and notice of the existence, creation or incurrence of any new or additional liability to which it may apply, and waives promptness, diligence, presentment, demand of payment, demand for performance, protest, notice of dishonor or nonpayment of any such liabilities, suit or taking of other action by the Administrative Agent or any other Secured Creditor against, and any other notice to, any party liable thereon (including such Guarantor, any other Guarantor, any other guarantor, any Borrower or any other Guaranteed Party) and each Guarantor further hereby waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice or proof of reliance by any Secured Creditor upon this Guaranty, and the Guaranteed Obligations shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended, modified, supplemented or waived, in reliance upon this Guaranty.

(b)Each Guarantor waives any right to require the Secured Creditors to: (i) proceed against any Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; (ii) proceed against or exhaust any security held from any Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any other remedy in the Secured Creditors’ power whatsoever. Each Guarantor waives any defense based on or arising out of any defense of any Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party other than payment in full in cash of the Guaranteed Obligations, including, without limitation, any defense based on or arising out of the disability of any Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party, or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Borrower or any other Guaranteed Party other than payment in full in cash of the Guaranteed Obligations. The Secured Creditors may, at their election, foreclose on any collateral serving as security held by the Administrative Agent, the Collateral Agent or the other Secured Creditors by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Secured Creditors may have against any Borrower, any other Guaranteed Party or any other party, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Guaranteed Obligations have been paid in full in cash. Each Guarantor waives any defense arising out of any such election by the Secured Creditors, even though such election operates to impair or extinguish any right of reimbursement, contribution, indemnification or subrogation or other right or remedy of such Guarantor against any Borrower, any other Guaranteed Party, any other guarantor of the Guaranteed Obligations or any other party or any security.

(c)Each Guarantor has knowledge and assumes all responsibility for being and keeping itself informed of each Borrower’s, each other Guaranteed Party’s and each other Guarantor’s financial condition, affairs 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 which such Guarantor assumes and incurs hereunder, and has adequate means to obtain from each Borrower, each other Guaranteed Party and each other Guarantor on an ongoing basis information relating thereto and each Borrower’s, each other Guaranteed Party’s and each other Guarantor’s ability to pay and perform its respective Guaranteed Obligations, and agrees to assume the responsibility for keeping, and to keep, so informed for so long as this Guaranty is in effect. Each Guarantor acknowledges and agrees that (x) the Secured Creditors shall have no obligation to investigate the financial condition or affairs of any Borrower, any other Guaranteed Party or any other Guarantor for the benefit of such Guarantor nor to advise such Guarantor of any fact respecting, or any change in, the financial condition, assets or affairs of any Borrower, any other Guaranteed Party or any other Guarantor that might become known to any Secured Creditor at any time, whether or not such Secured Creditor knows or believes or has reason to know or believe that any such fact or change is unknown to such Guarantor, or might (or does) increase the risk of such Guarantor as guarantor hereunder, or might (or would) affect the willingness of such Guarantor to continue as a guarantor of the Guaranteed Obligations hereunder and (y) the Secured Creditors shall have no duty to advise any Guarantor of information known to them regarding any of the aforementioned circumstances or risks.

(d)Each Guarantor hereby acknowledges and affirms that it understands that to the extent the Guaranteed Obligations are secured by Real Property located in the State of California, such Guarantor shall be liable for the full amount of the liability hereunder notwithstanding foreclosure on such Real Property by trustee sale or any other reason impairing such Guarantor’s or any Secured Creditors’ right to proceed against any Borrower, any other Guaranteed Party or any other guarantor of the Guaranteed Obligations.

(e)Each Guarantor hereby waives (to the fullest extent permitted by applicable law) all rights and benefits under Section 580a, 580b, 580d and 726 of the California Code of Civil Procedure. Each Guarantor hereby further waives (to the fullest extent permitted by applicable law), without limiting the generality of the foregoing or any other provision hereof, all rights and benefits which might otherwise be available to such Guarantor under Sections 2809, 2810, 2815, 2819, 2821, 2839, 2845, 2848, 2849, 2850, 2899 and 3433 of the California Civil Code.

(f)Until the Guaranteed Obligations have been paid in full in cash, each Guarantor waives its rights of subrogation and reimbursement and any other rights and defenses available to such Guarantor by reason of Sections 2787 to 2855, inclusive, of the California Civil Code, including, without limitation, (1) any defenses such Guarantor may have to this Guaranty by reason of an election of remedies by the Secured Creditors and (2) any rights or defenses such Guarantor may have by reason of protection afforded to any Borrower or any other Guaranteed Party pursuant to the antideficiency or other laws of California limiting or discharging such Borrower’s, such other Guaranteed Party’s indebtedness, including, without limitation, Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure. In furtherance of such provisions, each Guarantor hereby waives all rights and defenses arising out of an election of remedies by the Secured Creditors, even though that election of remedies, such as a nonjudicial foreclosure, destroys such Guarantor’s rights of subrogation and reimbursement against any Borrower or any other Guaranteed Party by the operation of Section 580d of the California Code of Civil Procedure or otherwise.

(g)Each Guarantor hereby acknowledges and agrees that no Secured Creditor nor any other Person shall be under any obligation (a) to marshal any assets in favor of such Guarantor or in payment of any or all of the liabilities of any Guaranteed Party under the Secured Debt Agreements or the obligation of such Guarantor hereunder or (b) to pursue any other remedy that such Guarantor may or may not be able to pursue itself any right to which such Guarantor hereby waives.

(h)Each Guarantor warrants and agrees that each of the waivers set forth in Section 3 and in this Section 4 is made with full knowledge of its significance and consequences and that if any of such waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective only to the maximum extent permitted by applicable law.

5. RIGHTS OF SECURED CREDITORS. Subject to Sections 4 and 13, the Secured Creditors may (except as shall be required by applicable statute and cannot be waived) at any time and from time to time without the consent of, or notice to, any Guarantor, without incurring responsibility to such Guarantor, without impairing or releasing the obligations or liabilities of such Guarantor hereunder, upon or without any terms or conditions and in whole or in part:

(a)change the manner, place or terms of payment of, and/or change, increase or extend the time of payment of, renew, increase, accelerate or alter, any of the Guaranteed Obligations (including, without limitation, any increase or decrease in the rate of interest thereon or the principal amount thereof), any security therefor, or any liability incurred directly or indirectly in respect thereof, and the guaranty herein made shall apply to the Guaranteed Obligations as so changed, extended, increased, accelerated, renewed or altered;

(b)take and hold security for the payment of the Guaranteed Obligations and sell, exchange, release, surrender, impair, realize upon or otherwise deal with in any manner and in any order any property or other collateral by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst;

(c)exercise or refrain from exercising any rights against any Borrower, any other Guaranteed Party, any other Credit Party, any Subsidiary thereof, any other guarantor of any Borrower or others or otherwise act or refrain from acting;

(d)release or substitute any one or more endorsers, Guarantors, other guarantors, any Borrower, any other Guaranteed Party, any other Credit Party or other obligors;

(e)settle or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of any Borrower or any other Guaranteed Party to creditors of such Borrower or such other Guaranteed Party other than the Secured Creditors;

(f)except as otherwise expressly required by the Security Documents, apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of any Borrower or any other Guaranteed Party to the Secured Creditors regardless of what liabilities of such Borrower or such other Guaranteed Party remain unpaid;

(g)consent to or waive any breach of, or any act, omission or default under, any of the Secured Debt Agreements or any of the instruments or agreements referred to therein, or otherwise amend, modify or supplement any of the Secured Debt Agreements or any of such other instruments or agreements;

(h)act or fail to act in any manner which may deprive such Guarantor of its right to subrogation against any Borrower or any other Guaranteed Party to recover full indemnity for any payments made pursuant to this Guaranty; and/or

(i)take any action or omit to take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of such Guarantor from its liabilities under this Guaranty (including, without limitation, any action or omission whatsoever that might otherwise vary the risk of such Guarantor or constitute a legal or equitable defense to or discharge of the liabilities of a guarantor or surety or that might otherwise limit recourse against such Guarantor); provided in each case that nothing in this Guaranty shall prevent the Guarantor from asserting the defense of payment of all or any portion of the Guaranteed Obligations.

No invalidity, illegality, irregularity or unenforceability of all or any part of the Guaranteed Obligations, the Secured Debt Agreements or any other agreement or instrument relating to the Guaranteed Obligations or of any security or guarantee therefor shall affect, impair or be a defense to this Guaranty, and this Guaranty shall be primary, absolute and unconditional notwithstanding the occurrence of any event or the existence of any other circumstances which might constitute a legal or equitable discharge of a surety or guarantor except payment in full in cash of the Guaranteed Obligations.

6. CONTINUING GUARANTY. This Guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon. No failure or delay on the part of any Secured Creditor in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein expressly specified are cumulative and not exclusive of any rights or remedies which any Secured Creditor would otherwise have. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Secured Creditor to any other or further action in any circumstances without notice or demand. It is not necessary for any Secured Creditor to inquire into the capacity or powers of any Borrower or any other Guaranteed Party or the officers, directors, partners or agents acting or purporting to act on its or their behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

7. SUBORDINATION OF INDEBTEDNESS HELD BY GUARANTORS. Any indebtedness of any Borrower or any other Guaranteed Party now or hereafter owing to any Guarantor is hereby subordinated to the Guaranteed Obligations of such Borrower or such other Guaranteed Party to the Secured Creditors, and such Guaranteed Obligations of such Borrower or such other Guaranteed Party to any Guarantor, if the Administrative Agent or the Collateral Agent, after the occurrence and during the continuance of an Event of Default, so requests, shall be collected, enforced and received by such Guarantor as trustee for the Secured Creditors and be paid over to the Secured Creditors on account of the Guaranteed Obligations of such Borrower or such other Guaranteed Parties to the Secured Creditors, but without affecting or impairing in any manner the liability of such Guarantor under the other provisions of this Guaranty. Prior to the transfer by any Guarantor of any note or negotiable instrument evidencing any indebtedness of any Borrower or any other Guaranteed Party to such Guarantor, such Guarantor shall mark such note or negotiable instrument with a legend that the same is subject to this subordination. Without limiting the generality of the foregoing, each Guarantor hereby agrees with the Secured Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been paid in full in cash; provided, that if any amount shall be paid to such Guarantor on account of such subrogation rights at any time prior to the irrevocable payment in full in cash of all the Guaranteed Obligations, such amount shall be held in trust for the benefit of the Secured Creditors and shall forthwith be paid to the Secured Creditors to be credited and applied upon the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Credit Documents or, if the Credit Documents do not provide for the application of such amount, to be held by the Secured Creditors as collateral security for any Guaranteed Obligations thereafter existing.

8. GUARANTY ENFORCEABLE BY ADMINISTRATIVE AGENT OR COLLATERAL AGENT. Notwithstanding anything to the contrary elsewhere in this Guaranty, the Secured Creditors agree (by their acceptance of the benefits of this Guaranty) that this Guaranty may be enforced only by the action of (i) the Administrative Agent or the Collateral Agent, in each case acting upon the instructions of the Required Lenders and (ii) with respect to the Other Obligations, the holders of at least a majority of the outstanding Other Obligations and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Guaranty or to realize upon the security to be granted by the Security Documents, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent or the Collateral Agent or, after all the Credit Document Obligations have been paid in full, by the holders of at least a majority of the outstanding Other Obligations, as the case may be, for the benefit of the Secured Creditors upon the terms of this Guaranty and the Security Documents. The Secured Creditors further agree that this Guaranty may not be enforced against any director, officer, employee, partner, member or stockholder of any Guarantor (except to the extent such partner, member or stockholder is also a Guarantor hereunder). It is expressly understood, acknowledged and agreed by each Secured Creditor that by accepting the benefits of this Agreement each such Secured Creditor acknowledges and agrees that the obligations of the Administrative Agent under this Agreement, are only those expressly set forth in this Agreement and in Annex M to the Security Agreement. The Administrative Agent shall act hereunder on the terms and conditions set forth herein and in Annex M to the Security Agreement, the terms of which shall be deemed incorporated herein by reference, mutatis mutandis, as fully as if the same were set forth herein (and referencing this Agreement) in its entirety. It is further understood and agreed that the agreement in this Section 8 is among and solely for the benefit of the Secured Creditors and that, if the Required Lenders (or, after the date on which all Credit Document Obligations have been paid in full, the holders of at least a majority of the outstanding Other Obligations) so agree (without requiring the consent of any Guarantor), this Guaranty may be directly enforced by any Secured Creditor.

9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF GUARANTORS. In order to induce the Lenders to make Loans to the Borrowers pursuant to the Credit Agreement and in order to induce the Other Creditors to execute, to deliver and perform the Secured Hedging Agreements to which they are a party, each Guarantor represents, warrants and covenants that:

(a)Such Guarantor (i) is a duly organized and validly existing corporation, partnership or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization, (ii) has the corporate, partnership or limited liability company power and authority, as the case may be, to own its property and assets and to transact the business in which it is engaged and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its property or the conduct of its business requires such qualification except for failures to be so qualified which, either individually or in the aggregate, could not reasonably be expected to have, a Material Adverse Effect.

(b)Such Guarantor has the corporate, partnership or limited liability company power and authority, as the case may be, to execute, deliver and perform the terms and provisions of this Guaranty and each other Secured Debt Agreement to which it is a party and has taken all necessary corporate, partnership or limited liability company action, as the case may be, to authorize the execution, delivery and performance by it of this Guaranty and each such other Secured Debt Agreement. Such Guarantor has duly executed and delivered this Guaranty and each other Secured Debt Agreement to which it is a party, and this Guaranty and each such other Secured Debt Agreement constitutes the legal, valid and binding obligation of such Guarantor enforceable in accordance with its terms, except to the extent that the enforceability hereof or thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

(c)Neither the execution, delivery or performance by such Guarantor of this Guaranty or any other Secured Debt Agreement to which it is a party, nor compliance by it with the terms and provisions hereof and thereof, will (i) contravene any provision of any material applicable law, statute, rule or regulation or any applicable order, writ, injunction or decree of any court or governmental instrumentality in any material respect, (ii) conflict with or result in any breach of any of the material terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Security Documents) upon any of the property or assets of such Guarantor or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, credit agreement, or any other material agreement, contract or instrument to which such Guarantor or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject or (iii) violate any provision of the certificate or articles of incorporation or by-laws (or equivalent organizational documents) of such Guarantor or any of its Subsidiaries.

(d)No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for (x) those that have otherwise been obtained or made, (y) filings which are necessary to perfect the security interests created under the Security Documents and (z) other than with respect to the Secured Debt Agreements, those the failure to obtain which could not reasonably be expected to have a Material Adverse Effect), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Guaranty by such Guarantor or any other Document to which such Guarantor is a party or (ii) the legality, validity, binding effect or enforceability of any Document to which such Guarantor is a party.

(e)There are no actions, suits or proceedings pending or, to such Guarantor’s knowledge, threatened in writing (i) with respect to this Guaranty or any other Secured Debt Agreement to which such Guarantor is a party or (ii) with respect to such Guarantor or any of its Subsidiaries that, either individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect.

(f)Each Guarantor covenants and agrees that on and after the Restatement Effective Date and until the date upon which the Total Commitment under the Credit Agreement has been terminated, no Note (as defined in the Credit Agreement) is outstanding (and all Loans have been paid in full) (the “Credit Document Termination Date”), all Guaranteed Obligations under Secured Hedging Agreements and all other Guaranteed Obligations (other than indemnities under the Credit Documents which are not then due and payable) have been paid in full and the Secured Hedging Agreements have been terminated, such Guarantor will comply, and will cause each of its Subsidiaries to comply, with all of the applicable provisions, covenants and agreements contained in Sections 7 and 8 of the Credit Agreement, and will take, or will refrain from taking, as the case may be, all actions that are necessary to be taken or not taken so that it is not in violation of any provision, covenant or agreement contained in Section 7 or 8 of the Credit Agreement, and so that no Default or Event of Default is caused by the actions of such Guarantor or any of its Subsidiaries.

(g)An executed (or conformed) copy of each of the Secured Debt Agreements, has been made available to a senior officer of such Guarantor and such officer is familiar with the contents thereof.

10. EXPENSES. The Guarantors hereby jointly and severally agree to pay all reasonable out-of-pocket costs and expenses of each Secured Creditor in connection with the enforcement of this Guaranty (including, without limitation, the fees and disbursements of counsel employed by each of the Secured Creditors) and of the Administrative Agent in connection with any amendment, waiver or consent relating hereto (including, without limitation, the reasonable fees and disbursements of counsel employed by each of the Agents).

11. BENEFIT AND BINDING EFFECT. This Guaranty shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the Secured Creditors and their successors and assigns.

12. AMENDMENTS; WAIVERS. Neither this Guaranty nor any provision hereof may be changed or waived except with the written consent of each Guarantor directly affected thereby (it being understood that the addition or release of any Guarantor hereunder shall not constitute a change or waiver affecting any Guarantor other than the Guarantor so added or released) and with the written consent of either (x) the Required Lenders (or, to the extent required by Section 11.12 of the Credit Agreement, with the written consent of each Lender) at all times prior to the Credit Document Termination Date or (y) the holders of at least a majority of the outstanding Other Obligations (taken as a whole) at all times after the time at which all Credit Document Obligations have been paid in full; provided, that (i) any change, waiver, modification or variance affecting the rights and benefits of a single Class (as defined below) of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall also require the written consent of the Requisite Creditors (as defined below) of such Class of Secured Creditors (it being understood that the addition or release of any Guarantor hereunder in accordance with the terms hereof or the Credit Agreement or any increase in or addition of one or more classes of Guaranteed Obligations shall not constitute a change or waiver affecting any Guarantor other than the Guarantor so added or released and shall not require the consent of any Secured Creditor other than the Administrative Agent) and (ii) to the extent provided in the Secured Hedging Agreement Intercreditor Agreement, the consent of the Other Creditors to amendments, modifications and waivers described in the Secured Hedging Agreement Intercreditor Agreement shall be required. For the purpose of this Guaranty, the term “Class” shall mean each class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the Credit Document Obligations, or (y) the Other Creditors as holders of the Other Obligations. For the purpose of this Guaranty, the term “Requisite Creditors” of any Class shall mean (x) with respect to the Credit Document Obligations, the Required Lenders (or, to the extent required by Section 11.12 of the Credit Agreement, each Lender) and (y) with respect to the Other Obligations, the holders of at least a majority of all Other Obligations outstanding from time to time.

13. SET OFF. In addition to any rights now or hereafter granted under applicable law (including, without limitation, Section 151 of the New York Debtor and Secured Creditor Law) and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default (such term to mean and include (i) at any time when any Credit Document Obligations are outstanding or any Commitments under the Credit Agreement exist, any Event of Default under, and as defined in the Credit Agreement and (ii) at any time after all of the Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated and no further Commitments may be provided thereunder, any event of default under any Secured Hedging Agreement or any payment default on any of the Obligations after the expiration of any applicable grace period), each Secured Creditor is hereby authorized, at any time or from time to time, without notice to any Guarantor or to any other Person, any such notice being expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Secured Creditor to or for the credit or the account of such Guarantor, against and on account of the obligations and liabilities of such Guarantor to such Secured Creditor under this Guaranty, irrespective of whether or not such Secured Creditor shall have made any demand hereunder and although said obligations, liabilities, deposits or claims, or any of them, shall be contingent or unmatured. Notwithstanding anything to the contrary contained in this Guaranty, at any time that the Guaranteed Obligations shall be secured by any Real Property located in the State of California, no Secured Creditor shall exercise any right of set-off, lien or counterclaim or take any court or administrative action or institute any proceedings to enforce any provision of this Guaranty without the prior consent of (x) at all times prior to the Credit Document Termination Date, the Administrative Agent or the Required Lenders (or, to the extent required by Section 11.12 of the Credit Agreement, all of the Lenders), or (y) the holders of a majority of the Other Obligations at all times after the Credit Document Termination Date, 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 Collateral Agent pursuant to the Security Documents or the enforceability of the Guaranteed Obligations hereunder, and any attempted exercise by any Secured Creditor or the Administrative Agent of any such right without obtaining such consent of (x) at all times prior to the Credit Document Termination Date, the Required Lenders or the Administrative Agent or (y) the holders of a majority of the Other Obligations at all times after the Credit Document Termination Date, shall be null and void. It is understood and agreed that the foregoing sentence of this Section 13 is for the sole benefit of the Secured Creditors and may be amended, modified or waived in any respect by (x) at all times prior to the Credit Document Termination Date, the Required Lenders or (y) the holders of a majority of the Other Obligations at all times after the Credit Document Termination Date, (without any requirement of prior notice to or consent by any Credit Party or any other Person) and does not constitute a waiver of any rights against any Credit Party or against any Collateral.

14. NOTICE. All notices, requests, demands or other communications pursuant hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Administrative Agent or any Guarantor shall not be effective until received by the Administrative Agent or such Guarantor, as the case may be. All notices and other communications shall be in writing and addressed to such party at (i) in the case of any Secured Creditor, as provided in the Credit Agreement, (ii) in the case of any Other Creditor, at such address as such Other Creditor shall have specified in writing to Aleris and the Administrative Agent and (iii) in the case of any Guarantor, at: Aleris International, Inc., 25825 Science Park Drive, Suite 400, Beachwood, OH 44122, Attention: General Counsel, Telephone No.: (216) 910-3400, Telecopier No.: (216) 910-3650; or in any case at such other address as any of the Persons listed above may hereafter notify the others in writing.

15. REINSTATEMENT. If claim is ever made upon any Secured Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including any Borrower or any other Guaranteed Party) then and in such event each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon such Guarantor, notwithstanding any revocation hereof or other instrument evidencing any liability of any Borrower or any other Guaranteed Party, and such Guarantor shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee.

16. CONSENT TO JURISDICTION; SERVICE OF PROCESS; AND WAIVER OF TRIAL BY JURY. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding with respect to this Guaranty or any other Credit Document to which any Guarantor is a party may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York in each case which are located within the City of New York, and, by execution and delivery of this Guaranty, each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby further irrevocably waives any claim that any such court lacks personal jurisdiction over it, and agrees not to plead or claim in any legal action or proceeding with respect to this Guaranty or any other Credit Document to which it is a party brought in any of the aforesaid courts that any such court lacks personal jurisdiction over such Guarantor. Each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such party at its address set forth in Section 14 hereof, such service to become effective 30 days after such mailing. Each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby irrevocably waives any objection to such service of process and further irrevocably waives and agrees not to plead or claim in any action or proceeding commenced hereunder or under any other Credit Document to which it is a party that such service of process was in any way invalid or ineffective. Nothing herein shall affect the right of any such party to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction.

(b)Each Guarantor and each Secured Party (by its acceptance of the benefits of this Guaranty) hereby irrevocably waives (to the fullest extent permitted by applicable law) any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Guaranty or any other Credit Document to which such Guarantor is a party brought in the courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that such action or proceeding brought in any such court has been brought in an inconvenient forum.

(c)EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

17. RELEASE OF LIABILITY OF GUARANTOR UPON SALE OR DISSOLUTION, ETC. In the event that all of the Equity Interests of a Guarantor are sold or otherwise disposed of or liquidated in compliance with the requirements of Section 8.02 of the Credit Agreement (or such sale, other disposition or liquidation has been approved in writing by the Required Lenders (or all the Lenders if required by Section 11.12 of the Credit Agreement) or is otherwise permitted pursuant to Section 11.12 of the Credit Agreement) and the proceeds of such sale, disposition or liquidation are applied in accordance with the provisions of the Credit Agreement, to the extent applicable, such Guarantor shall upon consummation of such sale or other disposition (except to the extent that such sale or disposition is to Aleris or another Subsidiary thereof) be released from this Guaranty automatically and without further action and this Guaranty shall, as to each such Guarantor, terminate, and have no further force or effect (it being understood and agreed that the sale of one or more Persons that own, directly or indirectly, all of the Equity Interests of any Guarantor shall be deemed to be a sale of such Guarantor for the purposes of this Section 17).

18. CONTRIBUTION. At any time a payment in respect of the Guaranteed Obligations is made under this Guaranty, the right of contribution of each Guarantor against each other Guarantor shall be determined as provided in the immediately following sentence, with the right of contribution of each Guarantor to be revised and restated as of each date on which a payment (a “Relevant Payment”) is made on the Guaranteed Obligations under this Guaranty. At any time that a Relevant Payment is made by a Guarantor that results in the aggregate payments made by such Guarantor in respect of the Guaranteed Obligations to and including the date of the Relevant Payment exceeding such Guarantor’s Contribution Percentage (as defined below) of the aggregate payments made by all Guarantors in respect of the Guaranteed Obligations to and including the date of the Relevant Payment (such excess, the “Aggregate Excess Amount”), each such Guarantor shall have a right of contribution against each other Guarantor who has made payments in respect of the Guaranteed Obligations to and including the date of the Relevant Payment in an aggregate amount less than such other Guarantor’s Contribution Percentage of the aggregate payments made to and including the date of the Relevant Payment by all Guarantors in respect of the Guaranteed Obligations (the aggregate amount of such deficit, the “Aggregate Deficit Amount”) in an amount equal to (x) a fraction the numerator of which is the Aggregate Excess Amount of such Guarantor and the denominator of which is the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate Deficit Amount of such other Guarantor. A Guarantor’s right of contribution pursuant to the preceding sentences shall arise at the time of each computation, subject to adjustment to the time of each computation; provided that no Guarantor may take any action to enforce such right until the Guaranteed Obligations have been paid in full in cash, it being expressly recognized and agreed by all parties hereto that any Guarantor’s right of contribution arising pursuant to this Section 18 against any other Guarantor shall be expressly junior and subordinate to such other Guarantor’s obligations and liabilities in respect of the Guaranteed Obligations and any other obligations owing under this Guaranty. As used in this Section 18: (i) each Guarantor’s “Contribution Percentage” shall mean the percentage obtained by dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the “Adjusted Net Worth” of each Guarantor shall mean the greater of (x) the Net Worth (as defined below) of such Guarantor and (y) zero; and (iii) the “Net Worth” of each Guarantor shall mean the amount by which the fair saleable value of such Guarantor’s assets on the date of any Relevant Payment exceeds its existing debts and other liabilities (including contingent liabilities, but without giving effect to any Guaranteed Obligations arising under this Guaranty on such date. Notwithstanding anything to the contrary contained above, any Guarantor that is released from this Guaranty pursuant to Section 17 hereof shall thereafter have no contribution obligations, or rights, pursuant to this Section 18, and at the time of any such release, if the released Guarantor had an Aggregate Excess Amount or an Aggregate Deficit Amount, same shall be deemed reduced to $0, and the contribution rights and obligations of the remaining Guarantors shall be recalculated on the respective date of release (as otherwise provided above) based on the payments made hereunder by the remaining Guarantors. All parties hereto recognize and agree that, except for any right of contribution arising pursuant to this Section 18, each Guarantor who makes any payment in respect of the Guaranteed Obligations shall have no right of contribution or subrogation against any other Guarantor in respect of such payment until all of the Guaranteed Obligations have been paid in full in cash. Each of the Guarantors recognizes and acknowledges that the rights to contribution arising hereunder shall constitute an asset in favor of the party entitled to such contribution. In this connection, each Guarantor has the right to waive its contribution right against any Guarantor to the extent that after giving effect to such waiver such Guarantor would remain solvent, in the determination of the Required Lenders.

19. LIMITATION ON GUARANTEED OBLIGATIONS. Each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby confirms that it is its intention that this Guaranty not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar Federal or state law. To effectuate the foregoing intention, each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby irrevocably agrees that the Guaranteed Obligations guaranteed by such Guarantor shall be limited to such amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws and after giving effect to any rights to contribution pursuant to any agreement providing for an equitable contribution among such Guarantor and the other Guarantors, result in the Guaranteed Obligations of such Guarantor in respect of such maximum amount not constituting a fraudulent transfer or conveyance.

20. COUNTERPARTS. This Guaranty may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Guarantors and the Administrative Agent.

21. PAYMENTS. All payments made by any Guarantor hereunder will be made without setoff, counterclaim or other defense and on the same basis as payments are made by the Borrowers under Sections 4.03 and 4.04 of the Credit Agreement.

22. ADDITIONAL GUARANTORS. It is understood and agreed that any Subsidiary of Aleris that is required to become a party to this Guaranty after the date hereof pursuant to the requirements of the Credit Agreement or any other Credit Document, shall become a Guarantor hereunder by (x) executing and delivering a counterpart hereof, or a joinder agreement in form satisfactory to the Administrative Agent, and delivering same to the Administrative Agent and (y) taking all actions as specified in this Guaranty as would have been taken by such Guarantor had it been an original party to this Guaranty, in each case with all documents required by the Credit Documents to be delivered to the Administrative Agent and with all documents and actions required by the Credit Documents to be taken to the reasonable satisfaction of the Administrative Agent.

23. HEADINGS DESCRIPTIVE. The headings of the several Sections of this Guaranty are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Guaranty.

24. VIRGINIA WAIVER. Guarantor waives all rights of Guarantor arising under Sections 49-25 and 49-26 of the Code of Virginia.

25. CALCULATION OF OBLIGATIONS UNDER SECURED HEDGING AGREEMENTS. Any calculation of obligations outstanding under a Secured Hedging Agreement for purposes of this Agreement shall be for purposes of the definition of Required Secured Creditors (x) if prior to the termination of such Secured Hedging Agreement, the maximum aggregate amount (giving effect to any netting agreements) that Aleris and the Guarantors would be required to pay if such Secured Hedging Agreement were terminated at such time, but in no event should such amount with respect to the Secured Hedging Agreement entered into on the Restatement Effective Date be deemed to be less than $35,000,000 and (y) if after the termination of such Secured Hedging Agreements, the amount which is actually due and payable by Aleris and the Guarantos under such Secured Hedging Agreement at such time.

26. AMENDMENT AND RESTATEMENT. This Guaranty shall amend and restate in its entirety the U.S. Subsidiaries Guaranty dated as of August 1, 2006 among certain of the Guarantors and the Administrative Agent (the “Existing U.S. Subsidiaries Guaranty”), and all obligations of the Guarantors thereunder shall be deemed replaced and extended as obligations under this Guaranty and be governed hereby without novation. In no event shall such amendment and restatement be construed as a termination of the obligations under the Existing U.S. Subsidiaries Guaranty.

***

IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered as of the date first above written.

ALCHEM ALUMINUM,INC., as a Guarantor

ALCHEM ALUMINUM SHELBYVILLE INC.,

as a Guarantor

ALERIS, INC., as a Guarantor

ALERIS OHIO MANAGEMENT, INC.,

as a Guarantor

ALSCO HOLDINGS, INC., as a Guarantor

ALSCO METALS CORPORATION,

as a Guarantor

ALUMITECH OF CLEVELAND, INC.,

as a Guarantor

ALUMITECH OF WABASH, INC.,

as a Guarantor

ALUMITECH OF WEST VIRGINIA, INC.,

as a Guarantor

ALUMITECH, INC., as a Guarantor

AWT PROPERTIES, INC., as a Guarantor

CA LEWISPORT, LLC, as a Guarantor

CI HOLDINGS, LLC, as a Guarantor

COMMONWEALTH ALUMINUM

CONCAST, INC., as a Guarantor

COMMONWEALTH ALUMINUM

LEWISPORT, LLC, as a Guarantor

COMMONWEALTH ALUMINUM METALS,

LLC, as a Guarantor

COMMONWEALTH ALUMINUM SALES

CORPORATION, as a Guarantor

COMMONWEALTH ALUMINUM TUBE

ENTERPRISES, LLC, as a Guarantor

COMMONWEALTH ALUMINUM, LLC,

as a Guarantor

COMMONWEALTH FINANCING CORP.,

as a Guarantor

COMMONWEALTH INDUSTRIES, INC.,

as a Guarantor

ETS SCHAEFER CORPORATION,

as a Guarantor

GULF REDUCTION CORPORATION,

as a Guarantor

IMCO INTERNATIONAL, INC.,

as a Guarantor

IMCO INVESTMENT COMPANY,

as a Guarantor

IMCO RECYCLING OF CALIFORNIA, INC.,

as a Guarantor

IMCO RECYCLING OF IDAHO INC.,

as a Guarantor

IMCO RECYCLING OF ILLINOIS INC.,

as a Guarantor

IMCO RECYCLING OF INDIANA INC.

as a Guarantor

IMCO RECYCLING OF MICHIGAN L.L.C.,

as a Guarantor

IMCO RECYCLING OF OHIO INC.,

as a Guarantor

IMCO RECYCLING OF UTAH INC.,

as a Guarantor

IMCO RECYCLING SERVICES COMPANY,

as a Guarantor

IMSAMET, INC., as a Guarantor

ALERIS BLANKING AND RIM PRODUCTS,

INC. (f/k/a INDIANA ALUMINUM INC.),

as a Guarantor

INTERAMERICAN ZINC, INC.,

as a Guarantor

METALCHEM, INC., as a Guarantor

MIDWEST ZINC CORPORATION,

as a Guarantor

ROCK CREEK ALUMINUM, INC.,

as a Guarantor

SILVER FOX HOLDING COMPANY,

as a Guarantor

U.S. ZINC CORPORATION, as a Guarantor

U.S. ZINC EXPORT CORPORATION,

as a Guarantor

WESTERN ZINC CORPORATION,

as a Guarantor

By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Director

IMCO INDIANA PARTNERSHIP L.P.

By: IMCO International, Inc., its General Partner,

as a Guarantor

By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	President

IMCO MANAGEMENT PARTNERSHIP, L.P.

By: Aleris International, Inc., its General Partner,

as a Guarantor

By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Chief Financial Officer

CORUS ALUMINIUM CORP., as a Guarantor

HOOGOVENS ALUMINIUM EUROPE INC., as a Guarantor

By:	/s/ Michael D. Friday
	Name:	Michael D. Friday
	Title:	Director

Accepted and Agreed to:

DEUTSCHE BANK AG NEW YORK BRANCH,

as Administrative Agent

By:	/s/ Carin Keegan
	Name:	Carin Keegan
	Title:	Vice President

By:	/s/ Scottye Lindsey
	Name:	Scottye Lindsey
	Title:	Director

EX-10.18

Exhibit 10.18

EXECUTION COPY

MANAGEMENT SERVICES AGREEMENT

This Management Services Agreement (the “Agreement”) is entered into as of December 18, 2006, by and among Aurora Acquisition Merger Sub, Inc., a Delaware corporation (together with its subsidiaries, “MergerSub”), Aurora Acquisition Holdings, Inc., a Delaware corporation (“Aurora” or the “Company”, and together with MergerSub and their respective subsidiaries, the “Companies”) and TPG GenPar IV, L.P. and TPG GenPar V, L.P. (the “Managers”).

WHEREAS, each of Aurora and MergerSub will engage in a transaction in which MergerSub will merge with and into Aleris International, Inc., a Delaware corporation (“Aleris”), with Aleris surviving (the “Merger”) pursuant to an Agreement and Plan of Merger, dated as of August 7, 2006 (as amended from time to time, the “Merger Agreement”);

WHEREAS, pursuant to the Merger Agreement and by virtue of the Merger, Aleris will assume, by operation of law, all of the liabilities and obligations of the Company, including all liabilities and obligations set forth in this Agreement;

WHEREAS, TPG Partners V, L.P. (together with parallel investment entities, “TPG V”‘), TPG Partners IV, L.P. (“TPG IV”) and certain co-investors are making an equity investment in Aurora Acquisition Holdings, LLC in connection with the Merger; and

WHEREAS, the Companies wish to retain the Managers to provide certain management and advisory services to the Companies, and the Managers are willing to provide such services on the terms set forth below.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

1 . Services. Each Manager hereby agrees that, during the term of this Agreement (the “Term”) it will provide to the Companies, to the extent appropriate and requested by the Companies, by and through itself and/or its successors, assigns, affiliates, officers, employees and/or representatives and third parties (collectively hereinafter referred to as the “Manager Designees”), as the Managers in their sole discretion may designate from time to time, management, advisory and consulting services in relation to the affairs of the Companies, including, without limitation:

(a) advice in connection with the negotiation and consummation of agreements, contracts, documents and instruments necessary to provide the Companies with financing on terms and conditions satisfactory to the Companies;

1

(b) advice in connection with acquisition, disposition and change of control transactions involving any of the Companies or any of their direct or indirect subsidiaries or any of their respective successors;

(c) financial, managerial and operational advice in connection with day-today operations, including, without limitation, advice with respect to the development and implementation of strategies for improving the operating, marketing and financial performance of the Companies; and

(d) such other services (which may include financial and strategic planning and analysis, consulting services, human resources and executive recruitment services and other services) as the Managers and the Companies may from time to time agree in writing.

The Managers or the Manager Designees will devote such time and efforts to the performance of the services contemplated hereby as the Managers deem reasonably necessary or appropriate; provided, however, that no minimum number of hours is required to be devoted by the Managers or the Manager Designees on a weekly, monthly, annual or other basis. The Companies acknowledge that each of the services are not exclusive to the Companies and that the Managers and the Manager Designees may render similar services to other persons and entities. The Managers and the Companies understand that the Companies may at times engage one or more investment bankers or financial advisers to provide services in addition to, but not in lieu of, services provided by the Managers and the Manager Designees under this Agreement; provided that any such engagement will be made pursuant to the terms of the Amended and Restated Limited Liability Operating Agreement (the “LLC Agreement”) of Aurora Acquisition Holdings, LLC (“Holdings”) among affiliates of the Managers and certain other parties. In providing services to the Companies, the Managers and Manager Designees will act as independent contractors and it is expressly understood and agreed that this Agreement is not intended to create, and does not create, any partnership, agency, joint venture or similar relationship and that no party has the right or ability to contract for or on behalf of any other party or to effect any transaction for the account of any other party.

2. Payment of Fees.

(a) On the date hereof, the Companies, jointly and severally, will pay to the Managers (or their designees) an aggregate transaction fee (the “Transaction Fee”) equal to $42,500,000 (forty two million five hundred thousand dollars), of which 35.63% will be received in respect of services performed by the Managers or the Manager Designees on behalf of TPG IV and 64.37% will be received in respect of services performed by Managers or the Manager Designees on behalf of TPG V (the “Fee Percentages”).

(b) During the Term, the Companies, jointly and severally, will pay to the Managers (or their designees) an aggregate annual Monitoring Fee (the “Monitoring Fee”) equal to $9,000,000 (nine million dollars) as compensation for the services provided by the Managers or the Manager Designees under this Agreement, such fee being payable by the Companies

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quarterly in advance on or before the start of each calendar quarter; provided, that in the event that either TPG IV or TPG V or any of their respective affiliates increases its equity contribution to any of the Companies after the date hereof, the Managers shall have the right to increase the Monitoring Fee proportionately to reflect such increased equity commitment.

(c) During the Term, the Managers or the Manager Designees will advise the Companies in connection with financing, acquisition, disposition and change of control transactions involving the Companies or any of their direct or indirect subsidiaries (however structured), and the Companies will pay to the Managers (or their designees) an aggregate fee (the “Subsequent Fee”) in connection with each such transaction equal to customary fees charged by internationally-recognized investment banks for serving as a financial advisor in similar transactions, such fee to be due and payable for the foregoing services at the closing of such transaction.

(d) The parties hereto acknowledge and agree that an objective of the Companies is to maximize value for their direct and indirect equity holders, which may include the consummation of an initial registered public offering of the equity securities or equity interests of the Companies or their successors (an “IPO”) or the sale of either of the Companies or their successors (through merger or otherwise) or a sale of all or substantially all of the assets of either of the Companies or their successors (any such sale transaction, a “Sale”). The services provided to the Companies by the Managers and the Manager Designees will help to facilitate the consummation of a IPO or Sale, should the Companies determine to pursue such a transaction. In the event a IPO or Sale is consummated, the Companies will pay in cash on the date of consummation of such IPO or Sale (in lieu of any Subsequent Fee) an aggregate success fee (the “Success Fee”) in an amount equal to four (4) times the Monitoring Fee in effect at such time.

(e) Each payment made pursuant to this Section 2 shall be paid by wire transfer of immediately available federal funds to the accounts specified on Schedule 1 hereto, or to such respective other account(s) as the respective Managers may specify to the Companies in writing prior to such payment. In the event of a IPO or a Sale that includes non-cash consideration, each Manager may elect for it or its designee receive all or any portion of its respective fee in the form of such non-cash consideration, valued at the sale price. Each payment made pursuant to this Section 2 shall be paid to each Manager (or its designee) pro rata in proportion to the number of shares of common stock of the Company owned by investment funds Affiliated with such Manager and the number of shares of common stock of the Company owned by all investment funds Affiliated with any of the Managers, which shall initially be in the proportions indicated on Schedule 2 hereto; provided, however, that only for the purpose of determining such pro rata proportions under this Section 2, TPG Partners IV, L.P. only shall be deemed to be an Affiliate of TPG GenPar IV, L.P. and TPG Partners V, L.P. only shall be deemed to be an Affiliate of TPG GenPar V, L.P.

3. Deferral. Any fee that would have been payable to the Managers (or their designees) pursuant to Section 2 above absent the restrictions, if any, in any financing or similar agreements (the “Financing Documents”) applicable to the Companies (the “Deferred Fees”) will accrue upon the immediately succeeding period in which such amounts could, consistent with the Financing Documents, be paid, and will be paid in such succeeding period (in addition to such other amounts that would otherwise be payable at such time) in the manner set forth in Section 2.

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4. Term. This Agreement will continue in full force and effect unless terminated by the Managers; provided, that the termination of this Agreement will not relieve a party from liability for any breach of this Agreement on or prior to such termination. In the event of a termination of this Agreement, the Companies will pay the Managers (or their respective designees) all unpaid Transaction Fees (pursuant to Section 2(a) above), Monitoring Fees (pursuant to Section 2(b) above), Subsequent Fees (pursuant to Section 2(c) above), Success Fees (pursuant to Section 2(d) above), Deferred Fees (pursuant to Section 3 above) and expenses (pursuant to Section 5(a) below) due with respect to periods prior to the date of termination. This Section 4, Section 5 and Section 9 will survive termination of this Agreement.

5. Expenses; Indemnification.

(a) Expenses. The Companies, jointly and severally, will pay to the Managers (or their respective designees) on demand all Reimbursable Expenses. As used herein, “Reimbursable Expenses” means (i) all out-of-pocket expenses incurred from and after the consummation of the merger (the “Closing Date”) relating to the services provided by the Managers, their respective affiliates, or the Manager Designees to the Companies or any of their affiliates from time to time (including, without limitation, all air travel (by first class on a commercial airline or by charter, as determined by the Managers or the Manager Designees) and other travel related expenses), (ii) all out-of-pocket legal expenses incurred by the Managers, their respective affiliates or the Manager Designees in connection with the enforcement of rights or taking of actions under this Agreement, the Merger Agreement or any related documents or instruments, whether incurred on or after the date of this Agreement; and (iii) all expenses incurred by the Managers, their respective affiliates or the Manager Designees which are properly allocable to the Companies under this Agreement, whether incurred on or after the date of this Agreement.

(b) Indemnity and Liability. The Companies, jointly and severally, will indemnify, exonerate and hold the Managers, the Manager Designees and each of their respective partners, shareholders, members, affiliates, directors, officers, fiduciaries, managers, controlling persons, employees and agents and each of the partners, shareholders, members, affiliates, directors, officers, fiduciaries, managers, controlling persons, employees and agents of each of the foregoing (collectively, the “Indemnitees”) free and harmless from and against any and all actions, causes of action, suits, claims, liabilities, losses, damages and costs and out-of-pocket expenses in connection therewith (including attorneys’ fees and expenses) incurred by the Indemnitees or any of them before or after the date of this Agreement (collectively, the “Indemnified Liabilities”), arising out of any action, cause of action, suit, arbitration, investigation or claim arising out of, or in any way relating to (i) this Agreement, the Merger Agreement, any transaction to which any of the Companies is a party or any other circumstances with respect to any of the Companies or (ii) operations of, or services provided by the Managers or the Manager Designees to, the Companies, or any of their respective affiliates from time to time; provided that the foregoing indemnification rights will not be available to the extent that any such Indemnified Liabilities arose on account of such Indemnitee’s gross negligence or

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willful misconduct; and provided, further, that if and to the extent that the foregoing undertaking may be unavailable or unenforceable for any reason, the Companies hereby agree to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. For purposes of this Section 5(b), none of the circumstances described in the limitations contained in the two provisos in the immediately preceding sentence will be deemed to apply absent a final non-appealable judgment of a court of competent jurisdiction to such effect, in which case to the extent any such limitation is so determined to apply to any Indemnitee as to any previously advanced indemnity payments made by the Companies, then such payments will be promptly repaid by such Indemnitee to the Companies without interest. The rights of any Indemnitee to indemnification hereunder will be in addition to any other rights any such person may have under any other agreement or instrument referenced above or any other agreement or instrument to which such Indemnitee is or becomes a party or is or otherwise becomes a beneficiary or under law or regulation.

6. Disclaimer and Limitation of Liability; Opportunities.

(a) Disclaimer; Standard of Care. Neither of the Managers nor any Manager Designee makes any representations or warranties, express or implied, in respect of the services to be provided by the Managers or the Manager Designees hereunder. In no event will the Managers, the Manager Designees or Indemnitees be liable to the Companies or any of their respective affiliates for any act, alleged act, omission or alleged omission that does not constitute gross negligence or willful misconduct of the Managers or the Manager Designees as determined by a final, non-appealable determination of a court of competent jurisdiction.

(b) Freedom to Pursue Opportunities. In recognition that the Managers, the Manager Designees and their respective Indemnitees currently have, and will in the future have or will consider acquiring, investments in numerous companies with respect to which the Managers, the Manager Designees or their respective Indemnitees may serve as an advisor, a director or in some other capacity, and in recognition that each Manager, each Manager Designee and their respective Indemnitees have myriad duties to various investors and partners, and in anticipation that the Companies, on the one hand and each Manager and Manager Designee (or one or more of their respective affiliates, associated investment funds or portfolio companies), on the other hand, may engage in the same or similar activities or lines of business and have an interest in the same areas of corporate opportunities, and in recognition of the benefits to be derived by the Companies hereunder and in recognition of the difficulties which may confront any advisor who desires and endeavors fully to satisfy such advisor’s duties in determining the full scope of such duties in any particular situation, the provisions of this Section 6(b) are set forth to regulate, define and guide the conduct of certain affairs of the Companies as they may involve the Managers or the Manager Designees. Except as the Managers or the Manager Designees, may otherwise agree in writing after the date hereof:

(i) The Managers, the Manager Designees and their respective Indemnitees will have the right: (A) to directly or indirectly engage in any business (including, without limitation, any business activities or lines of business that are the same as or similar to those pursued by, or competitive with, the Companies and their subsidiaries), (B) to directly or indirectly do business with

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any client or customer of the Companies and their subsidiaries, (C) to take any other action that a Manager or a Manager Designee believes in good faith is necessary to or appropriate to fulfill its obligations as described in the first sentence of this Section 6(b), and (D) not to present potential transactions, matters or business opportunities to the Companies or any of their subsidiaries, and to pursue, directly or indirectly, any such opportunity for itself, and to direct any such opportunity to another Person.

(ii) The Managers, the Manager Designees and their respective Indemnitees will have no duty (contractual or otherwise) to communicate or present any corporate opportunities to the Companies or any of their affiliates or to refrain from any actions specified in Section 6(b)(i), and the Companies, on their own behalf and on behalf of their affiliates, hereby renounce and waive any right to require the Managers, the Manager Designees or any of their respective Indemnitees to act in a manner inconsistent with the provisions of this Section 6(b).

(iii) None of the Managers, the Manager Designees nor any of their respective Indemnitees will be liable to the Companies or any of their affiliates for breach of any duty (contractual or otherwise) by reason of any activities or omissions of the types referred to in this Section 6(b) or of any such Person’s participation therein.

(c) Limitation of Liability. In no event will a Manager, a Manager Designee or any of their respective Indemnitees be liable to the Companies or any of their affiliates for any indirect, special, incidental or consequential damages, including, without limitation, lost profits or savings, whether or not such damages are foreseeable, or for any third party claims (whether based in contract, tort or otherwise), relating to the services to be provided by a Manager or a Manager Designee hereunder.

7. Assignment, etc. Except as provided below, none of the parties hereto will have the right to assign this Agreement without the prior written consent of each of the other parties. Notwithstanding the foregoing, (a) each Manager may assign all or part of its rights and obligations hereunder to any of its respective affiliates that provides services similar to those called for by this Agreement, in which event such Manager will no longer be entitled to any fees under Section 2 and reimbursement of expenses under Section 5(a) and will be released of all of its obligations hereunder and (b) the provisions hereof for the benefit of Indemnitees of the Managers will inure to the benefit of such Indemnitees and their successors and assigns.

8. Amendments and Waivers. No amendment or waiver of any term, provision or condition of this Agreement will be effective, unless in writing and executed by the Managers and the Companies; provided, that any Manager may waive any portion of any fee to which it is entitled pursuant to this Agreement, and, unless otherwise directed by the Manager, such waived portion will revert to the Companies. No waiver on any one occasion will extend to or effect or be construed as a waiver of any right or remedy on any future occasion. No course of dealing of any person nor any delay or omission in exercising any right or remedy will constitute an amendment of this Agreement or a waiver of any right or remedy of any party hereto.

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9. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF. ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AGREEMENT MAY BE BROUGHT AND ENFORCED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR (TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFOR) THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING IN MANHATTAN, AND THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF BOTH SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING.

10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

10. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes any prior communication or agreement with respect thereto.

11. Notice. All notices, demands, and communications required or permitted under this Agreement will be in writing and will be effective if served upon such other party and such other party’s copied persons as specified below to the address set forth for it below (or to such other address as such party will have specified by notice to each other party) if (i) delivered personally, (ii) sent and received by facsimile, (iii) sent by electronic mail or (iv) sent by certified or registered mail or by Federal Express, DHL, UPS or any other comparably reputable overnight courier service, postage prepaid, to the appropriate address as follows:

If to the Companies, to:

Aleris International, Inc.

25825 Science Park Drive

Suite 400

Beachwood, Ohio 44122

Facsimile. 216-910-3650

If to a Manager, to:

Texas Pacific Group

301 Commerce Street, Suite 3300

Fort Worth, Texas 76102

Attention: John Viola

Telephone: 1 (817) 871-4000

Facsimile No.: 1 (817) 871-4088

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with a copy (which will not constitute notice) to:

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Robert P. Davis, Esq.

Telephone: (212) 225-2000

Facsimile No.:(212) 225-3999

Unless otherwise specified herein, such notices or other communications will be deemed effective, (a) on the date received, if personally delivered or sent by facsimile or electronic mail during normal business hours, (b) on the business day after being received if sent by facsimile or electronic mail other than during normal business hours, (c) one business day after being sent by Federal Express, DHL or UPS or other comparably reputable delivery service and (d) five business days after being sent by registered or certified mail. Each of the parties hereto will be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.

12. Severability. If in any proceedings a court will refuse to enforce any provision of this Agreement, then such unenforceable provision will be deemed eliminated from this Agreement for the purpose of such proceedings to the extent necessary to permit the remaining provisions to be enforced. To the full extent, however, that the provisions of any applicable law may be waived, they are hereby waived to the end that this Agreement be deemed to be valid and binding agreement enforceable in accordance with its terms, and in the event that any provision hereof will be found to be invalid or unenforceable, such provision will be construed by limiting it so as to be valid and enforceable to the maximum extent consistent with and possible under applicable law.

13. Counterparts. This Agreement may be executed in any number of counterparts and by each of the parties hereto in separate counterparts, each of which when so executed will be deemed to be an original and all of which together will constitute one and the same agreement.

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IN WITNESS WHEREOF, each of the parties has duly executed this Agreement as of the date first above written.

[Executed Signature Pages to Follow]

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AURORA ACQUISITION HOLDINGS, INC.
By:	/s/ John E. Viola
	Name:	John E. Viola
	Title:	Vice President and Treasurer
AURORA ACQUISITION MERGER SUB, INC.
By:	/s/ Clive D. Bode
	Name:	Clive D. Bode
	Title:	Vice President and Secretary
TPG GENPAR IV, L.P.
By:	TPG Advisors IV, Inc.,
	its general partner
By:	/s/ Clive D. Bode
	Name:	Clive D. Bode
	Title:	Vice President
TPG GENPAR V, L.P.
By:	TPG Advisors V, Inc.,
	its general partner
By:	/s/ Clive D. Bode
	Name:	Clive D. Bode
	Title:	Vice President

Management Services Agreement

Schedule 1

Wire Transfer Instructions for the Manager:

JP Morgan Chase

ABA# 021000021

Tarrant Partners, L.P.

Account number 07303006780

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EX-10.19

Exhibit 10.19

EXECUTION COPY

MANAGEMENT STOCKHOLDERS’ AGREEMENT

This MANAGEMENT STOCKHOLDERS’ AGREEMENT (this “Agreement”), dated as of December 19, 2006, is by and among Aleris International, Inc. (“Aleris”), Aurora Acquisition Holdings, Inc. (the “Parent”, and together with Aleris, the “Company”), the Majority Stockholder (as defined below) and the individuals listed on Schedule A attached hereto (each, a “Management Stockholder”).

WHEREAS, the Management Stockholder may become the owner of shares of common stock of the Company, $0.01 par value per share (“Common Stock”) and/or may be granted options to purchase Common Stock (the “Options”), pursuant to Aurora Acquisition Holdings, Inc. Management Equity Incentive Plan (the “Plan”); and

WHEREAS, as a condition to the issuance of any shares of Common Stock by the Company to the Management Stockholder, the Management Stockholder is required to execute this Agreement; and

WHEREAS, the Management Stockholder, the Majority Stockholder and the Company desire to enter into this Agreement and to have this Agreement apply to any shares of Common Stock acquired by the Management Stockholder from whatever source, now or in the future (in the aggregate, the “Shares”).

NOW THEREFORE, in consideration of the premises hereinafter set forth, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows.

1. Investment. The Management Stockholder represents that the Shares are being acquired for investment and not with a view toward the distribution thereof.

2. Issuance of Shares. The Management Stockholder acknowledges and agrees that the certificate for the Shares shall bear the following legends (except that the second paragraph of this legend shall not be required after the Shares have been registered and except that the first paragraph of this legend shall not be required after the termination of this Agreement):

The shares represented by this certificate are subject to the terms and conditions of a Management Stockholders’ Agreement dated as of December 19, 2006 and may not be sold, transferred, hypothecated, assigned or encumbered, except as may be permitted by the aforesaid Agreement. A copy of the Management Stockholders’ Agreement may be obtained from the Secretary of the Company.

The shares represented by this certificate have not been registered under the Securities Act of 1933. The shares have been acquired for investment and may not be sold, transferred, pledged or hypothecated in the absence of an effective registration statement for the shares under the Securities Act of 1933 or an opinion of counsel for the Company that registration is not required under said Act.

Upon the termination of this Agreement, or upon registration of the Shares under the Securities Act of 1933 (the “Securities Act”), the Management Stockholder shall have the right to exchange any Shares containing the above legend (i) in the case of the registration of the Shares, for Shares legended only with the first paragraph described above and (ii) in the case of the termination of this Agreement, for Shares legended only with the second paragraph described above.

3. Transfer of Shares; Call Rights.

(a) Transfer Restrictions. The Management Stockholder agrees that he or she will not cause or permit the Shares or his or her interest in the Shares to be sold, transferred, hypothecated, assigned or encumbered except as expressly permitted by this Section 3; provided, however, that the Shares or any such interest may be Transferred (i) on the Management Stockholder’s death by bequest or inheritance to the Management Stockholder’s executors, administrators, testamentary trustees, legatees or beneficiaries, (ii) subject to the prior written approval by the Board of Directors of the Parent (the “Board”) and compliance with all applicable tax, securities and other laws, any trust or custodianship created by the Participant, the beneficiaries of which may include only the Participant, the Participant’s spouse or the Participant’s lineal descendants, and (iii) in accordance with Section 4 of this Agreement, subject in any such case to the agreement by each Transferee (other than the Company or as otherwise permitted by the Company) in writing to be bound by the terms of this Agreement as if such Transferee had been an original signatory hereto and provided in any such case that no such Transfer that would cause the Company to be required to register the Common Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shall be permitted.

(b) Call Rights.

(i) The Company (or its designated assignee) shall have the right, during the ninety-day period following the later to occur of (x) the termination of the Management Stockholder’s employment for any reason and (y) the date on which the Management Stockholder or Transferee has held the Shares most recently acquired to be sold pursuant to this Section 3(b) for at least six (6) months, to purchase from the Management Stockholder or the Management Stockholder’s Transferee, and upon the exercise of such right the Management Stockholder or such Transferee shall sell to the Company (or its designated assignee), all or any portion of the Shares acquired by the Management Stockholder or Transferee on the exercise of Options and held by the Management Stockholder or Transferee as of the date as of which such right is exercised at a per Share price equal to the Fair Market Value (as defined in the Plan) of a share of Common Stock determined as of the date as of which such right is exercised. The Company (or its designated assignee) shall exercise such right by delivering to the Management Stockholder or Transferee, as applicable, a written notice specifying its intent to purchase Shares held by the Management Stockholder or Transferee (the “Call Notice”), the date as of which such right is to be exercised and the number of Shares to be purchased. Such purchase and sale shall occur on such date as the Company (or its designated

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assignee) shall specify which date shall not be later than ninety (90) days after the fiscal quarter-end immediately following the date as of which the Company’s right is exercised; provided that the Company may delay any such payment in the event such payment will result in the violation of the terms or provisions of, or result in a default or event of default under, any guarantee, financing or security agreement or document entered into by the Company or any of its Affiliates and in effect on such date (hereinafter a “Financing Agreement”). In the event the payment of the purchase price is delayed as a result of a restriction imposed by a Financing Agreement as provided above, such payment shall be made without the application of further conditions or impediments as soon as practicable after the payment of such purchase price would no longer result in the violation of the terms or provisions of, or result in a default or event of default under, any Financing Agreement, and such payment shall equal the amount that would have been paid to the Management Stockholder or Transferee if no delay had occurred plus interest for the period from the date on which the purchase price would have been paid but for the delay in payment provided herein to the date on which such payment is made (the “Delay Period”), calculated at an annual rate equal to the average annual prime rate charged during the Delay Period by a nationally recognized bank designated by the Board. Notwithstanding the foregoing, if the delayed payment is not made within two (2) years after the date on which the Company issues the Call Notice, the exercise of the call right pursuant to the Call Notice shall be null and void, and the Shares specified in such Call Notice shall no longer be subject to this Section 3(b).

(ii) In the event that the Management Stockholder or Transferee disagrees with the Company’s determination of the Fair Market Value of a Share, the Management Stockholder or Transferee shall have the right to require the Company to seek an appraisal to determine the Fair Market Value of a Share in lieu of the Board determination (an “Outside Appraisal”). Any such Outside Appraisal shall be made by a qualified person, which can be an accounting firm or investment banking firm or similar firm (an “Appraiser”), having substantial experience in the valuation of similar enterprises in the United States. The Company and the Management Stockholder or Transferee shall mutually agree upon such Appraiser within 30 days of the Call Notice. The Management Stockholder or Transferee and the Company shall each bear 50% of the fees and expenses of the Appraiser; provided, that in the event the Appraiser’s determination of Fair Market Value of a Share is higher than the Company’s determination of Fair Market Value of a Share by more than 10% of the Company’s determination of Fair Market Value of a Share, the Company shall bear 100% of the fees and expenses of the Appraiser. The Company will have thirty (30) days following the conclusion of the Outside Appraisal to exercise its call right on the Shares of Common Stock originally designated in the Call Notice, using the Fair Market Value determined in the Outside Appraisal, subject in all cases to the Company’s right to delay payment in accordance with the provisions of Section 3(b)(i).

(c) If the Board receives the advice of counsel selected by the Company and reasonably acceptable to the Management Stockholder or any Transferee that the inclusion of the call right described in this Section 3 would result in the Option or Shares becoming subject to Section 409A of the Code, the Board shall have the right to make such modifications or amendments to this Section 3 as the Board determines are reasonably necessary to avoid the application of Section 409A of the Code without the consent of the Management Stockholder or any Transferee. In making any such amendments or modifications, the Board shall take all steps to put the parties in substantially same economic position as they would have been in had such

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modifications or amendments not been made, to the extent reasonably practical. The Management Stockholder and any Transferee hereby stipulate that Cleary Gottlieb Steen & Hamilton LLP is acceptable counsel for purposes of this Section 3(c).

4. Certain Rights.

(a) Drag Along Rights. If the Majority Stockholder desires to sell all or substantially all of its shares of Common Stock or a portion of its shares of Common Stock representing Control of the Company, in either case to a good faith independent purchaser (a “Purchaser”) (other than any other investment partnership, limited liability company or other entity established for investment purposes and controlled by one or more of the members or the principals of the Majority Stockholder or any of its affiliates and other than any employees of the Majority Stockholder hereinafter referred to as a “Permitted Transferee”) and said Purchaser desires to acquire all or substantially all of the issued and outstanding shares of Common Stock (or all or substantially all of the assets of the Company) upon such terms and conditions as agreed to with the Majority Stockholder, the Management Stockholder or his or her Transferee agrees to sell all of his or her Shares to said Purchaser (or to vote all of his or her Shares in favor of any merger or other transaction which would effect a sale of such shares of Common Stock or assets of the Company) at the same price per share of Common Stock and pursuant to the same terms and conditions with respect to payment for the shares of Common Stock as agreed to by the Majority Stockholder. In such case, the Majority Stockholder shall give written notice of such sale to the Management Stockholder or his or her Transferee at least fifteen (15) business days prior to the consummation of such sale, setting forth (i) the consideration to be received by the holders of shares of Common Stock, (ii) the identity of the Purchaser, (iii) any other material items and conditions of the proposed transfer and (iv) the date of the proposed transfer. In no event, however, shall the Management Stockholder or his or her Transferee be required to make any representations regarding the Company or the other selling stockholders, and (x) neither the Management Stockholder nor his or her Transferee shall have any liability with respect to representations of any other stockholder with respect to such other stockholders’ interest in the Company, the authority of such other stockholders to effect such transaction, the enforceability of such other stockholders’ obligations thereunder and other representations and covenants particular to such other stockholders, and (y) the maximum potential liability for any indemnities of the Management Stockholder and his or her Transferee(s) shall be limited to the lesser of (i) his, her or its pro rata portion (based upon his, her or its share of aggregate proceeds received in the sale) of the indemnity obligations or (ii) the amount of the aggregate proceeds received by him, her or it, including any amounts held in escrow for the purposes of securing indemnification claims and any amounts that may be set off by future payments. The Majority Stockholder and the Management Stockholder or his or her Transferee who exercises similar drag-along rights shall be responsible for his or her proportionate share of the costs of the proposed Transfer to the extent not paid or reimbursed by the proposed Purchaser or the Company. For purposes of this Section 4(a), “Control of the Company” shall mean the sale or disposition in a single transaction or a series of related transactions of at least fifty percent (50)% of the issued and outstanding shares of Common Stock or securities representing at least fifty percent (50)% of the voting power of the Company.

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(b) Tag Along Rights.

(i) Subject to paragraph (iv) of this Section 4(b), if the Majority Stockholder or its Permitted Transferee proposes to transfer any of its shares of Common Stock to a Purchaser (other than a Permitted Transferee), then the Majority Stockholder or his or her Transferee (hereinafter referred to as a “Selling Stockholder”) shall give written notice of such proposed transfer to the Management Stockholder or his or her Transferee (the “Selling Stockholder’s Notice”) at least thirty (30) days prior to the consummation of such proposed transfer, and shall provide notice to all other stockholders of the Company to whom the Majority Stockholder has granted similar “tag-along” rights (such stockholders together with the Management Stockholder or his or her Transferee, referred to herein as the “Other Stockholders”) setting forth the proposed material terms and conditions of such Transfer (including price per Share).

(ii) The Management Stockholder or his or her Transferee shall have the right to elect, by delivery of written notice to the Majority Stockholder within fifteen (15) days from delivery of the Selling Stockholder’s Notice, to sell to the proposed transferee a number of its shares of Common Stock, not to exceed (a) the number of shares of Common Stock held by such Management Stockholder or his or her Transferee multiplied by (b) a fraction, the numerator of which is aggregate number of the Majority Stockholder’s shares of Common Stock proposed to be transferred, and the denominator of which is the aggregate number of shares of Common Stock held by the Majority Stockholder, on substantially the same terms and conditions (including price per share of Common Stock) as the Majority Stockholder. In the event that the transferee does not wish to acquire all of the shares offered by the Management Stockholder or his or her Transferee, the number of shares of Common Stock to be purchased by such transferee shall be allocated pro rata among the Majority Stockholders and the Other Stockholders in accordance with the number of shares of Common Stock that each such stockholder elected to transfer to the transferee. If any Other Stockholder has not delivered written notice of its intent to participate in the Transfer by the end of the fifteen (15th) Business Day following delivery of the Tag-Along Notice, such Other Stockholder shall be deemed to have consented to the Transfer.

(iii) Any transfer of Shares by the Management Stockholder or his or her Transferee shall be at the same price per share of Common Stock and pursuant to the same terms and conditions with respect to payment for the shares of Common Stock as agreed to by the Selling Stockholder, provided, that in order to be entitled to exercise its tag-along rights pursuant to this Section 4(b), the Management Stockholder or his or her Transferee must agree to make to the proposed Purchaser, representations, warranties, covenants, indemnities and agreements comparable to those made by the Selling Stockholder in connection with the proposed transfer and agree to the same conditions to the proposed transfer as the Selling Stockholder agrees, it being understood that all such representations, warranties, covenants, indemnities and agreements shall be made by the Selling Stockholder, the Management Stockholder or his or her Transferee and any Other Stockholder exercising similar tag-along rights severally and not jointly. The Selling Stockholder, the Management Stockholder and any Other Stockholder who exercises similar tag-along rights shall be responsible for their proportionate share of the costs of the proposed Transfer to the extent not paid or reimbursed by the proposed Purchaser or the Company.

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(iv) Notwithstanding anything to the contrary contained herein, the provisions of this Section 4(b) shall not apply to any sale or transfer by the Majority Stockholder of shares of Common Stock unless and until the Majority Stockholder, after giving effect to the proposed sale or transfer, shall have sold or transferred in the aggregate (other than to Permitted Transferees) shares of Common Stock, representing 20.0% of shares of Common Stock owned by the Majority Stockholder as of December 19, 2006 (without taking into account any shares of Common Stock transferred to any employee of the Company on or before June 30, 2006).

5. Piggyback Registration Rights.

(a) Notice to Management Stockholder. If the Company determines that it will file a registration statement under the Securities Act, other than a registration statement on Form S-4 or Form S-8 or any successor form, for an offering which includes shares of Common Stock held by the Majority Stockholder, then the Company shall give prompt written notice to the Management Stockholder or Transferee that such filing is expected to be made (but in no event less than 30 days nor more than 60 days in advance of filing such registration statement), the jurisdiction or jurisdictions in which such offering is expected to be made, and the underwriter or underwriters (if any) that the Company (or the person requesting such registration) intends to designate for such offering. If the Company, within 15 days after giving such notice, receives a written request for registration of any Shares from the Management Stockholder or Transferee, then the Company shall include in the same registration statement the number of Shares to be sold by the Management Stockholder or Transferee as shall have been specified in his or her request, except that the Management Stockholder or Transferee shall not be permitted to register more than a Pro Rata Portion of her Shares. The Company shall bear all costs of preparing and filing the registration statement, and shall indemnify and hold harmless, to the extent customary and reasonable, pursuant to indemnification and contribution provisions to be entered into by the Company at the time of filing of the registration statement, the seller of any shares of Common Stock covered by such registration statement.

Notwithstanding anything herein to the contrary, the Company, on prior notice to the participating Stockholder, may abandon its intention to file a registration statement under this Section 5(a) at any time prior to such filing.

For purposes of Section 5 hereof, “Pro Rata Portion” shall mean a number equal to the product of (x) the total number of Shares owned by the Management Stockholder or Transferee and (y) a fraction, the numerator of which shall be the total number of shares of Common Stock offered (for sale or registration, as applicable) by the Majority Stockholder, and the denominator of which shall be the total number of shares of Common Stock owned by the Majority Stockholder.

(b) Allocation. If the managing underwriter shall inform the Company in writing that the number of shares of Common Stock requested to be included in such registration exceeds the number which can be sold in (or during the time of) such offering within a price range acceptable to the Majority Stockholder, then the Company shall include in such registration such number of shares of Common Stock which the Company is so advised can be sold in (or during the time of) such offering. All holders of shares of Common Stock proposing to sell shares of Common Stock shall share pro rata in the number of shares of Common Stock to be excluded from such offering, such sharing to be based on the respective numbers of shares of Common Stock as to which registration has been requested by such holders.

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(c) Permitted Transfer. Notwithstanding anything to the contrary contained herein, sales of Shares pursuant to a registration statement filed by the Company may be made without compliance with any other provision of this Agreement.

6. Termination. This Agreement shall terminate with respect to the Common Stock immediately following the existence of a Public Market for the Common Stock except that (i) the requirements contained in Section 2 hereof shall survive the termination of this Agreement and (ii) during such period of time, if any, as the Management Stockholder is precluded from selling such Shares pursuant to Rule 144 of the Securities Act, no Transfer will require the Company to register the Common Stock under Section 12(g) of the Exchange Act. For this purpose, a “Public Market” for the Common Stock shall be deemed to exist if at least 20% of the total outstanding Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act and trading regularly occurs in such Common Stock in, on or through the facilities of securities exchanges and/or inter-dealer quotation systems in the United States (within the meaning of Section 902(n) of the Securities Act) or any designated offshore securities market (within the meaning of Rule 902(a) of the Securities Act).

7. Distributions With Respect To Shares. As used herein, the term “Shares” includes securities of any kind whatsoever distributed with respect to the Common Stock acquired by the Management Stockholder or his or her Transferee pursuant to the Plan or any such securities resulting from a stock split or consolidation involving such Common Stock.

8. Amendment; Assignment. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by authorized representatives of the parties or, in the case of a waiver, by an authorized representative of the party waiving compliance. No such written instrument shall be effective unless it expressly recites that it is intended to amend, supersede, cancel, renew or extend this Agreement or to waive compliance with one or more of the terms hereof, as the case may be. Except for the Management Stockholder’s right to assign his or her rights under Section 3(a) or the Company’s right to assign its rights under Section 3(b), no party to this Agreement may assign any of its rights or obligations under this Agreement without the prior written consent of the other parties hereto.

9. “Majority Stockholder”. For purposes of this Agreement, the Majority Stockholder shall mean, collectively, TPG Partners IV, L.P. and TPG Partners V, L.P., collectively or individually as the context requires and their respective affiliates.

10. Notices. Each notice and other communication hereunder shall be in writing and shall be given and shall be deemed to have been duly given on the date it is delivered in person, on the next business day if delivered by overnight mail or other reputable overnight courier, or the third business day if sent by registered mail, return receipt requested, to the parties as follows:

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If to the Management Stockholder, to his most recent address shown on records of the Company or its Affiliate;

If to the Company:

Aleris International, Inc.

25825 Science Park Drive

Suite 400

Beachwood, Ohio 44122

Facsimile: 216-910-3650

Attn: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

If to the Parent:

Aurora Acquisition Holding, Inc.

301 Commerce Street, Suite 3300

Fort Worth, TX 76102

Attention: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall only be effective upon receipt.

11. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but each of which together shall constitute one and the same document.

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12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to its principles of conflicts of law.

13. Binding Effect. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the heirs, personal representatives, successors and permitted assigns of the parties hereto. Nothing expressed or referred to in this Agreement is intended or shall be construed to give any person other than the parties to this Agreement, or their respective heirs, personal representatives, successors or assigns, any legal or equitable rights, remedy or claim under or in respect of this Agreement or any provision contained herein.

14. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof.

15. Severability. If any term, provision, covenant or restriction of this Agreement, is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

16. Miscellaneous. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

*    *    *    *    *    *

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

AURORA ACQUISITION HOLDINGS, INC.
By:	/s/ John E. Viola
	Name: John E. Viola
	Title: Vice President and Treasurer
ALERIS INTERNATIONAL, INC.
By:	/s/ Michael D. Friday
	Name:
	Title:

1 of 2

Management Stockholders’ Agreement

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

TPG PARTNERS IV, L.P.
By:	TPG GenPar IV, L.P., its general partner
By:	TPG Advisors IV, Inc., its general partner
By:	/s/ Clive D. Bode
	Name: Clive D. Bode
	Title: Vice President
TPG PARTNERS V, L.P.
By:	TPG GenPar V, L.P., its general partner
By:	TPG Advisors V, Inc., its general partner
By:	/s/ Clive D. Bode
	Name: Clive D. Bode
	Title: Vice President

2 of 2

Management Stockholders’ Agreement

SCHEDULE A

MANAGEMENT STOCKHOLDERS

By:	/s/ Steven J. Demetriou
	Name: Steven J. Demetriou
By:	/s/ John J. Wasz
	Name: John J. Wasz
By:	/s/ Michael D. Friday
	Name: Michael D. Friday
By:	/s/ Christopher R. Clegg
	Name: Christopher R. Clegg
By:	/s/ Sean M. Stack
	Name: Sean M. Stack

A-1

EX-10.21

Exhibit 10.21

EXECUTION COPY

EMPLOYMENT AGREEMENT

AGREEMENT, dated as of December 19, 2006 (the “Agreement”), by and among Aleris International, Inc. (the “Company”), Aurora Acquisition Holdings, Inc. (the “Parent”) and Steven J. Demetriou (the “Executive”).

WHEREAS, the Company desires that the Executive continue to serve the Company as the Company’s Chairman and Chief Executive Officer, on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1. Employment, Duties and Agreements.

(a) The Company hereby agrees to continue to employ the Executive as its Chairman and Chief Executive Officer, and the Executive hereby agrees to continue to be employed in such position and agrees to serve the Company in such capacity during the employment period fixed by Section 3 hereof (the “Employment Period”) upon the terms and conditions set out in this Agreement. The Executive shall report directly to the Board of Directors of the Company (the “Board”), and shall have such duties, responsibilities and authority as are consistent with the Executive’s position and as may be assigned by the Board from time to time, which shall, without limiting the authority of the Board, include the direct charge of and general supervision over the business and affairs of the Company; provided, however, that such duties, functions, responsibilities, and authority as are assigned by the Board are reasonable and customary for a person serving in the same or similar capacity of an enterprise comparable to the Company. During the Employment Period, the Executive shall serve as a member of the Board and shall be appointed to the Board of Directors of Parent and any upper tier entity established after the date hereof and from which governance of the Company is directed. During the Employment Period, the Executive shall be subject to, and shall act in accordance with, all instructions and directions and all applicable policies and rules of the Board that are reasonable and customary for a person serving in the same or similar capacity as the Executive of an enterprise comparable to the Company.

(b) During the Employment Period, excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote his full working time, energy and attention to the performance of his duties and responsibilities hereunder and shall faithfully and diligently endeavor to promote the business and best interests of the Company. During the Employment Period, the Executive may not, without the prior written consent of the Company, directly or indirectly, operate, participate in the management, operations or control of, or act as an executive, officer, consultant, agent or representative of, any type of business or service (other than as an executive of the Company). It shall not, however, be a violation of the foregoing provisions of this Section 1(b) for the Executive to (i) subject to the approval of the Board, which shall not be unreasonably withheld, serve as a director of the board of directors or as a member of an advisory board of a noncompeting company (provided that all board roles in which Executive serves as of the Effective Date (defined below), as set forth on Schedule I hereto (“Schedule I”), shall be deemed to have been approved by the Board, and provided further that the Executive may serve as a member of an advisory board or the board of directors of no more than two public, noncompeting companies without the approval of the Board but with prior notice to the Board disclosing the names of such companies and such other information as the Board shall reasonably request) (ii) subject to the approval of the Board, which shall not be unreasonably withheld, serve as an officer or director or otherwise participate in non-profit, educational, welfare, social, religious and civil organizations, including, without limitation, all such positions and participation in effect as of the Effective Date, as set forth on Schedule I, or (iii) manage his personal, financial and legal affairs, so long as any such activities in (i), (ii) or (iii) do not interfere with the performance of his duties and responsibilities to the Company as provided hereunder.

(c) In connection with the Executive’s employment by the Company under this Agreement, the Executive shall be based at the principal executive offices of the Company, currently located in Beachwood, Ohio, except for such travel as the performance of the Executive’s duties in the business of the Company may require.

(d) The Severance Agreement, dated as of August 30, 2005, by and between the Company and the Executive (the “Severance Agreement”) is expressly assumed hereby as contemplated in section 10(b) thereof. The Executive hereby acknowledges and agrees that the foregoing assumption by the Company of the Severance Agreement, and the entrance by the Company into this Agreement, is in full satisfaction of the Company’s obligations under section 10(b) of the Severance Agreement to assume, by written instrument delivered to the Executive, all of the obligations under the Severance Agreement, and that the Executive will not have the right to terminate his employment for “Good Reason” as defined in the Severance Agreement under Item (5) of such definition as a result of the merger of Aurora Acquisition Merger Sub, Inc. (“Merger Sub”) with and into the Company, as contemplated by the Agreement and Plan of Merger, dated August 7, 2006, by and among the Parent, Merger Sub and the Company (the “Merger Agreement”). The Severance Agreement shall remain in full force and effect through the second anniversary of the Effective Date. Upon the second anniversary of the Effective Date, and not before, the Severance Agreement shall be terminated and of no further force or effect, provided, however, that the Severance Agreement shall continue in effect with respect to all rights and obligations that have accrued thereunder prior to such termination until such rights and obligations have been fully satisfied or otherwise expire. Notwithstanding anything to the contrary in the Severance Agreement (including, without limitation, section 8 thereof), this Agreement shall constitute notice pursuant to section 8 of the Severance Agreement, to the extent necessary, that the Severance Agreement shall terminate on the second anniversary of the Effective Date. During the period prior to the second anniversary of the Effective Date, in the event of a conflict between the terms of the Severance Agreement and this Agreement, the terms of the Severance Agreement shall govern.

2. Compensation.

(a)  As compensation for the agreements made by the Executive herein and the performance by the Executive of his obligations hereunder, during the Employment Period, the Company shall pay the Executive, pursuant to the Company’s normal and customary payroll procedures, a base salary at the rate of $1,000,000 per annum, (the “Base Salary”). During the Employment Term, the Base Salary will be reviewed annually and is subject to adjustment at the discretion of the Board, but in no event shall the Company pay the Executive a Base Salary less than that set forth above during the Employment Term. 

(b) In addition to the Base Salary, during the Employment Period, but beginning for the fiscal year ending December 31, 2007, the Executive shall be eligible to participate in the annual incentive plan (the “AIP”) established and approved by the Board and, pursuant to the AIP, the Executive may earn an annual bonus (the “Annual Bonus”) in each fiscal year during the Employment Period, with a target Annual Bonus of 100% of Base Salary up to a maximum of 200% of Base Salary, based on the achievement of annual performance objectives as set forth in the AIP, subject to the Executive’s employment with the Company through the applicable payment date for any such Annual Bonus (unless otherwise provided herein or in the Severance Agreement). For the fiscal year ending December 31, 2006, the Company shall pay the Executive all bonuses and other incentives to which the Executive is entitled pursuant to and in accordance with the Company’s incentive plans in effect as of the Effective Date.

(c)  As soon as practicable after the Effective Date (as defined below), the Company will grant the Executive a number of options (the “Options”) to purchase shares of the Parent (the “Shares”) at an exercise price per Share equal to the price per Share paid by TPG (as defined below). The specific terms and conditions governing all aspects of the Options shall be provided in separate grant agreements and any relevant plan documents (collectively, the “Option Agreements”). The Options shall be comprised of the following two tranches: (1) 60% of the Options (the “Time-Based Options”) will vest and become exercisable in equal annual installments of 20% over a five-year period, subject to the Executive’s continued employment with the Company through the applicable vesting date and (2) 40% of the stock options (the “Performance-Based Options”) will vest and become exercisable only upon the achievement by the Company of the following performance targets, in each case, subject to the Executive’s continued employment with the Company through the applicable vesting date: (A) 50% of the Performance-Based Options will vest upon the occurrence of any liquidity event in connection with which TPG Partners IV, L.P. and TPG Partners V, L.P. (together, "TPG") realize a multiple of money (“MoM”) of at least 2.0x its initial investment in the Company (through the Parent), as determined by the Board in good faith, and (B) the remaining 50% of the Performance-Based Options will vest upon the occurrence of any liquidity event in connection with which TPG realizes an MoM of at least 3.0x its initial investment in the Company (through the Parent), as determined by the Board in good faith, provided, that in the event the liquidity event occurs prior to the second anniversary of the Effective Date, the MoM in clause (B) of this Section 2(c) shall be 2.0x, and in the event the liquidity event occurs on or after the second anniversary, but prior to the third anniversary, of the Effective Date, the MoM in clause (B) of this Section 2(c) shall be 2.5x. TPG shall make a good faith projection with respect to the expected value of any such liquidity event, and, to the extent such projection, if accurate, would result in vesting of some or all of the Performance-Based Options, the Performance-Based Options shall be deemed vested to the applicable extent and solely for the purpose of permitting the Executive to participate in such liquidity event with the Shares underlying such Performance-Based Options.

Notwithstanding the foregoing, in the event of a change in control (as defined in the Plan, as defined below) (a “Change in Control”), TPG shall cause the buyer to (i) cancel all vested and exercisable Options and pay to the Executive, in cash or other property depending on, and in the same proportion as, the consideration received by TPG, an amount equal to the excess, if any, of the fair market value of a Share on such change in control over the exercise price of such Option (such excess, if any, the “Option Spread”) for each such vested and exercisable Option, and (ii) cancel all unvested Time-Based Options and pay to the Executive, in cash or other property depending on, and in the same proportion as, the consideration received by TPG, an amount equal to the aggregate Option Spread for each such unvested Time-Based Option, on the earlier to occur of (x) the date such unvested Time-Based Option would otherwise have vested, provided that the Executive is actively employed with the Company or an affiliate on such date, or (y) subject to Section 11(k), within five (5) business days following the Date of Termination of the Executive’s employment as a result of a termination by the Company without Cause or by the Executive for Good Reason.

Upon any termination of the Executive’s employment, any Options that are not vested and exercisable as of such termination and that do not become vested and exercisable as a result of such termination shall automatically expire on the Date of Termination (as defined in Section 4(b) below). Any Options that have become vested and exercisable as of (or that become exercisable as a result of) the Date of Termination shall expire on the earlier of (i) ninety (90) days after the date the Executive’s employment is terminated for any reason other than Cause, death or Disability; (ii) one year after the date the Executive’s employment is terminated by reason of death or Disability; (iii) the commencement of business on the date the Executive’s employment is terminated for Cause; or (iv) the tenth anniversary of the grant date. All Options that are outstanding as of the tenth anniversary of the grant date will expire on such date. The Executive shall be permitted to exercise the vested portion of the Options through net-physical settlement (i.e., by delivery of Shares net of the number of Shares having a value equal to the applicable exercise price and applicable withholding taxes at the minimum statutory rate) if such exercise occurs after termination of the Executive’s employment pursuant to Sections 3(a) or 3(b), by the Company pursuant to Paragraph 3(d) or by the Executive pursuant to Section 3(e) for Good Reason.  The Option shall be granted pursuant to and subject to the terms of a Management Equity Incentive Plan (the “Plan”), which shall contain rights to dividend equivalents in a manner intended to comply with Section 409A of the Code. 

(d) The Executive shall roll over all shares in the Company that the Executive holds as a capital asset prior to the Effective Date and such other amounts as are worth, in the aggregate, $4,000,000 on an after-tax basis into Shares of the Parent pursuant to and in accordance with a letter agreement between the Executive and Parent, dated as of December 15, 2006 (the “Rollover Agreement”).

(e) The purchase of any Shares upon the exercise of the Options, or any other purchase or issuance of Shares contemplated by this Agreement, including pursuant to any rollover as provided above, will be subject to the Executive’s execution of a Management Stockholders’ Agreement for the Company and the Parent in such form as provided by the Company and the Parent (the “Management Stockholders’ Agreement” and, together with the Option Agreements, the “Equity Agreements”) for the Company, which will include, among other things, (1) restrictions on transfer of the Shares and call rights by the Company, (2) certain drag-along and tag-along rights and obligations, (3) certain lock-up rights in connection with any underwritten public offering of equity securities of the Company or any affiliate and (4) that Executive make such representations and execute such documents as the Company determines are reasonably necessary or appropriate to comply with any applicable securities or tax law requirements, to qualify for any exemption from any applicable securities laws or to ensure Executive’s compliance with his obligations under the Management Stockholders’ Agreement. Notwithstanding anything to the contrary in the Management Stockholders’ Agreement, the Company call right shall not apply to the Shares of the Parent purchased or otherwise acquired pursuant to the Rollover Agreement unless the Executive’s employment is terminated by the Company or its affiliates for Cause or by the Executive without Good Reason or other than as a result of Retirement. For purposes of this Section 2(e), “Retirement” shall mean the Executive is eligible to retire without penalty or a reduction in benefits under any tax qualified pension plan maintained by the Company and in which the Executive is eligible to participate.

(f) During the Employment Period: (i) except as provided in the last sentence of this Section 2(f), the Executive and/or the Executive’s family, as the case may be, shall be entitled to participate in all employee benefit plans, practices, policies, programs and arrangements of the Company which are made available generally to other executive officers of the Company and/or their families, as the case may be, including, without limiting the Company’s right to terminate, modify or amend such plans in accordance with their terms or as provided in the immediately succeeding sentence, the Company’s benefits restoration program, life insurance, long-term disability and health plans and (ii) the Executive shall be entitled to the perquisites and other fringe benefits that are made available by the Company to its senior executives generally and to such perquisites and fringe benefits that are made available by the Company to the Executive in particular, subject to any applicable terms and conditions of any specific perquisite or other fringe benefit. Until the second anniversary of the Effective Date, except as consented to by the Executive, the Company agrees that the employee benefit plans, policies, programs and arrangements and perquisites and other fringe benefits that are made available to the Executive during the Employment Period will not be materially diminished in the aggregate from those benefit plans, policies, programs and arrangements and perquisites and fringe benefits made available immediately prior to the Effective Date. For the avoidance of doubt, such other plans, practices, policies, programs or arrangements shall not include any plan, practice, policy, program or arrangement that provides benefits in the nature of severance or continuation pay.

(g) The Company shall reimburse the Executive for all reasonable business expenses upon the presentation of statements of such expenses in accordance with the Company’s policies and procedures now in force or as such policies and procedures may be modified with respect to all senior executive officers of the Company.

(h) In the event the Company or the Parent engages in a significant subsequent corporate transaction with another entity, the Board will reconsider the size of the equity pool, taking into account the larger size of the resultant entity and taking into account all relevant circumstances, including competitive market data for companies of similar size and circumstance.

(i) The Executive will receive a profits interest (the “Profits Interest”) in Aurora Acquisition Holdings, LLC, representing a 1% interest in the Parent on a fully-diluted basis, taking into account the 8% option pool under the Plan and the investment by other executives in the Parent made on or before June 30, 2007. Fifty percent (50%) of the Profits Interest shall vest on the third anniversary of the Effective Date and the remaining 50% shall vest on the 6^th anniversary of the Effective Date, subject in each case to Executive’s continued employment with the Company through the applicable anniversary and provided that the Profits Interest shall become fully vested on a change in control, as defined in the agreement governing the Profits Interest, occurring subsequent to the Effective Date. One-half of the profits interest shall be subject to a hurdle of an MoM of 1.0x TPG’s initial investment, and the remainder shall be subject to a hurdle of an MoM of 2.0x TPG’s initial investment.

3. Employment Period.

The Employment Period shall commence on December 19, 2006 (the “Effective Date”) and shall terminate on the thirdanniversary of the Effective Date, provided that on the thirdanniversary of the Effective Date and on each anniversary thereafter, the Employment Period shall automatically be extended for additional one-year periods unless either party provides the other party with Notice of Termination in accordance with Section 4(a) at least ninety (90) days before any such anniversary (the anniversary date on which the Employment Period terminates shall be referred to herein as the “Scheduled Termination Date”). Notwithstanding the foregoing, the Executive’s employment hereunder may be terminated during the Employment Period prior to the Scheduled Termination Date upon the earliest to occur of any one of the following events (at which time the Employment Period shall be terminated):

(a) Death. The Executive’s employment hereunder shall terminate upon his death.

(b) Disability. The Company shall be entitled to terminate the Executive’s employment hereunder for “Disability” if, as a result of the Executive’s incapacity due to physical or mental illness or injury, the Executive (i) shall become eligible to receive a benefit under the Company’s long-term disability plan applicable to the Executive, or (ii) if no such long-term disability plan is applicable to the Executive, the Executive shall have been unable to perform his duties hereunder for a period of ninety (90) consecutive days or a period of ninety (90) days in any one hundred eighty (180) day period.

(c) Cause. The Company may terminate the Executive’s employment hereunder for Cause. For purposes of this Agreement, the term “Cause” shall mean: (i) a material breach by the Executive of this Agreement; (ii) other than as a result of physical or mental illness or injury, the willful and continued failure of the Executive to perform substantially the Executive’s duties with the Company or one of its affiliates; (iii) the Executive’s willful and continued misconduct or gross negligence which is materially injurious to the Company or an affiliate of the Company; or (iv) the indictment by the Executive of, or a plea by the Executive of nolo contendere to, a felony involving moral turpitude or other serious crime involving moral turpitude. In the case of clauses (i) and (ii) above, the Company shall provide notice to the Executive indicating in reasonable detail the events or circumstances that it believes constitute Cause hereunder and, if such breach or failure is reasonably susceptible to cure, provide the Executive with a reasonable period of time (not to exceed thirty (30) days) to cure such breach or failure. If, subsequent to the Executive’s termination of employment hereunder for other than Cause, it is determined in good faith by the Board that the Executive’s employment could have been terminated for Cause pursuant to clause (iv) of this Section 3(c), the Executive’s employment shall, at the election of the Board, be deemed to have been terminated for Cause retroactively to the date the events giving rise to Cause occurred.

(d) Without Cause. The Company may terminate the Executive’s employment hereunder during the Employment Period without Cause.

(e) Voluntarily. The Executive may voluntarily terminate his employment hereunder, with or without Good Reason, provided that the Executive provides the Company with notice of his intent to terminate his employment at least 60 days in advance of the Date of Termination (as defined in Section 4(b) below) (and, in the case of a termination by the Executive for Good Reason, complies with all requirements of such a termination as provided hereunder).

4. Termination Procedure.

(a) Notice of Termination. Any termination of the Executive’s employment by the Company or by the Executive during the Employment Period (other than a termination on account of the death of the Executive) shall be communicated by written “Notice of Termination” to the other party hereto in accordance with Section 11(a); provided, that, prior to the second anniversary of the Effective Date, with respect to a termination of the Executive’s employment without Cause by the Company or with Good Reason by the Executive, the notice provisions of section 11(b) of the Severance Agreement shall govern.

(b) Date of Termination. “Date of Termination” shall mean (i) if the Executive’s employment is terminated by his death, the date of his death, (ii) if the Executive’s employment is terminated pursuant to Section 3(b), on the date the Executive receives Notice of Termination from the Company, (iii) if the Executive voluntarily terminates his employment (whether or not for Good Reason), the date specified in the notice given pursuant to Section 3(e) herein which shall not be less than 90 days after the Notice of Termination, and (iv) if the Executive’s employment is terminated for any other reason, the date on which a Notice of Termination is given or any later date (within thirty (30) days, or any alternative time period agreed upon by the parties, after the giving of such notice) set forth in such Notice of Termination; provided, that, prior to the second anniversary of the Effective Date, with respect to a termination of the Executive’s employment without Cause by the Company or with Good Reason by the Executive, the notice provisions of section 11(b) of the Severance Agreement shall govern.

5. Termination Payments.

(a) Without Cause. In the event the Employment Period terminates under this Agreement as a result of the Company terminating the Executive without Cause or the Executive terminating his employment for Good Reason, the Executive shall be entitled to the payments and benefits set forth in this Section 5(a):

(i) On or Before the Second Anniversary of the Effective Date. In the event of a termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason on or before the second anniversary of the effective date, the Executive shall be entitled to such payments and benefits as set forth in sections 4 and 5 of the Severance Agreement.

(ii) After the Second Anniversary of the Effective Date. If the Executive’s employment is terminated after the second anniversary of the Effective Date, the Company shall pay the Executive (A) within thirty (30) days following the Date of Termination, the Executive’s accrued but unused vacation and Base Salary through the Date of Termination (to the extent not theretofore paid) (the “Accrued Benefits”) and (B) two (2x) times the sum of (1) the Executive’s Base Salary and (2) the Target Bonus, with such sum to be paid in lump sum within 30 days following the Date of Termination; provided, however, that the Executive shall be required to repay the payments described in clause (B) (net of any taxes paid by the Executive or the Company on such payments) in the event the Executive receives, within 18 months after the Date of Termination, written notice from the Company that in the reasonable judgment of the Company, the Executive engaged or is engaging in any conduct that violates or otherwise fails to comply with his obligations under Sections 7 and 8 hereof, or in the event the Executive is convicted of, or pleads guilty to, a felony involving moral turpitude within the three year period following the Date of Termination for an act or omission committed during the Employment Period. For the two-year period commencing on the day after Executive’s Date of Termination, the Company shall continue to provide medical benefits to Executive which are substantially similar to those provided generally to executive officers of the Company (including any required contribution by such executive officers) pursuant to such medical plan as may be in effect from time to time as if the Executive’s employment had not been terminated (it being understood that the Company may provide such coverage by paying the Executive’s COBRA premiums, less any contribution required by the Executive); provided, however, that if the Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the corresponding medical and other welfare benefits described herein shall be secondary to such benefits during the period of the Executive’s eligibility, and the Company shall reimburse the Executive for any increased cost to provide the Executive with the benefits provided under the Company’s medical plan. The Executive shall promptly notify the Company of any changes in his medical benefits coverage.

(iii) The payments and benefits provided under this Section 5(a) are subject to and conditioned upon the Executive executing a valid general release and waiver (in the form reasonably acceptable to the Company), waiving all claims the Executive may have against the Company, its successors, assigns, affiliates, executives, officers and directors, and such waiver becoming effective, and the payments and benefits are subject to and conditioned upon the Executive’s compliance with the Restrictive Covenants provided in Sections 7 and 8 hereof. For the avoidance of doubt, upon a termination of the Employment Period without Cause or as a result of Good Reason, the Executive shall not be entitled to any other compensation or benefits not expressly provided for in this section, regardless of the time that would otherwise remain in the Employment Period had the Employment Period not been terminated without Cause or for Good Reason. Except as provided in this Section 5(a), or pursuant to Section 2(c) if applicable, and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by Section 4980B of the Internal Revenue Code of 1986 and Section 601 of the Employee Retirement Income Security Act of 1974, as amended (which provisions are commonly known as “COBRA”), the Company shall have no additional obligations to the Executive.

(iv) For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s consent: (A) a reduction by the Company in the Executive’s Base Salary; (B) a material diminution in the Executive’s Annual Bonus opportunity; (C) a material diminution in the Executive’s position, duties, responsibilities or reporting relationships; or (D) a change of the Executive’s principal place of employment to a location more than seventy-five (75) miles from such principal place of employment as of the Effective Date; provided, Good Reason shall not occur unless the Executive shall have given a detailed written notice to the Company of any fact or circumstance believed by the Executive to constitute Good Reason within thirty (30) days of the occurrence of such fact or circumstance, and, if such fact or circumstance is reasonably susceptible to cure, the Company shall have thirty (30) days to cure such fact or circumstance and shall have failed to so cure.

(b) Cause or Voluntarily Other than for Good Reason. If the Executive’s employment is terminated during the Employment Period by the Company for Cause or voluntarily by the Executive other than for Good Reason, the Company shall pay the Executive within thirty (30) days following the Date of Termination the Accrued Benefits. Except as provided in this Section 5(b) and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by COBRA, the Company shall have no additional obligations to the Executive.

(c) Disability or Death. If the Executive’s employment is terminated during the Employment Period as a result of the Executive’s death or Disability, the Company shall pay the Executive or the Executive’s estate, as the case may be, within thirty (30) days following the Date of Termination: (i) the Accrued Benefits; and (ii) any Annual Bonus earned by the Executive in respect of the Company’s fiscal year ending immediately prior to the Date of Termination but not yet paid. Except as provided in this Section 5(c) and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by COBRA, the Company shall have no additional obligations to the Executive.

6. Legal Fees; Indemnification; Directors’ & Officers’ Liability Insurance.

(a) In the event of any contest or dispute between the Company and the Executive with respect to this Agreement or the Executive’s employment hereunder, each of the parties shall be responsible for its respective legal fees and expenses; provided, that, if the Executive prevails on any material issue in any action, the Company shall reimburse the Executive any reasonable legal fees and expenses incurred; provided, further, that with respect to an action to enforce the terms of the Severance Agreement, section 7 of the Severance Agreement shall govern the reimbursement of legal fees and expenses.

(b) The Executive will be entitled to indemnification on the same terms as indemnification is made available by the Company to its other senior executives, whether through the Company’s bylaws, the Merger Agreement or otherwise.

(c) During the Employment Period, the Executive shall be entitled to the same directors’ and officers’ liability insurance coverage that the Company provides generally to its other directors and officers, as may be amended from time to time for such directors and officers.

7. Non-Solicitation.

During the Employment Period and for two years thereafter, the Executive hereby agrees not to, directly or indirectly, solicit or hire or assist any other person or entity in soliciting or hiring any employee of the Company or any of its affiliates to perform services for any entity (other than the Company or its affiliates), or attempt to induce any such employee to leave the employ of the Company or its affiliates, or solicit, hire or engage on behalf of himself or any other Person (as defined below) any employee of the Company or anyone who was employed by the Company during the six-month period preceding such hiring or engagement.

8. Confidentiality; Non-Compete; Non-Disclosure; Non-Disparagement.

(a) The Executive hereby agrees that, during the Employment Period and thereafter, he will hold in strict confidence any proprietary or Confidential Information related to the Company and its affiliates. For purposes of this Agreement, the term “Confidential Information” shall mean all information of the Company or any of its affiliates (in whatever form) which is not generally known to the public, including without limitation any inventions, processes, methods of distribution, customer lists or customers’ or trade secrets.

(b) The Executive and the Company agree that the Company would likely suffer significant harm from the Executive’s competing with the Company during the Employment Period and for some period of time thereafter. Accordingly, the Executive agrees that he will not, during the Employment Period and for a period of two years following the termination of the Employment Period, directly or indirectly, become employed by, engage in business with, serve as an agent or consultant to, become a partner, member, principal, stockholder or other owner (other than a holder of less than 1% of the outstanding voting shares of any publicly held company) of, any Person competitive with, or otherwise perform services relating to, the business of the Company at the time of the termination for any Person (the “Business”) (whether or not for compensation). For purposes of this Agreement, the term “Person” shall mean any individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof that is engaged in the Business, or otherwise competes with the Company, anywhere in which the Company or its affiliates engage in or intend to engage in the Business or where the Company or its affiliates’ customers are located.

(c) The Executive hereby agrees that, upon the termination of the Employment Period, he shall not take, without the prior written consent of the Company, any drawing, blueprint, specification or other document (in whatever form) of the Company or its affiliates, which is of a confidential nature relating to the Company or its affiliates, or, without limitation, relating to its or their methods of distribution, or any description of any formulas or secret processes and will return any such information (in whatever form) then in his possession.

(d) The Executive hereby agrees not to defame or disparage the Company, its affiliates and their officers, directors, members or executives. The Executive hereby agrees to cooperate with the Company in refuting any defamatory or disparaging remarks by any third party made in respect of the Company or its affiliates or their directors, members, officers or executives.

9. Injunctive Relief.

It is impossible to measure in money the damages that will accrue to the Company in the event that the Executive breaches any of the restrictive covenants provided in Sections 7 and 8 hereof. In the event that the Executive breaches any such restrictive covenant, the Company shall be entitled to an injunction restraining the Executive from violating such restrictive covenant (without posting any bond). If the Company shall institute any action or proceeding to enforce any such restrictive covenant, the Executive hereby waives the claim or defense that the Company has an adequate remedy at law and agrees not to assert in any such action or proceeding the claim or defense that the Company has an adequate remedy at law. The foregoing shall not prejudice the Company’s right to require the Executive to account for and pay over to the Company, and the Executive hereby agrees to account for and pay over, the compensation, profits, monies, accruals or other benefits derived or received by the Executive as a result of any transaction constituting a breach of any of the restrictive covenants provided in Sections 7 and 8 hereof.

10. Gross Up.

(a) If, after the Effective Date, there occurs a transaction that constitutes a “change of control” under Regulation 1.280G of the Internal Revenue Code of 1986, as amended (the “Code”), and, immediately prior to the consummation of such change of control, the Parent or the Company is an entity whose stock is readily tradable on an established securities market (or otherwise) such that an exemption from the Excise Tax (as defined below) is not available, the following provisions will apply:

(i) In the event it shall be determined that any payment (including without limitation, the issuance of common shares, the granting or vesting of restricted shares, or the granting, vesting, exercise or termination of options therefor) to or for the benefit of the Executive hereunder is subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, hereinafter collectively referred to as the “Excise Tax”), the Executive shall be entitled to receive an additional payment or payments (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), including, without limitation, any income or employment taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the payments.  Notwithstanding the foregoing provisions of this Section 10(a)(i), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the payments do not exceed 110% of the greatest amount that could be paid to the Executive without giving rise to any Excise Tax (the “Safe Harbor Amount”), then no Gross-Up Payment shall be made to the Executive and the amounts payable under this Agreement shall be reduced so that the payments, in the aggregate, are reduced to the Safe Harbor Amount.  The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing the payments under Section 5(a), unless an alternative method of reduction is elected by the Executive.

(ii) All determinations required to be made under this Section 10, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within ten business days of the receipt of notice from the Executive that there have been payments to which Sections 280G and/or Section 4999 may apply, or such earlier time as is requested by the Company; provided that for purposes of determining the amount of any Gross-Up Payment, the Executive shall be deemed to pay federal income tax at the highest marginal rates applicable to individuals in the calendar year in which any such Gross-Up Payment is to be made and deemed to pay state and local income taxes at the highest effective rates applicable to individuals in the state or locality of the Executive’s residence or place of employment in the calendar year in which any such Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes that can be obtained from deduction of such state and local taxes, taking into account limitations applicable to individuals subject to federal income tax at the highest marginal rates.  All fees and expenses of the Accounting Firm shall be borne solely by the Company.  Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid by the Company to the Executive (or to the appropriate taxing authority on the Executive’s behalf) five (5) business days before the applicable tax is due.  If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall so indicate to the Executive in writing.  Any determination by the Accounting Firm shall be binding upon the Company and the Executive.  As a result of the uncertainty in the application of Section 4999 of the Code, it is possible that the amount of the Gross-Up Payment determined by the Accounting Firm to be due to (or on behalf of) the Executive was lower than the amount actually due (“Underpayment”).  In the event that the Company exhausts its remedies pursuant to Section 10(b) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment plus any interest and penalties incurred as a result of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

(b) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of any Gross-Up Payment.  Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid.  The Executive shall not pay such claim prior to the expiration of the thirty day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).  If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company and reasonably acceptable to the Executive, (C) cooperate with the Company in good faith in order to effectively contest such claim and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income or employment tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses.  Without limitation on the foregoing provisions of this Section 10, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, further, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income or employment tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; provided, further, that if the Executive is required to extend the statute of limitations to enable the Company to contest such claim, the Executive may limit this extension solely to such contested amount.  The Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(c) If, after the receipt by the Executive of an amount paid or advanced by the Company pursuant to this Section 10, the Executive becomes entitled to receive any refund with respect to a Gross-Up Payment, the Executive shall promptly pay to the Company the amount of such refund received (together with any interest paid or credited thereon after taxes applicable thereto). 

(d) With respect to any “change of control” under Regulation 1.280G for which the Executive is not entitled to receive the Gross-Up Payment as set forth in this Section 10, the Company, the Parent and the Executive shall use commercially reasonable best efforts to take such actions as may be necessary to avoid the imposition of any Excise Tax on the Executive, including seeking to obtain stockholder approval in accordance with the terms of Section 280G(b)(5).

11. Miscellaneous.

(a) Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and shall be deemed to be given when delivered personally or four days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or one day after it is sent by a reputable overnight courier service and, in each case, addressed as follows (or if it is sent through any other method agreed upon by the parties):

If to the Company:

Aleris International, Inc.

25825 Science Park Drive

Suite 400

Beachwood, Ohio 44122

Facsimile. 216-910-3650

Attn: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

If to the Parent:

301 Commerce Street, Suite 3300

Fort Worth, TX 76102

Attention: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

If to the Executive:

Steven J. Demetriou

25825 Science Park Drive

Suite 400

Beachwood, Ohio 44122

or to such other address as any party hereto may designate by notice to the others.

(b) Except as expressly provided herein with respect to the Severance Agreement, this Agreement shall constitute the entire agreement among the parties hereto with respect to the Executive’s employment hereunder, and supersedes and is in full substitution for any and all prior understandings or agreements with respect to the Executive’s employment (it being understood that any Options and Shares shall be governed by the relevant Equity Agreements). The Executive’s employment with the Company for purposes of this Agreement shall include the Executive’s employment by any direct or indirect subsidiary of the Parent or the Company.

(c) This Agreement may be amended only by an instrument in writing signed by the parties hereto, and any provision hereof may be waived only by an instrument in writing signed by the party or parties against whom or which enforcement of such waiver is sought. The failure of any party hereto at any time to require the performance by any other party hereto of any provision hereof shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by any party hereto of a breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision or a waiver of the provision itself or a waiver of any other provision of this Agreement.

(d) The parties hereto acknowledge and agree that each party has reviewed and negotiated the terms and provisions of this Agreement and has had the opportunity to contribute to its revision. Accordingly, the rule of construction to the effect that ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement. Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in favor or against either party.

(e) (i)This Agreement is binding on and is for the benefit of the parties hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. Neither this Agreement nor any right or obligation hereunder may be assigned by the Executive.

(ii) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in the Agreement, “the Company” shall mean both the Company as defined above and any such successor that assumes this Agreement, by operation of law or otherwise.

(f) Any provision of this Agreement (or portion thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. No waiver of any provision or violation of this Agreement by the Company shall be implied by the Company’s forbearance or failure to take action.

(g) The Company may withhold from any amounts payable to the Executive hereunder all federal, state, city or other taxes that the Company may reasonably determine are required to be withheld pursuant to any applicable law or regulation, (it being understood, that, except as provided in section 5 of the Severance Agreement, the Executive shall be responsible for payment of all taxes in respect of the payments and benefits provided herein).

(h) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to its principles of conflicts of law.

(i) This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. A facsimile of a signature shall be deemed to be and have the effect of an original signature.

(j) The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof.

(k) Notwithstanding anything to the contrary herein, in the event any payment hereunder would result in the imposition of an excise tax pursuant to Section 409A of the Code or the regulations thereunder, as amended (the “409A Excise Tax”), the Executive agrees that such payment shall be postponed to the date that is the earliest date upon which such payment would no longer result in the imposition of a 409A Excise Tax.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

EXECUTIVE

/s/ Steven J. Demetriou

___________________________________

Name: Steven J. Demetriou

ALERIS INTERNATIONAL, INC.

 /s/ Michael D. Friday

___________________________________

Name:  Michael D. Friday

Title: Executive Vice President and Chief Financial Officer

AURORA ACQUISITION HOLDINGS, INC.

 /s/ John E. Viola

___________________________________

Name:  John E. Viola

Title: Vice President and Treasurer

EX-10.22

Exhibit 10.22

EXECUTION COPY

EMPLOYMENT AGREEMENT

AGREEMENT, dated as of December 19, 2006 (the “Agreement”), by and among Aleris International, Inc. (the “Company”), Aurora Acquisition Holdings, Inc. (the “Parent”) and Michael D. Friday (the “Executive”).

WHEREAS, the Company desires that the Executive continue to serve the Company as the Company’s Executive Vice President and Chief Financial Officer, on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1. Employment, Duties and Agreements.

(a) The Company hereby agrees to continue to employ the Executive as its Executive Vice President and Chief Financial Officer, and the Executive hereby accepts such position and agrees to continue to serve the Company in such capacity during the employment period fixed by Section 3 hereof (the “Employment Period”). The Executive shall have such duties and responsibilities as are consistent with the Executive’s position and as may be assigned by the Company from time to time. During the Employment Period, the Executive shall be subject to, and shall act in accordance with, all reasonable instructions and directions and all applicable policies and rules of the Company.

(b) During the Employment Period, excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote his full working time, energy and attention to the performance of his duties and responsibilities hereunder and shall faithfully and diligently endeavor to promote the business and best interests of the Company. During the Employment Period, the Executive may not, without the prior written consent of the Company, directly or indirectly, operate, participate in the management, operations or control of, or act as an executive, officer, consultant, agent or representative of, any type of business or service (other than as an executive of the Company). It shall not, however, be a violation of the foregoing provisions of this Section 1(b) for the Executive to (i) subject to the approval of the Board, serve as an officer or director or otherwise participate in non-profit, educational, welfare, social, religious and civil organizations, or (ii) manage his personal, financial and legal affairs, so long as any such activities in (i) and (ii) do not interfere with the performance of his duties and responsibilities to the Company as provided hereunder.

(c) In connection with the Executive’s employment by the Company under this Agreement, the Executive shall be based at the principal executive offices of the Company, currently located in Beachwood, Ohio, except for such travel as the performance of the Executive’s duties in the business of the Company may require.

(d) The Severance Agreement, dated as of August 30, 2005, by and between the Company and the Executive (the “Severance Agreement”) is expressly assumed hereby as contemplated in section 10(b) thereof. The Executive hereby acknowledges and agrees that the foregoing assumption by the Company of the Severance Agreement, and the entrance by the Company into this Agreement, is in full satisfaction of the Company’s obligations under section 10(b) of the Severance Agreement to assume, by written instrument delivered to the Executive, all of the obligations under the Severance Agreement, and that the Executive will not have the right to terminate his employment for “Good Reason” as defined in the Severance Agreement under Item (5) of such definition as a result of the merger of Aurora Acquisition Merger Sub, Inc. (“Merger Sub”) with and into the Company, as contemplated by the Agreement and Plan of Merger, dated August 7, 2006, by and among the Parent, Merger Sub and the Company (the “Merger Agreement”). The Severance Agreement shall remain in full force and effect through the second anniversary of the Effective Date. Upon the second anniversary of the Effective Date, and not before, the Severance Agreement shall be terminated and of no further force or effect, provided, however, that the Severance Agreement shall continue in effect with respect to all rights and obligations that have accrued thereunder prior to such termination until such rights and obligations have been fully satisfied or otherwise expire. Notwithstanding anything to the contrary in the Severance Agreement (including, without limitation, section 8 thereof), this Agreement shall constitute notice pursuant to section 8 of the Severance Agreement, to the extent necessary, that the Severance Agreement shall terminate on the second anniversary of the Effective Date. During the period prior to the second anniversary of the Effective Date, in the event of a conflict between the terms of the Severance Agreement and this Agreement, the terms of the Severance Agreement shall govern.

2. Compensation.

(a) As compensation for the agreements made by the Executive herein and the performance by the Executive of his obligations hereunder, during the Employment Period, the Company shall pay the Executive, pursuant to the Company’s normal and customary payroll procedures, a base salary at the rate of $425,000 per annum, (the “Base Salary”). During the Employment Term, the Base Salary will be reviewed annually and is subject to adjustment at the discretion of the Board of Directors of the Company (the “Board”), but in no event shall the Company pay the Executive a Base Salary less than that set forth above during the Employment Term. 

(b) In addition to the Base Salary, during the Employment Period, but beginning for the fiscal year ending December 31, 2007, the Executive shall be eligible to participate in the annual incentive plan (the “AIP”) established and approved by the Board and, pursuant to the AIP, the Executive may earn an annual bonus (the “Annual Bonus”) in each fiscal year during the Employment Period, with a target Annual Bonus of 75% of Base Salary up to a maximum of 150% of Base Salary, based on the achievement of annual performance objectives as set forth in the AIP, subject to the Executive’s employment with the Company through the applicable payment date for any such Annual Bonus (unless otherwise provided herein or in the Severance Agreement). For the fiscal year ending December 31, 2006, the Company shall pay the Executive all bonuses and other incentives to which the Executive is entitled pursuant to and in accordance with the Company’s incentive plans in effect as of the Effective Date.

(c) As soon as practicable after the Effective Date (as defined below), the Company will grant the Executive a number of options (the “Options”) to purchase shares of the Parent (the “Shares”) at an exercise price per Share equal to the price per Share paid by TPG (as defined below). The specific terms and conditions governing all aspects of the Options shall be provided in separate grant agreements and any relevant plan documents (collectively, the “Option Agreements”). The Options shall be comprised of the following two tranches: (1) 60% of the Options (the “Time-Based Options”) will vest and become exercisable in equal annual installments of 20% over a five-year period, subject to the Executive’s continued employment with the Company through the applicable vesting date and (2) 40% of the stock options (the “Performance-Based Options”) will vest and become exercisable only upon the achievement by the Company of the following performance targets, in each case, subject to the Executive’s continued employment with the Company through the applicable vesting date: (A) 50% of the Performance-Based Options will vest upon the occurrence of any liquidity event in connection with which TPG Partners IV, L.P. and TPG Partners V, L.P. (together, "TPG") realize a multiple of money (“MoM”) of at least 2.0x its initial investment in the Company (through the Parent), as determined by the Board in good faith, and (B) the remaining 50% of the Performance-Based Options will vest upon the occurrence of any liquidity event in connection with which TPG realizes an MoM of at least 3.0x its initial investment in the Company (through the Parent), as determined by the Board in good faith, provided, that in the event the liquidity event occurs prior to the second anniversary of the Effective Date, the MoM in clause (B) of this Section 2(c) shall be 2.0x, and in the event the liquidity event occurs on or after the second anniversary, but prior to the third anniversary, of the Effective Date, the MoM in clause (B) of this Section 2(c) shall be 2.5x. TPG shall make a good faith projection with respect to the expected value of any such liquidity event, and, to the extent such projection, if accurate, would result in vesting of some or all of the Performance-Based Options, the Performance-Based Options shall be deemed vested to the applicable extent and solely for the purpose of permitting the Executive to participate in such liquidity event with the Shares underlying such Performance-Based Options.

Notwithstanding the foregoing, in the event of a change in control (as defined in below), TPG shall cause the buyer to (i) cancel all vested and exercisable Options and pay to the Executive, in cash or other property depending on, and in the same proportion as, the consideration received by TPG, an amount equal to the excess, if any, of the fair market value of a Share on such change in control over the exercise price of such Option (such excess, if any, the “Option Spread”) for each such vested and exercisable Option, and (ii) cancel all unvested Time-Based Options and pay to the Executive, in cash or other property depending on, and in the same proportion as, the consideration received by TPG, an amount equal to the aggregate Option Spread for each such unvested Time-Based Option, plus interest at a reasonable rate to be determined by the Board, on the earlier to occur of (x) the date such unvested Time-Based Option would otherwise have vested, provided that the Executive is actively employed with the Company or an affiliate on such date, or (y) subject to Section 11(k), within five (5) business days following the Date of Termination of the Executive’s employment as a result of a termination by the Company without Cause or by the Executive for Good Reason.

For purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the following events after the Effective Date: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company or the Parent on a consolidated basis to any person or group of related persons for purposes of Section 13(d) of the Exchange Act (a “Group”), together with any affiliates thereof other than to TPG or its affiliates; (ii) the approval by the holders of the outstanding voting power of the Company or the Parent of any plan or proposal for the liquidation or dissolution of the Company; (iii) (A) any person or Group (other than TPG or its affiliates) shall become the beneficial owner (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, of shares representing more than 40% of the aggregate outstanding voting power of the Company or the Parent and such person or Group actually has the power to vote such shares in any such election and (B) TPG and its affiliates beneficially owns (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, in the aggregate a lesser percentage of the voting power of the Company or the Parent than such other person or Group; (iv) the replacement of a majority of the board of directors of the Company or the Parent over a two-year period from the directors who constituted such board at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of such board then still in office who either were members of such board at the beginning of such period or whose election as a member of such board was previously so approved or who were nominated by, or designees of, TPG or its affiliates; or (v) consummation of a merger or consolidation of the Company or the Parent with another entity in which holders of shares of the Company or Parent immediately prior to the consummation of the transaction hold, directly or indirectly, immediately following the consummation of the transaction, less than 50% of the common equity interest in the surviving corporation in such transaction and TPG and its affiliate do not hold a sufficient amount of voting power (or similar securities) to elect a majority of the surviving entity’s board of directors.

Upon any termination of the Executive’s employment, any Options that are not vested and exercisable as of such termination and that do not become vested and exercisable as a result of such termination shall automatically expire on the Date of Termination (as defined in Section 4(b) below). Any Options that have become vested and exercisable as of (or that become exercisable as a result of) the Date of Termination shall expire on the earlier of (i) ninety (90) days after the date the Executive’s employment is terminated for any reason other than Cause, death or Disability; (ii) one year after the date the Executive’s employment is terminated by reason of death or Disability; (iii) the commencement of business on the date the Executive’s employment is terminated for Cause; or (iv) the tenth anniversary of the grant date. All Options that are outstanding as of the tenth anniversary of the grant date will expire on such date. The Executive shall be permitted to exercise the vested portion of the Options through net-physical settlement (i.e., by delivery of Shares net of the number of Shares having a value equal to the applicable exercise price and applicable withholding taxes at the minimum statutory rate) if such exercise occurs after termination of the Executive’s employment pursuant to Sections 3(a) or 3(b), by the Company pursuant to Paragraph 3(d) or by the Executive pursuant to Section 3(e) for Good Reason.  The Option shall be granted pursuant to and subject to the terms of a Management Equity Incentive Plan (the “Plan”), which shall contain rights to dividend equivalents in a manner intended to comply with Section 409A of the Code. 

(d) The Executive shall roll over all shares in the Company that the Executive holds as a capital asset prior to the Effective Date and such other amounts as are worth, in the aggregate, $1,800,000 on an after-tax basis into Shares of the Parent pursuant to and in accordance with a letter agreement between the Executive and Parent, dated as of December 15, 2006 (the “Rollover Agreement”).

(e) The purchase of any Shares upon the exercise of the Options, or any other purchase or issuance of Shares contemplated by this Agreement, including pursuant to any rollover as provided above, will be subject to the Executive’s execution of a Management Stockholders’ Agreement for the Company and the Parent in such form as provided by the Company and the Parent (the “Management Stockholders’ Agreement” and, together with the Option Agreements, the “Equity Agreements”) for the Company, which will include, among other things, (1) restrictions on transfer of the Shares and call rights by the Company, (2) certain drag-along and tag-along rights and obligations, (3) certain lock-up rights in connection with any underwritten public offering of equity securities of the Company or any affiliate and (4) that Executive make such representations and execute such documents as the Company determines are reasonably necessary or appropriate to comply with any applicable securities or tax law requirements, to qualify for any exemption from any applicable securities laws or to ensure Executive’s compliance with his obligations under the Management Stockholders’ Agreement. Notwithstanding anything to the contrary in the Management Stockholders’ Agreement, the Company call right shall not apply to the Shares of the Parent purchased or otherwise acquired pursuant to the Rollover Agreement unless the Executive’s employment is terminated by the Company or its affiliates for Cause or by the Executive without Good Reason or other than as a result of Retirement. In addition, in the event the Executive Retires following the third anniversary of the Effective Date, for the 90 day period following such Retirement, the Executive shall have the right to put the Shares of the Parent purchased or otherwise acquired pursuant to the Rollover Agreement to the Company at the fair market value of the Shares as of the Date of Termination. For purposes of this Section 2(e), “Retirement” shall mean the Executive is eligible to retire without penalty or a reduction in benefits under any tax qualified pension plan maintained by the Company and in which the Executive is eligible to participate, and “Retires” shall have the correlative meaning.

(f) During the Employment Period: (i) except as provided in the last sentence of this Section 2(f), the Executive and/or the Executive’s family, as the case may be, shall be entitled to participate in all employee benefit plans, practices, policies, programs and arrangements of the Company which are made available generally to other executive officers of the Company and/or their families, as the case may be, including, without limiting the Company’s right to terminate, modify or amend such plans in accordance with their terms or as provided in the immediately succeeding sentence, the Company’s benefits restoration program, life insurance, long-term disability and health plans and (ii) the Executive shall be entitled to the perquisites and other fringe benefits that are made available by the Company to its senior executives generally, subject to any applicable terms and conditions of any specific perquisite or other fringe benefit. Until the second anniversary of the Effective Date, except as consented to by the Executive, the Company agrees that the employee benefit plans, policies, programs and arrangements and perquisites and other fringe benefits that are made available to the Executive during the Employment Period will not be materially diminished in the aggregate from those benefit plans, policies, programs and arrangements and perquisites and fringe benefits made available immediately prior to the Effective Date. For the avoidance of doubt, such other plans, practices, policies, programs or arrangements shall not include any plan, practice, policy, program or arrangement that provides benefits in the nature of severance or continuation pay.

(g) The Company shall reimburse the Executive for all reasonable business expenses upon the presentation of statements of such expenses in accordance with the Company’s policies and procedures now in force or as such policies and procedures may be modified with respect to all senior executive officers of the Company.

(h) In the event the Company or the Parent engages in a significant subsequent corporate transaction with another entity, the Board will reconsider the size of the equity pool, taking into account the larger size of the resultant entity and taking into account all relevant circumstances, including competitive market data for companies of similar size and circumstance.

3. Employment Period.

The Employment Period shall commence on December 19, 2006 (the “Effective Date”) and shall terminate on the thirdanniversary of the Effective Date, provided that on the thirdanniversary of the Effective Date and on each anniversary thereafter, the Employment Period shall automatically be extended for additional one-year periods unless either party provides the other party with a Notice of Termination in accordance with Section 4(a) at least sixty (60) days before any such anniversary (the anniversary date on which the Employment Period terminates shall be referred to herein as the “Scheduled Termination Date”). Notwithstanding the foregoing, the Executive’s employment hereunder may be terminated during the Employment Period prior to the Scheduled Termination Date upon the earliest to occur of any one of the following events (at which time the Employment Period shall be terminated):

(a) Death. The Executive’s employment hereunder shall terminate upon his death.

(b) Disability. The Company shall be entitled to terminate the Executive’s employment hereunder for “Disability” if, as a result of the Executive’s incapacity due to physical or mental illness or injury, the Executive (i) shall become eligible to receive a benefit under the Company’s long-term disability plan applicable to the Executive, or (ii) if no such long-term disability plan is applicable to the Executive, the Executive shall have been unable to perform his duties hereunder for a period of ninety (90) consecutive days or a period of ninety (90) days in any one hundred eighty (180) day period.

(c) Cause. The Company may terminate the Executive’s employment hereunder for Cause. For purposes of this Agreement, the term “Cause” shall mean: (i) a material breach by the Executive of this Agreement; (ii) other than as a result of physical or mental illness or injury, the willful and continued failure of the Executive to perform substantially the Executive’s duties with the Company or one of its affiliates; (iii) the Executive’s willful and continued misconduct or gross negligence which is materially injurious to the Company or an affiliate of the Company; or (iv) the indictment by the Executive of, or a plea by the Executive of nolo contendere to, a felony involving moral turpitude or other serious crime involving moral turpitude. In the case of clauses (i) and (ii) above, the Company shall provide notice to the Executive indicating in reasonable detail the events or circumstances that it believes constitute Cause hereunder and, if such breach or failure is reasonably susceptible to cure, provide the Executive with a reasonable period of time (not to exceed thirty (30) days) to cure such breach or failure. If, subsequent to the Executive’s termination of employment hereunder for other than Cause, it is determined in good faith by the Board that the Executive’s employment could have been terminated for Cause pursuant to clause (iv) of this Section 3(c), the Executive’s employment shall, at the election of the Board, be deemed to have been terminated for Cause retroactively to the date the events giving rise to Cause occurred.

(d) Without Cause. The Company may terminate the Executive’s employment hereunder during the Employment Period without Cause.

(e) Voluntarily. The Executive may voluntarily terminate his employment hereunder, with or without Good Reason, provided that the Executive provides the Company with notice of his intent to terminate his employment at least 60 days in advance of the Date of Termination (as defined in Section 4(b) below) (and, in the case of a termination by the Executive for Good Reason, complies with all requirements of such a termination as provided hereunder).

4. Termination Procedure.

(a) Notice of Termination. Any termination of the Executive’s employment by the Company or by the Executive during the Employment Period (other than a termination on account of the death of the Executive) shall be communicated by written “Notice of Termination” to the other party hereto in accordance with Section 11(a); provided, that, prior to the second anniversary of the Effective Date, with respect to a termination of the Executive’s employment without Cause by the Company or with Good Reason by the Executive, the notice provisions of section 11(b) of the Severance Agreement shall govern.

(b) Date of Termination. “Date of Termination” shall mean (i) if the Executive’s employment is terminated by his death, the date of his death, (ii) if the Executive’s employment is terminated pursuant to Section 3(b), on the date the Executive receives Notice of Termination from the Company, (iii) if the Executive voluntarily terminates his employment (whether or not for Good Reason), the date specified in the notice given pursuant to Section 3(e) herein which shall not be less than 90 days after the Notice of Termination, and (iv) if the Executive’s employment is terminated for any other reason, the date on which a Notice of Termination is given or any later date (within thirty (30) days, or any alternative time period agreed upon by the parties, after the giving of such notice) set forth in such Notice of Termination; provided, that, prior to the second anniversary of the Effective Date, with respect to a termination of the Executive’s employment without Cause by the Company or with Good Reason by the Executive, the notice provisions of section 11(b) of the Severance Agreement shall govern.

5. Termination Payments.

(a) Without Cause. In the event the Employment Period terminates under this Agreement as a result of the Company terminating the Executive without Cause or the Executive terminating his employment for Good Reason, the Executive shall be entitled to the payments and benefits set forth in this Section 5(a):

(i) On or Before the Second Anniversary of the Effective Date. In the event of a termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason on or before the second anniversary of the effective date, the Executive shall be entitled to such payments and benefits as set forth in sections 4 and 5 of the Severance Agreement.

(ii) After the Second Anniversary of the Effective Date But Prior to a Change in Control. If the Executive’s employment is terminated after the second anniversary of the Effective Date but prior to a Change in Control, the Company shall pay the Executive (A) within thirty (30) days following the Date of Termination, the Executive’s accrued but unused vacation and Base Salary through the Date of Termination (to the extent not theretofore paid) (the “Accrued Benefits”) and (B) one and a half (1.5) times the sum of (1) the Executive’s Base Salary and (2) the Target Bonus, with such sum to be paid in lump sum within 30 days following the Date of Termination; provided, however, that the Executive shall be required to repay the payments described in clause (B) (net of any taxes paid by the Executive or the Company on such payments) in the event the Executive receives, within 18 months after the Date of Termination, written notice from the Company that in the reasonable judgment of the Company, the Executive engaged or is engaging in any conduct that violates or otherwise fails to comply with his obligations under Sections 7 and 8 hereof, or in the event the Executive is convicted of, or pleads guilty to, a felony involving moral turpitude within the three year period following the Date of Termination for an act or omission committed during the Employment Period.

(iii) After the Second Anniversary of the Effective Date and On or After a Change in Control. If the Executive’s employment is terminated after the second anniversary of the Effective Date and on or after a subsequent Change in Control, the Company shall pay the Executive (A) within thirty (30) days following the Date of Termination, the Executive’s Accrued Benefits and (B) one and a half (1.5) times the Executive’s Base Salary, with such sum to be paid in lump sum within 30 days following the Date of Termination; provided, however, that the Executive shall be required to repay the payments described in clause (B) (net of any taxes paid by the Executive or the Company on such payments) in the event the Executive receives, within 18 months after the Date of Termination, written notice from the Company that in the reasonable judgment of the Company, the Executive engaged or is engaging in any conduct that violates or otherwise fails to comply with his obligations under Sections 7 and 8 hereof, or in the event the Executive is convicted of, or pleads guilty to, a felony involving moral turpitude within the three year period following the Date of Termination for an act or omission committed during the Employment Period.

(iv) With respect to any termination of the Executive’s employment to which clause (ii) or (iii) of this Section 5(a) applies, for the eighteen month period commencing on the day after Executive’s Date of Termination, the Company shall continue to provide medical benefits to Executive which are substantially similar to those provided generally to executive officers of the Company (including any required contribution by such executive officers) pursuant to such medical plan as may be in effect from time to time as if the Executive’s employment had not been terminated (it being understood that the Company may provide such coverage by paying the Executive’s COBRA premiums, less any contribution required by the Executive); provided, however, that if the Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the corresponding medical and other welfare benefits described herein shall be secondary to such benefits during the period of the Executive’s eligibility, and the Company shall reimburse the Executive for any increased cost to provide the Executive with the benefits provided under the Company’s medical plan. The Executive shall promptly notify the Company of any changes in his medical benefits coverage.

(v) The payments and benefits provided under this Section 5(a) are subject to and conditioned upon the Executive executing a valid general release and waiver (in the form reasonably acceptable to the Company), waiving all claims the Executive may have against the Company, its successors, assigns, affiliates, executives, officers and directors, and such waiver becoming effective, and the payments and benefits are subject to and conditioned upon the Executive’s compliance with the Restrictive Covenants provided in Sections 7 and 8 hereof. For the avoidance of doubt, upon a termination of the Employment Period without Cause or as a result of Good Reason, the Executive shall not be entitled to any other compensation or benefits not expressly provided for in this section, regardless of the time that would otherwise remain in the Employment Period had the Employment Period not been terminated without Cause or for Good Reason. Except as provided in this Section 5(a), or pursuant to Section 2(c) if applicable, and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by Section 4980B of the Internal Revenue Code of 1986 and Section 601 of the Employee Retirement Income Security Act of 1974, as amended (which provisions are commonly known as “COBRA”), the Company shall have no additional obligations to the Executive.

(vi)  For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s consent: (A) a reduction by the Company in the Executive’s Base Salary; (B) a material diminution in the Executive’s Annual Bonus opportunity; (C) a material diminution in the Executive’s position, duties, responsibilities or reporting relationships; or (D) a change of the Executive’s principal place of employment to a location more than seventy-five (75) miles from such principal place of employment as of the Effective Date; provided, Good Reason shall not occur unless the Executive shall have given a detailed written notice to the Company of any fact or circumstance believed by the Executive to constitute Good Reason within thirty (30) days of the occurrence of such fact or circumstance, and, if such fact or circumstance is reasonably susceptible to cure, the Company shall have thirty (30) days to cure such fact or circumstance and shall have failed to so cure.

(b) Cause or Voluntarily Other than for Good Reason. If the Executive’s employment is terminated during the Employment Period by the Company for Cause or voluntarily by the Executive other than for Good Reason, the Company shall pay the Executive within thirty (30) days following the Date of Termination the Accrued Benefits. Except as provided in this Section 5(b) and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by COBRA, the Company shall have no additional obligations to the Executive.

(c) Disability or Death. If the Executive’s employment is terminated during the Employment Period as a result of the Executive’s death or Disability, the Company shall pay the Executive or the Executive’s estate, as the case may be, within thirty (30) days following the Date of Termination: (i) the Accrued Benefits; and (ii) any Annual Bonus earned by the Executive in respect of the Company’s fiscal year ending immediately prior to the Date of Termination but not yet paid. Except as provided in this Section 5(c) and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by COBRA, the Company shall have no additional obligations to the Executive.

6. Legal Fees; Indemnification; Directors’ & Officers’ Liability Insurance.

(a) In the event of any contest or dispute between the Company and the Executive with respect to this Agreement or the Executive’s employment hereunder, each of the parties shall be responsible for its respective legal fees and expenses; provided, that, if the Executive prevails on any material issue in any action, the Company shall reimburse the Executive any reasonable legal fees and expenses incurred; provided, further, that with respect to an action to enforce the terms of the Severance Agreement, section 7 of the Severance Agreement shall govern the reimbursement of legal fees and expenses.

(b) The Executive will be entitled to indemnification on the same terms as indemnification is made available by the Company to its other senior executives, whether through the Company’s bylaws, the Merger Agreement or otherwise.

(c) During the Employment Period, the Executive shall be entitled to the same directors’ and officers’ liability insurance coverage that the Company provides generally to its other directors and officers, as may be amended from time to time for such directors and officers.

7. Non-Solicitation.

During the Employment Period and for eighteen months thereafter, the Executive hereby agrees not to, directly or indirectly, solicit or hire or assist any other person or entity in soliciting or hiring any employee of the Company or any of its affiliates to perform services for any entity (other than the Company or its affiliates), or attempt to induce any such employee to leave the employ of the Company or its affiliates, or solicit, hire or engage on behalf of himself or any other Person (as defined below) any employee of the Company or anyone who was employed by the Company during the six-month period preceding such hiring or engagement.

8. Confidentiality; Non-Compete; Non-Disclosure; Non-Disparagement.

(a) The Executive hereby agrees that, during the Employment Period and thereafter, he will hold in strict confidence any proprietary or Confidential Information related to the Company and its affiliates. For purposes of this Agreement, the term “Confidential Information” shall mean all information of the Company or any of its affiliates (in whatever form) which is not generally known to the public, including without limitation any inventions, processes, methods of distribution, customer lists or customers’ or trade secrets.

(b) The Executive and the Company agree that the Company would likely suffer significant harm from the Executive’s competing with the Company during the Employment Period and for some period of time thereafter. Accordingly, the Executive agrees that he will not, during the Employment Period and for a period of eighteen months following the termination of the Employment Period, directly or indirectly, become employed by, engage in business with, serve as an agent or consultant to, become a partner, member, principal, stockholder or other owner (other than a holder of less than 1% of the outstanding voting shares of any publicly held company) of, any Person competitive with, or otherwise perform services relating to, the business of the Company at the time of the termination for any Person (the “Business”) (whether or not for compensation). For purposes of this Agreement, the term “Person” shall mean any individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof that is engaged in the Business, or otherwise competes with the Company, anywhere in which the Company or its affiliates engage in or intend to engage in the Business or where the Company or its affiliates’ customers are located.

(c) The Executive hereby agrees that, upon the termination of the Employment Period, he shall not take, without the prior written consent of the Company, any drawing, blueprint, specification or other document (in whatever form) of the Company or its affiliates, which is of a confidential nature relating to the Company or its affiliates, or, without limitation, relating to its or their methods of distribution, or any description of any formulas or secret processes and will return any such information (in whatever form) then in his possession.

(d) The Executive hereby agrees not to defame or disparage the Company, its affiliates and their officers, directors, members or executives. The Executive hereby agrees to cooperate with the Company in refuting any defamatory or disparaging remarks by any third party made in respect of the Company or its affiliates or their directors, members, officers or executives.

9. Injunctive Relief.

It is impossible to measure in money the damages that will accrue to the Company in the event that the Executive breaches any of the restrictive covenants provided in Sections 7 and 8 hereof. In the event that the Executive breaches any such restrictive covenant, the Company shall be entitled to an injunction restraining the Executive from violating such restrictive covenant (without posting any bond). If the Company shall institute any action or proceeding to enforce any such restrictive covenant, the Executive hereby waives the claim or defense that the Company has an adequate remedy at law and agrees not to assert in any such action or proceeding the claim or defense that the Company has an adequate remedy at law. The foregoing shall not prejudice the Company’s right to require the Executive to account for and pay over to the Company, and the Executive hereby agrees to account for and pay over, the compensation, profits, monies, accruals or other benefits derived or received by the Executive as a result of any transaction constituting a breach of any of the restrictive covenants provided in Sections 7 and 8 hereof.

10. Section 280G.   If, after the Effective Date, there occurs a transaction that constitutes a “change of control” under Regulation 1.280G of the Internal Revenue Code of 1986, as amended (the “Code”), the Parent and the Executive shall use commercially reasonable best efforts to take such actions as may be necessary to avoid the imposition of any the excise tax imposed by Section 4999 of the Code on the Executive, including seeking to obtain stockholder approval in accordance with the terms of Section 280G(b)(5).

11. Miscellaneous.

(a)Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and shall be deemed to be given when delivered personally or four days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or one day after it is sent by a reputable overnight courier service and, in each case, addressed as follows (or if it is sent through any other method agreed upon by the parties):

If to the Company:

Aleris International, Inc.

25825 Science Park Drive

Suite 400

Beachwood, Ohio 44122

Facsimile. 216-910-3650

Attn: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

If to the Parent:

301 Commerce Street, Suite 3300

Fort Worth, TX 76102

Attention: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

If to the Executive:

Michael D. Friday

4562 Hunting Valley Lane

Brecksville, Ohio 44141

or to such other address as any party hereto may designate by notice to the others.

(b) Except as expressly provided herein with respect to the Severance Agreement, this Agreement shall constitute the entire agreement among the parties hereto with respect to the Executive’s employment hereunder, and supersedes and is in full substitution for any and all prior understandings or agreements with respect to the Executive’s employment (it being understood that any Options and Shares shall be governed by the relevant Equity Agreements). The Executive’s employment with the Company for purposes of this Agreement shall include the Executive’s employment by any direct or indirect subsidiary of the Parent or the Company.

(c) This Agreement may be amended only by an instrument in writing signed by the parties hereto, and any provision hereof may be waived only by an instrument in writing signed by the party or parties against whom or which enforcement of such waiver is sought. The failure of any party hereto at any time to require the performance by any other party hereto of any provision hereof shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by any party hereto of a breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision or a waiver of the provision itself or a waiver of any other provision of this Agreement.

(d) The parties hereto acknowledge and agree that each party has reviewed and negotiated the terms and provisions of this Agreement and has had the opportunity to contribute to its revision. Accordingly, the rule of construction to the effect that ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement. Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in favor or against either party.

(e) (i)This Agreement is binding on and is for the benefit of the parties hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. Neither this Agreement nor any right or obligation hereunder may be assigned by the Executive.

(ii) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in the Agreement, “the Company” shall mean both the Company as defined above and any such successor that assumes this Agreement, by operation of law or otherwise.

(f) Any provision of this Agreement (or portion thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. No waiver of any provision or violation of this Agreement by the Company shall be implied by the Company’s forbearance or failure to take action.

(g) The Company may withhold from any amounts payable to the Executive hereunder all federal, state, city or other taxes that the Company may reasonably determine are required to be withheld pursuant to any applicable law or regulation, (it being understood, that, except as provided in section 5 of the Severance Agreement, the Executive shall be responsible for payment of all taxes in respect of the payments and benefits provided herein).

(h) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to its principles of conflicts of law.

(i) This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. A facsimile of a signature shall be deemed to be and have the effect of an original signature.

(j) The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof.

(k) Notwithstanding anything to the contrary herein, in the event any payment hereunder would result in the imposition of an excise tax pursuant to Section 409A of the Code or the regulations thereunder, as amended (the “409A Excise Tax”), the Executive agrees that such payment shall be postponed to the date that is the earliest date upon which such payment would no longer result in the imposition of a 409A Excise Tax.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

EXECUTIVE

/s/ Michael D. Friday

___________________________________

Name: Michael D. Friday

ALERIS INTERNATIONAL, INC.

 /s/ Christopher Clegg

___________________________________

Name:  Christopher Clegg

Title: Executive Vice President, General Counsel and Secretary

AURORA ACQUISITION HOLDINGS, INC.

 /s/ John E. Viola

___________________________________

Name:  John E. Viola

Title: Vice President and Treasurer

EX-10.23

Exhibit 10.23

EXECUTION COPY

EMPLOYMENT AGREEMENT

AGREEMENT, dated as of December 19, 2006 (the “Agreement”), by and among Aleris International, Inc. (the “Company”), Aurora Acquisition Holdings, Inc. (the “Parent”) and John J. Wasz (the “Executive”).

WHEREAS, the Company desires that the Executive continue to serve the Company as the Company’s Executive Vice President and President, Rolled Products - North America, on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1. Employment, Duties and Agreements.

(a) The Company hereby agrees to continue to employ the Executive as its Executive Vice President and President, Rolled Products - North America, and the Executive hereby accepts such position and agrees to continue to serve the Company in such capacity during the employment period fixed by Section 3 hereof (the “Employment Period”). The Executive shall have such duties and responsibilities as are consistent with the Executive’s position and as may be assigned by the Company from time to time. During the Employment Period, the Executive shall be subject to, and shall act in accordance with, all reasonable instructions and directions and all applicable policies and rules of the Company.

(b) During the Employment Period, excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote his full working time, energy and attention to the performance of his duties and responsibilities hereunder and shall faithfully and diligently endeavor to promote the business and best interests of the Company. During the Employment Period, the Executive may not, without the prior written consent of the Company, directly or indirectly, operate, participate in the management, operations or control of, or act as an executive, officer, consultant, agent or representative of, any type of business or service (other than as an executive of the Company). It shall not, however, be a violation of the foregoing provisions of this Section 1(b) for the Executive to (i) subject to the approval of the Board, serve as an officer or director or otherwise participate in non-profit, educational, welfare, social, religious and civil organizations, or (ii) manage his personal, financial and legal affairs, so long as any such activities in (i) and (ii) do not interfere with the performance of his duties and responsibilities to the Company as provided hereunder.

(c) In connection with the Executive’s employment by the Company under this Agreement, the Executive shall be based at the Company’s offices in Louisville, Kentucky, except for such travel as the performance of the Executive’s duties in the business of the Company may require.

(d) The Severance Agreement, dated as of August 30, 2005, by and between the Company and the Executive (the “Severance Agreement”) is expressly assumed hereby as contemplated in section 10(b) thereof. The Executive hereby acknowledges and agrees that the foregoing assumption by the Company of the Severance Agreement, and the entrance by the Company into this Agreement, is in full satisfaction of the Company’s obligations under section 10(b) of the Severance Agreement to assume, by written instrument delivered to the Executive, all of the obligations under the Severance Agreement, and that the Executive will not have the right to terminate his employment for “Good Reason” as defined in the Severance Agreement under Item (5) of such definition as a result of the merger of Aurora Acquisition Merger Sub, Inc. (“Merger Sub”) with and into the Company, as contemplated by the Agreement and Plan of Merger, dated August 7, 2006, by and among the Parent, Merger Sub and the Company (the “Merger Agreement”). The Severance Agreement shall remain in full force and effect through the second anniversary of the Effective Date. Upon the second anniversary of the Effective Date, and not before, the Severance Agreement shall be terminated and of no further force or effect, provided, however, that the Severance Agreement shall continue in effect with respect to all rights and obligations that have accrued thereunder prior to such termination until such rights and obligations have been fully satisfied or otherwise expire. Notwithstanding anything to the contrary in the Severance Agreement (including, without limitation, section 8 thereof), this Agreement shall constitute notice pursuant to section 8 of the Severance Agreement, to the extent necessary, that the Severance Agreement shall terminate on the second anniversary of the Effective Date. During the period prior to the second anniversary of the Effective Date, in the event of a conflict between the terms of the Severance Agreement and this Agreement, the terms of the Severance Agreement shall govern.

2. Compensation.

(a) As compensation for the agreements made by the Executive herein and the performance by the Executive of his obligations hereunder, during the Employment Period, the Company shall pay the Executive, pursuant to the Company’s normal and customary payroll procedures, a base salary at the rate of $400,000 per annum, (the “Base Salary”). During the Employment Term, the Base Salary will be reviewed annually and is subject to adjustment at the discretion of the Board of Directors of the Company (the “Board”), but in no event shall the Company pay the Executive a Base Salary less than that set forth above during the Employment Term. 

(b) In addition to the Base Salary, during the Employment Period, but beginning for the fiscal year ending December 31, 2007, the Executive shall be eligible to participate in the annual incentive plan (the “AIP”) established and approved by the Board and, pursuant to the AIP, the Executive may earn an annual bonus (the “Annual Bonus”) in each fiscal year during the Employment Period, with a target Annual Bonus of 75% of Base Salary up to a maximum of 150% of Base Salary, based on the achievement of annual performance objectives as set forth in the AIP, subject to the Executive’s employment with the Company through the applicable payment date for any such Annual Bonus (unless otherwise provided herein or in the Severance Agreement). For the fiscal year ending December 31, 2006, the Company shall pay the Executive all bonuses and other incentives to which the Executive is entitled pursuant to and in accordance with the Company’s incentive plans in effect as of the Effective Date.

(c) As soon as practicable after the Effective Date (as defined below), the Company will grant the Executive a number of options (the “Options”) to purchase shares of the Parent (the “Shares”) at an exercise price per Share equal to the price per Share paid by TPG (as defined below). The specific terms and conditions governing all aspects of the Options shall be provided in separate grant agreements and any relevant plan documents (collectively, the “Option Agreements”). The Options shall be comprised of the following two tranches: (1) 60% of the Options (the “Time-Based Options”) will vest and become exercisable in equal annual installments of 20% over a five-year period, subject to the Executive’s continued employment with the Company through the applicable vesting date and (2) 40% of the stock options (the “Performance-Based Options”) will vest and become exercisable only upon the achievement by the Company of the following performance targets, in each case, subject to the Executive’s continued employment with the Company through the applicable vesting date: (A) 50% of the Performance-Based Options will vest upon the occurrence of any liquidity event in connection with which TPG Partners IV, L.P. and TPG Partners V, L.P. (together, "TPG") realize a multiple of money (“MoM”) of at least 2.0x its initial investment in the Company (through the Parent), as determined by the Board in good faith, and (B) the remaining 50% of the Performance-Based Options will vest upon the occurrence of any liquidity event in connection with which TPG realizes an MoM of at least 3.0x its initial investment in the Company (through the Parent), as determined by the Board in good faith, provided, that in the event the liquidity event occurs prior to the second anniversary of the Effective Date, the MoM in clause (B) of this Section 2(c) shall be 2.0x, and in the event the liquidity event occurs on or after the second anniversary, but prior to the third anniversary, of the Effective Date, the MoM in clause (B) of this Section 2(c) shall be 2.5x. TPG shall make a good faith projection with respect to the expected value of any such liquidity event, and, to the extent such projection, if accurate, would result in vesting of some or all of the Performance-Based Options, the Performance-Based Options shall be deemed vested to the applicable extent and solely for the purpose of permitting the Executive to participate in such liquidity event with the Shares underlying such Performance-Based Options.

Notwithstanding the foregoing, in the event of a change in control (as defined in below), TPG shall cause the buyer to (i) cancel all vested and exercisable Options and pay to the Executive, in cash or other property depending on, and in the same proportion as, the consideration received by TPG, an amount equal to the excess, if any, of the fair market value of a Share on such change in control over the exercise price of such Option (such excess, if any, the “Option Spread”) for each such vested and exercisable Option, and (ii) cancel all unvested Time-Based Options and pay to the Executive, in cash or other property depending on, and in the same proportion as, the consideration received by TPG, an amount equal to the aggregate Option Spread for each such unvested Time-Based Option, plus interest at a reasonable rate to be determined by the Board, on the earlier to occur of (x) the date such unvested Time-Based Option would otherwise have vested, provided that the Executive is actively employed with the Company or an affiliate on such date, or (y) subject to Section 11(k), within five (5) business days following the Date of Termination of the Executive’s employment as a result of a termination by the Company without Cause or by the Executive for Good Reason.

For purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the following events after the Effective Date: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company or the Parent on a consolidated basis to any person or group of related persons for purposes of Section 13(d) of the Exchange Act (a “Group”), together with any affiliates thereof other than to TPG or its affiliates; (ii) the approval by the holders of the outstanding voting power of the Company or the Parent of any plan or proposal for the liquidation or dissolution of the Company; (iii) (A) any person or Group (other than TPG or its affiliates) shall become the beneficial owner (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, of shares representing more than 40% of the aggregate outstanding voting power of the Company or the Parent and such person or Group actually has the power to vote such shares in any such election and (B) TPG and its affiliates beneficially owns (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, in the aggregate a lesser percentage of the voting power of the Company or the Parent than such other person or Group; (iv) the replacement of a majority of the board of directors of the Company or the Parent over a two-year period from the directors who constituted such board at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of such board then still in office who either were members of such board at the beginning of such period or whose election as a member of such board was previously so approved or who were nominated by, or designees of, TPG or its affiliates; or (v) consummation of a merger or consolidation of the Company or the Parent with another entity in which holders of shares of the Company or Parent immediately prior to the consummation of the transaction hold, directly or indirectly, immediately following the consummation of the transaction, less than 50% of the common equity interest in the surviving corporation in such transaction and TPG and its affiliate do not hold a sufficient amount of voting power (or similar securities) to elect a majority of the surviving entity’s board of directors.

Upon any termination of the Executive’s employment, any Options that are not vested and exercisable as of such termination and that do not become vested and exercisable as a result of such termination shall automatically expire on the Date of Termination (as defined in Section 4(b) below). Any Options that have become vested and exercisable as of (or that become exercisable as a result of) the Date of Termination shall expire on the earlier of (i) ninety (90) days after the date the Executive’s employment is terminated for any reason other than Cause, death or Disability; (ii) one year after the date the Executive’s employment is terminated by reason of death or Disability; (iii) the commencement of business on the date the Executive’s employment is terminated for Cause; or (iv) the tenth anniversary of the grant date. All Options that are outstanding as of the tenth anniversary of the grant date will expire on such date. The Executive shall be permitted to exercise the vested portion of the Options through net-physical settlement (i.e., by delivery of Shares net of the number of Shares having a value equal to the applicable exercise price and applicable withholding taxes at the minimum statutory rate) if such exercise occurs after termination of the Executive’s employment pursuant to Sections 3(a) or 3(b), by the Company pursuant to Paragraph 3(d) or by the Executive pursuant to Section 3(e) for Good Reason.  The Option shall be granted pursuant to and subject to the terms of a Management Equity Incentive Plan (the “Plan”), which shall contain rights to dividend equivalents in a manner intended to comply with Section 409A of the Code. 

(d) The Executive shall roll over all shares in the Company that the Executive holds as a capital asset prior to the Effective Date and such other amounts as are worth, in the aggregate, $1,800,000 on an after-tax basis into Shares of the Parent pursuant to and in accordance with a letter agreement between the Executive and Parent, dated as of December 15, 2006 (the “Rollover Agreement”).

(e) The purchase of any Shares upon the exercise of the Options, or any other purchase or issuance of Shares contemplated by this Agreement, including pursuant to any rollover as provided above, will be subject to the Executive’s execution of a Management Stockholders’ Agreement for the Company and the Parent in such form as provided by the Company and the Parent (the “Management Stockholders’ Agreement” and, together with the Option Agreements, the “Equity Agreements”) for the Company, which will include, among other things, (1) restrictions on transfer of the Shares and call rights by the Company, (2) certain drag-along and tag-along rights and obligations, (3) certain lock-up rights in connection with any underwritten public offering of equity securities of the Company or any affiliate and (4) that Executive make such representations and execute such documents as the Company determines are reasonably necessary or appropriate to comply with any applicable securities or tax law requirements, to qualify for any exemption from any applicable securities laws or to ensure Executive’s compliance with his obligations under the Management Stockholders’ Agreement. Notwithstanding anything to the contrary in the Management Stockholders’ Agreement, the Company call right shall not apply to the Shares of the Parent purchased or otherwise acquired pursuant to the Rollover Agreement unless the Executive’s employment is terminated by the Company or its affiliates for Cause or by the Executive without Good Reason or other than as a result of Retirement. In addition, in the event the Executive Retires following the third anniversary of the Effective Date, for the 90 day period following such Retirement, the Executive shall have the right to put the Shares of the Parent purchased or otherwise acquired pursuant to the Rollover Agreement to the Company at the fair market value of the Shares as of the Date of Termination. For purposes of this Section 2(e), “Retirement” shall mean the Executive voluntarily resigns his employment and, on such voluntary termination of his employment, Cause does not exist, as such term is defined below, and provided that the Executive otherwise complies with his obligations that survive any termination of his employment hereunder, including without limitation Sections 7 and 8 hereof, and “Retires” shall have the correlative meaning.

(f) During the Employment Period: (i) except as provided in the last sentence of this Section 2(f), the Executive and/or the Executive’s family, as the case may be, shall be entitled to participate in all employee benefit plans, practices, policies, programs and arrangements of the Company which are made available generally to other executive officers of the Company and/or their families, as the case may be, including, without limiting the Company’s right to terminate, modify or amend such plans in accordance with their terms or as provided in the immediately succeeding sentence, the Company’s benefits restoration program, life insurance, long-term disability and health plans and (ii) the Executive shall be entitled to the perquisites and other fringe benefits that are made available by the Company to its senior executives generally, subject to any applicable terms and conditions of any specific perquisite or other fringe benefit. Until the second anniversary of the Effective Date, except as consented to by the Executive, the Company agrees that the employee benefit plans, policies, programs and arrangements and perquisites and other fringe benefits that are made available to the Executive during the Employment Period will not be materially diminished in the aggregate from those benefit plans, policies, programs and arrangements and perquisites and fringe benefits made available immediately prior to the Effective Date. For the avoidance of doubt, such other plans, practices, policies, programs or arrangements shall not include any plan, practice, policy, program or arrangement that provides benefits in the nature of severance or continuation pay.

(g) The Company shall reimburse the Executive for all reasonable business expenses upon the presentation of statements of such expenses in accordance with the Company’s policies and procedures now in force or as such policies and procedures may be modified with respect to all senior executive officers of the Company.

(h) In the event the Company or the Parent engages in a significant subsequent corporate transaction with another entity, the Board will reconsider the size of the equity pool, taking into account the larger size of the resultant entity and taking into account all relevant circumstances, including competitive market data for companies of similar size and circumstance.

3. Employment Period.

The Employment Period shall commence on December 19, 2006 (the “Effective Date”) and shall terminate on the thirdanniversary of the Effective Date, provided that on the thirdanniversary of the Effective Date and on each anniversary thereafter, the Employment Period shall automatically be extended for additional one-year periods unless either party provides the other party with a Notice of Termination in accordance with Section 4(a) at least sixty (60) days before any such anniversary (the anniversary date on which the Employment Period terminates shall be referred to herein as the “Scheduled Termination Date”). Notwithstanding the foregoing, the Executive’s employment hereunder may be terminated during the Employment Period prior to the Scheduled Termination Date upon the earliest to occur of any one of the following events (at which time the Employment Period shall be terminated):

(a) Death. The Executive’s employment hereunder shall terminate upon his death.

(b) Disability. The Company shall be entitled to terminate the Executive’s employment hereunder for “Disability” if, as a result of the Executive’s incapacity due to physical or mental illness or injury, the Executive (i) shall become eligible to receive a benefit under the Company’s long-term disability plan applicable to the Executive, or (ii) if no such long-term disability plan is applicable to the Executive, the Executive shall have been unable to perform his duties hereunder for a period of ninety (90) consecutive days or a period of ninety (90) days in any one hundred eighty (180) day period.

(c) Cause. The Company may terminate the Executive’s employment hereunder for Cause. For purposes of this Agreement, the term “Cause” shall mean: (i) a material breach by the Executive of this Agreement; (ii) other than as a result of physical or mental illness or injury, the willful and continued failure of the Executive to perform substantially the Executive’s duties with the Company or one of its affiliates; (iii) the Executive’s willful and continued misconduct or gross negligence which is materially injurious to the Company or an affiliate of the Company; or (iv) the indictment by the Executive of, or a plea by the Executive of nolo contendere to, a felony involving moral turpitude or other serious crime involving moral turpitude. In the case of clauses (i) and (ii) above, the Company shall provide notice to the Executive indicating in reasonable detail the events or circumstances that it believes constitute Cause hereunder and, if such breach or failure is reasonably susceptible to cure, provide the Executive with a reasonable period of time (not to exceed thirty (30) days) to cure such breach or failure. If, subsequent to the Executive’s termination of employment hereunder for other than Cause, it is determined in good faith by the Board that the Executive’s employment could have been terminated for Cause pursuant to clause (iv) of this Section 3(c), the Executive’s employment shall, at the election of the Board, be deemed to have been terminated for Cause retroactively to the date the events giving rise to Cause occurred.

(d) Without Cause. The Company may terminate the Executive’s employment hereunder during the Employment Period without Cause.

(e) Voluntarily. The Executive may voluntarily terminate his employment hereunder, with or without Good Reason, provided that the Executive provides the Company with notice of his intent to terminate his employment at least 60 days in advance of the Date of Termination (as defined in Section 4(b) below) (and, in the case of a termination by the Executive for Good Reason, complies with all requirements of such a termination as provided hereunder).

4. Termination Procedure.

(a) Notice of Termination. Any termination of the Executive’s employment by the Company or by the Executive during the Employment Period (other than a termination on account of the death of the Executive) shall be communicated by written “Notice of Termination” to the other party hereto in accordance with Section 11(a); provided, that, prior to the second anniversary of the Effective Date, with respect to a termination of the Executive’s employment without Cause by the Company or with Good Reason by the Executive, the notice provisions of section 11(b) of the Severance Agreement shall govern.

(b) Date of Termination. “Date of Termination” shall mean (i) if the Executive’s employment is terminated by his death, the date of his death, (ii) if the Executive’s employment is terminated pursuant to Section 3(b), on the date the Executive receives Notice of Termination from the Company, (iii) if the Executive voluntarily terminates his employment (whether or not for Good Reason), the date specified in the notice given pursuant to Section 3(e) herein which shall not be less than 90 days after the Notice of Termination, and (iv) if the Executive’s employment is terminated for any other reason, the date on which a Notice of Termination is given or any later date (within thirty (30) days, or any alternative time period agreed upon by the parties, after the giving of such notice) set forth in such Notice of Termination; provided, that, prior to the second anniversary of the Effective Date, with respect to a termination of the Executive’s employment without Cause by the Company or with Good Reason by the Executive, the notice provisions of section 11(b) of the Severance Agreement shall govern.

5. Termination Payments.

(a) Without Cause. In the event the Employment Period terminates under this Agreement as a result of the Company terminating the Executive without Cause or the Executive terminating his employment for Good Reason, the Executive shall be entitled to the payments and benefits set forth in this Section 5(a):

(i) On or Before the Second Anniversary of the Effective Date. In the event of a termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason on or before the second anniversary of the effective date, the Executive shall be entitled to such payments and benefits as set forth in sections 4 and 5 of the Severance Agreement.

(ii) After the Second Anniversary of the Effective Date But Prior to a Change in Control. If the Executive’s employment is terminated after the second anniversary of the Effective Date but prior to a Change in Control, the Company shall pay the Executive (A) within thirty (30) days following the Date of Termination, the Executive’s accrued but unused vacation and Base Salary through the Date of Termination (to the extent not theretofore paid) (the “Accrued Benefits”) and (B) one and a half (1.5) times the sum of (1) the Executive’s Base Salary and (2) the Target Bonus, with such sum to be paid in lump sum within 30 days following the Date of Termination; provided, however, that the Executive shall be required to repay the payments described in clause (B) (net of any taxes paid by the Executive or the Company on such payments) in the event the Executive receives, within 18 months after the Date of Termination, written notice from the Company that in the reasonable judgment of the Company, the Executive engaged or is engaging in any conduct that violates or otherwise fails to comply with his obligations under Sections 7 and 8 hereof, or in the event the Executive is convicted of, or pleads guilty to, a felony involving moral turpitude within the three year period following the Date of Termination for an act or omission committed during the Employment Period.

(iii) After the Second Anniversary of the Effective Date and On or After a Change in Control. If the Executive’s employment is terminated after the second anniversary of the Effective Date and on or after a subsequent Change in Control, the Company shall pay the Executive (A) within thirty (30) days following the Date of Termination, the Executive’s Accrued Benefits and (B) one and a half (1.5) times the Executive’s Base Salary, with such sum to be paid in lump sum within 30 days following the Date of Termination; provided, however, that the Executive shall be required to repay the payments described in clause (B) (net of any taxes paid by the Executive or the Company on such payments) in the event the Executive receives, within 18 months after the Date of Termination, written notice from the Company that in the reasonable judgment of the Company, the Executive engaged or is engaging in any conduct that violates or otherwise fails to comply with his obligations under Sections 7 and 8 hereof, or in the event the Executive is convicted of, or pleads guilty to, a felony involving moral turpitude within the three year period following the Date of Termination for an act or omission committed during the Employment Period.

(iv) With respect to any termination of the Executive’s employment to which clause (ii) or (iii) of this Section 5(a) applies, for the eighteen month period commencing on the day after Executive’s Date of Termination, the Company shall continue to provide medical benefits to Executive which are substantially similar to those provided generally to executive officers of the Company (including any required contribution by such executive officers) pursuant to such medical plan as may be in effect from time to time as if the Executive’s employment had not been terminated (it being understood that the Company may provide such coverage by paying the Executive’s COBRA premiums, less any contribution required by the Executive); provided, however, that if the Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the corresponding medical and other welfare benefits described herein shall be secondary to such benefits during the period of the Executive’s eligibility, and the Company shall reimburse the Executive for any increased cost to provide the Executive with the benefits provided under the Company’s medical plan. The Executive shall promptly notify the Company of any changes in his medical benefits coverage.

(v) The payments and benefits provided under this Section 5(a) are subject to and conditioned upon the Executive executing a valid general release and waiver (in the form reasonably acceptable to the Company), waiving all claims the Executive may have against the Company, its successors, assigns, affiliates, executives, officers and directors, and such waiver becoming effective, and the payments and benefits are subject to and conditioned upon the Executive’s compliance with the Restrictive Covenants provided in Sections 7 and 8 hereof. For the avoidance of doubt, upon a termination of the Employment Period without Cause or as a result of Good Reason, the Executive shall not be entitled to any other compensation or benefits not expressly provided for in this section, regardless of the time that would otherwise remain in the Employment Period had the Employment Period not been terminated without Cause or for Good Reason. Except as provided in this Section 5(a), or pursuant to Section 2(c) if applicable, and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by Section 4980B of the Internal Revenue Code of 1986 and Section 601 of the Employee Retirement Income Security Act of 1974, as amended (which provisions are commonly known as “COBRA”), the Company shall have no additional obligations to the Executive.

(vi) For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s consent: (A) a reduction by the Company in the Executive’s Base Salary; (B) a material diminution in the Executive’s Annual Bonus opportunity; (C) a material diminution in the Executive’s position, duties, responsibilities or reporting relationships; or (D) a change of the Executive’s principal place of employment to a location more than seventy-five (75) miles from such principal place of employment as of the Effective Date; provided, Good Reason shall not occur unless the Executive shall have given a detailed written notice to the Company of any fact or circumstance believed by the Executive to constitute Good Reason within thirty (30) days of the occurrence of such fact or circumstance, and, if such fact or circumstance is reasonably susceptible to cure, the Company shall have thirty (30) days to cure such fact or circumstance and shall have failed to so cure.

(b) Cause or Voluntarily Other than for Good Reason. If the Executive’s employment is terminated during the Employment Period by the Company for Cause or voluntarily by the Executive other than for Good Reason, the Company shall pay the Executive within thirty (30) days following the Date of Termination the Accrued Benefits. Except as provided in this Section 5(b) and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by COBRA, the Company shall have no additional obligations to the Executive.

(c) Disability or Death. If the Executive’s employment is terminated during the Employment Period as a result of the Executive’s death or Disability, the Company shall pay the Executive or the Executive’s estate, as the case may be, within thirty (30) days following the Date of Termination: (i) the Accrued Benefits; and (ii) any Annual Bonus earned by the Executive in respect of the Company’s fiscal year ending immediately prior to the Date of Termination but not yet paid. Except as provided in this Section 5(c) and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by COBRA, the Company shall have no additional obligations to the Executive.

6. Legal Fees; Indemnification; Directors’ & Officers’ Liability Insurance.

(a) In the event of any contest or dispute between the Company and the Executive with respect to this Agreement or the Executive’s employment hereunder, each of the parties shall be responsible for its respective legal fees and expenses; provided, that, if the Executive prevails on any material issue in any action, the Company shall reimburse the Executive any reasonable legal fees and expenses incurred; provided, further, that with respect to an action to enforce the terms of the Severance Agreement, section 7 of the Severance Agreement shall govern the reimbursement of legal fees and expenses.

(b) The Executive will be entitled to indemnification on the same terms as indemnification is made available by the Company to its other senior executives, whether through the Company’s bylaws, the Merger Agreement or otherwise.

(c) During the Employment Period, the Executive shall be entitled to the same directors’ and officers’ liability insurance coverage that the Company provides generally to its other directors and officers, as may be amended from time to time for such directors and officers.

7. Non-Solicitation.

During the Employment Period and for eighteen months thereafter, the Executive hereby agrees not to, directly or indirectly, solicit or hire or assist any other person or entity in soliciting or hiring any employee of the Company or any of its affiliates to perform services for any entity (other than the Company or its affiliates), or attempt to induce any such employee to leave the employ of the Company or its affiliates, or solicit, hire or engage on behalf of himself or any other Person (as defined below) any employee of the Company or anyone who was employed by the Company during the six-month period preceding such hiring or engagement.

8. Confidentiality; Non-Compete; Non-Disclosure; Non-Disparagement.

(a) The Executive hereby agrees that, during the Employment Period and thereafter, he will hold in strict confidence any proprietary or Confidential Information related to the Company and its affiliates. For purposes of this Agreement, the term “Confidential Information” shall mean all information of the Company or any of its affiliates (in whatever form) which is not generally known to the public, including without limitation any inventions, processes, methods of distribution, customer lists or customers’ or trade secrets.

(b) The Executive and the Company agree that the Company would likely suffer significant harm from the Executive’s competing with the Company during the Employment Period and for some period of time thereafter. Accordingly, the Executive agrees that he will not, during the Employment Period and for a period of eighteen months following the termination of the Employment Period, directly or indirectly, become employed by, engage in business with, serve as an agent or consultant to, become a partner, member, principal, stockholder or other owner (other than a holder of less than 1% of the outstanding voting shares of any publicly held company) of, any Person competitive with, or otherwise perform services relating to, the business of the Company at the time of the termination for any Person (the “Business”) (whether or not for compensation). For purposes of this Agreement, the term “Person” shall mean any individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof that is engaged in the Business, or otherwise competes with the Company, anywhere in which the Company or its affiliates engage in or intend to engage in the Business or where the Company or its affiliates’ customers are located.

(c) The Executive hereby agrees that, upon the termination of the Employment Period, he shall not take, without the prior written consent of the Company, any drawing, blueprint, specification or other document (in whatever form) of the Company or its affiliates, which is of a confidential nature relating to the Company or its affiliates, or, without limitation, relating to its or their methods of distribution, or any description of any formulas or secret processes and will return any such information (in whatever form) then in his possession.

(d) The Executive hereby agrees not to defame or disparage the Company, its affiliates and their officers, directors, members or executives. The Executive hereby agrees to cooperate with the Company in refuting any defamatory or disparaging remarks by any third party made in respect of the Company or its affiliates or their directors, members, officers or executives.

9. Injunctive Relief.

It is impossible to measure in money the damages that will accrue to the Company in the event that the Executive breaches any of the restrictive covenants provided in Sections 7 and 8 hereof. In the event that the Executive breaches any such restrictive covenant, the Company shall be entitled to an injunction restraining the Executive from violating such restrictive covenant (without posting any bond). If the Company shall institute any action or proceeding to enforce any such restrictive covenant, the Executive hereby waives the claim or defense that the Company has an adequate remedy at law and agrees not to assert in any such action or proceeding the claim or defense that the Company has an adequate remedy at law. The foregoing shall not prejudice the Company’s right to require the Executive to account for and pay over to the Company, and the Executive hereby agrees to account for and pay over, the compensation, profits, monies, accruals or other benefits derived or received by the Executive as a result of any transaction constituting a breach of any of the restrictive covenants provided in Sections 7 and 8 hereof.

10. Section 280G.   If, after the Effective Date, there occurs a transaction that constitutes a “change of control” under Regulation 1.280G of the Internal Revenue Code of 1986, as amended (the “Code”), the Parent and the Executive shall use commercially reasonable best efforts to take such actions as may be necessary to avoid the imposition of any the excise tax imposed by Section 4999 of the Code on the Executive, including seeking to obtain stockholder approval in accordance with the terms of Section 280G(b)(5).

11. Miscellaneous.

(a) Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and shall be deemed to be given when delivered personally or four days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or one day after it is sent by a reputable overnight courier service and, in each case, addressed as follows (or if it is sent through any other method agreed upon by the parties):

If to the Company:

Aleris International, Inc.

25825 Science Park Drive

Suite 400

Beachwood, Ohio 44122

Facsimile. 216-910-3650

Attn: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

If to the Parent:

301 Commerce Street, Suite 3300

Fort Worth, TX 76102

Attention: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

If to the Executive:

John J. Wasz

518 Woodlake Drive

Louisville KY 40245

or to such other address as any party hereto may designate by notice to the others.

(b) Except as expressly provided herein with respect to the Severance Agreement, this Agreement shall constitute the entire agreement among the parties hereto with respect to the Executive’s employment hereunder, and supersedes and is in full substitution for any and all prior understandings or agreements with respect to the Executive’s employment (it being understood that any Options and Shares shall be governed by the relevant Equity Agreements). The Executive’s employment with the Company for purposes of this Agreement shall include the Executive’s employment by any direct or indirect subsidiary of the Parent or the Company.

(c) This Agreement may be amended only by an instrument in writing signed by the parties hereto, and any provision hereof may be waived only by an instrument in writing signed by the party or parties against whom or which enforcement of such waiver is sought. The failure of any party hereto at any time to require the performance by any other party hereto of any provision hereof shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by any party hereto of a breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision or a waiver of the provision itself or a waiver of any other provision of this Agreement.

(d) The parties hereto acknowledge and agree that each party has reviewed and negotiated the terms and provisions of this Agreement and has had the opportunity to contribute to its revision. Accordingly, the rule of construction to the effect that ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement. Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in favor or against either party.

(e) (i)   This Agreement is binding on and is for the benefit of the parties hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. Neither this Agreement nor any right or obligation hereunder may be assigned by the Executive.

 (ii) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in the Agreement, “the Company” shall mean both the Company as defined above and any such successor that assumes this Agreement, by operation of law or otherwise.

(f) Any provision of this Agreement (or portion thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. No waiver of any provision or violation of this Agreement by the Company shall be implied by the Company’s forbearance or failure to take action.

(g) The Company may withhold from any amounts payable to the Executive hereunder all federal, state, city or other taxes that the Company may reasonably determine are required to be withheld pursuant to any applicable law or regulation, (it being understood, that, except as provided in section 5 of the Severance Agreement, the Executive shall be responsible for payment of all taxes in respect of the payments and benefits provided herein).

(h)This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to its principles of conflicts of law.

(i) This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. A facsimile of a signature shall be deemed to be and have the effect of an original signature.

(j) The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof.

(k) Notwithstanding anything to the contrary herein, in the event any payment hereunder would result in the imposition of an excise tax pursuant to Section 409A of the Code or the regulations thereunder, as amended (the “409A Excise Tax”), the Executive agrees that such payment shall be postponed to the date that is the earliest date upon which such payment would no longer result in the imposition of a 409A Excise Tax.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

EXECUTIVE

/s/ John J. Wasz

___________________________________

Name: John J. Wasz

ALERIS INTERNATIONAL, INC.

 /s/ Michael D. Friday

___________________________________

Name:  Michael D. Friday

Title: Executive Vice President and Chief Financial Officer

AURORA ACQUISITION HOLDINGS, INC.

 /s/ John E. Viola

___________________________________

Name:  John E. Viola

Title: Vice President and Treasurer

EX-10.24

Exhibit 10.24

EXECUTION COPY

EMPLOYMENT AGREEMENT

AGREEMENT, dated as of December 19, 2006 (the “Agreement”), by and among Aleris International, Inc. (the “Company”), Aurora Acquisition Holdings, Inc. (the “Parent”) and Sean Stack (the “Executive”).

WHEREAS, the Company desires that the Executive continue to serve the Company as the Company’s Executive Vice President and President, Europe, on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1. Employment, Duties and Agreements.

(a) The Company hereby agrees to continue to employ the Executive as its Executive Vice President and President, Europe, and the Executive hereby accepts such position and agrees to continue to serve the Company in such capacity during the employment period fixed by Section 3 hereof (the “Employment Period”). The Executive shall have such duties and responsibilities as are consistent with the Executive’s position and as may be assigned by the Company from time to time. During the Employment Period, the Executive shall be subject to, and shall act in accordance with, all reasonable instructions and directions and all applicable policies and rules of the Company.

(b) During the Employment Period, excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote his full working time, energy and attention to the performance of his duties and responsibilities hereunder and shall faithfully and diligently endeavor to promote the business and best interests of the Company. During the Employment Period, the Executive may not, without the prior written consent of the Company, directly or indirectly, operate, participate in the management, operations or control of, or act as an executive, officer, consultant, agent or representative of, any type of business or service (other than as an executive of the Company). It shall not, however, be a violation of the foregoing provisions of this Section 1(b) for the Executive to (i) subject to the approval of the Board, serve as an officer or director or otherwise participate in non-profit, educational, welfare, social, religious and civil organizations, or (ii) manage his personal, financial and legal affairs, so long as any such activities in (i) and (ii) do not interfere with the performance of his duties and responsibilities to the Company as provided hereunder.

(c) In connection with the Executive’s employment by the Company under this Agreement, the Executive shall be based at the principal executive offices of the Company, currently located in Beachwood, Ohio, except for such travel as the performance of the Executive’s duties in the business of the Company may require; provided, however, that the Executive agrees that the temporary assignment of the Executive to the Company’s current offices in the greater Zurich, Switzerland area, or such other location in the greater Zurich, Switzerland area to which such offices may be relocated, shall not be an event constituting Good Reason under the Severance Agreement (defined below) or this Agreement.

(d) The Severance Agreement, dated as of August 30, 2005, by and between the Company and the Executive (the “Severance Agreement”) is expressly assumed hereby as contemplated in section 10(b) thereof. The Executive hereby acknowledges and agrees that the foregoing assumption by the Company of the Severance Agreement, and the entrance by the Company into this Agreement, is in full satisfaction of the Company’s obligations under section 10(b) of the Severance Agreement to assume, by written instrument delivered to the Executive, all of the obligations under the Severance Agreement, and that the Executive will not have the right to terminate his employment for “Good Reason” as defined in the Severance Agreement under Item (5) of such definition as a result of the merger of Aurora Acquisition Merger Sub, Inc. (“Merger Sub”) with and into the Company, as contemplated by the Agreement and Plan of Merger, dated August 7, 2006, by and among the Parent, Merger Sub and the Company (the “Merger Agreement”). The Severance Agreement shall remain in full force and effect through the second anniversary of the Effective Date. Upon the second anniversary of the Effective Date, and not before, the Severance Agreement shall be terminated and of no further force or effect, provided, however, that the Severance Agreement shall continue in effect with respect to all rights and obligations that have accrued thereunder prior to such termination until such rights and obligations have been fully satisfied or otherwise expire. Notwithstanding anything to the contrary in the Severance Agreement (including, without limitation, section 8 thereof), this Agreement shall constitute notice pursuant to section 8 of the Severance Agreement, to the extent necessary, that the Severance Agreement shall terminate on the second anniversary of the Effective Date. During the period prior to the second anniversary of the Effective Date, in the event of a conflict between the terms of the Severance Agreement and this Agreement, the terms of the Severance Agreement shall govern.

2. Compensation.

(a) As compensation for the agreements made by the Executive herein and the performance by the Executive of his obligations hereunder, during the Employment Period, the Company shall pay the Executive, pursuant to the Company’s normal and customary payroll procedures, a base salary at the rate of $325,000 per annum, (the “Base Salary”). During the Employment Term, the Base Salary will be reviewed annually and is subject to adjustment at the discretion of the Board of Directors of the Company (the “Board”), but in no event shall the Company pay the Executive a Base Salary less than that set forth above during the Employment Term. 

(b) In addition to the Base Salary, during the Employment Period, but beginning for the fiscal year ending December 31, 2007, the Executive shall be eligible to participate in the annual incentive plan (the “AIP”) established and approved by the Board and, pursuant to the AIP, the Executive may earn an annual bonus (the “Annual Bonus”) in each fiscal year during the Employment Period, with a target Annual Bonus of 75% of Base Salary up to a maximum of 150% of Base Salary, based on the achievement of annual performance objectives as set forth in the AIP, subject to the Executive’s employment with the Company through the applicable payment date for any such Annual Bonus (unless otherwise provided herein or in the Severance Agreement). For the fiscal year ending December 31, 2006, the Company shall pay the Executive all bonuses and other incentives to which the Executive is entitled pursuant to and in accordance with the Company’s incentive plans in effect as of the Effective Date.

(c) As soon as practicable after the Effective Date (as defined below), the Company will grant the Executive a number of options (the “Options”) to purchase shares of the Parent (the “Shares”) at an exercise price per Share equal to the price per Share paid by TPG (as defined below). The specific terms and conditions governing all aspects of the Options shall be provided in separate grant agreements and any relevant plan documents (collectively, the “Option Agreements”). The Options shall be comprised of the following two tranches: (1) 60% of the Options (the “Time-Based Options”) will vest and become exercisable in equal annual installments of 20% over a five-year period, subject to the Executive’s continued employment with the Company through the applicable vesting date and (2) 40% of the stock options (the “Performance-Based Options”) will vest and become exercisable only upon the achievement by the Company of the following performance targets, in each case, subject to the Executive’s continued employment with the Company through the applicable vesting date: (A) 50% of the Performance-Based Options will vest upon the occurrence of any liquidity event in connection with which TPG Partners IV, L.P. and TPG Partners V, L.P. (together, "TPG") realize a multiple of money (“MoM”) of at least 2.0x its initial investment in the Company (through the Parent), as determined by the Board in good faith, and (B) the remaining 50% of the Performance-Based Options will vest upon the occurrence of any liquidity event in connection with which TPG realizes an MoM of at least 3.0x its initial investment in the Company (through the Parent), as determined by the Board in good faith, provided, that in the event the liquidity event occurs prior to the second anniversary of the Effective Date, the MoM in clause (B) of this Section 2(c) shall be 2.0x, and in the event the liquidity event occurs on or after the second anniversary, but prior to the third anniversary, of the Effective Date, the MoM in clause (B) of this Section 2(c) shall be 2.5x. TPG shall make a good faith projection with respect to the expected value of any such liquidity event, and, to the extent such projection, if accurate, would result in vesting of some or all of the Performance-Based Options, the Performance-Based Options shall be deemed vested to the applicable extent and solely for the purpose of permitting the Executive to participate in such liquidity event with the Shares underlying such Performance-Based Options.

Notwithstanding the foregoing, in the event of a change in control (as defined in below), TPG shall cause the buyer to (i) cancel all vested and exercisable Options and pay to the Executive, in cash or other property depending on, and in the same proportion as, the consideration received by TPG, an amount equal to the excess, if any, of the fair market value of a Share on such change in control over the exercise price of such Option (such excess, if any, the “Option Spread”) for each such vested and exercisable Option, and (ii) cancel all unvested Time-Based Options and pay to the Executive, in cash or other property depending on, and in the same proportion as, the consideration received by TPG, an amount equal to the aggregate Option Spread for each such unvested Time-Based Option, plus interest at a reasonable rate to be determined by the Board, on the earlier to occur of (x) the date such unvested Time-Based Option would otherwise have vested, provided that the Executive is actively employed with the Company or an affiliate on such date, or (y) subject to Section 11(k), within five (5) business days following the Date of Termination of the Executive’s employment as a result of a termination by the Company without Cause or by the Executive for Good Reason.

For purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the following events after the Effective Date: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company or the Parent on a consolidated basis to any person or group of related persons for purposes of Section 13(d) of the Exchange Act (a “Group”), together with any affiliates thereof other than to TPG or its affiliates; (ii) the approval by the holders of the outstanding voting power of the Company or the Parent of any plan or proposal for the liquidation or dissolution of the Company; (iii) (A) any person or Group (other than TPG or its affiliates) shall become the beneficial owner (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, of shares representing more than 40% of the aggregate outstanding voting power of the Company or the Parent and such person or Group actually has the power to vote such shares in any such election and (B) TPG and its affiliates beneficially owns (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, in the aggregate a lesser percentage of the voting power of the Company or the Parent than such other person or Group; (iv) the replacement of a majority of the board of directors of the Company or the Parent over a two-year period from the directors who constituted such board at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of such board then still in office who either were members of such board at the beginning of such period or whose election as a member of such board was previously so approved or who were nominated by, or designees of, TPG or its affiliates; or (v) consummation of a merger or consolidation of the Company or the Parent with another entity in which holders of shares of the Company or Parent immediately prior to the consummation of the transaction hold, directly or indirectly, immediately following the consummation of the transaction, less than 50% of the common equity interest in the surviving corporation in such transaction and TPG and its affiliate do not hold a sufficient amount of voting power (or similar securities) to elect a majority of the surviving entity’s board of directors.

Upon any termination of the Executive’s employment, any Options that are not vested and exercisable as of such termination and that do not become vested and exercisable as a result of such termination shall automatically expire on the Date of Termination (as defined in Section 4(b) below). Any Options that have become vested and exercisable as of (or that become exercisable as a result of) the Date of Termination shall expire on the earlier of (i) ninety (90) days after the date the Executive’s employment is terminated for any reason other than Cause, death or Disability; (ii) one year after the date the Executive’s employment is terminated by reason of death or Disability; (iii) the commencement of business on the date the Executive’s employment is terminated for Cause; or (iv) the tenth anniversary of the grant date. All Options that are outstanding as of the tenth anniversary of the grant date will expire on such date. The Executive shall be permitted to exercise the vested portion of the Options through net-physical settlement (i.e., by delivery of Shares net of the number of Shares having a value equal to the applicable exercise price and applicable withholding taxes at the minimum statutory rate) if such exercise occurs after termination of the Executive’s employment pursuant to Sections 3(a) or 3(b), by the Company pursuant to Paragraph 3(d) or by the Executive pursuant to Section 3(e) for Good Reason.  The Option shall be granted pursuant to and subject to the terms of a Management Equity Incentive Plan (the “Plan”), which shall contain rights to dividend equivalents in a manner intended to comply with Section 409A of the Code. 

(d) The Executive shall roll over all shares in the Company that the Executive holds as a capital asset prior to the Effective Date and such other amounts as are worth, in the aggregate, $1,200,000 on an after-tax basis into Shares of the Parent pursuant to and in accordance with a letter agreement between the Executive and Parent, dated as of December 15, 2006 (the “Rollover Agreement”).

(e) The purchase of any Shares upon the exercise of the Options, or any other purchase or issuance of Shares contemplated by this Agreement, including pursuant to any rollover as provided above, will be subject to the Executive’s execution of a Management Stockholders’ Agreement for the Company and the Parent in such form as provided by the Company and the Parent (the “Management Stockholders’ Agreement” and, together with the Option Agreements, the “Equity Agreements”) for the Company, which will include, among other things, (1) restrictions on transfer of the Shares and call rights by the Company, (2) certain drag-along and tag-along rights and obligations, (3) certain lock-up rights in connection with any underwritten public offering of equity securities of the Company or any affiliate and (4) that Executive make such representations and execute such documents as the Company determines are reasonably necessary or appropriate to comply with any applicable securities or tax law requirements, to qualify for any exemption from any applicable securities laws or to ensure Executive’s compliance with his obligations under the Management Stockholders’ Agreement. Notwithstanding anything to the contrary in the Management Stockholders’ Agreement, the Company call right shall not apply to the Shares of the Parent purchased or otherwise acquired pursuant to the Rollover Agreement unless the Executive’s employment is terminated by the Company or its affiliates for Cause or by the Executive without Good Reason or other than as a result of Retirement. For purposes of this Section 2(e), “Retirement” shall mean the Executive is eligible to retire without penalty or a reduction in benefits under any tax qualified pension plan maintained by the Company and in which the Executive is eligible to participate.

(f) During the Employment Period: (i) except as provided in the last sentence of this Section 2(f), the Executive and/or the Executive’s family, as the case may be, shall be entitled to participate in all employee benefit plans, practices, policies, programs and arrangements of the Company which are made available generally to other executive officers of the Company and/or their families, as the case may be, including, without limiting the Company’s right to terminate, modify or amend such plans in accordance with their terms or as provided in the immediately succeeding sentence, the Company’s benefits restoration program, life insurance, long-term disability and health plans and (ii) the Executive shall be entitled to the perquisites and other fringe benefits that are made available by the Company to its senior executives generally, subject to any applicable terms and conditions of any specific perquisite or other fringe benefit. Until the second anniversary of the Effective Date, except as consented to by the Executive, the Company agrees that the employee benefit plans, policies, programs and arrangements and perquisites and other fringe benefits that are made available to the Executive during the Employment Period will not be materially diminished in the aggregate from those benefit plans, policies, programs and arrangements and perquisites and fringe benefits made available immediately prior to the Effective Date. For the avoidance of doubt, such other plans, practices, policies, programs or arrangements shall not include any plan, practice, policy, program or arrangement that provides benefits in the nature of severance or continuation pay.

(g) The Company shall reimburse the Executive for all reasonable business expenses upon the presentation of statements of such expenses in accordance with the Company’s policies and procedures now in force or as such policies and procedures may be modified with respect to all senior executive officers of the Company.

(h) In the event the Company or the Parent engages in a significant subsequent corporate transaction with another entity, the Board will reconsider the size of the equity pool, taking into account the larger size of the resultant entity and taking into account all relevant circumstances, including competitive market data for companies of similar size and circumstance.

3. Employment Period.

The Employment Period shall commence on December 19, 2006 (the “Effective Date”) and shall terminate on the thirdanniversary of the Effective Date, provided that on the thirdanniversary of the Effective Date and on each anniversary thereafter, the Employment Period shall automatically be extended for additional one-year periods unless either party provides the other party with a Notice of Termination in accordance with Section 4(a) at least sixty (60) days before any such anniversary (the anniversary date on which the Employment Period terminates shall be referred to herein as the “Scheduled Termination Date”). Notwithstanding the foregoing, the Executive’s employment hereunder may be terminated during the Employment Period prior to the Scheduled Termination Date upon the earliest to occur of any one of the following events (at which time the Employment Period shall be terminated):

(a) Death. The Executive’s employment hereunder shall terminate upon his death.

(b) Disability. The Company shall be entitled to terminate the Executive’s employment hereunder for “Disability” if, as a result of the Executive’s incapacity due to physical or mental illness or injury, the Executive (i) shall become eligible to receive a benefit under the Company’s long-term disability plan applicable to the Executive, or (ii) if no such long-term disability plan is applicable to the Executive, the Executive shall have been unable to perform his duties hereunder for a period of ninety (90) consecutive days or a period of ninety (90) days in any one hundred eighty (180) day period.

(c) Cause. The Company may terminate the Executive’s employment hereunder for Cause. For purposes of this Agreement, the term “Cause” shall mean: (i) a material breach by the Executive of this Agreement; (ii) other than as a result of physical or mental illness or injury, the willful and continued failure of the Executive to perform substantially the Executive’s duties with the Company or one of its affiliates; (iii) the Executive’s willful and continued misconduct or gross negligence which is materially injurious to the Company or an affiliate of the Company; or (iv) the indictment by the Executive of, or a plea by the Executive of nolo contendere to, a felony involving moral turpitude or other serious crime involving moral turpitude. In the case of clauses (i) and (ii) above, the Company shall provide notice to the Executive indicating in reasonable detail the events or circumstances that it believes constitute Cause hereunder and, if such breach or failure is reasonably susceptible to cure, provide the Executive with a reasonable period of time (not to exceed thirty (30) days) to cure such breach or failure. If, subsequent to the Executive’s termination of employment hereunder for other than Cause, it is determined in good faith by the Board that the Executive’s employment could have been terminated for Cause pursuant to clause (iv) of this Section 3(c), the Executive’s employment shall, at the election of the Board, be deemed to have been terminated for Cause retroactively to the date the events giving rise to Cause occurred.

(d) Without Cause. The Company may terminate the Executive’s employment hereunder during the Employment Period without Cause.

(e) Voluntarily. The Executive may voluntarily terminate his employment hereunder, with or without Good Reason, provided that the Executive provides the Company with notice of his intent to terminate his employment at least 60 days in advance of the Date of Termination (as defined in Section 4(b) below) (and, in the case of a termination by the Executive for Good Reason, complies with all requirements of such a termination as provided hereunder).

4. Termination Procedure.

(a) Notice of Termination. Any termination of the Executive’s employment by the Company or by the Executive during the Employment Period (other than a termination on account of the death of the Executive) shall be communicated by written “Notice of Termination” to the other party hereto in accordance with Section 11(a); provided, that, prior to the second anniversary of the Effective Date, with respect to a termination of the Executive’s employment without Cause by the Company or with Good Reason by the Executive, the notice provisions of section 11(b) of the Severance Agreement shall govern.

(b) Date of Termination. “Date of Termination” shall mean (i) if the Executive’s employment is terminated by his death, the date of his death, (ii) if the Executive’s employment is terminated pursuant to Section 3(b), on the date the Executive receives Notice of Termination from the Company, (iii) if the Executive voluntarily terminates his employment (whether or not for Good Reason), the date specified in the notice given pursuant to Section 3(e) herein which shall not be less than 90 days after the Notice of Termination, and (iv) if the Executive’s employment is terminated for any other reason, the date on which a Notice of Termination is given or any later date (within thirty (30) days, or any alternative time period agreed upon by the parties, after the giving of such notice) set forth in such Notice of Termination; provided, that, prior to the second anniversary of the Effective Date, with respect to a termination of the Executive’s employment without Cause by the Company or with Good Reason by the Executive, the notice provisions of section 11(b) of the Severance Agreement shall govern.

5. Termination Payments.

(a) Without Cause. In the event the Employment Period terminates under this Agreement as a result of the Company terminating the Executive without Cause or the Executive terminating his employment for Good Reason, the Executive shall be entitled to the payments and benefits set forth in this Section 5(a):

(i) On or Before the Second Anniversary of the Effective Date. In the event of a termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason on or before the second anniversary of the effective date, the Executive shall be entitled to such payments and benefits as set forth in sections 4 and 5 of the Severance Agreement.

(ii) After the Second Anniversary of the Effective Date But Prior to a Change in Control. If the Executive’s employment is terminated after the second anniversary of the Effective Date but prior to a Change in Control, the Company shall pay the Executive (A) within thirty (30) days following the Date of Termination, the Executive’s accrued but unused vacation and Base Salary through the Date of Termination (to the extent not theretofore paid) (the “Accrued Benefits”) and (B) one and a half (1.5) times the sum of (1) the Executive’s Base Salary and (2) the Target Bonus, with such sum to be paid in lump sum within 30 days following the Date of Termination; provided, however, that the Executive shall be required to repay the payments described in clause (B) (net of any taxes paid by the Executive or the Company on such payments) in the event the Executive receives, within 18 months after the Date of Termination, written notice from the Company that in the reasonable judgment of the Company, the Executive engaged or is engaging in any conduct that violates or otherwise fails to comply with his obligations under Sections 7 and 8 hereof, or in the event the Executive is convicted of, or pleads guilty to, a felony involving moral turpitude within the three year period following the Date of Termination for an act or omission committed during the Employment Period.

(iii) After the Second Anniversary of the Effective Date and On or After a Change in Control. If the Executive’s employment is terminated after the second anniversary of the Effective Date and on or after a subsequent Change in Control, the Company shall pay the Executive (A) within thirty (30) days following the Date of Termination, the Executive’s Accrued Benefits and (B) one and a half (1.5) times the Executive’s Base Salary, with such sum to be paid in lump sum within 30 days following the Date of Termination; provided, however, that the Executive shall be required to repay the payments described in clause (B) (net of any taxes paid by the Executive or the Company on such payments) in the event the Executive receives, within 18 months after the Date of Termination, written notice from the Company that in the reasonable judgment of the Company, the Executive engaged or is engaging in any conduct that violates or otherwise fails to comply with his obligations under Sections 7 and 8 hereof, or in the event the Executive is convicted of, or pleads guilty to, a felony involving moral turpitude within the three year period following the Date of Termination for an act or omission committed during the Employment Period.

(iv) With respect to any termination of the Executive’s employment to which clause (ii) or (iii) of this Section 5(a) applies, for the eighteen month period commencing on the day after Executive’s Date of Termination, the Company shall continue to provide medical benefits to Executive which are substantially similar to those provided generally to executive officers of the Company (including any required contribution by such executive officers) pursuant to such medical plan as may be in effect from time to time as if the Executive’s employment had not been terminated (it being understood that the Company may provide such coverage by paying the Executive’s COBRA premiums, less any contribution required by the Executive); provided, however, that if the Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the corresponding medical and other welfare benefits described herein shall be secondary to such benefits during the period of the Executive’s eligibility, and the Company shall reimburse the Executive for any increased cost to provide the Executive with the benefits provided under the Company’s medical plan. The Executive shall promptly notify the Company of any changes in his medical benefits coverage.

(v) The payments and benefits provided under this Section 5(a) are subject to and conditioned upon the Executive executing a valid general release and waiver (in the form reasonably acceptable to the Company), waiving all claims the Executive may have against the Company, its successors, assigns, affiliates, executives, officers and directors, and such waiver becoming effective, and the payments and benefits are subject to and conditioned upon the Executive’s compliance with the Restrictive Covenants provided in Sections 7 and 8 hereof. For the avoidance of doubt, upon a termination of the Employment Period without Cause or as a result of Good Reason, the Executive shall not be entitled to any other compensation or benefits not expressly provided for in this section, regardless of the time that would otherwise remain in the Employment Period had the Employment Period not been terminated without Cause or for Good Reason. Except as provided in this Section 5(a), or pursuant to Section 2(c) if applicable, and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by Section 4980B of the Internal Revenue Code of 1986 and Section 601 of the Employee Retirement Income Security Act of 1974, as amended (which provisions are commonly known as “COBRA”), the Company shall have no additional obligations to the Executive.

(vi)  For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s consent: (A) a reduction by the Company in the Executive’s Base Salary; (B) a material diminution in the Executive’s Annual Bonus opportunity; (C) a material diminution in the Executive’s position, duties, responsibilities or reporting relationships; or (D) a change of the Executive’s principal place of employment to a location more than seventy-five (75) miles from such principal place of employment as of the Effective Date; provided, Good Reason shall not occur unless the Executive shall have given a detailed written notice to the Company of any fact or circumstance believed by the Executive to constitute Good Reason within thirty (30) days of the occurrence of such fact or circumstance, and, if such fact or circumstance is reasonably susceptible to cure, the Company shall have thirty (30) days to cure such fact or circumstance and shall have failed to so cure.

(b) Cause or Voluntarily Other than for Good Reason. If the Executive’s employment is terminated during the Employment Period by the Company for Cause or voluntarily by the Executive other than for Good Reason, the Company shall pay the Executive within thirty (30) days following the Date of Termination the Accrued Benefits. Except as provided in this Section 5(b) and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by COBRA, the Company shall have no additional obligations to the Executive.

(c) Disability or Death. If the Executive’s employment is terminated during the Employment Period as a result of the Executive’s death or Disability, the Company shall pay the Executive or the Executive’s estate, as the case may be, within thirty (30) days following the Date of Termination: (i) the Accrued Benefits; and (ii) any Annual Bonus earned by the Executive in respect of the Company’s fiscal year ending immediately prior to the Date of Termination but not yet paid. Except as provided in this Section 5(c) and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by COBRA, the Company shall have no additional obligations to the Executive.

6. Legal Fees; Indemnification; Directors’ & Officers’ Liability Insurance.

(a) In the event of any contest or dispute between the Company and the Executive with respect to this Agreement or the Executive’s employment hereunder, each of the parties shall be responsible for its respective legal fees and expenses; provided, that, if the Executive prevails on any material issue in any action, the Company shall reimburse the Executive any reasonable legal fees and expenses incurred; provided, further, that with respect to an action to enforce the terms of the Severance Agreement, section 7 of the Severance Agreement shall govern the reimbursement of legal fees and expenses.

(b) The Executive will be entitled to indemnification on the same terms as indemnification is made available by the Company to its other senior executives, whether through the Company’s bylaws, the Merger Agreement or otherwise.

(c) During the Employment Period, the Executive shall be entitled to the same directors’ and officers’ liability insurance coverage that the Company provides generally to its other directors and officers, as may be amended from time to time for such directors and officers.

7. Non-Solicitation.

During the Employment Period and for eighteen months thereafter, the Executive hereby agrees not to, directly or indirectly, solicit or hire or assist any other person or entity in soliciting or hiring any employee of the Company or any of its affiliates to perform services for any entity (other than the Company or its affiliates), or attempt to induce any such employee to leave the employ of the Company or its affiliates, or solicit, hire or engage on behalf of himself or any other Person (as defined below) any employee of the Company or anyone who was employed by the Company during the six-month period preceding such hiring or engagement.

8. Confidentiality; Non-Compete; Non-Disclosure; Non-Disparagement.

(a) The Executive hereby agrees that, during the Employment Period and thereafter, he will hold in strict confidence any proprietary or Confidential Information related to the Company and its affiliates. For purposes of this Agreement, the term “Confidential Information” shall mean all information of the Company or any of its affiliates (in whatever form) which is not generally known to the public, including without limitation any inventions, processes, methods of distribution, customer lists or customers’ or trade secrets.

(b) The Executive and the Company agree that the Company would likely suffer significant harm from the Executive’s competing with the Company during the Employment Period and for some period of time thereafter. Accordingly, the Executive agrees that he will not, during the Employment Period and for a period of eighteen months following the termination of the Employment Period, directly or indirectly, become employed by, engage in business with, serve as an agent or consultant to, become a partner, member, principal, stockholder or other owner (other than a holder of less than 1% of the outstanding voting shares of any publicly held company) of, any Person competitive with, or otherwise perform services relating to, the business of the Company at the time of the termination for any Person (the “Business”) (whether or not for compensation). For purposes of this Agreement, the term “Person” shall mean any individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof that is engaged in the Business, or otherwise competes with the Company, anywhere in which the Company or its affiliates engage in or intend to engage in the Business or where the Company or its affiliates’ customers are located.

(c) The Executive hereby agrees that, upon the termination of the Employment Period, he shall not take, without the prior written consent of the Company, any drawing, blueprint, specification or other document (in whatever form) of the Company or its affiliates, which is of a confidential nature relating to the Company or its affiliates, or, without limitation, relating to its or their methods of distribution, or any description of any formulas or secret processes and will return any such information (in whatever form) then in his possession.

(d) The Executive hereby agrees not to defame or disparage the Company, its affiliates and their officers, directors, members or executives. The Executive hereby agrees to cooperate with the Company in refuting any defamatory or disparaging remarks by any third party made in respect of the Company or its affiliates or their directors, members, officers or executives.

9. Injunctive Relief.

It is impossible to measure in money the damages that will accrue to the Company in the event that the Executive breaches any of the restrictive covenants provided in Sections 7 and 8 hereof. In the event that the Executive breaches any such restrictive covenant, the Company shall be entitled to an injunction restraining the Executive from violating such restrictive covenant (without posting any bond). If the Company shall institute any action or proceeding to enforce any such restrictive covenant, the Executive hereby waives the claim or defense that the Company has an adequate remedy at law and agrees not to assert in any such action or proceeding the claim or defense that the Company has an adequate remedy at law. The foregoing shall not prejudice the Company’s right to require the Executive to account for and pay over to the Company, and the Executive hereby agrees to account for and pay over, the compensation, profits, monies, accruals or other benefits derived or received by the Executive as a result of any transaction constituting a breach of any of the restrictive covenants provided in Sections 7 and 8 hereof.

10. Section 280G.    If, after the Effective Date, there occurs a transaction that constitutes a “change of control” under Regulation 1.280G of the Internal Revenue Code of 1986, as amended (the “Code”), the Parent and the Executive shall use commercially reasonable best efforts to take such actions as may be necessary to avoid the imposition of any the excise tax imposed by Section 4999 of the Code on the Executive, including seeking to obtain stockholder approval in accordance with the terms of Section 280G(b)(5).

11. Miscellaneous.

(a)Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and shall be deemed to be given when delivered personally or four days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or one day after it is sent by a reputable overnight courier service and, in each case, addressed as follows (or if it is sent through any other method agreed upon by the parties):

If to the Company:

Aleris International, Inc.

25825 Science Park Drive

Suite 400

Beachwood, Ohio 44122

Facsimile. 216-910-3650

Attn: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

If to the Parent:

301 Commerce Street, Suite 3300

Fort Worth, TX 76102

Attention: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

If to the Executive:

Sean Stack

2948 Courtland Blvd.

Shaker Heights, OH 44122

or to such other address as any party hereto may designate by notice to the others.

(b) Except as expressly provided herein with respect to the Severance Agreement, this Agreement shall constitute the entire agreement among the parties hereto with respect to the Executive’s employment hereunder, and supersedes and is in full substitution for any and all prior understandings or agreements with respect to the Executive’s employment (it being understood that any Options and Shares shall be governed by the relevant Equity Agreements). The Executive’s employment with the Company for purposes of this Agreement shall include the Executive’s employment by any direct or indirect subsidiary of the Parent or the Company.

(c) This Agreement may be amended only by an instrument in writing signed by the parties hereto, and any provision hereof may be waived only by an instrument in writing signed by the party or parties against whom or which enforcement of such waiver is sought. The failure of any party hereto at any time to require the performance by any other party hereto of any provision hereof shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by any party hereto of a breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision or a waiver of the provision itself or a waiver of any other provision of this Agreement.

(d) The parties hereto acknowledge and agree that each party has reviewed and negotiated the terms and provisions of this Agreement and has had the opportunity to contribute to its revision. Accordingly, the rule of construction to the effect that ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement. Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in favor or against either party.

(e) (i)    This Agreement is binding on and is for the benefit of the parties hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. Neither this Agreement nor any right or obligation hereunder may be assigned by the Executive.

(ii) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in the Agreement, “the Company” shall mean both the Company as defined above and any such successor that assumes this Agreement, by operation of law or otherwise.

(f) Any provision of this Agreement (or portion thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. No waiver of any provision or violation of this Agreement by the Company shall be implied by the Company’s forbearance or failure to take action.

(g) The Company may withhold from any amounts payable to the Executive hereunder all federal, state, city or other taxes that the Company may reasonably determine are required to be withheld pursuant to any applicable law or regulation, (it being understood, that, except as provided in section 5 of the Severance Agreement, the Executive shall be responsible for payment of all taxes in respect of the payments and benefits provided herein).

(h) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to its principles of conflicts of law.

(i) This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. A facsimile of a signature shall be deemed to be and have the effect of an original signature.

(j) The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof.

(k) Notwithstanding anything to the contrary herein, in the event any payment hereunder would result in the imposition of an excise tax pursuant to Section 409A of the Code or the regulations thereunder, as amended (the “409A Excise Tax”), the Executive agrees that such payment shall be postponed to the date that is the earliest date upon which such payment would no longer result in the imposition of a 409A Excise Tax.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

EXECUTIVE

/s/ Sean Stack

___________________________________

Name: Sean Stack

ALERIS INTERNATIONAL, INC.

 /s/ Michael D. Friday

___________________________________

Name:  Michael D. Friday

Title: Executive Vice President and Chief Financial Officer

AURORA ACQUISITION HOLDINGS, INC.

 /s/ John E. Viola

___________________________________

Name:  John E. Viola

Title: Vice President and Treasurer

EX-10.25

Exhibit 10.25

EXECUTION COPY

EMPLOYMENT AGREEMENT

AGREEMENT, dated as of December 19, 2006 (the “Agreement”), by and among Aleris International, Inc. (the “Company”), Aurora Acquisition Holdings, Inc. (the “Parent”) and Christopher Clegg (the “Executive”).

WHEREAS, the Company desires that the Executive continue to serve the Company as the Company’s Senior Vice President, General Counsel and Secretary, on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1. Employment, Duties and Agreements.

(a) The Company hereby agrees to continue to employ the Executive as its Senior Vice President, General Counsel and Secretary, and the Executive hereby accepts such position and agrees to continue to serve the Company in such capacity during the employment period fixed by Section 3 hereof (the “Employment Period”). The Executive shall have such duties and responsibilities as are consistent with the Executive’s position and as may be assigned by the Company from time to time. During the Employment Period, the Executive shall be subject to, and shall act in accordance with, all reasonable instructions and directions and all applicable policies and rules of the Company.

(b) During the Employment Period, excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote his full working time, energy and attention to the performance of his duties and responsibilities hereunder and shall faithfully and diligently endeavor to promote the business and best interests of the Company. During the Employment Period, the Executive may not, without the prior written consent of the Company, directly or indirectly, operate, participate in the management, operations or control of, or act as an executive, officer, consultant, agent or representative of, any type of business or service (other than as an executive of the Company). It shall not, however, be a violation of the foregoing provisions of this Section 1(b) for the Executive to (i) subject to the approval of the Board, serve as an officer or director or otherwise participate in non-profit, educational, welfare, social, religious and civil organizations, or (ii) manage his personal, financial and legal affairs, so long as any such activities in (i) and (ii) do not interfere with the performance of his duties and responsibilities to the Company as provided hereunder.

(c) In connection with the Executive’s employment by the Company under this Agreement, the Executive shall be based at the principal executive offices of the Company, currently located in Beachwood, Ohio, except for such travel as the performance of the Executive’s duties in the business of the Company may require.

(d) The Severance Agreement, dated as of August 30, 2005, by and between the Company and the Executive (the “Severance Agreement”) is expressly assumed hereby as contemplated in section 10(b) thereof. The Executive hereby acknowledges and agrees that the foregoing assumption by the Company of the Severance Agreement, and the entrance by the Company into this Agreement, is in full satisfaction of the Company’s obligations under section 10(b) of the Severance Agreement to assume, by written instrument delivered to the Executive, all of the obligations under the Severance Agreement, and that the Executive will not have the right to terminate his employment for “Good Reason” as defined in the Severance Agreement under Item (5) of such definition as a result of the merger of Aurora Acquisition Merger Sub, Inc. (“Merger Sub”) with and into the Company, as contemplated by the Agreement and Plan of Merger, dated August 7, 2006, by and among the Parent, Merger Sub and the Company (the “Merger Agreement”). The Severance Agreement shall remain in full force and effect through the second anniversary of the Effective Date. Upon the second anniversary of the Effective Date, and not before, the Severance Agreement shall be terminated and of no further force or effect, provided, however, that the Severance Agreement shall continue in effect with respect to all rights and obligations that have accrued thereunder prior to such termination until such rights and obligations have been fully satisfied or otherwise expire. Notwithstanding anything to the contrary in the Severance Agreement (including, without limitation, section 8 thereof), this Agreement shall constitute notice pursuant to section 8 of the Severance Agreement, to the extent necessary, that the Severance Agreement shall terminate on the second anniversary of the Effective Date. During the period prior to the second anniversary of the Effective Date, in the event of a conflict between the terms of the Severance Agreement and this Agreement, the terms of the Severance Agreement shall govern.

2. Compensation.

(a) As compensation for the agreements made by the Executive herein and the performance by the Executive of his obligations hereunder, during the Employment Period, the Company shall pay the Executive, pursuant to the Company’s normal and customary payroll procedures, a base salary at the rate of $315,000 per annum, (the “Base Salary”). During the Employment Term, the Base Salary will be reviewed annually and is subject to adjustment at the discretion of the Board of Directors of the Company (the “Board”), but in no event shall the Company pay the Executive a Base Salary less than that set forth above during the Employment Term. 

(b) In addition to the Base Salary, during the Employment Period, but beginning for the fiscal year ending December 31, 2007, the Executive shall be eligible to participate in the annual incentive plan (the “AIP”) established and approved by the Board and, pursuant to the AIP, the Executive may earn an annual bonus (the “Annual Bonus”) in each fiscal year during the Employment Period, with a target Annual Bonus of 60% of Base Salary up to a maximum of 120% of Base Salary, based on the achievement of annual performance objectives as set forth in the AIP, subject to the Executive’s employment with the Company through the applicable payment date for any such Annual Bonus (unless otherwise provided herein or in the Severance Agreement). For the fiscal year ending December 31, 2006, the Company shall pay the Executive all bonuses and other incentives to which the Executive is entitled pursuant to and in accordance with the Company’s incentive plans in effect as of the Effective Date.

(c) As soon as practicable after the Effective Date (as defined below), the Company will grant the Executive a number of options (the “Options”) to purchase shares of the Parent (the “Shares”) at an exercise price per Share equal to the price per Share paid by TPG (as defined below). The specific terms and conditions governing all aspects of the Options shall be provided in separate grant agreements and any relevant plan documents (collectively, the “Option Agreements”). The Options shall be comprised of the following two tranches: (1) 60% of the Options (the “Time-Based Options”) will vest and become exercisable in equal annual installments of 20% over a five-year period, subject to the Executive’s continued employment with the Company through the applicable vesting date and (2) 40% of the stock options (the “Performance-Based Options”) will vest and become exercisable only upon the achievement by the Company of the following performance targets, in each case, subject to the Executive’s continued employment with the Company through the applicable vesting date: (A) 50% of the Performance-Based Options will vest upon the occurrence of any liquidity event in connection with which TPG Partners IV, L.P. and TPG Partners V, L.P. (together, "TPG") realize a multiple of money (“MoM”) of at least 2.0x its initial investment in the Company (through the Parent), as determined by the Board in good faith, and (B) the remaining 50% of the Performance-Based Options will vest upon the occurrence of any liquidity event in connection with which TPG realizes an MoM of at least 3.0x its initial investment in the Company (through the Parent), as determined by the Board in good faith, provided, that in the event the liquidity event occurs prior to the second anniversary of the Effective Date, the MoM in clause (B) of this Section 2(c) shall be 2.0x, and in the event the liquidity event occurs on or after the second anniversary, but prior to the third anniversary, of the Effective Date, the MoM in clause (B) of this Section 2(c) shall be 2.5x. TPG shall make a good faith projection with respect to the expected value of any such liquidity event, and, to the extent such projection, if accurate, would result in vesting of some or all of the Performance-Based Options, the Performance-Based Options shall be deemed vested to the applicable extent and solely for the purpose of permitting the Executive to participate in such liquidity event with the Shares underlying such Performance-Based Options.

Notwithstanding the foregoing, in the event of a change in control (as defined in below), TPG shall cause the buyer to (i) cancel all vested and exercisable Options and pay to the Executive, in cash or other property depending on, and in the same proportion as, the consideration received by TPG, an amount equal to the excess, if any, of the fair market value of a Share on such change in control over the exercise price of such Option (such excess, if any, the “Option Spread”) for each such vested and exercisable Option, and (ii) cancel all unvested Time-Based Options and pay to the Executive, in cash or other property depending on, and in the same proportion as, the consideration received by TPG, an amount equal to the aggregate Option Spread for each such unvested Time-Based Option, plus interest at a reasonable rate to be determined by the Board, on the earlier to occur of (x) the date such unvested Time-Based Option would otherwise have vested, provided that the Executive is actively employed with the Company or an affiliate on such date, or (y) subject to Section 11(k), within five (5) business days following the Date of Termination of the Executive’s employment as a result of a termination by the Company without Cause or by the Executive for Good Reason.

For purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the following events after the Effective Date: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company or the Parent on a consolidated basis to any person or group of related persons for purposes of Section 13(d) of the Exchange Act (a “Group”), together with any affiliates thereof other than to TPG or its affiliates; (ii) the approval by the holders of the outstanding voting power of the Company or the Parent of any plan or proposal for the liquidation or dissolution of the Company; (iii) (A) any person or Group (other than TPG or its affiliates) shall become the beneficial owner (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, of shares representing more than 40% of the aggregate outstanding voting power of the Company or the Parent and such person or Group actually has the power to vote such shares in any such election and (B) TPG and its affiliates beneficially owns (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, in the aggregate a lesser percentage of the voting power of the Company or the Parent than such other person or Group; (iv) the replacement of a majority of the board of directors of the Company or the Parent over a two-year period from the directors who constituted such board at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of such board then still in office who either were members of such board at the beginning of such period or whose election as a member of such board was previously so approved or who were nominated by, or designees of, TPG or its affiliates; or (v) consummation of a merger or consolidation of the Company or the Parent with another entity in which holders of shares of the Company or Parent immediately prior to the consummation of the transaction hold, directly or indirectly, immediately following the consummation of the transaction, less than 50% of the common equity interest in the surviving corporation in such transaction and TPG and its affiliate do not hold a sufficient amount of voting power (or similar securities) to elect a majority of the surviving entity’s board of directors.

Upon any termination of the Executive’s employment, any Options that are not vested and exercisable as of such termination and that do not become vested and exercisable as a result of such termination shall automatically expire on the Date of Termination (as defined in Section 4(b) below). Any Options that have become vested and exercisable as of (or that become exercisable as a result of) the Date of Termination shall expire on the earlier of (i) ninety (90) days after the date the Executive’s employment is terminated for any reason other than Cause, death or Disability; (ii) one year after the date the Executive’s employment is terminated by reason of death or Disability; (iii) the commencement of business on the date the Executive’s employment is terminated for Cause; or (iv) the tenth anniversary of the grant date. All Options that are outstanding as of the tenth anniversary of the grant date will expire on such date. The Executive shall be permitted to exercise the vested portion of the Options through net-physical settlement (i.e., by delivery of Shares net of the number of Shares having a value equal to the applicable exercise price and applicable withholding taxes at the minimum statutory rate) if such exercise occurs after termination of the Executive’s employment pursuant to Sections 3(a) or 3(b), by the Company pursuant to Paragraph 3(d) or by the Executive pursuant to Section 3(e) for Good Reason.  The Option shall be granted pursuant to and subject to the terms of a Management Equity Incentive Plan (the “Plan”), which shall contain rights to dividend equivalents in a manner intended to comply with Section 409A of the Code. 

(d) The Executive shall roll over all shares in the Company that the Executive holds as a capital asset prior to the Effective Date and such other amounts as are worth, in the aggregate, $1,200,000 on an after-tax basis into Shares of the Parent pursuant to and in accordance with a letter agreement between the Executive and Parent, dated as of December 15, 2006 (the “Rollover Agreement”).

(e) The purchase of any Shares upon the exercise of the Options, or any other purchase or issuance of Shares contemplated by this Agreement, including pursuant to any rollover as provided above, will be subject to the Executive’s execution of a Management Stockholders’ Agreement for the Company and the Parent in such form as provided by the Company and the Parent (the “Management Stockholders’ Agreement” and, together with the Option Agreements, the “Equity Agreements”) for the Company, which will include, among other things, (1) restrictions on transfer of the Shares and call rights by the Company, (2) certain drag-along and tag-along rights and obligations, (3) certain lock-up rights in connection with any underwritten public offering of equity securities of the Company or any affiliate and (4) that Executive make such representations and execute such documents as the Company determines are reasonably necessary or appropriate to comply with any applicable securities or tax law requirements, to qualify for any exemption from any applicable securities laws or to ensure Executive’s compliance with his obligations under the Management Stockholders’ Agreement. Notwithstanding anything to the contrary in the Management Stockholders’ Agreement, the Company call right shall not apply to the Shares of the Parent purchased or otherwise acquired pursuant to the Rollover Agreement unless the Executive’s employment is terminated by the Company or its affiliates for Cause or by the Executive without Good Reason or other than as a result of Retirement. For purposes of this Section 2(e), “Retirement” shall mean the Executive is eligible to retire without penalty or a reduction in benefits under any tax qualified pension plan maintained by the Company and in which the Executive is eligible to participate.

(f) During the Employment Period: (i) except as provided in the last sentence of this Section 2(f), the Executive and/or the Executive’s family, as the case may be, shall be entitled to participate in all employee benefit plans, practices, policies, programs and arrangements of the Company which are made available generally to other executive officers of the Company and/or their families, as the case may be, including, without limiting the Company’s right to terminate, modify or amend such plans in accordance with their terms or as provided in the immediately succeeding sentence, the Company’s benefits restoration program, life insurance, long-term disability and health plans and (ii) the Executive shall be entitled to the perquisites and other fringe benefits that are made available by the Company to its senior executives generally, subject to any applicable terms and conditions of any specific perquisite or other fringe benefit. Until the second anniversary of the Effective Date, except as consented to by the Executive, the Company agrees that the employee benefit plans, policies, programs and arrangements and perquisites and other fringe benefits that are made available to the Executive during the Employment Period will not be materially diminished in the aggregate from those benefit plans, policies, programs and arrangements and perquisites and fringe benefits made available immediately prior to the Effective Date. For the avoidance of doubt, such other plans, practices, policies, programs or arrangements shall not include any plan, practice, policy, program or arrangement that provides benefits in the nature of severance or continuation pay.

(g) The Company shall reimburse the Executive for all reasonable business expenses upon the presentation of statements of such expenses in accordance with the Company’s policies and procedures now in force or as such policies and procedures may be modified with respect to all senior executive officers of the Company.

(h) In the event the Company or the Parent engages in a significant subsequent corporate transaction with another entity, the Board will reconsider the size of the equity pool, taking into account the larger size of the resultant entity and taking into account all relevant circumstances, including competitive market data for companies of similar size and circumstance.

3. Employment Period.

The Employment Period shall commence on December 19, 2006 (the “Effective Date”) and shall terminate on the thirdanniversary of the Effective Date, provided that on the thirdanniversary of the Effective Date and on each anniversary thereafter, the Employment Period shall automatically be extended for additional one-year periods unless either party provides the other party with a Notice of Termination in accordance with Section 4(a) at least sixty (60) days before any such anniversary (the anniversary date on which the Employment Period terminates shall be referred to herein as the “Scheduled Termination Date”). Notwithstanding the foregoing, the Executive’s employment hereunder may be terminated during the Employment Period prior to the Scheduled Termination Date upon the earliest to occur of any one of the following events (at which time the Employment Period shall be terminated):

(a) Death. The Executive’s employment hereunder shall terminate upon his death.

(b) Disability. The Company shall be entitled to terminate the Executive’s employment hereunder for “Disability” if, as a result of the Executive’s incapacity due to physical or mental illness or injury, the Executive (i) shall become eligible to receive a benefit under the Company’s long-term disability plan applicable to the Executive, or (ii) if no such long-term disability plan is applicable to the Executive, the Executive shall have been unable to perform his duties hereunder for a period of ninety (90) consecutive days or a period of ninety (90) days in any one hundred eighty (180) day period.

(c) Cause. The Company may terminate the Executive’s employment hereunder for Cause. For purposes of this Agreement, the term “Cause” shall mean: (i) a material breach by the Executive of this Agreement; (ii) other than as a result of physical or mental illness or injury, the willful and continued failure of the Executive to perform substantially the Executive’s duties with the Company or one of its affiliates; (iii) the Executive’s willful and continued misconduct or gross negligence which is materially injurious to the Company or an affiliate of the Company; or (iv) the indictment by the Executive of, or a plea by the Executive of nolo contendere to, a felony involving moral turpitude or other serious crime involving moral turpitude. In the case of clauses (i) and (ii) above, the Company shall provide notice to the Executive indicating in reasonable detail the events or circumstances that it believes constitute Cause hereunder and, if such breach or failure is reasonably susceptible to cure, provide the Executive with a reasonable period of time (not to exceed thirty (30) days) to cure such breach or failure. If, subsequent to the Executive’s termination of employment hereunder for other than Cause, it is determined in good faith by the Board that the Executive’s employment could have been terminated for Cause pursuant to clause (iv) of this Section 3(c), the Executive’s employment shall, at the election of the Board, be deemed to have been terminated for Cause retroactively to the date the events giving rise to Cause occurred.

(d) Without Cause. The Company may terminate the Executive’s employment hereunder during the Employment Period without Cause.

(e) Voluntarily. The Executive may voluntarily terminate his employment hereunder, with or without Good Reason, provided that the Executive provides the Company with notice of his intent to terminate his employment at least 60 days in advance of the Date of Termination (as defined in Section 4(b) below) (and, in the case of a termination by the Executive for Good Reason, complies with all requirements of such a termination as provided hereunder).

4. Termination Procedure.

(a) Notice of Termination. Any termination of the Executive’s employment by the Company or by the Executive during the Employment Period (other than a termination on account of the death of the Executive) shall be communicated by written “Notice of Termination” to the other party hereto in accordance with Section 11(a); provided, that, prior to the second anniversary of the Effective Date, with respect to a termination of the Executive’s employment without Cause by the Company or with Good Reason by the Executive, the notice provisions of section 11(b) of the Severance Agreement shall govern.

(b) Date of Termination. “Date of Termination” shall mean (i) if the Executive’s employment is terminated by his death, the date of his death, (ii) if the Executive’s employment is terminated pursuant to Section 3(b), on the date the Executive receives Notice of Termination from the Company, (iii) if the Executive voluntarily terminates his employment (whether or not for Good Reason), the date specified in the notice given pursuant to Section 3(e) herein which shall not be less than 90 days after the Notice of Termination, and (iv) if the Executive’s employment is terminated for any other reason, the date on which a Notice of Termination is given or any later date (within thirty (30) days, or any alternative time period agreed upon by the parties, after the giving of such notice) set forth in such Notice of Termination; provided, that, prior to the second anniversary of the Effective Date, with respect to a termination of the Executive’s employment without Cause by the Company or with Good Reason by the Executive, the notice provisions of section 11(b) of the Severance Agreement shall govern.

5. Termination Payments.

(a) Without Cause. In the event the Employment Period terminates under this Agreement as a result of the Company terminating the Executive without Cause or the Executive terminating his employment for Good Reason, the Executive shall be entitled to the payments and benefits set forth in this Section 5(a):

(i) On or Before the Second Anniversary of the Effective Date. In the event of a termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason on or before the second anniversary of the effective date, the Executive shall be entitled to such payments and benefits as set forth in sections 4 and 5 of the Severance Agreement.

(ii) After the Second Anniversary of the Effective Date But Prior to a Change in Control. If the Executive’s employment is terminated after the second anniversary of the Effective Date but prior to a Change in Control, the Company shall pay the Executive (A) within thirty (30) days following the Date of Termination, the Executive’s accrued but unused vacation and Base Salary through the Date of Termination (to the extent not theretofore paid) (the “Accrued Benefits”) and (B) one and a half (1.5) times the sum of (1) the Executive’s Base Salary and (2) the Target Bonus, with such sum to be paid in lump sum within 30 days following the Date of Termination; provided, however, that the Executive shall be required to repay the payments described in clause (B) (net of any taxes paid by the Executive or the Company on such payments) in the event the Executive receives, within 18 months after the Date of Termination, written notice from the Company that in the reasonable judgment of the Company, the Executive engaged or is engaging in any conduct that violates or otherwise fails to comply with his obligations under Sections 7 and 8 hereof, or in the event the Executive is convicted of, or pleads guilty to, a felony involving moral turpitude within the three year period following the Date of Termination for an act or omission committed during the Employment Period.

(iii) After the Second Anniversary of the Effective Date and On or After a Change in Control. If the Executive’s employment is terminated after the second anniversary of the Effective Date and on or after a subsequent Change in Control, the Company shall pay the Executive (A) within thirty (30) days following the Date of Termination, the Executive’s Accrued Benefits and (B) one and a half (1.5) times the Executive’s Base Salary, with such sum to be paid in lump sum within 30 days following the Date of Termination; provided, however, that the Executive shall be required to repay the payments described in clause (B) (net of any taxes paid by the Executive or the Company on such payments) in the event the Executive receives, within 18 months after the Date of Termination, written notice from the Company that in the reasonable judgment of the Company, the Executive engaged or is engaging in any conduct that violates or otherwise fails to comply with his obligations under Sections 7 and 8 hereof, or in the event the Executive is convicted of, or pleads guilty to, a felony involving moral turpitude within the three year period following the Date of Termination for an act or omission committed during the Employment Period.

(iv) With respect to any termination of the Executive’s employment to which clause (ii) or (iii) of this Section 5(a) applies, for the eighteen month period commencing on the day after Executive’s Date of Termination, the Company shall continue to provide medical benefits to Executive which are substantially similar to those provided generally to executive officers of the Company (including any required contribution by such executive officers) pursuant to such medical plan as may be in effect from time to time as if the Executive’s employment had not been terminated (it being understood that the Company may provide such coverage by paying the Executive’s COBRA premiums, less any contribution required by the Executive); provided, however, that if the Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the corresponding medical and other welfare benefits described herein shall be secondary to such benefits during the period of the Executive’s eligibility, and the Company shall reimburse the Executive for any increased cost to provide the Executive with the benefits provided under the Company’s medical plan. The Executive shall promptly notify the Company of any changes in his medical benefits coverage.

(v) The payments and benefits provided under this Section 5(a) are subject to and conditioned upon the Executive executing a valid general release and waiver (in the form reasonably acceptable to the Company), waiving all claims the Executive may have against the Company, its successors, assigns, affiliates, executives, officers and directors, and such waiver becoming effective, and the payments and benefits are subject to and conditioned upon the Executive’s compliance with the Restrictive Covenants provided in Sections 7 and 8 hereof. For the avoidance of doubt, upon a termination of the Employment Period without Cause or as a result of Good Reason, the Executive shall not be entitled to any other compensation or benefits not expressly provided for in this section, regardless of the time that would otherwise remain in the Employment Period had the Employment Period not been terminated without Cause or for Good Reason. Except as provided in this Section 5(a), or pursuant to Section 2(c) if applicable, and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by Section 4980B of the Internal Revenue Code of 1986 and Section 601 of the Employee Retirement Income Security Act of 1974, as amended (which provisions are commonly known as “COBRA”), the Company shall have no additional obligations to the Executive.

(vi) For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s consent: (A) a reduction by the Company in the Executive’s Base Salary; (B) a material diminution in the Executive’s Annual Bonus opportunity; (C) a material diminution in the Executive’s position, duties, responsibilities or reporting relationships; or (D) a change of the Executive’s principal place of employment to a location more than seventy-five (75) miles from such principal place of employment as of the Effective Date; provided, Good Reason shall not occur unless the Executive shall have given a detailed written notice to the Company of any fact or circumstance believed by the Executive to constitute Good Reason within thirty (30) days of the occurrence of such fact or circumstance, and, if such fact or circumstance is reasonably susceptible to cure, the Company shall have thirty (30) days to cure such fact or circumstance and shall have failed to so cure.

(b) Cause or Voluntarily Other than for Good Reason. If the Executive’s employment is terminated during the Employment Period by the Company for Cause or voluntarily by the Executive other than for Good Reason, the Company shall pay the Executive within thirty (30) days following the Date of Termination the Accrued Benefits. Except as provided in this Section 5(b) and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by COBRA, the Company shall have no additional obligations to the Executive.

(c) Disability or Death. If the Executive’s employment is terminated during the Employment Period as a result of the Executive’s death or Disability, the Company shall pay the Executive or the Executive’s estate, as the case may be, within thirty (30) days following the Date of Termination: (i) the Accrued Benefits; and (ii) any Annual Bonus earned by the Executive in respect of the Company’s fiscal year ending immediately prior to the Date of Termination but not yet paid. Except as provided in this Section 5(c) and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extent required by COBRA, the Company shall have no additional obligations to the Executive.

6. Legal Fees; Indemnification; Directors’ & Officers’ Liability Insurance.

(a) In the event of any contest or dispute between the Company and the Executive with respect to this Agreement or the Executive’s employment hereunder, each of the parties shall be responsible for its respective legal fees and expenses; provided, that, if the Executive prevails on any material issue in any action, the Company shall reimburse the Executive any reasonable legal fees and expenses incurred; provided, further, that with respect to an action to enforce the terms of the Severance Agreement, section 7 of the Severance Agreement shall govern the reimbursement of legal fees and expenses.

(b) The Executive will be entitled to indemnification on the same terms as indemnification is made available by the Company to its other senior executives, whether through the Company’s bylaws, the Merger Agreement or otherwise.

(c) During the Employment Period, the Executive shall be entitled to the same directors’ and officers’ liability insurance coverage that the Company provides generally to its other directors and officers, as may be amended from time to time for such directors and officers.

7. Non-Solicitation.

During the Employment Period and for eighteen months thereafter, the Executive hereby agrees not to, directly or indirectly, solicit or hire or assist any other person or entity in soliciting or hiring any employee of the Company or any of its affiliates to perform services for any entity (other than the Company or its affiliates), or attempt to induce any such employee to leave the employ of the Company or its affiliates, or solicit, hire or engage on behalf of himself or any other Person (as defined below) any employee of the Company or anyone who was employed by the Company during the six-month period preceding such hiring or engagement.

8. Confidentiality; Non-Compete; Non-Disclosure; Non-Disparagement.

(a) The Executive hereby agrees that, during the Employment Period and thereafter, he will hold in strict confidence any proprietary or Confidential Information related to the Company and its affiliates. For purposes of this Agreement, the term “Confidential Information” shall mean all information of the Company or any of its affiliates (in whatever form) which is not generally known to the public, including without limitation any inventions, processes, methods of distribution, customer lists or customers’ or trade secrets.

(b) The Executive and the Company agree that the Company would likely suffer significant harm from the Executive’s competing with the Company during the Employment Period and for some period of time thereafter. Accordingly, the Executive agrees that he will not, during the Employment Period and for a period of eighteen months following the termination of the Employment Period, directly or indirectly, become employed by, engage in business with, serve as an agent or consultant to, become a partner, member, principal, stockholder or other owner (other than a holder of less than 1% of the outstanding voting shares of any publicly held company) of, any Person competitive with, or otherwise perform services relating to, the business of the Company at the time of the termination for any Person (the “Business”) (whether or not for compensation). For purposes of this Agreement, the term “Person” shall mean any individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof that is engaged in the Business, or otherwise competes with the Company, anywhere in which the Company or its affiliates engage in or intend to engage in the Business or where the Company or its affiliates’ customers are located.

(c) The Executive hereby agrees that, upon the termination of the Employment Period, he shall not take, without the prior written consent of the Company, any drawing, blueprint, specification or other document (in whatever form) of the Company or its affiliates, which is of a confidential nature relating to the Company or its affiliates, or, without limitation, relating to its or their methods of distribution, or any description of any formulas or secret processes and will return any such information (in whatever form) then in his possession.

(d) The Executive hereby agrees not to defame or disparage the Company, its affiliates and their officers, directors, members or executives. The Executive hereby agrees to cooperate with the Company in refuting any defamatory or disparaging remarks by any third party made in respect of the Company or its affiliates or their directors, members, officers or executives.

9. Injunctive Relief.

It is impossible to measure in money the damages that will accrue to the Company in the event that the Executive breaches any of the restrictive covenants provided in Sections 7 and 8 hereof. In the event that the Executive breaches any such restrictive covenant, the Company shall be entitled to an injunction restraining the Executive from violating such restrictive covenant (without posting any bond). If the Company shall institute any action or proceeding to enforce any such restrictive covenant, the Executive hereby waives the claim or defense that the Company has an adequate remedy at law and agrees not to assert in any such action or proceeding the claim or defense that the Company has an adequate remedy at law. The foregoing shall not prejudice the Company’s right to require the Executive to account for and pay over to the Company, and the Executive hereby agrees to account for and pay over, the compensation, profits, monies, accruals or other benefits derived or received by the Executive as a result of any transaction constituting a breach of any of the restrictive covenants provided in Sections 7 and 8 hereof.

10. Section 280G. If, after the Effective Date, there occurs a transaction that constitutes a “change of control” under Regulation 1.280G of the Internal Revenue Code of 1986, as amended (the “Code”), the Parent and the Executive shall use commercially reasonable best efforts to take such actions as may be necessary to avoid the imposition of any the excise tax imposed by Section 4999 of the Code on the Executive, including seeking to obtain stockholder approval in accordance with the terms of Section 280G(b)(5).

11. Miscellaneous.

(a) Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and shall be deemed to be given when delivered personally or four days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or one day after it is sent by a reputable overnight courier service and, in each case, addressed as follows (or if it is sent through any other method agreed upon by the parties):

If to the Company:

Aleris International, Inc.

25825 Science Park Drive

Suite 400

Beachwood, Ohio 44122

Facsimile. 216-910-3650

Attn: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

If to the Parent:

301 Commerce Street, Suite 3300

Fort Worth, TX 76102

Attention: General Counsel

with a copy to:

Robert J. Raymond

Cleary, Gottlieb, Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

If to the Executive:

Christopher R. Clegg

48 Cohasset Drive

Hudson, Ohio 44236

or to such other address as any party hereto may designate by notice to the others.

(b) Except as expressly provided herein with respect to the Severance Agreement, this Agreement shall constitute the entire agreement among the parties hereto with respect to the Executive’s employment hereunder, and supersedes and is in full substitution for any and all prior understandings or agreements with respect to the Executive’s employment (it being understood that any Options and Shares shall be governed by the relevant Equity Agreements). The Executive’s employment with the Company for purposes of this Agreement shall include the Executive’s employment by any direct or indirect subsidiary of the Parent or the Company.

(c) This Agreement may be amended only by an instrument in writing signed by the parties hereto, and any provision hereof may be waived only by an instrument in writing signed by the party or parties against whom or which enforcement of such waiver is sought. The failure of any party hereto at any time to require the performance by any other party hereto of any provision hereof shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by any party hereto of a breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision or a waiver of the provision itself or a waiver of any other provision of this Agreement.

(d) The parties hereto acknowledge and agree that each party has reviewed and negotiated the terms and provisions of this Agreement and has had the opportunity to contribute to its revision. Accordingly, the rule of construction to the effect that ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement. Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in favor or against either party.

(e) (i)This Agreement is binding on and is for the benefit of the parties hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. Neither this Agreement nor any right or obligation hereunder may be assigned by the Executive.

(ii) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in the Agreement, “the Company” shall mean both the Company as defined above and any such successor that assumes this Agreement, by operation of law or otherwise.

(f) Any provision of this Agreement (or portion thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. No waiver of any provision or violation of this Agreement by the Company shall be implied by the Company’s forbearance or failure to take action.

(g) The Company may withhold from any amounts payable to the Executive hereunder all federal, state, city or other taxes that the Company may reasonably determine are required to be withheld pursuant to any applicable law or regulation, (it being understood, that, except as provided in section 5 of the Severance Agreement, the Executive shall be responsible for payment of all taxes in respect of the payments and benefits provided herein).

(h) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to its principles of conflicts of law.

(i) This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. A facsimile of a signature shall be deemed to be and have the effect of an original signature.

(j) The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof.

(k) Notwithstanding anything to the contrary herein, in the event any payment hereunder would result in the imposition of an excise tax pursuant to Section 409A of the Code or the regulations thereunder, as amended (the “409A Excise Tax”), the Executive agrees that such payment shall be postponed to the date that is the earliest date upon which such payment would no longer result in the imposition of a 409A Excise Tax.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

EXECUTIVE

/s/ Christopher Clegg

___________________________________

Name: Christopher Clegg

ALERIS INTERNATIONAL, INC.

 /s/ Michael D. Friday

___________________________________

Name:  Michael D. Friday

Title: Executive Vice President and Chief Financial Officer

AURORA ACQUISITION HOLDINGS, INC.

 /s/ John E. Viola

___________________________________

Name:  John E. Viola

Title: Vice President and Treasurer

EX-10.26

Exhibit 10.26

EXECUTION COPY

Aurora Acquisition Holdings, Inc.

December 15, 2006

Re: Opportunity to Acquire Shares

Dear Aleris Executive,

As you know, Aleris International, Inc. (“Aleris”) is in the process of undergoing a change of control, and following the change of control, 100% of its outstanding shares will be owned by an entity called Aurora Acquisition Holdings, Inc. (“Newco”). This transaction is pursuant to an Agreement and Plan of Merger, dated as of August 7, 2006, by and among Newco, Aurora Acquisition Merger Sub, Inc. and Aleris (the “Merger Agreement”). Although a delay is possible, we expect that the closing of the transaction will occur on December 19, 2006 (the “Closing”).

We are pleased to offer you the opportunity to invest in shares of common stock of Newco (the “Shares”) on the terms and conditions set out below. As further described below, to the extent that you own shares of Aleris as a capital asset, you are being given the opportunity to invest on a tax-deferred basis by “rolling over” a portion of these shares (any such shares being rolled over, the “Rollover Shares”). In addition, you are being offered the opportunity to make a cash contribution as set forth in Section 3 and the Acceptance Form (your “Cash Contribution”).

1. Merger Consideration; Rollover Shares. As a result of the transactions contemplated by the Merger Agreement, absent an election to contribute or “rollover” the Rollover Shares as contemplated in this agreement (this “Agreement”), you would be entitled, with respect to your Rollover Shares, to the “Merger Consideration” (as defined in the Merger Agreement) for each such Rollover Share (the aggregate such amount that you would be entitled to receive with respect to your Rollover Shares, the “Rollover Merger Consideration”). As a technical matter, the Rollover Merger Consideration that is payable to you in the absence of a rollover election would be distributed by Aleris. By completing the Acceptance Form below, you agree to, and instruct Newco and Aleris to use their reasonable efforts to, roll over your Rollover Shares into the Shares in lieu of receiving the Rollover Merger Consideration in cash. Upon your instruction, this rollover will occur as set forth below in “Sale and Purchase of Shares; Rollover Mechanics”, and will ultimately result in your Rollover Shares being contributed to Newco in exchange for the Shares.

2. Sale and Purchase of Shares; Rollover Mechanics. By completing and returning the Acceptance Form below, you agree to, immediately prior to the Closing, contribute your Rollover Shares to Newco and agree to forego any Rollover Merger Consideration (and any Merger Consideration you are using to satisfy your Cash Contribution) to which you would otherwise have been entitled absent an election to invest in the Shares. The Rollover Shares so contributed will be canceled and retired without any conversion thereof or payment or

distribution thereon, as set forth in Section 1.06 of the Merger Agreement. In exchange for the Rollover Shares and your Cash Contribution, you will receive such number of Shares having an aggregate value equal to the amount of your investment as indicated on the Acceptance Form. You will be the holder of record of the Shares as of the Closing, whether or not Newco issues physical certificates to you. This offer is conditioned upon the occurrence of the Closing. If the Closing does not occur, this Agreement will be canceled and will be of no force and effect.

3. Form of Consideration. If you choose to invest in the Shares, (i) you must invest a minimum of $50,000, and (ii) you must then satisfy your investment of the Rollover Shares by contributing all Aleris shares that you hold as a capital asset (e.g., shares you acquired on the market or shares you acquired by exercising stock options or upon vesting of awards of restricted stock), if any, or by making your Cash Contribution. Your Cash Contribution will automatically be deducted from your after-tax merger proceeds (e.g., from any cash payment of the Merger Consideration to which you may be entitled with respect to equity or equity-based interests other than those being rolled over pursuant to this Agreement), provided that if such proceeds are insufficient, any shortfall must be received by wire transfer by the close of business on the day before the Closing (wire information will be provided to you). Delivery of any Rollover Shares will occur as follows: (x) with respect to Rollover Shares for which physical certificates were delivered to you, by delivering the physical certificates that were so issued; and (y) with respect to Rollover Shares you hold through a brokerage account, by having the brokerage firm by which such Rollover Shares are held transfer these Rollover Shares to an account established in Newco’s name (the “Newco Account”) (transfer information will be provided to you). The Rollover Shares must be credited to the Newco Account before 12:00 p.m., Monday, December 18, 2006, which means that you should instruct your broker to initiate the transfer by 12:00 p.m. on Friday, December 15, 2006.

4. Acceptance and Closing; Conditions. You may accept this offer and the terms of this Agreement by completing and returning the Acceptance Form below, in which case the closing of the acquisition of the Shares will occur immediately after the Closing. This offer is conditioned upon the occurrence of the Closing. If the Closing does not occur on or before January 31, 2007 (the “Closing Deadline”), this Agreement will be canceled and you will have no rights with respect hereto and any Rollover Shares that you have transferred or cash payment that you have made pursuant to Section 3 will be returned to you; provided, that if Newco determines on or before the Closing Deadline and in good faith that the Closing is likely to occur on or before February 28, 2007, the Closing Deadline shall automatically be extended to February 28, 2007.

5. Limitation. Newco, in its discretion, may limit the number of Shares that you may purchase, and therefore may choose not to accept the full amount of your investment election. Rollover Shares not so accepted pursuant to the preceding sentence will be treated in accordance with the provisions of the Merger Agreement.

6. Vesting. Your Shares when issued will be fully vested.

7. Stockholders’ Agreement. By completing and returning the Acceptance Form below, you agree to become a party to the Management Stockholders’ Agreement, a draft of which is attached hereto as Annex A, as may be amended from time to time in accordance with its terms

2

(the “Stockholders’ Agreement”) and you will be subject to the terms and conditions thereof with respect to your Shares. Newco agrees that it will, and that it will cause the Majority Holders (as defined below) to, also become a party to the Stockholders’ Agreement.

8. Tax Reporting. It is intended that your contribution of the Rollover Shares, if any, shall be treated as a tax-free transfer under Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”). Your contribution of the Rollover Shares, if any, is being made at the same time as the initial investment being made by Majority Holders.

All discussions of U.S. federal tax considerations in this document have been written to support the marketing of the Shares. Such discussions were not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding U.S. federal tax penalties. You should consult your own tax advisers in determining the tax consequences of the rollover and of holding the Shares, including the application to your particular situation of the U.S. federal tax considerations discussed herein, as well as the application of state, local, foreign, or other tax laws.

9. Representations; Acknowledgements. By signing below and completing and returning the Acceptance Form, you hereby represent and warrant to Newco and Aleris that:

(i) you have the requisite power, authority and capacity to execute this Agreement and to deliver or cause to be delivered the Rollover Shares, to perform your obligations under this Agreement and to consummate the transactions contemplated hereby;

(ii) the Acceptance Form has been duly and validly executed and delivered by you and constitutes your legal, valid and binding obligation, enforceable against you in accordance with its terms, except to the extent that such validly binding effect and enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium and other laws relating to or affecting creditors’ rights generally;

(iii) the Shares are being acquired for your own account, for investment purposes only and not with a view to or in connection with any distribution, reoffer, resale, public offering or other disposition thereof not in compliance with the Securities Act of 1933 (the “Securities Act”), as may be amended from time to time, or any applicable United States federal or state securities laws or regulations;

(iv) you are an “accredited investor”, as defined in Rule 501(a) under the Securities Act, which means you are:

a. A person whose individual net worth, or joint net worth with your spouse, exceeds $1,000,000; OR

b. A person whose income exceeded $200,000 in each of the two most recent years, or joint income with your spouse exceeded $300,000 in each of those years, and you have a reasonable expectation of reaching the same income level in this year;

3

(v) you possess such expertise, knowledge, and sophistication in financial and business matters generally, and in the type of transaction in which Aleris and Newco propose to engage in particular;

(vi) you have had access to all of the information and individuals with respect to the Shares and your investment that you deem necessary to make a complete evaluation thereof;

(vii) you have had an opportunity to consult an independent tax and legal advisor and your decision to acquire the interest for investment has been based solely upon your evaluation;

(viii) you are aware that the Internal Revenue Service (the “IRS”) or other relevant taxing authority may take a position regarding the rollover contemplated in this Agreement and/or the tax classification of Newco and the Shares contrary to that intended by Newco as provided in this Agreement and you shall be solely responsible for any and all tax or other liabilities that may result from the IRS’s or other relevant taxing authority’s position; and

(ix) you are aware that the Stockholders’ Agreement provides significant restrictions on your ability to dispose of the Shares.

By electing to contribute the Rollover Shares pursuant to this Agreement, you acknowledge that you are instructing Newco and its affiliates to distribute to you, following the Closing, Shares in Newco instead of cash, as described above, and you hereby acknowledge that you do not have, and will not assert that you have, any claim against Newco, the Majority Holders (as defined below) or their respective affiliates to receive the Merger Consideration or any other payment in exchange for the Rollover Shares, except as contemplated herein.

The “Majority Holders” shall mean, collectively or individually, TPG Partners IV, L.P. and TPG Partners V, L.P. and their respective successors and assigns.

10. Other Aleris Interests. You acknowledge that any other equity or equity-based interests that you hold in Aleris that you do not elect to roll over, or which are not accepted for rollover for any reason pursuant to this Agreement, will be treated in accordance with the Merger Agreement.

11. Governing Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Delaware.

12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

Please sign your name on the space provided on the next page and please indicate whether and how you would like to invest in Newco by completing and executing the Acceptance Form attached to the end of this Agreement. Please return an executed copy of this Agreement and the Acceptance Form in original form or by FAX no later than 12:00 p.m. (Eastern Standard Time) on Monday, December 18th, 2006 to the attention of Chris

4

Clegg, Aleris International, Inc., 25825 Science Park Drive, Ste. 400, Beachwood, OH 44122. The fax number is (216) 910-3654. (If you fax your election form on Monday, the original should be delivered to Chris Clegg no later than 5:00 p.m. on Monday, December 18, 2006).

*        *        *        *        *

5

By signing below you are indicating your agreement with, and willingness to be bound by, the terms of this Agreement and any amount indicated by you on the Acceptance Form.

	Sincerely,
	AURORA ACQUISITION HOLDINGS, INC.
	By:	/s/ John E. Viola
		Name: John E. Viola
		Title:   Vice President and Treasurer
Agreed to and Accepted by:
/s/ Steven J. Demetriou
Signature
Please print your name and address:
Steven J. Demetriou
25825 Science Park Drive
Suite 400
Beachwood, OH 44122

By execution below, Aleris and its respective affiliates agree, if so directed by you, to use reasonable efforts to effect a rollover pursuant to this Agreement as a tax-free distribution under section 351 of the Code, unless otherwise required pursuant to a final determination, as defined in Section 1313 of the Code:
ALERIS INTERNATIONAL, INC.
By:	/s/ Michael D. Friday
	Name:
	Title:

Acceptance of Offer to Acquire Shares of Newco (the “Acceptance Form”)

Pursuant to the terms and conditions set forth in letter to me dated December 15, 2006, I, Steven J. Demetriou, hereby elect make an investment in Newco and purchase Shares in the amount and manner below:

1. $3,677,677.50, which will be satisfied through a contribution of 70,051 Aleris shares (at $52.50 per share);

2. $322,217.50, which will be satisfied through a reduction in my after-tax proceeds from any cash payment of the Merger Consideration I will receive in exchange equity or equity-based interests other than those being rolled over pursuant to this Agreement; and

3. $105,000, which will be satisfied by check

Aggregate Investment = $4,000,000 (sum of 1, 2 and 3 above cannot be less than $50,000)

/s/ Steven J. Demetriou

Signature

12/19/06

Date

F-1

ANNEX A

[STOCKHOLDERS’ AGREEMENT]

A-1

EX-10.27

Exhibit 10.27

EXECUTION COPY

Aurora Acquisition Holdings, Inc.

December 15, 2006

Re: Opportunity to Acquire Shares

Dear Aleris Executive,

As you know, Aleris International, Inc. (“Aleris”) is in the process of undergoing a change of control, and following the change of control, 100% of its outstanding shares will be owned by an entity called Aurora Acquisition Holdings, Inc. (“Newco”). This transaction is pursuant to an Agreement and Plan of Merger, dated as of August 7, 2006, by and among Newco, Aurora Acquisition Merger Sub, Inc. and Aleris (the “Merger Agreement”). Although a delay is possible, we expect that the closing of the transaction will occur on December 19, 2006 (the “Closing”).

We are pleased to offer you the opportunity to invest in shares of common stock of Newco (the “Shares”) on the terms and conditions set out below. As further described below, to the extent that you own shares of Aleris as a capital asset, you are being given the opportunity to invest on a tax-deferred basis by “rolling over” a portion of these shares (any such shares being rolled over, the “Rollover Shares”). In addition, you are being offered the opportunity to make a cash contribution as set forth in Section 3 and the Acceptance Form (your “Cash Contribution”).

1. Merger Consideration; Rollover Shares. As a result of the transactions contemplated by the Merger Agreement, absent an election to contribute or “rollover” the Rollover Shares as contemplated in this agreement (this “Agreement”), you would be entitled, with respect to your Rollover Shares, to the “Merger Consideration” (as defined in the Merger Agreement) for each such Rollover Share (the aggregate such amount that you would be entitled to receive with respect to your Rollover Shares, the “Rollover Merger Consideration”). As a technical matter, the Rollover Merger Consideration that is payable to you in the absence of a rollover election would be distributed by Aleris. By completing the Acceptance Form below, you agree to, and instruct Newco and Aleris to use their reasonable efforts to, roll over your Rollover Shares into the Shares in lieu of receiving the Rollover Merger Consideration in cash. Upon your instruction, this rollover will occur as set forth below in “Sale and Purchase of Shares; Rollover Mechanics”, and will ultimately result in your Rollover Shares being contributed to Newco in exchange for the Shares.

2. Sale and Purchase of Shares; Rollover Mechanics. By completing and returning the Acceptance Form below, you agree to, immediately prior to the Closing, contribute your Rollover Shares to Newco and agree to forego any Rollover Merger Consideration (and any Merger Consideration you are using to satisfy your Cash Contribution) to which you would otherwise have been entitled absent an election to invest in the Shares. The Rollover Shares so contributed will be canceled and retired without any conversion thereof or payment or

distribution thereon, as set forth in Section 1.06 of the Merger Agreement. In exchange for the Rollover Shares and your Cash Contribution, you will receive such number of Shares having an aggregate value equal to the amount of your investment as indicated on the Acceptance Form. You will be the holder of record of the Shares as of the Closing, whether or not Newco issues physical certificates to you. This offer is conditioned upon the occurrence of the Closing. If the Closing does not occur, this Agreement will be canceled and will be of no force and effect.

3. Form of Consideration. If you choose to invest in the Shares, (i) you must invest a minimum of $50,000, and (ii) you must then satisfy your investment of the Rollover Shares by contributing all Aleris shares that you hold as a capital asset (e.g., shares you acquired on the market or shares you acquired by exercising stock options or upon vesting of awards of restricted stock), if any, or by making your Cash Contribution. Your Cash Contribution will automatically be deducted from your after-tax merger proceeds (e.g., from any cash payment of the Merger Consideration to which you may be entitled with respect to equity or equity-based interests other than those being rolled over pursuant to this Agreement), provided that if such proceeds are insufficient, any shortfall must be received by wire transfer by the close of business on the day before the Closing (wire information will be provided to you). Delivery of any Rollover Shares will occur as follows: (x) with respect to Rollover Shares for which physical certificates were delivered to you, by delivering the physical certificates that were so issued; and (y) with respect to Rollover Shares you hold through a brokerage account, by having the brokerage firm by which such Rollover Shares are held transfer these Rollover Shares to an account established in Newco’s name (the “Newco Account”) (transfer information will be provided to you). The Rollover Shares must be credited to the Newco Account before 12:00 p.m., Monday, December 18, 2006, which means that you should instruct your broker to initiate the transfer by 12:00 p.m. on Friday, December 15, 2006.

4. Acceptance and Closing; Conditions. You may accept this offer and the terms of this Agreement by completing and returning the Acceptance Form below, in which case the closing of the acquisition of the Shares will occur immediately after the Closing. This offer is conditioned upon the occurrence of the Closing. If the Closing does not occur on or before January 31, 2007 (the “Closing Deadline”), this Agreement will be canceled and you will have no rights with respect hereto and any Rollover Shares that you have transferred or cash payment that you have made pursuant to Section 3 will be returned to you; provided, that if Newco determines on or before the Closing Deadline and in good faith that the Closing is likely to occur on or before February 28, 2007, the Closing Deadline shall automatically be extended to February 28, 2007.

5. Limitation. Newco, in its discretion, may limit the number of Shares that you may purchase, and therefore may choose not to accept the full amount of your investment election. Rollover Shares not so accepted pursuant to the preceding sentence will be treated in accordance with the provisions of the Merger Agreement.

6. Vesting. Your Shares when issued will be fully vested.

7. Stockholders’ Agreement. By completing and returning the Acceptance Form below, you agree to become a party to the Management Stockholders’ Agreement, a draft of which is attached hereto as Annex A, as may be amended from time to time in accordance with its terms

2

(the “Stockholders’ Agreement”) and you will be subject to the terms and conditions thereof with respect to your Shares. Newco agrees that it will, and that it will cause the Majority Holders (as defined below) to, also become a party to the Stockholders’ Agreement.

8. Tax Reporting. It is intended that your contribution of the Rollover Shares, if any, shall be treated as a tax-free transfer under Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”). Your contribution of the Rollover Shares, if any, is being made at the same time as the initial investment being made by Majority Holders.

All discussions of U.S. federal tax considerations in this document have been written to support the marketing of the Shares. Such discussions were not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding U.S. federal tax penalties. You should consult your own tax advisers in determining the tax consequences of the rollover and of holding the Shares, including the application to your particular situation of the U.S. federal tax considerations discussed herein, as well as the application of state, local, foreign, or other tax laws.

9. Representations; Acknowledgements. By signing below and completing and returning the Acceptance Form, you hereby represent and warrant to Newco and Aleris that:

(i) you have the requisite power, authority and capacity to execute this Agreement and to deliver or cause to be delivered the Rollover Shares, to perform your obligations under this Agreement and to consummate the transactions contemplated hereby;

(ii) the Acceptance Form has been duly and validly executed and delivered by you and constitutes your legal, valid and binding obligation, enforceable against you in accordance with its terms, except to the extent that such validly binding effect and enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium and other laws relating to or affecting creditors’ rights generally;

(iii) the Shares are being acquired for your own account, for investment purposes only and not with a view to or in connection with any distribution, reoffer, resale, public offering or other disposition thereof not in compliance with the Securities Act of 1933 (the “Securities Act”), as may be amended from time to time, or any applicable United States federal or state securities laws or regulations;

(iv) you are an “accredited investor”, as defined in Rule 501(a) under the Securities Act, which means you are:

a. A person whose individual net worth, or joint net worth with your spouse, exceeds $1,000,000; OR

b. A person whose income exceeded $200,000 in each of the two most recent years, or joint income with your spouse exceeded $300,000 in each of those years, and you have a reasonable expectation of reaching the same income level in this year;

3

(v) you possess such expertise, knowledge, and sophistication in financial and business matters generally, and in the type of transaction in which Aleris and Newco propose to engage in particular;

(vi) you have had access to all of the information and individuals with respect to the Shares and your investment that you deem necessary to make a complete evaluation thereof;

(vii) you have had an opportunity to consult an independent tax and legal advisor and your decision to acquire the interest for investment has been based solely upon your evaluation;

(viii) you are aware that the Internal Revenue Service (the “IRS”) or other relevant taxing authority may take a position regarding the rollover contemplated in this Agreement and/or the tax classification of Newco and the Shares contrary to that intended by Newco as provided in this Agreement and you shall be solely responsible for any and all tax or other liabilities that may result from the IRS’s or other relevant taxing authority’s position; and

(ix) you are aware that the Stockholders’ Agreement provides significant restrictions on your ability to dispose of the Shares.

By electing to contribute the Rollover Shares pursuant to this Agreement, you acknowledge that you are instructing Newco and its affiliates to distribute to you, following the Closing, Shares in Newco instead of cash, as described above, and you hereby acknowledge that you do not have, and will not assert that you have, any claim against Newco, the Majority Holders (as defined below) or their respective affiliates to receive the Merger Consideration or any other payment in exchange for the Rollover Shares, except as contemplated herein.

The “Majority Holders” shall mean, collectively or individually, TPG Partners IV, L.P. and TPG Partners V, L.P. and their respective successors and assigns.

10. Other Aleris Interests. You acknowledge that any other equity or equity-based interests that you hold in Aleris that you do not elect to roll over, or which are not accepted for rollover for any reason pursuant to this Agreement, will be treated in accordance with the Merger Agreement.

11. Governing Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Delaware.

12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

Please sign your name on the space provided on the next page and please indicate whether and how you would like to invest in Newco by completing and executing the Acceptance Form attached to the end of this Agreement. Please return an executed copy of this Agreement and the Acceptance Form in original form or by FAX no later than 12:00 p.m. (Eastern Standard Time) on Monday, December 18^th, 2006 to the attention of Chris

4

Clegg, Aleris International, Inc., 25825 Science Park Drive, Ste. 400, Beachwood, OH 44122. The fax number is (216) 910-3654. (If you fax your election form on Monday, the original should be delivered to Chris Clegg no later than 5:00 p.m. on Monday, December 18, 2006).

*        *        *        *        *

5

By signing below you are indicating your agreement with, and willingness to be bound by, the terms of this Agreement and any amount indicated by you on the Acceptance Form.

Sincerely,
AURORA ACQUISITION HOLDINGS, INC.
By:	/s/ John E. Viola
	Name: John E. Viola
	Title: Vice President and Treasurer

Agreed to and Accepted by:

/s/ Michael D. Friday

Signature

Please print your name and address:

Michael D. Friday

4562 Hunting Valley Lane

Brecksville, OH 44141

By execution below, Aleris and its respective affiliates agree, if so directed by you, to use reasonable efforts to effect a rollover pursuant to this Agreement as a tax-free distribution under section 351 of the Code, unless otherwise required pursuant to a final determination, as defined in Section 1313 of the Code:

ALERIS INTERNATIONAL, INC.
By:	/s/ Chris R. Clegg
	Name:
	Title:

Acceptance of Offer to Acquire Shares of Newco (the “Acceptance Form”)

Pursuant to the terms and conditions set forth in letter to me dated December 15, 2006, I, Michael D. Friday, hereby elect make an investment in Newco and purchase Shares in the amount and manner below:

1. $1,177,575.00, which will be satisfied through a contribution of 22,430 Aleris shares (at $52.50 per share); and

2. $622,425.00, which will be satisfied through a reduction in my after-tax proceeds from any cash payment of the Merger Consideration I will receive in exchange equity or equity-based interests other than those being rolled over pursuant to this Agreement.

Aggregate Investment = $1,800,000.00 (sum of 1 and 2 above cannot be less than $50,000)

/s/ Michael D. Friday

Signature

December 15, 2006

Date

F-1

ANNEX A

[STOCKHOLDERS’ AGREEMENT]

A-1

EX-10.28

Exhibit 10.28

EXECUTION COPY

Aurora Acquisition Holdings, Inc.

December 15, 2006

Re: Opportunity to Acquire Shares

Dear Aleris Executive,

As you know, Aleris International, Inc. (“Aleris”) is in the process of undergoing a change of control, and following the change of control, 100% of its outstanding shares will be owned by an entity called Aurora Acquisition Holdings, Inc. (“Newco”). This transaction is pursuant to an Agreement and Plan of Merger, dated as of August 7, 2006, by and among Newco, Aurora Acquisition Merger Sub, Inc. and Aleris (the “Merger Agreement”). Although a delay is possible, we expect that the closing of the transaction will occur on December 19, 2006 (the “Closing”).

We are pleased to offer you the opportunity to invest in shares of common stock of Newco (the “Shares”) on the terms and conditions set out below. As further described below, to the extent that you own shares of Aleris as a capital asset, you are being given the opportunity to invest on a tax-deferred basis by “rolling over” a portion of these shares (any such shares being rolled over, the “Rollover Shares”). In addition, you are being offered the opportunity to make a cash contribution as set forth in Section 3 and the Acceptance Form (your “Cash Contribution”).

1. Merger Consideration; Rollover Shares. As a result of the transactions contemplated by the Merger Agreement, absent an election to contribute or “rollover” the Rollover Shares as contemplated in this agreement (this “Agreement”), you would be entitled, with respect to your Rollover Shares, to the “Merger Consideration” (as defined in the Merger Agreement) for each such Rollover Share (the aggregate such amount that you would be entitled to receive with respect to your Rollover Shares, the “Rollover Merger Consideration”). As a technical matter, the Rollover Merger Consideration that is payable to you in the absence of a rollover election would be distributed by Aleris. By completing the Acceptance Form below, you agree to, and instruct Newco and Aleris to use their reasonable efforts to, roll over your Rollover Shares into the Shares in lieu of receiving the Rollover Merger Consideration in cash. Upon your instruction, this rollover will occur as set forth below in “Sale and Purchase of Shares; Rollover Mechanics”, and will ultimately result in your Rollover Shares being contributed to Newco in exchange for the Shares.

2. Sale and Purchase of Shares; Rollover Mechanics. By completing and returning the Acceptance Form below, you agree to, immediately prior to the Closing, contribute your Rollover Shares to Newco and agree to forego any Rollover Merger Consideration (and any Merger Consideration you are using to satisfy your Cash Contribution) to which you would otherwise have been entitled absent an election to invest in the Shares. The Rollover Shares so contributed will be canceled and retired without any conversion thereof or payment or

distribution thereon, as set forth in Section 1.06 of the Merger Agreement. In exchange for the Rollover Shares and your Cash Contribution, you will receive such number of Shares having an aggregate value equal to the amount of your investment as indicated on the Acceptance Form. You will be the holder of record of the Shares as of the Closing, whether or not Newco issues physical certificates to you. This offer is conditioned upon the occurrence of the Closing. If the Closing does not occur, this Agreement will be canceled and will be of no force and effect.

3. Form of Consideration. If you choose to invest in the Shares, (i) you must invest a minimum of $50,000, and (ii) you must then satisfy your investment of the Rollover Shares by contributing all Aleris shares that you hold as a capital asset (e.g., shares you acquired on the market or shares you acquired by exercising stock options or upon vesting of awards of restricted stock), if any, or by making your Cash Contribution. Your Cash Contribution will automatically be deducted from your after-tax merger proceeds (e.g., from any cash payment of the Merger Consideration to which you may be entitled with respect to equity or equity-based interests other than those being rolled over pursuant to this Agreement), provided that if such proceeds are insufficient, any shortfall must be received by wire transfer by the close of business on the day before the Closing (wire information will be provided to you). Delivery of any Rollover Shares will occur as follows: (x) with respect to Rollover Shares for which physical certificates were delivered to you, by delivering the physical certificates that were so issued; and (y) with respect to Rollover Shares you hold through a brokerage account, by having the brokerage firm by which such Rollover Shares are held transfer these Rollover Shares to an account established in Newco’s name (the “Newco Account”) (transfer information will be provided to you). The Rollover Shares must be credited to the Newco Account before 12:00 p.m., Monday, December 18, 2006, which means that you should instruct your broker to initiate the transfer by 12:00 p.m. on Friday, December 15, 2006.

4. Acceptance and Closing; Conditions. You may accept this offer and the terms of this Agreement by completing and returning the Acceptance Form below, in which case the closing of the acquisition of the Shares will occur immediately after the Closing. This offer is conditioned upon the occurrence of the Closing. If the Closing does not occur on or before January 31, 2007 (the “Closing Deadline”), this Agreement will be canceled and you will have no rights with respect hereto and any Rollover Shares that you have transferred or cash payment that you have made pursuant to Section 3 will be returned to you; provided, that if Newco determines on or before the Closing Deadline and in good faith that the Closing is likely to occur on or before February 28, 2007, the Closing Deadline shall automatically be extended to February 28, 2007.

5. Limitation. Newco, in its discretion, may limit the number of Shares that you may purchase, and therefore may choose not to accept the full amount of your investment election. Rollover Shares not so accepted pursuant to the preceding sentence will be treated in accordance with the provisions of the Merger Agreement.

6. Vesting. Your Shares when issued will be fully vested.

7. Stockholders’ Agreement. By completing and returning the Acceptance Form below, you agree to become a party to the Management Stockholders’ Agreement, a draft of which is attached hereto as Annex A, as may be amended from time to time in accordance with its terms

2

(the “Stockholders’ Agreement”) and you will be subject to the terms and conditions thereof with respect to your Shares. Newco agrees that it will, and that it will cause the Majority Holders (as defined below) to, also become a party to the Stockholders’ Agreement.

8. Tax Reporting. It is intended that your contribution of the Rollover Shares, if any, shall be treated as a tax-free transfer under Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”). Your contribution of the Rollover Shares, if any, is being made at the same time as the initial investment being made by Majority Holders.

All discussions of U.S. federal tax considerations in this document have been written to support the marketing of the Shares. Such discussions were not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding U.S. federal tax penalties. You should consult your own tax advisers in determining the tax consequences of the rollover and of holding the Shares, including the application to your particular situation of the U.S. federal tax considerations discussed herein, as well as the application of state, local, foreign, or other tax laws.

9. Representations; Acknowledgements. By signing below and completing and returning the Acceptance Form, you hereby represent and warrant to Newco and Aleris that:

(i) you have the requisite power, authority and capacity to execute this Agreement and to deliver or cause to be delivered the Rollover Shares, to perform your obligations under this Agreement and to consummate the transactions contemplated hereby;

(ii) the Acceptance Form has been duly and validly executed and delivered by you and constitutes your legal, valid and binding obligation, enforceable against you in accordance with its terms, except to the extent that such validly binding effect and enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium and other laws relating to or affecting creditors’ rights generally;

(iii) the Shares are being acquired for your own account, for investment purposes only and not with a view to or in connection with any distribution, reoffer, resale, public offering or other disposition thereof not in compliance with the Securities Act of 1933 (the “Securities Act”), as may be amended from time to time, or any applicable United States federal or state securities laws or regulations;

(iv) you are an “accredited investor”, as defined in Rule 501(a) under the Securities Act, which means you are:

a. A person whose individual net worth, or joint net worth with your spouse, exceeds $1,000,000; OR

b. A person whose income exceeded $200,000 in each of the two most recent years, or joint income with your spouse exceeded $300,000 in each of those years, and you have a reasonable expectation of reaching the same income level in this year;

3

(v) you possess such expertise, knowledge, and sophistication in financial and business matters generally, and in the type of transaction in which Aleris and Newco propose to engage in particular;

(vi) you have had access to all of the information and individuals with respect to the Shares and your investment that you deem necessary to make a complete evaluation thereof;

(vii) you have had an opportunity to consult an independent tax and legal advisor and your decision to acquire the interest for investment has been based solely upon your evaluation;

(viii) you are aware that the Internal Revenue Service (the “IRS”) or other relevant taxing authority may take a position regarding the rollover contemplated in this Agreement and/or the tax classification of Newco and the Shares contrary to that intended by Newco as provided in this Agreement and you shall be solely responsible for any and all tax or other liabilities that may result from the IRS’s or other relevant taxing authority’s position; and

(ix) you are aware that the Stockholders’ Agreement provides significant restrictions on your ability to dispose of the Shares.

By electing to contribute the Rollover Shares pursuant to this Agreement, you acknowledge that you are instructing Newco and its affiliates to distribute to you, following the Closing, Shares in Newco instead of cash, as described above, and you hereby acknowledge that you do not have, and will not assert that you have, any claim against Newco, the Majority Holders (as defined below) or their respective affiliates to receive the Merger Consideration or any other payment in exchange for the Rollover Shares, except as contemplated herein.

The “Majority Holders” shall mean, collectively or individually, TPG Partners IV, L.P. and TPG Partners V, L.P. and their respective successors and assigns.

10. Other Aleris Interests. You acknowledge that any other equity or equity-based interests that you hold in Aleris that you do not elect to roll over, or which are not accepted for rollover for any reason pursuant to this Agreement, will be treated in accordance with the Merger Agreement.

11. Governing Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Delaware.

12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

Please sign your name on the space provided on the next page and please indicate whether and how you would like to invest in Newco by completing and executing the Acceptance Form attached to the end of this Agreement. Please return an executed copy of this Agreement and the Acceptance Form in original form or by FAX no later than 12:00 p.m. (Eastern Standard Time) on Monday, December 18^th, 2006 to the attention of Chris

4

Clegg, Aleris International, Inc., 25825 Science Park Drive, Ste. 400, Beachwood, OH 44122. The fax number is (216) 910-3654. (If you fax your election form on Monday, the original should be delivered to Chris Clegg no later than 5:00 p.m. on Monday, December 18, 2006).

*        *        *        *        *

5

By signing below you are indicating your agreement with, and willingness to be bound by, the terms of this Agreement and any amount indicated by you on the Acceptance Form.

Sincerely,
AURORA ACQUISITION HOLDINGS, INC.
By:	/s/ John E. Viola
	Name: John E. Viola
	Title: Vice President and Treasurer

Agreed to and Accepted by:

/s/ John J. Wasz

Please print your name and address:

John J. Wasz

518 Woodlake Drive

Louisville, KY 40245

By execution below, Aleris and its respective affiliates agree, if so directed by you, to use reasonable efforts to effect a rollover pursuant to this Agreement as a tax-free distribution under section 351 of the Code, unless otherwise required pursuant to a final determination, as defined in Section 1313 of the Code:
ALERIS INTERNATIONAL, INC.
By:	/s/ Michael D. Friday
	Name:
	Title:

Acceptance of Offer to Acquire Shares of Newco (the “Acceptance Form”)

Pursuant to the terms and conditions set forth in letter to me dated December 15, 2006, I, John J. Wasz, hereby elect make an investment in Newco and purchase Shares in the amount and manner below:

1. $686,647.50, which will be satisfied through a contribution of 13,079 Aleris shares (at $52.50 per share); and

2. $1,113,352.50, which will be satisfied through a reduction in my after-tax proceeds from any cash payment of the Merger Consideration I will receive in exchange equity or equity-based interests other than those being rolled over pursuant to this Agreement.

Aggregate Investment = $1,800,000.00 (sum of 1 and 2 above cannot be less than $50,000)

/s/ John J. Wasz

Signature

December 15, 2006

Date

F-1

ANNEX A

[STOCKHOLDERS’ AGREEMENT]

A-1

EX-10.29

Exhibit 10.29

EXECUTION COPY

Aurora Acquisition Holdings, Inc.

December 15, 2006

Re: Opportunity to Acquire Shares

Dear Aleris Executive,

As you know, Aleris International, Inc. (“Aleris”) is in the process of undergoing a change of control, and following the change of control, 100% of its outstanding shares will be owned by an entity called Aurora Acquisition Holdings, Inc. (“Newco”). This transaction is pursuant to an Agreement and Plan of Merger, dated as of August 7, 2006, by and among Newco, Aurora Acquisition Merger Sub, Inc. and Aleris (the “Merger Agreement”). Although a delay is possible, we expect that the closing of the transaction will occur on December 19, 2006 (the “Closing”).

We are pleased to offer you the opportunity to invest in shares of common stock of Newco (the “Shares”) on the terms and conditions set out below. As further described below, to the extent that you own shares of Aleris as a capital asset, you are being given the opportunity to invest on a tax-deferred basis by “rolling over” a portion of these shares (any such shares being rolled over, the “Rollover Shares”). In addition, you are being offered the opportunity to make a cash contribution as set forth in Section 3 and the Acceptance Form (your “Cash Contribution”).

1. Merger Consideration; Rollover Shares. As a result of the transactions contemplated by the Merger Agreement, absent an election to contribute or “rollover” the Rollover Shares as contemplated in this agreement (this “Agreement”), you would be entitled, with respect to your Rollover Shares, to the “Merger Consideration” (as defined in the Merger Agreement) for each such Rollover Share (the aggregate such amount that you would be entitled to receive with respect to your Rollover Shares, the “Rollover Merger Consideration”). As a technical matter, the Rollover Merger Consideration that is payable to you in the absence of a rollover election would be distributed by Aleris. By completing the Acceptance Form below, you agree to, and instruct Newco and Aleris to use their reasonable efforts to, roll over your Rollover Shares into the Shares in lieu of receiving the Rollover Merger Consideration in cash. Upon your instruction, this rollover will occur as set forth below in “Sale and Purchase of Shares; Rollover Mechanics”, and will ultimately result in your Rollover Shares being contributed to Newco in exchange for the Shares.

2. Sale and Purchase of Shares; Rollover Mechanics. By completing and returning the Acceptance Form below, you agree to, immediately prior to the Closing, contribute your Rollover Shares to Newco and agree to forego any Rollover Merger Consideration (and any Merger Consideration you are using to satisfy your Cash Contribution) to which you would otherwise have been entitled absent an election to invest in the Shares. The Rollover Shares so contributed will be canceled and retired without any conversion thereof or payment or

distribution thereon, as set forth in Section 1.06 of the Merger Agreement. In exchange for the Rollover Shares and your Cash Contribution, you will receive such number of Shares having an aggregate value equal to the amount of your investment as indicated on the Acceptance Form. You will be the holder of record of the Shares as of the Closing, whether or not Newco issues physical certificates to you. This offer is conditioned upon the occurrence of the Closing. If the Closing does not occur, this Agreement will be canceled and will be of no force and effect.

3. Form of Consideration. If you choose to invest in the Shares, (i) you must invest a minimum of $50,000, and (ii) you must then satisfy your investment of the Rollover Shares by contributing all Aleris shares that you hold as a capital asset (e.g., shares you acquired on the market or shares you acquired by exercising stock options or upon vesting of awards of restricted stock), if any, or by making your Cash Contribution. Your Cash Contribution will automatically be deducted from your after-tax merger proceeds (e.g., from any cash payment of the Merger Consideration to which you may be entitled with respect to equity or equity-based interests other than those being rolled over pursuant to this Agreement), provided that if such proceeds are insufficient, any shortfall must be received by wire transfer by the close of business on the day before the Closing (wire information will be provided to you). Delivery of any Rollover Shares will occur as follows: (x) with respect to Rollover Shares for which physical certificates were delivered to you, by delivering the physical certificates that were so issued; and (y) with respect to Rollover Shares you hold through a brokerage account, by having the brokerage firm by which such Rollover Shares are held transfer these Rollover Shares to an account established in Newco’s name (the “Newco Account”) (transfer information will be provided to you). The Rollover Shares must be credited to the Newco Account before 12:00 p.m., Monday, December 18, 2006, which means that you should instruct your broker to initiate the transfer by 12:00 p.m. on Friday, December 15, 2006.

4. Acceptance and Closing; Conditions. You may accept this offer and the terms of this Agreement by completing and returning the Acceptance Form below, in which case the closing of the acquisition of the Shares will occur immediately after the Closing. This offer is conditioned upon the occurrence of the Closing. If the Closing does not occur on or before January 31, 2007 (the “Closing Deadline”), this Agreement will be canceled and you will have no rights with respect hereto and any Rollover Shares that you have transferred or cash payment that you have made pursuant to Section 3 will be returned to you; provided, that if Newco determines on or before the Closing Deadline and in good faith that the Closing is likely to occur on or before February 28, 2007, the Closing Deadline shall automatically be extended to February 28, 2007.

5. Limitation. Newco, in its discretion, may limit the number of Shares that you may purchase, and therefore may choose not to accept the full amount of your investment election. Rollover Shares not so accepted pursuant to the preceding sentence will be treated in accordance with the provisions of the Merger Agreement.

6. Vesting. Your Shares when issued will be fully vested.

7. Stockholders’ Agreement. By completing and returning the Acceptance Form below, you agree to become a party to the Management Stockholders’ Agreement, a draft of which is attached hereto as Annex A, as may be amended from time to time in accordance with its terms

2

(the “Stockholders’ Agreement”) and you will be subject to the terms and conditions thereof with respect to your Shares. Newco agrees that it will, and that it will cause the Majority Holders (as defined below) to, also become a party to the Stockholders’ Agreement.

8. Tax Reporting. It is intended that your contribution of the Rollover Shares, if any, shall be treated as a tax-free transfer under Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”). Your contribution of the Rollover Shares, if any, is being made at the same time as the initial investment being made by Majority Holders.

All discussions of U.S. federal tax considerations in this document have been written to support the marketing of the Shares. Such discussions were not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding U.S. federal tax penalties. You should consult your own tax advisers in determining the tax consequences of the rollover and of holding the Shares, including the application to your particular situation of the U.S. federal tax considerations discussed herein, as well as the application of state, local, foreign, or other tax laws.

9. Representations; Acknowledgements. By signing below and completing and returning the Acceptance Form, you hereby represent and warrant to Newco and Aleris that:

(i) you have the requisite power, authority and capacity to execute this Agreement and to deliver or cause to be delivered the Rollover Shares, to perform your obligations under this Agreement and to consummate the transactions contemplated hereby;

(ii) the Acceptance Form has been duly and validly executed and delivered by you and constitutes your legal, valid and binding obligation, enforceable against you in accordance with its terms, except to the extent that such validly binding effect and enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium and other laws relating to or affecting creditors’ rights generally;

(iii) the Shares are being acquired for your own account, for investment purposes only and not with a view to or in connection with any distribution, reoffer, resale, public offering or other disposition thereof not in compliance with the Securities Act of 1933 (the “Securities Act”), as may be amended from time to time, or any applicable United States federal or state securities laws or regulations;

(iv) you are an “accredited investor”, as defined in Rule 501(a) under the Securities Act, which means you are:

a. A person whose individual net worth, or joint net worth with your spouse, exceeds $1,000,000; OR

b. A person whose income exceeded $200,000 in each of the two most recent years, or joint income with your spouse exceeded $300,000 in each of those years, and you have a reasonable expectation of reaching the same income level in this year;

3

(v) you possess such expertise, knowledge, and sophistication in financial and business matters generally, and in the type of transaction in which Aleris and Newco propose to engage in particular;

(vi) you have had access to all of the information and individuals with respect to the Shares and your investment that you deem necessary to make a complete evaluation thereof;

(vii) you have had an opportunity to consult an independent tax and legal advisor and your decision to acquire the interest for investment has been based solely upon your evaluation;

(viii) you are aware that the Internal Revenue Service (the “IRS”) or other relevant taxing authority may take a position regarding the rollover contemplated in this Agreement and/or the tax classification of Newco and the Shares contrary to that intended by Newco as provided in this Agreement and you shall be solely responsible for any and all tax or other liabilities that may result from the IRS’s or other relevant taxing authority’s position; and

(ix) you are aware that the Stockholders’ Agreement provides significant restrictions on your ability to dispose of the Shares.

By electing to contribute the Rollover Shares pursuant to this Agreement, you acknowledge that you are instructing Newco and its affiliates to distribute to you, following the Closing, Shares in Newco instead of cash, as described above, and you hereby acknowledge that you do not have, and will not assert that you have, any claim against Newco, the Majority Holders (as defined below) or their respective affiliates to receive the Merger Consideration or any other payment in exchange for the Rollover Shares, except as contemplated herein.

The “Majority Holders” shall mean, collectively or individually, TPG Partners IV, L.P. and TPG Partners V, L.P. and their respective successors and assigns.

10. Other Aleris Interests. You acknowledge that any other equity or equity-based interests that you hold in Aleris that you do not elect to roll over, or which are not accepted for rollover for any reason pursuant to this Agreement, will be treated in accordance with the Merger Agreement.

11. Governing Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Delaware.

12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

Please sign your name on the space provided on the next page and please indicate whether and how you would like to invest in Newco by completing and executing the Acceptance Form attached to the end of this Agreement. Please return an executed copy of this Agreement and the Acceptance Form in original form or by FAX no later than 12:00 p.m. (Eastern Standard Time) on Monday, December 18^th, 2006 to the attention of Chris

4

Clegg, Aleris International, Inc., 25825 Science Park Drive, Ste. 400, Beachwood, OH 44122. The fax number is (216) 910-3654. (If you fax your election form on Monday, the original should be delivered to Chris Clegg no later than 5:00 p.m. on Monday, December 18, 2006).

*        *        *        *        *

5

By signing below you are indicating your agreement with, and willingness to be bound by, the terms of this Agreement and any amount indicated by you on the Acceptance Form.

	Sincerely,
	AURORA ACQUISITION HOLDINGS, INC.
	By:	/s/ John E. Viola
		Name: John E. Viola
		Title: Vice President and Treasurer
Agreed to and Accepted by:
/s/ Sean M. Stack
Signature
Please print your name and address:
Sean M. Stack
2948 Courtland Blvd.
Shaker Heights, Ohio 44122

By execution below, Aleris and its respective affiliates agree, if so directed by you, to use reasonable efforts to effect a rollover pursuant to this Agreement as a tax-free distribution under section 351 of the Code, unless otherwise required pursuant to a final determination, as defined in Section 1313 of the Code:
ALERIS INTERNATIONAL, INC.
By:	/s/ Michael D. Friday
	Name:
	Title:

Acceptance of Offer to Acquire Shares of Newco (the “Acceptance Form”)

Pursuant to the terms and conditions set forth in letter to me dated December 15, 2006, I, Sean M. Stack, hereby elect make an investment in Newco and purchase Shares in the amount and manner below:

1. $697,830.00, which will be satisfied through a contribution of 13,292 Aleris shares (at $52.50 per share); and

2. $502,170.00, which will be satisfied through a reduction in my after-tax proceeds from any cash payment of the Merger Consideration I will receive in exchange equity or equity-based interests other than those being rolled over pursuant to this Agreement.

Aggregate Investment = $1,200,000,00 (sum of 1 and 2 above cannot be less than $50,000)

/s/ Sean M. Stack

Signature

December 15, 2006

Date

F-1

ANNEX A

[STOCKHOLDERS’ AGREEMENT]

A-1

EX-10.30

Exhibit 10.30

EXECUTION COPY

Aurora Acquisition Holdings, Inc.

December 15, 2006

Re: Opportunity to Acquire Shares

Dear Aleris Executive,

As you know, Aleris International, Inc. (“Aleris”) is in the process of undergoing a change of control, and following the change of control, 100% of its outstanding shares will be owned by an entity called Aurora Acquisition Holdings, Inc. (“Newco”). This transaction is pursuant to an Agreement and Plan of Merger, dated as of August 7, 2006, by and among Newco, Aurora Acquisition Merger Sub, Inc. and Aleris (the “Merger Agreement”). Although a delay is possible, we expect that the closing of the transaction will occur on December 19, 2006 (the “Closing”).

We are pleased to offer you the opportunity to invest in shares of common stock of Newco (the “Shares”) on the terms and conditions set out below. As further described below, to the extent that you own shares of Aleris as a capital asset, you are being given the opportunity to invest on a tax-deferred basis by “rolling over” a portion of these shares (any such shares being rolled over, the “Rollover Shares”). In addition, you are being offered the opportunity to make a cash contribution as set forth in Section 3 and the Acceptance Form (your “Cash Contribution”).

1. Merger Consideration; Rollover Shares. As a result of the transactions contemplated by the Merger Agreement, absent an election to contribute or “rollover” the Rollover Shares as contemplated in this agreement (this “Agreement”), you would be entitled, with respect to your Rollover Shares, to the “Merger Consideration” (as defined in the Merger Agreement) for each such Rollover Share (the aggregate such amount that you would be entitled to receive with respect to your Rollover Shares, the “Rollover Merger Consideration”). As a technical matter, the Rollover Merger Consideration that is payable to you in the absence of a rollover election would be distributed by Aleris. By completing the Acceptance Form below, you agree to, and instruct Newco and Aleris to use their reasonable efforts to, roll over your Rollover Shares into the Shares in lieu of receiving the Rollover Merger Consideration in cash. Upon your instruction, this rollover will occur as set forth below in “Sale and Purchase of Shares; Rollover Mechanics”, and will ultimately result in your Rollover Shares being contributed to Newco in exchange for the Shares.

2. Sale and Purchase of Shares; Rollover Mechanics. By completing and returning the Acceptance Form below, you agree to, immediately prior to the Closing, contribute your Rollover Shares to Newco and agree to forego any Rollover Merger Consideration (and any Merger Consideration you are using to satisfy your Cash Contribution) to which you would otherwise have been entitled absent an election to invest in the Shares. The Rollover Shares so contributed will be canceled and retired without any conversion thereof or payment or

distribution thereon, as set forth in Section 1.06 of the Merger Agreement. In exchange for the Rollover Shares and your Cash Contribution, you will receive such number of Shares having an aggregate value equal to the amount of your investment as indicated on the Acceptance Form. You will be the holder of record of the Shares as of the Closing, whether or not Newco issues physical certificates to you. This offer is conditioned upon the occurrence of the Closing. If the Closing does not occur, this Agreement will be canceled and will be of no force and effect.

3. Form of Consideration. If you choose to invest in the Shares, (i) you must invest a minimum of $50,000, and (ii) you must then satisfy your investment of the Rollover Shares by contributing all Aleris shares that you hold as a capital asset (e.g., shares you acquired on the market or shares you acquired by exercising stock options or upon vesting of awards of restricted stock), if any, or by making your Cash Contribution. Your Cash Contribution will automatically be deducted from your after-tax merger proceeds (e.g., from any cash payment of the Merger Consideration to which you may be entitled with respect to equity or equity-based interests other than those being rolled over pursuant to this Agreement), provided that if such proceeds are insufficient, any shortfall must be received by wire transfer by the close of business on the day before the Closing (wire information will be provided to you). Delivery of any Rollover Shares will occur as follows: (x) with respect to Rollover Shares for which physical certificates were delivered to you, by delivering the physical certificates that were so issued; and (y) with respect to Rollover Shares you hold through a brokerage account, by having the brokerage firm by which such Rollover Shares are held transfer these Rollover Shares to an account established in Newco’s name (the “Newco Account”) (transfer information will be provided to you). The Rollover Shares must be credited to the Newco Account before 12:00 p.m., Monday, December 18, 2006, which means that you should instruct your broker to initiate the transfer by 12:00 p.m. on Friday, December 15, 2006.

4. Acceptance and Closing; Conditions. You may accept this offer and the terms of this Agreement by completing and returning the Acceptance Form below, in which case the closing of the acquisition of the Shares will occur immediately after the Closing. This offer is conditioned upon the occurrence of the Closing. If the Closing does not occur on or before January 31, 2007 (the “Closing Deadline”), this Agreement will be canceled and you will have no rights with respect hereto and any Rollover Shares that you have transferred or cash payment that you have made pursuant to Section 3 will be returned to you; provided, that if Newco determines on or before the Closing Deadline and in good faith that the Closing is likely to occur on or before February 28, 2007, the Closing Deadline shall automatically be extended to February 28, 2007.

5. Limitation. Newco, in its discretion, may limit the number of Shares that you may purchase, and therefore may choose not to accept the full amount of your investment election. Rollover Shares not so accepted pursuant to the preceding sentence will be treated in accordance with the provisions of the Merger Agreement.

6. Vesting. Your Shares when issued will be fully vested.

7. Stockholders’ Agreement. By completing and returning the Acceptance Form below, you agree to become a party to the Management Stockholders’ Agreement, a draft of which is attached hereto as Annex A, as may be amended from time to time in accordance with its terms

2

(the “Stockholders’ Agreement”) and you will be subject to the terms and conditions thereof with respect to your Shares. Newco agrees that it will, and that it will cause the Majority Holders (as defined below) to, also become a party to the Stockholders’ Agreement.

8. Tax Reporting. It is intended that your contribution of the Rollover Shares, if any, shall be treated as a tax-free transfer under Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”). Your contribution of the Rollover Shares, if any, is being made at the same time as the initial investment being made by Majority Holders.

All discussions of U.S. federal tax considerations in this document have been written to support the marketing of the Shares. Such discussions were not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding U.S. federal tax penalties. You should consult your own tax advisers in determining the tax consequences of the rollover and of holding the Shares, including the application to your particular situation of the U.S. federal tax considerations discussed herein, as well as the application of state, local, foreign, or other tax laws.

9. Representations; Acknowledgements. By signing below and completing and returning the Acceptance Form, you hereby represent and warrant to Newco and Aleris that:

(i) you have the requisite power, authority and capacity to execute this Agreement and to deliver or cause to be delivered the Rollover Shares, to perform your obligations under this Agreement and to consummate the transactions contemplated hereby;

(ii) the Acceptance Form has been duly and validly executed and delivered by you and constitutes your legal, valid and binding obligation, enforceable against you in accordance with its terms, except to the extent that such validly binding effect and enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium and other laws relating to or affecting creditors’ rights generally;

(iii) the Shares are being acquired for your own account, for investment purposes only and not with a view to or in connection with any distribution, reoffer, resale, public offering or other disposition thereof not in compliance with the Securities Act of 1933 (the “Securities Act”), as may be amended from time to time, or any applicable United States federal or state securities laws or regulations;

(iv) you are an “accredited investor”, as defined in Rule 501(a) under the Securities Act, which means you are:

a. A person whose individual net worth, or joint net worth with your spouse, exceeds $1,000,000; OR

b. A person whose income exceeded $200,000 in each of the two most recent years, or joint income with your spouse exceeded $300,000 in each of those years, and you have a reasonable expectation of reaching the same income level in this year;

3

(v) you possess such expertise, knowledge, and sophistication in financial and business matters generally, and in the type of transaction in which Aleris and Newco propose to engage in particular;

(vi) you have had access to all of the information and individuals with respect to the Shares and your investment that you deem necessary to make a complete evaluation thereof;

(vii) you have had an opportunity to consult an independent tax and legal advisor and your decision to acquire the interest for investment has been based solely upon your evaluation;

(viii) you are aware that the Internal Revenue Service (the “IRS”) or other relevant taxing authority may take a position regarding the rollover contemplated in this Agreement and/or the tax classification of Newco and the Shares contrary to that intended by Newco as provided in this Agreement and you shall be solely responsible for any and all tax or other liabilities that may result from the IRS’s or other relevant taxing authority’s position; and

(ix) you are aware that the Stockholders’ Agreement provides significant restrictions on your ability to dispose of the Shares.

By electing to contribute the Rollover Shares pursuant to this Agreement, you acknowledge that you are instructing Newco and its affiliates to distribute to you, following the Closing, Shares in Newco instead of cash, as described above, and you hereby acknowledge that you do not have, and will not assert that you have, any claim against Newco, the Majority Holders (as defined below) or their respective affiliates to receive the Merger Consideration or any other payment in exchange for the Rollover Shares, except as contemplated herein.

The “Majority Holders” shall mean, collectively or individually, TPG Partners IV, L.P. and TPG Partners V, L.P. and their respective successors and assigns.

10. Other Aleris Interests. You acknowledge that any other equity or equity-based interests that you hold in Aleris that you do not elect to roll over, or which are not accepted for rollover for any reason pursuant to this Agreement, will be treated in accordance with the Merger Agreement.

11. Governing Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Delaware.

12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

Please sign your name on the space provided on the next page and please indicate whether and how you would like to invest in Newco by completing and executing the Acceptance Form attached to the end of this Agreement. Please return an executed copy of this Agreement and the Acceptance Form in original form or by FAX no later than 12:00 p.m. (Eastern Standard Time) on Monday, December 18^th, 2006 to the attention of Chris

4

Clegg, Aleris International, Inc., 25825 Science Park Drive, Ste. 400, Beachwood, OH 44122. The fax number is (216) 910-3654. (If you fax your election form on Monday, the original should be delivered to Chris Clegg no later than 5:00 p.m. on Monday, December 18, 2006).

*        *        *        *        *

5

By signing below you are indicating your agreement with, and willingness to be bound by, the terms of this Agreement and any amount indicated by you on the Acceptance Form.

Sincerely,
AURORA ACQUISITION HOLDINGS, INC.
By:	/s/ John E. Viola
	Name: John E. Viola
	Title: Vice President and Treasurer

Agreed to and Accepted by:

/s/ Chris R. Clegg

Signature

Please print your name and address:

Christopher R. Clegg

48 Cohasset Drive

Hudson, Ohio 44236

By execution below, Aleris and its respective affiliates agree, if so directed by you, to use reasonable efforts to effect a rollover pursuant to this Agreement as a tax-free distribution under section 351 of the Code, unless otherwise required pursuant to a final determination, as defined in Section 1313 of the Code:

ALERIS INTERNATIONAL, INC.
By:	/s/ Michael D. Friday
	Name:
	Title:

Acceptance of Offer to Acquire Shares of Newco (the “Acceptance Form”)

Pursuant to the terms and conditions set forth in letter to me dated December 15, 2006, I, Christopher R. Clegg, hereby elect make an investment in Newco and purchase Shares in the amount and manner below:

1. $891,030.00, which will be satisfied through a contribution of 16,972 Aleris shares (at $52.50 per share); and

2. $308,970.00, which will be satisfied through a reduction in my after-tax proceeds from any cash payment of the Merger Consideration I will receive in exchange equity or equity-based interests other than those being rolled over pursuant to this Agreement.

Aggregate Investment = $1,200,000.00 (sum of 1 and 2 above cannot be less than $50,000)

/s/ Christopher R. Clegg

Signature

December 15, 2006

Date

F-1

ANNEX A

[STOCKHOLDERS’ AGREEMENT]

A-1

EX-12.1

Exhibit 12.1

Statement of Computation of Ratio of Earnings to Fixed Charges

(in millions, except ratios)

	(Successor)			(Predecessor)
	For the period from  December 20, 2006  to December 31, 2006			For the period from January 1, 2006 to December 19, 2006
						For the year ended December 31,
						2005		2004			2003			2002
Earnings:
(Loss) income before income taxes, minority interest, and cumulative effect of accounting change	$	(4.1	)	$	118.1	$	75.2	$	(16.1	)	$	(1.5	)	$	11.3
Add (less): Equity loss (earnings)		—			—		1.6		0.2			(0.8	)		(2.4	)
Add: Dividends		—			—		—		—			0.2			2.8
Sub-total:		(4.1	)		118.1		76.8		(15.9	)		(2.1	)		11.7
Add: Total fixed charges (per below)		7.2			91.2		46.2		31.6			17.9			11.3
Less: Interest capitalized		—			2.5		1.3		0.4			0.2			0.2
Total earnings before income taxes, minority interest, and cumulative effect of accounting change	$	3.1		$	206.8	$	121.7	$	15.3		$	15.6		$	22.8
Fixed Charges:
Interest expense, including interest capitalized		6.9			86.2		43.2		29.2			16.0			9.9
Portion of rental expense representative of the interest factor		0.3			5.0		3.0		2.4			1.9			1.4
Total fixed charges	$	7.2		$	91.2	$	46.2	$	31.6		$	17.9		$	11.3
Ratio of Earnings to Fixed Charges		(a	)		2.3		2.6		(a	)		(a	)		2.0

(a) For the period from December 20, 2006 to December 31, 2006 and for fiscal years 2004 and 2003 earnings were insufficient to cover fixed charges by $4.1, $16.3 and $2.3, respectively.

EX-21.1

Exhibit 21.1

Subsidiaries of Aleris International, Inc.

as of April 2, 2007

	Subsidiary	State or other jurisdiction of incorporation or organization
1.	Alchem Aluminum, Inc.	Delaware
2	Alchem Aluminum Shelbyville Inc.	Delaware
3.	Aleris Aluminum Austria GmbH f/k/a Corus Aluminium Verkauf GmbH	Austria
4.	Aleris Aluminum Bitterfeld GmbH f/k/a Corus Aluminium Profiltechnik Bitterfeld GmbH	Germany
5.	Aleris Aluminum Bonn GmbH f/k/a Corus Aluminium Profiltechnik Bonn GmbH	Germany
6.	Aleris Aluminum Canada Holding 2, Inc. f/k/a Corus Aluminium Inc.	Canada
7.	Aleris Aluminum Canada L.P. f/k/a Corus L.P.	Canada
8.	Aleris Aluminum Denmark ApS	Denmark
9.	Aleris Aluminum Duffel BVBA f/k/a Corus Aluminium BVBA	Belgium
10.	Aleris Aluminum Europe, Inc. f/k/a Hoogovens Aluminium Europe Inc.	Delaware
11.	Aleris Aluminum France SAS	France
12.	Aleris Aluminum GmbH f/k/a Corus Aluminium GmbH	Germany
13.	Aleris Aluminum Italy Srl f/k/a Corus Aluminium Rolled Products, Italia Srl	Italy
14.	Aleris Aluminum Japan, Ltd. f/k/a Corus Aluminium Japan, Ltd.	Japan
15.	Aleris Aluminum Koblenz GmbH f/k/a Corus Aluminium Walzprodukte GmbH	Germany
16.	Aleris Aluminum Netherlands B.V. f/k/a Corus Aluminium Rolled Products B.V.	Netherlands
17.	Aleris Aluminum Sales Europe GmbH f/k/a Aleris Aluminium Products GmbH	Germany
18.	Aleris Aluminum Service Center NV f/k/a Corus Aluminium Service Center NV	Belgium
19.	Aleris Aluminum Spain, S.A. f/k/a Corus Aluminium Espana SA	Spain
20.	Aleris Aluminum UK Limited	United Kingdom
21.	Aleris Aluminum U.S. Sales, Inc. f/k/a Corus Aluminium Corp.	Delaware
22.	Aleris Aluminum Vogt GmbH f/k/a Corus Aluminium Profiltecknik GmbH	Germany
23.	Aleris Aluminum Vogt GmbH [sp z.o.o.] f/k/a Corus Aluminium Profiltechnik GmbH sp. z o.o.	Poland
24.	Aleris Asia Pacific International (Barbados) Ltd.	Barbados
25.	Aleris Asia Pacific Limited	Hong Kong
26.	Aleris Asia Pacific Zinc (Barbados) Ltd.	Barbados
27.	Aleris Belgium BVBA	Belgium
28.	Aleris Blanking and Rim Products, Inc. (formerly Indiana Aluminum Inc.)	Indiana
29.	Aleris Deutschland Beteiligungsunternehmen Duffel GmbH	Germany
30.	Aleris Deutschland Holding GmbH	Germany
31.	Aleris Deutschland Vier GmbH Co KG	Germany
32.	Aleris Deutschland Vierte Verwaltungs GmbH1	Germany
33.	Aleris do Brasil Holding Ltda. (formerly IMCO Brazil Holding Ltda.)	Brazil
34.	Aleris Gibraltar Limited	Gibraltar
35.	Aleris Global Luxembourg S.a.r.l	Luxembourg
36.	Aleris Holding Belgium BVBA	Belgium
37.	Aleris Holding Canada Limited	Canada
38.	Aleris Holding Luxembourg S.a.r.l	Luxembourg
39.	Aleris Holding Luxembourg S.a.r.l & Co. KG	Germany
40.	Aleris Hylite B.V. f/k/a Corus Hylite B.V.	Netherlands
41.	Aleris Inc.	Delaware

¹ 50% owned.

	Subsidiary	State or other jurisdiction of incorporation or organization
42.	Aleris Latasa Reciclagem S.A.	Brazil
43.	Aleris Luxembourg S.a.r.l	Luxembourg
44.	Aleris Mexico, S. de R.L. de C.V. (formerly IMCO Reciclaje de Mexico, S. de R.L. de C.V.)	Mexico
45.	Aleris New Gibraltar Limited	Gibraltar
46.	Aleris Nuevo Leon, S. de R.L. de C.V. (formerly IMCO Reciclaje de Nuevo Leon, S. de R.L de C.V.)	Mexico
47.	Aleris Ohio Management, Inc.	Delaware
48.	Aleris Reciclagem Ltda. (formerly IMCO Reciclagem de Materiais Indústria e Comércio Ltda.)	Brazil
49.	Aleris Reciclaje Servicios Administrativos, S. de R.L. de C.V. (formerly IMCO Reciclaje Servicios Administrativos, S. de R.L. de C.V.)	Mexico
50.	Aleris Reciclaje Servicios de Manufactura, S. de R. L. de C.V. (formerly IMCO Reciclaje Servicios de Manufactura, S. de R.L. de C.V.)	Mexico
51.	Aleris Recycling (German Works) GmbH f/k/a VAW-IMCO Guß und Recycling GmbH	Germany
52.	Aleris Recycling Holding B.V. f/k/a IMCO Recycling Holding B.V.	Netherlands
53.	Aleris Recycling Netherlands B.V.	Netherlands
54.	Aleris Recycling (Swansea) Ltd. f/k/a IMCO Recycling (UK) Ltd.	United Kingdom
55.	Aleris (Shanghai) Trading Co. Ltd.	China
56.	Aleris South America Ltda.	Brazil
57.	Aleris Switzerland GmbH	Switzerland
58.	Aleris Technology (Netherlands) BV	Netherlands
59.	Aleris US Zinc (Changshu) Co. Ltd.	China
60.	Alerisalu Aluminum Portugal, Unipessoal, Lda. (formerly Hoogovens Aluminium Portugal Lda.)	Portugal
61.	ALSCO Holdings, Inc.	Delaware
62.	ALSCO Metals Corporation	Delaware
63.	Alumitech, Inc.	Delaware
64.	Alumitech of Cleveland, Inc.	Delaware
65.	Alumitech of Wabash, Inc.	Indiana
66.	Alumitech of West Virginia, Inc.	Delaware
67.	AWT Properties, Inc.	Ohio
68.	BUG-Alutechnik GmbH	Germany
69.	CA Lewisport, LLC	Delaware
70.	CI Holdings, LLC	Delaware
71.	Commonwealth Aluminum, LLC	Delaware
72.	Commonwealth Aluminum Concast, Inc.	Ohio
73.	Commonwealth Aluminum Lewisport, LLC	Delaware
74.	Commonwealth Aluminum Metals, LLC	Delaware
75.	Commonwealth Aluminum Sales Corporation	Delaware
76.	Commonwealth Aluminum Tube Enterprises, LLC	Delaware
77.	Commonwealth Financing Corp.	Delaware
78.	Commonwealth Industries, Inc.	Delaware
79.	Corus Aluminium Extrusions Tianjin Co Ltd2	China
80.	Corus Aluminium Japan Ltd.	Japan
81.	Duinlust Grundstucks GmbH	Germany
82.	Dutch Aluminum C.V.	Netherlands
83.	E Street Acquisition Corporation	Delaware
84.	ETS Schaefer Corporation	Ohio
85.	Grundstucksverwaltungsgesellschaft Objekt Wallershein GmbH	Germany
86.	Gulf Reduction Corporation	Delaware
87.	Hoogovens Aluminium Portugal Lda	Portugal
88.	IMCO Indiana Partnership L.P.	Indiana
89.	IMCO International, Inc.	Delaware

² 61% owned.

	Subsidiary	State or other jurisdiction of incorporation or organization
90.	IMCO Investment Company	Delaware
91.	IMCO Management Partnership L.P.	Texas
92.	IMCO Recycling of California, Inc.	Delaware
93.	IMCO Recycling of Idaho Inc.	Delaware
94.	IMCO Recycling of Illinois Inc.	Illinois
95.	IMCO Recycling of Indiana Inc.	Delaware
96.	IMCO Recycling of Michigan L.L.C.	Delaware
97.	IMCO Recycling of Ohio Inc.	Delaware
98.	IMCO Recycling of Utah Inc.	Delaware
99.	IMCO Recycling Services Company	Delaware
100.	IMCO Recycling (UK) Ltd.	England
101.	IMSAMET, Inc.	Delaware
102.	Imsamet of Arizona3	Arizona
103.	Interamerican Zinc, Inc.	Delaware
104.	MetalChem Handel GmbH	Germany
105.	MetalChem, Inc.	Pennsylvania
106.	Midwest Zinc Corporation	Delaware
107.	Rock Creek Aluminum, Inc.	Ohio
108.	Silver Fox Holding Corp.	Delaware
109.	U.S. Zinc Corporation	Delaware
110.	U.S. Zinc Export Corporation	Texas
111.	Western Zinc Corporation	California

³ 70% owned.

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

I, Steven J. Demetriou, certify that:

1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2006 of Aleris International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 2, 2007	/s/ Steven J. Demetriou
	Steven J. Demetriou
	Chairman of the Board and
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

I, Michael D. Friday, certify that:

1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2006 of Aleris International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 2, 2007	/s/ Michael D. Friday
	Michael D. Friday
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Annual Report of Aleris International, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven J. Demetriou, Chairman of the Board and Chief Executive Officer of the Company, and I, Michael D. Friday, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 2, 2007	/s/ Steven J. Demetriou
	Steven J. Demetriou
	Chairman of the Board and Chief Executive Officer
Date: April 2, 2007	/s/ Michael D. Friday
	Michael D. Friday
	Executive Vice President and Chief Financial Officer