-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UKDIjsmxYUEYtweNzIdX/I2j3mHKod5m0DQgxtx0WHK7PVw9uuuBsCucvfUD/kWw aqyCXxCPWfhR5l2DntSQiw== 0000054291-97-000038.txt : 19970804 0000054291-97-000038.hdr.sgml : 19970804 ACCESSION NUMBER: 0000054291-97-000038 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970801 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KAISER ALUMINUM & CHEMICAL CORP CENTRAL INDEX KEY: 0000054291 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY PRODUCTION OF ALUMINUM [3334] IRS NUMBER: 943030279 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03605 FILM NUMBER: 97650135 BUSINESS ADDRESS: STREET 1: 6177 SUNOL BOULEVARD CITY: PLEASANTON STATE: CA ZIP: 94566-7769 BUSINESS PHONE: 5104621122 MAIL ADDRESS: STREET 1: 6177 SUNOL BLVD CITY: PLEASANTON STATE: CA ZIP: 94566-7769 FORMER COMPANY: FORMER CONFORMED NAME: PERMANENTE METALS CORP DATE OF NAME CHANGE: 19660905 10-Q 1 KACC SECOND QTR Q - --------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997 Commission file number 1-3605 KAISER ALUMINUM & CHEMICAL CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 94-0928288 (State of incorporation) (I.R.S. Employer Identification No.) 6177 SUNOL BOULEVARD, PLEASANTON, CALIFORNIA 94566-7769 (Address of principal executive offices) (Zip Code) (510) 462-1122 (Registrant's telephone number, including area code) 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 ------- ------ At July 28, 1997, the registrant had 46,171,365 shares of Common Stock outstanding. - --------------------------------------------------------------------------- KAISER ALUMINUM & CHEMICAL CORPORATION AND SUBSIDIARY COMPANIES PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS -------------------- CONSOLIDATED BALANCE SHEETS (In millions of dollars)
June 30, December 31, 1997 1996 ------------------------------ ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 17.4 $ 81.3 Receivables 294.7 255.6 Inventories 564.5 562.2 Prepaid expenses and other current assets 133.0 127.8 ------------------------------ Total current assets 1,009.6 1,026.9 Investments in and advances to unconsolidated affiliates 166.5 168.4 Property, plant, and equipment - net 1,161.1 1,168.7 Deferred income taxes 278.2 263.3 Other assets 356.7 308.6 ------------------------------ Total $ 2,972.1 $ 2,935.9 ============================== LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 148.1 $ 189.3 Accrued interest 37.6 35.6 Accrued salaries, wages, and related expenses 82.2 95.4 Accrued postretirement medical benefit obligation - current portion 50.1 50.1 Other accrued liabilities 120.3 132.8 Payable to affiliates 103.4 96.9 Long-term debt - current portion 5.8 8.9 Note payable to parent 4.3 8.6 ------------------------------ Total current liabilities 551.8 617.6 Long-term liabilities 500.5 458.1 Accrued postretirement medical benefit obligation 717.8 722.5 Long-term debt 999.6 953.0 Minority interests 92.9 92.5 Redeemable preference stock 27.0 27.5 Commitments and contingencies Stockholders' equity: Preference stock 1.6 1.7 Common stock 15.4 15.4 Additional capital 1,882.4 1,829.8 Accumulated deficit (184.3) (201.3) Additional minimum pension liability (2.8) (2.8) Less: Note receivable from parent (1,629.8) (1,578.1) ------------------------------ Total stockholders' equity 82.5 64.7 ------------------------------ Total $ 2,972.1 $ 2,935.9 ==============================
The accompanying notes to interim consolidated financial statements are an integral part of these statements. KAISER ALUMINUM & CHEMICAL CORPORATION AND SUBSIDIARY COMPANIES STATEMENTS OF CONSOLIDATED INCOME (Unaudited) (In millions of dollars)
Quarter Ended Six Months Ended June 30, June 30, ------------------------------ ------------------------------ 1997 1996 1997 1996 ------------------------------ ------------------------------ Net sales $ 597.1 $ 567.6 $ 1,144.5 $ 1,098.7 ------------------------------ ------------------------------ Costs and expenses: Cost of products sold 489.3 476.1 950.0 909.8 Depreciation 22.8 24.2 45.9 48.2 Selling, administrative, research and development, and general 29.7 30.5 60.5 63.3 Restructuring of operations 19.7 19.7 ------------------------------ ------------------------------ Total costs and expenses 561.5 530.8 1,076.1 1,021.3 ------------------------------ ------------------------------ Operating income 35.6 36.8 68.4 77.4 Other income (expense): Interest expense (28.2) (23.0) (55.9) (45.7) Other - net (3.4) 1.2 (.8) .9 ------------------------------ ------------------------------ Income before income taxes and minority interests 4.0 15.0 11.7 32.6 (Provision) benefit for income taxes 11.0 (5.6) 8.1 (12.2) Minority interests (.4) (.9) .1 ------------------------------ ------------------------------ Net income $ 14.6 $ 9.4 $ 18.9 $ 20.5 ============================== ==============================
The accompanying notes to interim consolidated financial statements are an integral part of these statements. KAISER ALUMINUM & CHEMICAL CORPORATION AND SUBSIDIARY COMPANIES STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited) (In millions of dollars)
Six Months Ended June 30, ------------------------------ 1997 1996 ------------------------------ Cash flows from operating activities: Net income $ 18.9 $ 20.5 Adjustments to reconcile net income to net cash used for operating activities: Depreciation 45.9 48.2 Restructuring of operations 19.7 Non-cash benefit for income taxes (12.5) Amortization of excess investment over equity in unconsolidated affiliates 5.8 5.8 Amortization of deferred financing costs and net discount on long-term debt 3.0 2.7 Undistributed equity in (income) loss of unconsolidated affiliates, net of distributions 12.0 (7.9) Minority interests .9 (Increase) decrease in receivables (49.4) 30.1 Increase in inventories (5.5) (33.0) Increase in prepaid expenses and other assets (15.7) (31.2) Decrease in accounts payable (41.2) (21.5) Increase in accrued interest 2.0 .1 Decrease in payable to affiliates and accrued liabilities (18.7) (20.0) Decrease in accrued and deferred income taxes (6.1) (8.7) Other (.5) 4.1 ------------------------------ Net cash used for operating activities (41.4) (10.8) ------------------------------ Cash flows from investing activities: Net proceeds from disposition of property and investments 22.1 1.2 Additions to property, plant, and equipment (68.8) (51.9) Redemption fund for minority interests' preference stock (2.5) (1.3) ------------------------------ Net cash used for investing activities (49.2) (52.0) ------------------------------ Cash flows from financing activities: Borrowings under revolving credit facility, net 30.0 67.3 Borrowings of long-term debt 19.0 Repayments of long-term debt (5.1) (5.6) Increase in restricted cash, net (10.1) Payments to parent (4.3) (4.3) Incurrence of financing costs (.5) Dividends paid (.3) (.5) Redemption of minority interests' preference stock (2.0) (5.1) ------------------------------ Net cash provided by financing activities 26.7 51.8 ------------------------------ Net decrease in cash and cash equivalents during the period (63.9) (11.0) Cash and cash equivalents at beginning of period 81.3 21.7 ------------------------------ Cash and cash equivalents at end of period $ 17.4 $ 10.7 ============================== Supplemental disclosure of cash flow information: Interest paid, net of capitalized interest $ 50.9 $ 42.9 Income taxes paid 8.2 14.7 Tax allocation payments to Kaiser Aluminum Corporation .9 2.7 Tax allocation payments to MAXXAM Inc. 1.1
The accompanying notes to interim consolidated financial statements are an integral part of these statements. NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (In millions of dollars, except prices and per share amounts) 1. GENERAL Kaiser Aluminum & Chemical Corporation (the "Company") is the principal operating subsidiary of Kaiser Aluminum Corporation ("Kaiser"). Kaiser is a subsidiary of MAXXAM Inc. ("MAXXAM"). MAXXAM and one of its wholly owned subsidiaries together own approximately 62% of Kaiser's Common Stock, assuming the conversion of each outstanding share of 8.255% PRIDES, Convertible Preferred Stock (the "PRIDES"), into one share of Kaiser's Common Stock, with the remaining approximately 38% publicly held. The foregoing unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 1996. In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company's consolidated financial position and results of operations. Operating results for the quarter ended June 30, 1997, are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. 2. INVENTORIES The classification of inventories is as follows:
June 30, December 31, 1997 1996 ------------------------------ Finished fabricated aluminum products $ 119.4 $ 113.5 Primary aluminum and work in process 189.8 200.3 Bauxite and alumina 125.7 110.2 Operating supplies and repair and maintenance parts 129.6 138.2 ------------------------------ Total $ 564.5 $ 562.2 ==============================
Substantially all product inventories are stated at last-in, first-out (LIFO) cost, not in excess of market. Replacement cost is not in excess of LIFO cost. 3. SOLID WASTE DISPOSAL REVENUE BONDS In March 1997, the Company entered into an agreement (the "Loan Agreement") with the Industrial Development Corporation of Spokane County, Washington (the "IDC") in connection with which the IDC issued $19.0 of 7.6% Solid Waste Disposal Revenue Bonds due 2027 (the "Bonds") and loaned the proceeds to the Company to finance the construction of certain qualifying expenditures at its Mead smelter, which are part of the previously announced modernization and expansion of Mead's carbon baking furnace. The net proceeds from the sale of the Bonds of approximately $18.6 were deposited into a restricted construction account (the balance of which is included in Other Assets) and may be withdrawn from time to time by the Company, pursuant to the Loan Agreement and Bond indenture. The Loan Agreement requires the Company to make payments on the dates and in the amounts required to permit the IDC to satisfy all of its payment obligations under the Bonds and related indenture. 4. CONTINGENCIES ENVIRONMENTAL CONTINGENCIES The Company is subject to a number of environmental laws, to fines or penalties assessed for alleged breaches of such environmental laws, and to claims and litigation based upon such laws. The Company currently is subject to a number of lawsuits under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments Reauthorization Act of 1986 ("CERCLA"), and, along with certain other entities, has been named as a potentially responsible party for remedial costs at certain third-party sites listed on the National Priorities List under CERCLA. Based on the Company's evaluation of these and other environmental matters, the Company has established environmental accruals primarily related to potential solid waste disposal and soil and groundwater remediation matters. At June 30, 1997, the balance of such accruals, which are primarily included in Long-term liabilities, was $31.9. These environmental accruals represent the Company's estimate of costs reasonably expected to be incurred based on presently enacted laws and regulations, currently available facts, existing technology, and the Company's assessment of the likely remediation actions to be taken. The Company expects that these remediation actions will be taken over the next several years and estimates that annual expenditures to be charged to these environmental accruals will be approximately $3.0 to $9.0 for the years 1997 through 2001 and an aggregate of approximately $6.0 thereafter. As additional facts are developed and definitive remediation plans and necessary regulatory approvals for implementation of remediation are established or alternative technologies are developed, changes in these and other factors may result in actual costs exceeding the current environmental accruals. The Company believes that it is reasonably possible that costs associated with these environmental matters may exceed current accruals by amounts that could range, in the aggregate, up to an estimated $23.0 and that, subject to further regulatory review and approval, the factors upon which a substantial portion of this estimate is based are expected to be resolved during 1997. While uncertainties are inherent in the final outcome of these environmental matters, and it is presently impossible to determine the actual costs that ultimately may be incurred, management currently believes that the resolution of such uncertainties should not have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity. ASBESTOS CONTINGENCIES The Company is a defendant in a number of lawsuits, some of which involve claims of multiple persons, in which the plaintiffs allege that certain of their injuries were caused by, among other things, exposure to asbestos during, and as a result of, their employment or association with the Company or exposure to products containing asbestos produced or sold by the Company. The lawsuits generally relate to products the Company has not manufactured for at least 20 years. At June 30, 1997, the number of such claims pending was approximately 74,300, as compared with 71,100 at December 31, 1996. In 1996, approximately 21,100 of such claims were received and 9,700 were settled or dismissed. During the quarter and six months ended June 30, 1997, approximately 3,000 and 5,600 of such claims were received and 1,200 and 2,400 of such claims were settled or dismissed, respectively. Based on past experience and reasonably anticipated future activity, the Company has established an accrual for estimated asbestos-related costs for claims filed and estimated to be filed through 2008. There are inherent uncertainties involved in estimating asbestos-related costs, and the Company's actual costs could exceed or be less than these estimates. The Company's accrual was calculated based on the current and anticipated number of asbestos-related claims, the prior timing and amounts of asbestos-related payments, and the advice of Wharton Levin Ehrmantraut Klein & Nash, P. A. with respect to the current state of the law related to asbestos claims. Accordingly, an estimated asbestos-related cost accrual of $157.3, before consideration of insurance recoveries, is included primarily in Long-term liabilities at June 30, 1997. While the Company does not presently believe there is a reasonable basis for estimating such costs beyond 2008 and, accordingly, no accrual has been recorded for such costs which may be incurred beyond 2008, there is a reasonable possibility that such costs may continue beyond 2008, and such costs may be substantial. The Company estimates that annual future cash payments in connection with such litigation will be approximately $13.0 to $20.0 for each of the years 1997 through 2001, and an aggregate of approximately $81.0 thereafter. The Company believes that it has insurance coverage available to recover a substantial portion of its asbestos-related costs. Claims for recovery from some of the Company's insurance carriers are currently subject to pending litigation and other carriers have raised certain defenses, which have resulted in delays in recovering costs from the insurance carriers. The timing and amount of ultimate recoveries from these insurance carriers are dependent upon the resolution of these disputes. The Company believes, based on prior insurance-related recoveries in respect of asbestos-related claims, existing insurance policies, and the advice of Thelen, Marrin, Johnson & Bridges LLP with respect to applicable insurance coverage law relating to the terms and conditions of those policies, that substantial recoveries from the insurance carriers are probable. Accordingly, an estimated aggregate insurance recovery of $131.8, determined on the same basis as the asbestos- related cost accrual, is recorded primarily in Other assets at June 30, 1997. Management continues to monitor claims activity, the status of lawsuits (including settlement initiatives), legislative progress, and costs incurred in order to ascertain whether an adjustment to the existing accruals should be made to the extent that historical experience may differ significantly from the Company's underlying assumptions. While uncertainties are inherent in the final outcome of these asbestos matters and it is presently impossible to determine the actual costs that ultimately may be incurred and insurance recoveries that will be received, management currently believes that, based on the factors discussed in the preceding paragraphs, the resolution of asbestos-related uncertainties and the incurrence of asbestos-related costs net of related insurance recoveries should not have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity. OTHER CONTINGENCIES The Company is involved in various other claims, lawsuits, and other proceedings relating to a wide variety of matters. While uncertainties are inherent in the final outcome of such matters, and it is presently impossible to determine the actual costs that ultimately may be incurred, management currently believes that the resolution of such uncertainties and the incurrence of such costs should not have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity. See Note 9 of the Notes to Consolidated Financial Statements for the year ended December 31, 1996. 5. DERIVATIVE FINANCIAL INSTRUMENTS AND RELATED HEDGING PROGRAMS At June 30, 1997, the net unrealized loss, including unamortized net option premiums, on the Company's position in aluminum forward sales and option contracts, (based on an average price of $1,621 per ton* ($.74 per pound) of primary aluminum), natural gas and fuel oil forward purchase and option contracts, and forward foreign exchange contracts, was approximately $13.6. * All references to tons in this report refer to metric tons of 2,204.6 pounds. ALUMINA AND ALUMINUM The Company's earnings are sensitive to changes in the prices of alumina, primary aluminum and fabricated aluminum products, and also depend to a significant degree upon the volume and mix of all products sold. Primary aluminum prices have historically been subject to significant cyclical fluctuations. During the period January 1, 1993 through June 30, 1997, the Average Midwest United States transaction price for primary aluminum has ranged from approximately $.50 to $1.00 per pound. Alumina prices as well as fabricated aluminum product prices (which vary considerably among products) are significantly influenced by changes in the price of primary aluminum but generally lag behind primary aluminum price changes by up to three months. From time to time in the ordinary course of business, the Company enters into hedging transactions to provide price risk management in respect of the net exposure of earnings resulting from (i) anticipated sales of alumina, primary aluminum and fabricated aluminum products, less (ii) expected purchases of certain items, such as aluminum scrap, rolling ingot, and bauxite, whose prices fluctuate with the price of primary aluminum. Forward sales contracts are used by the Company to effectively lock-in or fix the price that the Company will receive for its shipments. The Company also uses option contracts (i) to establish a minimum price for its product shipments, (ii) to establish a "collar" or range of prices for the Company's anticipated sales, and/or (iii) to permit the Company to realize possible upside price movements. As of June 30, 1997, the Company had sold forward, at fixed prices, approximately 34,500, 93,600 and 24,000 tons of primary aluminum with respect to 1997, 1998 and 1999, respectively. As of June 30, 1997, the Company had also purchased put options to establish a minimum price for approximately 91,100 and 52,000 tons of primary aluminum with respect to 1997 and 1998, respectively, and had entered into option contracts that established a price range for an additional 78,000, 231,600 and 124,500 tons for 1997, 1998 and 1999, respectively. As of June 30, 1997, the Company had sold forward virtually all of the alumina available to it in excess of its projected internal smelting requirements for 1997, 1998 and 1999 at prices indexed to future prices of primary aluminum. ENERGY The Company is exposed to energy price risk from fluctuating prices for fuel oil and natural gas consumed in the production process. Accordingly, the Company from time to time in the ordinary course of business enters into hedging transactions with major suppliers of energy and energy related financial instruments. As of June 30, 1997, the Company had a combination of fixed price purchase and option contracts for the purchase of approximately 40,000 MMBtu of natural gas per day during the remainder of 1997, and for 25,000 MMBtu of natural gas per day for 1998. As of June 30, 1997, the Company also held a combination of fixed price purchase and option contracts for an average of 216,000, 222,000 and 25,000 barrels of fuel oil per month for 1997, 1998, and 1999, respectively. FOREIGN CURRENCY The Company enters into forward exchange contracts to hedge material cash commitments to foreign subsidiaries or affiliates. At June 30, 1997, the Company had net forward foreign exchange contracts totaling approximately $147.8 for the purchase of 192.0 Australian dollars from July 1997 through December 1998, in respect of its commitments for 1997 and 1998 expenditures denominated in Australian dollars. At June 30, 1997, KACC also held options to purchase approximately 20.0 Australian dollars over the last six months of 1997. See Note 10 of the Notes to Consolidated Financial Statements for the year ended December 31, 1996. 6. RESTRUCTURING OF OPERATIONS The Company has previously disclosed that it set a goal of achieving significant cost reductions and other profit improvements, with the full effect planned to be realized in 1998. The initiative is based on the Company's conclusion that the current level of performance of its existing facilities and businesses will not achieve the level of profits the Company considers satisfactory based upon historic long-term average prices for primary aluminum and alumina. During the second quarter of 1997, the Company recorded a $19.7 restructuring charge to reflect actions taken and plans put in place to achieve the reduced production costs, decreased corporate selling, general and administrative expenses, and enhanced product mix intended to achieve this goal. The significant components of the restructuring charge are enumerated below. ERIE PLANT DISPOSITION During the second quarter of 1997, the Company formed a joint venture with a third party related to the assets and liabilities associated with the wheel manufacturing operations at its Erie, Pennsylvania, fabrication plant. The Credit Agreement was amended to provide for the formation of the new entity. Management subsequently decided to close the remainder of the Erie plant in order to consolidate its aluminum forgings operations at two other facilities for increased efficiency. As a result of the joint venture formation and plant closure, the Company recognized a net pre-tax loss of approximately $1.4. OTHER ASSET DISPOSITIONS As a part of the Company's profit enhancement and cost reduction initiative, management made decisions regarding product rationalization and geographical optimization, which led management to decide to dispose of certain assets which had nominal operating contribution. These strategic decisions resulted in the Company recognizing a pre-tax charge for approximately $15.6 associated with such asset dispositions. EMPLOYEE AND OTHER COSTS As a part of the Company's profit enhancement and cost reduction initiative, management concluded that certain corporate and other staff functions could be consolidated or eliminated resulting in a pre-tax charge of approximately $2.7 for benefit and other costs. 7. COMPLETED ACQUISITION During June 1997, Kaiser Bellwood Corporation, a newly formed, wholly owned subsidiary of the Company, completed the acquisition of Reynolds Metals Company's Bellwood, Virginia, extrusion plant and its existing inventories for a total purchase price of $44.1, consisting of cash payments of $40.1 and the assumption of approximately $4.0 of employee related and other liabilities. The purchase price is subject to certain post-closing adjustments. The Company's Credit Agreement was amended in June 1997, to provide for the acquisition of the Bellwood facility. Additionally, upon completion of the transaction, Kaiser Bellwood Corporation became a subsidiary guarantor under the indentures in respect of the Company's 9-7/8% Senior Notes due 2002, 10-7/8% Series B and Series D Senior Notes due 2006, and 12-3/4% Senior Subordinated Notes due 2003. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- This section should be read in conjunction with the response to Item 1, Part I, of this Report. This section contains statements which constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this section (see, for example, "Profit Enhancement and Cost Reduction Initiative," "Results of Operations," and "Liquidity and Capital Resources"). Such statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "estimates," "will," "should," "plans" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of various factors. These factors include the effectiveness of management's strategies and decisions, general economic and business conditions, developments in technology, new or modified statutory or regulatory requirements, and changing prices and market conditions. This section and the Company's Annual Report on Form 10-K for the year ended December 31, 1996, each identify other factors that could cause such differences. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements. PROFIT ENHANCEMENT AND COST REDUCTION INITIATIVE The Company has previously disclosed that it has set a goal of achieving significant cost reductions and other profit improvements, with the full effect planned to be realized in 1998. The initiative is based on the Company's conclusion that the current level of performance of its existing facilities and businesses will not achieve the level of profits the Company considers satisfactory based upon historic long-term average prices for primary aluminum and alumina. During the second quarter of 1997, the Company recorded a $19.7 million restructuring charge to reflect actions taken and plans put in place to achieve the reduced production costs, decreased corporate selling, general and administrative expenses, and enhanced product mix intended to achieve this goal. The significant components of the restructuring charge are discussed in Note 6 of the Notes to Interim Consolidated Financial Statements. RECENT EVENTS During June 1997, Kaiser Bellwood Corporation, a newly formed, wholly owned subsidiary of the Company, completed the acquisition of Reynolds Metals Company's Bellwood, Virginia, extrusion plant and its existing inventories for a total purchase price of $44.1 million, subject to certain post-closing adjustments. See Note 7 of Notes to Interim Consolidated Financial Statements. RESULTS OF OPERATIONS The table on the following page provides selected operational and financial information on a consolidated basis with respect to the Company for the quarters and six month periods ended June 30, 1997, and 1996. As an integrated aluminum producer, the Company uses a portion of its bauxite, alumina, and primary aluminum production for additional processing at certain of its other facilities. Intracompany shipments and sales are excluded from the information set forth on the following page. Interim results are not necessarily indicative of those for a full year. SELECTED OPERATIONAL AND FINANCIAL INFORMATION (Unaudited) (In millions of dollars, except shipments and prices)
Quarter Ended Six Months Ended June 30, June 30, ------------------------------ ------------------------------ 1997 1996 1997 1996 ------------------------------ ------------------------------ Shipments: (1) Alumina 492.3 431.9 877.8 908.1 Aluminum products: Primary aluminum 82.0 100.0 160.5 174.8 Fabricated aluminum products 100.4 85.1 194.3 162.3 ------------------------------ ------------------------------ Total aluminum products 182.4 185.1 354.8 337.1 ============================== ============================== Average realized sales price: Alumina (per ton) $ 196 $ 207 $ 193 $ 208 Primary aluminum (per pound) .75 .69 .75 .71 Net sales: Bauxite and alumina: Alumina $ 96.5 $ 89.5 $ 169.7 $ 188.5 Other (2) (3) 26.5 27.0 53.1 51.4 ------------------------------ ------------------------------ Total bauxite and alumina 123.0 116.5 222.8 239.9 ------------------------------ ------------------------------ Aluminum processing: Primary aluminum 135.3 153.1 264.5 272.2 Fabricated aluminum products 334.5 294.1 648.9 579.0 Other (3) 4.3 3.9 8.3 7.6 ------------------------------ ------------------------------ Total aluminum processing 474.1 451.1 921.7 858.8 ------------------------------ ------------------------------ Total net sales $ 597.1 $ 567.6 $ 1,144.5 $ 1,098.7 ============================== ============================== Operating income (loss): Bauxite and alumina $ 7.5 $ 1.1 $ 6.0 $ 10.9 Aluminum processing (4) 46.2 50.2 97.5 98.7 Corporate (5) (18.1) (14.5) (35.1) (32.2) ------------------------------ ------------------------------ Total operating income $ 35.6 $ 36.8 $ 68.4 $ 77.4 ============================== ============================== Net income $ 14.6 $ 9.4 $ 18.9 $ 20.5 ============================== ============================== Capital expenditures: Property, plant, and equipment $ 47.0 $ 31.9 $ 68.8 $ 51.9 ============================== ============================== - --------------------------------- (1) In thousands of metric tons. (2) Includes net sales of bauxite. (3) Includes the portion of net sales attributable to minority interests in consolidated subsidiaries. (4) Includes a pre-tax charge of $15.1 related to restructuring of operations for both the quarter and six month period ended June 30, 1997. (5) Includes a pre-tax charge of $4.6 related to restructuring of operations for both the quarter and six month period ended June 30, 1997.
OVERVIEW The Company's operating results are sensitive to changes in prices of alumina, primary aluminum, and fabricated aluminum products, and also depend to a significant degree on the volume and mix of all products sold and on the Company's hedging strategies. Primary aluminum prices have historically been subject to significant cyclical fluctuations. Alumina prices as well as fabricated aluminum product prices (which vary considerably among products) are significantly influenced by changes in the price of primary aluminum but generally lag behind primary aluminum price changes by up to three months. During the first half of 1996, the Average Midwest United States transaction price ("AMT Price") for primary aluminum remained relatively stable in the $.70 - $.75 per pound range. During the second half of the year the AMT Price for primary aluminum fell, reaching a low of $.65 per pound for October 1996, before recovering late in the year. During the period 1993- June 30, 1997, the AMT Price for primary aluminum ranged from approximately $.50 to $1.00 per pound. The AMT Price for primary aluminum for the week ended July 25, 1997, was approximately $.78 per pound. See Note 5 of the Notes to Interim Consolidated Financial Statements for a discussion of the Company's hedging activities. QUARTER AND SIX MONTHS ENDED JUNE 30, 1997, COMPARED TO QUARTER AND SIX MONTHS ENDED JUNE 30, 1996 SUMMARY The Company reported net income of $14.6 million for the second quarter of 1997 compared to net income of $9.4 million for the same period of 1996. Net sales in the second quarter of 1997 totaled $597.1 million compared to $567.6 million in the second quarter of 1996. For the six-month period ended June 30, 1997, net income was $18.9 million compared to net income of $20.5 million for the six-month period ended June 30, 1996. Net sales for the six months ended June 30, 1997, were $1,144.5 million compared to $1,098.7 million for the first six months of 1996. Results for the quarter and six month period ended June 30, 1997, include the effect of certain non-recurring items including a $19.7 million restructuring charge (discussed above), an approximate $12.5 million non- cash tax benefit related to settlement of certain matters and a $5.8 million charge related to additional litigation reserves. Excluding these items, net income for the quarter and six month period ended June 30, 1997, would have been approximately $17.9 million and $22.2 million, respectively. BAUXITE AND ALUMINA Net sales of alumina increased by 8% for the quarter ended June 30, 1997, from the comparable period in the prior year, as a result of a 14% increase in alumina shipments offset by a 5% decline in average prices realized from the sale of alumina. Shipment volumes were up as compared to the quarter ended June 30, 1996, primarily as a result of the timing of shipments. For the six month period ended June 30, 1997, net segment sales declined by 7%, from the comparable period in the prior year. This change was due primarily to a 7% decrease in average realized prices between periods and to a lesser extent due to a 3% reduction in shipments. Segment operating income improved substantially on a quarter to quarter basis but declined by 45% for the comparative six month periods. On a quarterly basis, the improvement resulted primarily from improved operating efficiencies and reduced raw material and energy prices. On a year-to-date basis, however, these amounts were not sufficient to offset the impact of both a reduction in average realized alumina prices as well as alumina shipments. ALUMINUM PROCESSING Net sales of primary aluminum for the quarter ended June 30, 1997, decreased by 12% from the comparable prior year period as a result of a 18% decrease in shipments offset by an 8% increase in average realized prices. The decrease in primary aluminum shipments between periods is the result of the higher than usual shipments in the second quarter of 1996. Net sales of fabricated aluminum products for the quarter ended June 30, 1997, were up 14% as compared to the prior year period as a result of a 18% increase in shipments offset by a 4% decrease in average realized prices. The increase in fabricated aluminum product shipments over the second quarter of 1996 was due to increased international sales of can sheet and increased shipments of heat-treated products. For the six month period ended June 30, 1997, net sales for the aluminum processing segment increased by approximately 7% as a 12% increase in fabricated aluminum product net sales more than offset a 3% decline in net sales of primary aluminum. The increase in fabricated product net sales, and offsetting decrease in primary aluminum net sales, resulted from the same shipment and price factors discussed in the preceding paragraph. In addition to being affected by the price and volume factors discussed above, the Aluminum Processing segment's operating income also benefited from reduced power, raw material and supply costs as well as improved operating efficiencies. In addition, the segment's operating income for the quarter and six month period ended June 30, 1997, includes approximately $2.3 million and $5.2 million of operating income realized during the periods, related to the settlement of certain energy service contracts and a $15.1 million charge resulting from the previously discussed restructuring of operations. CORPORATE Corporate operating expenses represent corporate general and administrative expenses, which are not allocated to the Company's business segments. Operating results for the quarter and six month period ended June 30, 1997, both include a pre-tax charge of approximately $4.6 million associated with the Company's restructuring of operations. LIQUIDITY AND CAPITAL RESOURCES OPERATING ACTIVITIES At June 30, 1997, the Company had working capital of $457.8 million, compared with working capital of $409.3 million at December 31, 1996. The increase in working capital was due primarily to an increase in Receivables and a decrease in Accounts payable partially offset by a decrease in Cash and cash equivalents. INVESTING ACTIVITIES Capital expenditures during the quarter and six months ended June 30, 1997, were $47.0 million and $68.8 million, respectively, and were used primarily to acquire the Bellwood extrusion facility from Reynolds, improve production efficiency, reduce operating costs, expand capacity at existing facilities, and construct new facilities. The Company's first Micromill(TM) facility, which was constructed in Nevada during 1996 as a demonstration and production facility, achieved operational start-up by year-end 1996. The facility remained in a start-up mode during the first half of 1997 and is currently expected to commence limited product shipments to customers in the latter part of the year. Total consolidated capital expenditures (of which approximately 7% is expected to be funded by the Company's minority partners in certain foreign joint ventures) are expected to be between $70.0 and $140.0 million per annum in each of 1997 through 1999. Management continues to evaluate numerous projects all of which require substantial capital, including the Company's Micromill(TM) project, and other potential opportunities both in the United States and overseas. Kaiser Yellow River Investment Limited ("KYRIL"), a subsidiary of the Company, is a participant in Yellow River Aluminum Industry Company Limited, a Sino-foreign joint equity enterprise (the "Joint Venture") organized under the laws of the People's Republic of China ("PRC") along with the Lanzhou Aluminum Smelters ("LAS") of the China National Nonferrous Metals Industry Corporation (the "CNNC"). The parties to the Joint Venture are currently engaged in discussions concerning the future of the Joint Venture. In a June 1997 meeting, representatives of the Company and the CNNC agreed to extend the Joint Venture termination date from June 30, 1997 to March 31, 1998. Negotiations between KYRIL, LAS and the CNNC continue to focus on a sale of KYRIL's interests to a third party or LAS and/or the CNNC making a payment to KYRIL in return for its existing interests in the Joint Venture. However, no agreement has been reached concerning the amount of or terms for any such payments. Governmental approval in the PRC will be necessary in order to implement any arrangements agreed to by the parties, and there can be no assurance such approval will be obtained. FINANCING ACTIVITIES AND LIQUIDITY At June 30, 1997, the Company had long-term debt of $1,005.4 million, compared with $961.9 million at December 31, 1996. The change in long-term debt between periods is primarily the result of $30.0 million of borrowings under the Credit Agreement and $19.0 million of proceeds from the Spokane County, Washington, Solid Waste Disposal Revenue Bonds which were loaned to the Company to finance certain qualifying capital expenditures at its Mead smelter. At June 30, 1997, $243.8 million (of which $73.8 million could have been used for letters of credit) was available to the Company under the Credit Agreement. Loans under the Credit Agreement bear interest at a spread (which varies based on the results of a financial test) over either a base rate or LIBOR at the Company's option. During the quarter and six month period ended June 30, 1997, the average per annum interest rates on loans outstanding under the Credit Agreement were approximately 9.5% and 9.6%, respectively. The Credit Agreement does not permit the Company to pay any dividends on its common stock. During the quarter ended June 30, 1997, the Credit Agreement was amended to provide for the formation of the wheel manufacturing joint venture and the acquisition of the Bellwood facility. Additionally, upon completion of the acquisition of the Bellwood facility, Kaiser Bellwood Corporation became a subsidiary guarantor under the indentures in respect of the Company's 9-7/8% Senior Notes due 2002, 10-7/8% Series B and Series D Senior Notes due 2006, and 12-3/4% Senior Subordinated Notes due 2003. Management believes that the Company's existing cash resources, together with cash flows from operations and borrowings under the Credit Agreement, will be sufficient to meet its working capital and capital expenditure requirements for the next year. Additionally, with respect to long-term liquidity, management believes that operating cash flow, together with the ability to obtain both short and long-term financing, should provide sufficient funds to meet the Company's working capital and capital expenditure requirements. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ----------------- CATELLUS DEVELOPMENT CORPORATION V. KAISER ALUMINUM & CHEMICAL CORPORATION AND JAMES L FERRY & SON INC. On July 28, 1997, the Company and Catellus Development Corporation ("Catellus") entered into a settlement agreement and release settling all matters pending between the parties in the Untied States Court of Appeals for the Ninth Circuit. All matters relating to the litigation have now been resolved. The Company will remain liable to the City of Richmond for fifty percent (50%) of future costs of cleaning up certain parts of the property formerly owned by Catellus in accordance with the final judgement issued by the United States District Court. The Company's share of these costs is expected to be less than $500,000. See Part I, Item 3. "LEGAL PROCEEDINGS - Catellus Development Corporation v. Kaiser Aluminum & Chemical Corporation and James L Ferry & Son Inc." in the Company's Form 10-K for the year ended December 31, 1996. ASBESTOS-RELATED LITIGATION The Company is a defendant in a number of lawsuits, some of which involve claims of multiple persons, in which the plaintiffs allege that certain of their injuries were caused by, among other things, exposure to asbestos during, and as a result of, their employment or association with the Company or exposure to products containing asbestos produced or sold by the Company. The portion of Note 4 of the Notes to Interim Consolidated Financial Statements contained in this report under the heading "Asbestos Contingencies" is incorporated herein by reference. See Part I, Item 3. "LEGAL PROCEEDINGS - Asbestos-related Litigation" in the Company's Form 10- K for the year ended December 31, 1996. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS --------------------------------------------------- The annual meeting of stockholders of the Company was held on June 4, 1997, at which meeting the stockholders voted to elect management's slate of nominees as directors of the Company and approved the Kaiser 1997 Omnibus Stock Incentive Plan. The results of the matters voted on at the meeting are shown below. NOMINEES FOR DIRECTOR The nominees for election as directors of the Company are listed below, together with the number of votes cast for, against, and withheld with respect to each such nominee, as well as the number of abstentions and broker nonvotes with respect to each such nominee: Robert J. Cruikshank Votes For: 46,601,842 Votes Against: Votes Withheld: 173,422 Abstentions: Broker Nonvotes: George T. Haymaker, Jr. Votes For: 46,595,469 Votes Against: Votes Withheld: 179,795 Abstentions: Broker Nonvotes: Charles E. Hurwitz Votes For: 46,579,083 Votes Against: Votes Withheld: 196,181 Abstentions: Broker Nonvotes: Ezra G. Levin Votes For: 46,601,842 Votes Against: Votes Withheld: 173,422 Abstentions: Broker Nonvotes: Robert Marcus Votes For: 46,598,284 Votes Against: Votes Withheld: 176,980 Abstentions: Broker Nonvotes: Robert J. Petris Votes For: 46,492,354 Votes Against: Votes Withheld: 282,910 Abstentions: Broker Nonvotes: KAISER 1997 OMNIBUS STOCK INCENTIVE PLAN The vote with respect to the proposal to approve the Kaiser 1997 Omnibus Stock Incentive Plan was as follows: Votes For: 46,469,974 Votes Against: 176,929 Votes Withheld: Abstentions: 128,361 Broker Nonvotes ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits. Exhibit No. Exhibit ----------- ------- 3.1 Restated Certificate of Incorporation of Kaiser Aluminum & Chemical Corporation (the "Company" or "KACC"), dated July 25, 1989 (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1, dated August 25, 1989, filed by KACC, Registration No. 33-30645). 3.2 Certificate of Retirement of KACC, dated February 7, 1990 (incorporated by reference to Exhibit 3.2 to the Report on Form 10-K for the period ended December 31, 1989, filed by KACC, File No. 1-3605). *3.3 Amended and Restated Bylaws of KACC, dated July 22, 1997. *4.1 Third Supplemental Indenture, dated as of July 15, 1997, among KACC, as Issuer, Kaiser Alumina Australia Corporation, Alpart Jamaica Inc., Kaiser Jamaica Corporation, Kaiser Finance Corporation, Kaiser Micromill Holdings, LLC, Kaiser Sierra Micromills, LLC, Kaiser Texas Sierra Micromills, LLC, Kaiser Texas Micromill Holdings, LLC, and Kaiser Bellwood Corporation, as Subsidiary Guarantors, and State Street Bank and Trust Company, as Trustee, to the Indenture, dated as of February 1, 1993, regarding KACC's 12-3/4% Senior Subordinated Notes due 2003. *4.2 Second Supplemental Indenture, dated as of July 15, 1997, among KACC, as Issuer, Kaiser Alumina Australia Corporation, Alpart Jamaica Inc., Kaiser Jamaica Corporation, Kaiser Finance Corporation, Kaiser Micromill Holdings, LLC, Kaiser Sierra Micromills, LLC, Kaiser Texas Sierra Micromills, LLC, Kaiser Texas Micromill Holdings, LLC, and Kaiser Bellwood Corporation, as Subsidiary Guarantors, and First Trust National Association, as Trustee, to the Indenture, dated as of February 17, 1994, regarding KACC's 9-7/8% Senior Notes due 2002. *4.3 First Supplemental Indenture, dated as of July 15, 1997, among KACC, as Issuer, Kaiser Alumina Australia Corporation, Alpart Jamaica Inc., Kaiser Jamaica Corporation, Kaiser Finance Corporation, Kaiser Micromill Holdings, LLC, Kaiser Sierra Micromills, LLC, Kaiser Texas Micromill Holdings, LLC, Kaiser Texas Sierra Micromills, LLC, and Kaiser Bellwood Corporation, as Subsidiary Guarantors, and First Trust National Association, as Trustee, to the Indenture, dated as of October 23, 1996, regarding KACC's 10-7/8% Series B Senior Notes due 2006. *4.4 First Supplemental Indenture, dated as of July 15, 1997, among KACC, as Issuer, Kaiser Alumina Australia Corporation, Alpart Jamaica Inc., Kaiser Jamaica Corporation, Kaiser Finance Corporation, Kaiser Micromill Holdings, LLC, Kaiser Sierra Micromills, LLC, Kaiser Texas Micromill Holdings, LLC, Kaiser Texas Sierra Micromills, LLC, and Kaiser Bellwood Corporation, as Subsidiary Guarantors, and First Trust National Association, as Trustee, to the Indenture, dated as of December 23, 1996, regarding KACC's 10-7/8% Series D Senior Notes due 2006. *4.5 Ninth Amendment to the Credit Agreement, dated as of April 21, 1997, amending the Credit Agreement, dated as of February 15, 1994, as amended, among KACC, Kaiser Aluminum Corporation ("KAC"), the financial institutions a party thereto, and BankAmerica Business Credit, Inc., as Agent. *4.6 Tenth Amendment to the Credit Agreement, dated as of June 25, 1997, amending the Credit Agreement, dated as of February 15, 1994, as amended, among KACC, KAC, the financial institutions a party thereto, and BankAmerica Business Credit, Inc., as Agent. *27 Financial Data Schedule. (b) Reports on Form 8-K. No report on Form 8-K was filed by the Company during the quarter ended June 30, 1997. - --------------- * Filed herewith SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, who have signed this report on behalf of the registrant as the principal financial officer and principal accounting officer of the registrant, respectively. KAISER ALUMINUM & CHEMICAL CORPORATION /s/ John T. La Duc By: -------------------------- John T. La Duc Vice President and Chief Financial Officer (Principal Financial Officer) /s/Arthur S. Donaldson By: -------------------------- Arthur S. Donaldson Controller (Principal Accounting Officer) Dated: August 1, 1997 EX-27 2
5 This schedule contains summary financial information extracted from the consolidated financial statements of the Company for the six months ended June 30, 1997, and is qualified in its entirety by reference to such financial statements. 0000054291 KAISER ALUMINUM & CHEMICAL CORPORATION 1,000,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 17 0 294 5 565 1,010 1,161 46 2,972 552 1,000 27 2 15 65 2,972 1,145 1,145 950 950 106 20 56 12 (8) 19 0 0 0 19 .00 .00
EX-1 3 - --------------------------------------------------------------- KAISER ALUMINUM & CHEMICAL CORPORATION, as Issuer, KAISER ALUMINA AUSTRALIA CORPORATION, ALPART JAMAICA INC., KAISER JAMAICA CORPORATION, KAISER FINANCE CORPORATION, KAISER MICROMILL HOLDINGS, LLC, KAISER SIERRA MICROMILLS, LLC, KAISER TEXAS SIERRA MICROMILLS, LLC, KAISER TEXAS MICROMILL HOLDINGS, LLC, and KAISER BELLWOOD CORPORATION, as Subsidiary Guarantors and FIRST TRUST NATIONAL ASSOCIATION, as Trustee FIRST SUPPLEMENTAL INDENTURE Dated as of July 15, 1997 to INDENTURE Dated As of October 23, 1996 10-7/8% Series B Senior Notes due 2006 - --------------------------------------------------------------- FIRST SUPPLEMENTAL INDENTURE, dated as of July 15, 1997, among KAISER ALUMINUM & CHEMICAL CORPORATION, a Delaware corporation (the "Company"), as Issuer, KAISER ALUMINA AUSTRALIA CORPORATION, a Delaware corporation ("KAAC"), ALPART JAMAICA INC., a Delaware corporation ("AJI"), KAISER JAMAICA CORPORATION, a Delaware corporation ("KJC"), KAISER FINANCE CORPORATION, a Delaware corporation ("Kaiser Finance"), KAISER MICROMILL HOLDINGS, LLC, a Delaware limited liability company ("KMH"), KAISER SIERRA MICROMILLS, LLC, a Delaware limited liability company ("KSM"), KAISER TEXAS SIERRA MICROMILLS, LLC, a Texas limited liability company ("Texas Sierra"), KAISER TEXAS MICROMILL HOLDINGS, LLC, a Texas limited liability company ("Texas Holdings"), and KAISER BELLWOOD CORPORATION, a Delaware corporation ("Kaiser Bellwood"), as Subsidiary Guarantors, and First Trust National Association, a national banking association, as Trustee (the "Trustee"). WHEREAS, the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and the Trustee executed an Indenture, dated as of October 23, 1996 (the "Indenture"), in respect of $175,000,000 aggregate principal amount of the Company's 10-7/8% Series B Senior Notes due 2006 (the "Securities"); and WHEREAS, Section 4.12 of the Indenture requires, under circumstances specified in Section 4.12, that the Company shall cause certain Subsidiaries of the Company to execute and deliver to the Trustee a supplemental indenture in form and substance satisfactory to the Trustee pursuant to which such Subsidiaries of the Company shall be named as additional Subsidiary Guarantors; and WHEREAS, all conditions and requirements necessary to make this First Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized; NOW, THEREFORE, in consideration of the above premises, each party agrees, for the benefit of the other and for the equal and ratable benefit of the Holders of the Securities, as follows: ARTICLE I AMENDMENTS Section 1. The Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, Kaiser Bellwood, and the Trustee hereby amend the Indenture and agree that Kaiser Bellwood shall be a Subsidiary Guarantor for all purposes under the Indenture and the term "Subsidiary Guarantor" shall for all purposes under the Indenture specifically include Kaiser Bellwood. ARTICLE II MISCELLANEOUS PROVISIONS Section 2.1. Terms Defined. For all purposes of this First Supplemental Indenture, except as otherwise defined or unless the context otherwise requires, terms used in capitalized form in this First Supplemental Indenture and defined in the Indenture have the meanings specified in the Indenture. Section 2.2. Indenture. Except as amended hereby, the Indenture and the Securities are in all respects ratified and confirmed and all their terms shall remain in full force and effect. Section 2.3. Governing Law. This First Supplemental Indenture shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of said state without regard to the principles of the conflict of laws provisions thereof. Section 2.4. Successors and Assigns. All agreements of the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood in this First Supplemental Indenture and the Securities shall bind its successors and assigns. Section 2.5. Multiple Counterparts. This First Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 2.6. Effectiveness. The provisions of this First Supplemental Indenture shall become effective immediately upon its execution and delivery by the Trustee in accordance with the provisions of Article Ten of the Indenture. Section 2.7. Trustee Disclaimer. The Trustee accepts the amendment of the Indenture effected by this First Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby amended, but only upon the terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee, which terms and provisions shall in like manner define and limit its liabilities and responsibilities in the performance of the trust created by the Indenture as hereby amended, and, without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood, or for or with respect to (i) the validity, efficacy or sufficiency of this First Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood by corporate action or limited liability company action or otherwise, (iii) the due execution hereof by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood, or (iv) the consequences (direct or indirect and whether deliberate or inadvertent) of any amendment herein provided for, and the Trustee makes no representation with respect to any such matters. SIGNATURES IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, all as of the date first written above. KAISER ALUMINUM & CHEMICAL CORPORATION, as Issuer By: /s/ Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/ John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary KAISER ALUMINA AUSTRALIA CORPORATION, as a Subsidiary Guarantor By: /s/ Karen A. Twitchell ----------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary ALPART JAMAICA INC., as a Subsidiary Guarantor By:/s/ Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary KAISER JAMAICA CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ----------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary KAISER FINANCE CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/ John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary KAISER MICROMILL HOLDINGS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary KAISER SIERRA MICROMILLS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary KAISER TEXAS SIERRA MICROMILLS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell -------------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary KAISER TEXAS MICROMILL HOLDINGS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary KAISER BELLWOOD CORPORATION, as a Subsidiary Guarantor By:/s/ Karen A. Twitchell ------------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary FIRST TRUST NATIONAL ASSOCIATION, as Trustee By:/s/Kathe Barrett ------------------------ Name:Kathe Barrett Title: Trust Officer Dated: July 15, 1997 Attest: By:/s/Richard H. Prokosch ------------------ Name: Richard H. Prokosch Title: Assistant Secretrary EX-2 4 - --------------------------------------------------------------- KAISER ALUMINUM & CHEMICAL CORPORATION, as Issuer, KAISER ALUMINA AUSTRALIA CORPORATION, ALPART JAMAICA INC., KAISER JAMAICA CORPORATION, KAISER FINANCE CORPORATION, KAISER MICROMILL HOLDINGS, LLC, KAISER SIERRA MICROMILLS, LLC, KAISER TEXAS SIERRA MICROMILLS, LLC, KAISER TEXAS MICROMILL HOLDINGS, LLC, and KAISER BELLWOOD CORPORATION, as Subsidiary Guarantors and FIRST TRUST NATIONAL ASSOCIATION, as Trustee FIRST SUPPLEMENTAL INDENTURE Dated as of July 15, 1997 to INDENTURE Dated As of December 23, 1996 10-7/8% Series D Senior Notes due 2006 - --------------------------------------------------------------- FIRST SUPPLEMENTAL INDENTURE, dated as of July 15, 1997, among KAISER ALUMINUM & CHEMICAL CORPORATION, a Delaware corporation (the "Company"), as Issuer, KAISER ALUMINA AUSTRALIA CORPORATION, a Delaware corporation ("KAAC"), ALPART JAMAICA INC., a Delaware corporation ("AJI"), KAISER JAMAICA CORPORATION, a Delaware corporation ("KJC"), KAISER FINANCE CORPORATION, a Delaware corporation ("Kaiser Finance"), KAISER MICROMILL HOLDINGS, LLC, a Delaware limited liability company ("KMH"), KAISER SIERRA MICROMILLS, LLC, a Delaware limited liability company ("KSM"), KAISER TEXAS SIERRA MICROMILLS, LLC, a Texas limited liability company ("Texas Sierra"), KAISER TEXAS MICROMILL HOLDINGS, LLC, a Texas limited liability company ("Texas Holdings"), and KAISER BELLWOOD CORPORATION, a Delaware corporation ("Kaiser Bellwood"), as Subsidiary Guarantors, and First Trust National Association, a national banking association, as Trustee (the "Trustee"). WHEREAS, the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and the Trustee executed an Indenture, dated as of December 23, 1996 (the "Indenture"), in respect of $50,000,000 aggregate principal amount of the Company's 10-7/8% Series D Senior Notes due 2006 (the "Securities"); and WHEREAS, Section 4.12 of the Indenture requires, under circumstances specified in Section 4.12, that the Company shall cause certain Subsidiaries of the Company to execute and deliver to the Trustee a supplemental indenture in form and substance satisfactory to the Trustee pursuant to which such Subsidiaries of the Company shall be named as additional Subsidiary Guarantors; and WHEREAS, all conditions and requirements necessary to make this First Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized; NOW, THEREFORE, in consideration of the above premises, each party agrees, for the benefit of the other and for the equal and ratable benefit of the Holders of the Securities, as follows: ARTICLE I AMENDMENTS Section 1. The Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, Kaiser Bellwood, and the Trustee hereby amend the Indenture and agree that Kaiser Bellwood shall be a Subsidiary Guarantor for all purposes under the Indenture and the term "Subsidiary Guarantor" shall for all purposes under the Indenture specifically include Kaiser Bellwood. ARTICLE II MISCELLANEOUS PROVISIONS Section 2.1. Terms Defined. For all purposes of this First Supplemental Indenture, except as otherwise defined or unless the context otherwise requires, terms used in capitalized form in this First Supplemental Indenture and defined in the Indenture have the meanings specified in the Indenture. Section 2.2. Indenture. Except as amended hereby, the Indenture and the Securities are in all respects ratified and confirmed and all their terms shall remain in full force and effect. Section 2.3. Governing Law. This First Supplemental Indenture shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of said state without regard to the principles of the conflict of laws provisions thereof. Section 2.4. Successors and Assigns. All agreements of the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood in this First Supplemental Indenture and the Securities shall bind its successors and assigns. Section 2.5. Multiple Counterparts. This First Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 2.6. Effectiveness. The provisions of this First Supplemental Indenture shall become effective immediately upon its execution and delivery by the Trustee in accordance with the provisions of Article Ten of the Indenture. Section 2.7. Trustee Disclaimer. The Trustee accepts the amendment of the Indenture effected by this First Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby amended, but only upon the terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee, which terms and provisions shall in like manner define and limit its liabilities and responsibilities in the performance of the trust created by the Indenture as hereby amended, and, without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood, or for or with respect to (i) the validity, efficacy or sufficiency of this First Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood by corporate action or limited liability company action or otherwise, (iii) the due execution hereof by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood, or (iv) the consequences (direct or indirect and whether deliberate or inadvertent) of any amendment herein provided for, and the Trustee makes no representation with respect to any such matters. SIGNATURES IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, all as of the date first written above. KAISER ALUMINUM & CHEMICAL CORPORATION, as Issuer By:/s/Karen A. Twitchell -------------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary KAISER ALUMINA AUSTRALIA CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ----------------- Name: John Wm. Niemand II Title: Secretary ALPART JAMAICA INC., as a Subsidiary Guarantor By:/s/Karen A. Twitchell --------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ---------------- Name: John Wm. Niemand II Title: Secretary KAISER JAMAICA CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ---------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ----------------- Name: John Wm. Niemand II Title: Secretary KAISER FINANCE CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ----------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II --------------- Name: John Wm. Niemand II Title: Secretary KAISER MICROMILL HOLDINGS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II --------------- Name: John Wm. Niemand II Title: Secretary KAISER SIERRA MICROMILLS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II --------------- Name: John Wm. Niemand II Title: Secretary KAISER TEXAS SIERRA MICROMILLS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ----------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II --------------- Name: John Wm. Niemand II Title: Secretary KAISER TEXAS MICROMILL HOLDINGS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ---------------- Name: John Wm. Niemand II Title: Secretary KAISER BELLWOOD CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ---------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II --------------- Name: John Wm. Niemand II Title: Secretary FIRST TRUST NATIONAL ASSOCIATION, as Trustee By:/s/Kathe Barrett -------------------------- Name: Kathe Barrett Title:Trust Officer Dated: July 15, 1997 Attest: By:/s/Richard H. Prokosch ------------------ Name:Richard H. Prokosch Title: Assistant Secretary EX-3 5 - --------------------------------------------------------------- KAISER ALUMINUM & CHEMICAL CORPORATION, as Issuer, KAISER ALUMINA AUSTRALIA CORPORATION, ALPART JAMAICA INC., KAISER JAMAICA CORPORATION, KAISER FINANCE CORPORATION, KAISER MICROMILL HOLDINGS, LLC, KAISER SIERRA MICROMILLS, LLC, KAISER TEXAS SIERRA MICROMILLS, LLC, KAISER TEXAS MICROMILL HOLDINGS, LLC, and KAISER BELLWOOD CORPORATION, as Subsidiary Guarantors and STATE STREET BANK AND TRUST COMPANY, as Trustee THIRD SUPPLEMENTAL INDENTURE Dated as of July 15, 1997 to INDENTURE Dated As of February 1, 1993 12-3/4% Senior Subordinated Notes due 2003 - --------------------------------------------------------------- THIRD SUPPLEMENTAL INDENTURE, dated as of July 15, 1997, among KAISER ALUMINUM & CHEMICAL CORPORATION, a Delaware corporation (the "Company"), as Issuer, KAISER ALUMINA AUSTRALIA CORPORATION, a Delaware corporation ("KAAC"), ALPART JAMAICA INC., a Delaware corporation ("AJI"), KAISER JAMAICA CORPORATION, a Delaware corporation ("KJC"), KAISER FINANCE CORPORATION, a Delaware corporation ("Kaiser Finance"), KAISER MICROMILL HOLDINGS, LLC, a Delaware limited liability company ("KMH"), KAISER SIERRA MICROMILLS, LLC, a Delaware limited liability company ("KSM"), KAISER TEXAS SIERRA MICROMILLS, LLC, a Texas limited liability company ("Texas Sierra"), KAISER TEXAS MICROMILL HOLDINGS, LLC, a Texas limited liability company ("Texas Holdings"), and KAISER BELLWOOD CORPORATION, a Delaware corporation ("Kaiser Bellwood"), as Subsidiary Guarantors, and State Street Bank and Trust Company (as successor to The First National Bank of Boston), a Massachusetts trust company, as Trustee (the "Trustee"). WHEREAS, the Company, KAAC, AJI, KJC and The First National Bank of Boston executed an Indenture, dated as of February 1, 1993 (the "Original Indenture"), in respect of $400,000,000 aggregate principal amount of the Company's 12-3/4% Senior Subordinated Notes due 2003 (the "Securities"), and the Original Indenture was amended by a First Supplemental Indenture, dated as of May 1, 1993, and by a Second Supplemental Indenture, dated as of February 1, 1996 (the Original Indenture, as amended by such First Supplemental Indenture and Second Supplemental Indenture being hereinafter referred to as the "Indenture"); and WHEREAS, State Street Bank and Trust Company is the successor to The First National Bank of Boston, as Trustee under the Indenture; and WHEREAS, Section 5.12 of the Indenture requires, under circumstances specified in Section 5.12, that the Company shall cause certain Subsidiaries of the Company to execute and deliver to the Trustee a supplemental indenture in form and substance satisfactory to the Trustee pursuant to which such Subsidiaries of the Company shall be named as additional Subsidiary Guarantors; and WHEREAS, all conditions and requirements necessary to make this Third Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized; NOW, THEREFORE, in consideration of the above premises, each party agrees, for the benefit of the other and for the equal and ratable benefit of the Holders of the Securities, as follows: ARTICLE I AMENDMENTS Section 1. The Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, Kaiser Bellwood, and the Trustee hereby amend the Indenture and agree that Kaiser Bellwood shall be a Subsidiary Guarantor for all purposes under the Indenture and the term "Subsidiary Guarantor" shall for all purposes under the Indenture specifically include Kaiser Bellwood. ARTICLE II MISCELLANEOUS PROVISIONS Section 2.1. Terms Defined. For all purposes of this Third Supplemental Indenture, except as otherwise defined or unless the context otherwise requires, terms used in capitalized form in this Third Supplemental Indenture and defined in the Indenture have the meanings specified in the Indenture. Section 2.2. Indenture. Except as amended hereby, the Indenture and the Securities are in all respects ratified and confirmed and all their terms shall remain in full force and effect. Section 2.3. Governing Law. This Third Supplemental Indenture shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of said state without regard to the principles of the conflict of laws provisions thereof. Section 2.4. Successors and Assigns. All agreements of the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood in this Third Supplemental Indenture and the Securities shall bind its successors and assigns. Section 2.5. Multiple Counterparts. This Third Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 2.6. Effectiveness. The provisions of this Third Supplemental Indenture shall become effective immediately upon its execution and delivery by the Trustee in accordance with the provisions of Article Eleven of the Indenture. Section 2.7. Trustee Disclaimer. The Trustee accepts the amendment of the Indenture effected by this Third Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby amended, but only upon the terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee, which terms and provisions shall in like manner define and limit its liabilities and responsibilities in the performance of the trust created by the Indenture as hereby amended, and, without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood, or for or with respect to (i) the validity, efficacy or sufficiency of this Third Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood by corporate action or limited liability company action or otherwise, (iii) the due execution hereof by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood, or (iv) the consequences (direct or indirect and whether deliberate or inadvertent) of any amendment herein provided for, and the Trustee makes no representation with respect to any such matters. [Remainder of Page Intentionally Blank] SIGNATURES IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed, all as of the date first written above. KAISER ALUMINUM & CHEMICAL CORPORATION, as Issuer By:/s/Karen A. Twitchell ------------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ----------------- Name: John Wm. Niemand II Title: Secretary KAISER ALUMINA AUSTRALIA CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ---------------- Name: John Wm. Niemand II Title: Secretary ALPART JAMAICA INC., as a Subsidiary Guarantor By:/s/Karen A. Twitchell ----------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ---------------- Name: John Wm. Niemand II Title: Secretary KAISER JAMAICA CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II --------------- Name: John Wm. Niemand II Title: Secretary KAISER FINANCE CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ----------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ------------------ Name: John Wm. Niemand II Title: Secretary KAISER MICROMILL HOLDINGS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ---------------- Name: John Wm. Niemand II Title: Secretary KAISER SIERRA MICROMILLS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ---------------- Name: John Wm. Niemand II Title: Secretary KAISER TEXAS SIERRA MICROMILLS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ---------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ---------------- Name: John Wm. Niemand II Title: Secretary KAISER TEXAS MICROMILL HOLDINGS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II ---------------- Name: John Wm. Niemand II Title: Secretary KAISER BELLWOOD CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ----------------------- Name: Karen A. Twitchell Title: Treasurer Dated: July 15, 1997 Attest: By:/s/John Wm. Niemand II --------------- Name: John Wm. Niemand II Title: Secretary STATE STREET BANK AND TRUST COMPANY, as Trustee By:/s/James E. Mogavero ------------------------ Name: James E. Mogavero Title:Assistant Vice President Dated: July 15, 1997 Attest: By:/s/ Christina Van Ryzin Name:Christina Van Ryzin Title: Assistant Secretary EX-4 6 - --------------------------------------------------------------- KAISER ALUMINUM & CHEMICAL CORPORATION, as Issuer, KAISER ALUMINA AUSTRALIA CORPORATION, ALPART JAMAICA INC., KAISER JAMAICA CORPORATION, KAISER FINANCE CORPORATION, KAISER MICROMILL HOLDINGS, LLC, KAISER SIERRA MICROMILLS, LLC, KAISER TEXAS SIERRA MICROMILLS, LLC, KAISER TEXAS MICROMILL HOLDINGS, LLC, and KAISER BELLWOOD CORPORATION, as Subsidiary Guarantors and FIRST TRUST NATIONAL ASSOCIATION, as Trustee SECOND SUPPLEMENTAL INDENTURE Dated as of July 15, 1997 to INDENTURE Dated As of February 17, 1994 9-7/8% Senior Notes due 2002 - --------------------------------------------------------------- SECOND SUPPLEMENTAL INDENTURE, dated as of July 15, 1997, among KAISER ALUMINUM & CHEMICAL CORPORATION, a Delaware corporation (the "Company"), as Issuer, KAISER ALUMINA AUSTRALIA CORPORATION, a Delaware corporation ("KAAC"), ALPART JAMAICA INC., a Delaware corporation ("AJI"), KAISER JAMAICA CORPORATION, a Delaware corporation ("KJC"), KAISER FINANCE CORPORATION, a Delaware corporation ("Kaiser Finance"), KAISER MICROMILL HOLDINGS, LLC, a Delaware limited liability company ("KMH"), KAISER SIERRA MICROMILLS, LLC, a Delaware limited liability company ("KSM"), KAISER TEXAS SIERRA MICROMILLS, LLC, a Texas limited liability company ("Texas Sierra"), KAISER TEXAS MICROMILL HOLDINGS, LLC, a Texas limited liability company ("Texas Holdings"), and KAISER BELLWOOD CORPORATION, a Delaware corporation ("Kaiser Bellwood"), as Subsidiary Guarantors, and First Trust National Association, a national banking association, as Trustee (the "Trustee"). WHEREAS, the Company, KAAC, AJI, KJC, Kaiser Finance, and the Trustee executed an Indenture, dated as of February 17, 1994 (the "Original Indenture"), in respect of $225,000,000 aggregate principal amount of the Company's 9-7/8% Senior Notes due 2002 (the "Securities"), and the Original Indenture was amended by a First Supplemental Indenture, dated as of February 1, 1996 (the Original Indenture, as amended by such First Supplemental Indenture being hereinafter referred to as the "Indenture"); and WHEREAS, Section 4.12 of the Indenture requires, under circumstances specified in Section 4.12, that the Company shall cause certain Subsidiaries of the Company to execute and deliver to the Trustee a supplemental indenture in form and substance satisfactory to the Trustee pursuant to which such Subsidiaries of the Company shall be named as additional Subsidiary Guarantors; and WHEREAS, all conditions and requirements necessary to make this Second Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized; NOW, THEREFORE, in consideration of the above premises, each party agrees, for the benefit of the other and for the equal and ratable benefit of the Holders of the Securities, as follows: ARTICLE I AMENDMENTS Section 1. The Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, Kaiser Bellwood, and the Trustee hereby amend the Indenture and agree that Kaiser Bellwood shall be a Subsidiary Guarantor for all purposes under the Indenture and the term "Subsidiary Guarantor" shall for all purposes under the Indenture specifically include Kaiser Bellwood. ARTICLE II MISCELLANEOUS PROVISIONS Section 2.1. Terms Defined. For all purposes of this Second Supplemental Indenture, except as otherwise defined or unless the context otherwise requires, terms used in capitalized form in this Second Supplemental Indenture and defined in the Indenture have the meanings specified in the Indenture. Section 2.2. Indenture. Except as amended hereby, the Indenture and the Securities are in all respects ratified and confirmed and all their terms shall remain in full force and effect. Section 2.3. Governing Law. This Second Supplemental Indenture shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of said state without regard to the principles of the conflict of laws provisions thereof. Section 2.4. Successors and Assigns. All agreements of the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood in this Second Supplemental Indenture and the Securities shall bind its successors and assigns. Section 2.5. Multiple Counterparts. This Second Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 2.6. Effectiveness. The provisions of this Second Supplemental Indenture shall become effective immediately upon its execution and delivery by the Trustee in accordance with the provisions of Article Ten of the Indenture. Section 2.7. Trustee Disclaimer. The Trustee accepts the amendment of the Indenture effected by this Second Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby amended, but only upon the terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee, which terms and provisions shall in like manner define and limit its liabilities and responsibilities in the performance of the trust created by the Indenture as hereby amended, and, without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood, or for or with respect to (i) the validity, efficacy or sufficiency of this Second Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood by corporate action or limited liability company action or otherwise, (iii) the due execution hereof by the Company, KAAC, AJI, KJC, Kaiser Finance, KMH, KSM, Texas Sierra, Texas Holdings, and Kaiser Bellwood, or (iv) the consequences (direct or indirect and whether deliberate or inadvertent) of any amendment herein provided for, and the Trustee makes no representation with respect to any such matters. SIGNATURES IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed, all as of the date first written above. KAISER ALUMINUM & CHEMICAL CORPORATION, as Issuer By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Dated: July 15, 1997 Title: Treasurer Attest: By:/s/John Wm. Niemand II -------------------- Name: John Wm. Niemand II Title: Secretary KAISER ALUMINA AUSTRALIA CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell --------------------- Name: Karen A. Twitchell Dated: July 15, 1997 Title: Treasurer Attest: By:/s/John Wm. Niemand II -------------------- Name: John Wm. Niemand II Title: Secretary ALPART JAMAICA INC., as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Dated: July 15, 1997 Title: Treasurer Attest: By:/s/John Wm. Niemand II ------------------- Name: John Wm. Niemand II Title: Secretary SIGNATURES KAISER JAMAICA CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Dated: July 15, 1997 Title: Treasurer Attest: By:/s/John Wm. Niemand II --------------------- Name: John Wm. Niemand II Title: Secretary KAISER FINANCE CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------- Name: Karen A. Twitchell Dated: July 15, 1997 Title: Treasurer Attest: By:/s/John Wm. Niemand II -------------------- Name: John Wm. Niemand II Title: Secretary KAISER MICROMILL HOLDINGS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ----------------------- Name: Karen A. Twitchell Dated: July 15, 1997 Title: Treasurer Attest: By:/s/John Wm. Niemand II ---------------------- Name: John Wm. Niemand II Title: Secretary SIGNATURES KAISER SIERRA MICROMILLS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------- Name: Karen A. Twitchell Dated: July 15, 1997 Title: Treasurer Attest: By:/s/John Wm. Niemand II ---------------------- Name: John Wm. Niemand II Title: Secretary KAISER TEXAS SIERRA MICROMILLS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ---------------------- Name: Karen A. Twitchell Dated: July 15, 1997 Title: Treasurer Attest: By:/s/John Wm. Niemand II -------------------- Name: John Wm. Niemand II Title: Secretary KAISER TEXAS MICROMILL HOLDINGS, LLC, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ---------------------- Name: Karen A. Twitchell Dated: July 15, 1997 Title: Treasurer Attest: By:/s/John Wm. Niemand II --------------------- Name: John Wm. Niemand II Title: Secretary SIGNATURES KAISER BELLWOOD CORPORATION, as a Subsidiary Guarantor By:/s/Karen A. Twitchell ------------------------ Name: Karen A. Twitchell Dated: July 15, 1997 Title: Treasurer Attest: By:/s/John Wm. Niemand II --------------------- Name: John Wm. Niemand II Title: Secretary FIRST TRUST NATIONAL ASSOCIATION, as Trustee By:/s/Richard H. Prokosch ----------------------- Name:Richard H. Prokosch Dated: July 15, 1997 Title: Trust Officer Attest: By:/s/Kathe Barrett ---------------------- Name: Kathe Barrett Title: Assistant Secretary EX-5 7 EXECUTION COPY TENTH AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT -------------------------------------------------- THIS TENTH AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT (this "Amendment"), dated as of June 25, 1997, is by and among --------- KAISER ALUMINUM & CHEMICAL CORPORATION, a Delaware corporation (the "Company"), KAISER ALUMINUM CORPORATION, a Delaware ------- corporation (the "Parent Guarantor"), the various financial ----------------- institutions that are or may from time to time become parties to the Credit Agreement referred to below (collectively, the "Lenders" and, individually, a "Lender"), and BANKAMERICA ------- ------- BUSINESS CREDIT, INC., a Delaware corporation, as agent (in such capacity, together with its successors and assigns in such capacity, the "Agent") for the Lenders. Capitalized terms used, ----- but not defined, herein shall have the meanings given to such terms in the Credit Agreement, as amended hereby. W I T N E S S E T H: WHEREAS, the Company, the Parent Guarantor, the Lenders and the Agent are parties to the Credit Agreement, dated as of February 15, 1994, as amended by the First Amendment to Credit Agreement dated as of July 21, 1994, the Second Amendment to Credit Agreement, dated as of March 10, 1995, the Third Amendment to Credit Agreement and Acknowledgement, dated as of July 20, 1995, the Fourth Amendment to Credit Agreement, dated as of October 17, 1995, the Fifth Amendment to Credit Agreement, dated as of December 11, 1995, the Sixth Amendment to Credit Agreement, dated as of October 1, 1996, the Seventh Amendment to Credit Agreement, dated as of December 17, 1996, the Eighth Amendment to Credit Agreement, dated as of February 24, 1997, and the Ninth Amendment to Credit Agreement, dated as of April 21, 1997 (the "Credit Agreement"); ---------------- WHEREAS, National Westminster Bank, PLC, a Lender (the "Assigning Lender"), wishes to assign to the Lenders its ---------------- outstanding Credit Extensions and Commitments under the Credit Agreement as of the date hereof; and WHEREAS, the Company has requested that Lenders amend certain provisions of the Credit Agreement in order to permit, among other things, the acquisition by a Subsidiary of the Company of the Bellwood extrusion plant and related assets; NOW, THEREFORE, the parties hereto agree as follows: Section 1. Amendments to Credit Agreement. ------------------------------ A. Amendments to Article I: Definitions. ------------------------------------- 1. Section 1.1 of the Credit Agreement is hereby ------------ amended by adding the following definition in the appropriate alphabetical order: "Kaiser Bellwood" means Kaiser Bellwood Corporation, a ---------------- corporation organized under the laws of Delaware." 2. The definition of "Borrowing Base" contained in --------------- Section 1.1 of the Credit Agreement is hereby amended by (i) - ----------- adding the phrase ", Kaiser Bellwood" after the word "Company" the first time it appears in clause (c) thereof; and (ii) adding ---------- the phrase "and Kaiser Bellwood" after the word "Company" each time it appears in clause (ii) of the first proviso contained ------------ therein and in the second proviso contained therein. 3. The definition of "Eligible Account" contained in ----------------- Section 1.1 of the Credit Agreement is hereby amended by (i) - ----------- adding the phrase ", Kaiser Bellwood" after the word "Company" the first time it appears therein, in clause (a) thereof and in ---------- clauses (g), (i), (n) and (t) thereof; (ii) adding the phrase ", - ------- ---- ---- --- ---- Kaiser Bellwood's" after the phrase "Company's" in clause (a) ---------- thereof; and (iii) adding the phrase "or Kaiser Bellwood" after the word "Company" each time it appears in clause (c) thereof. ----------- 4. The definition of "Eligible Inventory" contained ------------------- in Section 1.1 of the Credit Agreement is hereby amended by (i) ------------ adding the phrase "or Kaiser Bellwood" after the word "Company" the first time it appears therein, in clause (b) thereof and in ---------- clause (d) thereof; and (ii) adding the phrase "or Kaiser - ---------- Bellwood's" after the word "Company's" the first time it appears therein and in clause (b) thereof. ---------- 5. The definition of "Inventory" contained in Section --------- -------- 1.1 of the Credit Agreement is hereby amended by adding the - ---- phrase "or Kaiser Bellwood's" after the word "Company's" therein. 6. The definition of "Product Swap" contained in ------------ Section 1.1 of the Credit Agreement is hereby amended by adding - ----------- the phrase ", Kaiser Bellwood" after the word "Company" each time it appears therein. 7. The definition of "Progress Billing" contained in ---------------- Section 1.1 of the Credit Agreement is hereby amended by adding - ----------- the phrase ", Kaiser Bellwood" after the word "Company" therein. 8. The definition of "Tolling Inventory" contained in ------------------ Section 1.1 of the Credit Agreement is hereby amended by adding - ----------- the phrase "or Kaiser Bellwood" after the word "Company" each time it appears therein. B. Amendments to Article II: Commitments and Borrowing ----------------------------------------------------- Procedures. - ---------- 1. Section 2.1.4 of the Credit Agreement is hereby -------------- amended by (i) adding the phrase ", Kaiser Bellwood" after the word "Company" the second and fourth time it appears in the final paragraph thereof; and (ii) adding the phrase "and Kaiser Bellwood" after the word "Company" the third time it appears in the final paragraph thereof. C. Amendments to Article IX: Covenants. ------------------------------------ 1. Section 9.1.5 of the Credit Agreement is hereby ------------- amended by (i) adding the phrase "and Kaiser Bellwood" after the word "KAII" in the second sentence of clause (a) thereof and the second time it appears in clause (b) thereof; (ii) adding the ---------- phrase ", Kaiser Bellwood's" after the word "Company's" the first, second, third, fourth, sixth and seventh times it appears in clause (b) thereof; (iii) adding the phrase "Kaiser Bellwood," ---------- after the phrase "Company," the second time it appears in clause ------- (b) thereof; and (iv) adding the phrase ", Kaiser Bellwood" after - --- the word "Company" the fourth and fifth times it appears in clause (b) thereof. - ---------- 2. Section 9.1.9 of the Credit Agreement is hereby -------------- amended by (i) adding the phrase "and Kaiser Bellwood" after the word "KAII" each time it appears therein and after the word "Company" in the first clauses (d) and (e) thereof and the second ------------ ---- clause (c) thereof; and (ii) adding the phrase ", Kaiser - ---------- Bellwood's" after the word "Company's" contained therein. 3. Clause (b)(i) of Section 9.2.2 of the Credit ------------- ------------- Agreement is hereby amended to read in its entirety as follows: "(i) Indebtedness of the Company in respect of (A) the Senior Debt, (B) the New Senior Debt, provided that (1) -------- the aggregate principal amount thereof does not exceed $200,000,000, (2) such Indebtedness is unsecured, (3) such Indebtedness is issued on or prior to February 1, 1997, (4) such Indebtedness does not mature prior to February 15, 2002 and (5) the New Senior Indenture is substantially in the form of the Senior Indenture and (C) the Additional New Senior Debt, provided that (1) the aggregate principal -------- amount thereof does not exceed $50,000,000, (2) such Indebtedness is unsecured, (3) such Indebtedness is issued on or prior to March 1, 1997, (4) such Indebtedness does not mature prior to February 15, 2002 and (5) the Additional New Senior Indentures are substantially in the form of the New Senior Indenture; and Contingent Obligations of AJI, KJC, KFC, KAAC, KMH, KSM, Texas Holdings, Texas Sierra and Kaiser Bellwood as a 'Subsidiary Guarantor' (under and as defined in the Senior Indenture, the New Senior Indenture, the Additional New Senior Indentures and the Subordinated Indenture) in respect of the Senior Debt, the New Senior Debt, the Additional New Senior Debt and the Subordinated Debt, respectively;" 4. Section 9.2.2 of the Credit Agreement is hereby ------------- amended by adding the phrase ", Kaiser Bellwood" after the term "KJC" in clause (b)(xi) therein. 5. Section 9.2.2 of the Credit Agreement is hereby ------------- further amended by adding the following to the end of clause ------- (b)(xvii) thereof: - --------- "; and provided, further, that Indebtedness of Kaiser --------- -------- Bellwood incurred pursuant to this Section 9.2.2(b)(xvii) shall ---------------------- not exceed $10,000,000 at any time outstanding and shall be incurred solely for the purpose of making Capital Expenditures" 6. Clause (c) of Section 9.2.13 of the Credit ---------- -------------- Agreement is hereby amended by adding the phrase "Kaiser Bellwood," after the phrase "Texas Sierra," in the parenthetical contained therein. D. Amendments to Signature Pages. ----------------------------- The Credit Agreement is hereby amended to delete the Assigning Lender as a Lender thereunder. Subject to the last paragraph of this Section D, the Percentages set forth opposite the Lenders' names on the signature pages of the Credit Agreement are hereby amended to read as follows: BankAmerica Business Credit, Inc. 29.011% Congress Financial Corporation 27.768% La Salle National Bank 05.231% CIT Group/Business Credit, Inc. 06.769% Transamerica Business Credit Corporation 07.362% Bank of America National Trust and Savings Association 09.090% Heller Financial, Inc. 09.538% ABN Amro N.V. 05.231% Subject to the last paragraph of this Section D, the Agent is hereby directed to pay all interest and fees accrued to and excluding the Tenth Amendment Effective Date (as defined below) on the Assigned Portion (as defined below) to the Assigning Lender and to pay all interest and fees accrued from and including the Tenth Amendment Effective Date on the Assigned Portion to the Lenders in accordance with their respective shares of the Assigned Portion. Effective on the Tenth Amendment Effective Date and notwithstanding anything to the contrary contained in Section 5.4 ------------ of the Credit Agreement, each Lender shall be deemed to hold an undivided interest and participation, to the extent of such Lender's Percentage as reflected above, in all Letters of Credit and the Company's Reimbursement Obligations with respect thereto outstanding as of such date. Subject to the last paragraph of this Section D, on the Tenth Amendment Effective Date each Lender whose Percentage is increased pursuant to this Amendment shall make a payment to the Agent in a amount equal to the amount of such increase multiplied by the amount of all then outstanding Loans, and the Agent shall distribute such payments to the Assigning Lender. Anything contained in this Agreement or the other Loan Documents to the contrary notwithstanding, each Lender's Percentage interest in any LIBO Rate Loan outstanding on the Tenth Amendment Effective Date shall remain unchanged for all purposes under the Loan Documents until the date of expiration of the Interest Period in effect as of the Tenth Amendment Effective Date with respect to such LIBO Rate Loan, at which time (i) all payments of interest and principal, if any, made on such date in respect of such LIBO Rate Loan shall be distributed to Lenders in accordance with such unchanged Percentages and (ii) in the event such LIBO Rate Loan is to remain outstanding for an additional Interest Period commencing on such date or is to be converted to a Reference Rate Loan on such date, Lenders shall make such payments, and the Agent shall distribute such payments to the Assigning Lender, on such date. Section 2. Assignment. ----------- Subject to the last paragraph of Section D above, the Assigning Lender hereby assigns, delegates, transfers, conveys and delivers, and the Lenders agree to accept the assignment, delegation, transfer, conveyance and delivery of, all of the Assigning Lender's right, title and interest in and to the Assigning Lender's outstanding Credit Extensions and Commitments under the Credit Agreement as of the Tenth Amendment Effective Date (the "Assigned Portion"). Subject to the last paragraph of ----------------- Section D above, the Assigning Lender hereby acknowledges that, from and after the Tenth Amendment Effective Date, the Assigning Lender is no longer a Lender for purposes of the Credit Agreement and, other than as set forth in Section 12.5 of the Credit ------------- Agreement, the rights and obligations of the Assigning Lender under the Credit Agreement are terminated. The Assigning Lender shall pay to the Agent a processing fee in the amount of $3,500 pursuant to subsection 12.11.1 of the Credit Agreement. Section 3. Supplements to Collateral Documents. ------------------------------------ The parties agree that, as of the Tenth Amendment Effective Date, (i) the Subsidiary Security Agreement shall be supplemented as set forth in Exhibit A hereto, (ii) the Subsidiary Guaranty shall be supplemented as set forth in Exhibit B hereto, and (iii) the Subsidiary Pledge Agreement shall be supplemented as set forth in Exhibit C hereto. The Required Lenders hereby approve the forms of such supplements, and hereby authorize the Agent on their behalf to accept from Kaiser Bellwood and authorize the Agent to execute and deliver as Agent such supplements in substantially the forms of such Exhibits A, B and C with such changes, additions or deletions as the Agent, in its sole and absolute discretion, may approve. Section 4. Consent of Lenders. ------------------- The Lenders hereby consent to the execution and delivery of a supplement to the Senior Indenture, a supplement to the New Senior Indenture, a supplement to the Additional New Senior Indentures and a supplement to the Subordinated Indenture, in form and substance satisfactory to the Agent in its sole and absolute discretion, for the purpose of adding Kaiser Bellwood as a "Subsidiary Guarantor" (under and as defined in the Senior Indenture, New Senior Indenture, Additional New Senior Indentures and Subordinated Indenture). Section 5. Conditions to Effectiveness. ---------------------------- This Amendment shall become effective as of the date hereof only when the following conditions shall have been satisfied and notice thereof shall have been given by the Agent to the Parent Guarantor, the Company and each Lender (the date of satisfaction of such conditions and the giving of such notice being referred to herein as the "Tenth Amendment Effective -------------------------- Date"): - ----- A. The Agent shall have received for each Lender counterparts hereof duly executed on behalf of the Parent Guarantor, the Company, the Agent and the Required Lenders (or notice of the approval of this Amendment by the Required Lenders satisfactory to the Agent shall have been received by the Agent), together with a Pledge Amendment to the Company Pledge Agreement, dated as of June 25, 1997, with respect to the stock of Kaiser Bellwood (the "Pledge Amendment") duly executed on behalf of the ----------------- Company. B. The Agent shall have received: 1. Resolutions of the Board of Directors or of the Executive Committee of the Board of Directors of the Company and the Parent Guarantor approving and authorizing the execution, delivery and performance of this Amendment, and, as to the Company, the Pledge Amendment, certified by their respective corporate secretaries or an assistant secretary as being in full force and effect without modification or amendment as of the date of execution hereof by the Company or the Parent Guarantor, as the case may be. 2. A signature and incumbency certificate of the officers of the Company and the Parent Guarantor executing this Amendment, and, as to the Company, the Pledge Amendment. 3. Copies of the Intercompany Demand Note issued in favor of KFC by Kaiser Bellwood (the "New Intercompany Demand ------------------------ Note"), in substantially the form of Exhibit O-4 to the Credit - ----- ------------ Agreement, with such changes, additions and deletions as the Agent shall approve in its sole and absolute discretion. 4. Copies of the Supplement to Subsidiary Security Agreement, dated as of June 25, 1997, between Kaiser Bellwood and the Agent (the "Subsidiary Security Supplement") ------------------------------- duly executed on behalf of Kaiser Bellwood and the Agent. 5. Copies of the Supplement to Subsidiary Guaranty, dated as of June 25, 1997, by and between Kaiser Bellwood and the Agent (the "Subsidiary Guaranty Supplement") ------------------------------- duly executed on behalf of Kaiser Bellwood and the Agent. 6. Copies of the Supplement to Subsidiary Pledge Agreement, dated as of June 25, 1997, by and between Kaiser Bellwood and the Agent (the "Subsidiary Pledge Supplement") duly ----------------------------- executed on behalf of Kaiser Bellwood and the Agent. 7. Certified copies of the Certificate of Incorporation of Kaiser Bellwood. 8. Copies of the Bylaws of Kaiser Bellwood, certified as of the date of delivery to the Agent by its corporate secretary or an assistant secretary or other authorized representative. 9. Resolutions of the Board of Directors of Kaiser Bellwood approving and authorizing the execution, delivery and performance of the Subsidiary Guaranty Supplement, the Subsidiary Pledge Supplement, the Subsidiary Security Supplement and the New Intercompany Demand Note, certified by its corporate secretary or an assistant secretary as being in full force and effect without modification or amendment as of the date of execution thereof by Kaiser Bellwood. 10. A signature and incumbency certificate of the officers of Kaiser Bellwood executing the Subsidiary Guaranty Supplement, the Subsidiary Pledge Supplement, the Subsidiary Security Supplement and the New Intercompany Demand Note. 11. Duly executed financing statements (Form UCC-1) naming Kaiser Bellwood as the debtor and the Agent as the secured party, or other similar instruments or documents, suitable for filing under the Uniform Commercial Code of all jurisdictions as may be necessary or, in the reasonable opinion of the Agent, desirable to perfect the security interest of the Agent in the Collateral granted pursuant to the Subsidiary Security Agreement to the extent that perfection may be accomplished by filing under the Uniform Commercial Code in any state in the United States or the District of Columbia. 12. Stock certificates evidencing 100% of the issued and outstanding shares of capital stock of Kaiser Bellwood, accompanied by undated stock powers duly executed in blank. 13. Copies of a Pledge Amendment to the Subsidiary Pledge Agreement, dated as of June 25, 1997, with respect to the New Intercompany Demand Note (the "Subsidiary ----------- Pledge Amendment") duly executed on behalf of KFC. - ---------------- 14. Resolutions of the Board of Directors of KFC approving and authorizing the execution, delivery and performance of the Subsidiary Pledge Amendment, certified by its corporate secretary or an assistant secretary as being in full force and effect without modification or amendment as of the date of execution thereof by KFC. 15. A signature and incumbency certificate of the officers or other authorized representative of KFC executing the Subsidiary Pledge Amendment. C. The Agent shall have received for each Lender an opinion, addressed to the Agent and each Lender, from Kramer, Levin, Naftalis & Frankel, in form and substance satisfactory to the Agent. Section 6. Assigning Lender's Representation and -------------------------------------- Warranty. - --------- In order to induce the Company, Lenders and the Agent to enter into this Amendment and to amend the Credit Agreement and the other Loan Documents in the manner provided herein, the Assigning Lender represents and warrants to the Company, each Lender and the Agent that, prior to the Tenth Amendment Effective Date, the Assigning Lender has not assigned, delegated, transferred, conveyed or delivered any part of the Assigned Portion. Section 7. Company's Representations and Warranties. ----------------------------------------- In order to induce the Lenders and the Agent to enter into this Amendment and to amend the Credit Agreement and the other Loan Documents in the manner provided herein, the Parent Guarantor and the Company represent and warrant to each Lender and the Agent that, as of the Tenth Amendment Effective Date after giving effect to the effectiveness of this Amendment, the following statements are true and correct in all material respects: A. Authorization of Agreements. The execution and ---------------------------- delivery of this Amendment by the Company and the Parent Guarantor and the performance of the Credit Agreement as amended by this Amendment (the "Amended Agreement") by the Company and ------------------ the Parent Guarantor are within such Obligor's corporate powers and have been duly authorized by all necessary corporate action on the part of the Company and the Parent Guarantor, as the case may be. B. No Conflict. The execution and delivery by the ------------ Company and the Parent Guarantor of this Amendment and the performance by the Company and the Parent Guarantor of the Amended Agreement do not: 1. contravene such Obligor's Organic Documents; 2. contravene the Senior Indenture, the New Senior Indenture, the Additional New Senior Indentures or the Subordinated Indenture or contravene any other contractual restriction where such a contravention has a reasonable possibility of having a Materially Adverse Effect or contravene any law or governmental regulation or court decree or order binding on or affecting such Obligor or any of its Subsidiaries; or 3. result in, or require the creation or imposition of, any Lien on any of such Obligor's properties or any of the properties of any Subsidiary of such Obligor, other than pursuant to the Loan Documents. C. Binding Obligation. This Amendment has been duly ------------------- executed and delivered by the Company and the Parent Guarantor and this Amendment and the Amended Agreement constitute the legal, valid and binding obligations of the Company and the Parent Guarantor, enforceable against the Company and the Parent Guarantor in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally and by general principles of equity. D. Governmental Approval, Regulation, etc. No --------------------------------------- authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other Person is required for the due execution, delivery or performance of this Amendment by the Company or the Parent Guarantor. E. Incorporation of Representations and Warranties ------------------------------------------------ from Credit Agreement. Each of the statements set forth in - ---------------------- Section 7.2.1 of the Credit Agreement is true and correct. - ------------- Section 8. Acknowledgement and Consent. --------------------------- The Company is a party to the Company Collateral Documents, in each case as amended through the date hereof, pursuant to which the Company has created Liens in favor of the Agent on certain Collateral to secure the Obligations. The Parent Guarantor is a party to the Parent Collateral Documents, in each case as amended through the date hereof, pursuant to which the Parent Guarantor has created Liens in favor of the Agent on certain Collateral and pledged certain Collateral to the Agent to secure the Obligations of the Parent Guarantor. Certain Subsidiaries of the Company are parties to the Subsidiary Guaranty and/or one or more of the Subsidiary Collateral Documents, in each case as amended through the date hereof, pursuant to which such Subsidiaries have (i) guarantied the Obligations and/or (ii) created Liens in favor of the Agent on certain Collateral. The Company, the Parent Guarantor and such Subsidiaries are collectively referred to herein as the "Credit ------- Support Parties", and the Company Collateral Documents, the - ---------------- Parent Collateral Documents, the Subsidiary Guaranty and the Subsidiary Collateral Documents are collectively referred to herein as the "Credit Support Documents". ------------------------- Each Credit Support Party hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement as amended by this Amendment and consents to the amendment of the Credit Agreement effected as of the date hereof pursuant to this Amendment and the amendment of the other Loan Documents effected as of the date hereof. Each Credit Support Party acknowledges and agrees that any of the Credit Support Documents to which it is a party or otherwise bound shall continue in full force and effect. Each Credit Support Party hereby confirms that each Credit Support Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guaranty or secure, as the case may be, the payment and performance of all obligations guaranteed or secured thereby, as the case may be. Each Credit Support Party (other than the Company and the Parent Guarantor) acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Credit Support Party is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Credit Support Party to any future amendments to the Credit Agreement. Section 9. Miscellaneous. -------------- A. Reference to and Effect on the Credit Agreement ------------------------------------------------ and the Other Loan Documents. ----------------------------- 1. On and after the Tenth Amendment Effective Date, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement shall mean and be a reference to the Amended Agreement. 2. Except as specifically amended by this Amendment and the amendments to the other Loan Documents executed as of the date hereof, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. B. Applicable Law. THIS AMENDMENT SHALL BE DEEMED TO --------------- BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH LAWS RELATING TO CONFLICTS OF LAWS. C. Headings. The various headings of this Amendment --------- are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or any provision hereof. D. Counterparts. This Amendment may be executed by ------------- the parties hereto in several counterparts and by the different parties on separate counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. E. Severability. Any provision of this Amendment ------------- which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Amendment or affecting the validity or enforceability of such provisions in any other jurisdiction. IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as of the day and year first above written. KAISER ALUMINUM CORPORATION KAISER ALUMINUM & CHEMICAL CORPORATION By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer BANKAMERICA BUSINESS CREDIT, INC. BANKAMERICA BUSINESS CREDIT,INC., as Agent By:/s/Michael J. Jasaitis By:/s/Michael J. Jasaitis ---------------------- ------------------------ Name Printed: Michael J. Jasaitis Name Printed: Michael J. Jasaitis Its: Vice President Its: Vice President BANK OF AMERICA NATIONAL THE CIT GROUP/BUSINESS TRUST AND SAVINGS ASSOCIATION CREDIT, INC. By:/s/James P. Johnson By:/s/Timothy S. Culver ------------------ ----------------------- Name Printed:James P. Johnson Name Printed:Timothy S. Culver Its: Managing Director Its: Assistant Vice President CONGRESS FINANCIAL CORPORATION HELLER FINANCIAL, INC. (WESTERN) By:/s/Kristine Metchikian By:/s/Tara Hopkins -------------------------- ----------------------- Name Printed:Kristine Metchikian Name Printed: Tara Hopkins Its: Vice President Its: Assistant Vice President LA SALLE NATIONAL BANK NATIONAL WESTMINSTER BANK PLC By:/s/Douglas C. Collath By:/s/Ian M. Plester ---------------------- ---------------------- Name Printed: Douglas C. Collath Name Printed:Ian M. Plester Its: First Vice President Its: Vice President TRANSAMERICA BUSINESS CREDIT ABN AMRO BANK N.V. CORPORATION By:/s/Matthew N. McAlpine By: /s/L.T. Osborne ---------------------- ---------------------- Name Printed:Matthew N. McAlpine Name Printed:L.T. Osborne Its: Vice President Its: Group Vice President ACKNOWLEDGED AND AGREED TO: AKRON HOLDING CORPORATION KAISER ALUMINUM & CHEMICAL INVESTMENT, INC. By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINUM PROPERTIES, INC. KAISER ALUMINUM TECHNICAL SERVICES, INC. By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer OXNARD FORGE DIE COMPANY, INC. KAISER ALUMINIUM INTERNATIONAL, INC. By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINA AUSTRALIA KAISER FINANCE CORPORATION CORPORATION By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ---------------------- Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer ALPART JAMAICA INC. KAISER JAMAICA CORPORATION By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ---------------------- Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER BAUXITE COMPANY KAISER EXPORT COMPANY By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER MICROMILL HOLDINGS, LLC KAISER SIERRA MICROMILLS, LLC By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER TEXAS SIERRA MICROMILLS, KAISER TEXAS MICROMILL LLC HOLDINGS, LLC By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer EXHIBIT A SUPPLEMENT TO SUBSIDIARY SECURITY AGREEMENT -------------------------------------------- THIS SUPPLEMENT TO SUBSIDIARY SECURITY AGREEMENT (this "Supplement"), dated as of June 25, 1997, is by and between ---------- Kaiser Bellwood Corporation, a Delaware corporation, (the "New ---- Kaiser Subsidiary"), and BankAmerica Business Credit, Inc., a - ----------------- Delaware corporation, as agent for the Secured Lenders (as defined in the Credit Agreement referred to below) (in such capacity, together with its successors and assigns in such capacity, the "Agent"). Capitalized terms used, but not defined, ----- herein shall have the meanings given to such terms in the Credit Agreement, as amended by the Tenth Amendment. W I T N E S S E T H: WHEREAS, Kaiser Aluminum & Chemical Corporation, a Delaware corporation (the "Company"), Kaiser Aluminum -------- Corporation, a Delaware corporation (the "Parent Guarantor"), the ---------------- various financial institutions that are or may from time to time become parties to the Credit Agreement (collectively, the "Lenders" and, individually, a "Lender"), and the Agent are -------- ------- parties to the Credit Agreement, dated as of February 15, 1994, as amended by the First Amendment to Credit Agreement, dated as of July 21, 1994, the Second Amendment to Credit Agreement, dated as of March 10, 1995, the Third Amendment to Credit Agreement and Acknowledgment, dated as of July 20, 1995, the Fourth Amendment to Credit Agreement, dated as of October 17, 1995, the Fifth Amendment to Credit Agreement, dated as of December 11, 1995, the Sixth Amendment to Credit Agreement, dated as of October 1, 1996, the Seventh Amendment to Credit Agreement, dated as of December 17, 1996, the Eighth Amendment to Credit Agreement, dated as of February 24, 1997, and the Ninth Amendment to Credit Agreement, dated as of April 21, 1997 (the "Credit Agreement"); and ----------------- WHEREAS, as of the date hereof the Company, the Parent Guarantor, the Lenders and the Agent are entering into a Tenth Amendment to Credit Agreement (the "Tenth Amendment"); and --------------- WHEREAS, the New Kaiser Subsidiary is required as a condition to the effectiveness of the Tenth Amendment to execute this Supplement; and WHEREAS, the Required Lenders have consented to the execution and delivery of this Supplement by the Agent; NOW, THEREFORE, the parties hereto agree as follows: Section 1. Addition of New Kaiser Subsidiary. ---------------------------------- On and after the Tenth Amendment Effective Date (as defined in the Tenth Amendment), the New Kaiser Subsidiary shall be a party to the Subsidiary Security Agreement and the terms "Kaiser Subsidiary" and "Kaiser Subsidiaries" (as used in the Subsidiary Security Agreement) shall include and also be a reference to the New Kaiser Subsidiary. Schedules I through VI of the Subsidiary Security Agreement are hereby supplemented to include the information set forth on Schedules I through VI hereto with respect to the New Kaiser Subsidiary. Section 2. Kaiser Subsidiary's Representations and ---------------------------------------- Warranties. - ----------- In order to induce the Agent to enter into this Supplement and to supplement the Subsidiary Security Agreement in the manner provided herein, and to induce the Required Lenders to consent to such action by the Agent, the New Kaiser Subsidiary represents and warrants as a Kaiser Subsidiary to each Lender and the Agent that, as of the Tenth Amendment Effective Date after giving effect to the effectiveness of this Supplement, the following statements are true and correct in all material respects: A. Authorization of Agreements. The execution and ---------------------------- delivery of this Supplement by such Kaiser Subsidiary and the performance of the Subsidiary Security Agreement as supplemented by this Supplement (the "Supplemented Agreement") by such Kaiser ----------------------- Subsidiary are within such Kaiser Subsidiary's corporate powers and have been duly authorized by all necessary corporate action on the part of such Kaiser Subsidiary. B. No Conflict. The execution and delivery by such ------------ Kaiser Subsidiary of this Supplement and the performance by such Kaiser Subsidiary of the Supplemented Agreement do not: (1) contravene such Kaiser Subsidiary's Organic Documents; (2) contravene the Senior Indenture, the New Senior Indenture, the Additional New Senior Indentures or the Subordinated Indenture or contravene any other contractual restriction where such a contravention has a reasonable possibility of having a Materially Adverse Effect or contravene any law or governmental regulation or court decree or order binding on or affecting such Kaiser Subsidiary or any of its Subsidiaries; or (3) result in, or require the creation or imposition of, any Lien on any of such Kaiser Subsidiary's properties, other than pursuant to the Loan Documents. C. Binding Obligation. This Supplement has been duly ------------------ executed and delivered by such Kaiser Subsidiary and this Supplement and the Supplemented Agreement constitute the legal, valid and binding obligations of such Kaiser Subsidiary, enforceable against such Kaiser Subsidiary in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally and by general principles of equity. D. Governmental Approval, Regulation, etc. No ---------------------------------------- authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance of this Supplement by such Kaiser Subsidiary, other than the filing of appropriate financing statements. Section 4. Miscellaneous. -------------- A. Applicable Law. THIS SUPPLEMENT SHALL BE DEEMED --------------- TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH LAWS RELATING TO CONFLICTS OF LAWS. B. Headings. The various headings of this Supplement --------- are inserted for convenience only and shall not affect the meaning or interpretation of this Supplement or any provision hereof. C. Counterparts. This Supplement may be executed by ------------- the parties hereto in several counterparts and by the different parties on separate counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. D. Severability. Any provision of this Supplement ------------- which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Supplement or affecting the validity or enforceability of such provisions in any other jurisdiction. IN WITNESS WHEREOF, this Supplement has been duly executed and delivered as of the day and year first above written. BANKAMERICA BUSINESS CREDIT, KAISER BELLWOOD CORPORATION INC., as Agent By: By: ---------------------- ---------------------- Name:Michael J. Jasaitis Name: Karen A. Twitchell Its: Vice President Its: Treasurer ACKNOWLEDGED AND AGREED TO: AKRON HOLDING CORPORATION KAISER ALUMINUM & CHEMICAL INVESTMENT, INC. By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINUM PROPERTIES, INC. KAISER ALUMINUM TECHNICAL SERVICES, INC. By: By: ----------------------- ----------------------- Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer OXNARD FORGE DIE COMPANY, INC. KAISER ALUMINIUM INTERNATIONAL, INC. By: By: ---------------------- ----------------------- Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINA AUSTRALIA KAISER FINANCE CORPORATION CORPORATION By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER MICROMILL HOLDINGS, LLC KAISER SIERRA MICROMILLS, LLC By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER TEXAS SIERRA MICROMILLS, LLC KAISER TEXAS MICROMILL HOLDINGS, LLC By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer Supplement to the Subsidiary Security Agreement ----------------------------------------------- Schedule I U.S. Trademarks, Trade Names and Service Marks As of the Tenth Amendment Effective Date, there are no Trademarks registered in the name of the New Kaiser Subsidiary in the United States Patent and Trademark Office. Supplement to the Subsidiary Security Agreement ------------------------------------------------ Schedule II U.S. Patents As of the Tenth Amendment Effective Date, there are no Patents registered in the name of the New Kaiser Subsidiary in the United States Patent and Trademark Office. Supplement to the Subsidiary Security Agreement ----------------------------------------------- Schedule III Location of Collateral The chief place of business and the chief executive office of the New Kaiser Subsidiary as of the Tenth Amendment Effective Date is, and for the four-month period immediately preceding such date (or such shorter time as such New Kaiser Subsidiary has been organized) has been, located at 6177 Sunol Boulevard, Pleasanton, California 94566-7769 or 5847 San Felipe, Suite 2600, Houston, Texas 77057-3010. As of the Tenth Amendment Effective Date, all of the current books and records located in the United States of the New Kaiser Subsidiary, including its records regarding any Accounts and contracts relating to any Accounts and all originals, if any, of Chattel Paper and Documents (including all Documents covering any Goods of such New Kaiser Subsidiary), and all of the New Kaiser Subsidiary's other books and records, contracts, Chattel Paper, Equipment, Documents, Inventory, and other Goods located in the United States (excluding such books and records, Documents, Equipment, contracts, Chattel Paper, Inventory, or other Goods which are in transit or which are otherwise temporarily off such premises in the ordinary course of such New Kaiser Subsidiary's business) are located at: 6177 SUNOL BOULEVARD PLEASANTON, CALIFORNIA 94566-7769 (ALAMEDA COUNTY) 5847 SAN FELIPE SUITE 2600 HOUSTON, TEXAS 77057-3010 (HARRIS COUNTY) 1901 REYMET ROAD RICHMOND, VIRGINIA 23237 6601 WEST BROAD STREET RICHMOND, VIRGINIA 23230 401 MADRID AVENUE TORRANCE, CALIFORNIA 90509 (LOS ANGELES COUNTY) Supplement to the Subsidiary Security Agreement ------------------------------------------------ Schedule IV Third Party Locations of Collateral As of the Tenth Amendment Effective Date, Collateral of the New Kaiser Subsidiary may be located at the following third party locations: CNC MACHINING 515 HULL STREET RICHMOND, VIRGINIA 23224 B & B ELECTROPLATING 400 MCGEE WAY BELTON, SOUTH CAROLINA 29627 (ANDERSON COUNTY) ROBIN INDUSTRIES 1265 WEST 65TH STREET CLEVELAND, OHIO 44102 (CUYAHOGA COUNTY) WASHINGTON ALUMINUM 1330 KNECHT AVE. BALTIMORE, MARYLAND 21226 (BALTIMORE COUNTY) AEROTEC INC. 9505 JEFFERSON DAVIE HWY. RICHMOND, VIRGINIA 23237 IMCO RECYCLING INC. 388 WILLIAMSON DRIVE LOUDON, TN 37774 (LOUDON COUNTY) MUELLER IMPACTS CO. 2409 WILLS STREET MARYSVILLE, MI 48040 (ST. CLAIR COUNTY) Supplement to the Subsidiary Security Agreement ----------------------------------------------- Schedule V Deposit and Cash Equivalent Investment Accounts As of the Tenth Amendment Effective Date, the New Kaiser Subsidiary has no deposit accounts or accounts for holding Cash Equivalent Investments in the United States. It is anticipated that the New Kaiser Subsidiary will open account no. 79-51868 at Bank of America, 231 South La Salle Street, Chicago, Illinois. Supplement to the Subsidiary Security Agreement ------------------------------------------------ Schedule VI List of Trade Names and Fictitious Business Names No additional information. List of Filing Offices Reference is made to Schedule B to the opinion of Kramer, Levin, Naftalis & Frankel, dated June 27, 1997, which Schedule B is incorporated herein by this reference. EXHIBIT B SUPPLEMENT TO SUBSIDIARY GUARANTY --------------------------------- THIS SUPPLEMENT TO SUBSIDIARY GUARANTY (this "Supplement"), dated as of June 25, 1997, is by and between ---------- Kaiser Bellwood Corporation, a Delaware corporation, (the "New ---- Kaiser Subsidiary"), and BankAmerica Business Credit, Inc., a - ------------------ Delaware corporation, as agent for the Secured Lenders (as defined in the Credit Agreement referred to below) (in such capacity, together with its successors and assigns in such capacity, the "Agent"). Capitalized terms used, but not defined, ----- herein shall have the meanings given to such terms in the Credit Agreement, as amended by the Tenth Amendment. W I T N E S S E T H: WHEREAS, Kaiser Aluminum & Chemical Corporation, a Delaware corporation (the "Company"), Kaiser Aluminum -------- Corporation, a Delaware corporation (the "Parent Guarantor"), the ----------------- various financial institutions that are or may from time to time become parties to the Credit Agreement (collectively, the "Lenders" and, individually, a "Lender"), and the Agent are -------- ------- parties to the Credit Agreement, dated as of February 15, 1994, as amended by the First Amendment to Credit Agreement, dated as of July 21, 1994, the Second Amendment to Credit Agreement, dated as of March 10, 1995, the Third Amendment to Credit Agreement and Acknowledgment, dated as of July 20, 1995, the Fourth Amendment to Credit Agreement, dated as of October 17, 1995, the Fifth Amendment to Credit Agreement, dated as of December 11, 1995, the Sixth Amendment to Credit Agreement, dated as of October 1, 1996, the Seventh Amendment to Credit Agreement, dated as of December 17, 1996, the Eighth Amendment to Credit Agreement, dated as of February 24, 1997, and the Ninth Amendment to Credit Agreement, dated as of April 21, 1997; and WHEREAS, as of the date hereof the Company, the Parent Guarantor, the Lenders and the Agent are entering into a Tenth Amendment to Credit Agreement (the "Tenth Amendment"); and ---------------- WHEREAS, the New Kaiser Subsidiary is required as a condition to the effectiveness of the Tenth Amendment to execute this Supplement; and WHEREAS, the Required Lenders have consented to the execution and delivery of this Supplement by the Agent; NOW, THEREFORE, the parties hereto agree as follows: Section 1. Addition of New Kaiser Subsidiary. -------------------- ------------- On and after the Tenth Amendment Effective Date (as defined in the Tenth Amendment), the New Kaiser Subsidiary shall be party to the Subsidiary Guaranty and the terms "Guarantor" and "Guarantors" (as used in the Subsidiary Guaranty) shall include and also be a reference to the New Kaiser Subsidiary. Section 2. Guarantors' Representations and Warranties. ------------------------------------------ In order to induce the Agent to enter into this Supplement and to supplement the Subsidiary Guaranty in the manner provided herein, and to induce the Required Lenders to consent to such action by the Agent, the New Kaiser Subsidiary represents and warrants as a Guarantor to each Lender and the Agent that, as of the Tenth Amendment Effective Date after giving effect to the effectiveness of this Supplement, the following statements are true and correct in all material respects: A. Authorization of Agreements. The execution and --------------------------- delivery of this Supplement by such Guarantor and the performance of the Subsidiary Guaranty as supplemented by this Supplement (the "Supplemented Agreement") by such Guarantor are within such ---------------------- Guarantor's corporate powers and have been duly authorized by all necessary corporate action on the part of such Guarantor. B. No Conflict. The execution and delivery by such ----------- Guarantor of this Supplement and the performance by such Guarantor of the Supplemented Agreement do not: (1) contravene such Guarantor's Organic Documents; (2) contravene the Senior Indenture, the New Senior Indenture, the Additional New Senior Indentures or the Subordinated Indenture or contravene any other contractual restriction where such a contravention has a reasonable possibility of having a Materially Adverse Effect or contravene any law or governmental regulation or court decree or order binding on or affecting such Guarantor or any of its Subsidiaries; or (3) result in, or require the creation or imposition of, any Lien on any of such Guarantor's properties, other than pursuant to the Loan Documents. C. Binding Obligation. This Supplement has been duly ------------------ executed and delivered by such Guarantor and this Supplement and the Supplemented Agreement constitute the legal, valid and binding obligations of such Guarantor, enforceable against such Guarantor in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally and by general principles of equity. D. Governmental Approval, Regulation, etc. No ---------------------------------------- authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance of this Supplement by such Guarantor. Section 3. Miscellaneous. -------------- A. Applicable Law. THIS SUPPLEMENT SHALL BE DEEMED --------------- TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH LAWS RELATING TO CONFLICTS OF LAWS. B. Headings. The various headings of this Supplement --------- are inserted for convenience only and shall not affect the meaning or interpretation of this Supplement or any provision hereof. C. Counterparts. This Supplement may be executed by ------------- the parties hereto in several counterparts and by the different parties on separate counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. D. Severability. Any provision of this Supplement ------------ which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Supplement or affecting the validity or enforceability of such provisions in any other jurisdiction. IN WITNESS WHEREOF, this Supplement has been duly executed and delivered as of the day and year first above written. BANKAMERICA BUSINESS CREDIT, KAISER BELLWOOD CORPORATION INC., as Agent By: By: --------------------------- --------------------------- Name:Michael J. Jasaitis Name: Karen A. Twitchell Its: Vice President Its: Treasurer ACKNOWLEDGED AND AGREED TO: AKRON HOLDING CORPORATION KAISER ALUMINUM & CHEMICAL INVESTMENT, INC. By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINUM PROPERTIES, INC. KAISER ALUMINUM TECHNICAL SERVICES, INC. By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer OXNARD FORGE DIE COMPANY, INC. KAISER ALUMINIUM INTERNATIONAL, INC. By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINA AUSTRALIA KAISER FINANCE CORPORATION CORPORATION By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer ALPART JAMAICA INC. KAISER JAMAICA CORPORATION By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER MICROMILL HOLDINGS, LLC KAISER SIERRA MICROMILLS, LLC By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER TEXAS SIERRA MICROMILLS, KAISER TEXAS MICROMILL LLC HOLDINGS, LLC By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer EXHIBIT C SUPPLEMENT TO SUBSIDIARY PLEDGE AGREEMENT ----------------------------------------- THIS SUPPLEMENT TO SUBSIDIARY PLEDGE AGREEMENT (this "Supplement"), dated as of June 25, 1997, is by and between ---------- Kaiser Bellwood Corporation, a Delaware corporation,(the "New ---- Kaiser Subsidiary"), and BankAmerica Business Credit, Inc., a - ------------------ Delaware corporation, as agent for the Secured Lenders (as defined in the Credit Agreement referred to below) (in such capacity, together with its successors and assigns in such capacity, the "Agent"). Capitalized terms used, but not defined, ----- herein shall have the meanings given to such terms in the Credit Agreement, as amended by the Tenth Amendment. W I T N E S S E T H: WHEREAS, Kaiser Aluminum & Chemical Corporation, a Delaware corporation (the "Company"), Kaiser Aluminum -------- Corporation, a Delaware corporation (the "Parent Guarantor"), the ----------------- various financial institutions that are or may from time to time become parties to the Credit Agreement (collectively, the "Lenders" and, individually, a "Lender"), and the Agent are -------- ------- parties to the Credit Agreement, dated as of February 15, 1994, as amended by the First Amendment to Credit Agreement, dated as of July 21, 1994, the Second Amendment to Credit Agreement, dated as of March 10, 1995, the Third Amendment to Credit Agreement and Acknowledgment, dated as of July 20, 1995, the Fourth Amendment to Credit Agreement, dated as of October 17, 1995, the Fifth Amendment to Credit Agreement, dated as of December 11, 1995, the Sixth Amendment to Credit Agreement, dated as of October 1, 1996, the Seventh Amendment to Credit Agreement, dated as of December 17, 1996, the Eighth Amendment to Credit Agreement, dated as of February 24, 1997, and the Ninth Amendment to Credit Agreement, dated as of April 21, 1997; and WHEREAS, as of the date hereof the Company, the Parent Guarantor, the Lenders and the Agent are entering into a Tenth Amendment to Credit Agreement (the "Tenth Amendment"); and ---------------- WHEREAS, the New Kaiser Subsidiary is required as a condition to the effectiveness of the Tenth Amendment to execute this Supplement; and WHEREAS, the Required Lenders have consented to the execution and delivery of this Supplement by the Agent; NOW, THEREFORE, the parties hereto agree as follows: Section 1. Addition of New Kaiser Subsidiary. ---------------------------------- On and after the Tenth Amendment Effective Date (as defined in the Tenth Amendment), the New Kaiser Subsidiary shall be a party to the Subsidiary Pledge Agreement and the terms "Pledgor" and "Pledgors" (as used in the Subsidiary Pledge Agreement) shall include and also be a reference to the New Kaiser Subsidiary. Section 2. Pledgor's Representations and Warranties. ----------------------------------------- In order to induce the Agent to enter into this Supplement and to supplement the Subsidiary Pledge Agreement in the manner provided herein, and to induce the Required Lenders to consent to such action by the Agent, the New Kaiser Subsidiary represents and warrants as a Pledgor to each Lender and the Agent that, as of the Tenth Amendment Effective Date after giving effect to the effectiveness of this Supplement, the following statements are true and correct in all material respects: A. Authorization of Agreements. The execution and ---------------------------- delivery of this Supplement by such Pledgor and the performance of the Subsidiary Pledge Agreement as supplemented by this Supplement (the "Supplemented Agreement") by such Pledgor are ----------------------- within such Pledgor's corporate powers and have been duly authorized by all necessary corporate action on the part of such Pledgor. B. No Conflict. The execution and delivery by such ------------ Pledgor of this Supplement and the performance by such Pledgor of the Supplemented Agreement do not: (1) contravene such Pledgor's Organic Documents; (2) contravene the Senior Indenture, the Subordinated Indenture, the New Senior Indenture, or the Additional New Senior Indentures or contravene any other contractual restriction where such a contravention has a reasonable possibility of having a Materially Adverse Effect or contravene any law or governmental regulation or court decree or order binding on or affecting such Pledgor or any of its Subsidiaries; or (3) result in, or require the creation or imposition of, any Lien on any of such Pledgor's properties, other than pursuant to the Loan Documents. C. Binding Obligation. This Supplement has been duly ------------------- executed and delivered by such Pledgor and this Supplement and the Supplemented Agreement constitute the legal, valid and binding obligations of such Pledgor, enforceable against such Pledgor in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally and by general principles of equity. D. Governmental Approval, Regulation, etc. No ---------------------------------------- authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance of this Supplement by such Pledgor. Section 3. Miscellaneous. -------------- A. Applicable Law. THIS SUPPLEMENT SHALL BE DEEMED --------------- TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH LAWS RELATING TO CONFLICTS OF LAWS. B. Headings. The various headings of this Supplement --------- are inserted for convenience only and shall not affect the meaning or interpretation of this Supplement or any provision hereof. C. Counterparts. This Supplement may be executed by ------------- the parties hereto in several counterparts and by the different parties on separate counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. D. Severability. Any provision of this Supplement ------------- which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Supplement or affecting the validity or enforceability of such provisions in any other jurisdiction. IN WITNESS WHEREOF, this Supplement has been duly executed and delivered as of the day and year first above written. BANKAMERICA BUSINESS CREDIT, KAISER BELLWOOD CORPORATION INC., as Agent By: By: --------------------------- ------------------------- Name:Michael J. Jasaitis Name: Karen A. Twitchell Its: Vice President Its: Treasurer ACKNOWLEDGED AND AGREED TO: AKRON HOLDING CORPORATION KAISER ALUMINUM & CHEMICAL INVESTMENT, INC. By: By: ---------------------- ------------------------- Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINUM PROPERTIES, INC. KAISER ALUMINUM TECHNICAL SERVICES, INC. By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer OXNARD FORGE DIE COMPANY, INC. KAISER ALUMINIUM INTERNATIONAL, INC. By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINA AUSTRALIA KAISER FINANCE CORPORATION CORPORATION By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER MICROMILL HOLDINGS, LLC KAISER SIERRA MICROMILLS, LLC By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER TEXAS SIERRA MICROMILLS, LLC KAISER TEXAS MICROMILL HOLDINGS, LLC By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer EX-6 8 E x e c u t i o n C o p y NINTH AMENDMENT TO CREDIT AGREEMENT AND ACKNOWLEDGMENT ------------------------------------------------------- THIS NINTH AMENDMENT TO CREDIT AGREEMENT AND ACKNOWLEDGMENT (this "Amendment"), dated as of April 21, 1997, is --------- by and between KAISER ALUMINUM & CHEMICAL CORPORATION, a Delaware corporation (the "Company"), KAISER ALUMINUM CORPORATION, a ------- Delaware corporation (the "Parent Guarantor"), the various ----------------- financial institutions that are or may from time to time become parties to the Credit Agreement referred to below (collectively, the "Lenders" and, individually, a "Lender"), and BANKAMERICA ------- ------- BUSINESS CREDIT, INC., a Delaware corporation, as agent (in such capacity, together with its successors and assigns in such capacity, the "Agent") for the Lenders. Capitalized terms used, ----- but not defined, herein shall have the meanings given to such terms in the Credit Agreement, as amended hereby. W I T N E S S E T H: WHEREAS, the Company, the Parent Guarantor, the Lenders and the Agent are parties to the Credit Agreement, dated as of February 15, 1994, as amended by the First Amendment to Credit Agreement, dated as of July 21, 1994, the Second Amendment to Credit Agreement, dated as of March 10, 1995, the Third Amendment to Credit Agreement and Acknowledgment, dated as of July 20, 1995, the Fourth Amendment to Credit Agreement, dated as of October 17, 1995, the Fifth Amendment to Credit Agreement, dated as of December 11, 1995, the Sixth Amendment to Credit Agreement, dated as of October 1, 1996, the Seventh Amendment to Credit Agreement, dated as of December 17, 1996, and the Eighth Amendment to Credit Agreement, dated as of February 24, 1997 (the "Credit Agreement"); and ----------------- WHEREAS, the parties hereto have agreed to amend the Credit Agreement as herein provided; NOW, THEREFORE, the parties hereto agree as follows: Section 1. Amendments to Credit Agreement. ------------------------------ 1.1 Amendment to Article I: Definitions. ------------------------ ------------ A. The definition of "Joint Venture Affiliate" contained in Section 1.1 of the Credit Agreement is hereby ----------- amended by inserting the phrase "AKW, AKW LLC," after the term "Furukawa," in the second line thereof. B. The following definitions are hereby added to Section 1.1 of the Credit Agreement in the appropriate - ----------- alphabetical order: "AKW" means AKW L.P., a limited partnership organized --- under the laws of Delaware. "AKW LLC" means AKW General Partner L.L.C., a limited ------- liability company organized under the laws of the State of Delaware. 1.2 Amendments to Article IX: Covenants. ------------------------------------ A. Section 9.2.2 of the Credit Agreement is hereby ------------- amended by (i) deleting the word "and" at the end of clause ------ (b)(xix) thereof; and (ii) adding the following as new clause - -------- ------- (b)(xxi) thereof: - -------- "(xxi) Indebtedness of the Company in an aggregate principal amount not to exceed $5,000,000 outstanding at any one time in respect of AKW and/or AKW LLC; and" B. Section 9.2.5 of the Credit Agreement is hereby ------------- amended by (i) deleting the word "and" at the end of clause (r) ---------- thereof; (ii) deleting the period at the end of clause (s) ---------- thereof and substituting "; and" therefor; and (iii) adding the following as new clause (t) thereof: ---------- "(t) Investments by the Company or any of its Subsidiaries in AKW and/or AKW LLC of cash, equipment, Inventory, intellectual property and/or other Property (such Property (other than cash) to be valued at the fair market value thereof as determined in good faith by the Board of Directors or the Executive Committee of the Board of Directors of the Company) in an aggregate amount outstanding at any one time (net of the proceeds contemporaneously received by the Company from the sale of a portion of the equity in AKW) not exceeding $30,000,000." C. Section 9.2.11 of the Credit Agreement is hereby -------------- amended by (i) deleting the word "and" at the end of clause (j) ---------- thereof; (ii) deleting the period at the end of clause (k) ---------- thereof and substituting a semicolon therefor; and (iii) adding the following as new clauses (l) and (m) thereof: ------------------- "(l) a sale by the Company of a portion of the equity in AKW as contemplated by subsection 9.2.5(t); and "(m) a sale by the Company to AKW or AKW LLC of Inventory in connection with the formation of AKW and relating to the business of AKW in an amount not to exceed $10,000,000." D. Section 9.2.18 of the Credit Agreement is hereby -------------- amended by (i) deleting the period at the end of clause (vii) ------------ thereof and substituting "; and" therefor; (ii) amending clause ------ (vi) thereof to read in its entirety as follows: - ---- "(vi) Investments permitted by Sections 9.2.5(f), ----------------- 9.2.5(n), 9.2.5(o), 9.2.5(q), 9.2.5(r), 9.2.5(s) and 9.2.5(t);" - -------- -------- -------- -------- -------- -------- and (iii) adding the following as new clause (viii) thereof: "(viii) The Company and AKW may enter into a lease with respect to a portion of the property owned by the Company located in Erie, Pennsylvania, in form and substance satisfactory to the Agent in its sole and absolute discretion; provided that the Company's interest in such lease is assigned as Collateral to the Agent on behalf of the Lenders on terms and pursuant to documentation in form and substance satisfactory to the Agent in its sole and absolute discretion." Section 2. Acknowledgment and Consent. -------------------------- Subject to the terms and conditions set forth herein and in reliance on the representations and warranties of Company herein contained, the Lenders hereby (i) acknowledge that the Property to be contributed by the Company or any of its Subsidiaries to AKW or AKW LLC pursuant to Section 9.2.5(t) constitutes Collateral, and hereby consent to the release by the Agent of the security interest of the Agent, on behalf of the Lenders, in such Collateral and in the Proceeds of such Collateral; (ii) consent to the release by the Agent of the security interest of the Agent, on behalf of the Lenders, in the capital stock of Akron Holding Corporation, a Subsidiary of the Company ("Akron"), and in the Intercompany Demand Note issued by ----- the Company to Akron; (iii) in accordance with Section 1.15 of ------------ the Open-End Mortgage with Power of Sale, Assignment of Leases and Rents, Security Agreement, Fixture Filing and Financing Statement (recorded February 18, 1994, with the Recorder of Deeds, Erie County), as amended (the "Erie Mortgage"), consent to -------------- the entering into of a lease by the Company and AKW with respect to a portion of the property owned by the Company located in Erie, Pennsylvania, in a form satisfactory to the Agent in its sole discretion (the "Lease"); and (iv) authorize the Agent to ----- execute and deliver such documents, in form and substance satisfactory to the Agent, in its sole and absolute discretion, as may be necessary or appropriate to subordinate the Erie Mortgage to the interest of AKW in the Lease. Section 3. Amendments to Collateral Documents. ---------------------------------- The parties agree that, as of the Ninth Amendment Effective Date, (i) the Parent Security Agreement shall be amended as set forth in Exhibit A hereto, (ii) the Company Security Agreement shall be amended as set forth in Exhibit B hereto, and (iii) the Subsidiary Security Agreement shall be amended as set forth in Exhibit C hereto. The Required Lenders hereby approve the forms of such amendments, and hereby authorize the Agent on their behalf to accept from the Parent Guarantor, the Company and the Subsidiaries of the Company executing such amendments, and authorize the Agent to execute and deliver as Agent, the amendment to the Parent Security Agreement in substantially the form of such Exhibit A, the amendment to the Company Security Agreement in substantially the form of such Exhibit B, and the amendment to the Subsidiary Security Agreement in substantially the form of such Exhibit C with such changes, additions or deletions as the Agent, in its sole and absolute discretion, may approve. Section 4. Conditions to Effectiveness. --------------------------- This Amendment shall become effective as of the date hereof only when the following conditions shall have been satisfied and notice thereof shall have been given by the Agent to the Parent Guarantor, the Company, the Agent and each Lender (the date of satisfaction of such conditions and the giving of such notice being referred to herein as the "Ninth Amendment --------------- Effective Date"): - -------------- A. The Agent shall have received for each Lender counterparts hereof duly executed on behalf of the Parent Guarantor, the Company, the Agent and the Required Lenders (or notice of the approval of this Amendment by the Required Lenders satisfactory to the Agent shall have been received by the Agent), together with counterparts of the Third Amendment to Company Security Agreement, dated as of April 21, 1997, between the Company and the Agent (the "Company Security Amendment") and the -------------------------- Second Amendment to Parent Security Agreement, dated as of April 21, 1997, between the Parent Guarantor and the Agent (the "Parent Security Amendment"). ------------------------- B. The Agent shall have received: (1) Resolutions of the Board of Directors or of the Executive Committee of the Company and the Parent Guarantor approving and authorizing the execution, delivery and performance of this Amendment, and the Company Security Amendment or the Parent Security Amendment, as the case may be, certified by its corporate secretary or an assistant secretary as being in full force and effect without modification or amendment as of the date of execution hereof by the Company or the Parent Guarantor, as the case may be; (2) A signature and incumbency certificate of the officers of the Company and the Parent Guarantor executing this Amendment and the Company Security Amendment or Parent Security Amendment, as the case may be; (3) Copies of the Third Amendment to Subsidiary Security Agreement, dated as of April 21, 1997, between the Subsidiaries of the Company parties thereto and the Agent (the "Subsidiary Security Amendment") duly executed on behalf of such ----------------------------- Subsidiaries; (4) Resolutions of the Board of Directors or of the Executive Committee or other authorized governing body or entity of each of the Subsidiaries of the Company executing the Subsidiary Security Amendment approving and authorizing the execution, delivery and performance of the Subsidiary Security Amendment, certified by their respective corporate secretaries or an assistant secretary or other authorized representative as being in full force and effect without modification or amendment as of the date of execution hereof by such Subsidiary; (5) A signature and incumbency certificate of the officers or other authorized representative of each of the Subsidiaries of the Company executing the Subsidiary Security Amendment; (6) For each Lender an opinion, addressed to the Agent and each Lender, from Kramer, Levin, Naftalis & Frankel, in form and substance satisfactory to the Agent; and (7) Such other information approvals, opinions, documents, or instruments as the Agent may reasonably request. Section 5. Company's Representations and Warranties. ---------------------------------------- In order to induce the Lenders and the Agent to enter into this Amendment and to amend the Credit Agreement and the other Loan Documents in the manner provided herein, the Parent Guarantor and the Company represent and warrant to each Lender and the Agent that, as of the Ninth Amendment Effective Date after giving effect to the effectiveness of this Amendment, the following statements are true and correct in all material respects: A. Authorization of Agreements. The execution and --------------------------- delivery of this Amendment by the Company and the Parent Guarantor and the performance of the Credit Agreement as amended by this Amendment (the "Amended Agreement") by the Company and ----------------- the Parent Guarantor are within such Obligor's corporate powers and have been duly authorized by all necessary corporate action on the part of the Company and the Parent Guarantor, as the case may be. B. No Conflict. The execution and delivery by the ----------- Company and the Parent Guarantor of this Amendment and the performance by the Company and the Parent Guarantor of the Amended Agreement do not: (1) contravene such Obligor's Organic Documents; (2) contravene the Subordinated Indenture, the Senior Indenture, the New Senior Indenture or the Additional New Senior Indenture or contravene any other contractual restriction where such a contravention has a reasonable possibility of having a Materially Adverse Effect or contravene any law or governmental regulation or court decree or order binding on or affecting such Obligor orany of its Subsidiaries; or (3) result in, or require the creation or imposition of, any Lien on any of such Obligor's properties or any of the properties of any Subsidiary of such Obligor, other than pursuant to the Loan Documents. C. Binding Obligation. This Amendment has been duly ------------------ executed and delivered by the Company and the Parent Guarantor and this Amendment and the Amended Agreement constitute the legal, valid and binding obligations of the Company and the Parent Guarantor, enforceable against the Company and the Parent Guarantor in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally and by general principles of equity. D. Governmental Approval, Regulation, etc. No ---------------------------------------- authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other Person is required for the due execution, delivery or performance of this Amendment by the Company or the Parent Guarantor. E. Incorporation of Representations and Warranties ------------------------------------------------ from Credit Agreement. Each of the statements set forth in - --------------------- Section 7.2.1 of the Credit Agreement is true and correct. - ------------- Section 6. Acknowledgment and Consent. --------------------------- The Company is a party to the Company Collateral Documents, in each case as amended through the Ninth Amendment Effective Date, pursuant to which the Company has created Liens in favor of the Agent on certain Collateral to secure the Obligations. The Parent Guarantor is a party to the Parent Collateral Documents, in each case as amended through the Ninth Amendment Effective Date, pursuant to which the Parent Guarantor has created Liens in favor of the Agent on certain Collateral and pledged certain Collateral to the Agent to secure the Obligations of the Parent Guarantor. Certain Subsidiaries of the Company are parties to the Subsidiary Guaranty and/or one or more of the Subsidiary Collateral Documents, in each case as amended through the Ninth Amendment Effective Date, pursuant to which such Subsidiaries have (i) guarantied the Obligations and/or (ii) created Liens in favor of the Agent on certain Collateral. The Company, the Parent Guarantor and such Subsidiaries are collectively referred to herein as the "Credit Support Parties", ----------------------- and the Company Collateral Documents, the Parent Collateral Documents, the Subsidiary Guaranty and the Subsidiary Collateral Documents are collectively referred to herein as the "Credit ------ Support Documents". - ----------------- Each Credit Support Party hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement as amended by this Amendment and consents to the amendment of the Credit Agreement effected as of the date hereof pursuant to this Amendment and the amendment of the other Loan Documents effected as of the date hereof. Each Credit Support Party acknowledges and agrees that any of the Credit Support Documents to which it is a party or otherwise bound shall continue in full force and effect. Each Credit Support Party hereby confirms that each Credit Support Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guaranty or secure, as the case may be, the payment and performance of all obligations guaranteed or secured thereby, as the case may be. Each Credit Support Party (other than the Company and the Parent Guarantor) acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Credit Support Party is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Credit Support Party to any future amendments to the Credit Agreement. Section 7. Miscellaneous. ------------- A. Reference to and Effect on the Credit Agreement ------------------------------------------------ and the Other Loan Documents. - ------------------------------- (1) On and after the Ninth Amendment Effective Date, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement shall mean and be a reference to the Amended Agreement. (2) Except as specifically amended by this Amendment and the other Loan Documents executed as of the date hereof, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. B. Applicable Law. THIS AMENDMENT SHALL BE DEEMED TO --------------- BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH LAWS RELATING TO CONFLICTS OF LAWS. C. Headings. The various headings of this Amendment --------- are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or any provision hereof. D. Counterparts. This Amendment may be executed by ------------- the parties hereto in several counterparts and by the different parties on separate counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. E. Severability. Any provision of this Amendment ------------- which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Amendment or affecting the validity or enforceability of such provisions in any other jurisdiction. IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as of the day and year first above written. KAISER ALUMINUM CORPORATION KAISER ALUMINUM & CHEMICAL CORPORATION By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer BANKAMERICA BUSINESS CREDIT, INC. BANKAMERICA BUSINESS CREDIT, INC., as Agent By:/s/Michael J. Jasaitis By:/s/Michael J. Jasaitis ---------------------- ---------------------- Name: Michael J. Jasaitis Name: Michael J. Jasaitis Its: Vice President Its: Vice President BANK OF AMERICA NATIONAL THE CIT GROUP/BUSINESS TRUST AND SAVINGS ASSOCIATION CREDIT, INC. By:/s/ Richard E. Bryson By:/s/Timothy S. Culver ---------------------- ---------------------- Name Printed:Richard E. Bryson Name Printed: Timothy S. Culver Its: Managing Director Its: Assistant Vice President CONGRESS FINANCIAL CORPORATION HELLER FINANCIAL, INC. (WESTERN) By:/s/Kristine M. Metchikian By:/s/Tara Hopkins ---------------------- ---------------------- Name Printed: Kristine M. Metchikian Name Printed:Tara Hopkins Its: Vice President Its: Assistant Vice President LA SALLE NATIONAL BANK NATIONAL WESTMINSTER BANK PLC By: /s/Douglas C. Colletti By:/s/Ian M. Plester ---------------------- ---------------------- Name Printed: Douglas C. Colletti Name Printed: Ian M. Plester Its: First Vice President Its: Vice President TRANSAMERICA BUSINESS CREDIT ABN AMRO BANK N.V. CORPORATION By:/s/Matthew N. McAlpine By:/s/Bradford H. Leahy ---------------------- ---------------------- Name Printed: Matthew N. McAlpine Name Printed: Bradford H. Leahy Its: Vice President Its: Assistant Vice President ACKNOWLEDGED AND AGREED TO: AKRON HOLDING CORPORATION KAISER ALUMINUM & CHEMICAL INVESTMENT, INC. By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINUM PROPERTIES, INC. KAISER ALUMINUM TECHNICAL SERVICES, INC. By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer OXNARD FORGE DIE COMPANY, INC. KAISER ALUMINIUM INTERNATIONAL, INC. By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINA AUSTRALIA KAISER FINANCE CORPORATION CORPORATION By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer ALPART JAMAICA INC. KAISER JAMAICA CORPORATION By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER BAUXITE COMPANY KAISER EXPORT COMPANY By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER MICROMILL HOLDINGS, LLC KAISER SIERRA MICROMILLS, LLC By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Treasurer of Kaiser Aluminum Its: Treasurer & Chemical Corporation KAISER TEXAS SIERRA MICROMILLS, LLC KAISER TEXAS MICROMILL HOLDINGS, LLC By:/s/Karen A. Twitchell By:/s/Karen A. Twitchell ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer EXHIBIT A SECOND AMENDMENT TO PARENT SECURITY AGREEMENT ---------------------------------------------- THIS SECOND AMENDMENT TO PARENT SECURITY AGREEMENT (this "Amendment"), dated as of April 21, 1997, is by and between --------- Kaiser Aluminum Corporation, a Delaware corporation (the "Parent ------ Guarantor"), and BankAmerica Business Credit, Inc., a Delaware - --------- corporation, as agent for the Secured Lenders (as defined in the Credit Agreement referred to below) (in such capacity, together with its successors and assigns in such capacity, the "Agent"). ----- Capitalized terms used, but not defined, herein shall have the meanings given to such terms in the Credit Agreement, as amended by the Ninth Amendment. W I T N E S S E T H: WHEREAS, the Parent Guarantor, Kaiser Aluminum & Chemical Corporation, a Delaware corporation (the "Company"), the -------- various financial institutions that are or may from time to time become parties to the Credit Agreement (collectively, the "Lenders" and, individually, a "Lender"), and the Agent are ------- ------ parties to the Credit Agreement, dated as of February 15, 1994, as amended by the First Amendment to Credit Agreement, dated as of July 21, 1994, the Second Amendment to Credit Agreement, dated as of March 10, 1995, the Third Amendment to Credit Agreement and Acknowledgment, dated as of July 20, 1995, the Fourth Amendment to Credit Agreement, dated as of October 17, 1995, the Fifth Amendment to Credit Agreement, dated as of December 11, 1995, the Sixth Amendment to Credit Agreement, dated as of October 1, 1996, the Seventh Amendment to Credit Agreement, dated as of December 17, 1996, and the Eighth Amendment to Credit Agreement, dated as of February 24, 1997 (the "Credit Agreement"); and ----------------- WHEREAS, as of the date hereof the Parent Guarantor, the Company, the Lenders and the Agent are entering into a Ninth Amendment to Credit Agreement (the "Ninth Amendment"); and --------------- WHEREAS, the Parent Guarantor and the Agent are parties to the Parent Security Agreement, Financing Statement and Conditional Assignment of Patents and Trademarks, dated as of February 15, 1994, as amended by the First Amendment to Parent Security Agreement, dated as of July 21, 1994 (the "Parent ------- Security Agreement"), and have agreed to amend the Parent - ------------------ Security Agreement as herein provided; and WHEREAS, the Required Lenders have consented to the execution and delivery of this Amendment by the Agent; NOW, THEREFORE, the parties hereto agree as follows: Section 1. Amendment to Parent Security Agreement. -------------------------------------- The proviso contained in the first paragraph of Section 2 of the Parent Security Agreement is hereby amended by adding the phrase "AKW, AKW LLC," immediately following the phrase "Furukawa," each time it appears in clause (A) thereof. Section 2. Parent Guarantor's Representations and --------------------------------------- Warranties. - ---------- In order to induce the Agent to enter into this Amendment and to amend the Parent Security Agreement in the manner provided herein, and to induce the Required Lenders to consent to such action by the Agent, the Parent Guarantor represents and warrants to each Lender and the Agent that, as of the Ninth Amendment Effective Date (as defined in the Ninth Amendment) after giving effect to the effectiveness of this Amendment, the following statements are true and correct in all material respects: A. Authorization of Agreements. The execution and --------------------------- delivery of this Amendment by the Parent Guarantor and the performance of the Parent Security Agreement as amended by this Amendment (the "Amended Agreement") by the Parent Guarantor are ----------------- within the Parent Guarantor's corporate powers and have been duly authorized by all necessary corporate action on the part of the Parent Guarantor. B. No Conflict. The execution and delivery by the ----------- Parent Guarantor of this Amendment and the performance by the Parent Guarantor of the Amended Agreement do not: (1) contravene the Parent Guarantor's Organic Documents; (2) contravene the Senior Indenture, the Subordinated Indenture, the New Senior Indenture or the Additional New Senior Indenture or contravene any other contractual restriction where such a contravention has a reasonable possibility of having a Materially Adverse Effect or contravene any law or governmental regulation or court decree or order binding on or affecting the Parent Guarantor or any of its Subsidiaries; or (3) result in, or require the creation or imposition of, any Lien on any of the Parent Guarantor's properties, other than pursuant to the Loan Documents. C. Binding Obligation. This Amendment has been duly ------------------ executed and delivered by the Parent Guarantor and this Amendment and the Amended Agreement constitute the legal, valid and binding obligations of the Parent Guarantor, enforceable against the Parent Guarantor in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally and by general principles of equity. D. Governmental Approval, Regulation, etc. No --------------------------------------- authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance of this Amendment by the Parent Guarantor. Section 3. Miscellaneous. ------------- A. Reference to and Effect on the Parent Security ---------------------------------------------- Agreement and the Other Loan Documents. - -------------------------------------- (1) On and after the Ninth Amendment Effective Date, each reference in the Parent Security Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import referring to the Parent Security Agreement, and each reference in the other Loan Documents to the "Parent Security Agreement", "thereunder", "thereof" or words of like import referring to the Parent Security Agreement shall mean and be a reference to the Amended Agreement. (2) Except as specifically amended by this Amendment, the Parent Security Agreement shall remain in full force and effect and is hereby ratified and confirmed. (3) The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Agent or any Lender under, the Parent Security Agreement. B. Applicable Law. THIS AMENDMENT SHALL BE DEEMED TO -------------- BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH LAWS RELATING TO CONFLICTS OF LAWS. C. Headings. The various headings of this Amendment -------- are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or any provision hereof. D. Counterparts. This Amendment may be executed by ------------ the parties hereto in several counterparts and by the different parties on separate counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. E. Severability. Any provision of this Amendment ------------ which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Amendment or affecting the validity or enforceability of such provisions in any other jurisdiction. IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as of the day and year first above written. KAISER ALUMINUM BANKAMERICA BUSINESS CREDIT, CORPORATION INC., as Agent By: By: --------------------------- --------------------------- Name: Karen A. Twitchell Name: Michael J. Jasaitis Its: Treasurer Its: Vice President EXHIBIT B THIRD AMENDMENT TO COMPANY SECURITY AGREEMENT --------------------------------------------- THIS THIRD AMENDMENT TO COMPANY SECURITY AGREEMENT (this "Amendment"), dated as of April 21, 1997, is by and between --------- Kaiser Aluminum & Chemical Corporation, a Delaware corporation (the "Company"), and BankAmerica Business Credit, Inc., a ------- Delaware corporation, as agent for the Secured Lenders (as defined in the Credit Agreement referred to below) (in such capacity, together with its successors and assigns in such capacity, the "Agent"). Capitalized terms used, but not defined, ----- herein shall have the meanings given to such terms in the Credit Agreement, as amended by the Ninth Amendment. W I T N E S S E T H: WHEREAS, the Company, Kaiser Aluminum Corporation, a Delaware corporation (the "Parent Guarantor"), the various ---------------- financial institutions that are or may from time to time become parties to the Credit Agreement (collectively, the "Lenders" and, -------- individually, a "Lender"), and the Agent are parties to the ------ Credit Agreement, dated as of February 15, 1994, as amended by the First Amendment to Credit Agreement, dated as of July 21, 1994, the Second Amendment to Credit Agreement, dated as of March 10, 1995, the Third Amendment to Credit Agreement and Acknowledgment, dated as of July 20, 1995, the Fourth Amendment to Credit Agreement, dated as of October 17, 1995, the Fifth Amendment to Credit Agreement, dated as of December 11, 1995, the Sixth Amendment to Credit Agreement, dated as of October 1, 1996, the Seventh Amendment to Credit Agreement, dated as of December 17, 1996, and the Eighth Amendment to Credit Agreement, dated as of February 24, 1997 (the "Credit Agreement"); and ---------------- WHEREAS, as of the date hereof the Company, the Parent Guarantor, the Lenders and the Agent are entering into a Ninth Amendment to Credit Agreement (the "Ninth Amendment"); and --------------- WHEREAS, the Company and the Agent are parties to the Company Security Agreement, Financing Statement and Conditional Assignment of Patents and Trademarks, dated as of February 15, 1994, as amended by the First Amendment to Company Security Agreement, dated as of July 21, 1994 and Second Amendment to Company Security Agreement, dated as of December 11, 1995 (the "Company Security Agreement"), and have agreed to amend the -------------------------- Company Security Agreement as herein provided; and WHEREAS, the Required Lenders have consented to the execution and delivery of this Amendment by the Agent; NOW, THEREFORE, the parties hereto agree as follows: Section 1. Amendment to Company Security Agreement. ---------------------------------------- The proviso contained in the first paragraph of Section 2 of the Company Security Agreement is hereby amended by adding the phrase "AKW, AKW LLC," immediately following the phrase "Furukawa," each time it appears in clause (A) thereof. Section 2. Company's Representations and Warranties. ----------------------------------------- In order to induce the Agent to enter into this Amendment and to amend the Company Security Agreement in the manner provided herein, and to induce the Required Lenders to consent to such action by the Agent, the Company represents and warrants to each Lender and the Agent that, as of the Ninth Amendment Effective Date (as defined in the Ninth Amendment) after giving effect to the effectiveness of this Amendment, the following statements are true and correct in all material respects: A. Authorization of Agreements. The execution and --------------------------- delivery of this Amendment by the Company and the performance of the Company Security Agreement as amended by this Amendment (the "Amended Agreement") by the Company are within the Company's ------------------ corporate powers and have been duly authorized by all necessary corporate action on the part of the Company. B. No Conflict. The execution and delivery by the ----------- Company of this Amendment and the performance by the Company of the Amended Agreement do not: (1) contravene the Company's Organic Documents; (2) contravene the Senior Indenture, the Subordinated Indenture, the New Senior Indenture or the Additional New Senior Indenture or contravene any other contractual restriction where such a contravention has a reasonable possibility of having a Materially Adverse Effect or contravene any law or governmental regulation or court decree or order binding on or affecting the Company or any of its Subsidiaries; or (3) result in, or require the creation or imposition of, any Lien on any of the Company's properties, other than pursuant to the Loan Documents. C. Binding Obligation. This Amendment has been duly ------------------ executed and delivered by the Company and this Amendment and the Amended Agreement constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally and by general principles of equity. D. Governmental Approval, Regulation, etc. No --------------------------------------- authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance of this Amendment by the Company. Section 3. Miscellaneous. -------------- A. Reference to and Effect on the Company Security ------------------------------------------------ Agreement and the Other Loan Documents. - -------------------------------------- (1) On and after the Ninth Amendment Effective Date, each reference in the Company Security Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import referring to the Company Security Agreement, and each reference in the other Loan Documents to the "Company Security Agreement", "thereunder", "thereof" or words of like import referring to the Company Security Agreement shall mean and be a reference to the Amended Agreement. (2) Except as specifically amended by this Amendment, the Company Security Agreement shall remain in full force and effect and is hereby ratified and confirmed. (3) The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Agent or any Lender under, the Company Security Agreement. B. Applicable Law. THIS AMENDMENT SHALL BE DEEMED TO -------------- BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH LAWS RELATING TO CONFLICTS OF LAWS. C. Headings. The various headings of this Amendment -------- are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or any provision hereof. D. Counterparts. This Amendment may be executed by ------------ the parties hereto in several counterparts and by the different parties on separate counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. E. Severability. Any provision of this Amendment ------------ which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Amendment or affecting the validity or enforceability of such provisions in any other jurisdiction. IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as of the day and year first above written. KAISER ALUMINUM & CHEMICAL BANKAMERICA BUSINESS CREDIT, CORPORATION INC., as Agent By: By: --------------------------- --------------------------- Name: Karen A. Twitchell Name: Michael J. Jasaitis Its: Treasurer Its: Vice President EXHIBIT C THIRD AMENDMENT TO SUBSIDIARY SECURITY AGREEMENT ------------------------------------------------ THIS THIRD AMENDMENT TO SUBSIDIARY SECURITY AGREEMENT (this "Amendment"), dated as of April 21, 1997, is by and among --------- Akron Holding Corporation, an Ohio corporation, Kaiser Alumina Australia Corporation, a Delaware corporation, Kaiser Aluminium International, Inc., a Delaware corporation, Kaiser Aluminum & Chemical Investment, Inc., a Delaware corporation, Kaiser Aluminum Properties, Inc., a Delaware corporation, Kaiser Aluminum Technical Services, Inc., a California corporation, Kaiser Finance Corporation, a Delaware corporation, Oxnard Forge Die Company, Inc., a California corporation, Kaiser Micromill Holdings, LLC, a limited liability company organized under the laws of Delaware, Kaiser Sierra Micromills, LLC, a limited liability company organized under the laws of Delaware, Kaiser Texas Sierra Micromills, LLC, a limited liability company organized under the laws of Texas, and Kaiser Texas Micromill Holdings, LLC, a limited liability company organized under the laws of Texas (collectively, the "Kaiser Subsidiaries" and ------------------- individually, a "Kaiser Subsidiary"), and BankAmerica Business ----------------- Credit, Inc., a Delaware corporation, as agent for the Secured Lenders (as defined in the Credit Agreement referred to below) (in such capacity, together with its successors and assigns in such capacity, the "Agent"). Capitalized terms used, but not ----- defined, herein shall have the meanings given to such terms in the Credit Agreement, as amended by the Ninth Amendment. W I T N E S S E T H: WHEREAS, Kaiser Aluminum & Chemical Corporation, a Delaware corporation (the "Company"), Kaiser Aluminum ------- Corporation, a Delaware corporation (the "Parent Guarantor"), the ----------------- various financial institutions that are or may from time to time become parties to the Credit Agreement (collectively, the "Lenders" and, individually, a "Lender"), and the Agent are ------- ------ parties to the Credit Agreement, dated as of February 15, 1994, as amended by the First Amendment to Credit Agreement, dated as of July 21, 1994, the Second Amendment to Credit Agreement, dated as of March 10, 1995, the Third Amendment to Credit Agreement and Acknowledgment, dated as of July 20, 1995, the Fourth Amendment to Credit Agreement, dated as of October 17, 1995, the Fifth Amendment to Credit Agreement, dated as of December 11, 1995, the Sixth Amendment to Credit Agreement, dated as of October 1, 1996, the Seventh Amendment to Credit Agreement, dated as of December 17, 1996, and the Eighth Amendment to Credit Agreement, dated as of February 24, 1997 (the "Credit ------ Agreement"); and - --------- WHEREAS, as of the date hereof the Company, the Parent Guarantor, the Lenders and the Agent are entering into a Ninth Amendment to Credit Agreement (the "Ninth Amendment"); and --------------- WHEREAS, the Kaiser Subsidiaries and the Agent are parties to the Subsidiary Security Agreement, Financing Statement and Conditional Assignment of Patents and Trademarks, dated as of February 15, 1994, as amended by the First Amendment to Subsidiary Security Agreement, dated as of July 21, 1994 and Second Amendment to Subsidiary Security Agreement dated as of December 11, 1995 (the "Subsidiary Security Agreement"), and have ------------------------------- agreed to amend the Subsidiary Security Agreement as herein provided; and WHEREAS, the Required Lenders have consented to the execution and delivery of this Amendment by the Agent; NOW, THEREFORE, the parties hereto agree as follows: Section 1. Amendment to Subsidiary Security Agreement. ------------------------------------------ The proviso contained in the first paragraph of Section 2 of the Subsidiary Security Agreement is hereby amended by adding the phrase "AKW, AKW LLC," immediately following the phrase "Furukawa," each time it appears in clause (A) thereof. Section 2. Kaiser Subsidiaries' Representations and ---------------------------------------- Warranties. - ---------- In order to induce the Agent to enter into this Amendment and to amend the Subsidiary Security Agreement in the manner provided herein, and to induce the Required Lenders to consent to such action by the Agent, each Kaiser Subsidiary represents and warrants to each Lender and the Agent that, as of the Ninth Amendment Effective Date (as defined in the Ninth Amendment) after giving effect to the effectiveness of this Amendment, the following statements are true and correct in all material respects: A. Authorization of Agreements. The execution and ---------------------------- delivery of this Amendment by such Kaiser Subsidiary and the performance of the Subsidiary Security Agreement as amended by this Amendment (the "Amended Agreement") by such Kaiser ----------------- Subsidiary are within such Kaiser Subsidiary's corporate powers or company powers, as the case may be, and have been duly authorized by all necessary corporate action or company action, as the case may be, on the part of such Kaiser Subsidiary. B. No Conflict. The execution and delivery by such ----------- Kaiser Subsidiary of this Amendment and the performance by such Kaiser Subsidiary of the Amended Agreement do not: (1) contravene such Kaiser Subsidiary's Organic Documents or the Organizational Agreements; (2) contravene the Senior Indenture, the Subordinated Indenture, the New Senior Indenture or the Additional New Senior Indenture or contravene any other contractual restriction where such a contravention has a reasonable possibility of having a Materially Adverse Effect or contravene any law or governmental regulation or court decree or order binding on or affecting such Kaiser Subsidiary or any of its Subsidiaries; or (3) result in, or require the creation or imposition of, any Lien on any of such Kaiser Subsidiary's properties, other than pursuant to the Loan Documents. C. Binding Obligation. This Amendment has been duly ------------------ executed and delivered by such Kaiser Subsidiary and this Amendment and the Amended Agreement constitute the legal, valid and binding obligations of such Kaiser Subsidiary, enforceable against such Kaiser Subsidiary in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally and by general principles of equity. D. Governmental Approval, Regulation, etc. No --------------------------------------- authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance of this Amendment by such Kaiser Subsidiary. Section 3. Miscellaneous. -------------- A. Reference to and Effect on the Subsidiary Security -------------------------------------------------- Agreement and the Other Loan Documents. - -------------------------------------- (1) On and after the Ninth Amendment Effective Date, each reference in the Subsidiary Security Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import referring to the Subsidiary Security Agreement, and each reference in the other Loan Documents to the "Subsidiary Security Agreement", "thereunder", "thereof" or words of like import referring to the Subsidiary Security Agreement shall mean and be a reference to the Amended Agreement. (2) Except as specifically amended by this Amendment, the Subsidiary Security Agreement shall remain in full force and effect and is hereby ratified and confirmed. C-3 (3) The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Agent or any Lender under, the Subsidiary Security Agreement. B. Applicable Law. THIS AMENDMENT SHALL BE DEEMED TO -------------- BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH LAWS RELATING TO CONFLICTS OF LAWS. C. Headings. The various headings of this Amendment -------- are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or any provision hereof. D. Counterparts. This Amendment may be executed by ------------ the parties hereto in several counterparts and by the different parties on separate counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. E. Severability. Any provision of this Amendment ------------- which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Amendment or affecting the validity or enforceability of such provisions in any other jurisdiction. IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as of the day and year first above written. BANKAMERICA BUSINESS CREDIT, INC., as Agent By: --------------------------- Name: Michael J. Jasaitis Its: Vice President C-4 AKRON HOLDING CORPORATION KAISER ALUMINUM & CHEMICAL INVESTMENT, INC. By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINUM PROPERTIES, INC. KAISER ALUMINUM TECHNICAL SERVICES, INC. By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer OXNARD FORGE DIE COMPANY, INC. KAISER ALUMINIUM INTERNATIONAL, INC. By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER ALUMINA AUSTRALIA KAISER FINANCE CORPORATION CORPORATION By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer KAISER MICROMILL HOLDINGS, LLC KAISER SIERRA MICROMILLS, LLC By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Treasurer of Kaiser Aluminum Its: Treasurer & Chemical Corporation KAISER TEXAS SIERRA MICROMILLS, LLC KAISER TEXAS MICROMILL HOLDINGS, LLC By: By: ---------------------- ------------------------ Name Printed: Karen A. Twitchell Name Printed: Karen A. Twitchell Its: Treasurer Its: Treasurer EX-7 9 AMENDED AND RESTATED BY-LAWS OF KAISER ALUMINUM & CHEMICAL CORPORATION July 22, 1997 INDEX Page ---- ARTICLE I - OFFICES Section 1. Registered Office. . . . . . . .. . . . . . . 1 Section 2. Other Offices. . . . . . . . . . . . . . . . . 1 ARTICLE II - MEETINGS OF SHAREHOLDERS Section 1. Place of Meetings. . . . . . . . . . . . . . . 1 Section 2. Annual Meetings. . . . . . . . . . . . . . . . 1 Section 3. Special Meetings . . . . . . . . . . . . . . . 2 Section 4. Adjourned Meetings, Notice . . . . . . . . . . 2 Section 5. Voting . . . . . . . . . . . . . . . . . . . . 2 Section 6. Quorum . . . . . . . . . . . . . . . . . . . . 2 Section 7. Proxies. . . . . . . . . . . . . . . . . . . . 3 ARTICLE III - DIRECTORS Section 1. Powers . . . . . . . . . . . . . . . . . . . . 3 Section 2. Number and Qualification of Directors. . . . . 3 Section 3. Election and Term of Office. . . . . . . . . . 4 Section 4. Vacancies. . . . . . . . . . . . . . . . . . . 4 Section 5. Place of Meeting . . . . . . . . . . . . . . . 4 Section 6. Organization Meeting . . . . . . . . . . . . . 5 Section 7. Other Regular Meetings . . . . . . . . . . . . 5 Section 8. Special Meetings . . . . . . . . . . . . . . . 5 Section 9. Quorum . . . . . . . . . . . . . . . . . . . . 5 Section 10. Adjournment. . . . . . . . . . . . . . . . . . 5 Section 11. Fees and Compensation. . . . . . . . . . . . . 5 Section 12. Directors' Action Without Meetings . . . . . . 6 Section 13. Meetings by Telecommunication. . . . . . . . . 6 ARTICLE IV - COMMITTEES Section 1. Committees . . . . . . . . . . . . . . . . . . 6 Section 2. Committee Rules. . . . . . . . . . . . . . . . 7 ARTICLE V - OFFICERS Section 1. Officers . . . . . . . . . . . . . . . . . . . 7 Section 2. Election . . . . . . . . . . . . . . . . . . . 7 Section 3. Removal and Resignation. . . . . . . . . . . . 8 Section 4. Vacancies. . . . . . . . . . . . . . . . . . . 8 Section 5. Chairman of the Board. . . . . . . . . . . . . 8 Section 6. Vice Chairman of the Board . . . . . . . . . . 8 Section 7. Chief Executive Officer. . . . . . . . . . . . 8 Section 8. President. . . . . . . . . . . . . . . . . . . 9 Section 9. Chief Operating Officer. . . . . . . . . . . . 9 Section 10. Executive Presidents and Senior Vice Presidents. . . . . . . . . . . . . . . 9 Section 11. Vice Presidents. . . . . . . . . . . . . . . . 9 Section 12. Secretary. . . . . . . . . . . . . . . . . . . 9 Section 13. Treasurer. . . . . . . . . . . . . . . . . . . 10 Section 14. Controller . . . . . . . . . . . . . . . . . . 10 ARTICLE VI - MISCELLANEOUS Section 1. Record Dates . . . . . . . . . . . . . . . . . 11 Section 2. Checks, Drafts, Etc. . . . . . . . . . . . . . 11 Section 3. Contracts, How Executed. . . . . . . . . . . . 12 Section 4. Waiver of Notice of Meetings of Shareholders, Directors and Committees . . . . . . . . . . 12 Section 5. Certificates of Stock. . . . . . . . . . . . . 12 Section 6. Representation of Shares Held by Other Corporations . . . . . . . . . . . . . . . . 13 Section 7. Inspection of Stock Ledger . . . . . . . . . . 13 Section 8. Interested Directors, Quorum . . . . . . . . . 13 Section 9. Indemnification. . . . . . . . . . . . . . . . 14 ARTICLE VII - AMENDMENTS Section 1. Adoption, Amendment or Repeal of By-laws . . . 15 AMENDED AND RESTATED BY-LAWS of KAISER ALUMINUM & CHEMICAL CORPORATION --------------------- Article I - OFFICES SECTION 1. Registered Office. The registered office ----------------- of the Corporation is hereby fixed and located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware. The name of the registered agent in charge thereof is The Corporation Trust Company. SECTION 2. Other Offices. The Corporation shall have ------------- its principal office in the Kaiser Center, 300 Lakeside Drive, Oakland, California. Other offices may at any time be established by the Board of Directors at any place or places, within or without the State of Delaware, where the Corporation is qualified to do business. Article II - MEETINGS OF SHAREHOLDERS SECTION 1. Place of Meetings. All meetings of ----------------- Shareholders for the election of Directors shall be held at the principal office of the Corporation or at such other place either within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Meetings of the Shareholders for any other purpose may be held at such place as shall be stated in the notice of the meeting. SECTION 2. Annual Meetings. The annual meetings of --------------- Shareholders shall be held at such date, time and place as may be designated by the Board of Directors from time to time. At each annual meeting the Shareholders shall elect a Board of Directors and transact such other business as may properly be brought before the meeting. SECTION 3. Special Meetings. Special meetings of ------------------ Shareholders, for any purpose or purposes whatsoever, may be called at any time by the Chairman of the Board or by any two (2) of the Directors. SECTION 4. Adjourned Meetings, Notice. Any -------------------------- Shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time, to be reconvened at the same or some other place, by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy thereat. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting, but in the absence of a quorum no other business may be transacted at any such meeting. When any Shareholders' meeting, either annual or special, is adjourned for thirty (30) days or more or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting, if the time and place of the adjourned meeting are announced at the meeting at which such adjournment is taken. SECTION 5. Voting. At all meetings of Shareholders, ------ every Shareholder entitled to vote shall have the right to vote in person or by proxy the number of shares standing in his own name on the stock records of the Corporation; provided, however, that at all elections of Directors each holder of record of stock entitled to vote for the election of Directors shall be entitled to one vote for each share of such stock held by such Shareholder for each Director's position to be filled. Cumulative voting for Directors shall not be permitted. Voting shall be conducted by ballot. SECTION 6. Quorum. Subject to any provisions of the ------ Certificate of Incorporation relating to a quorum at meetings at which the holders of shares of stock of any class are entitled to vote separately as a class, the presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting shall constitute a quorum for the transaction of business. The Shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough Shareholders to leave less than a quorum. Shares of its own capital stock belonging on the record date for the meeting to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity. SECTION 7. Proxies. Every person entitled to vote at ------- a meeting of Shareholders shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by such person or his duly authorized agent and filed with the Secretary of the Corporation; provided that no such proxy shall be valid after the expiration of three (3) years from its date, unless the proxy provides for a longer period of time. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A Shareholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation. Article III - DIRECTORS SECTION 1. Powers. Subject to the limitations of the ------ Certificate of Incorporation, the By-laws and the General Corporation Law of the State of Delaware as to action to be authorized or approved by the Shareholders, and subject to the duties of Directors as prescribed by the By-laws, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed by or under the direction of, the Board of Directors. SECTION 2. Number and Qualification of Directors. The ------------------------------------- Board of Directors shall consist of three (3) to fifteen (15) members, the number thereof to be determined from time to time by a majority of the entire Board of Directors. Directors need not be Shareholders. SECTION 3. Election and Term of Office. The Directors --------------------------- shall be elected at each annual meeting of Shareholders, but if any such annual meeting is not held, or the Directors are not elected thereat, the Directors may be elected at any special meeting of Shareholders held for that purpose. All Directors shall hold office until their respective successors are elected and qualified or until their earlier resignation or removal. SECTION 4. Vacancies. Vacancies in the Board of ---------- Directors may be filled by a majority of the remaining Directors, though less than a quorum, or by a sole remaining Director, and each Director so elected shall hold office until his successor is elected at an annual or a special meeting of the Shareholders. Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more Directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the Directors elected by such class or classes or series thereof then in office, or by the sole remaining Director so elected. A vacancy or vacancies shall be deemed to exist in case of the death, resignation or removal of any Director. The Shareholders may at any time elect Directors to fill any vacancy not filled by the Directors. Any Director may resign at any time by giving written notice to the Board of Directors, the Chief Executive Officer or the Secretary of the Corporation. Any such resignation shall take effect at the time of receipt of such notice or at such later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. If any Director resigns, the Board shall have power to elect a successor to take office at such time as the resignation shall become effective. SECTION 5. Place of Meeting. Subject to the ---------------- provisions of Section 13 of this Article III, all meetings of the Board of Directors shall be held at the principal office of the Corporation or at such other place in the United States designated at any time by the Board. SECTION 6. Organization Meeting. Immediately --------------------- following each annual meeting of Shareholders, the Board of Directors shall hold a regular meeting for the purpose of organization, election of officers, and the transaction of other business. Notice of all such regular meetings shall not be required. SECTION 7. Other Regular Meetings. Other regular ----------------------- meetings of the Board of Directors shall be held without call at such times as shall from time to time be determined by the Board of Directors. Notice of all such regular meetings shall not be required. SECTION 8. Special Meetings. Special meetings of the ----------------- Board of Directors, for any purpose or purposes whatsoever, shall be called at any time by the Chairman of the Board or by any two (2) of the Directors. Reasonable notice thereof shall be given by the person or persons calling the meeting. SECTION 9. Quorum. At all meetings of the Board of ------- Directors a majority of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business, except to fill vacancies in the Board as hereinbefore provided, and except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors. SECTION 10. Adjournment. A quorum of the Directors ----------- may adjourn any Directors' meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum a majority of the Directors present at any Directors' meeting, either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors. Notice of the time and place of holding an adjourned meeting of a Directors' meeting, either regular or special, need not be given to absent Directors if the time and place are fixed at the meeting adjourned. SECTION 11. Fees and Compensation. Directors shall ---------------------- receive such compensation for their services as Directors as shall be determined from time to time by resolution of the Board of Directors. Any Director may serve the Corporation in any other capacity as an Officer, agent, employee or otherwise and receive compensation therefor. SECTION 12. Directors' Action Without Meetings. Any ----------------------------------- action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if a written consent thereto is signed by all members of the Board or such committee as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. SECTION 13. Meetings by Telecommunication. Any ------------------------------ meeting, regular or special, of the Board of Directors or of any committee thereof may be held by conference telephone or similar communication equipment, provided that all Directors participating can hear one another. Participation in such a meeting shall constitute presence in person at the meeting. Article IV - COMMITTEES SECTION 1. Committees. The Board of Directors may, by ---------- resolution passed by a majority of the entire Board, designate one or more committees, each committee to consist of one or more Directors. The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the Shareholders the sale, lease or exchange of all or substantially all of the Corpo- ration's property and assets, recommending to the Shareholders a dissolution of the Corporation or a revocation of dissolution, or amending these By-laws; and, unless the resolution expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. SECTION 2. Committee Rules. Unless the Board of ---------------- Directors otherwise provides, each committee designated by the Board may adopt, amend and repeal rules for the conduct of its business. Reasonable notice of each committee meeting (other than regularly scheduled meetings) shall be furnished to all members of the committee. A majority of the entire authorized number of members of such committee shall constitute a quorum for the transaction of business, the vote of a majority of the members present at a meeting at the time of such vote if a quorum is then present shall be the act of such committee, and in other respects each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article III of these By-laws. Article V - OFFICERS SECTION 1. Officers. The Officers of the Corporation -------- shall be a Chief Executive Officer, a President, a Secretary, a Treasurer and a Controller. The Board of Directors may also, at its discretion, choose from among its members a Chairman of the Board and a Vice Chairman of the Board. The Corporation may also have, at the discretion of the Board of Directors, a Chief Operating Officer, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and one or more Assistant Controllers. One person may hold two or more offices. Unless otherwise determined by resolution of the Board, no person serving as the Vice Chairman of the Board, an Assistant Secretary, an Assistant Treasurer or an Assistant Controller shall be deemed to be an executive officer of the Corporation. SECTION 2. Election. The Officers of the Corporation -------- shall be elected by the Board of Directors and each shall hold his office until he shall resign or shall be removed or otherwise disqualified to serve, or his successor shall be elected and qualified. SECTION 3. Removal and Resignation. Any Officer may ----------------------- be removed, either with or without cause, by a majority of the Directors at the time in office, at any regular or special meeting of the Board of Directors, or, except in the case of an Officer chosen by the Board, by the Chief Executive Officer. Any Officer may resign at any time by giving written notice to the Board of Directors, the Chief Executive Officer or the Secretary of the Corporation. Any such resignation shall take effect at the time of receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. SECTION 4. Vacancies. A vacancy in any office because --------- of death, resignation, removal, disqualification or any other cause, shall be filled in the manner prescribed in the By-laws for regular appointments to such office. SECTION 5. Chairman of the Board. The Chairman of the --------------------- Board, if any, shall preside at all meetings of the Board of Directors and of the Shareholders at which he shall be present and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors or prescribed by the By-laws. If so designated by the Board of Directors, the Chairman of the Board shall be the Chief Executive Officer. SECTION 6. Vice Chairman of the Board. In the absence -------------------------- of the Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the Shareholders at which he shall be present. The Vice Chairman of the Board shall exercise such other powers and duties as may be from time to time assigned to him by the Board of Directors or prescribed by the By-laws. SECTION 7. Chief Executive Officer. Subject to such ----------------------- supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board or the Vice Chairman of the Board, if there be such Officers, the Chief Executive Officer shall have general supervision, direction and control of the business and affairs of the Corporation. SECTION 8. President. If the Chairman of the Board ---------- has not been designated as the Chief Executive Officer, the President shall be the Chief Executive Officer with the powers and duties set forth in Section 7 of this Article V. If the Chairman of the Board has been so designated, the President shall have such powers and perform such duties as from time to time may be prescribed by the Board of Directors, the Chief Executive Officer or the By-laws. In the absence of the Chairman of the Board and of the Vice Chairman of the Board, the President shall preside at all meetings of the Board of Directors and of the Shareholders at which he shall be present. SECTION 9. Chief Operating Officer. Subject to such ------------------------ supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board or the Vice Chairman of the Board or the Chief Executive Officer, if there be such Officers, the Chief Operating Officer shall have such powers and perform such duties as from time to time may be prescribed by the Board of Directors, the Chief Executive Officer, or the By-Laws. SECTION 10. Executive Vice Presidents and Senior Vice ----------------------------------------- Presidents. The Executive Vice Presidents and Senior Vice - ---------- Presidents, if any, shall have such powers and perform such duties as from time to time may be prescribed by the Board of Directors, the Chief Executive Officer or the By-laws. SECTION 11. Vice Presidents. The Vice Presidents --------------- shall have such powers and perform such duties as from time to time may be prescribed by the Board of Directors, the Chief Executive Officer or the By-laws. SECTION 12. Secretary. The Secretary shall keep, or ---------- cause to be kept, a book of minutes at the principal office of the Corporation or such other place as the Board of Directors may order, of all meetings of the Board of Directors and any committee thereof and of the Shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at Directors' and committee meetings, the number of shares present or represented at Shareholders' meetings and the proceedings thereof. The Secretary shall keep, or cause to be kept, at the principal office of the Corporation and at the office of the Corporation's transfer agent, if a transfer agent shall be appointed, a stock ledger, or a duplicate stock ledger, showing the names of the shareholders and their addresses; the number and classes of shares held by each; the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give, or cause to be given, notice of all the meetings of the Shareholders and of the Board of Directors required by the By-laws or by law to be given, and he shall keep the seal of the Corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the Chief Executive Officer or the By-laws. SECTION 13. Treasurer. The Treasurer shall keep or --------- cause to be kept full and accurate records of all receipts and disbursements in books of the Corporation and shall have the care and custody of all funds and securities of the Corporation. The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositaries as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the Chief Executive Officer, the President and Directors, whenever they request it, an account of all of his transactions as Treasurer and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the Chief Executive Officer or the By-laws. SECTION 14. Controller. The Controller shall be the ---------- chief accounting officer of the Corporation. He shall keep or cause to be kept all books of accounts and accounting records of the Corporation and shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all times be open to inspection by any Director. He shall prepare or cause to be prepared appropriate financial statements for the Corporation and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the Chief Executive Officer or the By-laws. Article VI - MISCELLANEOUS SECTION 1. Record Dates. The Board of Directors may ------------ fix in advance a date as a record date for the determination of the Shareholders entitled to notice of and to vote at any meeting of Shareholders, or entitled to receive payment of any dividend, or the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or the date for any other lawful action, and in such case such Shareholders, and only such Shareholders as shall be Shareholders of record on the date so fixed, shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to take such other action, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. Notwithstanding any other provision hereof, the record date established pursuant to this Section shall, with respect to a meeting of Shareholders, be not more than sixty (60) nor less than ten (10) days before the date of such meeting, nor, with respect to any other action, more than sixty (60) days prior to such action. SECTION 2. Checks, Drafts, Etc. All checks, drafts or -------------------- other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors. SECTION 3. Contracts, How Executed. The Board of ----------------------- Directors may authorize any Officer or Officers, agent or agents, to enter into any contracts or execute any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board of Directors, no Officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or to any amount. SECTION 4. Waiver of Notice of Meetings of ------------------------------- Shareholders, Directors and Committees. Whenever notice is - -------------------------------------- required to be given by law or under any provision of the Certificate of Incorporation or these By-laws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Shareholders, Directors, or members of a committee of Directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation or these By-laws. SECTION 5. Certificates of Stock. A certificate for --------------------- shares of the capital stock of the Corporation shall be issued to each Shareholder when any such shares are fully paid up. All such certificates shall be signed by or in the name of the Corporation by the Chief Executive Officer or the President or a Vice President and the Secretary or an Assistant Secretary. Every certificate must be countersigned by a transfer agent or transfer clerk, and be registered by an incorporated bank or trust company, either domestic or foreign, as a registrar of transfers, before issuance. The transfer agent for any class of stock may also serve as registrar of such class, and any or all of the signatures on the certificates may be a facsimile. In case any Officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such Officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such Officer, transfer agent or registrar at the date of issue. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. SECTION 6. Representation of Shares Held by Other -------------------------------------- Corporations. Shares of the Corporation standing in the name of - ------------ another corporation may be voted or represented, and all rights incident thereto may be exercised on behalf of such other corporation, by any officer thereof authorized so to do by resolution of its board of directors, or by its executive committee, or by its by-laws, or by any person authorized so to do by proxy or power of attorney duly executed by the president or vice president and secretary or assistant secretary of such other corporation, or by authority of the board of directors thereof. SECTION 7. Inspection of Stock Ledger. The Secretary --------------------------- shall prepare and make, at least ten (10) days before every meeting of Shareholders, a complete list of the Shareholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each Shareholder and the number of shares registered in the name of each Shareholder. Such list shall be open to the examination of any Shareholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any Shareholder who is present. SECTION 8. Interested Directors, Quorum. No contract ----------------------------- or transaction between the Corporation and one or more of its Directors or Officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its Directors or Officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the Director or Officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or her or their votes are counted for such purpose, if: (a) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested Directors, even though the disinterested Directors be less than a quorum; or (b) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the Shareholders; or (c) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board, a committee thereof or the Shareholders. Common or interested Directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction. SECTION 9. Indemnification. The Corporation shall --------------- indemnify to the full extent authorized by law, whether by statute, court decision or otherwise, any person made or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person or such person's testator or intestate is or was a Director, Officer or employee of the Corporation or serves or served at the request of the Corporation any other enterprise as a director, officer or employee. Expenses incurred by a Director or Officer of the Corporation in defending a civil or criminal action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Director or Officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation. Such expenses incurred by other employees may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. For purposes of this By-law, the term "Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed by the Corporation in a consolidation or merger, the term "other enterprise" shall include any corporation, partnership, joint venture, trust or employee benefit plan; service "at the request of the Corporation" shall include service as a Director, Officer or employee of the Corporation which imposes duties on, or involves services by, such Director, Officer or employee with respect to an employee benefit plan, its participants or beneficiaries; any excise taxes assessed on a person with respect to an employee benefit plan shall be deemed to be indemnifiable expenses; and action by a person with respect to any employee benefit plan which such person reasonably believes to be in the interest of the participants and beneficiaries of such plan shall be deemed to be action not opposed to the best interests of the Corporation. Article VII - AMENDMENTS SECTION 1. Adoption, Amendment or Repeal of By-laws. ---------------------------------------- By-laws may be made, adopted, altered, amended or repealed by the vote of Shareholders entitled to exercise a majority of the voting power of the Corporation. Subject to the right of Shareholders to make, adopt, amend, alter or repeal By-laws, By-laws may be made, adopted, amended, altered or repealed by the Board of Directors. -----END PRIVACY-ENHANCED MESSAGE-----