10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2004.

OR

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

For the transition period from                     to                    .

Commission file number 0-27918

Century Aluminum Company

(Exact name of Registrant as specified in its Charter)

Delaware (State of Incorporation)	13-3070826 (IRS Employer Identification No.)
2511 Garden Road Building A, Suite 200 Monterey, California (Address of principal executive offices)	93940 (Zip Code)

Registrant’s telephone number, including area code: (831) 642-9300

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

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [  ]

     The registrant had 32,010,464 shares of common stock outstanding at November 3, 2004.

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
	Item 1. - Financial Statements.
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF OPERATIONS
		CONSOLIDATED STATEMENTS OF CASH FLOWS
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures about Market Risk
	Item 4. Controls and Procedures
Part II. OTHER INFORMATION
	Item 4. Submission of Matters to a Vote of Stockholders
	Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
EXHIBIT INDEX
EX-4.2: PURCHASE AGREEMENT
EX-4.5: PURCHASE AGREEMENT
EX-10.1: PURCHASE AGREEMENT
EX-10.2: TOLLING AGREEMENT
EX-10.4: CONSENT AND AMENDMENT TO REVOLVING CREDIT AGREEMENT
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION

PART I - FINANCIAL INFORMATION

Item 1. - Financial Statements.

CENTURY ALUMINUM COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)

	September 30,			December 31,
	2004			2003
ASSETS
Current Assets:
Cash and cash equivalents	$	76,474		$	28,204
Restricted cash		1,675			—
Accounts receivable – net		70,478			51,370
Due from affiliates		12,094			10,957
Inventories		102,652			89,360
Prepaid and other current assets		8,896			4,101
Deferred taxes – current portion		12,796			3,413
Total current assets		285,065			187,405
Property, plant and equipment – net		754,207			494,957
Intangible asset — net		89,891			99,136
Goodwill		107,259			—
Other assets		37,976			28,828
Total	$	1,274,398		$	810,326
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable, trade	$	52,607		$	34,829
Due to affiliates		57,702			27,139
Accrued and other current liabilities		44,237			30,154
Accrued employee benefits costs — current portion		8,295			8,934
Current portion of long-term debt		5,945			—
Convertible senior notes		175,000			—
Industrial revenue bonds		7,815			7,815
Total current liabilities		351,601			108,871
Senior secured notes payable– net		9,874			322,310
Senior unsecured notes payable		250,000			—
Nordural debt		77,425			—
Notes payable — affiliates		—			14,000
Accrued pension benefits costs – less current portion		12,003			10,764
Accrued postretirement benefits costs — less current portion		84,871			78,218
Other liabilities		34,879			33,372
Due to affiliates – less current portion		9,978			—
Deferred taxes		57,610			55,094
Total noncurrent liabilities		536,640			513,758
Contingencies and Commitments (See Note 7)
Shareholders’ equity:
Convertible preferred stock (8.0% cumulative, 0 and 500,000 shares outstanding at September 30, 2004 and December 31, 2003, respectively)		—			25,000
Common stock (one cent par value, 50,000,000 shares authorized; 31,986,798 and 21,130,839 shares outstanding at September 30, 2004 and December 31, 2003)		320			211
Additional paid-in capital		414,642			173,138
Accumulated other comprehensive loss		(27,103	)		(5,222	)
Accumulated deficit		(1,702	)		(5,430	)
Total shareholders’ equity		386,157			187,697
Total	$	1,274,398		$	810,326

See notes to consolidated financial statements

1

CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2004			2003			2004			2003
NET SALES:
Third-party customers	$	231,502		$	170,086		$	649,278		$	487,287
Related parties		42,815			31,402			120,866			89,377
		274,317			201,488			770,144			576,664
Cost of goods sold		230,948			191,448			644,535			551,142
Gross profit		43,369			10,040			125,609			25,522
Selling, general and administrative expenses		7,567			3,929			16,966			12,150
Operating income		35,802			6,111			108,643			13,372
Interest expense – third party		(10,657	)		(10,341	)		(32,496	)		(30,894	)
Interest expense – related party		—			(1,000	)		(380	)		(2,000	)
Interest income		517			83			848			278
Net gain (loss) on forward contracts		(3,149	)		(3,481	)		(17,146	)		38,423
Loss on early extinguishment of debt		(47,448	)		—			(47,448	)		—
Other expense		(4	)		(10	)		(609	)		(510	)
Income (loss) before income taxes, minority interest and cumulative effect of change in accounting principle		(24,939	)		(8,638	)		11,412			18,669
Income tax (expense) benefit		8,890			3,271			(4,373	)		(6,556	)
Income (loss) before minority interest and cumulative effect of change in accounting principle		(16,049	)		(5,367	)		7,039			12,113
Minority interest		—			—			—			986
Income (loss) before cumulative effect of change in accounting principle		(16,049	)		(5,367	)		7,039			13,099
Cumulative effect of change in accounting principle, net of tax benefit of $3,430		—			—			—			(5,878	)
Net income (loss)		(16,049	)		(5,367	)		7,039			7,221
Preferred dividends		—			(500	)		(769	)		(1,500	)
Net income (loss) applicable to common shareholders	$	(16,049	)	$	(5,867	)	$	6,270		$	5,721
EARNINGS (LOSS) PER COMMON SHARE:
Basic:
Income (loss) before cumulative effect of change in accounting principle	$	(0.51	)	$	(0.28	)	$	0.23		$	0.55
Cumulative effect of change in accounting principle	$	—		$	—		$	—		$	(0.28	)
Net income (loss)	$	(0.51	)	$	(0.28	)	$	0.23		$	0.27
Diluted:
Income (loss) before cumulative effect of change in accounting principle	$	(0.51	)	$	(0.28	)	$	0.23		$	0.55
Cumulative effect of change in accounting principle	$	—		$	—		$	—		$	(0.28	)
Net income (loss)	$	(0.51	)	$	(0.28	)	$	0.23		$	0.27
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		31,754			21,070			27,542			21,070
Diluted		31,754			21,070			27,659			21,074

See notes to consolidated financial statements

2

CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)

	Nine months ended
	September 30,
	2004			2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	7,039		$	7,221
Adjustments to reconcile net income to net cash provided by operating activities:
Unrealized net loss (gain) on forward contracts		4,712			(6,974	)
Depreciation and amortization		36,889			38,403
Deferred income taxes		(3,965	)		3,125
Pension and other postretirement benefits		7,253			7,592
Inventory market adjustment		(2,273	)		(1,617	)
Loss on disposal of assets		719			841
Minority interest		—			(986	)
Cumulative effect of change in accounting principle		—			9,308
Non-cash loss on early extinguishment of debt		9,659			—
Changes in operating assets and liabilities:
Accounts receivable – net		(10,342	)		(7,170	)
Due from affiliates		(1,346	)		(866	)
Inventories		966			4,512
Prepaids and other current assets		(1,276	)		(1,046	)
Accounts payable, trade		7,730			101
Due to affiliates		4,606			3,897
Accrued and other current liabilities		7,850			11,392
Other – net		3,643			10,309
Net cash provided by operating activities		71,864			78,042
CASH FLOWS FROM INVESTING ACTIVITIES:
Nordural expansion		(17,482	)		—
Purchase of other property, plant and equipment		(8,832	)		(12,389	)
Acquisitions, net of cash acquired		(184,869	)		(59,837	)
Net cash used in investing activities		(211,183	)		(72,226	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings		425,569			—
Repayment of debt – third party		(422,846	)		—
Repayment of debt – related party		(14,000	)		—
Financing fees		(12,805	)		(297	)
Dividends		(3,311	)		(11	)
Issuance of common stock		214,982			3
Net cash provided by (used in) financing activities		187,589			(305	)
NET INCREASE IN CASH		48,270			5,511
CASH, BEGINNING OF PERIOD		28,204			45,092
CASH, END OF PERIOD	$	76,474		$	50,603

See notes to consolidated financial statements

3

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

1. General

     The accompanying unaudited interim consolidated financial statements of Century Aluminum Company (the “Company” or “Century”) should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2003. In management’s opinion, the unaudited interim consolidated financial statements reflect all adjustments, which are of a normal and recurring nature, that are necessary for a fair presentation of financial results for the interim periods presented. Operating results for the first nine months of 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. Certain reclassifications of 2003 information were made to conform to the 2004 presentation.

2. Acquisitions

  Nordural Acquisition

     On April 27, 2004, the Company completed the acquisition of Nordural hf (“Nordural”) from Columbia Ventures Corporation (“CVC”), a privately-owned investment company headquartered in Vancouver, Washington. Nordural hf is an Icelandic company that owns and operates the Nordural facility, a primary aluminum reduction facility located in Grundartangi, Iceland, approximately 25 miles north of Reykjavik, Iceland’s capital. The results of operations of Nordural are included in the Company’s Statement of Operations beginning April 28, 2004.

     The Nordural acquisition is a significant step forward in achieving the Company’s strategic goals of reducing its average cost to produce aluminum and geographically diversifying its asset base. The Nordural facility, built in 1998, is the Company’s most recently constructed and lowest operating cost facility. The Company is expanding the Nordural facility to increase its annual production capacity to 467 million pounds, or more than double its current production capacity.

     The Company accounted for the acquisition as a purchase using the accounting standards established in Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets.” The Company recognized $107,259 of Goodwill in the transaction.

     The purchase price for Nordural was $195,346, allocated as follows:

Allocation of Purchase Price:
Current assets	$	41,322
Property, plant and equipment		261,871
Goodwill		107,259
Current liabilities		(26,144	)
Long-term debt		(177,132	)
Other non-current liabilities		(11,830	)
Total purchase price	$	195,346

     The appraisal, upon which portions of the purchase allocation will be based, is not yet complete and additional adjustments to the purchase price allocation may still be required. Century used a portion of the proceeds from a registered equity offering to finance the acquisition (see Note 18 – Equity Offering).

     The following tables represent the unaudited pro forma results of operations for the three and nine months ended September 30, 2004 and 2003 assuming the acquisition occurred on January 1, 2003. The unaudited pro forma amounts may not be indicative of the results that actually would have occurred if the transaction described above had been completed and in effect for the periods indicated.

4

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2004			2003			2004		2003
Net sales	$	274,317		$	226,876		$	808,519	$	651,231
Net income (loss)		(16,049	)		(276	)		13,947		19,777
Net income (loss) available to common shareholders		(16,049	)		(776	)		13,178		18,277
Earnings (loss) per share:
Basic	$	(0.51	)	$	(0.03	)	$	0.43	$	0.61
Diluted	$	(0.51	)	$	(0.03	)	$	0.42	$	0.61

   The Gramercy Acquisition

     On October 1, 2004, the Company, together with subsidiaries of Noranda, Inc. (“Noranda”), completed the joint purchase of the Gramercy, Louisiana alumina refinery owned by Kaiser Aluminum and Chemical Corporation (“Kaiser”) and Kaiser’s 49% interest in a Jamaican bauxite mining partnership. The purchase price was $23.0 million, subject to working capital adjustments. The Company and Noranda each paid one-half of the purchase price. Kaiser sold these alumina and bauxite assets as part of its reorganization to emerge from Chapter 11 bankruptcy. The bauxite mining partnership supplies all of the bauxite used for the production of alumina at the Gramercy refinery and also supplies bauxite to a third party refinery in Texas. The Gramercy refinery chemically refines bauxite into alumina, the principal raw material in the production of primary aluminum. The Gramercy refinery began operations in 1959 and had extensive portions rebuilt and modernized in 2000. Gramercy has an annual production capacity of 1.2 million metric tons of alumina, approximately 80% of which is supplied to the Hawesville facility and to a primary aluminum production facility separately owned by Noranda. The Hawesville Facility purchases all of its alumina requirements from Gramercy. The Company intends to apply the equity method of accounting for the Gramercy acquisition.

     In October 2004, certain bauxite loading equipment used by the bauxite mining partnership at its St. Ann, Jamaica port facility failed, resulting in the interruption of bauxite shipments from the facility. The St. Ann port facility is used to ship bauxite to the Gramercy alumina facility and to other customers. The Company does not anticipate any interruption in aluminum production at the Hawesville facility as a result of the equipment failure at the St. Ann port facility.

3. Stock-Based Compensation

     The Company has elected not to adopt the recognition provisions for employee stock-based compensation as permitted in SFAS No. 123, “Accounting for Stock-Based Compensation.” As such, the Company accounts for stock based compensation in accordance with Accounting Principles Board Opinion No. 25 “Accounting for Stock Issued to Employees.” No compensation cost has been recognized for the stock option portions of the plan because the exercise prices of the stock options granted were equal to the market value of the Company’s stock on the date of grant. Had compensation cost for the Stock Incentive Plan been determined using the fair value method provided under SFAS No. 123, the Company’s net income and earnings per share would have changed to the pro forma amounts indicated below:

5

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

		Three months ended						Nine months ended
		September 30,						September 30,
		2004			2003			2004			2003
Net income (loss) applicable to common shareholders	As Reported	$	(16,049	)	$	(5,867	)	$	6,270		$	5,721
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects			360			119			1,406			317
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			(464	)		(276	)		(1,643	)		(823	)
Pro forma net income (loss)		$	(16,153	)	$	(6,024	)	$	6,033		$	5,215
Basic earnings (loss) per share	As reported	$	(0.51	)	$	(0.28	)	$	0.23		$	0.27
	Pro forma	$	(0.51	)	$	(0.29	)	$	0.22		$	0.25
Diluted earnings (loss) per share	As reported	$	(0.51	)	$	(0.28	)	$	0.23		$	0.27
	Pro forma	$	(0.51	)	$	(0.29	)	$	0.22		$	0.25

4. Inventories

     Inventories consist of the following:

	September 30,		December 31,
	2004		2003
Raw materials	$	47,270	$	35,621
Work-in-process		16,341		15,868
Finished goods		10,053		14,920
Operating and other supplies		28,988		22,951
	$	102,652	$	89,360

     At September 30, 2004 and December 31, 2003, approximately 70% and 78% of the inventories, respectively, were valued at the lower of last-in, first-out (“LIFO”) cost or market. The excess of LIFO cost (or market, if lower) over FIFO cost was approximately $824 and $3,762 at September 30, 2004 and December 31, 2003, respectively. Inventories at Nordural are stated at lower of first in, first out (“FIFO”) cost or market. Operating and other supplies inventories at all facilities are based upon the average cost method.

5. Intangible Asset

     The intangible asset consists of the power contract acquired in connection with the Company’s acquisition of an 80% interest in the Hawesville facility in April 2001. The contract value is being amortized over its term (ten years) using a method that results in annual amortization equal to the percentage of a given year’s expected gross annual benefit to the total as applied to the total recorded value of the power contract. In connection with the Company’s acquisition of the remaining 20% interest in the Hawesville facility from Glencore on April 1, 2003, the 20% portion of the power contract that was indirectly owned by Glencore was revalued in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations.” As a result, the gross carrying amount of the contract and the accumulated amortization, both related to the 20% portion of the contract indirectly owned by Glencore, were removed and the fair value of the 20% of the power contract acquired on April 1, 2003 was recorded. As of September 30, 2004, the gross carrying amount of the intangible asset was $153,592 with

6

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

accumulated amortization of $63,701. For the three month periods ended September 30, 2004 and September 30, 2003, amortization expense for the intangible asset totaled $3,081 and $4,584, respectively. For the nine month periods ended September 30, 2004 and September 30, 2003, amortization expense for the intangible asset totaled $9,245 and $14,095, respectively. For the year ending December 31, 2004, the estimated aggregate amortization expense for the intangible asset will be approximately $12,326. The estimated aggregate amortization expense for the intangible asset for the following five years is as follows:

	For the year ending December 31,
	2005		2006		2007		2008		2009
Estimated Amortization Expense	$	14,162	$	12,695	$	13,617	$	14,669	$	15,717

     The intangible asset is reviewed for impairment in accordance with SFAS 142, “Goodwill and Other Intangible Assets,” whenever events or circumstances indicate that its net carrying amount may not be recoverable.

6. Debt

     Secured First Mortgage Notes

     In August 2004, the Company completed a tender offer and consent solicitation for the Company’s 11.75% senior secured first mortgage notes due 2008 (the “Notes”). The principal purpose of the tender offer and consent solicitation was to refinance Century’s outstanding Notes with debt bearing a lower interest rate, thereby reducing the Company’s annual interest expense. On August 26, 2004, the Company purchased $315,055 in principal amount of Notes in the tender offer. Following the purchase, the Company has outstanding a principal amount of $9,945 of Notes. No principal payments are required until maturity. On or after April 15, 2005, the Company anticipates redeeming the balance of the Notes at 105.875% of the principal balance, plus accrued and unpaid interest. Holders received $1,096.86 for each $1,000 principal amount of Notes purchased in the tender offer, plus accrued and unpaid interest. Holders who tendered their Notes by August 6, 2004, received a consent payment of $20.00 per $1,000 of principal amount of Notes resulting in a total consideration of $1,116.86 for each $1,000 principal amount of Notes purchased in the tender offer, plus accrued and unpaid interest up to but not including the date of payment.

     The Company financed the tender offer and consent solicitation with a portion of the proceeds from the private placement of its 7.5% Senior Unsecured Notes due 2014 (“Senior Unsecured Notes”) in the aggregate principal amount of $250,000 and 1.75% Senior Convertible Notes due 2024 (“Convertible Notes”) in the aggregate principal amount of $175,000. The sale of the Convertible Notes closed August 9, 2004 resulting in net proceeds to the Company of approximately $169,209. The sale of the Senior Unsecured Notes closed August 26, 2004 and resulted in net proceeds to the Company of approximately $243,238. The Company used the remaining proceeds from these offerings and available cash to repay a portion of the outstanding debt at Nordural.

     The Company had unamortized discounts on the Notes of $71 and $2,690 at September 30, 2004 and December 31, 2003, respectively. In connection with the consent solicitation, the Company entered into a supplemental indenture that eliminated substantially all of the restrictive covenants and certain default provisions contained in the indenture governing the remaining Notes.

     In the third quarter of 2004, the Company recognized a loss on early extinguishment of debt of $47,448 related to the refinancing of the Notes. The loss was composed of the following:

7

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

Purchase price premium, less consent fee	$	30,516
Consent payments		6,301
Write-off of capitalized financing fees		7,373
Write-off of bond discount		2,286
Other tender costs		972
	$	47,448

  Issuance of Convertible Senior Notes

     On August 9, 2004, the Company completed the sale of $175,000 aggregate principal amount of its Convertible Notes in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the “Act”).

     The Convertible Notes are convertible at any time at an initial conversion rate of 32.7430 shares of Century common stock per one thousand dollars of principal amount of Convertible Notes, subject to adjustments for certain events. The initial conversion rate is equivalent to a conversion price of approximately $30.5409 per share of Century common stock. Upon conversion of a Convertible Note, the holder of such Convertible Note shall receive cash equal to the principal amount of the Convertible Note and, at Century’s election, either cash, Century common stock, or a combination thereof, for the Convertible Notes’ conversion value in excess of such principal amount, if any. In addition, the Convertible Notes will be redeemable at Century’s option beginning on August 6, 2009, and the holders may require Century to repurchase all or part of their Convertible Notes for cash on each of August 1, 2011, August 1, 2014 and August 1, 2019.

     The obligations of the Company pursuant to the Convertible Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Company’s existing domestic restricted subsidiaries other than Century Aluminum of Kentucky, LLC.

     The Company has agreed to file and cause to become effective a shelf registration statement with the Securities and Exchange Commission for the resale of the Convertible Notes and any shares of common stock issuable upon the conversion of the Convertible Notes. If the shelf registration statement is not filed on or prior to the date that is 120 days after August 9, 2004 or is not declared effective on or prior to the date that is 210 days after August 9, 2004 (each, a “Registration Default”), the annual interest rate on the Convertible Notes will increase by 0.25% following such Registration Default, not to exceed an aggregate of 0.50% per annum.

   Private Placement of Senior Unsecured Notes

     On August 26, 2004, the Company completed the sale of $250,000 aggregate principal amount of its Senior Unsecured Notes in a private placement exempt from the registration requirements of the Act.

     The indenture governing the Senior Unsecured Notes contains customary covenants, including limitations on the Company’s ability to incur additional indebtedness, pay dividends, sell assets or stock of certain subsidiaries and purchase or redeem capital stock.

     The obligations of the Company pursuant to the Senior Unsecured Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Company’s existing domestic restricted subsidiaries other than Century Aluminum of Kentucky, LLC.

     The Company has agreed to file and cause to become effective a registration statement to exchange the Senior Unsecured Notes for new notes in a transaction registered under the Act. The terms of the exchange notes will be substantially identical to the Senior Unsecured Notes, except that the exchange notes will not be subject to transfer restrictions. If the exchange offer is not

8

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

consummated on or prior to the date that is 210 days after August 26, 2004, the annual interest rate on the Senior Unsecured Notes will increase by 0.5% from the 210th day until the exchange offer is consummated.

   Revolving Credit Facility

     Effective April 1, 2001, the Company entered into a $100,000 senior secured revolving credit facility (the “Revolving Credit Facility”) with a syndicate of banks. The Revolving Credit Facility will mature on April 2, 2006. The Company’s obligations under the Revolving Credit Facility are unconditionally guaranteed by its domestic subsidiaries (other than Century Aluminum of Kentucky, LLC (the “LLC”) and certain subsidiaries formed in connection with the Nordural acquisition) and secured by a first priority security interest in all accounts receivable and inventory belonging to the Company and its subsidiary borrowers. The availability of funds under the Revolving Credit Facility is subject to a $30,000 reserve and limited by a specified borrowing base consisting of certain eligible accounts receivable and inventory. Borrowings under the Revolving Credit Facility are, at the Company’s option, at the LIBOR rate or the Fleet National Bank base rate plus, in each case, an applicable interest margin. The applicable interest margin ranges from 2.25% to 3.0% over the LIBOR rate and 0.75% to 1.5% over the base rate and is determined by certain financial measurements of the Company. There were no outstanding borrowings under the Revolving Credit Facility as of September 30, 2004 and December 31, 2003. Interest periods for LIBOR rate borrowings are one, two, three or six months, at the Company’s option. As of September 30, 2004, the Company had a borrowing base of $76,752 under the Revolving Credit Facility. The Company is subject to customary covenants, including limitations on capital expenditures, additional indebtedness, liens, guarantees, mergers and acquisitions, dividends, distributions, capital redemptions and investments.

   Industrial Revenue Bonds

     Effective April 1, 2001, in connection with its acquisition of the Hawesville facility, the Company assumed industrial revenue bonds (the “IRBs”) in the aggregate principal amount of $7,815. From April 1, 2001 through April 1, 2003, Glencore assumed 20% of the liability related to the IRBs consistent with its ownership interest in the Hawesville facility during that period. The IRBs mature on April 1, 2028, and bear interest at a variable rate not to exceed 12% per annum determined weekly based on prevailing rates for similar bonds in the bond market, with interest paid quarterly. The IRBs are secured by a Glencore guaranteed letter of credit and the Company provides for the servicing costs for the letter of credit. The Company has agreed to reimburse Glencore for all costs arising from the letter of credit. The Company’s maximum potential amount of future payments under the reimbursement obligations for the Glencore letter of credit securing the IRBs would be $8,150. The interest rate on the IRBs at September 30, 2004 was 2.00%. The IRBs are classified as current liabilities because they are remarketed weekly and could be required to be repaid upon demand if there is a failed remarketing, as provided in the indenture governing the IRBs. The Company’s reimbursement obligations related to the Glencore letter of credit securing the IRBs are guaranteed by each of its material consolidated subsidiaries, except for the LLC (see Note 17 for a discussion of note guarantees), and secured by a first priority interest in the 20% interest in the Hawesville facility.

   Glencore Note Payable

     On April 1, 2003, in connection with its acquisition of the remaining 20% interest in the Hawesville facility, the Company issued a six-year $40,000 promissory note payable to Glencore bearing interest at a rate of 10% per annum (the “Glencore Note”). In April 2004, the Company paid the remaining $14,000 of principal on the Glencore Note, which consisted of a $2,000 required principal payment and an optional $12,000 prepayment of principal.

   Term Loan Facility – Nordural

     As of September 30, 2004, Nordural had approximately $83,370 of debt, principally consisting of a senior term loan facility maturing December 31, 2009. In September 2004, the Company repaid $100,000 of the loan facility with available cash resulting in an outstanding balance under the loan facility of $71,384 at September 30, 2004. Amounts borrowed under Nordural’s loan facility generally bear interest at the applicable LIBOR rate plus a margin of 1.45% per year, plus an applicable percentage to cover certain lender compliance costs.

9

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

     Nordural’s obligations under the loan facility are secured by the stock of Nordural and substantially all of Nordural’s assets. Amounts outstanding under the loan facility are payable semiannually in installments through December 31, 2009. The amount of each installment is based on a scheduled rate that fluctuates between 2.74% and 3.88% of outstanding principal. Nordural may voluntarily prepay all or part of the loan facility without penalty provided it gives five business days’ notice, subject to a minimum payment threshold. The agreement provides for mandatory prepayment upon the receipt of proceeds from certain asset sales, events impairing the value of assets and insurance recoveries. If the price of aluminum falls below designated levels for six months prior to a payment date and the debt coverage ratio is less than one to one, the loan facility provides for deferral of principal payments. Principal payments are increased if certain debt coverage ratios are exceeded and/or the price of aluminum exceeds designated levels.

     Nordural’s loan facility contains customary covenants, including limitations on additional indebtedness, security interests, investments, asset sales, loans, guarantees, capital expenditures, mergers and acquisitions, amendments to various agreements used in the operation of the Nordural facility, hedging agreements, distributions and share capital redemptions.

     Nordural Refinancing and Expansion Financing

     The Company has agreed to terms on a five year $310,000 senior term loan facility with a syndicate of banks led by Landsbanki Islands hf. and Kaupthing Bank hf, subject to customary closing conditions including the negotiation and execution of definitive agreements. Amounts borrowed will be used to repay debt currently outstanding at Nordural and to finance a portion of the costs associated with the ongoing expansion of the Nordural facility. The term loan facility can be extended by an additional seven years upon the satisfaction of certain conditions.

7. Contingencies and Commitments

  Environmental Contingencies

     The Company believes its current environmental liabilities do not have, and are not likely to have, a material adverse effect on the Company’s financial condition, results of operations or liquidity. However, there can be no assurance that future requirements at currently or formerly owned or operated properties will not result in liabilities which may have a material adverse effect.

     Century Aluminum of West Virginia, Inc. (“Century of West Virginia”) continues to perform remedial measures at its Ravenswood facility pursuant to an order issued by the Environmental Protection Agency (“EPA”) in 1994 (the “3008(h) Order”). Century of West Virginia also conducted a RCRA facility investigation (“RFI”) under the 3008(h) Order evaluating other areas at the Ravenswood facility that may have contamination requiring remediation. The RFI has been approved by appropriate agencies. Century of West Virginia has completed interim remediation measures at two sites identified in the RFI, and the Company believes no further remediation will be required. A Corrective Measures Study, which will formally document the conclusion of these activities, is being completed with EPA. The Company believes a significant portion of the contamination on the two sites identified in the RFI is attributable to the operations of Kaiser, which had previously owned and operated the Ravenswood facility, and is the financial responsibility of Kaiser.

     On September 28, 2004, the Bankruptcy Court for the District of Delaware approved an agreement by Kaiser to transfer its environmental liability at Ravenswood to TRC Companies, Inc., and TRC Environmental Corporation (collectively “TRC”). The Bankruptcy Court also approved an agreement between, Kaiser, TRC, Century of West Virginia and Pechiney Rolled Products, Inc. (“Pechiney”), effective as of September 1, 2004, pursuant to which TRC assumed all of Kaiser’s environmental liabilities at Ravenswood. TRC also purchased insurance in amounts the Company believes are sufficient to cover the costs of any TRC liability at Ravenswood. Also, as of September 1, 2004, Century of West Virginia and Pechiney entered into an agreement releasing Century of West Virginia from all of the environmental indemnification obligations for Kaiser-related matters arising out of the Century of West Virginia’s 1999 sale of the Ravenswood rolling mill to Pechiney.

     Under the Company’s agreement with Southwire Company to purchase the Hawesville, Kentucky facility, Southwire indemnified the Company against all on-site environmental liabilities known to exist prior to April 1, 2001 (the “Closing”) and against risks associated with off-site hazardous material disposals which pre-dated the Closing.

10

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

     Prior to the Closing, the EPA had issued a final Record of Decision (“ROD”), under the Comprehensive Environmental Response, Compensation and Liability Act, directing that certain response actions be taken at the Hawesville facility. Under its agreement with Century, Southwire agreed to perform all obligations under the ROD. The total costs for the obligations to be undertaken and paid for by Southwire relative to these liabilities are estimated under the ROD to be $12,600, and the forecast of annual operating and maintenance costs is $1,200. Century Kentucky, LLC (“Century Kentucky”) will operate and maintain the ground water treatment system required under the ROD on behalf of Southwire, and Southwire will reimburse Century Kentucky for any expense that exceeds $400 annually.

     If any on-site environmental liabilities become known prior to March 31, 2007 that were not known to exist at Closing but which arose from pre-Closing activities at the Hawesville facility, the Company will share the costs of remedial action with Southwire pro rata depending on the year the liability is identified. The Company will be responsible for any such liabilities which first become known on or after March 31, 2007. The Company also will be responsible for any post-Closing environmental liabilities which result from a change in laws.

     The Company acquired the Hawesville facility by purchasing all of the outstanding equity securities of Metalsco Ltd. (“Metalsco”), which was a wholly owned subsidiary of Southwire. Metalsco previously owned certain assets unrelated to the Hawesville plant’s operations (“Unwanted Assets”). All Unwanted Assets owned by Metalsco were distributed to Southwire prior to the Closing, and Southwire indemnified the Company for all liabilities related to the Unwanted Assets. Southwire also retained ownership of and full responsibility for certain land adjacent to the Hawesville facility containing potliner disposal areas.

     Southwire has secured its indemnity obligations to the Company for environmental liabilities through April 1, 2008 by posting a letter of credit in the Company’s favor in the amount of $14,000. Southwire is obligated to post an additional $15,000 if its net worth drops below a pre-determined level prior to April 1, 2008. The amount of security Southwire provides may increase (but not above $14,500 or $29,500, as applicable) or decrease (but not below $3,000) if certain specified conditions are met.

     The Company cannot be certain Southwire will be able to meet its indemnity obligations. In that event, under certain environmental laws which impose liability regardless of fault, the Company may be liable for any outstanding remedial measures required under the ROD and for certain liabilities related to the unwanted properties. If Southwire fails to meet its indemnity obligations or if the Company’s shared or assumed liability is significantly greater than anticipated, the Company’s financial condition, results of operations and liquidity could be materially adversely affected.

     Century is a party to an EPA Administrative Order on Consent (the “Order”) pursuant to which other past and present owners of an alumina refining facility at St. Croix, Virgin Islands have agreed to carry out a Hydrocarbon Recovery Plan to remove and manage hydrocarbons floating on groundwater underlying the facility. Pursuant to the Hydrocarbon Recovery Plan, recovered hydrocarbons and groundwater are delivered to the adjacent petroleum refinery where they are received and managed. Lockheed Martin Corporation (“Lockheed”), which sold the facility to one of the Company’s affiliates, Virgin Islands Alumina Corporation (“Vialco”), in 1989, has tendered indemnity and defense of this matter to Vialco pursuant to terms of the Lockheed–Vialco Asset Purchase Agreement. Management does not believe Vialco’s liability under the Order or its indemnity to Lockheed will require material payments. Through September 30, 2004, the Company has expended approximately $440 on the Recovery Plan. Although there is no limit on the obligation to make indemnification payments, the Company expects the future potential payments under this indemnification will be approximately $200 which may be offset in part by sales of recoverable hydrocarbons.

     The Company, along with others, including former owners of its former St. Croix facility, received notice of a threatened lawsuit alleging natural resource damages involving the subsurface contamination at the facility. Century has entered into a Joint Defense Agreement with the other parties who received notification of the threatened lawsuit. While it is not presently possible to determine the outcome of this matter, the Company’s known liabilities with respect to this and other matters relating to compliance and cleanup, based on current information, are not expected to be material and should not materially adversely affect the Company’s operating results. However, if more stringent compliance or cleanup standards under environmental laws or regulations are imposed, previously unknown environmental conditions or damages to natural resources are discovered, or if

11

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

contributions from other responsible parties with respect to sites for which the Company has cleanup responsibilities are not available, the Company may be subject to additional liability, which may be material.

     Nordural is subject to various Icelandic and other environmental laws and regulations. These laws and regulations are subject to change, which changes could result in increased costs. Operating in a foreign country exposes the Company to political, regulatory, currency and other related risks. The Nordural facility, built in 1998, uses technology currently defined to be “best available technology” under the European Union’s Integrated Pollution Prevention and Control Directive of 1996, or IPPC. The operational restrictions for the Nordural facility, as determined by the Icelandic Minister for the Environment, are set forth in the facility’s operating license. The license currently allows for both the facility’s current and planned expansion capacity.

     On October 1, 2004, Century and Noranda Finance, Inc. (“Noranda”) jointly acquired the assets of the Gramercy Alumina plant located near Gramercy, Louisiana, from Kaiser with Bankruptcy Court approval. Prior to closing, Century and Noranda performed a pre-purchase due diligence investigation of the environmental conditions present at the Gramercy facility. The results of this investigation were submitted to state regulatory officials. In addition, as part of this submittal Century and Noranda agreed to undertake certain specified remedial activities at the Gramercy plant. As a result of this submittal, state environmental officials have confirmed that Century and Noranda met the conditions for Bona Fide Prospective Purchaser protections against liability for pre-existing environmental conditions at the facility. Accordingly, Century does not believe it faces any contingent environmental liabilities of a material nature resulting from its purchase of the Gramercy facility.

     In conjunction with the purchase of the Gramercy facility, Century and Noranda jointly purchased Kaiser’s 49% interest in Kaiser-Jamaica Bauxite Company (“KJBC”), a partnership located in Jamaica and 51% owned by the Jamaican government. Now reconstituted as St. Ann Jamaican Bauxite Partnership (“SAJBP”), the entity carries out bauxite mining, drying, storage and shipping operations. Century and Noranda performed a pre-purchase due diligence investigation of the KJBC operations which disclosed no significant environmental liabilities or regulatory non-compliance. While it is impossible to predict what future environmental requirements might be, Century does not believe that the acquisition of KJBC presents the Company with any material environmental liabilities.

     It is the Company’s policy to accrue for costs associated with environmental assessments and remedial efforts when it becomes probable that a liability has been incurred and the costs can be reasonably estimated. The aggregate environmental related accrued liabilities were $775 and $694 at September 30, 2004 and December 31, 2003, respectively. All accrued amounts have been recorded without giving effect to any possible future recoveries. With respect to ongoing environmental compliance costs, including maintenance and monitoring, such costs are expensed as incurred.

     Because of the issues and uncertainties described above, and the Company’s inability to predict the requirements of the future environmental laws, there can be no assurance that future capital expenditures and costs for environmental compliance will not have a material adverse effect on the Company’s future financial condition, results of operations, or liquidity. Based upon all available information, management does not believe that the outcome of these environmental matters, or environmental matters concerning Mt. Holly, will have a material adverse effect on the Company’s financial condition, results of operations, or liquidity.

   Legal Contingencies

     Prior to the Kaiser bankruptcy, Century was a named defendant, along with Kaiser and many other companies, in civil actions brought by employees of third party contractors who alleged asbestos-related diseases arising out of exposure at facilities where they worked, including Ravenswood. All of those actions relating to the Ravenswood facility have been dismissed or resolved with respect to the Company and as to Kaiser. Only 14 plaintiffs were able to show they had been on the Ravenswood premises during the period the Company owned the plant, and the parties have agreed to settle all of those claims for non-material amounts. The Company is awaiting receipt of final documentation of those settlements and the entry of dismissal orders. The Company does not expect the Kaiser bankruptcy will have any effect on the settlements reached on those asbestos claims. Since the Kaiser bankruptcy, the Company has been named in additional civil actions based on similar allegations with unspecified monetary claims against Century, 75 of which remain outstanding. To the best of the Company’s knowledge, of the

12

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

remaining civil actions, only two of the claimants were in the Ravenswood facility during the Company’s ownership, and both were employees of Kaiser or Century.

     The Company has pending against it or may be subject to various other lawsuits, claims and proceedings related primarily to employment, commercial, environmental and safety and health matters. Although it is not presently possible to determine the outcome of these matters, management believes their ultimate disposition will not have a material adverse effect on the Company’s financial condition, results of operations, or liquidity.

   Power Commitments

     The Hawesville facility currently purchases all of its power from Kenergy Corporation (“Kenergy”), a local retail electric cooperative, under a power supply contract that expires at the end of 2010. Kenergy acquires the power it provides to the Hawesville facility mostly from a subsidiary of LG&E Energy Corporation (“LG&E”), with delivery guaranteed by LG&E. The Hawesville facility currently purchases all of its power from Kenergy at fixed prices. Approximately 121 MW or 27% of the Hawesville facility’s power requirements are unpriced in calendar years 2006 through 2010. The Company will negotiate the price for the unpriced portion of the contract at such times as the Company and Kenergy deem appropriate.

     The Company purchases all of the electricity requirements for the Ravenswood facility from Ohio Power Company, a unit of American Electric Power Company, under a fixed price power supply agreement that runs through December 31, 2005.

     The Mt. Holly facility purchases all of its power from the South Carolina Public Service Authority (“Santee Cooper”) at rates established by published schedules. The Mt. Holly facility’s current power contract expires December 31, 2015. Power delivered through 2010 will be priced as set forth in currently published schedules, subject to adjustments for fuel costs. Rates for the period 2011 through 2015 will be as provided under then-applicable schedules.

     The Nordural facility purchases power from Landsvirkjun, a power company jointly owned by the Republic of Iceland and two Icelandic municipal governments, under a contract due to expire in 2019. The power delivered to the Nordural facility under its current contract is from hydroelectric and geothermal sources, both competitively-priced and renewable sources of power in Iceland, at a rate based on the London Metal Exchange (“LME”) price for primary aluminum. In connection with the planned expansion, Nordural has entered into a power contract with Orkuveita Reykjavikur (“OR”) and Hitaveita Sudurnesja hf (“HS”) for the supply of the additional power required for the expansion capacity. Power under this agreement will be generated from geothermal resources and prices will be LME-based. By the terms of a Second Amendment to the Landsvirkjun/Nordural Power Contract, dated as of April 21, 2004, Landsvirkjun has agreed on a best commercial efforts basis to provide backup power to Nordural should OR or HS be unable to meet the obligations of their contract to provide power for the Nordural expansion.

     The Company may suffer losses due to a temporary or prolonged interruption of the supply of electrical power to its facilities, which can be caused by unusually high demand, blackouts, equipment failure, natural disasters or other catastrophic events. The Company uses large amounts of electricity to produce primary aluminum, and any loss of power which causes an equipment shutdown can result in the hardening or “freezing” of molten aluminum in the pots where it is produced. If this occurs, the Company may experience significant losses if the pots are damaged and require repair or replacement, a process that could limit or shut down production operations for a prolonged period of time. Although the Company maintains property and business interruption insurance to mitigate losses resulting from catastrophic events, the Company may still be required to pay significant amounts under the deductible provisions of those insurance policies. Century’s coverage may not be sufficient to cover all losses, or certain events may not be covered. For example, certain of Century’s insurance policies do not cover any losses the Company may incur if its suppliers are unable to provide the Company with power during periods of unusually high demand. Certain material losses which are not covered by insurance may trigger a default under the Company’s Revolving Credit Facility. No assurance can be given that a material shutdown will not occur in the future or that such a shutdown would not have a material adverse effect on the Company.

13

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

  Labor Commitments

     Approximately 80% of the Company’s U.S. based workforce are represented by the United Steelworker’s of America (the “USWA”) and are working under agreements that expire as follows: March 31, 2006 (Hawesville) and May 31, 2006 (Ravenswood).

     There are six national labor unions representing Nordural’s work force. The current contract with these unions expires on December 31, 2004. The terms of a new contract are currently being negotiated.

  Other Commitments and Contingencies

     The Company may be required to make post-closing payments to Southwire up to an aggregate maximum of $7,000 if the price of primary aluminum on the LME exceeds specified levels during the seven years following closing of the Hawesville Acquisition in April 2001. No post-closing payments were made to Southwire through September 30, 2004; however, if LME prices remain at or above current levels, Southwire would be entitled to receive the entire $7,000 in 2005.

8. Forward Delivery Contracts and Financial Instruments

     As a producer of primary aluminum products, the Company is exposed to fluctuating raw material and primary aluminum prices. The Company routinely enters into fixed and market priced contracts for the sale of primary aluminum and the purchase of raw materials in future periods.

   Alumina Tolling

     Nordural is party to a long-term alumina tolling contract with a subsidiary of BHP Billiton (the “Tolling Agreement”) which is due to expire December 31, 2013. Under this contract, which is for all of the Nordural facility’s existing production capacity, Nordural receives an LME-based fee for the conversion of alumina, supplied by BHP Billiton, into primary aluminum. The contract includes customary termination provisions upon a force majeure event or material breach that could result in early termination. On August 1, 2004, the Company entered into a ten-year alumina toll conversion agreement with Glencore for Nordural’s expansion capacity. That contract also provides Nordural with an LME-based fee. The contract is effective in mid-2006.

   Primary Aluminum Sales Agreements

     Century has a contract with Pechiney (the “Pechiney Metal Agreement”) under which Pechiney purchases 23 to 27 million pounds, per month, of molten aluminum produced at the Ravenswood facility through December 31, 2005, at a price determined by reference to the U.S. Midwest Market Price. This contract will be automatically extended through July 31, 2007 provided that the Company’s power contract for the Ravenswood facility is extended or replaced through that date. Pechiney has the right, upon twelve months notice, to reduce its purchase obligations by 50% under this contract. In December 2003, Alcan Inc. (“Alcan”) completed an acquisition of Pechiney.

     The Pechiney rolling mill that purchases primary aluminum from the Company under this contract is located adjacent to the Ravenswood facility, which allows the Company to deliver molten aluminum, thereby reducing its casting and shipping costs. If Alcan materially reduces its purchases or fails to renew the contract when it expires, the Company’s casting, shipping and marketing costs at the Ravenswood facility would increase.

     On April 1, 2000, the Company entered into an agreement with Glencore, expiring December 31, 2009, to sell and deliver monthly, primary aluminum totaling approximately 110 million pounds per year at a fixed price for the years 2002 through 2009 (the “Original Sales Contract”). In January 2003, Century and Glencore agreed to terminate and settle the Original Sales Contract for the years 2005 through 2009. At that time, the parties entered into a new contract (the “New Sales Contract”) that requires Century to deliver the same quantity of primary aluminum as did the Original Sales Contract for these years. The New Sales Contract provides for variable pricing

14

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

determined by reference to the LME for the years 2005 through 2009. For deliveries through 2004, the price of primary aluminum delivered will remain fixed.

     Prior to the January 2003 agreement to terminate and settle the years 2005 though 2009 of the Original Sales Contract, the Company had been classifying and accounting for it as a normal sales contract under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” A contract that is so designated and that meets other conditions established by SFAS No. 133 is exempt from the requirements of SFAS No. 133, although by its terms the contract would otherwise be accounted for as a derivative instrument. Accordingly, prior to January 2003, the Original Sales Contract was recorded on an accrual basis of accounting and changes in the fair value of the Original Sales Contract were not recognized.

     According to SFAS No. 133, it must be probable that at inception and throughout its term, a contract classified as “normal” will not result in a net settlement and will result in physical delivery. In April 2003, the Company and Glencore net settled a significant portion of the Original Sales Contract, and it no longer qualified for the “normal” exception of SFAS No. 133. The Company marked the Original Sales Contract to current fair value in its entirety. Accordingly, in the first quarter of 2003 the Company recorded a derivative asset and a pre-tax gain of $41,700. Of the total recorded gain, $26,100 related to the favorable terms of the Original Sales Contract for the years 2005 through 2009, and $15,600 relates to the favorable terms of the Original Sales Contract for 2003 through 2004.

     The Company determined the fair value by estimating the excess of the contractual cash flows of the Original Sales Contract (using contractual prices and quantities) above the estimated cash flows of a contract based on identical quantities using LME-quoted prevailing forward market prices for aluminum plus an estimated U.S. Midwest premium adjusted for delivery considerations. The Company discounted the excess estimated cash flows to present value using a discount rate of 7%.

     On April 1, 2003, the Company received $35,500 from Glencore, $26,100 of which related to the settlement of the Original Sales Contract for the years 2005 through 2009, and $9,400 of which represented the fair value of the New Sales Contracts discussed below. In January 2003, the Company began accounting for the unsettled portion of the Original Sales Contract (years 2003 and 2004) as a derivative and recognizing period-to-period changes in fair value in current income. The Company also accounts for the New Sales Contract as a derivative instrument under SFAS No. 133. The Company has not designated the New Sales Contract as “normal” because it replaces and substitutes for a significant portion of the Original Sales Contract which, after January 2003, no longer qualified for this designation. The $9,400 initial fair value of the New Sales Contract is a derivative liability and represents the present value of the contract’s favorable term to Glencore in that the New Sales Contract excludes from its variable price an estimated U.S. Midwest premium, adjusted for delivery considerations. Because the New Sales Contract is variably priced, the Company does not expect significant variability in its fair value, other than changes that might result from the absence of the U.S. Midwest premium.

     In connection with the acquisition of the Hawesville facility in April 2001, the Company entered into a 10-year contract with Southwire (the “Southwire Metal Agreement”) to supply 240 million pounds of high-purity molten aluminum annually to Southwire’s wire and cable manufacturing facility located adjacent to the Hawesville facility. Under this contract, Southwire will also purchase 60.0 million pounds of standard grade molten aluminum each year for the first five years of the contract, with an option to purchase an equal amount in each of the remaining five years. Southwire has exercised this option through 2008. Prior to the acquisition of the 20% interest in the Hawesville facility on April 1, 2003, the Company and Glencore were each responsible for providing a pro rata portion of the aluminum supplied to Southwire under this contract. In connection with the Company’s acquisition of the 20% interest in the Hawesville facility, the Company assumed Glencore’s delivery obligations under the Southwire Metal Agreement. The price for the molten aluminum to be delivered to Southwire from the Hawesville facility is variable and will be determined by reference to the U.S. Midwest Market Price. This agreement expires on March 31, 2011, and will automatically renew for additional five-year terms, unless either party provides 12 months notice that it has elected not to renew.

     In connection with the acquisition of the 20% interest in the Hawesville facility, the Company entered into a ten-year contract with Glencore (the “Glencore Metal Agreement”) from 2004 through 2013 under which Glencore will purchase approximately 45 million pounds per year of primary aluminum produced at the Ravenswood and Mt.

15

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

Holly facilities, at prices based on then-current market prices, adjusted by a negotiated U.S. Midwest premium with a cap and a floor as applied to the current U.S. Midwest premium.

     Apart from the Pechiney Metal Agreement, the Glencore Metal Agreement, Original Sales Contract, New Sales Contract and Southwire Metal Agreement, the Company had forward delivery contracts to sell 194.3 million pounds and 351.8 million pounds of primary aluminum at September 30, 2004 and December 31, 2003, respectively. Of these forward delivery contracts, the Company had fixed price commitments to sell 12.8 million pounds and 70.5 million pounds of primary aluminum at September 30, 2004 and December 31, 2003, respectively. Of these forward delivery contracts, 5.6 million pounds and 53.5 million pounds at September 30, 2004 and December 31, 2003, respectively, were with Glencore.

   Alumina Purchase Agreements

     The Company is party to long-term supply agreements with Glencore for the supply of alumina to the Company’s Ravenswood and Mt. Holly facilities that extend through December 2006 and January 2008 at prices indexed to the price of primary aluminum quoted on the LME.

     Prior to October 1, 2004, the Company purchased the alumina used at its Hawesville facility from Kaiser under a long term agreement that ran through December 2006. Kaiser filed for bankruptcy under Chapter 11 of the Bankruptcy Code in February 2002. Subsequent to that date, and with bankruptcy court approval, Kaiser agreed to assume the Company’s alumina supply agreement and a new alumina supply agreement for the Company’s Hawesville facility for the years 2006 through 2008. Through September 30, 2004, Kaiser continued to supply alumina to the Company pursuant to the terms of its agreement.

     On October 1, 2004, the Company and Noranda, Inc. jointly acquired the Gramercy alumina refinery and related Jamaican bauxite mining assets from Kaiser for $23,000, subject to closing adjustments. Century and Noranda each paid one-half, or $11,500, of the purchase price.

     The price the Company pays for alumina used by the Hawesville facility is now based on the cost of alumina production, rather than the LME price for primary aluminum. Those production costs may be materially higher than an LME-based price. The impact of the Gramercy acquisition to the Company’s cost of goods sold may not be materially different than under the Company’s existing LME-based contract with Gramercy in periods of high aluminum prices such as the Company is currently experiencing. However, the Company believes that the price of alumina based on production costs at Gramercy could be materially higher than under the LME-based contract price in periods when aluminum prices are low and natural gas prices are high.

   Anode Purchase Agreement

     Nordural has a contract for the supply of anodes for its existing capacity which expires in 2013. Pricing for the anode contract is variable and is indexed to the raw material market for petroleum coke products, certain labor rates, and maintenance cost indices.

   Financial Sales and Purchase Agreements

     To mitigate the volatility in its unpriced forward delivery contracts, the Company enters into fixed price financial sales contracts, which settle in cash in the period corresponding to the intended delivery dates of the forward delivery contracts. Certain of these fixed price financial sales contracts are accounted for as cash flow hedges depending on the Company’s designation of each contract at its inception.

16

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

Fixed Price Financial Sales Contracts at September 30, 2004:

	(Millions of pounds)
	2004		2005		2006		2007		Total
Aluminum		33.1		425.7		86.5		4.4		549.7

     At September 30, 2004 and December 31, 2003, the Company had fixed price financial sales contracts with Glencore for 549.7 million pounds and 102.9 million pounds, respectively, of which 538.7 million pounds and 58.8 million pounds, respectively, were designated as cash flow hedges. These financial instruments are scheduled for settlement at various dates through 2007. The Company had no fixed price financial purchase contracts to purchase aluminum at September 30, 2004 or December 31, 2003. Additionally, to mitigate the volatility of the natural gas markets, the Company enters into fixed price financial purchase contracts, accounted for as cash flow hedges, which settle in cash in the period corresponding to the intended usage of natural gas.

Fixed Price Financial Purchase Contracts at September 30, 2004:

	(Thousands of DTH)
	2004		2005		2006		2007		2008		Total
Natural Gas		420		1,280		480		480		480		3,140

     At September 30, 2004 and December 31, 2003, the Company had financial purchase contracts for 3.1 million and 2.7 million DTH (one decatherm is equivalent to one million British Thermal Units), respectively. These financial instruments are scheduled for settlement at various dates through 2008.

     Based on the fair value of the Company’s fixed price financial sales contracts and financial purchase contracts as of September 30, 2004, accumulated other comprehensive loss of $17,599 is expected to be reclassified as a reduction to earnings over the next twelve month period.

     The forward financial sales and purchase contracts are subject to the risk of non-performance by the counterparties. However, the Company only enters into forward financial contracts with counterparties it determines to be creditworthy. If any counterparty failed to perform according to the terms of the contract, the accounting impact would be limited to the difference between the nominal value of the contract and the market value on the date of settlement.

9. Supplemental Cash Flow Information

     In the nine months ended September 30, 2004, the Company had two significant non-cash equity transactions. In April 2004, the Company issued approximately 67,000 shares of common stock to satisfy a performance share liability of $1,630 to certain employees of the Company. Additionally, in May 2004, Glencore exercised its option to convert its shares of cumulative convertible preferred stock. The Company issued 1,395,089 shares of common stock in exchange for Glencore’s $25,000 of preferred stock, see Note 14.

17

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

	Nine months ended
	September 30,
	2004		2003
Cash paid for:
Interest	$	36,152	$	19,169
Income tax		198		—
Cash received for:
Interest		843		278
Income tax refunds		135		—
Seller financing related to the acquisition of the 20% interest in the Hawesville facility		—		40,000

10. Asset Retirement Obligations

     In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” This Statement establishes standards for accounting for legal obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The Company adopted the Standard during the first quarter of 2003. SFAS 143 requires that the Company record the fair value of a legal liability for an asset retirement obligation (“ARO”) in the period in which it is incurred and capitalize the ARO by increasing the carrying amount of the related asset. The liability is accreted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset. The Company’s asset retirement obligations consist primarily of costs associated with the removal and disposal of spent pot liner from its reduction facilities.

     With the adoption of SFAS 143 on January 1, 2003, Century recorded an ARO asset of $6,484, net of accumulated amortization of $7,372, a deferred tax asset of $3,430, and an ARO liability of $14,220. The net amount initially recognized as a result of applying the Statement was reported as a cumulative effect of a change in accounting principle. The Company recorded a one-time, non-cash charge of $5,878, for the cumulative effect of a change in accounting principle. For the year ended December 31, 2003, $1,795 of the additional ARO liability incurred was related to the acquisition of the 20% interest in the Hawesville facility in April 2003.

     The reconciliation of the changes in the asset retirement obligations is presented below:

	For the Nine			For the Year
	months ended			ended December
	September 30, 2004			31, 2003
Beginning balance, ARO liability	$	16,495		$	14,220
Additional ARO liability incurred		1,032			3,402
ARO liabilities settled		(2,515	)		(2,423	)
Accretion expense		2,035			1,296
Ending balance, ARO liability	$	17,047		$	16,495

11. New Accounting Standards

     Accounting for the Medicare Act

     On December 8, 2003, the “Medicare Prescription Drug Improvement and Modernization Act of 2003” (“the Act”) was signed into law. The Act introduces a prescription drug benefit under Medicare as well as a federal

18

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least “actuarially equivalent” to Medicare Part D.

     In the second quarter of 2004, a Financial Accounting Standards Board (FASB) Staff Position (FSP FAS106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and Modernization Act of 2003”) was issued providing guidance on the accounting for the effects of the Act for employers that sponsor postretirement health care plans that provide prescription drug benefits. This FSP superseded FSP FAS 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and Modernization Act of 2003.” The FSP is effective for the first interim or annual period beginning after June 15, 2004.

     The guidance in this FSP applies only to the sponsor of a single-employer defined benefit postretirement health plan for which the employer has concluded that prescription drug benefits available under the plan are actuarially equivalent and thus qualify for the subsidy under the Act and the expected subsidy will offset or reduce the employer’s share of the costs of postretirement prescription drug coverage provided by the plan. The Company determined that its plans were actuarially equivalent and elected to adopt the provisions of FSP FAS 106-2 in the third quarter of 2004 on a prospective basis. The Company compared the Medicare Part D plan to its retiree prescription drug coverage using actuarial equivalencies and reflecting the retiree premiums and cost sharing provisions of the various plans. This analysis showed Century’s plans provide more valuable benefits to retirees than the Medicare Part D plan. Based on the Company’s understanding of the intent of the Act and subsequent proposed regulations, the Company still believes its plans will meet the actuarial equivalence requirements necessary to receive the Medicare reimbursement.

     For retirees with post-65 prescription drug benefits, Century estimates the net effect on post-65 per capita medical and prescription drug costs to be a reduction of approximately 11 to 14% due to the Medicare reimbursement. The changes are assumed to have no impact on future participation rates in Century’s post-65 prescription drug programs.

     The Company has reduced its accumulated benefit obligation (ABO) for the subsidy related to benefits attributed to past service by approximately $16,400. The reduction will be recognized on the balance sheet through amortization. The effect of the subsidy on the measurement of net periodic postretirement benefit cost for the third and fourth quarters of 2004 is expected to be approximately $1,310 and will be recognized evenly over the third and fourth quarters. The effect will include lower amortization of actuarial losses of approximately $490, lower service costs of approximately $310, and lower interest costs on the ABO of approximately $510 for the third and fourth quarters. For further information on postretirement costs, see Note 15, “Components of Net Periodic Benefit Cost.”

     Accounting for the FASB Interpretation No. 46 (revised December 2003)

     In December 2003, the FASB issued FASB Interpretation (“FIN”) No. 46 (revised December 2003), “Consolidation of Variable Interest Entities.” This Interpretation clarifies the application of Accounting Research Bulletin (“ARB”) No. 51, “Consolidated Financial Statements” and replaces FIN No. 46, “Consolidation of Variable Interest Entities.” The Interpretation explains how to identify variable interest entities and how an enterprise assesses its interests in a variable interest entity to decide whether to consolidate that entity. The effective date of this Interpretation varies depending on several factors, including public status of the entity, small business issuer status, and whether the public entities currently have any interests in special-purpose entities. Century applied this Interpretation in the first quarter of 2004. The application of FIN No. 46 had no impact on the Company’s Consolidated Financial Statements.

19

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

12. Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

	Nine months ended
	September 30,
	2004			2003
Net income	$	7,039		$	7,221
Other comprehensive income (loss):
Net unrealized gain (loss) on financial instruments, net of tax of $13,806 and $51, respectively		(24,230	)		(140	)
Net amount reclassified as loss (income), net of tax of ($1,306) and $3,632, respectively		2,349			(6,443	)
Minimum pension liability adjustment, net of tax of $0 and 1,122		—			(1,995	)
Comprehensive loss	$	(14,842	)	$	(1,357	)

   Composition of Accumulated Other Comprehensive Loss:

	September 30,			December 31,
	2004			2003
Net unrealized loss on financial instruments, net of tax of $13,374 and $864	$	(23,472	)	$	(1,591	)
Minimum pension liability adjustment, net of tax of $2,042 and $2,042		(3,631	)		(3,631	)
Total accumulated other comprehensive loss	$	(27,103	)	$	(5,222	)

13. Earnings Per Share

     The following table provides a reconciliation of the computation of the basic and diluted earnings per share for income from continuing operations:

	Three months ended September 30,
	2004								2003
	Income			Shares		Per-Share			Income			Shares		Per-Share
Loss before cumulative effect of change in accounting principle	$	(16,049	)						$	(5,367	)
Less: Preferred stock dividends		—								(500	)
Basic EPS:
Loss applicable to common shareholders		(16,049	)		31,754	$	(0.51	)		(5,867	)		21,070	$	(0.28	)
Effect of Dilutive Securities:
Plus: Incremental Shares		—			—					—			—
Diluted EPS:
Loss applicable to common shareholders with assumed conversions	$	(16,049	)		31,754	$	(0.51	)	$	(5,867	)		21,070	$	(0.28	)

20

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

	Nine months ended September 30,
	2004							2003
	Income			Shares		Per-Share		Income			Shares		Per-Share
Income before cumulative effect of change in accounting principle	$	7,039						$	13,099
Less: Preferred stock dividends		(769	)						(1,500	)
Basic EPS:
Income applicable to common shareholders		6,270			27,542	$	0.23		11,599			21,070	$	0.55
Effect of Dilutive Securities:
Plus: Incremental shares from assumed conversion of stock options		—			117				—			4
Diluted EPS:
Income applicable to common shareholders with assumed conversions	$	6,270			27,659	$	0.23	$	11,599			21,074	$	0.55

     Options to purchase 313,179 and 711,867 shares of common stock were outstanding during the periods ended September 30, 2004 and 2003, respectively. For the nine month periods ended September 30, 2004 and 2003, incremental shares from the assumed conversion of stock options of 117,152 and 4,302 were included in the calculation of diluted earnings per share based upon the average market price of the common shares during the period; for the three month periods ended September 30, 2004 and 2003, no incremental shares were included in the calculation of diluted earnings per share because of the antidilutive effect.

14. Preferred Stock Dividends and Conversion

     In May 2004, the Company used a portion of the proceeds from a registered equity offering that closed in April 2004 to pay preferred stock dividends of $3,269 or $6.54 per preferred stock share. In May 2004, Glencore exercised its option to convert its $25,000 8.0% cumulative convertible preferred stock into shares of the Company’s common stock at a price of $17.92 per common share. The Company issued 1,395,089 shares of its common stock to Glencore in the conversion.

21

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

15. Components of Net Periodic Benefit Cost

	Three months ended September 30,
	Pension Benefits						Other Benefits
	2004			2003			2004			2003
Service cost	$	846		$	830		$	890		$	935
Interest cost		1,066			934			1,672			1,698
Expected return on plan assets		(1,187	)		(858	)		—			—
Amortization of prior service cost		210			304			(84	)		(84	)
Amortization of net gain		81			207			299			370
Net periodic benefit cost	$	1,016		$	1,417		$	2,777		$	2,919

	Nine months ended September 30,
	Pension Benefits						Other Benefits
	2004			2003			2004			2003
Service cost	$	2,524		$	2,512		$	3,192		$	2,813
Interest cost		3,195			2,829			5,663			5,110
Expected return on plan assets		(3,563	)		(2,598	)		—			—
Amortization of prior service cost		631			919			(253	)		(252	)
Amortization of net gain		244			626			1,532			1,112
Net periodic benefit cost	$	3,031		$	4,288		$	10,134		$	8,783

     Employer Contributions

     The Company previously disclosed in its financial statements for the year ended December 31, 2003, that it expects to contribute $3,300 to its pension plans in 2004. As of September 30, 2004, contributions of $2,206 have been made.

     Medicare Act

     In the third quarter of 2004, the Company elected to start recording the benefits of a federal reimbursement for retiree prescription drug costs that will result from the Medicare legislation enacted in December 2003. The total reduction in 2004 postretirement medical expenses for the third and fourth quarters as a result of this federal reimbursement is anticipated to be approximately $1,310, of which approximately $655 was recorded in the third quarter of 2004. Century’s adoption of FSP 106-2 in conjunction with the change in Medicare prescription drug coverage reduced these costs (see Note 11, “Recently Issued Accounting Standards” for further information).

16. Restricted Cash

     At September 30, 2004, the Company had $1,675 in restricted cash held in escrow accounts for security of workers compensation self-insurance obligations.

22

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

17. Condensed Consolidating Financial Information

     The Company’s 11.75% Senior Secured First Mortgage Notes due 2008, 7.5% Senior Unsecured Notes due 2014, and 1.75% Convertible Senior Notes due 2024 are jointly and severally and fully and unconditionally guaranteed by all of the Company’s wholly owned direct and indirect domestic subsidiaries other than the LLC and a subsidiary formed in connection with the Nordural acquisition (together with the Company’s foreign subsidiaries, the “Non-Guarantor Subsidiaries”). The Company’s policy for financial reporting purposes is to allocate expenses to subsidiaries. For the three months ended September 30, 2004 and September 30, 2003, the Company allocated total corporate expenses of $48,274 and $285 to its subsidiaries, respectively. For the nine months ended September 30, 2004 and September 30, 2003, the Company allocated total corporate expenses of $48,330 and $2,875 to its subsidiaries, respectively. Additionally, the Company charges interest on certain intercompany balances.

     Because certain Non-Guarantor Subsidiaries are not “minor” as defined in Rule 3-10(f) of Regulation S-X under the Securities Exchange Act of 1934, as amended, the Company is providing the condensed consolidating financial information required under Rule 3-10(f). See Note 6 to the Consolidated Financial Statements for information about the terms of these notes.

     The following summarized condensed consolidating balance sheets as of September 30, 2004 and December 31, 2003, condensed consolidating statements of operations for the three and nine months ended September 30, 2004 and September 30, 2003 and the condensed consolidating statements of cash flows for the nine months ended September 30, 2004 and September 30, 2003 present separate results for Century Aluminum Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries.

     This summarized condensed consolidating financial information may not necessarily be indicative of the results of operations or financial position had the Company, the Guarantor Subsidiaries or the Non-Guarantor Subsidiaries operated as independent entities.

23

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

CONDENSED CONSOLIDATING BALANCE SHEET
As of September 30, 2004

	Combined			Combined
	Guarantor			Non-Guarantor			The			Reclassifications
	Subsidiaries			Subsidiaries			Company			and Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—		$	29,914		$	46,560		$	—		$	76,474
Restricted cash		1,173			502			—			—			1,675
Accounts receivables, net		61,716			8,762			—			—			70,478
Due from affiliates		148,253			18,118			654,316			(808,593	)		12,094
Inventories		67,262			35,390			—			—			102,652
Prepaid and other current assets		2,027			2,359			4,510			—			8,896
Deferred taxes — current portion		12,796			—			—			—			12,796
Total current assets		293,227			95,045			705,386			(808,593	)		285,065
Investment in subsidiaries		69,474			—			265,019			(334,493	)		—
Property, plant and equipment, net		470,983			283,096			128			—			754,207
Intangible asset — net		—			89,891			—			—			89,891
Goodwill		—			107,259			—			—			107,259
Deferred tax asset – less current portion		—			1,181			16,165			(17,346	)		—
Other assets		15,986			—			21,990			—			37,976
Total assets	$	849,670		$	576,472		$	1,008,688		$	(1,160,432	)	$	1,274,398
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable, trade	$	11,271		$	41,336		$	—		$	—		$	52,607
Due to affiliates		89,723			—			154,275			(186,296	)		57,702
Industrial revenue bonds		7,815			—			—			—			7,815
Accrued and other current liabilities		13,898			9,798			20,541			—			44,237
Current portion of long-term debt		—			5,945			—			—			5,945
Accrued employee benefits costs – current portion		6,375			1,920			—			—			8,295
Convertible senior notes payable		—			—			175,000			—			175,000
Total current liabilities		129,082			58,999			349,816			(186,296	)		351,601
Senior secured notes payable – net		—			—			9,874			—			9,874
Senior unsecured notes payable		—			—			250,000			—			250,000
Nordural long-term debt		—			77,425			—			—			77,425
Accrued pension benefits costs – less current portion		—			—			12,003			—			12,003
Accrued postretirement benefits costs – less current portion		56,652			27,381			838			—			84,871
Other liabilities/intercompany loan		437,250			219,856			—			(622,227	)		34,879
Due to affiliates – less current portion		9,978			—			—			—			9,978
Deferred taxes – less current portion		59,235			15,791			—			(17,416	)		57,610
Total non-current liabilities		563,115			340,453			272,715			(639,643	)		536,640
Shareholders’ Equity:
Common stock		59			13			320			(72	)		320
Additional paid-in capital		188,424			234,538			414,642			(422,962	)		414,642
Accumulated other comprehensive income (loss)		(26,462	)		—			(27,103	)		26,462			(27,103	)
Retained earnings (deficit)		(4,548	)		(57,531	)		(1,702	)		62,079			(1,702	)
Total shareholders’ equity		157,473			177,020			386,157			(334,493	)		386,157
Total liabilities and equity	$	849,670		$	576,472		$	1,008,688		$	(1,160,432	)	$	1,274,398

24

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2003

	Combined									Reclassifications
	Guarantor			Non-Guarantor			The			and
	Subsidiaries			Subsidiary			Company			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	104		$	—		$	28,100		$	—		$	28,204
Accounts receivable – net		51,131			239			—			—			51,370
Due from affiliates		101,489			23,586			455,025			(569,143	)		10,957
Inventories		76,878			12,482			—			—			89,360
Prepaid and other assets		850			134			3,117			—			4,101
Deferred taxes – current portion		3,413			—			—			—			3,413
Total current assets		233,865			36,441			486,242			(569,143	)		187,405
Investment in subsidiaries		78,720			—			178,483			(257,203	)		—
Property, plant and equipment – net		489,502			5,299			156			—			494,957
Intangible asset – net		—			99,136			—			—			99,136
Other assets		14,877			—			13,951			—			28,828
Total	$	816,964		$	140,876		$	678,832		$	(826,346	)	$	810,326
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable, trade	$	13,137		$	21,692		$	—		$	—		$	34,829
Due to affiliates		25,392			525			116,538			(115,316	)		27,139
Industrial revenue bonds		7,815			—			—			—			7,815
Accrued and other current liabilities		8,929			5,740			15,485			—			30,154
Accrued employee benefits costs - current portion		7,306			1,628			—			—			8,934
Total current liabilities		62,579			29,585			132,023			(115,316	)		108,871
Long term debt – net		—			—			322,310			—			322,310
Notes payable – affiliates		—			—			14,000			—			14,000
Accrued pension benefit costs - less current portion		—			—			10,764			—			10,764
Accrued postretirement benefit costs - less current portion		53,234			24,334			650			—			78,218
Other liabilities/intercompany loan		478,892			8,237			—			(453,757	)		33,372
Deferred taxes		43,776			—			11,388			(70	)		55,094
Total noncurrent liabilities		575,902			32,571			359,112			(453,827	)		513,758
Shareholders’ Equity:
Convertible preferred stock		—			—			25,000			—			25,000
Common stock		59			—			211			(59	)		211
Additional paid-in capital		188,424			133,175			173,138			(321,599	)		173,138
Accumulated other comprehensive income (loss)		(4,582	)		—			(5,222	)		4,582			(5,222	)
Retained earnings (deficit)		(5,418	)		(54,455	)		(5,430	)		59,873			(5,430	)
Total shareholders’ equity		178,783			78,720			187,697			(257,203	)		187,697
Total	$	816,964		$	140,876		$	678,832		$	(826,346	)	$	810,326

25

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Three months ended September 30, 2004

	Combined			Combined						Reclassifications
	Guarantor			Non-Guarantor			The			and
	Subsidiaries			Subsidiaries			Company			Eliminations			Consolidated
Net sales:
Third-party customers	$	200,407		$	31,095		$	—		$	—		$	231,502
Related parties		42,815			—			—			—			42,815
		243,222			31,095			—			—			274,317
Cost of goods sold		206,384			111,063			—			(86,499	)		230,948
Reimbursement from owner		—			(86,540	)		—			86,540			—
Gross profit (loss)		36,838			6,572			—			(41	)		43,369
Selling, general and administrative expenses		7,567			—			—			—			7,567
Operating income (loss)		29,271			6,572			—			(41	)		35,802
Interest expense – third party		(6,142	)		(4,515	)		—			—			(10,657	)
Interest income		370			118			—			29			517
Net loss on forward contracts		(3,149	)		—			—			—			(3,149	)
Loss on early extinguishment of debt		(47,448	)		—			—			—			(47,448	)
Other income (expense), net		3			(20	)		—			13			(4	)
Income (loss) before taxes, minority interest and cumulative effect of change in accounting principle		(27,095	)		2,155			—			1			(24,939	)
Income tax (expense) benefit		9,524			(1,806	)		—			1,172			8,890
Net income (loss) before equity earnings (loss) of subsidiaries		(17,571	)		349			—			1,173			(16,049	)
Equity earnings (loss) of subsidiaries		(1,911	)		—			(16,049	)		17,960			—
Net income (loss)	$	(19,482	)	$	349		$	(16,049	)	$	19,133		$	(16,049	)

26

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Three months ended September 30, 2003

	Combined			Combined						Reclassifications
	Guarantor			Non-Guarantor			The			and
	Subsidiaries			Subsidiary			Company			Eliminations			Consolidated
Net sales:
Third-party customers	$	170,086		$	—		$	—		$	—		$	170,086
Related parties		31,402			—			—			—			31,402
		201,488			—			—			—			201,488
Cost of goods sold		186,891			83,524			—			(78,967	)		191,448
Reimbursement from owner		—			(78,996	)		—			78,996			—
Gross profit (loss)		14,597			(4,528	)		—			(29	)		10,040
Selling, general and administrative expenses		3,929			—			—			—			3,929
Operating income (loss)		10,668			(4,528	)		—			(29	)		6,111
Interest expense – third party		(10,334	)		(30	)		—			23			(10,341	)
Interest expense – affiliates		(1,000	)		—			—			—			(1,000	)
Interest income		83			—			—			—			83
Net loss on forward contracts		(3,481	)		—			—			—			(3,481	)
Other income (expense), net		10			(26	)		—			6			(10	)
Loss before taxes		(4,054	)		(4,584	)		—			—			(8,638	)
Income tax benefit		1,529			—			—			1,742			3,271
Net income (loss) before equity earnings (loss) of subsidiaries		(2,525	)		(4,584	)		—			1,742			(5,367	)
Equity earnings (loss) of subsidiaries		(2,842	)		—			(5,367	)		8,209			—
Net income (loss)	$	(5,367	)	$	(4,584	)	$	(5,367	)	$	9,951		$	(5,367	)

27

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Nine months ended September 30, 2004

	Combined			Combined					Reclassifications
	Guarantor			Non-Guarantor			The		and
	Subsidiaries			Subsidiaries			Company		Eliminations			Consolidated
Net sales:
Third-party customers	$	596,700		$	52,578		$	—	$			$	649,278
Related parties		120,866			—			—		—			120,866
		717,566			52,578			—		—			770,144
Cost of goods sold		599,282			294,843			—		(249,590	)		644,535
Reimbursement from owners		—			(249,705	)		—		249,705			—
Gross profit (loss)		118,284			7,440			—		(115	)		125,609
Selling, general and administrative expenses		16,966			—			—		—			16,966
Operating income (loss)		101,318			7,440			—		(115	)		108,643
Interest expense — third party		(25,053	)		(7,443	)		—		—			(32,496	)
Interest expense – related party		(380	)		—			—		—			(380	)
Interest income		627			140			—		81			848
Net loss on forward contracts		(17,146	)		—			—		—			(17,146	)
Loss on early extinguishment of debt		(47,448	)		—			—		—			(47,448	)
Other income (expense) — net		(679	)		37			—		33			(609	)
Income (loss) before taxes		11,239			174			—		(1	)		11,412
Income tax (expense) benefit		(4,636	)		(3,250	)		—		3,513			(4,373	)
Equity earnings (loss) of subsidiaries		(5,733	)		—			7,039		(1,306	)		—
Net income (loss)	$	870		$	(3,076	)	$	7,039	$	2,206		$	7,039

28

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Nine months ended September 30, 2003

	Combined			Combined					Reclassifications
	Guarantor			Non-Guarantor			The		and
	Subsidiaries			Subsidiary			Company		Eliminations			Consolidated
Net sales:
Third-party customers	$	487,287		$	—		$	—	$	—		$	487,287
Related parties		89,377			—			—		—			89,377
		576,664			—			—		—			576,664
Cost of goods sold		537,089			250,496			—		(236,443	)		551,142
Reimbursement from owners		—			(236,533	)		—		236,533			—
Gross profit (loss)		39,575			(13,963	)		—		(90	)		25,522
Selling, general and administrative expenses		12,150			—			—		—			12,150
Operating income (loss)		27,425			(13,963	)		—		(90	)		13,372
Interest expense — third party		(30,881	)		(91	)		—		78			(30,894	)
Interest expense — affiliates		(2,000	)		—			—		—			(2,000	)
Interest income		278			—			—		—			278
Net gain on forward contracts		38,423			—			—		—			38,423
Other income (expense), net		(481	)		(41	)		—		12			(510	)
Income (loss) before taxes		32,764			(14,095	)		—		—			18,669
Income tax (expense) benefit		(11,537	)		—			—		4,981			(6,556	)
Net income (loss) before minority interest and cumulative effect of change in accounting principle		21,227			(14,095	)		—		4,981			12,113
Minority interest		—			—			—		986			986
Net income (loss) before cumulative effect of change in accounting principle		21,227			(14,095	)		—		5,967			13,099
Cumulative effect of change in accounting principle, net of tax benefit of $3,430		(5,878	)		—			—		—			(5,878	)
Equity earnings (loss) of subsidiaries		(8,128	)		—			7,221		907			—
Net income (loss)	$	7,221		$	(14,095	)	$	7,221	$	6,874		$	7,221

29

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine months ended September 30, 2004

	Combined			Combined						Reclassifications
	Guarantor			Non-Guarantor			The			and
	Subsidiaries			Subsidiaries			Company			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	(16,952	)	$	88,816		$	—		$	—	$	71,864
Investing activities:
Purchase of property, plant and equipment — net		(5,437	)		(3,395	)		—			—		(8,832	)
Nordural expansion		—			(17,482	)		—			—		(17,482	)
Acquisitions, net of cash acquired		—			—			(184,869	)		—		(184,869	)
Net cash used in investing activities		(5,437	)		(20,877	)		(184,869	)		—		(211,183	)
Financing activities:
Borrowings		—			569			425,000			—		425,569
Repayment of debt – third party		—			(107,791	)		(315,055	)		—		(422,846	)
Repayment of debt – related party		—			—			(14,000	)		—		(14,000	)
Financing fees		—			—			(12,805	)		—		(12,805	)
Dividends		—			—			(3,311	)		—		(3,311	)
Intercompany transactions		22,285			69,197			(91,482	)		—		—
Issuance of common stock		—			—			214,982			—		214,982
Net cash provided by (used in) financing activities		22,285			(38,025	)		203,329			—		187,589
Net increase (decrease) in cash		(104	)		29,914			18,460			—		48,270
Cash, beginning of period		104			—			28,100			—		28,204
Cash, end of period	$	—		$	29,914		$	46,560		$	—	$	76,474

30

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine months ended September 30, 2003

	Combined			Combined						Reclassifications
	Guarantor			Non-guarantor			The			and
	Subsidiaries			Subsidiary			Company			Eliminations		Consolidated
Net cash provided by operating activities	$	75,976		$	2,066		$	—		$	—	$	78,042
Investing activities:
Purchase of property, plant and equipment, net		(11,522	)		(736	)		(131	)		—		(12,389	)
Acquisition of minority interest		—			—			(59,837	)				(59,837	)
Net cash used in investing activities		(11,522	)		(736	)		(59,968	)		—		(72,226	)
Financing activities:
Financing Fees		—			—			(297	)		—		(297	)
Dividends		—			—			(11	)		—		(11	)
Intercompany transactions		(65,013	)		(1,124	)		66,137			—		—
Issuance of common stock		—			—			3			—		3
Net cash provided by (used in) financing activities		(65,013	)		(1,124	)		65,832			—		(305	)
Net increase (decrease) in cash		(559	)		206			5,864			—		5,511
Cash, beginning of period		745			—			44,347			—		45,092
Cash, end of period	$	186		$	206		$	50,211		$	—	$	50,603

18. Equity Offering

     In April 2004, the Company completed a public equity offering of 9,000,000 shares of its common stock at a price to the public of $24.50 per share. The Company received $208,211 in net proceeds from the offering. The Company used: (1) $195,346 to fund the Nordural acquisition, including $2,652 in transaction fees and expenses; (2) $12,000 to repay the remaining principal outstanding under the Glencore Note; and (3) the remaining proceeds plus available cash to pay dividends of $3,269 on the Company’s cumulative convertible preferred stock.

19. Subsequent Events

     On November 3, 2004, the Company announced plans to further increase primary aluminum capacity at its Nordural subsidiary’s operations in Iceland.

     The decision follows an agreement reached with Hitaveita Sudurnesja and Orkuveita Reykjavikur for additional long-term supplies of electric power.

     The current expansion project to add 90,000 metric tons per year (mtpy) of capacity is being increased by 32,000 mtpy which will raise the plant’s total capacity to 212,000 mtpy by October 2006. The energy agreement includes power for an additional 8,000 mtpy of capacity that is subject to certain conditions, including the completion of a power transmission agreement. This would bring total capacity of the plant to 220,000 mtpy by late 2006. A decision on the additional 8,000 mtpy of capacity is expected in the next several months.

     The 32,000 mtpy of added capacity is estimated to cost $106 million, bringing total cost for the expansion to 212,000 mtpy to approximately $454 million. The electric power for the expansion is being supplied by the two Icelandic companies from geothermal sources at rates indexed to the LME price of primary aluminum.

31

CENTURY ALUMINUM COMPANY
Notes to Consolidated Financial Statements
Nine month periods ended September 30, 2004 and 2003
(Dollars in thousands)
(Unaudited)

     Following completion of the expansion, Nordural will have all the infrastructure and support facilities necessary for further expansion to 260,000 mtpy. This expansion would be made at relatively low capital cost. Century is in discussions with Orkuveita Reykjavikur for electric power to support this further expansion.

     The first 90,000 mtpy of the expansion will be financed through cash flow and Nordural bank financing. The financing is being arranged by Icelandic banks and is non-recourse to Century (see Note 6 — Debt). The Company is evaluating financing options for the added 32,000 mtpy of capacity.

32

FORWARD-LOOKING STATEMENTS – CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES REFORM ACT OF 1995.

          This Quarterly Report on Form 10-Q contains forward-looking statements. The Company has based these forward-looking statements on current expectations and projections about future events. Many of these statements may be identified by the use of forward-looking words such as “expects,” “anticipates,” “plans,” “believes,” “projects,” “estimates,” “should,” and “potential” and variations of such words. All of these forward-looking statements are based on estimates and assumptions made by management that, although believed to be reasonable, are inherently uncertain. There can be no assurance that any of such estimates or statements will be realized and actual results may differ materially from those contemplated by such forward looking statements. Factors that may cause such differences include:

• The Company’s high level of indebtedness reduces cash available for other purposes and limits the Company’s ability to incur additional debt and pursue its growth strategy;

• The cyclical nature of the aluminum industry causes variability in the Company’s earnings and cash flows;

• The loss of a major customer would increase the Company’s production costs at those facilities which deliver molten aluminum;

• The Company could suffer losses due to a temporary or prolonged interruption of the supply of electrical power to its facilities, which can be caused by unusually high demand, blackouts, equipment failure, natural disasters or other catastrophic events;

• Due to increasing prices for alumina, the principal raw material used in primary aluminum production, changes to or disruptions in the Company’s current alumina supply arrangements would materially impact its raw material costs;

• By expanding its geographic presence and diversifying its operations through the acquisition of bauxite mining and alumina refining assets, the Company is exposed to new risks that could adversely affect its business;

• Changes in the relative cost of certain raw materials and energy compared to the price of primary aluminum could affect the Company’s margins;

• Most of the Company’s employees are unionized and any labor dispute or failure to successfully renegotiate an existing labor agreement could materially impair the Company’s ability to conduct its production operations at its unionized facilities;

• The Company is subject to a variety of environmental laws that could result in costs or liabilities; and

• The Company may not realize the expected benefits of its growth strategy if the Company is unable to successfully integrate the businesses it acquires.

     Although the Company believes the expectations reflected in its forward-looking statements are reasonable, the Company cannot guarantee its future performance or results of operations and the risks described above should be considered when reading any forward-looking statements. All forward-looking statements in this filing are based on information available to the Company on the date of this filing; however, the Company is not obligated to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company qualifies all of the Company’s forward-looking statements by these cautionary statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

     The following discussion reflects Century’s historical results of operations, which do not include results for the Company’s interest in the Nordural facility until it was acquired in April 2004 and the additional 20% interest in the Hawesville facility until it was acquired from Glencore in April 2003.

33

     Century’s financial highlights include:

	Three months ended						Nine months ended
	September 30,						September 30,
	2004			2003			2004		2003
				(In thousands, except per share data)
Net sales
Third-party customers	$	231,502		$	170,086		$	649,278	$	487,287
Related party customers		42,815			31,402			120,866		89,377
Total	$	274,317		$	201,488		$	770,144	$	576,664
Net income (loss)	$	(16,049	)	$	(5,367	)	$	7,039	$	7,221
Net income (loss) applicable to common shareholders	$	(16,049	)	$	(5,867	)	$	6,270	$	5,721
Earnings per common share:
Basic – Income (loss) before cumulative effect of change in accounting principle	$	(0.51	)	$	(0.28	)	$	0.23	$	0.55
Basic — Cumulative effect of change in accounting principle		—			—			—	$	(0.28	)
Basic — Net income (loss)	$	(0.51	)	$	(0.28	)	$	0.23	$	0.27
Diluted – Income (loss) before cumulative effect of change in accounting principle	$	(0.51	)	$	(0.28	)	$	0.23	$	0.55
Diluted — Cumulative effect of change in accounting principle		—			—			—	$	(0.28	)
Diluted — Net income (loss)	$	(0.51	)	$	(0.28	)	$	0.23	$	0.27

     Net sales. Net sales for the three months ended September 30, 2004 increased $72.8 million or 36% to $274.3 million. Higher price realizations for primary aluminum in the third quarter 2004, due to improved London Metal Exchange (“LME”) prices and Midwest premiums for primary aluminum, contributed an additional $41.5 million in sales. Increased shipment volumes of 51.6 million pounds, primarily a result of the late April 2004 Nordural facility acquisition, accounted for the remaining $31.3 million in increased sales. Net sales for the nine months ended September 30, 2004 increased $193.5 million or 34% to $770.1 million. Higher price realizations for primary aluminum in the current period, due to an improved LME price and Midwest premium for primary aluminum, contributed an additional $110.1 million in sales. Shipment volume increased 131.7 million pounds, primarily associated with the Nordural facility acquisition beginning in late April 2004 and the additional 20% interest in the Hawesville facility beginning in April 2003, accounting for the remaining $83.4 million of the increase.

     Gross profit. Gross profit for the three months ended September 30, 2004 increased $33.4 million or 332% to $43.4 million from $10.0 million for the same period in 2003. Improved price realizations net of increased alumina costs improved gross profit by $32.5 million with increased shipment volume, primarily a result of the Nordural facility acquisition, contributing $11.5 million in additional gross profit. Partially offsetting these gains were increased power costs, $3.0 million; raw material quality, $0.9 million; increased replacement of pot cells and its effect on operational performance, $4.9 million; increased net amortization and depreciation charges, $0.6 million, and the elimination of credits to cost of goods sold for lower-of-cost or market inventory adjustments, $1.2 million.

     For the nine month period ended September 30, 2004, gross profit improved $100.1 million to $125.6 million. Improved price realizations net of increased alumina costs improved gross profit by $83.9 million with increased shipment volume, primarily a result of the Nordural facility acquisition in April 2004 and the additional 20% interest in the Hawesville facility beginning in April 2003, contributing $23.7 million in additional gross profit. Lower net depreciation and amortization charges of $1.4 million, primarily related to the intangible asset, (see Item 1, Notes to the Consolidated Financial Statements, Note 5 – Intangible Asset), and increased credits to cost of goods sold for

34

lower-of-cost or market of $0.7 million, were offset by increased power costs, $4.4 million, raw material quality, $2.5 million and costs associated with the replacement of pot cells and it’s effect on operational performance, $2.7 million.

     Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended September 30, 2004 increased $3.6 million to $7.6 million. Approximately half of the increase was a result of increased fees associated with the Company’s indirect refinancing and acquisition activities and Sarbanes Oxley Section 404 compliance work during the current quarter. The remaining increase in expense was a result of increased incentive compensation accruals in the quarter.

     Selling, general and administrative expenses for the nine months ended September 30, 2004 increased $4.8 million from the same period in 2003. The increase was primarily a result of incentive compensation expense accruals and increased fees associated with the Company’s indirect refinancing and acquisition activities and Sarbanes Oxley Section 404 compliance work during the current period.

     Net gain/loss on forward contracts. Net loss on forward contracts for the three months ended September 30, 2004 was $3.1 million as compared to a net loss on forward contracts of $3.5 million for the same period in 2003. For the nine month period ended September 30, 2004, net loss on forward contracts was $17.1 million as compared to a net gain on forward contracts of $38.4 million for the same period in 2003. The losses and gain reported for the three and nine month periods ended September 30, 2004 and September 30, 2003, respectively, primarily relate to the early termination of a fixed price forward sales contract with Glencore (see Item 1, Notes to the Consolidated Financial Statements, Note 8 – Forward Delivery Contracts and Financial Instruments).

     Loss on early extinguishment of debt: For the three and nine month periods ended September 30, 2004 the Company recorded a loss on early extinguishment of debt of $47.4 million for the one-time cost of tendering for the $325.0 million in senior secured notes due 2008.

     Tax provision. Income tax benefit for the three months ended September 30, 2004 increased $5.6 million from the same period in 2003 and the income tax expense for the nine month period ended September 30, 2004 decreased $2.2 million due to the changes in income (loss) before income taxes discussed above.

     Liquidity and Capital Resources

   Historical

	Nine months ended
	September 30,
	2004			2003
	(dollars in thousands)
Net cash provided by operating activities	$	71,864		$	78,042
Net cash used in investing activities		(211,183	)		(72,226	)
Net cash provided by (used) in financing activities		187,589			(305	)
Increase in cash	$	48,270		$	5,511

     Net cash from operating activities of $71.9 million in the first nine months of 2004 was $6.2 million lower than the same period in 2003. Exclusive of the $35.5 million settlement received during the second quarter 2003 from the termination of the Original Sales Contract and entering into the New Sales Contract with Glencore for the years 2005 through 2009 and the $50.3 million cash payment during the current quarter for the tender premium plus accrued interest for the refinancing of the Company’s senior secured notes, net cash from operating activities increased $79.7 million in the current quarter. This increase was a direct result of improved price realizations and margin contributions from the Nordural facility which was

35

acquired in April 2004, and were partially offset by increased accounts receivable balances of $10.3 million and other working capital changes for the period.

     The Company’s net cash used for investing activities during the nine month period ended September 30, 2004 increased $139.0 million from the same period in 2003. The net acquisition cost of the Nordural facility in April 2004 was $184.9 million. The net purchase price for the additional 20% interest in the Hawesville facility in April 2003 was $59.8 million. Purchases of property, plant and equipment, including the Nordural expansion costs, were $26.3 million in 2004. Purchases of property, plant and equipment were $12.4 million in 2003.

     Net cash provided by financing activities during the nine month period ending September 30, 2004 increased $187.9 million primarily due to net proceeds from the issuance of $425.0 million of debt, and the issuance of $215.0 million of common stock, which was partially offset by debt repayments of $436.8 million, consisting of payments of $315.1 million for the senior secured first mortgage notes tendered in a debt refinancing, $106.9 million for the Nordural term loan facility, the $14.0 million repayment of Glencore Note debt, and $0.8 million for other miscellaneous debt payments. Additionally, the Company paid $12.8 million of financing fees for the debt issued in the current quarter and $3.3 million payment of accrued preferred dividends in the second quarter of 2004.

   Liquidity

     The Company believes that cash flow from operations and its unused Revolving Credit Facility will provide sufficient liquidity to meet working capital needs, fund capital improvements, and provide for debt service requirements. At September 30, 2004, the Company had no outstanding borrowings and had borrowing availability of $76.7 million on its revolving credit facility, subject to customary convenants.

     The Company’s principal uses of cash are operating costs, payments of principal and interest on the Company’s outstanding debt, the funding of capital expenditures, working capital and other general corporate requirements. During 2004, the Company completed certain transactions that may materially affect the current and future financial condition and results of operations of the Company, 1) the acquisition of the Nordural facility; 2) the Gramercy acquisition; 3) the refinancing of the Company’s debt obligations, and; 4) the expansion of Nordural facility (discussed in Capital Resources below).

   The Nordural Acquisition

     On April 27, 2004, the Company completed the acquisition of Nordural ehf. The purchase price for the shares was $195.4 million. In addition, the Company assumed Nordural’s debt of approximately $190.6 million. Century used the proceeds from a registered equity offering to finance the acquisition (see Item 1, Notes to the Consolidated Financial Statements, Note 2 – Acquisitions).

   The Gramercy Acquisition

     On October 1, 2004, the Company and Noranda, Inc. jointly acquired the Gramercy alumina refinery and related Jamaican bauxite mining assets from Kaiser Aluminum & Chemical Corporation for $23,000, subject to closing adjustments. Century and Noranda each paid one-half, or $11,500, of the purchase price (see Item 1, Consolidated Financial Statements, Note 2 – Acquisitions).

     The price the Company expects to pay for alumina used by the Hawesville facility would be based on the cost of alumina production, rather than the LME price for primary aluminum. The impact of the Gramercy acquisition to the Company's cost of goods sold may not be materially different than under the Company's existing LME-based contract with Gramercy in periods of high aluminum prices such as the Company is currently experiencing. However, the Company believes that the price of alumina based on production costs at Gramercy could be materially higher than under the LME-based contract price in periods when aluminum prices are low and natural gas prices are high.

36

   The Refinancing of Debt

     In the third quarter of 2004, the Company refinanced its 11.75% senior secured first mortgage notes due 2008 (the “Notes”) with the issuance of $250 million of 7.50% senior unsecured notes due 2014 (the “Senior Unsecured Notes”) and $175 million of 1.75% convertible senior notes due 2024 (the “Convertible Notes”). The Company paid $50.3 million in tender premium, consent fees and accrued interest in connection with the redemption of $315 million principal amount of Notes. The Company used the remaining proceeds from the debt offerings and available cash to prepay $100 million of the Nordural term loan. The debt refinancing will substantially lower the future interest costs for the Company’s long-term debt (see Item 1, Consolidated Financial Statements, Note 6 – Debt).

   Capital Resources

     The Company has commenced work on an expansion of the Nordural facility that will increase its annual production capacity to 467 million pounds, or more than double its current production capacity. The current expansion project will add approximately 269 million pounds to the Nordural facility’s annual production capacity, including 71 million pounds in capacity recently added to the project after the Company reached an agreement with Hitaveita Sudurnesja hf and Orkuveita Reykjavikur for the long-term supply of additional electrical power. The Company estimates the expansion will cost approximately $454 million, including approximately $106 million for the recently added 71 million pounds in capacity.

     The Company anticipates that it will spend approximately $70.0 million on the Nordural expansion in 2004. Through September 30, 2004, the Company had outstanding capital commitments related to Nordural expansion of $159.9 million. The Company’s cost commitments for the Nordural expansion may materially change depending on the exchange rate between the US dollar and certain foreign currencies, principally the euro and the Icelandic krona (“ISK”). Approximately 84% of the outstanding commitments for the Nordural expansion are denominated in currencies other than the US dollar, primarily the euro and ISK. As of September 30, 2004, the Company had no hedges to mitigate its foreign currency exposure.

     The Company plans to finance the first 198 million pounds in additional production capacity from the expansion project through cash flow and Nordural bank financing, which is non-recourse to Century Aluminum Company, and is evaluating financing options for the 71 million pounds of capacity recently added to the expansion project. The Company has agreed to terms on a five year $310.0 million senior term loan facility with Landsbanki Islands hf. and Kaupthing Bank hf, subject to definitive agreement. Amounts borrowed will be used to repay the $71.4 million outstanding on an existing term loan held by Nordural and to finance a portion of the costs associated with the ongoing expansion of the Nordural facility. The expansion is projected to be completed by mid-2006, subject to satisfaction of various conditions, including the closing of the new term loan facility.

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   Contractual Obligations

     The Company’s contractual obligations materially changed in the third quarter of 2004 due to refinanced debt obligations and cost commitments for the Nordural expansion project. The changes resulting from these transactions and the Nordural acquisition are reflected in the specified contractual obligations provided below.

			Payments Due by Period
	Total		<1 Year		1-3 Years		3-5 Years		> 5 Years
			(dollars in millions)
Debt obligations (1)	$	526.1	$	5.9	$	11.1	$	22.2	$	486.9
Purchase obligations (2)		1,955.6		476.8		607.5		319.0		552.3
Total	$	2,481.7	$	482.7	$	618.6	$	341.2	$	1,039.2

      (1) Debt obligation includes principal repayments on the Notes, Senior Unsecured Notes, Convertible Notes, industrial revenue bonds due 2028 (the “IRB”), and the Nordural term loan facility, Nordural site lease agreements, a Nordural bank loan agreement and a Nordural power contract debt obligation. Debt obligation amounts do not include expected interest payments on these items totaling $304.8 million, of which $11.6 million would be due within a year, $56.9 million due within 1 to 3 years, $54.7 million due within 3 to 5 years, and $181.6 million due 5 years and thereafter. Except for the site lease agreements, Nordural’s debt bears interest at a variable rate based on the LIBOR rate plus an applicable margin. The future interest obligations were estimated based upon an assumed LIBOR rate of 1.5% initially, increasing to 5.0% by 2007 and steady thereafter. The IRBs’ interest rate is variable and the Company estimated future interest payments based on a rate of 1.55%.

      (2) Purchase obligations include long-term alumina, power, and anode contracts, and the Nordural expansion project commitments, but do not include any change in purchase obligations related to the Gramercy acquisition, which closed on October 1, 2004. Nordural’s power contracts and domestic alumina contracts are priced as a percentage of the LME price of primary aluminum. The Company assumed an LME price of $1,525 per metric ton for purposes of calculating expected future cash flows for these contracts. The Nordural anode contract is denominated in euros, the Company assumed a $1.20/euro conversion rate to estimate the obligations under this contract.

Environmental Expenditures and Other Contingencies

     The Company has incurred and in the future will continue to incur capital expenditures and operating expenses for matters relating to environmental control, remediation, monitoring and compliance. The aggregate environmental related accrued liabilities were $0.8 million and $0.7 million at September 30, 2004 and December 31, 2003, respectively. The Company believes that compliance with current environmental laws and regulations is not likely to have a material adverse effect on the Company’s financial condition, results of operations or liquidity; however, environmental laws and regulations may change, and the Company may become subject to more stringent environmental laws and regulations in the future. There can be no assurance that compliance with more stringent environmental laws and regulations that may be enacted in the future, or future remediation costs, would not have a material adverse effect on the Company’s financial condition, results of operations or liquidity.

     The Company has planned environmental capital expenditures of approximately $1.3 million for 2004, $0.4 million for 2005 and $0.2 million for 2006. In addition, the Company expects to incur operating expenses relating to environmental matters of approximately $4.9 million, $5.0 million, and $5.8 million in each of 2004, 2005 and 2006, respectively. As part of the Company’s general capital expenditure plan, it also expects to incur capital expenditures for other capital projects that may, in addition to improving operations, reduce certain environmental impacts.

     The Company is a defendant in several actions relating to various aspects of its business. While it is impossible to predict the ultimate disposition of any litigation, the Company does not believe that any of these lawsuits, either

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individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, results of operations or liquidity.

     Nordural is subject to various Icelandic environmental laws and regulations. While the Company does not believe that the cost of complying with these laws and regulations will have a material adverse effect on the Company’s financial condition, results of operations or liquidity, these laws and regulations are subject to change, which changes could result in increased costs.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Commodity Prices

     The Company is exposed to the price of primary aluminum. The Company manages its exposure to fluctuations in the price of primary aluminum by selling aluminum at fixed prices for future delivery and through financial instruments as well as by purchasing alumina under certain of its supply contracts at prices tied to the same indices as the Company’s aluminum sales contracts (see Item 1, Notes to the Consolidated Financial Statements, Note 8 – Forward Delivery Contracts and Financial Instruments). The Company’s risk management activities do not include trading or speculative transactions.

     Apart from the Pechiney Metal Agreement, the Glencore Metal Agreement, Original Sales Contract, New Sales Contract and Southwire Metal Agreement, the Company had forward delivery contracts to sell 194.3 million pounds and 351.8 million pounds of primary aluminum at September 30, 2004 and December 31, 2003, respectively. Of these forward delivery contracts, the Company had fixed price commitments to sell 12.8 million pounds and 70.5 million pounds of primary aluminum at September 30, 2004 and December 31, 2003, respectively, of which, 5.6 million pounds and 53.5 million pounds at September 30, 2004 and December 31, 2003, respectively, were with Glencore.

     At September 30, 2004 and December 31, 2003, the Company had fixed price financial sales contracts, primarily with Glencore, for 549.7 million pounds and 102.9 million pounds of primary aluminum, respectively, of which 538.7 million pounds and 58.8 million pounds, respectively, were designated cash flow hedges. These fixed price financial sales contracts are scheduled for settlement at various dates in 2004 through 2007. The Company had no fixed price financial purchase contracts to purchase aluminum at September 30, 2004 or December 31, 2003.

     Fixed Price Financial Sales Contracts at September 30, 2004:

			(Millions of pounds)
	2004		2005		2006		2007		Total
Aluminum		33.1		425.7		86.5		4.4		549.7

     Additionally, to mitigate the volatility of the natural gas markets, the Company enters into fixed price financial purchase contracts, accounted for as cash flow hedges, which settle in cash in the period corresponding to the intended usage of natural gas.

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Fixed Price Financial Purchase Contracts at September 30, 2004:

					(Thousands of DTH)
	2004		2005		2006		2007		2008		Total
Natural Gas		420		1,280		480		480		480		3,140

     At September 30, 2004 and December 31, 2003, the Company had fixed price financial purchase contracts for 3.1 million and 2.7 million DTH (one decatherm is equivalent to one million British Thermal Units), respectively. These financial instruments are scheduled for settlement at various dates in 2004 through 2008.

     On a hypothetical basis, a $0.01 per pound increase or decrease in the market price of primary aluminum is estimated to have an unfavorable or favorable impact of $3.4 million after tax on accumulated other comprehensive income for the contracts designated cash flow hedges, and $0.1 million on net income, for the contracts designated as derivatives, for the period ended September 30, 2004 as a result of the forward primary aluminum financial sales contracts outstanding at September 30, 2004.

     On a hypothetical basis, a $0.50 per DTH decrease or increase in the market price of natural gas is estimated to have an unfavorable or favorable impact of $1.0 million after tax on accumulated other comprehensive income for the period ended September 30, 2004 as a result of the forward natural gas financial purchase contracts outstanding at September 30, 2004.

     The Company’s metals and natural gas risk management activities are subject to the control and direction of senior management. The metals related activities are regularly reported to the Board of Directors of Century.

     Nordural. Substantially all of Nordural’s revenues are derived from a Toll Conversion Agreement whereby it converts alumina provided to it into primary aluminum for a fee based on the LME price for primary aluminum. Nordural’s revenues are subject to the risk of decreases in the market price of primary aluminum; however, Nordural is not exposed to increases in the price for alumina, the principal raw material used in the production of primary aluminum. In addition, under its current power contract, Nordural purchases power at a rate which is a percentage of the LME price for primary aluminum, providing Nordural with a natural hedge against downswings in the market for primary aluminum.

     Nordural is exposed to foreign currency risk due to fluctuations in the value of the U.S. dollar as compared to the euro and the Icelandic krona. Under its Toll Conversion and power contracts, Nordural’s revenues and power costs are based on the LME price for primary aluminum, which is denominated in U.S. dollars. There is no currency risk associated with these contracts. Nordural’s labor costs are denominated in Icelandic krona and a portion of its anode costs are denominated in euros. As a result, an increase or decrease in the value of those currencies relative to the U.S. dollar would affect Nordural’s operating margins.

     Nordural does not currently have financial instruments to hedge commodity, currency or interest rate risk. Nordural may hedge such risk in the future, through the purchase of aluminum put options and interest rate swaps which would have the effect of fixing a portion of its floating rate debt.

Interest Rates

     Interest Rate Risk. The Company’s primary debt obligations are the outstanding Senior Unsecured Notes, Convertible Notes, Notes, the Nordural debt, borrowings under its Revolving Credit Facility, if any, and the IRBs that the Company assumed in connection with the Hawesville acquisition. Because the Senior Unsecured Notes, Convertible Notes and Notes bear a fixed rate of interest, changes in interest rates do not subject the Company to changes in future interest expense with respect to these borrowings. Borrowings under the Company’s Revolving Credit Facility, if any, are at variable rates at a margin over LIBOR or the Fleet National Bank base rate, as defined in the Revolving Credit Facility. The IRBs bear interest at variable rates determined by reference to the interest rate of similar instruments in the industrial revenue bond market. At September 30, 2004, Nordural had approximately $83.4 million of long-term debt consisting primarily of obligations under the Nordural loan facility. Borrowings under Nordural’s loan facility bear interest at a margin over the

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applicable LIBOR rate, plus, under certain conditions, an applicable percentage to cover certain lender compliance costs. At September 30, 2004, Nordural had $76.9 million of liabilities which bear interest at a variable rate.

     At September 30, 2004, the Company had $84.7 million of variable rate borrowings. A hypothetical one percentage point increase in the interest rate would increase the Company’s annual interest expense by $0.8 million, assuming no debt reduction.

     The Company’s primary financial instruments are cash and short-term investments, including cash in bank accounts and other highly rated liquid money market investments and government securities.

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Item 4. Controls and Procedures

a. Evaluation of Disclosure Controls and Procedures

     As of September 30, 2004, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon that evaluation, the Company’s Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective.

b. Changes in Internal Control over Financial Reporting

     During the quarter ended September 30, 2004, there has not been any change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Stockholders

The Annual Meeting of Stockholders was held July 16, 2004. The following are the results of Stockholder voting on proposals that were presented and adopted:

1. The election of the following directors for a term of three (3) years expiring at the Annual Meeting of Stockholders to be held in 2007:

	For		Withheld
John C. Fontaine		28,777,876		946,112
John P. O’Brien		28,790,306		933,682

2. To amend the Company’s 1996 Stock Incentive Plan: (i) to extend the duration of the plan by five (5) years through February 28, 2011, and (ii) to increase the common stock reserved and available for issuance thereunder by 1,000,000 (one million) shares.

For	21,919,743
Against	3,091,756
Withheld	2,283,890
Broker Non-Vote	2,428,599

3. To ratify the appointment of Deloitte & Touche LLP as the Company’s independent auditors for the fiscal year ending December 31, 2004.

For	28,921,026
Against	791,505
Withheld	11,457

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Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits –

Exhibit No.		Exhibit Description
	4.1	Third Supplemental Indenture for the Company’s 11.75% Senior Secured First Mortgage Notes (“Mortgage Notes”), entered into as of August 6, 2004, among Century Aluminum Company, the guarantors party thereto and Wilmington Trust Company, as trustee*
	4.2	Purchase Agreement for the Company’s 7.5% Senior Notes due 2014 (“Senior Unsecured Notes”), dated August 10, 2004, among Century Aluminum Company as issuer, the guarantors party thereto and Credit Suisse First Boston LLC, as representative of the several purchasers
	4.3	Indenture for the Senior Unsecured Notes, dated as of August 26, 2004, among Century Aluminum Company as issuer, the guarantors party thereto and Wilmington Trust Company, as trustee*
	4.4	Registration Rights Agreement, dated as of August 26, 2004, among Century Aluminum Company, the guarantors party thereto and Credit Suisse First Boston LLC, as Representative of the Initial Purchasers*
	4.5	Purchase Agreement for the Company’s 1.75% Convertible Senior Notes due August 1, 2024 (“Convertible Notes”), dated as of July 30, 2004, between Century Aluminum Company and Credit Suisse First Boston LLC, as representative of the several purchasers
	4.6	Indenture for the Convertible Notes, dated as of August 9, 2004, between Century Aluminum Company as issuer and Wilmington Trust Company, as trustee**
	4.7	Supplemental Indenture No. 1 for the Convertible Notes, dated as of October 26, 2004, between Century Aluminum Company and Wilmington Trust Company, as trustee**
	4.8	Supplemental Indenture No. 2 for the Convertible Notes, dated as of October 26, 2004, among Century Aluminum Company, the guarantors party thereto and Wilmington Trust Company, as trustee.**
	4.9	Registration Rights Agreement for the Convertible Notes, dated August 9, 2004, between Century Aluminum Company and Credit Suisse First Boston LLC, as Representative of the Initial Purchasers.
	10.1	Purchase Agreement, dated as of May 17, 2004, among Kaiser Aluminum & Chemical Corporation, Kaiser Bauxite Company, Gramercy Alumina LLC and St. Ann Bauxite Limited***
	10.2	Tolling Agreement, dated August 1, 2004, between Century Aluminum Company and Glencore Ltd.****
	10.3	Consent and Third Amendment to Revolving Credit Agreement, dated as of August 4, 2004, by and among Century Aluminum Company, Berkeley Aluminum, Inc., Century Aluminum of West Virginia, Inc., Century Kentucky, Inc., Metalsco, Ltd. and NSA Ltd., as Borrowers, the Lenders and Fleet Capital Corporation as agent for the Lenders***
	31.2	Certification of Disclosure in Century Aluminum Company’s Quarterly Report by the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (13 U.S.C. 1350).
	32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (13 U.S.C. 1350).

*	Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 1, 2004.
**	Incorporated by reference to the Company’s Current Report on Form 8-K filed on November 1, 2004
***	Schedules and exhibits are omitted and will be furnished to the Securities and Exchange Commission upon request.
****	Confidential information was omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

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SIGNATURES

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

		Century Aluminum Company
Date: November 9, 2004	By:	/s/ Craig A. Davis
		Craig A. Davis
		Chairman and Chief Executive Officer
Date: November 9, 2004	By:	/s/ David W. Beckley
		David W. Beckley
		Executive Vice-President/Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Exhibit Description
4.1	Third Supplemental Indenture for the Company’s 11 3/4% Senior Secured First Mortgage Notes, entered into as of August 6, 2004, among Century Aluminum Company, the guarantors party thereto and Wilmington Trust Company, as trustee*
4.2	Purchase Agreement for the Company’s 7 1/2% Senior Notes due 2014 (“Senior Unsecured Notes”), dated August 10, 2004, among Century Aluminum Company as issuer, the guarantors party thereto and Credit Suisse First Boston LLC, as representative of the several purchasers
4.3	Indenture for the Senior Unsecured Notes, dated as of August 26, 2004, among Century Aluminum Company as issuer, the guarantors party thereto and Wilmington Trust Company, as trustee*
4.4	Registration Rights Agreement, dated as of August 26, 2004, among Century Aluminum Company, the guarantors party thereto and Credit Suisse First Boston LLC, as Representative of the Initial Purchasers*
4.5	Purchase Agreement for the Company’s 1.75% Convertible Senior Notes due August 1, 2024 (“Convertible Notes”), dated as of July 30, 2004, between Century Aluminum Company and Credit Suisse First Boston LLC, as representative of the several purchasers
4.6	Indenture for the Convertible Notes, dated as of August 9, 2004, between Century Aluminum Company as issuer and Wilmington Trust Company, as trustee**
4.7	Supplemental Indenture No. 1 for the Convertible Notes, dated as of October 26, 2004, between Century Aluminum Company and Wilmington Trust Company, as trustee**
4.8	Supplemental Indenture No. 2 for the Convertible Notes, dated as of October 26, 2004, among Century Aluminum Company, the guarantors party thereto and Wilmington Trust Company, as trustee.**
4.9	Registration Rights Agreement for the Convertible Notes, dated August 9, 2004, between Century Aluminum Company and Credit Suisse First Boston LLC, as Representative of the Initial Purchasers.
10.1	Purchase Agreement, dated as of May 17, 2004, among Kaiser Aluminum   Chemical Corporation, Kaiser Bauxite Company, Gramercy Alumina LLC and St. Ann Bauxite Limited***
10.2	Tolling Agreement, dated August 1, 2004, between Century Aluminum Company and Glencore Ltd.****
10.3	Consent and Third Amendment to Revolving Credit Agreement, dated as of August 4, 2004, by and among Century Aluminum Company, Berkeley Aluminum, Inc., Century Aluminum of West Virginia, Inc., Century Kentucky, Inc., Metalsco, Ltd. and NSA Ltd., as Borrowers, the Lenders and Fleet Capital Corporation as agent for the Lenders***
31.2	Certification of Disclosure in Century Aluminum Company’s Quarterly Report by the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (13 U.S.C. 1350).
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (13 U.S.C. 1350).

*	Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 1, 2004.
**	Incorporated by reference to the Company’s Current Report on Form 8-K filed on November 1, 2004.
***	Schedules and exhibits are omitted and will be furnished to the Securities and Exchange Commission upon request.
****	Confidential information was omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

EX-4.2

Exhibit 4.2

$250,000,000

Century Aluminum Company

and
the parties listed on the signature page hereto
as Guarantors

7.5% Senior Notes due August 15,  2014

PURCHASE AGREEMENT

August 10, 2004

CREDIT SUISSE FIRST BOSTON LLC,
  As Representative of the Several Purchasers,
    Eleven Madison Avenue,
      New York, N.Y. 10010-3629

Dear Sirs:

     1. Introductory. Century Aluminum Company, a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the several initial purchasers named in Schedule A hereto (the “Purchasers”) $250,000,000 principal amount of its 7.5% Senior Notes due 2014 (the “Offered Securities”). The Offered Securities will be unconditionally guaranteed as to payment of principal, premium, if any, and interest (the “Guarantees”), by each of the guarantors listed on the signature page hereof (the “Guarantors”). The Offered Securities are to be issued under an indenture to be dated as of August 26,  2004 (the “Indenture”), among the Company, the Guarantors and Wilmington Trust Company, as Trustee, on a private placement basis pursuant to an exemption under Section 4(2) of the United States Securities Act of 1933, as amended (the “Securities Act”), and Rule 144A (“Rule 144A”) and Regulation S (“Regulation S”) thereunder.

     Holders (including subsequent transferees) of the Offered Securities will have the registration rights set forth in the registration rights agreement (the “Registration Rights Agreement”), to be dated the Closing Date (as defined below), in substantially the form of Exhibit A hereto, for so long as such Offered Securities constitute “Transfer Restricted Securities” (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company and the Guarantors will agree to file with the Securities and Exchange Commission (the “Commission”) under the circumstances set forth therein, (i) a registration statement under the Securities Act (the “Exchange Offer Registration Statement”) relating to the Company’s 7.5% Senior Exchange Notes due 2014, guaranteed by the Guarantors, in a like aggregate principal amount as the Offered Securities issued by the Company under the Indenture, identical in all material respects to the Offered Securities (the “Exchange Securities”), to be offered in exchange for the Offered Securities (such offer to exchange being referred to as the “Exchange Offer”) and the Subsidiary Guarantees thereof and (ii) if required by the terms of the Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 under the Securities Act (the “Shelf Registration Statement” and, together with the Exchange Offer Registration Statement, the “Registration Statements”) relating to the resale by certain holders of the Offered Securities, and to use their best efforts to cause such

1

Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer.

       2. Representations and Warranties of the Company and the Guarantors. The Company and each of the Guarantors jointly and severally represent and warrant to, and agree with, the several Purchasers that:

     (a) A preliminary offering circular and an offering circular relating to the Offered Securities to be offered by the Purchasers have been prepared by the Company. Such preliminary offering circular (the “Preliminary Offering Circular”) and offering circular (the “Offering Circular”), including documents incorporated by reference therein, and as supplemented as of the date of this Agreement, are hereinafter collectively referred to as the “Offering Document”. As of its date the Preliminary Offering Circular did not, and on the date of this Agreement, the Offering Circular does not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Offering Document based upon written information furnished to the Company by any Purchaser through Credit Suisse First Boston LLC (“CSFB”) specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 7(b) hereof. Except as disclosed in the Offering Document, on the date of this Agreement, the Company’s Annual Report on Form 10-K most recently filed with the Commission and all subsequent reports (collectively, the “Exchange Act Reports”) which have been filed by the Company with the Commission or sent to shareholders pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) do not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder.

     (b) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority to own its properties and conduct its business as described in the Offering Document; and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified or in good standing would not have a material adverse effect on the Company and its subsidiaries taken as a whole.

     (c) Each subsidiary of the Company has been duly organized and is validly existing as a corporation, limited liability company or limited partnership in good standing under the laws of the jurisdiction of its organization, with power and authority (corporate, limited liability company or limited partnership) to own its properties and conduct its business as described in the Offering Document; and each subsidiary of the Company is duly qualified to do business as a foreign corporation, limited liability company or limited partnership in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified or in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; all of the issued and outstanding shares of capital stock or other equity interests of each subsidiary of the Company has been duly authorized and validly issued and is fully paid and nonassessable or, in the case of any subsidiary that is not a corporation, all necessary actions under the limited liability company act or the limited partnership act under which the subsidiary was organized and the subsidiary’s constituent documents have been taken for the purchase of such subsidiary’s equity interests; and the capital stock or other equity interests of each subsidiary owned by the Company, directly or through subsidiaries, is owned free from liens, encumbrances and defects except for (i) encumbrances on the Company’s

2

ability to dispose of the stock of Berkeley Aluminum, Inc. pursuant to the Amended and Restated Owners’ Agreement dated as of January 26, 1996, as amended heretofore, governing the use and ownership of the Mt. Holly facility, (ii) the rights of Glencore Ltd. and Glencore Acquisition I LLC under that certain Security Agreement dated April 1, 2003 respecting Hancock Aluminum LLC’s membership interest in Century Aluminum of Kentucky LLC, (iii) liens, encumbrances, equities or claims under the Indenture dated April 2, 2001 relating to the Company’s 11 3/4% Senior Secured First Mortgage Notes due 2008 (“the 2001 Indenture”), and (iv) liens, encumbrances, equities or claims under Nordura’s senior term loan facility dated September 2, 2003.

     (d) This Agreement has been duly authorized, executed and delivered by the Company and each Guarantor.

     (e) Each of the Indenture and the Registration Rights Agreement has been duly authorized by the Company and each Guarantor, and when executed and delivered by the Company and such Guarantors, will be a valid and binding obligation of each such person, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights, general principles of equity (regardless of whether considered in an action at law or in equity) and limitations on the enforceability of indemnification or contribution provisions because of considerations of public policy.

     (f) The Offered Securities have been duly authorized; and when the Offered Securities are executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Purchasers pursuant to this Agreement, such Offered Securities will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity (regardless of whether considered in an action at law or in equity).

     (g) Each Guarantor has duly authorized its Guarantee of the Offered Securities and, when the Offered Securities are executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Purchasers in accordance with the terms of this Agreement, such Guarantee will be a valid and binding obligation of such Guarantor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity (regardless of whether considered in an action at law or in equity).

     (h) The Exchange Securities and the Guarantees thereof have been duly authorized by the Company and each Guarantor; and when the Exchange Securities are issued, executed and authenticated in accordance with the terms of the Exchange Offer and the Indenture, the Exchange Securities will be entitled to the benefits of the Indenture and will be the valid and legally binding obligations of the Company and the Guarantors, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity (regardless of whether considered in an action at law or in equity).

     (i) The execution and delivery by the Company and each of the Guarantors of, and the performance by the Company and each of the Guarantors of its obligations under, this Agreement, the Indenture and the Registration Rights Agreement, and the consummation of the transactions contemplated hereby and thereby, will not contravene in any material respect any provision of

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applicable law or regulation or the certificate of incorporation or by-laws or other constituent documents of the Company or any of its subsidiaries or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required to be obtained by the Company or its subsidiaries for the performance by the Company or any of the Guarantors of their respective obligations under this Agreement and the Registration Rights Agreement in connection with the issuance and sale of the Offered Securities and the Guarantees thereof by the Company and the Guarantors, except such as are disclosed in the Offering Document as may be required to comply with the Company’s and the Guarantors’ obligations under the Registration Rights Agreement under federal and state securities laws or as may be required to comply with the securities or Blue Sky laws of the various states in connection with the offer and sale of the Offered Securities (including the Guarantees thereof).

     (j) The Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the Securities Exchange Act of 1934 and files reports with the Commission on the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.

     (k) No securities of the same class (within the meaning of Rule 144A(d)(3)(i)) as the Offered Securities are listed on any national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.

     (1) Assuming compliance by the Purchasers with their representations and warranties set forth in Section 4, it is not necessary in connection with the offer, sale and delivery of the Offered Securities to the Purchasers and the offer and sale of the Offered Securities by the Purchasers in the manner contemplated by this Agreement to register the Offered Securities (including the Guarantees) under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended.

     (m) None of the Company, the Guarantors nor any of their affiliates, nor any person acting on any of their behalf (other than the Purchasers, as to whom the Company and the Guarantors make no representation) (i) has offered or sold the Offered Securities or any security of the same class or series as the Offered Securities which is or will be integrated with the sale of the Offered Securities in a manner that would require the registration under the Securities Act of the Offered Securities, (ii) has offered or will offer or sell the Offered Securities in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (iii) has engaged or will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the Offered Securities and the Company and its affiliates and any person acting on its or their behalf (other than the Purchasers, as to whom the Company and Guarantors make no representation) have complied and will comply with the offering restrictions requirements of Regulation S. The Company has not entered and will not enter into any contractual arrangement with respect to the distribution of the Offered Securities except for this Agreement from the date hereof until the Closing Date.

     (n) The sale of the Offered Securities pursuant to Regulation S is not part of a plan or scheme to evade the registration provisions of the Securities Act.

     (o) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in

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the Offering Circular (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement).

     (p) Except as disclosed in the Offering Document, there are no pending actions, suits or proceedings against or affecting the Company, any of its subsidiaries or any of their respective properties that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a material adverse effect on the Company and its subsidiaries, taken as a whole, or would materially and adversely affect the ability of the Company or any Guarantor to perform its obligations under the Indenture, this Agreement, or the Registration Rights Agreement; and, to the knowledge of the Company and the Guarantors, no such actions, suits or proceedings are threatened or contemplated.

     (q) Neither the Company nor any Guarantor is and after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Offering Document, none will be an “investment company” as defined in the United States Investment Company Act of 1940 (the “Investment Company Act”).

     (r) The Company and its subsidiaries (1) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (2) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (3) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

     (s) Other than as disclosed in the Offering Document, the Company and its subsidiaries do not have any costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

     (t) There are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company other than the Registration Rights Agreement dated August 9, 2004, or to require the Company to include any securities with the securities registered pursuant to any Registration Statement.

     (u) Neither the Company nor any of its subsidiaries (i) is in violation of its respective charter or by-laws or similar organizational documents or (ii) is in default in the performance or observance of any obligation, agreement, covenant or condition contained in any bond, debenture, note or other evidence of indebtedness, or in any lease, contract, indenture, deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company or any of its subsidiaries is a party, or by which it or any of its subsidiaries or their respective properties may be bound, except where such default would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole; and neither the Company nor any of its subsidiaries is in violation of any law, order, rule, regulation, writ, injunction, judgment or decree of any court, government or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or over their respective properties except

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where such violations would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

     (v) Each of the contracts set forth on Schedule B hereto (the “Material Operating Contracts”) has been duly authorized, executed and delivered by, and constitutes a valid and binding obligation of, the Company and/or its subsidiaries party thereto; (ii) each of the Material Operating Contracts is in full force and effect as of the date hereof and, as of the Closing Date, will be in full force and effect; (iii) neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company, any of the other parties thereto, is, or with the giving of notice or lapse of time or both would be, in violation of or in default under any of the Material Operating Contracts, except for violations and defaults which singly or in the aggregate would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.

     (w) Subsequent to the date as of which information is given in the Offering Circular (exclusive of any amendment or supplement thereto subsequent to the date of this Agreement), (i) the Company and its subsidiaries have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction not in the ordinary course of business; (ii) the Company has not purchased any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock other than ordinary and customary dividends; and (iii) there has not been any material change in the capital stock, short-term debt or long-term debt of the Company and its subsidiaries, except in each case as described in the Offering Circular.

     (x) Except as described in the Offering Document, the Company and its subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title to all personal property owned by them, in each case which is material to the business of the Company and its subsidiaries, taken as a whole, in each case free and clear of all liens, encumbrances and defects except such liens, encumbrances and defects that do not in the aggregate materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries, in each case except as described in the Offering Document.

     (y) The Company and its subsidiaries own or possess, or can acquire on reasonable terms, all material patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names currently employed by them in connection with the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the Company and its subsidiaries, taken as a whole.

     (z) No material labor dispute with the employees of the Company or any of its subsidiaries exists, or, to the knowledge of the Company, is imminent; and the Company is not aware of any existing, threatened or imminent labor disturbances by the employees of any of its principal suppliers, manufacturers or contractors that could, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

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     (aa) The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; neither the Company nor its subsidiaries has been refused any material insurance coverage sought or applied for; and neither the Company nor its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, except as described in the Offering Document.

     (bb) Except as described in the Offering Document, the Company and its subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and have made all declarations and filings with, all federal, state, local and other governmental authorities (including foreign regulatory agencies), all self-regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, except such as would not, singly or in the aggregate, result in a material adverse effect on the Company and its subsidiaries, taken as a whole, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the Company and its subsidiaries, taken as a whole, except as described in the Offering Document.

     (cc) Except as disclosed in the Offering Document, there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Purchaser for a brokerage commission, finder’s fee or other like payment in connection with this offering.

     (dd)The Company and each of its subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

     (ee) The financial statements of the Company included in the Offering Document present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis; the financial statements of Nordural hf, an Icelandic company and wholly owned subsidiary of the Company (“Nordural”), incorporated by reference in the Offering Document present fairly in all material respects the financial position of Nordural as of the dates shown and its results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with the applicable rules and regulations of the Commission; and the assumptions used in preparing the pro forma financial statements included in the Offering Document provide a reasonable basis for presenting the material effects directly attributable to the transactions or events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma columns therein reflect the proper application of those adjustments to the corresponding historical financial statement amounts.

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     (ff) (i) Deloitte & Touche LLP, which has certified certain financial statements of the Company and certain of its subsidiaries, and (ii) to the best of the Company’s knowledge, PricewaterhouseCoopers hf, which has certified certain financial statements of Nordural, are each independent public accountants as required by the Securities Act and the rules and regulations of the Commission thereunder.

     (gg) The Company is not engaged in discussions regarding any possible acquisitions or dispositions that would be required to be disclosed if the Offering Circular were a Registration Statement on Form S-l and are not so disclosed.

     (hh) Immediately prior to and after the Closing Date, the present fair saleable value of the assets of each Guarantor (other than Virgin Islands Alumina Corporation LLC, Century Aluminum Holdings, Inc. and Century Louisiana, Inc.) will exceed the amount that will be required to be paid on or in respect of the existing debts and other liabilities (including contingent liabilities but excluding guarantees under the 2001 Indenture governing the Company’s 11¾% Senior Secured First Mortgage Notes (the “First Mortgage Notes”) with regard to the First Mortgage Notes being repurchased pursuant to the Company’s tender offer dated July 29, 2004 for its outstanding First Mortgage Notes) of such Guarantor as they become absolutely due and matured. The Company and each Guarantor believes that the assets of each Guarantor, immediately prior to and after the Closing Date, will not constitute unreasonably small capital to permit it to carry out its business as conducted or as proposed to be conducted. No Guarantor intends to, and none believes that it will, incur debts beyond its ability to pay such debts as they mature. For purposes of this representation, the amount of any liability (including contingent liabilities) at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that is, or can reasonably be expected to become, an actual or matured liability.

     (ii) Schedule C hereto is a true and complete list of all of the Company’s significant subsidiaries (as defined in Rule l-02(w) of Regulation S-X) as of the date of this Agreement (the “Significant Subsidiaries”).

     (jj) The Guarantors party hereto constitute all of the Domestic Restricted Subsidiaries (as defined in the Indenture) of the Company as of the Closing Date (other than Century Aluminum of Kentucky, LLC and any Foreign-Owned Parent Holding Company (as defined in the Offering Document)).

     (kk)The agreements and other documents (1) filed as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 or filed as an exhibit to any subsequent filing under the Exchange Act, (2) relating to the Company’s issuance of its 1.75% Convertible Senior Notes due August 1, 2004, together with (3) the Third Amendment and Consent to Revolving Credit Agreement dated as of August 4, 2004, the Purchase Agreement dated May 17, 2004 relating to the Gramercy Acquisition, and the Supplemental Indenture to the 2001 Indenture dated as of August 6, 2004, all to be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, constitute all of the outstanding material contracts of the Company and its subsidiaries taken as a whole required to be filed as exhibits under Item 601 of Regulation S-K.

     (ll) To the Company’s knowledge, the section in the Offering Circular entitled “The Planned Gramercy Acquisition” does not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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     3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to sell to the Purchasers, and the Purchasers agree, severally and not jointly, to purchase from the Company, at a purchase price of 97.75% of the principal amount thereof plus accrued interest, if any, from August 26, 2004 to the Closing Date (as hereinafter defined), the respective principal amounts of Offered Securities set forth opposite the names of the several Purchasers in Schedule A hereto.

     The Company will deliver against payment of the purchase price the Offered Securities in the form of one or more permanent global securities in definitive form (the “Global Securities”) deposited with the Trustee as custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee for DTC. Interests in any permanent global securities will be held only in book-entry form through DTC, except in the limited circumstances described in the Offering Document. Payment for the Offered Securities shall be made by the Purchasers in Federal (same day) funds by wire transfer to an account specified by the Company drawn to the order of the Company at the office of Davis Polk & Wardwell, New York, N.Y., at 10:00 A.M. (New York time), on August 26, 2004, or at such other time not later than seven full business days thereafter as CSFB and the Company determine, such time being herein referred to as the “Closing Date,” against delivery to the Trustee as custodian for DTC of the Global Securities representing all of the Offered Securities. The Global Securities will be made available for checking at Davis Polk & Wardwell, New York, N.Y., at least 24 hours prior to the Closing Date.

     The Company hereby agrees that, without the prior written consent of Credit Suisse First Boston LLC on behalf of the Purchasers, it will not, during the period beginning on the date hereof and continuing to and including the Closing Date, offer, sell, contract to sell or otherwise dispose of any debt of the Company or any Guarantor or warrants to purchase debt of the Company or any Guarantor substantially similar to the Offered Securities (other than the sale of the Offered Securities under this Agreement or any guarantee by any Guarantor of the Company’s 1.75% Convertible Senior Notes); provided that if this Agreement terminates and the Closing Date does not occur, this lockup shall expire upon such termination.

     4. Representations by Purchasers; Resale by Purchasers.

     (a) Each Purchaser severally represents and warrants to the Company that it is a “Qualified Institutional Buyer” as defined in Rule 144A (a “QIB”).

     (b) Each Purchaser severally acknowledges that the Offered Securities have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the Securities Act. Each Purchaser severally represents and agrees that, with respect to offers and sales made outside the United States, it has offered and sold the Offered Securities and will offer and sell the Offered Securities (i) as part of its distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the offering and the Closing Date, only in accordance with Rule 903 of Regulation S or Rule 144A. Accordingly, neither such Purchaser nor its affiliates, nor any persons acting on its or their behalf, have engaged or will engage in any directed selling efforts with respect to the Offered Securities, and such Purchaser, its affiliates and all persons acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S and Rule 144A. Each Purchaser severally agrees that, at or prior to confirmation of sale of the Offered Securities, other than a sale pursuant to Rule 144A, such Purchaser will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases the Offered Securities from it during the restricted period a confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933 (the “Securities Act”) and may not be offered or sold within the United States or to, or

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for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the date of the commencement of the offering and the closing date, except in either case in accordance with Regulation S (or Rule 144A if available) under the Securities Act. Terms used above have the meanings given to them by Regulation S.”

     Terms used in this subsection (b) have the meanings given to them by Regulation S.

     (c) Each Purchaser severally agrees that it and each of its affiliates has not entered and will not enter into any contractual arrangement with respect to the distribution of the Offered Securities except for any such arrangements with its affiliates, the other Purchasers or affiliates of the other Purchasers or with the prior written consent of the Company.

     (d) Each Purchaser severally agrees that it and each of its affiliates will not offer or sell the Offered Securities in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, including, but not limited to (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. Each Purchaser severally agrees, with respect to resales made in reliance on Rule 144A of any of the Offered Securities, to deliver either with the confirmation of such resale or otherwise prior to settlement of such resale a notice to the effect that the resale of such Offered Securities has been made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A.

     (e) Each of the Purchasers severally represents and agrees that (i) it has not offered or sold and prior to the expiry of a period of six months from the closing date, will not offer or sell any Offered Securities to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) received by it in connection with the issue or sale of any Offered Securities in circumstances in which section 21(1) of the FSMA does not apply to the Company or any Guarantor; and (iii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Offered Securities in, from or otherwise involving the United Kingdom.

     5. Certain Agreements of the Company and Guarantors. The Company and each Guarantor agrees with the several Purchasers that:

     (a) The Company will advise CSFB promptly of any proposal to amend or supplement the Offering Document and will not effect such amendment or supplementation without CSFB’s consent, which will not be unreasonably withheld. If, at any time prior to the completion of the resale of the Offered Securities by the Purchasers any event occurs as a result of which the Offering Document as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Offering Document is delivered to a purchaser, not misleading, the Company promptly will notify CSFB of such event and promptly will prepare, at its own expense, an amendment or supplement which will correct such statement or omission. Neither CSFB’s consent to, nor the Purchasers’ delivery to offerees or investors of, any such amendment or supplement shall constitute a

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waiver of any of the conditions set forth in Section 6. The Purchasers agree to notify the Company of the completion of the resale of the Offered Securities by the Purchasers.

     (b) The Company will furnish to CSFB copies of any preliminary offering circular, the Offering Document and all amendments and supplements to such documents, in each case as soon as available and in such quantities as CSFB requests. At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company will promptly furnish or cause to be furnished to CSFB (and, upon request, to each of the other Purchasers) and, upon request of holders and prospective purchasers of the Offered Securities, to such holders and purchasers, copies of the information required to be delivered to holders and prospective purchasers of the Offered Securities pursuant to Rule 144A(d)(4) (or any successor provision thereto) in order to permit compliance with Rule 144A in connection with resales by such holders of the Offered Securities. The Company will pay the expenses of printing and distributing to the Purchasers all such documents.

     (c) The Company will endeavor to arrange for the qualification of the Offered Securities (including the Guarantees) for sale under the laws of such states in the United States as CSFB reasonably designates and will continue such qualifications in effect so long as required for the resale of the Offered Securities by the Purchasers provided that the Company will not be required to qualify as a foreign corporation or to file a general consent to service of process in any such state or to subject itself to taxation in any jurisdiction where it is not now so subject.

     (d) During the period of two years after the Closing Date, the Company and the Guarantors will not, nor will the Company permit any of its other subsidiaries to, and it will use its best efforts to cause its other affiliates (as defined in Rule 144 under the Securities Act) not to, resell any of the Offered Securities that have been reacquired by any of them that constitute “restricted” securities under Rule 144 except pursuant to an effective registration statement under the Securities Act.

     (e) During the period of two years after the Closing Date, the Company will not take any steps that would cause the Offered Securities not to be eligible to be offered under Rule 144A.

     (f) None of the Company, any Guarantor or any of the Company’s or any Guarantors’ affiliates or any person acting on its or their behalf (other than the Purchasers, as to whom the Company makes no representation) will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the Offered Securities and the Company, each Guarantor and each of the Company’s and each Guarantor’s affiliates and any person acting on its or their behalf (other than the Purchasers, as to whom the Company and Guarantors make no representation) have complied and will comply with the offering restrictions requirements of Regulation S.

     (g) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid all expenses of the Company and the Guarantors incidental to the performance of their respective obligations under this Agreement, the Indenture and the Registration Rights Agreement including (i) the fees and expenses of the Trustee and its professional advisers; (ii) all expenses in connection with the execution, issue, authentication, packaging and initial delivery of the Offered Securities (including the Guarantees), the preparation and printing of this Agreement, the Registration Rights Agreement, the Offered Securities, the Indenture, the Offering Document and amendments and supplements thereto, and any other document relating to the issuance, offer, sale and delivery of the Offered Securities (but not including the fees for professional services of counsel to the Purchasers); (iii) the cost of qualifying the Offered Securities for trading in The Portal^SM Market (“PORTAL”) of The Nasdaq Stock Market, Inc. and any expenses incidental thereto; (iv) the cost of any advertising approved by the Company in connection with the issue of the Offered Securities; (v) any expenses (including fees and disbursements of counsel) incurred in connection with qualification of the Offered Securities

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(including the Guarantees) for sale under the laws of such jurisdictions as CSFB designates and the printing of memoranda relating thereto; (vi) any fees charged by investment rating agencies for the rating of the Offered Securities; (vii) any expenses incurred in distributing the Preliminary Offering Circular and the Offering Circular (including any amendments and supplements thereto and any documents delivered therewith) to the Purchasers and potential investors; and (viii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company and any such lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the road show. It is understood, however, that, except as provided in this paragraph (g), Section 7 and Section 9, the Purchasers will pay all of their costs and expenses, including fees and disbursements of their counsel, transfer taxes payable on resale of any of the Offered Securities by them and any advertising expenses in connection with any offers they may make.

     (h) In connection with the offering, until CSFB shall have notified the Company and the other Purchasers of the completion of the resale of the Offered Securities, neither the Company nor any Guarantor nor any of the Company’s or any Guarantor’s affiliates has or will, either alone or with one or more other persons, bid for or purchase for any account in which it or any of its affiliates has a beneficial interest any Offered Securities or attempt to induce any person to purchase any Offered Securities; and neither the Company nor any Guarantor nor any of the Company’s or any Guarantor’s affiliates will make bids or purchases for the purpose of creating actual, or apparent, active trading in, or of raising the price of, the Offered Securities.

     6. Conditions of the Obligations of the Purchasers. The obligations of the several Purchasers to purchase and pay for the Offered Securities on the Closing Date will be subject to the accuracy of the representations and warranties on the part of the Company and the Guarantors herein, to the accuracy of the statements of officers of the Company and the Guarantors made pursuant to the provisions hereof, to the performance by the Company and the Guarantors of its obligations hereunder and to the following additional conditions precedent:

     (a)(l) The Purchasers shall have received a letter, dated the date of this Agreement, of Deloitte & Touche LLP confirming that it is an independent public accountant within the meaning of the Securities Act and the applicable published rules and regulations thereunder (“Rules and Regulations”) and to the effect that:

     (i) in its opinion the financial statements examined by it and included in the Offering Document and in the Exchange Act Reports comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published Rules and Regulations;

     (ii) they have performed the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in Statement of Auditing Standards No. 100, Interim Financial Information, on the unaudited financial statements included in the Offering Document;

     (iii) on the basis of the review referred to in clause (ii) above, a reading of the latest available interim financial statements of the Company, inquiries of officials of the Company who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that:

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     (A) the unaudited financial statements included in the Offering Document or in the Exchange Act Reports do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published Rules and Regulations or any material modifications should be made to such unaudited financial statements for them to be in conformity with generally accepted accounting principles;

     (B) at the date of the latest available balance sheet read by such accountants, or at a subsequent specified date not more than three business days prior to the date of this Agreement, there was any change in the capital stock, any increase in long-term debt of the Company and its consolidated subsidiaries or any decrease in consolidated net current assets or stockholders’ equity, as compared with amounts shown on the latest balance sheet included in the Offering Document; or

     (C) for the period from the closing date of the latest income statement included in the Offering Document to the closing date of the latest available income statement read by such accountants or at a subsequent specified date not more than three business days prior to the date of this Agreement there were any decreases, as compared with the corresponding period in the preceding year and with the period of corresponding length ended the date of the latest income statement included in the Offering Document, in consolidated net sales, operating income or in the total or per-share amounts of net income;

except in all cases set forth in clauses (B) and (C) above for changes, increases or decreases which the Offering Document discloses have occurred or may occur or which are described in such letter;

     (iv) on the basis of a reading of the pro forma financial statements included in the Offering Document, inquiries of officials of the Company who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that the pro forma financial statements for the year ended December 31, 2003 and the six-month period ended June 30, 2004 included in the Offering Document do not comply as to form in all material respects with the applicable accounting requirements of Rule 11-02 of the Regulation S-X and that the pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements; and

     (v) they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Offering Document and the Exchange Act Reports (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Company and its subsidiaries subject to the internal controls of the Company’s accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter.

     (a)(2) The Purchasers shall have received a letter, dated the date of this Agreement, of PricewaterhouseCoopers hf confirming that it is an independent public accountant within the meaning of the Securities Act and Rules and Regulations and to the effect that:

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     (i) in its opinion the financial statements examined by it and included in the Offering Document and in the Exchange Act Reports comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published Rules and Regulations;

     (ii) they have performed the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in Statement of Auditing Standards No. 100, Interim Financial Information, on the unaudited financial statements of Nordural as of and for the period ending March 31, 2004;

     (iii) on the basis of the review referred to in clause (ii) above, inquiries of officials of the Company who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that there should be any material modifications to the unaudited financial statements referred to in (ii) above for them to be in conformity with generally accepted accounting principles; and

     (iv) they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Offering Document and the Exchange Act Reports (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Company and its subsidiaries subject to the internal controls of the Company’s accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter.

     (b) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date, there shall not have occurred: (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as one enterprise which, in the judgment of a majority in interest of the Purchasers, including CSFB, is material and adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Offered Securities; (ii) other than with respect to the Company’s First Mortgage Notes, its 1.75% Convertible Senior Notes due 2024 or the Offered Securities, any downgrading in the rating of any debt securities of the Company by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the Securities Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) or any announcement that the Company has been placed on negative outlook; (iii) any change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of a majority in interest of the Purchasers, including CSFB, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Offered Securities, whether in the primary market or in respect of dealings in the secondary market; (iv) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange, the Nasdaq National Market or the London Metal Exchange or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (v) any general moratorium on commercial banking activities in New York declared by U.S. Federal or New York authorities; (vi) any major disruption of settlements of securities or clearance services in the United States; or (vii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the judgment of a majority in interest of the Purchasers including CSFB, the effect of

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any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the offering or sale of and payment for the Offered Securities.

     (c) The Purchasers shall have received an opinion, dated the Closing Date, of Gerald J. Kitchen, Executive Vice President, General Counsel and Chief Administrative Officer of the Company, to the effect that:

     (i) all of the issued shares of capital stock or other equity interests of each subsidiary of the Company other than Century Bermuda I Limited, Century Bermuda II Limited, Nordural HF, Nordural Holdings I eHF and Nordural Holdings II eHF (the “Foreign Subsidiaries”) have been duly and validly authorized and issued, are fully paid and non-assessable, or in the case of any subsidiary that is not a corporation, all necessary actions under the limited liability company act or the limited partnership act under which the subsidiary was organized and the subsidiary’s constituent documents have been taken for the purchase of such subsidiary’s equity interests and are owned by the Company either directly or through wholly owned subsidiaries, free and clear of all liens, encumbrances, equities or claims except for (A) encumbrances on the Company’s ability to dispose of the stock of Berkeley Aluminum, Inc. pursuant to the Amended and Restated Owners’ Agreement dated as of January 26, 1996, as amended heretofore, governing the use and ownership of the Mt. Holly facility, (B) the rights of Glencore Ltd. and Glencore Acquisition I LLC under that certain Security Agreement dated April 1, 2003 respecting Hancock Aluminum LLC’s membership interest in Century Aluminum of Kentucky LLC and (C) liens, encumbrances, equities or claims under the Indenture.

     (ii) each of the Material Operating Contracts (other than those numbered 14 through 19 as to which such counsel need not express any opinion) has been duly authorized, executed and delivered by, and constitutes a valid and binding obligation of, the Company and/or its subsidiaries party thereto, as applicable; each of the Material Operating Contracts (other than those numbered 14 through 19 as to which such counsel need not express any opinion) is in fall force and effect as of the date hereof; and

     (iii) the Company and its subsidiaries (other than the Foreign Subsidiaries) (i) are in compliance with any and all applicable federal environmental laws of the United States of America (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

     In addition, such counsel shall state in a separate letter that such counsel has participated in conferences with officers and other representatives of the Company at which conferences such counsel discussed the contents of the Offering Circular, including the documents incorporated by reference therein and related matters, and nothing has come to the attention of such counsel that causes such counsel to believe that (A) each document filed pursuant to the Exchange Act and incorporated by reference in the Offering Circular (except for the financial statements and financial schedules and other financial and statistical data included therein or omitted therefrom, as to which such counsel need not express any comment) did not comply as to form when filed in all material respects with the requirements of the Exchange Act and the applicable rules and regulations of the

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Commission thereunder, (B) the Offering Circular, including the documents incorporated by reference therein (except for the financial statements and financial schedules and other financial and statistical data included therein or omitted therefrom, as to which such counsel need not express any comment) as of its date or as of the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

     (d) The Purchasers shall have received an opinion, dated the Closing Date, of Curtis, Mallet-Prevost, Colt & Mosle LLP, counsel for the Company and the Guarantors, to the effect that:

     (i) the Company has been duly incorporated and validly existing as a corporation in good standing under the laws of the State of Delaware, has the corporate power and authority to own its properties and conduct its business as described in the Offering Document; and the Company is duly qualified to transact business as a foreign corporation and is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole;

     (ii) each of the Guarantors and each of the other Significant Subsidiaries of the Company (other than the Foreign Subsidiaries), as to which such counsel need express no opinion) is validly existing as a corporation, limited liability company or limited partnership in good standing under the laws of the jurisdiction of its organization and has the corporate, limited liability company or limited partnership power and authority to own its properties and conduct its business as described in the Offering Document; and each such subsidiary is duly qualified to transact business as a foreign corporation, limited liability company or limited partnership and is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole;

     (iii) all of the issued and outstanding capital stock of each Guarantor and of each other Significant Subsidiary (other than the Foreign Subsidiaries) of the Company that is a corporation is owned by the Company, directly or through subsidiaries, free of any perfected security interests;

     (iv) the Indenture has been duly authorized, executed and delivered by the Company and each Guarantor; the Offered Securities have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Purchasers in accordance with the terms of the Purchase Agreement, the Offered Securities will constitute valid and legally binding obligations of the Company enforceable against it in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity; and the Indenture conforms in all material respects to the requirements of the Trust Indenture Act and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder;

     (v) each Guarantor has duly authorized its Guarantee of the Offered Securities and, when the Offered Securities delivered are executed and delivered on the

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Closing Date, the Guarantee of each Guarantor will constitute a valid and legally binding obligation of such Guarantor, enforceable against it in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity;

     (vi) the Exchange Securities and the Guarantees thereof have been duly authorized by the Company and each Guarantor; and when the Exchange Securities are issued, executed and authenticated and delivered in accordance with the terms of the Exchange Offer and the Indenture, the Exchange Securities will be entitled to the benefits of the Indenture and will be the valid and legally binding obligations of the Company and the Guarantors, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity;

     (vii) the execution and delivery by the Company and each of the Guarantors, and the performance by the Company and each of the Guarantors of their obligations under, the Indenture, this Agreement and the Registration Rights Agreement to which any of the Company or the Guarantors is a party, including the issuance and sale of the Offered Securities and compliance with the terms and provisions thereof, and the use of proceeds as set forth in the Offering Document under the section thereof entitled “Use of Proceeds,” will not contravene any provision of applicable law or the certificate of incorporation or by-laws or other constituent documents of the Company, any Guarantor or any of the Company’s other Significant Subsidiaries (other than the Foreign Subsidiaries as to which such counsel need express no opinion) or, to the best of such counsel’s knowledge after due inquiry, the Purchase Agreement, Registration Rights Agreement or the Indenture in respect of the Company’s 1.75% Convertible Senior Notes due 2004, or any agreement or other instrument binding upon the Company or any of its subsidiaries that has been filed or incorporated by reference as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 or any subsequent Exchange Act Report, or, to such counsel’s knowledge, any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary (other than the Foreign Subsidiaries as to which such counsel need express no opinion), and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company or any Guarantor of their respective obligations under this Agreement, the Indenture or the Registration Rights Agreement or the consummation of the offering of the Offered Securities, except as disclosed in the Offering Document or as may be required to comply with the Registration Rights Agreement under federal and state securities laws (including qualifications of the Indenture pursuant to the Trust Indenture Act) or as may be required to comply with the securities or Blue Sky laws of the various states in connection with the offer and sale of the Offered Securities (as to which such counsel need express no opinion);

     (viii) each of this Agreement and the Registration Rights Agreement has been duly authorized, executed and delivered by the Company and each Guarantor and, assuming that they have been duly authorized, executed and delivered by the other parties thereto, each of this Agreement and the Registration Rights Agreement is a valid and binding obligation of the Company and each Guarantor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether considered in an action at

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law or in equity) and limitations on the enforceability of indemnification or contribution provisions because of considerations of public policy;

     (ix) the statements in the Offering Document under the captions “Description of Certain Indebtedness,” “Material U.S. Federal Tax Considerations,” “Description of the Notes” and “Plan of Distribution,” in each case insofar as such statements constitute summaries of the legal matters, documents or proceedings referred to therein, fairly summarize in all material respects such matters, documents or proceedings;

     (x) such counsel does not know of any legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries (other than the Foreign Subsidiaries as to which such counsel need express no opinion) is a party or to which any of the properties of the Company or any of its subsidiaries (other than the Foreign Subsidiaries as to which such counsel need express no opinion) is subject that would be required to be described in a registration statement on Form S-3 of the Company and are not described in the Offering Document or of any statutes, regulations, contracts or other documents that would required to be described in the registration statement on Form S-3 of the Company that are not described in the Offering Document;

     (xi) neither the Company nor any Guarantor is, and after giving effect to the offering and sale of the Offered Securities by the Company and the application of the proceeds thereof as described in the Offering Document will be, required to register as an “investment company” as such term is defined in the Investment Company Act; and

     (xii) no registration under the Securities Act of the Offered Securities (including the Guarantees) is required for the sale of the Offered Securities to the Purchasers as contemplated hereby or for the initial resale of the Offered Securities in accordance herewith assuming the accuracy of the Company’s representations and warranties in Sections 2(k) and 2(m) hereof and of the Purchasers’ representations set forth in Section 4 hereof, compliance by the Company and the Purchasers with their respective covenants and agreements contained herein and the accuracy of the representations and warranties made in accordance with the Offering Circular by the purchasers to whom the Purchasers initially resell Offered Securities.

     In addition, such counsel shall state in a separate letter that such counsel has participated in conferences with officers and other representatives of the Company at which conferences such counsel discussed the contents of the Offering Circular and related matters, and nothing has come to the attention of such counsel that causes such counsel to believe that the Offering Circular, including the documents incorporated by reference therein or any amendment or supplement thereto, as of its date and as of the Closing Date, contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein not misleading; it being understood that such counsel need express no comment as to the financial statements and financial schedules and other financial and statistical data contained in or omitted from the Offering Circular or documents incorporated by reference therein.

     (e) The Purchasers shall have received an opinion of Logos, outside Icelandic counsel for the Company, dated the Closing Date, to the effect that:

     (i) Nordural has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as

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described in the Offering Document and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on Nordural;

     (ii) all of the issued shares of capital stock of Nordural have been duly authorized and are validly issued, fully paid and non-assessable and are owned by the Company directly or indirectly, free and clear of all liens, encumbrances, equities or claims, except as otherwise disclosed in the Offering Document;

     (iii) the consummation of the transactions contemplated hereby will not contravene the certificate of incorporation or by-laws of Nordural or any agreement or other instrument binding upon Nordural that is material to Nordural, or, to the best of such counsel’s knowledge, any judgment, order or decree of any governmental body, agency or court having jurisdiction over Nordural;

     (iv) to the best of such counsel’s knowledge, there are no legal or governmental proceedings pending or threatened to which Nordural is a party or to which any of the properties of Nordural is subject except as otherwise disclosed in the Offering Document or of any statutes, regulations, contracts or other documents that are material to Nordural or the operation of Nordural that are not otherwise described in the Offering Document;

     (v) Nordural (i) is in compliance with any and all applicable Icelandic environmental laws (“Environmental Laws”), (ii) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and (iii) is in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on Nordural;

     (vi) each of the Material Operating Contracts (other than those numbered 1 through 13 to which such counsel need not express any opinion) has been duly authorized, executed and delivered by, and each of the Material Operating Contracts (other than those numbered 1 through 13, 16 and 19 to which such counsel need not express any opinion) constitutes a valid and binding obligation of, Nordural; each of the Material Operating Contracts (other than those numbered 1 through 13, 16 and 19 to which such counsel need not express any opinion) is in full force and effect as of the date hereof.

     Such counsel will also provide opinions to the effect of (i), (ii), (iii) and (iv) above with respect to Nordural Holdings I ehF and Nordural Holdings II ehF.

     (f) The Purchasers shall have received from Davis Polk & Wardwell, counsel for the Purchasers, dated the Closing Date, with respect to the incorporation of the Company, the validity of the Offered Securities, the Offering Circular, the exemption from registration for the offer and sale of the Offered Securities by the Company to the several Purchasers and the resales by the several Purchasers as contemplated hereby and other related matters as CSFB may require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

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     (g) The Purchasers shall have received a certificate, dated the Closing Date, of an executive officer of the Company and of each Guarantor in which such officers, to the best of his or her knowledge after reasonable investigation, shall state that the representations and warranties of the Company and the Guarantor in this Agreement are true and correct, that the Company and each Guarantor has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, and that, subsequent to the date of the most recent financial statements in the Offering Document there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole except as set forth in or contemplated by the Offering Document or as described in such certificate.

     (h) The Purchasers shall have received a letter, dated the Closing Date, of each of Deloitte & Touche LLP and PricewaterhouseCoopers hf which meets the requirements of subsection (a)(l) and (a)(2), respectively, of this Section, except that the specified date referred to in such subsection will be a date not more than three days prior to the Closing Date for the purposes of this subsection.

     (i) An amendment to the Company’s $100 million senior secured revolving credit facility required to consummate the transactions contemplated herein shall have been duly authorized, executed and delivered prior to the Closing Date and shall be in full force and effect on the Closing Date.

     (j) The Offered Securities shall have been designated eligible for trading on PORTAL.

     (k) The Purchasers shall have received counterparts of the Registration Rights Agreement duly executed by the Company and each Guarantor.

     (l) In connection with the Company’s tender offer for its outstanding 11¾% Senior Secured First Mortgage Notes due 2008, the Company shall have received a sufficient number of consents from holders of such notes to amend, and shall have amended, the indenture governing such notes to allow for the sale of the Offered Securities and shall have concurrently accepted for purchase all such notes validly tendered and not withdrawn.

The Company will furnish the Purchasers with such conformed copies of such opinions, certificates, letters and documents as the Purchasers reasonably request. CSFB may in its sole discretion waive on behalf of the Purchasers compliance with any conditions to the obligations of the Purchasers hereunder.

     7. Indemnification and Contribution.

     (a) The Company and each Guarantor will jointly and severally indemnify and hold harmless each Purchaser, its partners, directors and officers and each person, if any, who controls such Purchaser within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such Purchaser may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or any related preliminary offering circular or the Exchange Act Reports, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, including any losses, claims, damages or liabilities arising out of or based upon the Company’s or any Guarantor’s failure to perform its obligations under Section 5(a) of this Agreement,

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and will reimburse each Purchaser for any legal or other expenses reasonably incurred by such Purchaser in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company and the Guarantors will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by any Purchaser through CSFB specifically for use therein, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below; provided, however, that the foregoing indemnity agreement with respect to losses, claims, damages or liabilities shall not inure to the benefit of any Purchaser (or any person controlling any Purchaser) with respect to any losses, claims, damages or liabilities arising out of or based upon (x) any untrue statement or alleged untrue statement of any material fact in the Preliminary Offering Circular or (y) the omission or alleged omission to state in the Preliminary Offering Circular a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, if: (1) the Company furnished sufficient copies of the Offering Circular on a timely basis to permit delivery of the Offering Circular to all persons purchasing notes from the Purchasers in the initial resale of such notes (such persons “Initial Resale Purchasers”) at or prior to the written confirmation of the sale of the Offered Securities to such person; (2) the Initial Resale Purchaser asserting such losses, claims, damages or liabilities purchased Offered Securities in the initial resale from the Purchasers and a copy of the Offering Circular was not sent or given by or on behalf of such Purchaser to such Initial Resale Purchaser; and (3) the Offering Circular would have cured the defect giving rise to such losses, claims, damages or liabilities.

     (b) Each Purchaser will severally and not jointly indemnify and hold harmless the Company and the Guarantors, their respective directors and officers and each person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities to which the Company or any Guarantor may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Purchaser through CSFB specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company or any Guarantor in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by any Purchaser consists of (i) the following information in the Offering Document furnished on behalf of each Purchaser: the second sentence of the fourth paragraph, the fifth paragraph, the seventh paragraph (regarding market making only) and the eighth paragraph (regarding stabilizing transactions by the Purchasers) under the caption “Plan of Distribution”; and (ii) the information in the Offering Document regarding material relationship disclosure under the caption “Plan of Distribution”; provided however, that the Purchasers shall not be liable for any losses, claims, damages or liabilities arising out of or based upon the Company’s failure to perform its obligations under Section 5(a) of this Agreement.

     (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from

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any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses. In case any such action is brought against any indemnified party, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes (i) an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to or an admission of fault or failure to act by or on behalf of any indemnified party.

     (d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantor on the one hand and the Purchasers on the other from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantors on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors on the one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company and the Guarantors bear to the total discounts and commissions received by the Purchasers from the Company under this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or any Guarantor or the Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities purchased by it were resold exceeds the amount of any damages which such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The Purchasers’ obligations in this subsection (d) to contribute are several in proportion to their respective purchase obligations and not joint.

     The Company, the Guarantors and the Purchasers agree that it would not be just and equitable if contribution pursuant to this Section were determined by pro rata allocation (even if the Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section. No person

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guilty of fraudulent misrepresentation (within the meaning of Section 1l(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of fraudulent misrepresentation.

     (e) The obligations of the Company and the Guarantors under this Section shall be in addition to any liability which they may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Purchaser within the meaning of the Securities Act or the Exchange Act; and the obligations of the Purchasers under this Section shall be in addition to any liability which the respective Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Company or any Guarantor within the meaning of the Securities Act or the Exchange Act.

     8. Default of Purchasers. If any Purchaser or Purchasers default in their obligations to purchase Offered Securities hereunder on the Closing Date and the aggregate principal amount of the Offered Securities that such defaulting Purchaser or Purchasers agreed but failed to purchase does not exceed 10% of the total principal amount of the Offered Securities that the Purchasers are obligated to purchase on the Closing Date, CSFB may make arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons, including any of the Purchasers, but if no such arrangements are made by the Closing Date, the non-defaulting Purchasers shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting Purchasers agreed but failed to purchase on the Closing Date. If any Purchaser or Purchasers so default and the aggregate principal amount of the Offered Securities with respect to which such default or defaults occur exceeds 10% of the total principal amount of the Offered Securities that the Purchasers are obligated to purchase on the Closing Date and arrangements satisfactory to CSFB and the Company for the purchase of such Offered Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Purchaser, the Company or the Guarantors, except as provided in Section 9. As used in this Agreement, the term “Purchaser” includes any person substituted for a Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser from liability for its default.

     9. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the several Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Purchaser, the Company, any Guarantor or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If this Agreement is terminated by the Purchasers, or any of them, because of any failure or refusal on the part of the Company or any Guarantor to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company or any Guarantor shall be unable to perform its obligations under this Agreement, the Company and the Guarantors jointly and severally agree that they will reimburse the Purchasers or such Purchasers as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Purchasers in connection with this Agreement or the offering contemplated hereunder.

     10. Notices. All communications hereunder will be in writing and, if sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to the Purchasers c/o Credit Suisse First Boston LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, or, if sent to the Company or any Guarantor, will be mailed, delivered or telegraphed and confirmed to it at Century Aluminum Company, 2511 Garden Road, Building A, Suite 200, Monterey, CA, 93940, Attention: Gerald J. Kitchen with a copy to Curtis, Mallet-Prevost, Colt & Mosle LLP, Attention: Jeffrey N. Ostrager; provided, however, that any notice to a Purchaser pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to such Purchaser.

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     11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder.

     12. Representation of Purchasers. You will act for the several Purchasers in connection with this purchase, and any action under this Agreement taken by you jointly or by CSFB will be binding upon all the Purchasers.

     13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

     14. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of laws.

     The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

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     If the foregoing is in accordance with the Purchasers’ understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof whereupon it will become a binding agreement among the Company, the Guarantors and the several Purchasers in accordance with its terms.

Very truly yours,
CENTURY ALUMINUM COMPANY
By:	/s/ Gerald J. Kitchen
	Name:	Gerald J. Kitchen
	Title:	Executive Vice President, General Counsel
		Chief Administrative Officer, Secretary
BERKELEY ALUMINUM, INC., as a       Guarantor
By:	/s/ Gerald J. Kitchen
	Name:	Gerald J. Kitchen
	Title:	Vice President,
		Secretary
CENTURY ALUMINUM OF WEST
VIRGINIA, INC., as a Guarantor
By:	/s/ Gerald J. Kitchen
	Name:	Gerald J. Kitchen
	Title:	Vice President,
		Secretary
CENTURY KENTUCKY, INC., as a Guarantor
By:	/s/ Gerald J. Kitchen
	Name:	Gerald J. Kitchen
	Title:	Vice President,
		Secretary
METALSCO, LTD., as a Guarantor
By:	/s/ Gerald J. Kitchen
	Name:	Gerald J. Kitchen
	Title:	Vice President,
		Secretary

SKYLINER INC., as a Guarantor
By:	/s/ Gerald J. Kitchen
	Name:	Gerald J. Kitchen
	Title:	Vice President,
		Secretary
NSA, LTD., as a Guarantor
By:	Metalsco, Ltd., its general partner
By:	/s/ Gerald J. Kitchen
	Name:	Gerald J. Kitchen
	Title:	Vice President,
		Secretary
HANCOCK ALUMINUM LLC, as a Guarantor
By:	/s/ Gerald J. Kitchen
	Name:	Gerald J. Kitchen
	Title:	Vice President,
		Secretary
CENTURY ALUMINUM HOLDINGS, INC., as a Guarantor
By:	/s/ Gerald J. Kitchen
	Name:	Gerald J. Kitchen
	Title:	Vice President,
		Secretary
CENTURY LOUISIANA, INC., as a Guarantor
By:	/s/ Gerald J. Kitchen
	Name:	Gerald J. Kitchen
	Title:	Vice President,
		Secretary
VIRGIN ISLANDS ALUMINA CORPORATION LLC, as a Guarantor
By:	/s/ Gerald J. Kitchen
	Name:	Gerald J. Kitchen
	Title:	Vice President,
		Secretary

The foregoing Purchase Agreement is hereby confirmed and accepted as of the date first above written.

CREDIT SUISSE FIRST BOSTON LLC

By:	/s/ PAUL D SCHERZEA
	Name: PAUL D SCHERZEA
	Title: VICE PRESIDENT

Acting on behalf of itself and as the Representative of the several Purchasers

SCHEDULE A

	Principal Amount of
Purchaser	Offered Securities
Credit Suisse First Boston LLC	$	150,001,000
Banc of America Securities LLC		33,333,000
Goldman, Sachs & Co		33,333,000
J.P. Morgan Securities Inc.		33,333,000
Total	$	250,000,000

SCHEDULE B

Material Operating Contracts

1.	Molten Aluminum Purchase Agreement between Century Aluminum of West Virginia, Inc. and Pechiney Rolled Products, LLC, dated September 20, 1999.
2.	Aluminum Purchase Agreement between Berkeley Aluminum, Inc. and Glencore Ltd., dated April 1, 2003, as amended.
3.	Aluminum Purchase Agreement between Berkeley Aluminum, Inc. and Glencore Ltd. dated January 1,2003
4.	Alumina Supply Agreement dated June 26, 1996 between Glencore AG and Berkeley Aluminum, Inc., as assignee of Glencore Primary Aluminum Company LLC pursuant to the Assignment and Assumption of Alumina Supply Agreement between Xstrata Aluminum Corporation and Berkeley Aluminum, Inc. dated March 31, 2000
5.	Alumina Supply Agreement, dated as of January 1, 2001, between Glencore AG and Berkeley Aluminum, Inc.
6.	Alumina Supply Agreement, dated as of January 1, 2001, between Glencore Ltd. and Century Aluminum of West Virginia, Inc.
7.	Electric Power Supply Agreement between Century Aluminum of West Virginia, Inc. and Ohio Power Company (d.b.a. American Electric Power), dated May 3, 1997
8.	South Carolina Public Service Authority Service Agreement for Large Power Electric Service between the South Carolina Public Service Authority and Alumax of South Carolina, Inc., dated July 1, 2003.
9.	Amended and Restated Owners’ Agreement, dated as of January 26, 1996, as amended relating to the Mt. Holly facility
10.	Aluminum Supply Agreement between Century Aluminum Company and Southwire Company, dated as of April 2, 2001.
11.	Alumina Purchase Agreement between Kaiser Aluminum & Chemical Corporation and Southwire Company, dated December 18, 1997 as amended heretofore by First Amendment and Second Amendment, as assigned to Century or one of its subsidiaries pursuant to the assignment and assumption agreement dated on or about April 1, 2001.
12.	Alumina Purchase Agreement between Kaiser Aluminum & Chemical Corporation and Century Aluminum of Kentucky LLC, dated May 26, 2003.
13.	Agreement for Electric Service between Green River Electric Corporation and Southwire Company, dated July 15, 1998, as amended by Amendment No. 1 dated July 15, 1998, as assigned to Century or one of its subsidiaries pursuant to the assignment and assumption agreement dated on or about April 2, 2001.
14.	Investment Agreement, dated as of August 7, 1997, by and among the Government of Iceland, Columbia Ventures Corporation and Nordural hf as amended by the First Amendment to the Investment Agreement dated June 14, 2000 between the Government of Iceland, Columbia Ventures Corporation and Nordural hf.

15.	Power Agreement, dated as of August 7, 1997, by and between Landsvirkjun (The National Power Company) and Nordural hf as amended by the First Amendment to the Power Agreement dated October 29, 1999 between Landsvirkjun and Nordural hf.
16.	Alumina Supply, Toll Conversion and Aluminium Metal Supply Agreement, dated September 23, 1997, by and between Billiton Marketing and Trading B.V. and Nordural hf, as amended by the First Amendment to the Alumina Supply, Toll Conversion and Aluminium Metal Supply Agreement, dated June 16, 2000, by and between Billiton Marketing B.V. and Nordural hf.
17.	Harbour Agreement dated August 7, 1997 between The Grundartangi Harbour Fund and Nordural hf.
18.	Smelter Site Agreement dated March 20, 1997 between The State Treasury of Iceland and Nordural hf as amended by the First Amendment to the Smelter Site Agreement dated August 7, 1997 between The State Treasury of Iceland and Nordural hf.
19.	Amended and Restated Carbon Anode Blocks Sales and Purchase Agreement, dated as of June 15, 2000, by and between VAW aluminium AG and Nordural hf.

SCHEDULE C

Significant Subsidiaries

Berkeley Aluminum, Inc.
Century Aluminum of West Virginia, Inc.
Century Bermuda I Limited
Century Bermuda II Limited
Century Kentucky, Inc.
Metalsco, Ltd.
Skyliner, Inc.
Nordural Hf
Nordural Holdings I eHf
Nordural Holdings II eHf
Nordural U.S. LLC
NSA, Ltd.
Hancock Aluminum LLC
Century Aluminum of Kentucky LLC

EX-4.5

Exhibit 4.5

$150,000,000

Century Aluminum Company

1.75% Convertible Senior Notes due August 1, 2024

PURCHASE AGREEMENT

July 30, 2004

CREDIT SUISSE FIRST BOSTON LLC,
  As Representative of the Several Purchasers,
    Eleven Madison Avenue,
      NewYork, N.Y. 10010-3629

Dear Sirs:

     1. Introductory. Century Aluminum Company, a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the several initial purchasers named in Schedule A hereto (the “Purchasers”) $150,000,000 principal amount of its 1.75% Convertible Senior Notes due 2024 (the “Firm Securities”) and, at the election of the Purchasers an aggregate of up to an additional $25,000,000 principal amount (“Optional Securities”) of its 1.75% Convertible Senior Notes due 2024 (the Firm Securities and the Optional Securities which the Purchasers may elect to purchase pursuant to Section 3 hereof are herein collectively called the “Offered Securities”). The Offered Securities are to be issued under an indenture to be dated as of July 9, 2004 (the “Indenture”), among the Company and Wilmington Trust Company, as Trustee, on a private placement basis pursuant to an exemption under Section 4(2) of the United States Securities Act of 1933 (the “Securities Act”) and Rule 144A thereunder (“Rule 144A”).

     The holders of the Offered Securities will be entitled to the benefits of a Registration Rights Agreement among the Company and the Purchasers (the “Registration Rights Agreement”), pursuant to which the Company agrees to file a registration statement (the “Shelf Registration Statement”) with the Securities Exchange Commission (the “Commission”) registering the resale of the Offered Securities and the Underlying Shares, as hereinafter defined, under the Securities Act.

     2. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, the several Purchasers that:

   (a) An offering circular relating to the Offered Securities to be offered by the Purchasers has been prepared by the Company. Such offering circular (the “Offering Circular”), including documents incorporated by reference therein, and as supplemented as of the date of this Agreement, is hereinafter collectively referred to as the “Offering Document”. On the date of this Agreement, the Offering Document does not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Offering Document based upon written information furnished to the

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Company by any Purchaser through Credit Suisse First Boston LLC (“CSFB”) specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 7(b) hereof. Except as disclosed in the Offering Document, on the date of this Agreement, the Company’s Annual Report on Form 10-K most recently filed with the Commission and all subsequent reports (collectively, the “Exchange Act Reports”) which have been filed by the Company with the Commission or sent to shareholders pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) do not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder.

   (b) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority to own its properties and conduct its business as described in the Offering Document; and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified or in good standing would not have a material adverse effect on the Company and its subsidiaries taken as a whole.

   (c) Each subsidiary of the Company has been duly organized and is validly existing as a corporation, limited liability company or limited partnership in good standing under the laws of the jurisdiction of its organization, with power and authority (corporate, limited liability company or limited partnership) to own its properties and conduct its business as described in the Offering Document; and each subsidiary of the Company is duly qualified to do business as a foreign corporation, limited liability company or limited partnership in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified or in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; all of the issued and outstanding shares of capital stock or other equity interests of each subsidiary of the Company has been duly authorized and validly issued and is fully paid and nonassessable or, in the case of any subsidiary that is not a corporation, all necessary actions under the limited liability company act or the limited partnership act under which the subsidiary was organized and the subsidiary’s constituent documents have been taken for the purchase of such subsidiary’s equity interests; and the capital stock or other equity interests of each subsidiary owned by the Company, directly or through subsidiaries, is owned free from liens, encumbrances and defects except for (i) encumbrances on the Company’s ability to dispose of the stock of Berkeley Aluminum, Inc. pursuant to the Amended and Restated Owners’ Agreement dated as of January 26, 1996, as amended heretofore, governing the use and ownership of the Mt. Holly facility, (ii) the rights of Glencore Ltd. and Glencore Acquisition I LLC under that certain Security Agreement dated April 1, 2003 respecting Hancock Aluminum LLC’s membership interest in Century Aluminum of Kentucky LLC, and (iii) liens, encumbrances, equities or claims under the Indenture dated April 2, 2001 relating to the Company’s 11 3/4% Senior Secured First Mortgage Notes due 2008 (“the 2001 Indenture”).

   (d) This Agreement has been duly authorized, executed and delivered by the Company.

   (e) Each of the Indenture and the Registration Rights Agreement has been duly authorized by the Company and each of its subsidiaries party thereto, and when executed and delivered by the Company or such subsidiaries, will be a valid and binding obligation of each such person, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally, general principles of equity (regardless of

2

whether considered in an action at law or in equity) and limitations on the enforceability of indemnification or contribution provisions because of considerations of public policy.

   (f) The authorized capital stock of the Company conforms as to legal matters to the description there of contained in the Offering Document.

   (g) The Offered Securities have been duly authorized; and when the Offered Securities are executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Purchasers pursuant to this Agreement, such Offered Securities will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

   (h) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Indenture and the Registration Rights Agreement, and the consummation of the transactions contemplated hereby and thereby, will not contravene in any material respect any provision of applicable law or regulation or the certificate of incorporation or by-laws or other constituent documents of the Company or any of its subsidiaries or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required to be obtained by the Company or its subsidiaries for the performance by the Company of its obligations under this Agreement and the Registration Rights Agreement in connection with the issuance and sale of the Offered Securities by the Company, except such as are disclosed in the Offering Document as may be required to comply with the Company’s obligations under the Registration Rights Agreement under federal and state securities laws or as may be required to comply with the securities or Blue Sky laws of the various states in connection with the offer and sale ofthe Offered Securities.

   (i) When the Offered Securities are delivered and paid for pursuant to this Agreement on each Closing Date, such Offered Securities will be convertible into cash up to the aggregate principal amount of Offered Securities to be converted and, at the election of the Company, cash, shares of common stock, par value $0.01 per share of the Company (“Common Stock”) or a combination thereof, with respect to the remainder, if any, of the Company’s conversion obligation in excess of the principal amount of Offered Securities to be converted, in accordance with the terms of the Indenture; the shares initially issuable upon conversion of such Offered Securities (the “Underlying Shares”) have been duly authorized and reserved for issuance upon such conversion and, when issued and delivered upon such conversion in accordance with the terms of the Indenture, will be validly issued, fully paid and nonassessable; the outstanding Common Stock has been duly authorized and validly issued, is fully paid and nonassessable and conform to the description thereof contained in the Offering Document; and the stockholders of the Company have no preemptive rights with respect to the Offered Securities or the Underlying Shares.

   (j) The Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the Securities Exchange Act of 1934 and files reports with the Commission on the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.

   (k) No securities of the same class (within the meaning of Rule 144A(d)(3)(i)) as the Offered Securities are listed on any national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.

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   (1) Assuming compliance by the Purchasers with their representations and warranties set forth in Section 4, it is not necessary in connection with the offer, sale and delivery of the Offered Securities to the Purchasers and the offer and sale of the Offered Securities by the Purchasers in the manner contemplated by this Agreement to register the Offered Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended.

   (m) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf (other than the Purchasers, as to whom the Company makes no representation) (i) has offered or sold the Offered Securities or any security of the same class or series as the Offered Securities which is or will be integrated with the sale of the Offered Securities in a manner that would require the registration under the Securities Act of the Offered Securities or (ii) has offered or will offer or sell the Offered Securities in the United Statesby means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act. The Company has not entered and will not enter into any contractual arrangement with respect to the distribution of the Offered Securities except for this Agreement until the earlier of (i) the Option Closing Date on which the Purchasers’ option to purchase Optional Securities is fully exercised or (ii) the expiration of the 45 day period subsequent to the date of this Agreement during which the Purchasers may exercise their option to purchase Optional Securities.

   (n) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Offering Document (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement).

   (o) Except as disclosed in the Offering Document, there are no pending actions, suits or proceedings against or affecting the Company, any of its subsidiaries or any of their respective properties that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a material adverse effect on the Company and its subsidiaries, taken as a whole, or would materially and adversely affect the ability of the Company to perform its obligations under the Indenture, this Agreement, or the Registration Rights Agreement; and, to the Company’s knowledge, no such actions, suits or proceedings are threatened or contemplated.

   (p) The Company is not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Offering Document, will not be an “investment company” as defined in the United States Investment Company Act of 1940 (the “Investment Company Act”).

   (q) The Company and its subsidiaries (1) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (2) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (3) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

   (r) Other than as disclosed in the Offering Document, the Company and its subsidiaries do not have any costs or liabilities associated with Environmental Laws (including, without

4

limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

   (s) There are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company or to require the Company to include such securities with the securities registered pursuant to any Shelf Registration Statement.

   (t) The Company has duly notified the NASDAQ Stock Market of this offering and to list the Underlying Shares for quotation on the NASDAQ Stock Market.

   (u) Neither the Company nor any of its subsidiaries (i) is in violation of its respective charter or by-laws or similar organizational documents or (ii) is in default in the performance or observance of any obligation, agreement, covenant or condition contained in any bond, debenture, note or other evidence of indebtedness, or in any lease, contract indenture, deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company or any of its subsidiaries is a party, or by which it or any of its subsidiaries or their respective properties may be bound, except where such default would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole; and neither the Company nor any of its subsidiaries is in violation of any law, order, rule, regulation, writ, injunction, judgment or decree of any court, government or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or over their respective properties except where such violations would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

   (v) Each of the contracts set forth on Schedule B hereto (the “Material Operating Contracts”) has been duly authorized, executed and delivered by, and constitutes a valid and binding obligation of, the Company and/or its subsidiaries party thereto; (ii) each of the Material Operating Contracts is in full force and effect as of the date hereof and, as of each Closing Date, will be in full force and effect; (iii) neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company, any of the other parties thereto, is, or with the giving of notice or lapse of time or both would be, in violation of or in default under any of the Material Operating Contracts, except for violations and defaults which singly or in the aggregate would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.

   (w) Subsequent to the date as of which information is given in the Offering Document (exclusive of any amendment or supplement thereto subsequent to the date of this Agreement), (i) the Company and its subsidiaries have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction not in the ordinary course of business; (ii) the Company has not purchased any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock other than ordinary and customary dividends; and (iii) there has not been any material change in the capital stock, short-term debt or long-term debt of the Company and its subsidiaries, except in each case as described in the Offering Document.

   (x) Except as described in the Offering Document, the Company and its subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title to all personal property owned by them, in each case which is material to the business of the Company and its subsidiaries, taken as a whole, in each case free and clear of all

5

liens, encumbrances and defects except such liens, encumbrances and defects that do not in the aggregate materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such propertyby the Company and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries, in each case except as described in the Offering Document.

   (y) The Company and its subsidiaries own or possess, or can acquire on reasonable terms, all material patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names currently employed by them in connection with the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the Company and its subsidiaries, taken as a whole.

   (z) No material labor dispute with the employees of the Company or any of its subsidiaries exists, or, to the knowledge of the Company, is imminent; and the Company is not aware of any existing, threatened or imminent labor disturbances by the employees of any of its principal suppliers, manufacturers or contractors that could, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

   (aa) The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; neither the Company nor its subsidiaries has been refused any material insurance coverage sought or applied for; and neither the Company nor its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, except as described in the Offering Document.

   (bb) Except as described in the Offering Document, the Company and its subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and have made all declarations and filings with, all federal, state, local and other governmental authorities (including foreign regulatory agencies), all self-regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, except such as would not, singly or in the aggregate, result in a material adverse effect on the Company and its subsidiaries, taken as a whole, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the Company and its subsidiaries, taken as a whole, except as described in the Offering Document.

   (cc) Except as disclosed in the Offering Document, there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Purchaser for a brokerage commission, finder’s fee or other like payment in connection with this offering.

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   (dd) The Company and each of its subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

   (ee) The financial statements of the Company included in the Offering Document present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis; the financial statements of Nordural hf, an Icelandic company and wholly owned subsidiary of the Company (“Nordural”), incorporated by reference in the Offering Document present fairly in all material respects the financial position of Nordural as of the dates shown and its results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with the applicable rules and regulations of the Commission; and the assumptions used in preparing the pro forma financial statements included in the Offering Document provide a reasonable basis for presenting the material effects directly attributable to the transactions or events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma columns therein reflect the proper application of those adjustments to the corresponding historical financial statement amounts.

   (ff) As of the date hereof, there are no outstanding subscriptions, rights, warrants, options, calls, convertible securities or commitments of sale granted or issued by the Company or any of its subsidiaries relating to or entitling any person to purchase or otherwise to acquire any shares of the capital stock of the Company or any of its subsidiaries, except (1) as otherwise disclosed in the Offering Document and (2) for the issuance of 10,000 options to Michael Tanchuk, 7,500 performance shares granted to Dick Starkweather and 5,000 performance shares granted to Ragnar Guamundsson and options granted to the Company’s non-employee directors following the July 16, 2004 annual meeting of stockholders under the Company’s Non-Employee Directors Stock Option Plan.

   (gg) (i) Deloitte & Touche LLP, which has certified certain financial statements of the Company and each of its subsidiaries, and (ii) to the best of the Company’s knowledge, PricewaterhouseCoopers hf, which has certified certain financial statements of Nordural, are each independent public accountants as required by the Securities Act and the rules and regulations of the Commission thereunder.

   (hh) The Company is not engaged in discussions regarding any possible acquisitions or dispositions that would be required to be disclosed if the Offering Circular were a Registration Statement on Form S-l and are not so disclosed.

   (ii) Schedule C hereto is a true and complete list of all of the Company’s significant subsidiaries (as defined in Rule 1-02(w) of Regulation S-X) as of the date of this Agreement (the “Significant Subsidiaries”).

   (jj) The agreements and other documents (1) filed as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 or filed as an exhibit to any

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subsequent filing under the Exchange Act or (2) relating to Nordural that are to be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 constitute all of the outstanding material contracts of the Company and its subsidiaries taken as a whole required to be filed as exhibits under Item 601 of Regulation S-K.

   (kk) To the Company’s knowledge, the section in the Offering Circular entitled “Summary—Recent Developments—The Planned Gramercy Acquisition” does not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light ofthe circumstances under which they were made, not misleading.

     3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to sell to the Purchasers, and the Purchasers agree, severally and not jointly, to purchase from the Company, at a purchase price of 97% of the principal amount thereof plus accrued interest, if any, from August 9, 2004 to the First Closing Date (as hereinafter defined), the respective principal amounts of Firm Securities set forth opposite the names of the several Purchasers in ScheduleA hereto.

     The Company will deliver against payment of the purchase price the Firm Securities in the form of one or more permanent global securities in definitive form (the “Firm Global Securities”) deposited with the Trustee as custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee for DTC. Interests in any permanent global securities will be held only in book-entry form through DTC, except in the limited circumstances described in the Offering Document. Payment for the Firm Securities shall be made by the Purchasers in Federal (same day) funds by wire transfer to an account specified by the Company drawn to the order of the Company at the office of Davis Polk & Wardwell, New York, N.Y., at 10:00 AM. (New York time), on August 9, 2004, or at such other time not later than seven full business days thereafter as CSFB and the Company determine, such time being herein referred to as the “First Closing Date,” against delivery to the Trustee as custodian for DTC of the Firm Global Securities representing all of the Firm Securities. The Firm Global Securities will be made available for checking at Davis Polk &Wardwell, New York, N.Y., at least 24 hours prior to the First Closing Date.

     In addition, upon written notice from CSFB given to the Company from time to time notmore than 45 days subsequent to the date of this Agreement, the Purchasers may purchase all or less than all of the Optional Securities at the purchase price per principal amount of Offered Securities (including any accrued interest thereonto the related Optional Closing Date) to be paid for the Firm Securities. The Company agrees to sell to the Purchasers the principal amount of Optional Securities specified in such notice and the Purchasers agree, severally and not jointly to purchase such Optional Securities. Such Optional Securities shall be purchased from the Company for the account of each Purchaser in the same proportion as the principal amount of Firm Securities set forth opposite such Purchaser’s name in Schedule A hereto bears to the total principal amount of Firm Securities (subject to adjustment by CSFB to eliminate fractions) and may be purchased by the Purchasers for the purpose of covering over-allotments made in connection with the sale of the Firm Securities or otherwise. No Optional Securities shall be sold or delivered unless the Firm Securities previously have been, or simultaneously are sold and delivered. The right to purchase the Optional Securities or any portion thereof may be exercised from time to time and to the extent not previously exercised may be surrendered and terminated at any time upon notice by CSFB to the Company.

     Each time for the delivery of and payment for the Optional Securities, being herein referred to as the “Optional Closing Date”, which may be the First Closing Date (the First Closing Date and each Optional Closing Date, if any, being sometimes referred to as a “Closing Date”), shall be determined by CSFB on behalf of the several Purchasers but shall be neither earlier than the First Closing Date nor later than ten full business days after written notice of election to purchase Optional Securities is given.

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     The Company will deliver against payment of the purchase price the Optional Securities being purchased on each Optional Closing Date in the form of one or more permanent global securities in definitive form (each, an “Optional Global Security”) deposited with the Trustee as custodian forDTC and registered in the name of Cede & Co., as nominee for DTC. Payment for such Optional Securities shall be made by the Purchasers in Federal (same day) funds by wire transfer to an account specified by the Company drawn to the order of the Company at the office of Davis Polk & Wardwell, New York, N.Y. against delivery to the Trustee as custodian for DTC of the Optional Global Securities representing all of the Optional Securities being purchased on such Optional Closing Date.

     4. Representations by Purchasers;Resale by Purchasers.

   (a) Each Purchaser severally represents and warrants to the Company that it is a “Qualified Institutional Buyer” as defined in Rule 144A (a “QIB”).

   (b) Each Purchaser severally acknowledges that the Offered Securities have not been registered under the Securities Act and may not be offered or sold except pursuant to an exemption from the registration requirements of the Securities Act. Each Purchaser severally represents and agrees that it has solicited offers for, offered and sold the Offered Securities and will solicit offers for, offer and sell the Offered Securities as part of its distribution only in accordance with Rule 144A to persons it reasonably believes are QIBs.

   (c) Each Purchaser severally agrees that it and each of its affiliates has not entered and will not enter into any contractual arrangement with respect to the distribution of the Offered Securities except for any such arrangements with the other Purchasers or affiliates of the other Purchasers or with the prior written consent of the Company.

   (d) Each Purchaser severally agrees that it and each of its affiliates will not solicit offers for, offer or sell the Offered Securities by means of any form of general solicitation or general advertising, within the meaning of Rule 502(c) under the Securities Act or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act, including, but not limited to (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. Each Purchaser severally agrees, with respect to resales made in reliance on Rule l44A of any of the Offered Securities, to deliver either with or prior to the confirmation of such resale a notice to the effect that the resale of such Offered Securities has been made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A.

     5. Certain Agreements of the Company. The Company agrees with the several Purchasers that:

   (a) The Company will advise CSFB promptly of any proposal to amend or supplement the Offering Document and will not effect such amendment or supplementation without CSFB’s consent, which will not be unreasonably withheld. If, at any time prior to the completion of the resale of the Offered Securities by the Purchasers any event occurs as a restilt of which the Offering Document as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Offering Document is delivered to a purchaser, not misleading, the Company promptly will notify CSFB of such event and promptly will prepare, at its own expense, an amendment or supplement which will correct such statement or omission. Neither CSFB’s consent to, nor the Purchasers’ delivery to offerees or investors of, any such amendment or supplement shall constitute a

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waiver of any of the conditions set forth in Section 6. The Purchasers agree to notify the Company of the completion of the resale of the Offered Securities by the Purchasers.

   (b) The Company will furnish to CSFB copies of the Offering Document and all amendments and supplements to such document, in each case as soon as available and in such quantities as CSFB requests. At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company will promptly furnish or cause to be furnished to CSFB (and, upon request, to each of the other Purchasers) and, upon request of holders and prospective purchasers of the Offered Securities, to such holders and purchasers, copies of the information required to be delivered to holders and prospective purchasers of the Offered Securities pursuant to Rule 144A(d)(4) (or any successor provision thereto) in order to permit compliance with Rule l44A in connection with resales by such holders of the Offered Securities. The Company will pay the expenses of printing and distributing to the Purchasers all such documents.

   (c) The Company will endeavor to arrange for the qualification of the Offered Securities for sale under the laws of such states in the United States as CSFB reasonably designates and will continue such qualifications in effect so long as required for the resale of the Offered Securities by the Purchasers provided that the Company will not be required to qualify as a foreign corporation or to file a general consent to service of process in any such state or to subject itself to taxation in any jurisdiction where it is not now so subject.

   (d) During the period of two years after the later of the First Closing Date and the last Optional Closing Date, the Company will not, nor will it permit any of its subsidiaries to, and it will use its best efforts to cause its other affiliates (as defined in Rule 144 under the Securities Act) not to, resell any of the Offered Securities that have been reacquired by any of them that constitute “restricted” securities under Rule 144 except pursuant to an effective registration statement under the Securities Act.

   (e) During the period of two years after the later of the First Closing Date and the last Optional Closing Date, the Company will not take any steps that would cause the Offered Securities not to be eligible to be offered under Rule 144A.

   (f) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid all expenses incidental to the performance of its obligations under this Agreement, the Indenture and the Registration Rights Agreement including (i) the fees and expenses of the Trustee and its professional advisers; (ii) all expenses in connection with the execution, issue, authentication, packaging and initial delivery of the Offered Securities, the preparation and printing of this Agreement, the Registration Rights Agreement, the Offered Securities, the Indenture, the Offering Document and amendments and supplements thereto, and any other document relating to the issuance, offer, sale and delivery of the Offered Securities (but not including the fees for professional services of counsel to the Purchasers); (iii) the cost of qualifying the Offered Securities for trading in The Portal^SM Market (“PORTAL”) of The Nasdaq Stock Market, Inc. and any expenses incidental thereto; (iv) the cost of any advertising approved by the Company in connection with the issue of the Offered Securities; (v) for any expenses (including fees and disbursements of counsel) incurred in connection with qualification of the Offered Securities for sale under the laws of such jurisdictions as CSFB designates and the printing of memoranda relating thereto; (vi) for any fees charged by investment rating agencies for the rating of the Offered Securities; (vii) for expenses incurred in distributing the Offering Document (including any amendments and supplements thereto) to the Purchasers and potential investors; and (viii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without

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limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company and any such lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the road show. It is understood, however, that, except as provided in this paragraph (f), Section 7 and Section 9, the Purchasers will pay all of their costs and expenses, including fees and disbursements of their counsel, transfer taxes payable on resale of any of the Offered Securities by them and any advertising expenses in connection with any offers they may make.

   (g) In connection with the offering, until CSFB shall have notified the Company and the other Purchasers of the completion of the resale of the Offered Securities, neither the Company nor any of its affiliates has or will, either alone or with one or more other persons, bid for or purchase for any account in which it or any of its affiliates has a beneficial interest any Offered Securities or attempt to induce any person to purchase any Offered Securities; and neither it nor any of its affiliates will make bids or purchases for the purpose of creating actual, or apparent, active trading in, or of raising the price of, the Offered Securities.

   (h) For a period of 45 days after the date hereof, the Company will not offer, sell, contract to sell, pledge, or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating to, any shares of Common Stock or securities convertible into or exchangeable or exercisable for shares of Common Stock, including notes or warrants or other rights to purchase shares of Common Stock, or publicly disclose the Company’s intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of CSFB, as representative of the Purchasers; provided that the foregoing shall not apply to (A) the issuance of the Offered Securities, (B) any issuances of shares of Common Stock upon conversion of the Offered Securities, (C) the grant or award of stock options, performance shares or other stock-based compensation under the Company’s 1996 Stock Incentive Plan or Non-Employee Directors Stock Plan as in effect on the date of the Offering Circular or (D) the issuance by the Company of shares of Common Stock upon the exercise of an option or warrant or the conversion of a security or upon the vesting of performance shares outstanding on the date of the Offering Circular. The Company will not at any time offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any securities under circumstances where such offer, sale, pledge, contract or disposition would cause the exemption afforded by Section 4(2) of the Securities Act to cease to be applicable to the offer and sale of the Offered Securities.

     6. Conditions of the Obligations of the Purchasers. The obligations of the several Purchasers to purchase and pay for the Firm Securities on the First Closing Date and for the Optional Securities on each Optional Closing Date will be subject to the accuracy of the representations and warranties on the part of the Company herein, to the accuracy of the statements of officers ofthe Company made pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions precedent:

   (a)( 1) The Purchasers shall have received a letter, dated the date of this Agreement, of Deloitte & Touche LLP confirming that it is an independent public accountant within the meaning of the Securities Act and the applicable published rules and regulations thereunder (“Rules and Regulations”) and to the effect that:

   (i) in its opinion the financial statements examined by it and included in the Offering Document and in the Exchange Act Reports comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published Rules and Regulations;

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   (ii) they have performed the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in Statement of Auditing Standards No. 100, Interim Financial Information, on the unaudited financial statements included in the Offering Document;

   (iii) on the basis of the review referred to in clause (ii) above, a reading of the latest available interim financial statements of the Company, inquiries of officials of the Company who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that:

   (A) the unaudited financial statements included in the Offering Document or in the Exchange Act Reports do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published Rules and Regulations or any material modifications should be made to such unaudited financial statements for them to be in conformity with generally accepted accounting principles;

   (B) at the date of the latest available balance sheet read by such accountants, or at a subsequent specified date not more than three business days prior to the date of this Agreement, there was any change in the capital stock, any increase in long-term debt of the Company and its consolidated subsidiaries or any decrease in consolidated net current assets or stockholders’ equity, as compared with amounts shown on the latest balance sheet included in the Offering Document; or

   (C) for the period from the closing date of the latest income statement included in the Offering Document to the closing date of the latest available income statement read by such accountants or at a subsequent specified date not more than three business days prior to the date of this Agreement there were any decreases, as compared with the corresponding period in the preceding year and with the period of corresponding length ended the date of the latest income statement included in the Offering Document, in consolidated net sales, operating income or in the total or per-share amounts of net income;

except in all cases set forth in clauses (B) and (C) above for changes, increases or decreases which the Offering Document discloses have occurred or may occur or which are described in such letter;

   (iv) on the basis of a reading of the pro forma financial statements included in the Offering Document, inquiries of officials of the Company who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that the pro forma financial statements for the year ended December 31, 2003 and the three-month period ended March 31, 2004 included in the Offering Document do not comply as to form in all material respects with the applicable accounting requirements of Rule 11-02 of the Regulation S-X and that the pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements; and

   (v) they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Offering Document and the Exchange Act Reports (in each case to the extent that such dollar amounts, percentages and

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other financial information are derived from the general accounting records of the Company and its subsidiaries subject to the internal controls of the Company’s accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter.

   (a)(2) The Purchasers shall have received a letter, dated the date of this Agreement, of PricewaterhouseCoopers hf confirming that it is an independent public accountant within the meaning of the Securities Act and Rules and Regulations and to the effect that:

   (i) in its opinion the financial statements examined by it and included in the Offering Document and in the Exchange Act Reports comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published Rules and Regulations;

   (ii) they have performed the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in Statement of Auditing Standards No. 100, Interim Financial Information, on the unaudited financial statements ofNordural included in the Offering Document;

   (iii) on the basis of the review referred to in clause (ii) above, a reading of the latest available interim financial statements of the Company, inquiries of officials of the Company who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that the unaudited financial statements included in the Offering Document or in the Exchange Act Reports do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published Rules and Regulations or any material modifications should be made to such unaudited financial statements for them to be in conformity with generally accepted accounting principles; and

   (iv) they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Offering Document and the Exchange Act Reports (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Company and its subsidiaries subject to the internal controls of the Company’s accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter.

   (b) Subsequent to the execution and delivery of this Agreement and prior to such Closing Date, there shall not have occurred: (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as one enterprise which, in the judgment of a majority in interest of the Purchasers, including CSFB, is material and adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Offered Securities; (ii) any downgrading in the rating of any debt securities of the Company by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the Securities Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications

13

of a possible upgrading, and no implication of a possible downgrading, of such rating) or any announcement that the Company has been placed on negative outlook; (iii) any change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of a majority in interest of the Purchasers, including CSFB, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Offered Securities, whether in the primary market or in respect of dealings in the secondary market; (iv) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange, the Nasdaq National Market or the London Metal Exchange or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (v) any general moratorium on commercial banking activities in NewYork declared by U.S. Federal or NewYork authorities; (vi) any major disruption of settlements of securities or clearance services in the United States; or (vii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the judgment of a majority in interest of the Purchasers including CSFB, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the offering or sale of and payment for the Offered Securities.

   (c) The Purchasers shall have received an opinion, dated such Closing Date, of Gerald J. Kitchen, Executive Vice President, General Counsel and Chief Administrative Officer of the Company, to the effect that:

   (i) the shares of outstanding Common Stock have been duly authorized and are validly issued, fully paid and non-assessable;

   (ii) all of the issued shares of capital stock or other equity interests of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable, or in the case of any subsidiary that is not a corporation, all necessary actions under the limited liability company act or the limited partnership act under which the subsidiary was organized and the subsidiary’s constituent documents have been taken for the purchase of such subsidiary’s equity interests and are owned by the Company either directly or through wholly owned subsidiaries, free and clear of all liens, encumbrances, equities or claims except for (A) encumbrances on the Company’s ability to dispose of the stock of Berkeley Aluminum, Inc. pursuant to the Amended and Restated Owners’ Agreement dated as of January 26, 1996, as amended heretofore, governing the use and ownership of the Mt. Holly facility, (B) the rights of Glencore Ltd. and Glencore Acquisition I LLC under that certain Security Agreement dated April 1, 2003 respecting Hancock Aluminum LLC’s membership interest in Century Aluminum of Kentucky LLC, and (C) liens, encumbrances, equities or claims under the Indenture;

   (iii) each of the Material Operating Contracts (other than those numbered 14 through 19 to which such counsel need not express any opinion) has been duly authorized, executed and delivered by, and constitutes a valid and binding obligation of, the Company and/or its subsidiaries party thereto, as applicable; each of the Material Operating Contracts (other than those numbered 14 through 19 to which such counsel need not express any opinion) is in full force and effect as of the date hereof

   (iv) there are no outstanding subscriptions, rights, warrants, options, calls, convertible securities or commitments of sale granted or issued by the Company or any of its subsidiaries relating to or entitling any person to purchase or otherwise to acquire any shares of the capital stock of the Company or any of its subsidiaries, except (1) as

14

otherwise disclosed in the Offering Document and (2) and for the issuance of 10,000 options to Michael Tanchuk, 7,500 performance shares granted to Dick Starkweather and 5,000 performance shares granted to Ragnar Guamundsson and options granted to the Company’s non-employee directors following the July 16, 2004 annual meeting of stockholders under the Company’s Non-Employee Directors Stock Option Plan; and

   (v) the Company and its subsidiaries (i) are in compliance with any and all applicable federal environmental laws of the United States of America (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

   In addition, such counsel shall state in a separate letter that such counsel has participated in conferences with officers and other representatives of the Company at which conferences such counsel discussed the contents of the Offering Document and related matters, and nothing has come to the attention of such counsel that causes such counsel to believe that (A) each document filed pursuant to the Exchange Act and incorporated by reference in the Offering Document (except for the financial statements and financial schedules and other financial and statistical data included therein or omitted therefrom, as to which such counsel need not express any comment) did not comply as to form when filed in all material respects with the requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, (B) the Offering Document (except for the financial statements and financial schedules and other financial and statistical data included therein or omitted therefrom, as to which such counsel need not express any comment) as of its date or as of the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessaryin order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

   (d) The Purchasers shall have received an opinion, dated such Closing Date, of Curtis, Mallet-Prevost, Colt & Mosle LLP, counsel for the Company, to the effect that:

   (i) the Company has been duly incorporated and validly existing as a corporation in good standing under the laws of the State of Delaware, has the corporate power and authority to own its properties and conduct its business as described in the Offering Document; and the Company is duly qualified to transact business as a foreign corporation and is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole;

   (ii) each of the Significant Subsidiaries of the Company (other than Nordural, as to which such counsel need express no opinion) is validly existing as a corporation, limited liability company or limited partnership in good standing under the laws of the jurisdiction of its organization and has the corporate, limited liability company or limited partnership power and authority to own its properties and conduct its business as described in the Offering Document; and each such Significant Subsidiary of the Company is duly qualified to transact business as a foreign corporation, limited liability company or limited partnership and is in good standing in each jurisdiction in which its

15

ownership or lease of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole;

   (iii) the authorized capital stock of the Company conforms as to legal matters in all material respects to the description thereof contained in the Offering Document;

   (iv) all of the issued and outstanding capital stock of each Significant Subsidiary of the Company that is a corporation is owned by the Company, directly or through subsidiaries, free of any perfected security interests;

   (v) the Indenture has been duly authorized, executed and delivered by the Company; the Offered Securities delivered on such Closing Date have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Indenture, the Offered Securities delivered on such Closing Date will constitute valid and legally binding obligations of the Company enforceable against it in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles (such counsel need express no opinion as to the validity, legally binding effect or enforceability of those sections of the Indenture or any related provisions in the Offered Securities that require or relate to a “make-whole” premium at a rate or in an amount that a court would determine in the circumstances under applicable law to be commercially unreasonable or a penalty or forfeiture); and the Indenture conforms in all material respects to the requirements of the Trust Indenture Act and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder;

   (vi) the shares of Common Stock initially issuable upon conversion of the Offered Securities delivered on such Closing Date have been duly authorized and reserved for issuance upon such conversion and, when issued upon such conversion, will be validly issued, fully paid and nonassessable, and, to the knowledge of such counsel, the shareholders of the Company have no preemptive rights or similar rights with respect to the Offered Securities or the Common Stock issuable upon conversion thereof;

   (vii) the execution and delivery by the Company and each of its subsidiaries of, and the performance by the Company and each of its subsidiaries of their obligations under, the Indenture, this Agreement and the Registration Rights Agreement to which any of the Company or its subsidiaries is a party, including the issuance and sale of the Offered Securities and compliance with the terms and provisions thereof, and the use of proceeds as set forth in the Offering Document under the section thereof entitled “Use of Proceeds,” will not contravene any provision of applicable law or the certificate of incorporation or by-laws or other constitutive documents of the Company or any of its Significant Subsidiaries or, to the best of such counsel’s knowledge after due inquiry, any agreement or other instrument binding upon the Company or any of its subsidiaries that has been filed or incorporated by reference as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 or any subsequent Exchange Act Report, or, to such counsel’s knowledge, any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary (not including Nordural), and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance

16

by the Company of its obligations under this Agreement, the Indenture or the Registration Rights Agreement or the consummation of the offering of the Offered Securities, except as disclosed in the Offering Circular or as may be required to comply with the Registration Rights Agreement under federal and state securities laws or as may be required to comply with the securities or Blue Sky laws of the various states in connection with the offer and sale of the Offered Securities (as to which such counsel need express no opinion), provided that in rendering the opinion under this clause (vii), such counsel may rely upon a certificate of an officer of the Company with respect to the Company’s compliance with financial covenants under the 2001 Indenture;

   (viii) each of this Agreement and the Registration Rights Agreement has been duly authorized, executed and delivered by the Company and, assuming that they have been duly authorized, executed and delivered by the other parties thereto, each of this Agreement and the Registration Rights Agreement is a valid and binding obligation of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether considered in an action at law or in equity) and limitations on the enforceability of indemnification or contribution provisions because of considerations of public policy;

   (ix) the statements in the Offering Document under the captions “Description of Capital Stock,” “Description of Certain Indebtedness,” “Material U.S. Federal Tax Considerations” and “Plan of Distribution,” insofar as such statements constitute summaries of the legal matters, documents or proceedings referred to therein, fairly present the information called for with respect to such legal matters, documents and proceedings and fairly summarize in all material respects the matters referred to therein;

   (x) such counsel does not know of any legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that would be required to be described in the registration statement on Form S-4 of the Company and are not described in the Offering Circular or of any statutes, regulations, contracts or other documents that would required to be described in the registration statement on Form S-4 of the Company that are not described in the Offering Circular;

   (xi) the Company is not, and after giving effect to the offering and sale of the Shares by the Company and the application of the proceeds thereof as described in the Offering Document will not be, required to register as an “investment company” as such term is defined in the Investment CompanyAct; and

   (xii) no registration under the Securities Act of the Offered Securities is required for the sale of the Offered Securities to the Purchasers as contemplated hereby or for the initial resale of the Offered Securities in accordance herewith assuming the accuracy of the Purchaser’s representations set forth in Section 4 hereof and their compliance with the covenants and agreements of each of them contained herein.

   In addition, such counsel shall state in a separate letter that such counsel has participated in conferences with officers and other representatives of the Company at which conferences such counsel discussed the contents of the Offering Document and related matters, and nothing has come to the attention of such counsel that causes such counsel to believe that the Offering Circular, or any amendment or supplement thereto, as of the date hereof and as of the Closing Date, contained any untrue statement of a material fact or omitted to state any material fact necessary to make the

17

statements therein not misleading; it being understood that such counsel need express no opinion as to the financial statements and financial schedules and other financial and statistical data contained in or omitted from the Offering Circular.

   (e) The Purchasers shall have received an opinion of Logos, outside Icelandic counsel for the Company, dated such Closing Date, to the effect that:

   (i) Nordural has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Offering Document and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on Nordural;

   (ii) all of the issued shares of capital stock of Nordural have been duly authorized and are validly issued, fully paid and non-assessable and are owned by the Company directly or indirectly, free and clear of all liens, encumbrances, equities or claims, except as otherwise disclosed in the Offering Document;

   (iii) the consummation of the transactions contemplated hereby will not contravene the certificate of incorporation or by-laws of Nordural or any agreement or other instrument binding upon Nordural that is material to Nordural, or, to the best of such counsel’s knowledge, any judgment, order or decree of any governmental body, agency or court having jurisdiction over Nordural;

   (iv) to the best of such counsel’s knowledge, there are no legal or governmental proceedings pending or threatened to which Nordural is a party or to which any of the properties of Nordural is subject except as otherwise disclosed in the Offering Document or of any statutes, regulations, contracts or other documents that are material to Nordural or the operation of Nordural that are not otherwise described in the Offering Document;

   (v) Nordural (i) is in compliance with any and all applicable Icelandic environmental laws (“Environmental Laws”), (ii) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and (iii) is in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on Nordural;

   (vi) each of the Material Operating Contracts (other than those numbered 1 through 13 to which such counsel need not express any opinion) has been duly authorized, executed and delivered by, and each of the Material Operating Contracts (other than those numbered 1 through 13, 16 and 19 to which such counsel need not express any opinion) constitutes a valid and binding obligation of, Nordural; each of the Material Operating Contracts (other than those numbered 1 through 13, 16 and 19 to which such counsel need not express any opinion) is in full force and effect as of the date hereof

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   (f) The Purchasers shall have received from Davis Polk & Wardwell, counsel for the Purchasers, such opinion or opinions, dated such Closing Date, with respect to the incorporation of the Company, the validity of the Offered Securities, the Offering Circular, the exemption from registration for the offer and sale of the Offered Securities by the Company to the several Purchasers and the resales by the several Purchasers as contemplated hereby and other related matters as CSFB may require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

   (g) The Purchasers shall have received a certificate, dated such Closing Date, of an executive officer of the Company in which such officers, to the best of his or her knowledge after reasonable investigation, shall state that the representations and warranties of the Company in this Agreement are true and correct, that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, and that, subsequent to the date of the most recent financial statements in the Offering Document there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole except as set forth in or contemplated by the Offering Document or as described in such certificate.

   (h) The Purchasers shall have received a letter, dated such Closing Date, of each of Deloitte & Touche LLP and PricewaterhouseCoopers hf which meets the requirements of subsection (a)(l) and (a)(2), respectively, of this Section, except that the specified date referred to in such subsection will be a date not more than three days prior to such Closing Date for the purposes of this subsection.

   (i) The “lock up” agreements, each substantially in the form of Exhibit A hereto, between you and Glencore International AG and each executive officer and director of the Company as listed in Schedule D hereto relating to sales and certain other dispositions of shares of Common Stock or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on such Closing Date.

   (j) An amendment to the Company’s $100 million senior secured revolving credit facility required to consummate the transactions contemplated herein shall have been duly authorized, executed and delivered prior to such Closing Date and shall be in full force and effect on such Closing Date.

The Company will furnish the Purchasers with such conformed copies of such opinions, certificates, letters and documents as the Purchasers reasonably request. CSFB may in its sole discretion waive on behalf of the Purchasers compliance with any conditions to the obligations of the Purchasers hereunder.

       7. Indemnification and Contribution.

   (a) The Company will indemnify and hold harmless each Purchaser, its partners, directors and officers and each person, if any, who controls such Purchaser within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such Purchaser may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or the Exchange Act Reports, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, including any losses, claims, damages or liabilities arising out of or based upon the

19

Company’s failure to perform its obligations under Section 5(a) of this Agreement, and will reimburse each Purchaser for any legal or other expenses reasonably incurred by such Purchaser in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by any Purchaser through CSFB specifically for use therein, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below.

   (b) Each Purchaser will severally and not jointly indemnify and hold harmless the Company, its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities to which the Company may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or arise out of or are basedupon the omission or the alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Purchaser through CSFB specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by any Purchaser consists of (i) the following information in the Offering Document furnished on behalf of each Purchaser: the third, eighth (with regard to market making only), tenth and eleventh paragraphs under the caption “Plan of Distribution”; and (ii) the information in the Offering Document regarding material relationship disclosure under the caption “Plan of Distribution”; provided however, that the Purchasers shall not be liable for any losses, claims, damages or liabilities arising out of or based upon the Company’s failure to perform its obligations under Section 5(a) of this Agreement.

   (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses. In case any such action is brought against any indemnified party, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes (i) an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii)

20

does not include a statement as to or an admission of fault or failure to act by or on behalf of any indemnified party.

   (d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Purchasers on the other from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total discounts and commissions received by the Purchasers from the Company under this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities purchased by it were resold exceeds the amount of any damages which such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The Purchasers’ obligations in this subsection (d) to contribute are several in proportion to their respective purchase obligations and not joint.

   The Company and the Purchasers agree that it would not be just and equitable if contribution pursuant to this Section were determined by pro rata allocation (even if the Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of fraudulent misrepresentation.

   (e) The obligations of the Company under this Section shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Purchaser within the meaning of the Securities Act or the Exchange Act; and the obligations of the Purchasers under this Section shall be in addition to any liability which the respective Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act.

     8. Default of Purchasers. If any Purchaser or Purchasers default in their obligations to purchase Offered Securities hereunder on either the First Closing Date or any Optional Closing Date and the aggregate principal amount of the Offered Securities that such defaulting Purchaser or Purchasers agreed but failed to purchase does not exceed 10% of the total principal amount of the Offered Securities that the Purchasers are obligated to purchase on such Closing Date, CSFB may make arrangements satisfactory to the Company for the

21

purchase of such Offered Securities by other persons, including any of the Purchasers, but if no such arrangements are made by the Closing Date, the non-defaulting Purchasers shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting Purchasers agreed but failed to purchase on such Closing Date. If any Purchaser or Purchasers so default and the aggregate principal amount of the Offered Securities with respect to which such default or defaults occur exceeds 10% of the total principal amount of the Offered Securities that the Purchasers are obligated to purchase on such Closing Date and arrangements satisfactory to CSFB and the Company for the purchase of such Offered Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Purchaser or the Company, except as provided in Section 9 (provided that if such default occurs with respect to Optional Securities after the First Closing Date, this Agreement shall not terminate as to the Firm Securities or any Optional Securities purchased prior to such termination). As used in this Agreement, the term “Purchaser” includes any person substituted for a Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser from liability for its default.

     9. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the several Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Purchaser, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If this Agreement is terminated by the Purchasers, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Purchasers or such Purchasers as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Purchasers in connection with this Agreement or the offering contemplated hereunder.

     10. Notices. All communications hereunder will be in writing and, if sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to the Purchasers c/o Credit Suisse First Boston LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at Century Aluminum Company, 2511 Garden Road, Building A, Suite 200, Monterey, CA, 93940, Attention: Gerald J. Kitchenwith a copy to Curtis, Mallet-Prevost, Colt & Mosle LLP, Attention: Jeffrey N. Ostrager; provided, however, that any notice to a Purchaser pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to such Purchaser.

     11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder.

     12. Representation of Purchasers. You will act for the several Purchasers in connection with this purchase, and any action under this Agreement taken by you jointly or by CSFB will be binding upon all the Purchasers.

     13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

     14. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of laws.

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     The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

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     If the foregoing is in accordance with the Purchasers’ understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a binding agreement between the Company and the several Purchasers in accordance with its terms.

		Very truly yours,
		CENTURY ALUMINUM COMPANY
		By:	/s/ Gerald J. Kitchen
			Name:	Gerald J. Kitchen
			Title:	Executive Vice President
				General Counsel
				Chief Administrative Officer
The foregoing Purchase Agreement is
hereby confirmed and accepted as of
the date first above written.
CREDIT SUISSE FIRST BOSTON LLC
By:
	Name:
	Title:
Acting on behalf of itself and as the
Representative of the several Purchasers

     If the foregoing is in accordance with the Purchasers’ understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a binding agreement between the Company and the several Purchasers in accordance with its terms.

		Very truly yours,
		CENTURY ALUMINUM COMPANY
		By:
			Name:
			Title:
The foregoing Purchase Agreement is
hereby confirmed and accepted as of
the date first above written.
CREDIT SUISSE FIRST BOSTON LLC
By:	/s/ STEVEN WINNERT
	Name: STEVEN WINNERT
	Title: MANAGING DIRECTOR
Acting on behalf of itself and as the
Representative of the several Purchasers

SCHEDULE A

	Principal Amount of
Purchaser	Offered Securities
Credit Suisse First Boston LLC	$	90,000,000
Goldman, Sachs & Co.		30,000,000
Banc of America Securities LLC		30,000,000
Total	$	150,000,000

SCHEDULE B

Material Operating Contracts

1.	Molten Aluminum Purchase Agreement between Century Aluminum of West Virginia, Inc. and Pechiney Rolled Products, LLC, dated September 20, 1999.
2.	Aluminum Purchase Agreement between Berkeley Aluminum, Inc. and Glencore Ltd., dated April 1, 2003, as amended.
3.	Aluminum Purchase Agreement between Berkeley Aluminum, Inc. and Glencore Ltd. dated January 1, 2003
4.	Alumina Supply Agreement dated June 26, 1996 between Glencore AG and Berkeley Aluminum, Inc., as assignee of Glencore Primary Aluminum Company LLC pursuant to the Assignment and Assumption of Alumina Supply Agreement between Xstrata Aluminum Corporation and Berkeley Aluminum, Inc. dated March 31, 2000
5.	Alumina Supply Agreement, dated as of January 1, 2001, between Glencore AG and Berkeley Aluminum, Inc.
6.	Alumina Supply Agreement, dated as of January 1, 2001, between Glencore Ltd. and Century Aluminum of West Virginia, Inc.
7.	Electric Power Supply Agreement between Century Aluminum of West Virginia, Inc. and Ohio Power Company (d.b.a. American Electric Power), dated May 3, 1997
8.	South Carolina Public Service Authority Service Agreement for Large Power Electric Service between the South Carolina Public Service Authority and Alumax of South Carolina, Inc., dated July 1, 2003.
9.	Amended and Restated Owners’ Agreement, dated as of January 26, 1996, as amended relating to the Mt. Holly facility
10.	Aluminum Supply Agreement between Century Aluminum Company and Southwire Company, dated as of April 2, 2001.
11.	Alumina Purchase Agreement between Kaiser Aluminum & Chemical Corporation and Southwire Company, dated December 18, 1997 as amended heretofore by First Amendment and Second Amendment, as assigned to Century or one of its subsidiaries pursuant to the assignment and assumption agreement dated on or about April 1, 2001.
12.	Alumina Purchase Agreement between Kaiser Aluminum & Chemical Corporation and Century Aluminum of Kentucky LLC, dated May 26, 2003.
13.	Agreement for Electric Service between Green River Electric Corporation and Southwire Company, dated July 15, 1998, as amended by Amendment No. 1 dated July 15, 1998, as assigned to Century or one of its subsidiaries pursuant to the assignment and assumption agreement dated on or about April 2, 2001.
14.	Investment Agreement, dated as of August 7, 1997, by and among the Government of Iceland, Columbia Ventures Corporation and Nordural hf as amended by the First Amendment to the Investment Agreement dated June 14, 2000 between the Government of Iceland, Columbia Ventures Corporation and Nordural hf.

15.	Power Agreement, dated as of August 7, 1997, by and between Landsvirkjun (The National Power Company) and Nordural hf as amended by the First Amendment to the Power Agreement dated October 29, 1999 between Landsvirkjun and Nordural hf.
16.	Alumina Supply, Toll Conversion and Aluminium Metal Supply Agreement, dated September 23, 1997, by and between Billiton Marketing and Trading B.V. and Nordural hf, as amended by the First Amendment to the Alumina Supply, Toll Conversion and Aluminium Metal Supply Agreement, dated June 16, 2000, by and between Billiton Marketing B.V. and Nordural hf.
17.	Harbour Agreement dated August 7, 1997 between The Grundartangi Harbour Fund and Nordural hf.
18.	Smelter Site Agreement dated March 20, 1997 between The State Treasury of Iceland and Nordural hf as amended by the First Amendment to the Smelter Site Agreement dated August 7, 1997 between The State Treasury of Iceland and Nordural hf.
19.	Amended and Restated Carbon Anode Blocks Sales and Purchase Agreement, dated as of June 15, 2000, by and between VAW aluminium AG and Nordural hf.

SCHEDULE C

Significant Subsidiaries

Berkeley Aluminum, Inc.
Century Aluminum of West Virginia, Inc.
Century Bermuda I Limited
Century Bermuda II Limited
Century Kentucky, Inc.
Metalsco, Ltd.
Skyliner, Inc.
Nordural Hf
Nordural Holdings I eHf
Nordural Holdings II eHf
Nordural U.S. LLC
NSA, Ltd.
Hancock Aluminum LLC
Century Aluminum of Kentucky LLC

SCHEDULE D

Lock-Up Agreements

Craig A. Davis
Gerald J. Kitchen
David W. Beckley
E. Jack Gates
Daniel J. Krofcheck
Steve Schneider
Peter C. McGuire
John C. Fontaine
John P. O’Brien
Robert E. Fishman
William R. Hampshire
Roman A. Bninski
Stuart M. Schreiber
Willy R. Strothotte
Glencore International AG

EXHIBIT A

FORM OF
LOCK-UP AGREEMENT

July                    , 2004

Century Aluminum Company
2511 Garden Road
Building A, Suite 200
Monterey, CA, 93940

Credit Suisse First Boston LLC
As Representative of the Several Purchasers,
Eleven Madison Avenue,
New York, NY 10010-3629

Dear Sirs:

     The undersigned understands that the Purchasers intend to undertake an offering of the Securities referred to below as part of a series of proposed transactions that include a tender offer (the “Tender Offer”) for Century Aluminum Company’s 11.75% Senior Secured First Mortgage Notes. As an inducement to the Purchasers to execute the Purchase Agreement pursuant to which an offering will be made that is intended to result in an orderly market for Convertible Senior Notes (the “Securities”) of Century Aluminum Company, a Delaware corporation, and any successor (by merger or otherwise) thereto (the “Company”), the undersigned hereby agrees that during the period specified in the following paragraph (the “Lock-Up Period”), the undersigned will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of the Company’s common stock, par value $0.01 per share (the “common stock”) or securities convertible into or exchangeable or exercisable for any shares of the Company’s common stock, enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the Company’s common stock, whether any such aforementioned transaction is to be settled by delivery of the Company’s common stock or such other securities, in cash or otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of Credit Suisse First Boston LLC (“CSFB”), as representative of the purchasers (the “Purchasers”) that may be party to the Purchase Agreement to be entered into by the Company and such Purchasers. In addition, the undersigned agrees that, without the prior written consent of CSFB, it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any of the Company’s common stock or any security convertible into or exercisable or exchangeable for the Company’s common stock, including the Securities.

     The Lock-Up Period will commence on the date of the Lock-Up Agreement and continue for 45 days after the offering date set forth on the final Offering Document used to sell the Securities (the “Offering Date”) pursuant to the Purchase Agreement.

     Notwithstanding the foregoing, the following transactions, in each case will not be subject to this Agreement:

1. transactions by the undersigned relating to shares of the Company’s common stock or other securities acquired in open market transactions after the completion of the offering of the Securities;

2.	the transfer of shares of the Company’s common stock as bona fide gifts; provided that the transferred shares remain subject to the restrictions above (provided that up to an aggregate of 1,000 Shares of common stock transferred by the undersigned shall not remain subject to the restrictions following transfer as bona fide gifts) and the transferor is not required to file a Form 4 under the Exchange Act;
3.	sales or other dispositions of shares of the Company’s common stock to the Company to discharge tax withholding obligations resulting from the vesting of performance shares or the exercise of stock options during the term of the Lock-Up Period; provided that the aggregate number of shares withheld by the Company for all persons subject to these restrictions in reliance on this exception (and the similar exception contained in the lock-up agreements signed by such other persons) does not exceed 100,000 shares of the Company’s common stock;
4.	transfers or other dispositions of shares of the Company’s common stock to the Company in payment of the exercise price of stock options during the term of the Lock-Up Period, or upon the cashless exercise of stock options during the term of the Lock-Up Period; provided that such shares are not subsequently sold by the Company during the Lock-up Period; and
5.	Any sales, transfers or other dispositions by the undersigned, if the undersigned is an officer or director, of the Company’s common stock beginning on the date, if any, that is two weeks after the successful consummation of the Tender Offer; provided that (a) the aggregate number of shares sold, transferred or otherwise disposed of by all persons subject to these restrictions in reliance on this exception (and the similar exception contained in the lock-up agreements signed by such other persons) does not exceed 350,000 shares of Common Stock and (b) any such sales transfers or other dispositions are effected through Credit Suisse First Boston LLC.

     Any shares of the Company’s common stock received upon exercise of options granted to the undersigned will also be subject to this Agreement.

     In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to make any transfer of shares of common stock if such transfer would constitute a violation or breach of this Agreement

     This Agreement shall be binding on the undersigned and the successors, heirs, personal representatives and assigns of the undersigned. This Agreement shall lapse and become null and void if the Offering Date shall not have occurred on or before September 30, 2004. This agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

Very truly yours,

EX-10.1

Exhibit 10.1

EXECUTION COPY

PURCHASE AGREEMENT

dated as of

May 17, 2004

among

KAISER ALUMINUM & CHEMICAL CORPORATION
and
KAISER BAUXITE COMPANY

and

GRAMERCY ALUMINA LLC
and
ST. ANN BAUXITE LIMITED

TABLE OF CONTENTS

	Page
ARTICLE I DEFINITIONS		2
1.1 Definitions		2
1.2 Certain Interpretive Matters		17
1.2.1 Certain References		17
1.2.2 Titles and Headings		17
1.2.3 Participation in Drafting		17
ARTICLE II PURCHASE AND SALE; TREATMENT OF LIABILITIES		17
2.1 Sale and Transfer of Assets		17
2.2 Assumed Liabilities		17
2.3 Retained Liabilities		17
2.4 Nonassignable Contracts		17
2.4.1 Nonassignability		17
2.4.2 Efforts to Obtain Consents		18
2.4.3 Alternative Arrangements If Consents Not Obtained		18
2.4.4 Obligation of Buyers to Perform		18
2.5 Arrangements with Respect to KJBC Owned Real Property		18
2.6 Conditions Precedent		18
2.7 Permitted Liens		18
ARTICLE III PURCHASE PRICE		19
3.1 Aggregate Purchase Price		19
3.2 Deposit		19
3.3 Adjustment of Purchase Price		19
3.3.1 Closing Balance Sheet		20
3.3.2 Cooperation		20
3.3.3 Review of Closing Statements		20
3.3.4 Adjustment to Purchase Price		21
3.3.5 Estimate of Purchase Price Adjustment		21
3.4 Physical Inventory		21
3.5 Purchase Price Allocation		22
3.6 Intercompany Accounts		22

i

TABLE OF CONTENTS
(continued)

	Page
3.6.1 KBC		22
3.6.2 Alpart		23
ARTICLE IV CLOSING		23
4.1 Closing		23
4.2 Documents to be Delivered by Buyers		23
4.2.1 Purchase Price		23
4.2.2 Compliance Certificate		23
4.2.3 Officer’s Certificate		23
4.2.4 Assumption Documents		23
4.2.5 Secretary’s Certificate		23
4.3 Documents to be Delivered by Sellers		23
4.3.1 Receipt		23
4.3.2 Compliance Certificate		24
4.3.3 Officer’s Certificate		24
4.3.4 Transfer Documents		24
4.3.5 Secretary’s Certificate		24
4.3.6 Technology Licenses		24
4.4 Other Documents to be Delivered		24
4.4.1 Transition and Shared Services Agreement		24
4.4.2 Environmental Escrow Agreement		24
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLERS GENERALLY AND WITH RESPECT TO KJBC AND KBC		24
5.1 Organization		24
5.2 Corporate Authority		25
5.3 Consents		25
5.4 Partnership Interests		26
5.4.1 Partners’ Respective Holdings		26
5.4.2 No Other Obligation to Transfer Partnership Interest		26
5.4.3 Title to Partnership Interest		26
5.5 Interest in Other Persons		26

ii

TABLE OF CONTENTS
(continued)

	Page
5.6 Financial Statements		26
5.7 Sufficiency of Assets		27
5.8 KBC Inventory		27
5.9 Conduct of Business		27
5.10 Real Property		27
5.10.1 KJBC Owned Real Property		27
5.10.2 KJBC Leased Real Property		27
5.10.3 KBC Owned Real Property		27
5.10.4 KBC Leased Real Property		28
5.10.5 Possession		28
5.10.6 Zoning and Other Restrictions		28
5.11 Tangible Personal Property		28
5.11.1 KJBC Owned Tangible Personal Property		28
5.11.2 KJBC Leased Tangible Personal Property		28
5.11.3 KBC Owned Tangible Personal Property		29
5.11.4 KBC Leased Tangible Personal Property		29
5.12 Material Contracts		29
5.12.1 KJBC Material Contracts		29
5.12.2 KBC Material Contracts		29
5.12.3 Agreements Provided		30
5.13 Intellectual Property		30
5.13.1 KJBC Owned Intellectual Property		30
5.13.2 KJBC Licensed Intellectual Property		30
5.13.3 KBC Owned Intellectual Property		30
5.13.4 KBC Licensed Intellectual Property		30
5.13.5 No Unresolved Claims		31
5.14 Permits		31
5.14.1 List of Permits		31
5.14.2 Permit Compliance		31
5.15 Compliance with Law		31

iii

TABLE OF CONTENTS
(continued)

	Page
5.16 Litigation		31
5.17 Environmental Matters		32
5.17.1 Environmental Compliance		32
5.17.2 Disposal Sites		32
5.17.3 List of Environmental Permits		32
5.17.4 Environmental Permit Compliance		32
5.18 Employees		32
5.18.1 Compliance with Laws		32
5.18.2 Employment and Severance Agreements		33
5.18.3 Liabilities Satisfied		33
5.19 Labor Matters		33
5.19.1 Collective Bargaining Agreements		33
5.19.2 No Other Labor Organization		33
5.20 KBC Plans and Employee Compensation		33
5.21 Administration of KBC Plans		33
5.22 Insurance		33
5.23 Tax Matters		33
5.23.1 Tax Returns		34
5.23.2 Unresolved Items		34
5.23.3 Stamp Duty		34
5.24 Related Party Transactions		34
5.25 Brokers and Finders		34
5.26 Title to KBC Purchased Assets		34
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF KAISER WITH RESPECT TO THE GRAMERCY PURCHASED ASSETS		35
6.1 Sufficiency of Assets		35
6.2 Gramercy Inventory		35
6.3 Conduct of Business		35
6.4 Real Property		35
6.4.1 Owned Real Property		35

iv

TABLE OF CONTENTS
(continued)

	Page
6.4.2 Leased Real Property		35
6.4.3 Possession		35
6.4.4 Zoning and Other Restrictions		36
6.5 Tangible Personal Property		36
6.5.1 Owned Tangible Personal Property		36
6.5.2 Leased Tangible Personal Property		36
6.5.3 Condition of Assets		36
6.6 Gramercy Material Contracts		36
6.6.1 Gramercy Material Contracts		37
6.6.2 Agreements Provided		37
6.7 Intellectual Property		37
6.7.1 Owned Intellectual Property		37
6.7.2 Licensed Intellectual Property		37
6.7.3 No Unresolved Claims		37
6.8 Permits		37
6.8.1 List of Permits		37
6.8.2 Permit Compliance		38
6.9 Compliance with Law		38
6.10 Litigation		38
6.11 Environmental Matters		38
6.11.1 Environmental Compliance		38
6.11.2 Disposal Sites		38
6.11.3 List of Environmental Permits		38
6.11.4 Environmental Permit Compliance		39
6.12 Labor Matters		39
6.12.1 Collective Bargaining Agreements		39
6.12.2 No Other Labor Organization		39
6.13 Insurance		39
6.14 Tax Matters		39
6.14.1 Tax Returns		39

v

TABLE OF CONTENTS
(continued)

	Page
6.14.2 Unresolved Items		39
6.15 Title to Gramercy Purchased Assets		39
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF BUYER		40
7.1 Organization		40
7.2 Corporate Authority		40
7.3 Consents		40
7.4 Representations Exclusive		41
7.5 Sufficiency of Funds		41
7.6 Investment Intent		41
7.7 Brokers and Finders		41
ARTICLE VIII CERTAIN COVENANTS		41
8.1 Conduct of the Business; Transition Planning		41
8.1.1 Certain Restrictions		41
8.1.2 Transition Planning		44
8.2 Access to Information; Confidentiality		44
8.3 Commercially Reasonable Efforts; Regulatory Matters		44
8.3.1 Efforts to Close		44
8.3.2 Notice of Breaches		45
8.4 Bankruptcy Court Approval		45
8.4.1 Sales Process and Approval Motion		45
8.4.2 Hearing for the Bidding Procedures Order		45
8.5 Sales Order; Cooperation		46
8.5.1 Sales Order		46
8.5.2 Cooperation		46
8.6 Public Announcements		46
8.7 Tax Matters		47
8.7.1 Cooperation		47
8.7.2 Treatment of Payments		47
8.7.3 Tax Elections		47
8.7.4 Allocation of Taxes		47

vi

TABLE OF CONTENTS
(continued)

	Page
8.7.5 Tax Returns and Payments		48
8.7.6 Contests		48
8.8 KBC Employees		49
8.8.1 Employment Offers for KBC Represented Employees		49
8.8.2 Employment Offers for Non-Represented KBC Employees		49
8.8.3 KBC Labor Agreements and Pension Plans		49
8.8.4 Benefits Maintenance for KBC Represented Employees		49
8.8.5 No Employment Guarantee		49
8.8.6 No Prohibition on Amendment of Plans		49
8.8.7 Elimination of Severance and Redundancy Obligations		49
8.9 Seller Employees		50
8.9.1 Employment Offer to Seller Employees		50
8.9.2 Release of Seller Employees; No Solicitation		50
8.10 Gramercy Employees		50
8.10.1 Employment Offers to Gramercy Salaried Employees		51
8.10.2 Release of Gramercy Salaried Employees; No Solicitation		51
8.10.3 Collective Bargaining		51
8.10.4 Form W-2		51
8.10.5 No Employment Guarantee		51
8.10.6 WARN Act		51
8.11 Plan of Reorganization		51
8.12 Financial Statements		52
8.13 Insurance		52
8.14 Confidential Information		53
8.15 Gramercy Environmental Conditions		53
8.15.1 Scheduled Environmental Conditions		53
8.15.2 Environmental Escrow Agreement		53
8.15.3 Environmental Insurance		54
8.15.4 Release		54
8.16 Demolition of La Roche Site		54

vii

TABLE OF CONTENTS
(continued)

	Page
8.17 Procurement of BFPP Letter		54
8.17.1 Kaiser Assistance		54
8.17.2 Gramercy Environmental History		54
8.17.3 Coordination with Kaiser		55
8.17.4 LDEQ Approval		55
8.17.5 Alternative Measures		55
8.18 LDEQ Compliance		55
8.19 Trade Names		56
8.20 Name Change		56
8.21 Further Assurances		56
ARTICLE IX CONDITIONS TO CLOSING		56
9.1 Conditions to the Obligations of Each Party		56
9.1.1 No Injunction		56
9.1.2 HSR		56
9.1.3 Third Party Consents		56
9.1.4 Bankruptcy Court Approval		56
9.1.5 Consent Under DIP Facility		56
9.2 Conditions to the Obligations of Sellers		56
9.2.1 Compliance by Buyers		57
9.2.2 Accuracy of Buyers’ Representations		57
9.2.3 Assumption Documents		57
9.2.4 Payment of Purchase Price		57
9.2.5 Resolutions of Buyers		57
9.3 Conditions to the Obligations of Buyers		57
9.3.1 Compliance by Sellers		57
9.3.2 Accuracy of Each Seller’s Representations		58
9.3.3 Transfer Documents		58
9.3.4 Environmental Escrow Agreement		58
9.3.5 No Material Adverse Change		58
9.3.6 Sales Order		58

viii

TABLE OF CONTENTS
(continued)

	Page
9.3.7 KBC Contracts and Gramercy Contracts		58
9.3.8 Resolutions of Sellers		58
9.3.9 Technology Licenses		58
9.3.10 Alcan License		58
9.3.11 Property Taxes		59
ARTICLE X TERMINATION		59
10.1 Termination		59
10.1.1 Mutual Consent		59
10.1.2 Sellers Termination		59
10.1.3 Buyers Termination		60
10.2 Effect of Termination		62
10.3 Termination Fee		62
ARTICLE XI INDEMNIFICATION		62
11.1 Survival of Representations and Warranties		63
11.2 Indemnification by Buyers		63
11.3 Indemnification by Sellers		64
11.4 Limitations		64
11.4.1 Basket and Cap		64
11.4.2 Netting of Insurance Proceeds		64
11.5 Procedures		64
11.5.1 Notice of Claim; Information		64
11.5.2 Right to Defense		65
11.6 Exclusive Remedies		65
ARTICLE XII MISCELLANEOUS		65
12.1 Entire Agreement		65
12.2 Notices		65
12.3 Amendments and Waivers		67
12.3.1 Writing Required		67
12.3.2 No Implied Waiver		67
12.4 Expenses		67

ix

TABLE OF CONTENTS
(continued)

	Page
12.4.1 Expenses Relating to this Agreement		67
12.4.2 Consents and Transfers		67
12.4.3 Certain Other Obligations		68
12.4.4 Certain Jamaican Filings		68
12.4.5 Rights to Refunds		68
12.4.6 Certain Prohibitions		68
12.5 Damages		68
12.6 Successors and Assigns		69
12.7 Governing Law		69
12.8 Bulk Sales		69
12.9 Knowledge		69
12.10 Consent to Jurisdiction; Arbitration		69
12.10.1 During Bankruptcy Cases		69
12.10.2 Post-Bankruptcy		69
12.10.3 Disputes as to Arbitration		69
12.10.4 Service of Process		69
12.11 Severability		69
12.12 Counterparts; Effectiveness		70

x

TABLE OF SCHEDULES AND EXHIBITS

SCHEDULES

Schedule 1.1(a)	Gramercy Excluded Assets
Schedule 1.1(b)	Gramercy Excluded Contracts
Schedule 1.1(c)	KBC Excluded Assets
Schedule 1.1(d)	KBC Excluded Contracts
Schedule 3.5	Purchase Price Allocation
Schedule 5.3	Seller Consents
Schedule 5.6	KJBC Financial Statements
Schedule 5.8	KBC Inventory Statement
Schedule 5.9	Conduct of KJBC Operations
Schedule 5.10.1(a)	KJBC Owned Real Property Liens
Schedule 5.10.1(b)	KJBC Owned Real Property
Schedule 5.10.2(a)	KJBC Leased Real Property Liens
Schedule 5.10.2(b)	KJBC Leased Real Property
Schedule 5.10.3(a)	KBC Owned Real Property Liens
Schedule 5.10.3(b)	KBC Owned Real Property
Schedule 5.10.4(a)	KBC Leased Real Property Liens
Schedule 5.10.4(b)	KBC Leased Real Property
Schedule 5.10.5	Possession; Encroachment
Schedule 5.10.6(a)	Zoning Restrictions
Schedule 5.10.6(b)	Zoning Applications
Schedule 5.11.1(a)	KJBC Owned Tangible Personal Property Liens
Schedule 5.11.1(b)	KJBC Owned Tangible Personal Property
Schedule 5.11.2(a)	KJBC Leased Tangible Personal Property Rights
Schedule 5.11.2(b)	KJBC Leased Tangible Personal Property
Schedule 5.11.3(a)	KBC Owned Tangible Personal Property Liens
Schedule 5.11.3(b)	KBC Owned Tangible Personal Property
Schedule 5.11.4(a)	KBC Leased Tangible Personal Property Rights
Schedule 5.11.4(b)	KBC Leased Tangible Personal Property
Schedule 5.12.1(a)	KJBC Material Contracts
Schedule 5.12.1(b)	Disputes Under KJBC Material Contracts
Schedule 5.12.2(a)	KBC Material Contracts
Schedule 5.12.2(b)	Disputes Under KBC Material Contracts
Schedule 5.13.1(a)	KJBC Owned Intellectual Property Rights
Schedule 5.13.1(b)	KJBC Owned Intellectual Property
Schedule 5.13.2(a)	KJBC Licensed Intellectual Property Rights
Schedule 5.13.2(b)	KJBC Licensed Intellectual Property
Schedule 5.13.3(a)	KBC Owned Intellectual Property Rights
Schedule 5.13.3(b)	KBC Owned Intellectual Property
Schedule 5.13.4(a)	KBC Licensed Intellectual Property Rights
Schedule 5.13.4(b)	KBC Licensed Intellectual Property
Schedule 5.14.1	KJBC/KBC Permits
Schedule 5.14.2	KJBC/KBC Permit Compliance

xi

Schedule 5.15	KJBC/KBC Compliance with Law
Schedule 5.16	KJBC/KBC Litigation
Schedule 5.17.1	KJBC/KBC Environmental Matters
Schedule 5.17.2	KJBC/KBC Disposal Sites
Schedule 5.17.3	KJBC/KBC Environmental Permits
Schedule 5.17.4	KJBC/KBC Environmental Permit Compliance
Schedule 5.18.1	Employees
Schedule 5.18.2	Employment and Severance Agreements
Schedule 5.19.1	KJBC/KBC Labor and Collective Bargaining Agreements
Schedule 5.20	KBC Plans
Schedule 5.21	Administration of KBC Plans
Schedule 5.22	KJBC Insurance Policies
Schedule 5.23.1	Tax Returns
Schedule 5.23.2	Unresolved Items
Schedule 6.2	Gramercy Inventory Statement
Schedule 6.3	Conduct of Gramercy Operations
Schedule 6.4.1(a)	Gramercy Owned Real Property Liens
Schedule 6.4.1(b)	Gramercy Owned Real Property
Schedule 6.4.2(a)	Gramercy Leased Real Property Liens
Schedule 6.4.2(b)	Gramercy Leased Real Property
Schedule 6.4.4(a)	Zoning Restrictions
Schedule 6.4.4(b)	Zoning Applications
Schedule 6.5.1(a)	Gramercy Owned Tangible Personal Property Liens
Schedule 6.5.1(b)	Gramercy Owned Tangible Personal Property
Schedule 6.5.2(a)	Gramercy Leased Tangible Personal Property Rights
Schedule 6.5.2(b)	Gramercy Leased Tangible Personal Property
Schedule 6.5.3	Condition of Assets
Schedule 6.6.1(a)	Gramercy Material Contracts
Schedule 6.6.1(b)	Disputes Under Gramercy Material Contracts
Schedule 6.7.1(a)	Gramercy Owned Intellectual Property Rights
Schedule 6.7.1(b)	Gramercy Owned Intellectual Property
Schedule 6.7.2(a)	Gramercy Licensed Intellectual Property Rights
Schedule 6.7.2(b)	Gramercy Licensed Intellectual Property
Schedule 6.8.1	Gramercy Permits
Schedule 6.8.2	Gramercy Permit Compliance
Schedule 6.9	Gramercy Compliance with Law
Schedule 6.10	Gramercy Litigation
Schedule 6.11.1	Gramercy Environmental Matters
Schedule 6.11.2	Gramercy Disposal Sites
Schedule 6.11.3	Gramercy Environmental Permits
Schedule 6.11.4	Gramercy Environmental Permit Compliance
Schedule 6.12.1	Gramercy Labor and Collective Bargaining Agreements
Schedule 6.13	Gramercy Insurance Policies
Schedule 6.14.1	Gramercy Tax Returns
Schedule 6.14.2	Gramercy Unresolved Items
Schedule 7.3	Buyers Consents

xii

Schedule 8.1.1(a)	Conduct of the Businesses
Schedule 8.1.1(b)	KJBC Capital Spending Plans
Schedule 8.1.1(c)	Gramercy Capital Spending Plans
Schedule 8.8.3	KBC Pension Plans
Schedule 8.9.1	Seller Employees
Schedule 8.10.1	Gramercy Salaried Employees
Schedule 8.15.1	Gramercy Scheduled Environmental Conditions
Schedule 9.1.3	Third Party Consents
Schedule 12.9	Sellers’ Knowledge

EXHIBITS

Exhibit A	Form of Bidding and Auction Procedures
Exhibit B	Form of Environmental Escrow Agreement
Exhibit C	Form of Escrow Agreement
Exhibit D	Sample Calculation of Closing Gramercy Inventory Statement
Exhibit E	Sample Calculation of Modified Working Capital
Exhibit F	Sample Calculation of Closing KBC Inventory Statement
Exhibit G	Form of Sales Process and Approval Motion
Exhibit H	Form of Sales Order
Exhibit I	Form of KJBC Technology License Agreement
Exhibit J	Form of Gramercy Technology License Agreement

xiii

PURCHASE AGREEMENT

     This PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of May 17, 2004, by and among Kaiser Aluminum & Chemical Corporation, a Delaware corporation (“Kaiser”), Kaiser Bauxite Company, a Nevada corporation (“KBC,” and collectively with Kaiser, “Sellers”), St. Ann Bauxite Limited, a Jamaican private limited company (“KJBC Buyer”), and Gramercy Alumina LLC, a Delaware limited liability company (“Gramercy Buyer” and collectively with KJBC Buyer, “Buyers”).

RECITALS:

     A. Kaiser Jamaica Bauxite Company (“KJBC”) is a Jamaican registered partnership between KBC and Jamaica Bauxite Mining Company Ltd., a Government of Jamaica state-owned corporation (“JBM”).

     B. KBC is a wholly-owned subsidiary of Kaiser.

     C. KBC and JBM, doing business as KJBC, own and operate a bauxite mining operation on the north coast of Jamaica, including drying, storage and shipping facilities located at Port Rhoades, Discovery Bay (the “KJBC Operations”).

     D. Under the Partnership Agreement (as defined below), ownership of all real and personal property of KJBC is vested in the partners of KJBC in proportion to each partner’s Partnership Interest (as defined below), and therefore, legal title to the property used in the KJBC Operations is held by KBC and JBM, as tenants in common, for the use and benefit of KJBC.

     E. Kaiser owns and operates an alumina refinery (“Gramercy”) located on the Mississippi River in Gramercy, Louisiana, including drying and material handling facilities, a power house for steam and electricity production, a deep water dock and a third party barge loading facility (the “Gramercy Operations” and together with the KJBC Operations, the “Combined Operations”).

     F. On February 12, 2002 (the “Kaiser Petition Date”) Kaiser filed, and on January 14, 2003 (the “KBC Petition Date”) KBC filed, voluntary petitions for relief under chapter 11 of title 11 of the United States Code (as now in effect or hereafter amended, the “Bankruptcy Code”) with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), and those chapter 11 cases (collectively, the “Bankruptcy Cases”) have been consolidated for procedural purposes only and are being administered jointly as Case No. 02-10429 (JKF).

     G. Sellers desire to sell, and Buyers desire to purchase, the KBC Purchased Assets (as defined below) and the Gramercy Purchased Assets (as defined below), pursuant to, inter alia, Sections 363 and 365 of the Bankruptcy Code, on the terms and subject to the conditions hereinafter set forth.

AGREEMENTS:

     NOW, THEREFORE, in consideration of the representations, warranties and covenants set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Sellers and Buyers hereby agree as follows:

ARTICLE I
DEFINITIONS

     1.1 Definitions. The following capitalized terms used in this Agreement shall have the respective meanings ascribed to them in this Section 1.1:

     “ACC” has the meaning set forth in Section 8.14.

     “Adjustment” has the meaning set forth in Section 3.3.4.

     “Adjustment Request” has the meaning set forth in Section 3.3.3.

     “Affiliate” means, with respect to any Person, any other Person who directly or indirectly controls, is controlled by or is under the common control with that Person. For the purposes of this definition, the term “control,” when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by contract or otherwise.

     “Agreement” has the meaning set forth in the introductory paragraph of this purchase agreement.

     “Alcan License” has the meaning set forth in Section 9.3.10.

     “Alpart” means Alumina Partners of Jamaica.

     “Assumed Liabilities” means the KBC Assumed Liabilities and the Gramercy Assumed Liabilities.

     “Assumption Documents” means those instruments of assumption and other instruments and documents as may be necessary or appropriate to effect or to evidence assumption of the Assumed Liabilities by Buyers in accordance with the terms of this Agreement.

     “Auction” has the meaning set forth in the Bidding and Auction Procedures.

     “Balance Sheet” has the meaning set forth in Section 5.6.

     “Balance Sheet Date” has the meaning set forth in Section 5.6.

     “Balance Sheet Date Gramercy Inventory Statement” has the meaning set forth in Section 6.2.

     “Balance Sheet Date KBC Inventory Statement” has the meaning set forth in Section 5.8.

2

     “Bankruptcy Cases” has the meaning set forth in Recital F to this Agreement.

     “Bankruptcy Code” has the meaning set forth in Recital F to this Agreement.

     “Bankruptcy Court” has the meaning set forth in Recital F to this Agreement.

     “Bankruptcy Laws” means the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, as amended, and the local rules of the Bankruptcy Court.

     “Bankruptcy Pleadings” means all pleadings relating to this Agreement filed with the Bankruptcy Court by either Seller or any other Person.

     “Basket” has the meaning set forth in Section 11.4.1.

     “BFPP Letter” means a document from the LDEQ addressed to Gramercy Buyer in form and substance acceptable to Gramercy Buyer, confirming the status of Gramercy Buyer as a “bona fide prospective purchaser” as contemplated under LSA-R.S. 30:2271-2283 with respect to the Gramercy Site.

     “Bidding and Auction Procedures” means the bidding and auction procedures, substantially in the form attached hereto as Exhibit A, to be followed in connection with the proposed sale by the Sellers of the Purchased Assets as approved by the Bidding Procedures Order.

     “Bidding Procedures Hearing” has the meaning set forth in Section 8.4.2.

     “Bidding Procedures Order” has the meaning set forth in Section 8.4.1.

     “Book Value” has the meaning set forth in Section 3.3.1.

     “Buyer Indemnified Parties” has the meaning set forth in Section 11.3.

     “Buyers” has the meaning set forth in the introductory paragraph to this Agreement.

     “Buyers’ Proposed Calculations” has the meaning set forth in Section 3.3.1.

     “Closing” means the consummation of the purchase and sale of the Purchased Assets contemplated by this Agreement.

     “Closing Balance Sheet” has the meaning set forth in Section 3.3.1.

     “Closing Date” has the meaning set forth in Section 4.1.

     “Closing Employee Loan Statement” has the meaning set forth in Section 3.3.1.

     “Closing Gramercy Inventory” has the meaning set forth in Section 3.3.1.

     “Closing Gramercy Inventory Statement” has the meaning set forth in Section 3.3.1.

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     “Closing KBC Inventory” has the meaning set forth in Section 3.3.1.

     “Closing KBC Inventory Statement” has the meaning set forth in Section 3.3.1.

     “Closing Modified Working Capital” has the meaning set forth in Section 3.3.1.

     “Closing Statements” has the meaning set forth in Section 3.3.1.

     “Combined Operations” has the meaning set forth in Recital E to this Agreement.

     “Confidentiality Agreement” means the Confidentiality Agreement, dated June 14, 2003, between Kaiser and Century Aluminum Company.

     “Consent” means any consent, waiver, approval, order or authorization of, or registration, declaration or filing with or notice to, any Person, including any required passage of time or waiting period after any such registration, declaration or filing.

     “Deposit” has the meaning set forth in Section 3.2.

     “DIP Facility” means the Post-Petition Credit Agreement, dated as of February 12, 2002, among Kaiser Aluminum & Chemical Corporation, Kaiser Aluminum Corporation, certain financial institutions party thereto and Bank of America, N.A., as Agent (as amended, modified, supplemented, restated or replaced from time to time).

     “Dispute Notice” has the meaning set forth in Section 3.5.

     “Effective Time” means 11:59 p.m. on the Closing Date.

     “Election A” has the meaning set forth in the Bidding and Auction Procedures.

     “Election B” has the meaning set forth in the Bidding and Auction Procedures.

     “Eligible Participants” has the meaning set forth in the Bidding and Auction Procedures.

     “Environment” means any land (including soil, surface land and sub-surface strata, sea bed or river bed under any water referred to below and any natural or man-made structures), any waters (including coastal and inland waters, surface waters, ground waters, aquifers and water in pipes, drains or other conduits) and air (including ambient air and air within buildings and other natural or man-made structures above or below ground).

     “Environmental Deposit” has the meaning set forth in Section 8.15.2.

     “Environmental Escrow Agent” means Bank of Texas, N.A.

     “Environmental Escrow Agreement” means the environmental escrow agreement, substantially in the form attached hereto as Exhibit B, to be executed and delivered by and among, Kaiser, Gramercy Buyer and the Environmental Escrow Agent prior to Closing.

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     “Environmental Laws” means any and all Laws, and applicable standards adopted by Governmental Entities with which compliance is mandatory, relating to the protection of the Environment or releases of Hazardous Materials into the Environment or otherwise relating to the manufacture, use, treatment, storage, transport, disposal or handling of Hazardous Materials or the clean-up or other remediation thereof.

     “Environmental Termination Date” has the meaning set forth in Section 11.1.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “Escrow Agent” means Bank of Texas, N.A.

     “Escrow Agreement” means the escrow agreement, substantially in the form attached hereto as Exhibit C, to be executed and delivered by and among Sellers, Gramercy Buyer and the Escrow Agent simultaneously with the execution and delivery of this Agreement.

     “Estimated Balance Sheet” has the meaning set forth in Section 3.3.5.

     “Estimated Calculations” has the meaning set forth in Section 3.3.5.

     “Estimated Gramercy Inventory Statement” has the meaning set forth in Section 3.3.5.

     “Estimated KBC Employee Loan Statement” has the meaning set forth in Section 3.3.5.

     “Estimated KBC Inventory Statement” has the meaning set forth in Section 3.3.5.

     “Estimated Purchase Price” has the meaning set forth in Section 3.3.5.

     “Estimated Statements” has the meaning set forth in Section 3.3.5.

     “Final Allocable Amount” has the meaning set forth in Section 3.5.

     “Final Allocation Statement” has the meaning set forth in Section 3.5.

     “Final Order” means an order or judgment of the Bankruptcy Court (a) that is not the subject of a pending appeal, petition for certiorari, motion for reconsideration or other proceeding for review, rehearing or reargument, (b) that has not been reversed, stayed, modified or amended, and (c) that the time period in which to appeal, to petition for certiorari, to move for reconsideration or to seek review, rehearing or reargument shall have expired, as a result of which such order shall have become final in accordance with Rule 8002 of the Federal Rules of Bankruptcy Procedure and other applicable Laws.

     “Final Purchase Price” has the meaning set forth in Section 3.1.

     “Futures Representative” has the meaning set forth in Section 8.14.

     “General Termination Date” has the meaning set forth in Section 11.1.

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     “GOJ Approval” means (a) an agreement between KJBC Buyer and the applicable Governmental Entities of Jamaica with respect to a fiscal regime for KJBC Buyer relating to its ownership of the KBC Purchased Assets, including in respect of income taxes, bauxite levies, bauxite royalties, property taxes, customs duties, asset usage fees and land use, dedication and depletion fees, that is consistent with the release of Sellers from any obligation to the applicable Governmental Entities of Jamaica arising from the operation of the KJBC Operations from and after Closing and (b) the consents listed or described on Schedule 5.3 required to be obtained from the applicable Governmental Entities of Jamaica.

     “GOJ Release” has the meaning set forth in Section 10.1.2.

     “Governmental Entity” means any federal, state, parish, local, municipal, foreign or other government or any provincial, departmental or political subdivision thereof, or any entity, body or authority exercising or entitled to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power of any nature, or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing, including any arbitral body.

     “Gramercy” has the meaning set forth in Recital E to this Agreement.

     “Gramercy Assumed Liabilities” means all liabilities and obligations arising out of or relating to the ownership and use of the Gramercy Purchased Assets or the operation of the Gramercy Operations after the Effective Time, but excluding the Gramercy Retained Liabilities.

     “Gramercy Buyer” has the meaning set forth in the introductory paragraph to this Agreement.

     “Gramercy Contracts” means all licenses, contracts, agreements, commitments and undertakings, whether written or oral, to which Kaiser is a party or by which Kaiser is bound and that are included in the Gramercy Purchased Assets.

     “Gramercy Employees” shall mean the Gramercy Salaried Employees and the Gramercy Represented Employees.

     “Gramercy Excluded Assets” means: (a) cash and cash equivalents of Kaiser; (b) accounts receivable of Kaiser; (c) insurance policies insuring the Gramercy Operations or the Gramercy Purchased Assets; (d) Kaiser’s corporate seals, minute books, charter documents, Tax Returns and work papers related thereto, corporate stock record books and records pertaining to organization, existence or share capitalization and such books and records as are necessary to enable Kaiser to file its Tax Returns and reports; (e) rights (including rights to indemnification, contribution, subrogation or reimbursement, rights under or pursuant to warranties and rights arising from or related to defense, release, compromise, discharge or satisfaction), claims, actions, causes of action, judgments, deferred charges, advance payments, prepaid items, security and other deposits, claims for refunds, rights of offset and credits of whatever nature relating to any of the assets referred to in any other clause of this definition or to any of the Gramercy Retained Liabilities; (f) refunds of Taxes attributable to any period or portion thereof ending on or prior to the Effective Time (except for any refunds, claims for refunds or credits of any Transfer Taxes paid by Buyers, either directly or indirectly as reimbursement to Sellers, pursuant

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to Section 12.4); (g) the trademark “Kaiser” and any variation thereof, whether alone or in combination with other words, and goodwill associated therewith; (h) domain names and internet pages employing the name “Kaiser” and internet protocol address space allocated to Kaiser; (i) access to Kaiser telephone and computer networks, including internet mail; (j) rights of Kaiser under this Agreement; and (k) all other assets listed or described on Schedule 1.1(a); provided, however, that by written notice to Buyers delivered prior to June 14, 2004, Sellers may designate any Gramercy Contract set forth on Schedule 1.1(b) as a Gramercy Excluded Asset.

     “Gramercy Exit Agreement” has the meaning set forth in Section 10.1.2.

     “Gramercy Inventory” means, as of any particular date, all of Kaiser’s bauxite inventory, inventories of raw materials, work in process, finished goods, processing supplies and stores owned by Kaiser and relating primarily to the conduct of the Gramercy Operations.

     “Gramercy Labor Agreement” means the 2000 Labor Agreement, dated September 18, 2000, between Kaiser and United Steelworkers of America AFL-CIO, as amended, including as amended by (a) the Settlement Agreement, dated September 18, 2000, between Kaiser and the United Steelworkers of America AFL-CIO, and (b) Kaiser’s final proposal to the United Steelworkers of America AFL-CIO under 11 U.S.C. Section 1113 and 1114, dated January 27, 2004, when and if effective.

     “Gramercy Leased Real Property” has the meaning set forth in Section 6.4.2.

     “Gramercy Leased Tangible Personal Property” has the meaning set forth in Section 6.5.2.

     “Gramercy Licensed Intellectual Property” has the meaning set forth in Section 6.7.2.

     “Gramercy Listed Insurance Policies” has the meaning set forth in Section 6.13.

     “Gramercy Material Contracts” means any Gramercy Contract (a) involves aggregate future payments in excess of $1,000,000 or (b) extends for a period of more than 12 months and cannot be cancelled by Kaiser upon 90 or fewer days prior notice without further payment or penalty.

     “Gramercy Operations” has the meaning set forth in Recital E to this Agreement.

     “Gramercy Owned Intellectual Property” has the meaning set forth in Section 6.7.1.

     “Gramercy Owned Real Property” has the meaning set forth in Section 6.4.1.

     “Gramercy Owned Tangible Personal Property” has the meaning set forth in Section 6.5.1.

     “Gramercy Plan” means any Plan, other than the Gramercy Labor Agreement, used in connection with Gramercy Employees and sponsored or contributed to or required to be contributed to by Kaiser or any other Person for the benefit of the Gramercy Employees or former Gramercy Employees or their dependents.

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     “Gramercy Purchased Assets” means Kaiser’s right, title and interest in, to and under the rights, properties and assets of every kind, character or description, whether real, personal, or mixed, or fixed, contingent or otherwise, wherever located, used by Kaiser primarily in connection with, or relating primarily to, the conduct of the Gramercy Operations, including assets in the categories listed on Exhibit D, but excluding the Gramercy Excluded Assets.

     “Gramercy Real Property” has the meaning set forth in Section 6.4.2.

     “Gramercy Represented Employees” has the meaning set forth in Section 8.10.3.

     “Gramercy Retained Liabilities” means all liabilities and obligations of Kaiser (1) arising out of or relating to the ownership or use of the Gramercy Purchased Assets or the operation of the Gramercy Operations at or prior to the Effective Time (regardless of whether any such liabilities and obligations are listed or described in the schedules to this Agreement), including: (a) all accounts payable arising out of or relating to the ownership and use of the Gramercy Purchased Assets at or prior to the Effective Time; (b) all liabilities and obligations of Kaiser for any Taxes (including all such liabilities and obligations arising under any Tax sharing agreement or similar arrangement to which Kaiser is a party) arising out of or relating to the ownership or use of the Gramercy Purchased Assets at or prior to the Effective Time; (c) all liabilities and obligations of Kaiser with respect to any warranty or similar liabilities or obligations relating to alumina sold at or prior to the Effective Time; (d) all indemnification, warranty and similar make whole obligations arising under the Gramercy Contracts in respect of or resulting from acts, occurrences and omissions at or prior to the Effective Time; (e) all liabilities and obligations that result from any breach of a Gramercy Contract at or prior to the Effective Time, or any performance or non-performance thereof or compliance or failure to comply therewith on the part of either Seller, including for fraud, breach or misfeasance or under any other theory, relating to either Seller’s conduct at or prior to the Effective Time; (f) all liabilities and obligations of Kaiser with respect to employees and former employees of Kaiser, including the Gramercy Employees, arising at or prior to the Effective Time; (g) all liabilities and obligations of Kaiser for torts arising out of or resulting from acts, occurrences and omissions in connection with the ownership or use of the Gramercy Purchased Assets at or prior to the Effective Time; (h) all liabilities and obligations of Kaiser under any Laws arising out of or resulting from acts, occurrences and omissions in connection with the ownership or use of the Gramercy Purchased Assets at or prior to the Effective Time; and (2) (a) all liabilities and obligations of Kaiser arising out of or relating to the ownership or use of the Gramercy Excluded Assets (whether prior to, on or after the Effective Time); (b) all liabilities and obligations of Kaiser arising under the Gramercy Labor Agreement, any Gramercy Plan or the National Labor Relations Act, including all liabilities and obligations of Kaiser under Title IV of ERISA for any “employee pension benefit plan” as defined in Section 3(2) of ERISA; (c) all liabilities and obligations of Kaiser arising under this Agreement or the transactions contemplated hereby; (d) all liabilities and obligations of Kaiser with respect to costs and expenses incurred by Kaiser in connection with this Agreement or the administration of the Bankruptcy Cases; (e) all indebtedness for borrowed money of Kaiser, including all liabilities and obligations of Kaiser under the DIP Facility; (f) all liabilities and obligations payable pursuant to Section 365(b)(1)(A) or (B) of the Bankruptcy Code in order to effectuate, pursuant to the Bankruptcy Code, the assumption by Sellers and assignment to Gramercy Buyer of the Gramercy Contracts to the extent contemplated by this Agreement as of the Effective Time pursuant to Bankruptcy Court approval; and (g) all liabilities

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and obligations under Environmental Laws arising from Offsite Disposal or any Pre-Closing Environmental Release.

     “Gramercy Salaried Employees” has the meaning set forth in Section 8.10.1.

     “Gramercy Scheduled Environmental Conditions” has the meaning set forth in Section 8.15.1.

     “Gramercy Site” means all real property in St. John and St. James Parishes, Louisiana, in which Kaiser has a real property interest of any kind, including those interests listed or described on Schedule 6.4.1(b) and Schedule 6.4.2(b).

     “Hazardous Materials” means any substance defined as toxic, radioactive and otherwise hazardous and regulated under Environmental Laws, including substances the presence of which requires or may require remediation under any Laws.

     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

     “HSR Filings” means any filings required under the HSR Act.

     “Indemnification Claim” has the meaning set forth in Section 11.5.1.

     “Independent Auditor” has the meaning set forth in Section 3.5.

     “Independent Observer” means such individual or individuals as Buyers and Sellers mutually agree.

     “Intellectual Property” means trademarks, trade names, brand names and other marks or trade rights, and patents, copyrights, designs, patterns, know-how, formulae, treatments, processes and all other intellectual property or proprietary rights, whether registered or unregistered, domestic or foreign, and all applications thereof and goodwill associated therewith.

     “Intercompany Obligations” means all intercompany notes, cash advances and payables between Sellers and their Affiliates (other than KJBC), on the one hand, and KJBC, on the other hand, arising from transactions between Seller and their Affiliates (other than KJBC), on the one hand, and KJBC, on the other hand, prior to the Effective Time.

     “JBM” has the meaning set forth in Recital A to this Agreement.

     “JGAAP” means accounting principles generally acceptable in Jamaica.

     “Kaiser” has the meaning set forth in the introductory paragraph to this Agreement.

     “Kaiser Petition Date” has the meaning set forth in Recital F to this Agreement.

     “KBC” has the meaning set forth in the introductory paragraph to this Agreement.

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     “KBC Assumed Liabilities” means all liabilities and obligations of KBC whatsoever arising out of or relating to the ownership and use of the KBC Purchased Assets or the operation of the KJBC Operations (including liabilities in the categories listed on Exhibit E, all liabilities and obligations arising under the KBC Labor Agreements and KBC Plans, all liabilities and obligations of KBC owing to KJBC and all liabilities and obligations of KBC for which it, together with any other partner of KJBC, are jointly and severally liable because such parties are liable for obligations of KJBC as a matter of law by virtue of their status as a general partner of KJBC), whether arising prior to, on or after the Petition Date, that have not been satisfied and discharged prior to Closing, but excluding, in all cases, the KBC Retained Liabilities.

     “KBC Contracts” means all licenses, contracts, agreements, commitments and undertakings, whether written or oral, to which KBC is a party or by which KBC is bound that are included in the KBC Purchased Assets.

     “KBC Employee Loans” means outstanding loans made by KBC to KBC Employees and classified on the balance sheet of KBC as “Employee Receivables: Auto Loan,” “Employee Receivables: Home Loan” or “Employee Receivables: Soft Loans.”

     “KBC Employees” has the meaning set forth in Section 8.8.2.

     “KBC Excluded Assets” means: (a) cash and cash equivalents of KBC; (b) accounts receivable of KBC (other than amounts due from KJBC and accounts receivable owing from employees or former employees of KBC under KBC Employee Loans); (c) insurance policies insuring the KJBC Operations or the KBC Purchased Assets; (d) KBC’s corporate seals, minute books, charter documents, Tax Returns and work papers related thereto, corporate stock record books and records pertaining to organization, existence or share capitalization and such books and records as are necessary to enable KBC to file its Tax Returns and reports; (e) rights (including rights to indemnification, contribution, subrogation or reimbursement, rights under or pursuant to warranties and rights arising from or related to defense, release, compromise, discharge or satisfaction), claims, actions, causes of action, judgments, deferred charges, advance payments, prepaid items, security and other deposits, claims for refunds, rights of offset and credits of whatever nature relating to any of the assets referred to in any other clause of this definition or to any of the KBC Retained Liabilities; (f) refunds of Taxes (except for any refunds, claims for refunds or credits of any Transfer Taxes paid by Buyers, either directly or indirectly as reimbursement to Sellers, pursuant to Section 12.4) attributable to any period or portion thereof ending at or prior to the Effective Time; (g) the trademark “Kaiser” and any variation thereof, whether alone or in combination with other words, and goodwill associated therewith; (h) domain names and internet pages employing the name “Kaiser” and internet protocol address space allocated to Kaiser; (i) access to Kaiser telephone and computer networks, including internet mail; (j) rights of KBC under this Agreement; (k) rights of KBC under the Sherwin Contract; and (l) any other assets listed or described on Schedule 1.1(c); provided, however, that by written notice to Buyers delivered prior to June 14, 2004, Sellers may designate any KBC Contract set forth on Schedule 1.1(d) as a KBC Excluded Asset. The KBC Excluded Assets shall not include any KJBC Assets.

     “KBC Inventory” means, as of any particular date, all of KBC’s work in process and bauxite inventories held for sale to customers in the ordinary course of business.

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     “KBC Labor Agreements” means (a) the Memorandum of Agreement, dated December 6, 1999, between KJBC and the Union of Technical, Administrative and Supervisory Personnel, representing certain categories of salaried employees, and (b) the Memorandum of Agreement, dated December 2, 1999, between KJBC and the University for Allied Workers Union, representing the Hourly-Paid Bargaining Unit.

     “KBC Leased Real Property” has the meaning set forth in Section 5.10.4.

     “KBC Leased Tangible Personal Property” has the meaning set forth in Section 5.11.4.

     “KBC Licensed Intellectual Property” has the meaning set forth in Section 5.13.4.

     “KBC Material Contracts” means any KBC Contract that (a) involves aggregate future payments to, by or on behalf of KBC in excess of $1,000,000 or (b) extends for a period of more than 12 months and cannot be cancelled by KBC upon 90 or fewer days prior notice without further payment or penalty.

     “KBC Owned Intellectual Property” has the meaning set forth in Section 5.13.3.

     “KBC Owned Real Property” has the meaning set forth in Section 5.10.3.

     “KBC Owned Tangible Personal Property” has the meaning set forth in Section 5.11.3.

     “KBC Partnership Interest” means KBC’s 49% Partnership Interest in KJBC.

     “KBC Pension Plans” means the pension plans administered pursuant to the (a) Trust Deed for Kaiser Bauxite Company Hourly Retirement Plan, and (b) Trust Deed for Kaiser Bauxite Company Salaried Retirement Plan.

     “KBC Petition Date” has the meaning set forth in Recital F to this Agreement.

     “KBC Plan” means any Plan, other than the KBC Labor Agreements, sponsored or contributed to or required to be contributed to by KBC or any other Person for the benefit of KBC’s employees or former employees or their dependents.

     “KBC Purchased Assets” means KBC’s right, title and interest in, to and under (a) the KBC Partnership Interest, (b) the KJBC Assets, and (c) the other rights, properties and assets of every kind, character or description, whether real, personal or mixed, or fixed, contingent or otherwise, wherever located, used by KBC in connection with, or relating to, the conduct of the KJBC Operations, including rights to all amounts due from KJBC, amounts receivable from current and former employees of KBC under the KBC Employee Loans and assets in the categories listed on Exhibit F, but excluding the KBC Excluded Assets.

     “KBC Real Property” has the meaning set forth in Section 5.10.4.

     “KBC Represented Employees” has the meaning set forth in Section 8.8.1.

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     “KBC Retained Liabilities” means: (a) all accounts payable of KBC arising out of or relating to the ownership or use of the KBC Purchased Assets at or prior to the Effective Time other than amounts payable to KJBC; (b) all liabilities and obligations of KBC for any Taxes (including all such liabilities and obligations arising under any Tax sharing agreement or similar arrangement to which KBC is a party) arising out of or relating to the ownership or use of the KBC Purchased Assets at or prior to the Effective Time; (c) all liabilities and obligations of KBC with respect to any warranty or similar liabilities or obligations relating to bauxite sold at or prior to the Effective Time; (d) all indemnification, warranty and similar make whole obligations arising under the KBC Contracts in respect of or resulting from acts, occurrences and omissions at or prior to the Effective Time; (e) all liabilities and obligations that result from any breach of a KBC Contract at or prior to the Effective Time, or any performance or non-performance thereof or compliance or failure to comply therewith on the part of either Seller, including for fraud, breach or misfeasance or under any other theory, relating to either Seller’s conduct at or prior to the Effective Time; (f) all liabilities and obligations of KBC with respect to employees or former employees of KBC, including the KBC Employees, arising at or prior to the Effective Time, excluding liabilities and obligations arising under the KBC Labor Agreements and KBC Plans (subject to Section 8.8.3 in respect of the KBC Pension Plans); (g) all liabilities and obligations of KBC arising out of or relating to the ownership or use of the KBC Excluded Assets (whether prior to, on or after the Effective Time); (h) all liabilities and obligations of KBC arising on or prior to the KBC Petition Date that, under section 1141(d) of the Bankruptcy Code, may be discharged pursuant to confirmation by the Bankruptcy Court of a plan of reorganization in the Bankruptcy Cases; (i) all liabilities and obligations of KBC with respect to costs and expenses incurred by KBC in connection with this Agreement or the administration of the Bankruptcy Cases; (j) all liabilities and obligations of KBC, in connection with the DIP Facility or otherwise, under any loan or credit agreement, security agreement, guaranty, indenture, mortgage, pledge or similar agreements or instruments relating to indebtedness for borrowed money; (k) all liabilities and obligations payable pursuant to Section 365(b)(1)(A) or (B) of the Bankruptcy Code in order to effectuate, pursuant to the Bankruptcy Code, the assumption by Sellers and assignment to Buyers of the KBC Contracts to the extent contemplated by this Agreement as of the Effective Time pursuant to Bankruptcy Court approval; (l) all liabilities and obligations of KBC for torts arising out of or resulting from acts, occurrences and omissions in connection with the ownership or use of the KBC Purchased Assets at or prior to the Effective Time, excluding all liabilities and obligations of KBC for which it, together with any other partner of KJBC, is jointly and severally liable because such parties are liable for obligations of KJBC as a matter of law by virtue of their status as a general partner of KJBC; (m) all liabilities and obligations of KBC under any Laws, including Environmental Laws, arising out of or resulting from acts, occurrences and omissions in connection with the ownership or use of the KBC Purchased Assets at or prior to the Effective Time, excluding all liabilities and obligations of KBC for which it, together with any other partner of KJBC, is jointly and severally liable because such parties are liable for obligations of KJBC as a matter of law by virtue of their status as a general partner of KJBC; and (n) all liabilities and obligations pursuant to the Sherwin Contract.

     “KJBC” has the meaning set forth in Recital A to this Agreement.

     “KJBC Assets” means all assets and property of every kind and nature, wherever located, that are owned by KJBC, including bauxite and other inventory, or by its partners as tenants in common for the use and benefit of KJBC.

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     “KJBC Buyer” has the meaning set forth in the introductory paragraph to this Agreement.

     “KJBC Financial Statements” has the meaning set forth in Section 5.6.

     “KJBC Leased Real Property” has the meaning set forth in Section 5.10.2.

     “KJBC Leased Tangible Personal Property” has the meaning set forth in Section 5.11.2.

     “KJBC Licensed Intellectual Property” has the meaning set forth in Section 5.13.2.

     “KJBC Listed Insurance Policies” has the meaning set forth in Section 5.22.

     “KJBC Material Contracts” means any (a) license, contract, agreement, commitment and undertaking (whether written or oral) to which KJBC is a party or by which it or any of the KJBC Assets is bound that (i) involves aggregate future payments to, by or on behalf of KJBC in excess of $1,000,000 or (ii) extends for a period of more than 12 months and cannot be cancelled by KJBC upon 90 or fewer days prior notice without further payment or penalty, or (b) loan or credit agreement, security agreement, guaranty, indenture, mortgage, pledge or other agreement or instrument evidencing indebtedness for borrowed money of KJBC.

     “KJBC Operations” has the meaning set forth in Recital C to this Agreement.

     “KJBC Owned Intellectual Property” has the meaning set forth in Section 5.13.1.

     “KJBC Owned Real Property” has the meaning set forth in Section 5.10.1.

     “KJBC Owned Tangible Personal Property” has the meaning set forth in Section 5.11.1.

     “KJBC Real Property” has the meaning set forth in Section 5.10.2.

     “La Roche Demolition Contract” means the Construction Contract, dated January 23, 2004, by and between Kaiser and Seco/American Wrecking Corporation.

     “Laws” means all applicable laws, statutes, regulations, rules, judgments, orders, injunctions and decrees of Governmental Entities.

     “LDEQ” means the Louisiana Department of Environmental Quality.

     “Lien” means, with respect to any property or asset, any mortgage, lien, claim, pledge, security interest or other encumbrance thereon.

     “Losses” has the meaning set forth in Section 11.2.

     “Management Agreement” means the Management Agreement, dated October 26, 1979, between KJBC and KBC, as amended.

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     “Material Adverse Effect” means a material and adverse effect on (a) the business, operations, properties, assets, condition (financial or otherwise) or results of operations of the Combined Operations, taken as a whole, (b) the value of the KJBC Contracts or the Gramercy Contracts, taken as a whole, (c) the ability of Buyers to operate or conduct the Combined Operations in the manner in which it is currently operated or conducted, or (d) the ability of Sellers to consummate the transactions contemplated by this Agreement, other than effects (i) resulting from the announcement of this Agreement or the transactions contemplated hereby or from either Seller’s compliance herewith and performance of its respective obligations hereunder, (ii) resulting prior to the date of this Agreement from the pending bankruptcy proceedings of the Sellers or any of their Affiliates, or (iii) resulting from events, changes or developments relating to the financial, banking, capital, energy or metals markets or the economy in general or industry-wide developments affecting Persons in businesses similar to the KJBC Operations or the Gramercy Operations.

     “Modified Working Capital” has the meaning set forth in Section 3.3.1.

     “National Labor Relations Act” means The National Labor Relations Act, 29 U.S.C. §§ 151-169.

     “New Labor Agreement” has the meaning set forth in Section 8.10.3.

     “NFA” means a written determination by LDEQ that further evaluation or remedial action by LDEQ is not warranted at a particular site, including, where applicable, under Louisiana Administrative Code 33.

     “Notice of Claim” has the meaning set forth in Section 11.5.1.

     “Offsite Disposal” means the release or disposal of Hazardous Materials, as arranged by Kaiser, on properties other than the Gramercy Site where such Hazardous Materials did not migrate from the Gramercy Site following their release or disposal on the Gramercy Site.

     “Other KBC Employees” has the meaning set forth in Section 8.8.2.

     “Partnership Agreement” means the Deed of Partnership, dated October 26, 1979, between KBC and JBM.

     “Partnership Interest” means, with respect to any partner of KJBC, such partner’s entire right, title and interest in, to and under KJBC, including all right, title and interest of such partner in, to and under the Partnership Agreement, but not including the KJBC Assets.

     “Permitted Liens” means (a) warehousemen’s, materialmen’s, contractor’s and carrier’s liens and similar Liens arising as a matter of Law for obligations which are not delinquent, (b) Liens related to Taxes, other than income Taxes, that are not delinquent, (c) the rights of JBM arising under the Partnership Agreement, (d) Liens that exist on or otherwise relate to the Partnership Interest(s) held by JBM or the interest of JBM in the KJBC Assets, in each case, to secure obligations of JBM or its Affiliates other than obligations owed to KJBC, Sellers or their Affiliates, (e) rights reserved to lessors, licensors and other owners of property that is leased or licensed to another party or which another party otherwise has the right to use or possess under

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the applicable lease, license or other agreement, (f) Liens that are created, suffered or assumed by Buyers, and (g) Liens that do not have, individually or in the aggregate, a material adverse effect on either (i) the Gramercy Operations and the Gramercy Purchased Assets, taken as a whole, on the one hand, or (ii) the KJBC Operations, the KJBC Assets and the KBC Purchased Assets, taken as a whole, on the other hand.

     “Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Entity.

     “Plan” means any benefit fund, plan, program or policy (including any plan, program or policy providing for: severance or other payments in connection with the termination of employment (whether voluntary or not); medical, dental or vision benefits; life insurance or death benefits; disability benefits, sick pay or other wage replacement; vacation, holiday or sabbatical pay; pension or profit-sharing benefits; deferred compensation; equity compensation; bonus or incentive pay; or other material fringe benefits).

     “PLL Policy” has the meaning set forth in Section 8.15.3.

     “Pre-Closing Environmental Release” means any new environmental conditions arising from a new release of Hazardous Materials at the Gramercy Site occurring after the date of this Agreement and at or prior to the Effective Time.

     “Pre-Hearing Termination Date” means June 11, 2004.

     “Prevailing Bid” has the meaning set forth in the Bidding and Auction Procedures.

     “Prevailing Bidder” has the meaning set forth in the Bidding and Auction Procedures.

     “Purchased Assets” means the KBC Purchased Assets and the Gramercy Purchased Assets.

     “Qualified Bid” has the meaning set forth in the Bidding and Auction Procedures.

     “Qualified Bidder” has the meaning set forth in the Bidding and Auction Procedures.

     “Retained Liabilities” means the Gramercy Retained Liabilities and the KBC Retained Liabilities.

     “Retained Names” has the meaning set forth in Section 8.19.

     “Sales Hearing” has the meaning set forth in Section 8.5.1.

     “Sales Order” has the meaning set forth in Section 8.5.1.

     “Sales Process and Approval Motion” has the meaning set forth in Section 8.4.1.

     “Seller Employees” has the meaning set forth in Section 8.9.1.

     “Sellers” has the meaning set forth in the introductory paragraph of this Agreement.

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     “Sellers Indemnified Parties” has the meaning set forth in Section 11.2.

     “Sherwin Contract” means the Bauxite Purchase Agreement, dated November 13, 2001, between KBC and Sherwin Alumina, L.P., as amended, modified, supplemented or restated from time to time.

     “Standard Exceptions” has the meaning set forth in Section 5.2.

     “Tax” or “Taxes” means any and all taxes, fees, levies (including with respect to bauxite), duties, tariffs, imposts and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity, including (a) taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation, or net worth and (b) taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes; license, registration and documentation fees; and customs’ duties, and similar charges.

     “Tax Return” means any return, declaration, report, claim for refund, information return or other document (including any related or supporting estimates, elections, schedules, statements or information) filed or required to be filed in connection with the determination, assessment or collection of any Tax or the administration of any Laws relating to any Tax.

     “Tax Termination Date” has the meaning set forth in Section 11.1.

     “Technology Licenses” has the meaning set forth in Section 9.3.9.

     “Termination Dates” has the meaning set forth in Section 11.1.

     “Termination Fee” has the meaning set forth in Section 10.3.

     “Transfer” has the meaning set forth in Section 2.1.

     “Transfer Documents” means such bills of sale, assignments, novations, certificates of title, certificates of affidavit and other instruments of transfer as may be necessary or appropriate to Transfer or evidence the Transfer to Buyers all of Sellers’ right, title and interest in, to and under the Purchased Assets.

     “Transfer Taxes” has the meaning set forth in Section 12.4.3.

     “Transition and Shared Services Committee” has the meaning set forth in Section 8.1.2.

     “UCC” has the meaning set forth in Section 8.14.

     “Unadjusted Purchase Price” has the meaning set forth in Section 3.3.4.

     “USWA” has the meaning set forth in Section 8.10.3.

     “WARN Act” has the meaning set forth in Section 8.10.6.

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     1.2 Certain Interpretive Matters.

          1.2.1 Certain References. Unless the context otherwise requires, (a) all references in this Agreement to Sections, Articles, Schedules or Exhibits are to Sections, Articles, Schedules or Exhibits of or to this Agreement, (b) words in the singular include the plural and vice versa, and (c) the verb “will” will have a mandatory connotation, indicating the parties’ respective obligations to each other. Whenever the words “include,” “includes” or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation.” All references to “$” or dollar amounts are to lawful currency of the United States of America.

          1.2.2 Titles and Headings. Titles and headings to Sections, Articles, Schedules and Exhibits in this Agreement are inserted for convenience of reference only, and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

          1.2.3 Participation in Drafting. No provision of this Agreement shall be interpreted in favor of, or against, any of the parties to this Agreement by reason of the extent to which that party or its counsel participated in the drafting thereof or by reason of the extent to which that provision is inconsistent with any prior draft hereof or thereof.

ARTICLE II
PURCHASE AND SALE; TREATMENT OF LIABILITIES

     2.1 Sale and Transfer of Assets. On the terms and subject to the conditions set forth in this Agreement, as of the Effective Time, (a) KBC shall sell, assign, transfer and convey (“Transfer”) to KJBC Buyer, and KJBC Buyer shall purchase and accept from KBC, the KBC Purchased Assets, and (b) Kaiser shall Transfer to Gramercy Buyer, and Gramercy Buyer shall purchase and accept from Kaiser, the Gramercy Purchased Assets.

     2.2 Assumed Liabilities. On the terms and subject to the conditions hereof, (a) KJBC Buyer shall assume as of the Effective Time, and thereafter in due course pay, perform and/or discharge, the KBC Assumed Liabilities and (b) Gramercy Buyer shall assume as of the Effective Time, and thereafter in due course pay, perform and/or discharge, the Gramercy Assumed Liabilities.

     2.3 Retained Liabilities. KBC shall retain, and KJBC Buyer shall not assume or be responsible for, the KBC Retained Liabilities, and Kaiser shall retain, and Gramercy Buyer shall not assume or be responsible or liable for, the Gramercy Retained Liabilities.

     2.4 Nonassignable Contracts.

          2.4.1 Nonassignability. To the extent that any KBC Contract or Gramercy Contract to be Transferred pursuant to the terms of Section 2.1 is not capable of being Transferred without the Consent of a third Person, or if such Transfer or attempted Transfer would constitute a breach thereof or a violation of any Law, nothing in this Agreement shall constitute a Transfer or an attempted Transfer thereof prior to the time at which all Consents necessary for such Transfer shall have been obtained.

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          2.4.2 Efforts to Obtain Consents. Sellers shall use commercially reasonable efforts, and Buyers shall reasonably cooperate with Sellers in such efforts, to obtain such Consents necessary to Transfer to Buyers all of the KBC Contracts and Gramercy Contracts referred to in Section 2.4.1 hereof.

          2.4.3 Alternative Arrangements If Consents Not Obtained. To the extent that the Consents referred to in Section 2.4.1 are not obtained, if and to the extent requested by Buyers, Sellers shall, during the term of the affected KBC Contract or Gramercy Contract, use commercially reasonable efforts to (a) provide to Buyers the benefits under any KBC Contract or Gramercy Contract referred to in Section 2.4.1, (b) cooperate in any reasonable and lawful arrangement designed to provide such benefits to Buyers, and (c) enforce, at the written request of Buyers, for the account of Buyers, any rights of Sellers under the affected KBC Contract or Gramercy Contract (including the right to elect to terminate such KBC Contract or Gramercy Contract in accordance with the terms thereof upon the direction of Buyers). Buyers shall reasonably cooperate with Sellers in order to enable Sellers to provide the benefits contemplated by this Section 2.4.3 to Buyers.

          2.4.4 Obligation of Buyers to Perform. Buyers shall perform the obligations of Sellers arising under each affected KBC Contract and Gramercy Contract referred to in Section 2.4.1, but only if and to the extent that Sellers provide to Buyers the benefits thereof pursuant to Section 2.4.3.

     2.5 Arrangements with Respect to KJBC Owned Real Property. With respect to parcels of KJBC Owned Real Property for which Transfer Documents have not been delivered to KJBC Buyer at Closing (to the extent permitted by Section 9.3.3), KBC will use its commercially reasonable efforts to deliver as soon as practicable after Closing an instrument of transfer, in recordable form, in favor of KJBC Buyer for KBC’s interest therein. If requested by KJBC Buyer, KBC will deliver to KJBC Buyer at Closing a power of attorney in the form prescribed by the Registration of Titles Act of Jamaica permitting KJBC Buyer to execute, on behalf of KBC, documents relating to the transfer of legal title to KBC’s interest in the KJBC Owned Real Property to KJBC Buyer. In addition, if and to the extent requested by KJBC Buyer, KBC shall use commercially reasonable efforts to take the legal steps necessary to Transfer to KJBC Buyer legal title to KBC’s interests in the KJBC Owned Real Property for which legal title was not Transferred to KJBC Buyer at Closing.

     2.6 Conditions Precedent. Nothing in Section 2.4 or Section 2.5 shall affect, or be construed as affecting, rights arising under Section 9.1.3.

     2.7 Permitted Liens. Nothing in the definition of “Permitted Liens,” any provision of this Agreement referring to Permitted Liens or any disclosure of Liens on or in respect of the Purchased Assets in the schedules to this Agreement shall affect, or be construed to affect, the responsibility of KBC for the KBC Retained Liabilities or the responsibility of Kaiser for the Gramercy Retained Liabilities.

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ARTICLE III
PURCHASE PRICE

     3.1 Aggregate Purchase Price. At Closing, in addition to assuming the Assumed Liabilities, Buyers shall pay to Sellers an amount equal to the Estimated Purchase Price. The Estimated Purchase Price shall be subject to adjustment as provided in Section 3.3 (as increased or decreased pursuant to Section 3.3, the “Final Purchase Price”).

     3.2 Deposit. Upon execution of this Agreement, Buyers shall pay $2,300,000 (the “Deposit”) to Sellers via wire transfer of immediately available funds to the account set forth in the Escrow Agreement. Application to payment of the Estimated Purchase Price, return and forfeiture of the Deposit, among other things, shall be subject to the terms and provisions of the Escrow Agreement.

     3.3 Adjustment of Purchase Price.

          3.3.1 Closing Balance Sheet. As soon as practicable, but in no event later than 120 calendar days, after the Closing Date, Buyers, at Buyers’ sole expense, shall cause to be prepared and delivered to Sellers (a) an unaudited consolidated balance sheet of KJBC as of the Effective Time (the “Closing Balance Sheet”), (b) a listing of the KBC Inventory and the book value thereof (“Book Value”) as of the Effective Time (the “Closing KBC Inventory Statement”), (c) a listing of the Gramercy Inventory and the Book Value thereof as of the Effective Time (the “Closing Gramercy Inventory Statement”), and (d) a listing of the KBC Employee Loans outstanding as of the Effective Time and the aggregate face value of such loans (the “Closing Employee Loan Statement” and together with the Closing Balance Sheet, the Closing KBC Inventory Statement and the Closing Gramercy Inventory Statement, the “Closing Statements”). The Closing Balance Sheet shall be prepared from the books and records of KJBC, and in accordance with JGAAP applied on a basis consistent with the Balance Sheet. When the Closing Statements are delivered to Sellers, Buyers shall deliver a statement containing Buyers’ calculations, based on the Closing Statements (the “Buyers’ Proposed Calculations”), of (a) Modified Working Capital as of the Effective Time (the “Closing Modified Working Capital”), (b) the Book Value of the KBC Inventory as of the Effective Time (the “Closing KBC Inventory”), and (c) the Book Value of the Gramercy Inventory as of the Effective Time (the “Closing Gramercy Inventory”). For purposes of this Agreement “Modified Working Capital” means the difference between (a) the sum of (i) total current assets of KJBC in the categories listed on Exhibit E and (ii) the aggregate face value of the KBC Employee Loans outstanding and (b) total current liabilities of KJBC in the categories listed on Exhibit E, including the current portion of long-term debt. The Closing Modified Working Capital shall be calculated on the same basis as, and in accordance with, the sample calculation of Modified Working Capital as of August 31, 2003 attached as Exhibit E, except as expressly otherwise provided in Exhibit E. The Closing KBC Inventory Statement shall be prepared on the same basis as the Balance Sheet Date KBC Inventory Statement and the Closing KBC Inventory will be calculated on the same basis as, and in accordance with, the sample calculation of the Book Value of the KBC Inventory as of August 31, 2003 attached as Exhibit F. The Closing Gramercy Inventory Statement shall be prepared on the same basis as the Balance Sheet Date Gramercy Inventory Statement and the Closing Gramercy Inventory will be calculated on the

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same basis as, and in accordance with, the sample calculation of the Book Value of the Gramercy Inventory as of August 31, 2003 attached as Exhibit D.

          3.3.2 Cooperation. Without limiting the generality or effect of any other provision hereof, Sellers shall take such actions as may be reasonably requested by Buyers to close, or to assist Buyers in closing, as of the Effective Time, the books and accounting records of KJBC and otherwise reasonably cooperate with Buyers and Buyers’ accountants in the preparation of the Closing Statements.

          3.3.3 Review of Closing Statements. Within 30 calendar days from the date of delivery of the Closing Statements and the accompanying statement of Buyers’ Proposed Calculations, Sellers shall notify Buyers in writing of any disagreement with Buyers’ Proposed Calculations; provided that Sellers may only dispute Buyers’ Proposed Calculations to the extent that they deviate from the requirements of Section 3.3.1 or reflect mathematical error. If Sellers dispute any such aspect of Buyers’ Proposed Calculations, Sellers shall have the right to propose any adjustment thereto within such 30-day period. Any such proposed adjustment shall be in writing (the “Adjustment Request”), shall be submitted to Buyers within the 30-day period referred to in the first sentence of this Section 3.3.3, and shall specify (a) the amount of the proposed adjustment and (b) the item to which such proposed adjustment relates. Unless Sellers notify Buyers in writing within such 30-day period that they object to the findings contained in Buyers’ Proposed Calculations, Buyers’ Proposed Calculations shall be binding upon Buyers and Sellers. Buyers and Sellers shall use their commercially reasonable efforts for 30 calendar days after the submission of any Adjustment Request to agree upon any proposed adjustment to Buyers’ Proposed Calculations. Any dispute as to the content or preparation of Buyers’ Proposed Calculations which is not resolved by Buyers and Sellers during such 30-day period shall be submitted for resolution to a mutually acceptable independent public accounting firm, the costs of which shall be divided equally between Buyers, on the one hand, and Sellers, on the other hand. The decision of such firm shall be final and binding on Buyers and Sellers.

          3.3.4 Adjustment to Purchase Price. Upon the definitive determination pursuant to Section 3.3.3 of the Closing Modified Working Capital, the Closing KBC Inventory, and the Closing Gramercy Inventory, the Final Purchase Price shall be calculated. The Final Purchase Price shall be equal to $23,000,000 (the “Unadjusted Purchase Price”), adjusted as follows: (a) plus the amount, if any, by which the Closing Modified Working Capital is greater than $3,856,872 or minus the amount, if any, by which the Closing Modified Working Capital is less than $3,856,872, (b) plus the amount, if any, by which the Closing KBC Inventory is greater than $4,897,736 or minus the amount, if any, by which the Closing KBC Inventory is less than $4,397,736, and (c) plus the amount, if any, by which the Closing Gramercy Inventory is greater than $20,418,251 or minus the amount, if any, by which the Closing Gramercy Inventory is less than $18,918,251 (the amount added or subtracted from the Unadjusted Purchase Price being referred to herein as the “Adjustment”). If the Final Purchase Price exceeds the Estimated Purchase Price, Buyers shall pay an amount equal to such excess to Sellers, and if the Final Purchase Price is less than the Estimated Purchase Price, Sellers shall pay an amount equal to such deficiency to Buyers. Any such payment shall be made in cash or same day funds within 10 calendar days after the determination of the Adjustment pursuant to this Section 3.3.4. Any such payment shall bear interest (calculated on the basis of a 360-day year consisting of 12 months of 30 calendar days) from the Effective Time through and including the date

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preceding payment at a rate per annum equal to the “Prime Rate” as set forth on the Closing Date in The Wall Street Journal “Money Rates” column plus 200 basis points.

          3.3.5 Estimate of Purchase Price Adjustment. Not later than the third business day prior to the Closing Date, Sellers shall deliver to Buyers (a) an estimated consolidated balance sheet of KJBC (the “Estimated Balance Sheet”) as of the Effective Time, (b) an estimated listing of the KBC Inventory and the Book Value thereof (the “Estimated KBC Inventory Statement”) as of the Effective Time, (c) an estimated listing of the Gramercy Inventory and the Book Value thereof (the “Estimated Gramercy Inventory Statement”) as of the Effective Time, (d) an estimated listing of the KBC Employee Loans outstanding as of the Effective Time and the aggregate face value thereof (the “Estimated KBC Employee Loan Statement” and together with the Estimated Balance Sheet, the Estimated KBC Inventory Statement and the Estimated Gramercy Inventory Statement, the “Estimated Statements”) as of the Effective Time, and (e) a statement setting forth calculations (the “Estimated Calculations”), based on the Estimated Statements, of (i) the estimated Closing Modified Working Capital, (ii) the estimated Closing KBC Inventory, and (iii) the estimated Closing Gramercy Inventory. The Estimated Statements and Estimated Calculations shall be prepared in good faith based upon Sellers’ review of financial information then available to them and inquiries of personnel responsible for the development and preparation of financial information of KJBC, KBC and Kaiser in the ordinary course of business. The estimated purchase price to be delivered at Closing (the “Estimated Purchase Price”), which is intended to constitute an estimate of the Final Purchase Price, shall equal the Unadjusted Purchase Price, adjusted as follows: (a) plus the amount, if any, by which the estimated Closing Modified Working Capital is greater than $3,856,872 or minus the amount, if any, by which the estimated Closing Modified Working Capital is less than $3,856,872, (b) plus the amount, if any, by which the estimated Closing KBC Inventory is greater than $4,897,736 or minus the amount, if any, by which the estimated Closing KBC Inventory is less than $4,397,736, and (c) plus the amount, if any, by which the estimated Closing Gramercy Inventory is greater than $20,418,251 or minus the amount, if any, by which the estimated Closing Gramercy Inventory is less than $18,918,251.

     3.4 Physical Inventory. In connection with the preparation of the Closing Statements and the Buyers’ Proposed Calculations, Buyers and Sellers shall cause a physical inventory of the KBC Inventory and the Gramercy Inventory (excluding, in the case of the KBC Inventory, a physical inventory of stores) to be taken as of the Effective Time. The Independent Observer shall report on such physical inventory and furnish Buyers and Sellers a copy of such report promptly upon its completion. Sellers, on the one hand, and Buyers, on the other hand, and their respective representatives shall be entitled to be present to observe such physical inventory. The report to be rendered by the Independent Observer on the physical inventory shall be based upon procedures reasonably acceptable to Buyers and Sellers. The fees, costs and expenses of such physical inventory, including the fees, costs and expenses of the Independent Observer, but excluding the salaries or the compensation of individuals employed in the KJBC Operations or the Gramercy Operations conducting the physical inventory, shall be divided equally between Buyers, on the one hand, and Sellers, on the other hand.

     3.5 Purchase Price Allocation. The Final Purchase Price plus the aggregate amount of Assumed Liabilities included in the amount realized for U.S. federal income tax purposes shall be allocated among the Purchased Assets pursuant to this Section 3.5 in accordance with their

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fair market values and Schedule 3.5). Within 60 calendar days after the Final Purchase Price is determined, Buyers shall deliver to Sellers a statement (the “Final Allocation Statement”) setting forth: (a) the Final Purchase Price plus the aggregate amount of Assumed Liabilities to be included in the amount realized for U.S. federal income tax purposes (the “Final Allocable Amount”); and (b) the allocation of the Final Allocable Amount among the Purchased Assets in accordance with their fair market values as of the Closing Date as reasonably determined by the Buyers and Schedule 3.5. Sellers shall take such actions as may be reasonably requested by Buyers to assist Buyers in the preparation of the Final Allocation Statement. Within 30 calendar days after their receipt of the Final Allocation Statement, Sellers may deliver to Buyers a written objection to the allocation set forth therein specifying in reasonable detail the nature and basis of such objection (a “Dispute Notice”); provided, however, that Sellers may only object to such allocation to the extent it deviates from the requirements of this Section 3.5. If Sellers do not deliver a Dispute Notice to Buyers within such time period, then Buyers’ allocation as set forth in the Final Allocation Statement shall be final and binding on Sellers and Buyers. Sellers and Buyers shall consult with each other and attempt to resolve in good faith any objections contained in a Dispute Notice. If Sellers and Buyers, notwithstanding such good faith efforts, cannot resolve the matters contained in a Dispute Notice within 30 calendar days after the Buyers’ receipt of the Dispute Notice, then Buyers and Sellers shall engage, by mutual agreement, one of the “Big Four” accounting firms or any other nationally recognized accounting firm (the “Independent Auditor”) to resolve the matters remaining in dispute; provided that, the Independent Auditor shall first determine whether Buyers’ allocation as to the matters remaining in dispute is reasonable and consistent with the requirements of this Section 3.5 and, if the Independent Auditor determines that such allocation is reasonable and consistent with the requirements of this Section 3.5, then Buyers’ allocations set forth in the Final Allocation Statement as to such matters shall be final and binding on Sellers and Buyers. The decision of the Independent Auditor shall be final and binding on the parties. The fees and expenses of the Independent Auditor shall be borne equally by Buyers, on the one hand, and Sellers, on the other hand. Each of the parties shall report the purchase and sale of the Purchased Assets in all Tax Returns in accordance with the allocation determined pursuant to this Section 3.5; provided, however, that Buyers’ aggregate basis in the Purchased Assets may exceed the total amount allocated in order to reflect the Buyers’ capitalized transaction costs not included in Final Purchase Price or Assumed Liabilities included in the amount realized for U.S. federal income tax purposes, and Sellers’ aggregate amount realized may be less than the total amount allocated in order to reflect its transaction costs.

     3.6 Intercompany Accounts.

          3.6.1 KBC. All of KBC’s rights in respect of Intercompany Obligations between KBC and KJBC are included in the KBC Purchased Assets and all of KBC’s obligations in respect of such Intercompany Obligations are included in the KBC Assumed Liabilities; consequently, KJBC Buyer will acquire all such rights and assume all such obligations as of the Effective Time. Prior to the Effective Time, the Sellers and KJBC Buyer shall engage in discussions regarding the feasibility of offsetting, on or prior to Closing, Intercompany Obligations between KJBC and KBC, provided that offsets shall not be required to be made if they would have, in the reasonable opinion of KBC or Gramercy Buyer, negative tax, accounting, regulatory or economic effects on KBC, KJBC or Buyers.

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          3.6.2 Alpart. Immediately prior to Closing, all Intercompany Obligations between KJBC and Alpart due and payable as of the Effective Time or attributable to any period ending on or prior to the Effective Time shall be netted as between the appropriate obligors and obligees and the resulting balances shall be settled at or prior to the Effective Time, with the result that immediately following the Effective Time, such Intercompany Obligations between KJBC and Alpart shall not exist.

ARTICLE IV
CLOSING

     4.1 Closing. Unless this Agreement has been terminated and the transactions contemplated under this Agreement have been abandoned pursuant to Article X, and subject to the fulfillment or, if permitted, waiver of the conditions set forth in Article IX, Closing shall take place at the offices of Jones Day, 2727 North Harwood Street, Dallas, Texas, at 10:00 a.m. local time on the tenth business day following the fulfillment or, if permissible, waiver of the conditions set forth in Article IX (other than those conditions set forth in Article IX that are to be fulfilled at Closing), unless another place, date or time is agreed to in writing by the parties to this Agreement or ordered by the Bankruptcy Court (the date of Closing being referred to herein as the “Closing Date”). Closing shall be deemed effective as of the Effective Time.

     4.2 Documents to be Delivered by Buyers. At Closing, Buyers shall deliver to Sellers:

          4.2.1 Purchase Price. Evidence of wire transfer of cash in an amount equal to the Estimated Purchase Price minus (i) the amount of the Deposit calculated pursuant to the Escrow Agreement (including the deduction of any Fees (as defined in the Escrow Agreement)) as of the close of business on the last business day immediately preceding the Closing Date and (ii) an amount equal to the Environmental Deposit.

          4.2.2 Compliance Certificate. A certificate, dated the Closing Date, executed on behalf of each Buyer in the form described in Section 9.2.1.

          4.2.3 Officer’s Certificate. A certificate, dated the Closing Date, executed on behalf of each Buyer in the form described in Section 9.2.2.

          4.2.4 Assumption Documents. Such Assumption Documents as Sellers reasonably request, each of which shall be duly executed by or on behalf of Buyers, if appropriate, and in form and substance reasonably satisfactory to Sellers.

          4.2.5 Secretary’s Certificate. A copy of the resolutions adopted by the board of directors of each Buyer, approving the execution of this Agreement and each of the other documents delivered by such Buyer hereunder and authorizing the consummation of the transactions contemplated hereby and thereby, certified by the secretary or an assistant secretary of such Buyer.

     4.3 Documents to be Delivered by Sellers. At Closing, Sellers shall deliver to Buyers:

          4.3.1 Receipt. Sellers shall execute and deliver a receipt whereby Sellers acknowledge receipt of an amount equal to the Estimated Purchase Price.

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          4.3.2 Compliance Certificate. A certificate, dated the Closing Date, executed on behalf of each Seller in the form described in Section 9.3.1.

          4.3.3 Officer’s Certificate. A certificate, dated the Closing Date, executed on behalf of each Seller in the form described in Section 9.3.2.

          4.3.4 Transfer Documents. Such Transfer Documents as are required to effect the transfers contemplated by this Agreement to occur as of the Effective Time or as Buyers reasonably request, including a deed of assignment of all patents included on Schedule 6.7.2(b) except those patents licensed pursuant to the Technology Licenses, with each Transfer Document duly executed by or on behalf of Sellers, if appropriate, and in form and substance reasonably satisfactory to Buyers and, in the case of the deed of assignment of patents, in form acceptable for recordation with the U.S. Patent and Trademark Office.

          4.3.5 Secretary’s Certificate. A copy of the resolutions adopted by the board of directors of each Seller, approving the execution and delivery of this Agreement and each of the other documents delivered by such Seller hereunder and authorizing the consummation of the transactions contemplated hereby and thereby, certified by the secretary or an assistant secretary of such Seller.

          4.3.6 Technology Licenses. Copies of the Technology Licenses, each executed by all parties thereto.

     4.4 Other Documents to be Delivered. At Closing:

          4.4.1 Transition and Shared Services Agreement. Buyers and Sellers shall execute and deliver a transition and shared services agreement (subject to Section 8.1.2).

          4.4.2 Environmental Escrow Agreement. Gramercy Buyer and Kaiser shall execute and deliver the Environmental Escrow Agreement.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS
GENERALLY AND WITH RESPECT TO KJBC AND KBC

     Sellers hereby represent and warrant to Buyers as follows:

     5.1 Organization. KBC is a corporation duly organized and validly existing under the laws of the State of Nevada, is duly registered or otherwise qualified to do business as a foreign corporation under the Laws of Jamaica and has full power and authority to own the KBC Purchased Assets owned by it and to conduct its business as currently conducted. Kaiser is a corporation duly organized and validly existing under the laws of the State of Delaware, is duly qualified to do business as a foreign corporation under the laws of the State of Louisiana and has full power and authority to own the Gramercy Purchased Assets and to conduct the Gramercy Operations as currently conducted. KJBC is a partnership established and validly existing under the laws of Jamaica pursuant to the Partnership Agreement and has full power and authority to own the KJBC Assets owned by it and to conduct its business as currently conducted.

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     5.2 Corporate Authority. Each Seller has the requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the Escrow Agreement by each Seller and the performance by each Seller of the obligations contemplated to be performed by each Seller hereunder and thereunder have been duly authorized by all necessary corporate actions of that Seller, and the execution and delivery of the Transition and Shared Services Agreement (subject to Section 8.1.2), the Environmental Escrow Agreement and the Technology Licenses by each Seller party thereto and the performance by each such Seller of the obligations contemplated to be performed by it thereunder will be duly authorized by all necessary corporate actions of that Seller as of the Closing. This Agreement and the Escrow Agreement have been duly executed and delivered by each Seller party hereto and thereto, and the Transition and Shared Services Agreement (subject to Section 8.1.2), the Environmental Escrow Agreement and the Technology Licenses will be duly executed and delivered by each Seller party thereto as of the Closing, and subject to the approval of the Bankruptcy Court, each of this Agreement and the Escrow Agreement is, and each of the Transition and Shared Services Agreement (subject to Section 8.1.2), the Environmental Escrow Agreement and the Technology Licenses will be as of the date of its execution and delivery, a valid and binding obligation of each Seller, as applicable, enforceable against each Seller, as applicable, in accordance with its terms, except that (a) the enforceability hereof and thereof may be subject to applicable bankruptcy, insolvency or other similar Laws now or hereafter in effect affecting creditors’ rights generally, (b) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought, and (c) the rights to indemnification may be limited by public policy considerations (the exceptions set forth in clauses (a), (b) and (c) being referred to herein as the “Standard Exceptions”).

     5.3 Consents. No Consent is required in connection with the execution or delivery by Sellers of, or the performance by Sellers of their obligations under, this Agreement, except for (a) the Consents listed or described on Schedule 5.3, (b) the making of applicable HSR Filings, if any, and the expiration or termination of the applicable waiting period thereunder, (c) the approval of the Bankruptcy Court, and (d) Consents that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect if not obtained or made. Except as listed or described on Schedule 5.3, assuming that, as of the Closing, the Consents referred to in the preceding sentence have been obtained or made and remain in full force and effect, the execution and delivery of this Agreement by Sellers do not, and the performance by Sellers of their obligations under this Agreement will not, conflict with or result in the violation of, or constitute a default under, or give rise to a right of termination, cancellation or acceleration of any obligation under, (a) the certificate or articles of incorporation or bylaws of either Seller, (b) the Partnership Agreement, (c) any Law to which Sellers, KJBC or any of the Purchased Assets is subject, or (d) any KJBC Material Contract, KBC Material Contract or Gramercy Material Contract; except in the case of clauses (c) and (d), such conflicts, violations, defaults or rights that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or give rise to the creation of any Lien on the Purchased Assets.

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     5.4 Partnership Interests.

          5.4.1 Partners’ Respective Holdings. As of the date of this Agreement, the sole partners of record of KJBC are JBM, with a 51.0% Partnership Interest, and KBC, with a 49.0% Partnership Interest, and immediately prior to Closing, KBC shall hold no less than a 49.0% Partnership Interest.

          5.4.2 No Other Obligation to Transfer Partnership Interest. Except as contemplated herein and in the Partnership Agreement, (a) none of the Sellers or any of their Affiliates has any obligation, absolute or contingent, to Transfer any Partnership Interest to any Person or to enter into any agreement with respect thereto, and (b) KJBC has no obligation, absolute or contingent, to issue or redeem after the date hereof any Partnership Interest, to effect any merger, consolidation or other reorganization or sale of the KJBC Assets (other than sales of inventory and obsolete tangible personal property in the ordinary course of business and consistent with past practice) after the date hereof or to enter into any agreement with respect thereto.

          5.4.3 Title to Partnership Interest. KBC has good and valid title to the KBC Partnership Interest. At Closing and upon delivery of the KBC Partnership Interest and payment therefor pursuant hereto, Buyers will acquire good and valid title to the KBC Partnership Interest free and clear of all Liens, except as may be created by either Buyer and except for transfer restrictions under applicable securities Laws.

     5.5 Interest in Other Persons. Except for the KBC Partnership Interest and shares of Alpart Farms (Jamaica), Ltd., a Delaware corporation, owned by KBC, neither KBC nor KJBC owns, directly or indirectly, any capital stock or equity securities of any corporation or have any direct or indirect equity or ownership interest in any other Person.

     5.6 Financial Statements. Attached as Schedule 5.6 are the following (collectively, the “KJBC Financial Statements”): (a) the audited financial statements of KJBC as of and for the fiscal year ended December 31, 2002; (b) the unaudited financial statements of KJBC as of and for the eight-month period ended August 31, 2003 (the August 31, 2003 unaudited balance sheet being referred to as the “Balance Sheet” and such date, the “Balance Sheet Date”); and (c) the unaudited financial statements of KJBC as of and for the fiscal year ended December 31, 2003. The KJBC Financial Statements (a) have been prepared in accordance with the books and records of KJBC, (b) have been prepared in accordance with JGAAP in a manner consistent with KJBC’s historic JGAAP accounting practices, except that the unaudited financial statements do not have notes thereto and are subject to year-end adjustments, and (c) present fairly, in all material respects, the financial position of KJBC as of their respective dates and the mining charges accounts and cash flows of KJBC for the respective fiscal periods then ended, subject, in the case of the unaudited financial statements, to year-end adjustments.

     5.7 Sufficiency of Assets. The KJBC Assets and the KBC Purchased Assets, when utilized by a labor force substantially similar to that used in the conduct of the KJBC Operations as of the date of this Agreement, and assuming appropriate post-closing services are available to and utilized by KJBC Buyer under the Transition and Shared Services Agreement, will be adequate to conduct the KJBC Operations immediately after the Effective Time in the same

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manner in all material respects as such operations are conducted under KBC’s management as of the date of this Agreement.

     5.8 KBC Inventory. Sellers have delivered to Buyers an inventory statement, dated as of the Balance Sheet Date (the “Balance Sheet Date KBC Inventory Statement”), a copy of which is attached hereto as Schedule 5.8, which Balance Sheet Date KBC Inventory Statement presents fairly the KBC Inventory and the Book Value thereof as of the Balance Sheet Date and, except as specified in the notes thereto, was prepared in all material respects using valuation and other accounting practices based on KBC’s standard inventory costs consistent with KBC’s past practice.

     5.9 Conduct of Business. Since the Balance Sheet Date, except as listed or described on Schedule 5.9, (a) the KJBC Operations have been conducted in the ordinary course of business in all material respects, and (b) no event has occurred that, individually or in the aggregate with other events, would reasonably be expected to have a Material Adverse Effect.

     5.10 Real Property.

          5.10.1 KJBC Owned Real Property. Except as listed or described on Schedule 5.10.1(a), all of the real property owned by KJBC or owned by the partners of KJBC as tenants in common for the use and benefit of KJBC (the “KJBC Owned Real Property”) is free and clear of all Liens except for Permitted Liens. Schedule 5.10.1(b) sets forth in all material respects a true and complete list as of the date of this Agreement of the KJBC Owned Real Property.

          5.10.2 KJBC Leased Real Property. Except as listed or described on Schedule 5.10.2(a), KJBC has, or the partners of KJBC as tenants in common for the use and benefit of KJBC have, a valid leasehold interest in or valid rights to all of the real property interests of KJBC, or held by the partners of KJBC as tenants in common for the use and benefit of KJBC, other than the KJBC Owned Real Property (the “KJBC Leased Real Property” and together with the KJBC Owned Real Property, the “KJBC Real Property”) free and clear of all Liens except Permitted Liens. Schedule 5.10.2(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the KJBC Leased Real Property.

          5.10.3 KBC Owned Real Property. Except as listed or described on Schedule 5.10.3(a), all of the real property owned by KBC and used primarily with respect to the KJBC Operations other than the KJBC Owned Real Property (the “KBC Owned Real Property”) is free and clear of all Liens except Permitted Liens. Schedule 5.10.3(b) sets forth in all material respect a true and complete list as of the date of this Agreement of the KBC Owned Real Property.

          5.10.4 KBC Leased Real Property. Except as listed or described on Schedule 5.10.4(a), KBC has a valid leasehold interest in or valid rights to all of the real property interests of KBC used primarily with respect to the KJBC Operations other than the KBC Owned Real Property, KJBC Owned Real Property and the KJBC Leased Real Property (the “KBC Leased Real Property” and together with the KBC Owned Real Property, the “KBC Real

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Property”). Schedule 5.10.4(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the KBC Leased Real Property.

          5.10.5 Possession. Except as listed or described on Schedule 5.10.5, KJBC and KBC are in all material respects in peaceful and undisturbed possession of the KJBC Real Property and KBC is in all material respects in peaceful and undisturbed possession of the KBC Real Property. Except as listed or described on Schedule 5.10.5, none of the structures on the KJBC Real Property or KBC Real Property encroaches upon real property of another Person, except such encroachments that would not reasonably be expected to have a material adverse effect on the value of such property.

          5.10.6 Zoning and Other Restrictions.

               (a) Except as listed or described on Schedule 5.10.6(a), there is no material violation of any building, planning, zoning or similar Laws with respect to any of the KJBC Real Property or KBC Real Property, and (subject to compliance with Laws of general application) there are no contractual or legal restrictions that preclude or restrict in any material respect the ability to mine the KJBC Real Property and KBC Real Property that is held for mining.

               (b) Except as listed or described on Schedule 5.10.6(b), there is no material zoning or other land use or planning application relating to the KJBC Real Property or KBC Real Property that has been submitted to a Governmental Entity which is pending, which has been denied (and which is necessary for the conduct of the KJBC Operations as presently conducted and as proposed to be conducted), or which is the subject matter of any pending appeal.

     5.11 Tangible Personal Property.

          5.11.1 KJBC Owned Tangible Personal Property. Except as listed or described on Schedule 5.11.1(a), KJBC has, or the partners of KJBC as tenants in common for the use and benefit of KJBC have, valid title to all of the tangible personal property owned by KJBC or owned by the partners of KJBC as tenant in common for the use and benefit of KJBC (the “KJBC Owned Tangible Personal Property”) free and clear of all Liens except for Permitted Liens. Schedule 5.11.1(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the KJBC Owned Tangible Personal Property, except for inventory and individual items of tangible personal property having a book value of less than $250,000.

          5.11.2 KJBC Leased Tangible Personal Property. Except as listed or described on Schedule 5.11.2(a), KJBC has, or the partners of KJBC as tenants in common for the use and benefit of KJBC have, a valid leasehold interest in or valid rights to the material tangible personal property that is leased to or otherwise used by KJBC, other than the KJBC Owned Tangible Personal Property, in connection with the conduct of the KJBC Operations (the “KJBC Leased Tangible Personal Property”) in accordance with the terms of the applicable contract. Schedule 5.11.2(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the KJBC Leased Tangible Personal Property.

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          5.11.3 KBC Owned Tangible Personal Property. Except as listed or described on Schedule 5.11.3(a), KBC has valid title to all of the tangible personal property owned by KBC and used primarily with respect to the KJBC Operations, except for KJBC Owned Tangible Personal Property (the “KBC Owned Tangible Personal Property”) free and clear of all Liens except for Permitted Liens. Schedule 5.11.3(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the KBC Owned Tangible Personal Property, except for inventory and other items of tangible personal property having a book value of less than $250,000.

          5.11.4 KBC Leased Tangible Personal Property. Except as listed or described on Schedule 5.11.4(a), KBC has a valid leasehold interest in or valid rights to all of the material tangible personal property that is leased to KBC and used primarily with respect to the KJBC Operations, other than the KBC Owned Tangible Personal Property, KJBC Owned Tangible Personal Property and KJBC Leased Tangible Personal Property (the “KBC Leased Tangible Personal Property”) in accordance with the applicable contract. Schedule 5.11.4(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the KBC Leased Tangible Personal Property.

     5.12 Material Contracts.

          5.12.1 KJBC Material Contracts. Schedule 5.12.1(a) sets forth a true and complete list as of the date of this Agreement of each KJBC Material Contract. Except as listed or described in Schedule 5.12.1(b), neither KJBC nor, to Sellers’ knowledge, any counterparty to any KJBC Material Contract is in breach of, or in default under, any KJBC Material Contract in any material respect, and there is no pending or, to Sellers’ knowledge, threatened dispute in relation to any material matter under any KJBC Material Contract. As of the date of this Agreement, each of the KJBC Material Contracts to which KJBC is a party is, in all material respects, a valid and binding obligation of KJBC enforceable against KJBC in accordance with its terms, subject to the Standard Exceptions. As of the Effective Time, each of the KJBC Material Contracts, other than KJBC Material Contracts that expire by their terms or may be terminated without violation of Section 8.1.1 prior to the Effective Time, to which KJBC is a party will be, in all material respects, a valid and binding obligation of KJBC, enforceable against KJBC in accordance with its terms, subject to the Standard Exceptions.

          5.12.2 KBC Material Contracts. Schedule 5.12.2(a) sets forth a true and complete list as of the date of this Agreement of each KBC Material Contract. Except as listed or described in Schedule 5.12.2(b), neither KBC nor, to Sellers’ knowledge, any counterparty to any KBC Material Contract is in breach of, or in default under, any KBC Material Contract in any material respect, and there is no pending or, to Sellers’ knowledge, threatened dispute in relation to any material matter under any KBC Material Contract. As of the date of this Agreement, each of the KBC Material Contracts to which KBC is a party is, in all material respects, a valid and binding obligation of KBC enforceable against KBC in accordance with its terms, subject to the Standard Exceptions. As of the Effective Time, each of the KBC Material Contracts, other than KBC Material Contracts that expire by their terms or may be terminated without violation of Section 8.1.1 prior to the Effective Time, to which KBC is a party will be, in all material respects, a valid and binding obligation of KBC, enforceable against KBC in accordance with its terms, subject to the Standard Exceptions.

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          5.12.3 Agreements Provided. Sellers have made available to Buyers true and complete copies of each KJBC Material Contract, KBC Material Contract, KBC Labor Agreement and KBC Plan, including all amendments thereto.

     5.13 Intellectual Property.

          5.13.1 KJBC Owned Intellectual Property. Except as listed or described on Schedule 5.13.1(a), (a) KJBC owns, or the partners of KJBC as tenants in common for the use and benefit of KJBC own, the entire right, title and interest in and to all of the Intellectual Property owned by KJBC or owned by the partners of KJBC as tenants in common for the use and benefit of KJBC (the “KJBC Owned Intellectual Property”) free and clear of all Liens except Permitted Liens, and (b) none of KJBC, KBC or to Sellers’ knowledge, JBM has granted any license to any other Person relating to any of the KJBC Owned Intellectual Property. Schedule 5.13.1(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the KJBC Owned Intellectual Property.

          5.13.2 KJBC Licensed Intellectual Property. Except as listed or described on Schedule 5.13.2(a), KJBC is entitled to the use of the material Intellectual Property other than the KJBC Owned Intellectual Property that is used by KJBC or for the benefit of KJBC in connection with the conduct of the KJBC Operations (the “KJBC Licensed Intellectual Property”) and no payments in respect of the KJBC Licensed Intellectual Property are payable to any Person in connection with the use of the KJBC Licensed Intellectual Property by KJBC or for the benefit of KJBC or will become payable to any Person as a result of the transactions contemplated by this Agreement. Schedule 5.13.2(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the KJBC Licensed Intellectual Property.

          5.13.3 KBC Owned Intellectual Property. Except as listed or described on Schedule 5.13.3(a), (a) KBC owns the entire right, title and interest in and to all of the Intellectual Property owned by KBC and used primarily in connection with the conduct of the KJBC Operations other than the KJBC Owned Intellectual Property (the “KBC Owned Intellectual Property”) free and clear of all Liens except Permitted Liens, and (b) KBC has not granted any license to any other Person relating to any of the KBC Owned Intellectual Property. Schedule 5.13.3(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the KBC Owned Intellectual Property.

          5.13.4 KBC Licensed Intellectual Property. Except as listed or described on Schedule 5.13.4(a), KBC is entitled to the use of the material Intellectual Property other than the KBC Owned Intellectual Property, KJBC Owned Intellectual Property and KJBC Licensed Intellectual Property that is used by KBC primarily in connection with the conduct of the KJBC Operations (the “KBC Licensed Intellectual Property”) and no payments in respect of the KBC Licensed Intellectual Property are payable to any Person in connection with the use of the KBC Licensed Intellectual Property by KBC or will become payable to any Person as a result of the transactions contemplated by this Agreement. Schedule 5.13.4(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the KBC Licensed Intellectual Property.

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          5.13.5 No Unresolved Claims. There is no unresolved material claim against KJBC asserting infringement by or of the KJBC Owned Intellectual Property or, to Sellers’ knowledge, the KJBC Licensed Intellectual Property, or any other unresolved material claim against KJBC asserting a conflict with the rights of others in connection with KJBC’s use of any of the KJBC Owned Intellectual Property or the KJBC Licensed Intellectual Property, and, to Sellers’ knowledge, there is no basis for any such claim to be brought. There is no unresolved material claim against KBC asserting infringement by or of the KBC Owned Intellectual Property or, to Sellers’ knowledge, the KBC Licensed Intellectual Property, or any other unresolved material claim against KBC asserting a conflict with the rights of others in connection with KBC’s use of any of the KBC Owned Intellectual Property or the KBC Licensed Intellectual Property, and, to Sellers’ knowledge, there is no basis for any such claim to be brought.

     5.14 Permits.

          5.14.1 List of Permits. Schedule 5.14.1 sets forth a true and complete list as of the date of this Agreement of all material licenses, permits and authorizations from Governmental Entities required to be maintained by each of KJBC and KBC in connection with the conduct of the KJBC Operations (other than those required under Environmental Laws, which are addressed in Section 5.17).

          5.14.2 Permit Compliance. Except as set forth in Schedule 5.14.2, each of KJBC and KBC has, maintains and is in compliance in all material respects with all licenses, permits and authorizations from Governmental Entities required to be maintained by each of them in connection with the conduct of the KJBC Operations (other than those required under Environmental Laws, which are addressed in Section 5.17). Neither KJBC nor KBC has received from any Governmental Entity specific written notification that, and to Sellers’ knowledge, there is no reasonable basis for a claim that, any material permit or authorization (a) is not in full force and effect, (b) has been violated in any material respect, or (c) is subject to any suspension, revocation or cancellation.

     5.15 Compliance with Law. Except as listed or described on Schedule 5.15, KJBC is in compliance in all material respects with all applicable Laws (other than Environmental Laws, which are addressed in Section 5.17). KBC is in compliance, in all material respects, with all applicable Laws in respect of its ownership of the KBC Purchased Assets and its operation of the KJBC Operations.

     5.16 Litigation. Except as listed or described on Schedule 5.16, there are no civil, criminal, administrative, arbitral or similar proceedings, actions or suits pending or, to Sellers’ knowledge, threatened by or against KJBC or KBC arising out of or relating to the conduct of the KJBC Operations, or otherwise pertaining to or affecting the KBC Purchased Assets or the KJBC Assets (other than proceedings, actions or suits arising out of or relating to any violations of Environmental Laws which are addressed in Section 5.17), that have a stated claim amount in excess of $50,000 and to Sellers’ knowledge, there is no basis for any such proceeding, action or suit.

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     5.17 Environmental Matters.

          5.17.1 Environmental Compliance. Except as listed or described on Schedule 5.17.1, (a) KJBC and KBC are in compliance in all material respects with all Environmental Laws applicable to the KJBC Operations and (b) there is no civil, criminal or administrative action or suit pending against KJBC or KBC that alleges any material violation of Environmental Laws arising from the conduct of the KJBC Operations, and to Sellers’ knowledge, no such action or suit is threatened against KJBC or KBC.

          5.17.2 Disposal Sites. Schedule 5.17.2 sets forth a true and complete list and description as of the date of this Agreement of all disposal sites used in the KJBC Operations since January 1, 1994, whether or not located on any KJBC Real Property.

          5.17.3 List of Environmental Permits. Schedule 5.17.3 sets forth a true and complete list as of the date of this Agreement of all material licenses, permits and authorizations from Governmental Entities required to be maintained under Environmental Laws by each of KJBC and KBC in connection with the conduct of the KJBC Operations.

          5.17.4 Environmental Permit Compliance. Except as set forth in Schedule 5.17.4, each of KJBC and KBC has, maintains and is in compliance in all material respects with all licenses, permits and authorizations from Governmental Entities required to be maintained under Environmental Laws by each of them in connection with the conduct of the KJBC Operations. Neither KJBC nor KBC has received from any Governmental Entity specific written notification that, and to Sellers’ knowledge, there is no reasonable basis for a claim that, any material permit or authorization (a) is not in full force and effect, (b) has been violated in any material respect, or (c) is subject to any suspension, revocation or cancellation.

     5.18 Employees.

          5.18.1 Compliance with Laws. Schedule 5.18.1 sets forth a true and complete list, as of the date of this Agreement, of the names of all KBC Employees or individuals to whom KBC has made an outstanding offer of employment. KBC and KJBC have complied in all material respects with all applicable Laws related to the employment of employees and, to Sellers’ knowledge, except as listed or described on Schedule 5.18.1, since January 1, 2002, neither KBC or KJBC has received any notice of any claim that (a) it has not complied in any material respect with any Laws relating to the employment of employees, including any provision thereof relating to wages, hours or employee safety, or (b) it is liable for any arrearage of wages or any Taxes or penalties for failure to comply with any of the foregoing. All of the KBC Employees are employed in Jamaica exclusively in the KJBC Operations. All outstanding offers of employment made by KBC were made only in the ordinary course of business.

          5.18.2 Employment and Severance Agreements. Except as set forth in Schedule 5.18.2 or 5.19.1 or permitted by Section 8.1, KBC is not a party to, is not bound by, and has no outstanding obligations under, any employment, compensation, severance, consulting, retainer or other similar agreement, arrangement or understanding, including any arrangement or agreement to make payments to any Person in connection with the continued employment or the termination of their employment, in each case, written or oral. Sellers have

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made available to Buyers copies of all such agreements or summaries of the material terms of any oral arrangements or understanding.

          5.18.3 Liabilities Satisfied. All obligations and liabilities of KBC owing to the KBC Employees, former employees of KBC and their dependents, including all obligations and liabilities for (a) wages, salaries and other compensation payments, (b) all payments and other liabilities under all KBC Plans (including all collective bargaining agreements), and (c) all liabilities under Laws relating to terms and conditions of employment, (i) have been, to the extent due or payable, fully satisfied or (ii) are or will be reflected as current liabilities on the financial statements of KBC to the extent required under U.S. generally accepted accounting principles.

     5.19 Labor Matters.

          5.19.1 Collective Bargaining Agreements. Schedule 5.19.1 sets forth a true and complete list of each labor or collective bargaining agreement to which KBC or KJBC is a party.

          5.19.2 No Other Labor Organization. Sellers have no knowledge of any activity or proceeding of any labor organization (or representatives thereof) to organize any KBC Employees, nor of any concerted activities, strikes, slowdowns, work stoppages, lockouts or threats thereof by or with respect to any KBC Employees.

     5.20 KBC Plans and Employee Compensation. Schedule 5.20 sets forth a true and complete list of each KBC Plan. With respect to each KBC Plan, Sellers have delivered or made available to Buyers a true, complete and correct copy of such KBC Plan (or, if not written, a written summary of its material terms) and the most recent summary plan description, if any, related to such KBC Plan. With respect to Other KBC Employees, Sellers have made available to Buyers the current base pay and incentive compensation of such Other KBC Employees.

     5.21 Administration of KBC Plans. Except as listed or described on Schedule 5.21, each KBC Plan has been administered in accordance with its terms and all applicable Laws in all material respects, and all contributions required to be made to any KBC Plan have been timely made in accordance with its terms and all applicable Laws. To Sellers’ knowledge, no event has occurred, and there exists no condition or set of circumstances (other than general economic conditions), that would reasonably be expected to result in material liabilities (other than routine benefit liabilities) under the terms of, or with respect to, any such KBC Plan.

     5.22 Insurance. Schedule 5.22 sets forth a true and complete list of all insurance policies (collectively, “KJBC Listed Insurance Policies”) and describes all self-insurance arrangements as of the date of this Agreement of or for the benefit of KJBC covering any aspect of the KJBC Operations. As of the date of this Agreement, all of the KJBC Listed Insurance Policies are in full force and effect through the respective dates set forth on Schedule 5.22.

     5.23 Tax Matters.

          5.23.1 Tax Returns. Except as listed or described on Schedule 5.23.1: (a) all Tax Returns required to be filed as of the date hereof with respect to the KBC Purchased Assets, KJBC, any KJBC Assets or the KJBC Operations have been timely filed other than Tax Returns

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that do not involve a material amount of Taxes; (b) all Taxes shown to be due on such Tax Returns have been timely paid or otherwise discharged; (c) all such Tax Returns are true, correct and complete in all material respects; (d) no material adjustment relating to such Tax Returns has been proposed formally or, to Sellers’ knowledge, informally by any Tax authority and, to Sellers’ knowledge, no basis exists for any such adjustment; (e) there are no pending or, to Sellers’ knowledge, threatened actions or proceedings for the assessment or collection of material Taxes relating to the KBC Purchased Assets, KJBC, any KJBC Assets or the KJBC Operations; and (f) to Sellers’ knowledge, there are no Tax liens on any KJBC Assets or any of the KBC Purchased Assets other than Permitted Liens.

          5.23.2 Unresolved Items. Except as listed or described on Schedule 5.23.2: (a) there are no outstanding waivers or agreements extending the statute of limitations for any period with respect to any material Tax to which the KBC Purchased Assets, KJBC Assets, KJBC or the KJBC Operations may be subject; (b) there are no requests for information from any Tax authority currently outstanding that could materially and adversely affect the Taxes on or in respect of the KBC Purchased Assets, KJBC, any KJBC Assets or the KJBC Operations; and (c) to Sellers’ knowledge, there are no proposed reassessments of any property included in the KBC Purchased Assets, the KJBC Assets or the KJBC Operations that could materially increase the amount of any Tax to which the KBC Purchased Assets, the KJBC Assets or the KJBC Operations would be subject.

          5.23.3 Stamp Duty. To Sellers’ knowledge, all documents and instruments relating to the KBC Purchased Assets or any KJBC Assets and which are subject to a material amount of stamp duty (other than as a result of the transactions contemplated by this Agreement) have been properly stamped.

     5.24 Related Party Transactions. Neither KBC nor KJBC is a party to any contract, agreement, arrangement or understanding, written or oral, with either of the Sellers or any of their Affiliates that is not listed on Schedule 5.12.1 or Schedule 5.12.2. KJBC has no Intercompany Obligations other than Intercompany Obligations between KJBC and KBC and Intercompany Obligations between KJBC and Alpart.

     5.25 Brokers and Finders. None of Sellers or their Affiliates have employed any broker or finder or incurred any liability for any brokerage fees, commission or finders fees in connection with the transactions contemplated hereby, except for the employment of, and related fees and expenses payable to, Lazard Frères & Co. LLC, which will be borne by Sellers or their Affiliates.

     5.26 Title to KBC Purchased Assets. Except as set forth in Section 2.5, (a) KBC has good and valid title to the KBC Purchased Assets and KJBC has good and valid title to the KJBC Assets, and (b) at Closing and upon delivery of the KBC Purchased Assets and payment therefore pursuant hereto, KJBC Buyer will acquire good and valid title to the KBC Purchased Assets and KJBC will continue to have good and valid title to the KJBC Assets.

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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF KAISER WITH
RESPECT TO THE GRAMERCY PURCHASED ASSETS

     Kaiser hereby represents and warrants to Buyers as follows:

     6.1 Sufficiency of Assets. The Gramercy Purchased Assets, when utilized by a labor force substantially similar to that used by Kaiser in connection with the Gramercy Operations as of the date of this Agreement, assuming appropriate post-closing services are available to and utilized by Gramercy Buyer under the Transition and Shared Services Agreement, will be adequate to conduct the Gramercy Operations immediately after the Effective Time in the same manner in all material respects as such operations are conducted as of the date of this Agreement.

     6.2 Gramercy Inventory. Sellers have delivered to Buyers an inventory statement, dated as of the Balance Sheet Date (the “Balance Sheet Date Gramercy Inventory Statement”), a copy of which is attached hereto as Schedule 6.2, which Balance Sheet Date Gramercy Inventory Statement presents fairly the Gramercy Inventory and the Book Value thereof as of the Balance Sheet Date and, except as specified in the notes thereto, was prepared in all material respects using valuation and other accounting practices based on Kaiser’s standard inventory costs consistent with Kaiser’s past practice.

     6.3 Conduct of Business. Since the Balance Sheet Date, except as listed or described on Schedule 6.3, (a) Kaiser has not conducted the Gramercy Operations in a manner outside the ordinary course of business in any material respect, and (b) no event has occurred that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

     6.4 Real Property.

          6.4.1 Owned Real Property. Except as listed or described on Schedule 6.4.1(a), all of the real property owned by Kaiser and used primarily with respect to the Gramercy Operations (the “Gramercy Owned Real Property”) is free and clear of all Liens except Permitted Liens. Schedule 6.4.1(b) sets forth in all material respects a true and complete list as of the date of this Agreement of the Gramercy Owned Real Property.

          6.4.2 Leased Real Property. Except as listed or described on Schedule 6.4.2(a), Kaiser has a valid leasehold interest in or valid rights to all of the real property interests of Kaiser used primarily with respect to the Gramercy Operations other than the Gramercy Owned Real Property (the “Gramercy Leased Real Property” and together with the Gramercy Owned Real Property, the “Gramercy Real Property”). Schedule 6.4.2(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the Gramercy Leased Real Property.

          6.4.3 Possession. Kaiser is in all material respects in peaceful and undisturbed possession of the Gramercy Owned Real Property. None of the structures on the Gramercy Owned Real Property encroaches upon real property of another Person, except such encroachments that would not reasonably be expected to have a material adverse effect on the value of such property.

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          6.4.4 Zoning and Other Restrictions.

               (a) Except as listed or described on Schedule 6.4.4(a), there is no material violation of any building, planning, zoning or similar Laws with respect to any of the Gramercy Real Property, and (subject to compliance with Laws of general application) there are no contractual or legal restrictions that preclude or restrict in any material respect the ability to use such Gramercy Real Property as currently used.

               (b) Except as listed or described on Schedule 6.4.4(b), there is no material zoning or other land use or planning application relating to the Gramercy Real Property that has been submitted to a Governmental Entity which is pending, which has been denied (and which is necessary for the conduct of the Gramercy Operations as presently conducted), or which is the subject matter of any pending appeal.

     6.5 Tangible Personal Property.

          6.5.1 Owned Tangible Personal Property. Except as listed or described on Schedule 6.5.1(a), Kaiser has valid title to all of the tangible personal property owned by Kaiser and used primarily with respect to the Gramercy Operations (the “Gramercy Owned Tangible Personal Property”) free and clear of all Liens except for Permitted Liens. Schedule 6.5.1(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the Gramercy Owned Tangible Personal Property, except for inventory and items of tangible personal property having a book value of less than $250,000.

          6.5.2 Leased Tangible Personal Property. Except as listed or described on Schedule 6.5.2(a), Kaiser has a valid leasehold interest in or valid rights to the material tangible personal property that is leased to Kaiser and used primarily with respect to the Gramercy Operations other than the Gramercy Owned Tangible Personal Property (the “Gramercy Leased Tangible Personal Property”). Schedule 6.5.2(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the Gramercy Leased Tangible Personal Property.

          6.5.3 Condition of Assets. Except as listed or described on Schedule 6.5.3, the Gramercy Owned Tangible Personal Property and the Gramercy Leased Tangible Personal Property listed on Schedules 6.5.1(b) and 6.5.2(b), considered collectively and not on an item by item basis, is in good repair and operating condition, ordinary wear and tear excepted, except where failure to be in such condition would not reasonably be expected to have a Material Adverse Effect.

     6.6 Gramercy Material Contracts.

          6.6.1 Gramercy Material Contracts. Schedule 6.6.1(a) sets forth a true and complete list as of the date of this Agreement of each Gramercy Material Contract. Except as listed or described in Schedule 6.6.1(b), neither Kaiser nor, to Sellers’ knowledge, any counterparty to any Gramercy Material Contract is in breach of, or in default under, any Gramercy Material Contract in any material respect, and there is no pending or, to Sellers’ knowledge, threatened dispute in relation to any material matter under any Gramercy Material Contract. As of the date of this Agreement, each of the Gramercy Material Contracts to which

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Kaiser is a party is, in all material respects, a valid and binding obligation of Kaiser enforceable against Kaiser in accordance with its terms, subject to the Standard Exceptions. As of the Effective Time, each of the Gramercy Material Contracts, other than Gramercy Material Contracts that expire by their terms or may be terminated without violation of Section 8.1.1 prior to the Effective Time, to which Kaiser is a party will be, in all material respects, a valid and binding obligation of Kaiser, enforceable against Kaiser in accordance with its terms, subject to the Standard Exceptions.

          6.6.2 Agreements Provided. Sellers have made available to Buyers true and complete copies of each Gramercy Material Contract, including all amendments thereto.

     6.7 Intellectual Property.

          6.7.1 Owned Intellectual Property. Except as listed or described on Schedule 6.7.1(a), (a) Kaiser owns the entire right, title and interest in and to all of the Intellectual Property owned by Kaiser and used primarily with respect to the Gramercy Operations (the “Gramercy Owned Intellectual Property”) free and clear of all Liens except Permitted Liens, and (b) Kaiser has not granted any license to any other Person relating to any of the Gramercy Owned Intellectual Property. Schedule 6.7.1(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the Gramercy Owned Intellectual Property.

          6.7.2 Licensed Intellectual Property. Except as listed or described on Schedule 6.7.2(a), Kaiser is entitled to the use of the material Intellectual Property other than the Gramercy Owned Intellectual Property that is used by Kaiser primarily in connection with the conduct of the Gramercy Operations (the “Gramercy Licensed Intellectual Property”) and no payments in respect of the Gramercy Licensed Intellectual Property are payable to any Person in connection with the use of the Gramercy Licensed Intellectual Property by Kaiser or will become payable to any Person as a result of the transactions contemplated by this Agreement. Schedule 6.7.2(b) sets forth in all material respects a true and complete list as of the date of this Agreement of all of the Gramercy Licensed Intellectual Property.

          6.7.3 No Unresolved Claims. There is no unresolved material claim against Kaiser asserting infringement by or of the Gramercy Owned Intellectual Property or, to Kaiser’s knowledge, the Gramercy Licensed Intellectual Property, or any other unresolved material claim against Kaiser asserting a conflict with the rights of others in connection with Kaiser’s use of any of the Gramercy Owned Intellectual Property or the Gramercy Licensed Intellectual Property, and, to Kaiser’s knowledge, there is no basis for any such claim to be brought.

     6.8 Permits.

          6.8.1 List of Permits. Schedule 6.8.1 sets forth a true and complete list as of the date of this Agreement of all material licenses, permits and authorizations from Governmental Entities required to be maintained by Kaiser in connection with the conduct of the Gramercy Operations (other than those required under Environmental Laws, which are addressed in Section 6.11).

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          6.8.2 Permit Compliance. Except as set forth in Schedule 6.8.2, Kaiser has, maintains and is in compliance in all material respects with all licenses, permits and authorizations from Governmental Entities required to be maintained by it in connection with the conduct of the Gramercy Operations (other than those required under Environmental Laws, which are addressed in Section 6.11). Kaiser has not received from any Governmental Entity specific written notification that, and to Kaiser’s knowledge there is no reasonable basis for a claim that, any material permit or authorization (a) is not in full force and effect, (b) has been violated in any material respect, or (c) is subject to any suspension, revocation, or cancellation.

     6.9 Compliance with Law. Except as listed or described on Schedule 6.9, Kaiser is in compliance in all material respects with all applicable Laws (other than Environmental Laws, which are addressed in Section 6.11) with respect to the conduct of the Gramercy Operations. Kaiser is in compliance, in all material respects, with all applicable Laws in respect of its ownership of the Gramercy Purchased Assets.

     6.10 Litigation. Except as listed or described on Schedule 6.10, there are no civil, criminal, administrative, arbitral or similar proceedings, actions or suits pending or, to Kaiser’s knowledge, threatened against Kaiser arising out of or relating to the conduct of the Gramercy Operations, or otherwise pertaining to or affecting the Gramercy Purchased Assets (other than proceedings, actions or suits arising out of or relating to any violation of Environmental Laws which are addressed in Section 6.11) that have a stated claim amount in excess of $100,000, and to Kaiser’s knowledge there is no basis for any such proceeding, action or suit.

     6.11 Environmental Matters.

          6.11.1 Environmental Compliance. Except as listed or described on Schedule 6.11.1, (a) to its knowledge, Kaiser is in material compliance with all Environmental Laws applicable to the Gramercy Operations and (b) there is no civil, criminal or administrative action or suit pending against Kaiser that alleges any material violation of Environmental Laws arising from the conduct of the Gramercy Operations, and to Kaiser’s knowledge, no such action or suit is threatened against Kaiser.

          6.11.2 Disposal Sites. Schedule 6.11.2 sets forth a true and complete list and description as of the date of this Agreement of all disposal sites used in the Gramercy Operations since January 1, 1994, whether or not located on any Gramercy Real Property.

          6.11.3 List of Environmental Permits. Schedule 6.11.3 sets forth a true and complete list as of the date of this Agreement of all material licenses, permits and authorizations from Governmental Entities required to be maintained under Environmental Laws by Kaiser in connection with the conduct of the Gramercy Operations.

          6.11.4 Environmental Permit Compliance. Except as set forth in Schedule 6.11.4, to its knowledge, Kaiser has, maintains and is in compliance in all material respects with all licenses, permits and authorizations from Governmental Entities required to be maintained under Environmental Laws by it in connection with the conduct of the Gramercy Operations. Kaiser has not received from any Governmental Entity specific written notification that, and to Kaiser’s knowledge there is no reasonable basis for a claim that, any such permit or

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authorization that is material (a) is not in full force and effect, (b) has been violated in any material respect, or (c) is subject to any suspension, revocation, or cancellation.

     6.12 Labor Matters.

          6.12.1 Collective Bargaining Agreements. Schedule 6.12.1 sets forth a true and complete list of each labor or collective bargaining agreement related to the Gramercy Operations to which Kaiser is a party.

          6.12.2 No Other Labor Organization. Kaiser has no knowledge of any activity or proceeding of any labor organization (or representatives thereof) to organize any Gramercy Employees, nor of any concerted activity, strikes, slowdowns, work stoppages, lockouts or threats thereof by or with respect to any Gramercy Employees.

     6.13 Insurance. Schedule 6.13 sets forth a true and complete list of all insurance policies (collectively, “Gramercy Listed Insurance Policies”) and describes all self-insurance arrangements as of the date of this Agreement of or for the benefit of Kaiser covering any aspect of the Gramercy Operations. As of the date of this Agreement, all of the Gramercy Listed Insurance Policies are in full force and effect through the respective dates set forth on Schedule 6.13.

     6.14 Tax Matters.

          6.14.1 Tax Returns. Except as listed or described on Schedule 6.14.1, to Sellers’ knowledge, (a) there are no pending or threatened actions or proceedings for the assessment or collection of material property or ad valorem taxes relating to the Gramercy Purchased Assets, and (b) there are no Tax Liens on any of the Gramercy Purchased Assets.

          6.14.2 Unresolved Items. Except as listed or described on Schedule 6.14.2, (a) there are no outstanding waivers or agreements extending the statute of limitations for any period with respect to any material property or ad valorem tax to which the Gramercy Purchased Assets may be subject, (b) there are no requests for information from any Tax authority currently outstanding that could materially adversely affect any property or ad valorem taxes on or in respect of the Gramercy Purchased Assets, and (c) to Seller’s knowledge, there are no proposed reassessments of any property included in the Gramercy Purchased Assets that could reasonably be expected to materially increase the amount of any property or ad valorem tax to which the Gramercy Purchased Assets would be subject.

     6.15 Title to Gramercy Purchased Assets. Kaiser has good and valid title to the Gramercy Purchased assets. At Closing and upon delivery of the Gramercy Purchased Assets and payment therefore pursuant hereto, Gramercy Buyer will acquire good and valid title to the Gramercy Purchased Assets.

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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyers hereby represents and warrants to Sellers as follows:

     7.1 Organization. KJBC Buyer is a private limited company duly organized and validly existing under the laws of Jamaica. Gramercy Buyer is a limited liability company duly organized and validly existing under the laws of the State of Delaware.

     7.2 Corporate Authority. Each Buyer has the requisite organizational power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the Escrow Agreement by each Buyer, as applicable, and the performance by each Buyer of the obligations contemplated to be performed by each Buyer hereunder and thereunder, as applicable, have been duly authorized by all necessary organizational actions of that Buyer, and the execution and delivery of the Transition and Shared Services Agreement (subject to Section 8.1.2), the Environmental Escrow Agreement and the Technology Licenses by each Buyer party thereto and the performance by each such Buyer of the obligations contemplated to be performed by it thereunder will be duly authorized by all necessary organizational actions of that Buyer as of the Closing. This Agreement and the Escrow Agreement have been duly executed and delivered by each Buyer party hereto and thereto, and the Transition and Shared Services Agreement (subject to Section 8.1.2), the Environmental Escrow Agreement and the Technology Licenses will be duly executed and delivered by each Buyer party thereto as of the Closing, and each of this Agreement and the Escrow Agreement is, and each of the Transition and Shared Services Agreement (subject to Section 8.1.2), the Environmental Escrow Agreement and the Technology Licenses will be as of the date of its execution and delivery, a valid and binding obligation of each Buyer, as applicable, enforceable against each Buyer, as applicable, in accordance with its terms, subject to the Standard Exceptions.

     7.3 Consents. No Consent is required in connection with the execution or delivery by Buyers of, or the performance by Buyers of their obligations under, this Agreement, except for (a) the Consents listed or described on Schedule 7.3, (b) the making of applicable HSR Filings, if any, and the expiration or termination of the applicable waiting period thereunder, and (c) Consents that would not have, individually or in the aggregate, a material adverse effect on the ability of Buyers to consummate the transactions contemplated by this Agreement if not obtained or made. Except as listed or described on Schedule 7.3, assuming that, as of the Closing, the Consents referred to in the preceding sentence have been obtained or made and remain in full force and effect, the execution and delivery of this Agreement by Buyers do not, and the performance by Buyers of their obligations under this Agreement will not, conflict with or result in the violation of, or constitute a default under, or give rise to a right of termination, cancellation or acceleration of any obligation under, (a) the charter or bylaws or similar documents of either Buyer, (b) any Law to which either Buyer is subject, or (c) any agreement or contract to which either Buyer is a party or by which either Buyer is bound; except in the case of clauses (b) and (c) such conflicts, violations, defaults or rights that would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of Buyers to consummate the transactions contemplated by this Agreement.

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     7.4 Representations Exclusive. Each Buyer acknowledges that except as expressly set forth in this Agreement, Sellers have made no representation or warranty as to KJBC, the Combined Operations, the Purchased Assets or the Assumed Liabilities. Each Buyer further acknowledges that this Agreement is subject to any applicable order or act of the Bankruptcy Court.

     7.5 Sufficiency of Funds. Buyers have unencumbered cash on hand or credit arrangements with financially responsible third parties, or a combination thereof, in an aggregate amount sufficient, when combined with the Deposit, to enable them to pay the Final Purchase Price and all fees and expenses payable by them in connection with this Agreement and the transactions contemplated hereby.

     7.6 Investment Intent. The general partnership interest in KJBC included in the KBC Partnership Interest is being purchased by KJBC Buyer for investment and not with a view to distribution of all or any portion thereof, and neither the KBC Partnership Interest as a whole nor any portion thereof will be disposed of by KJBC Buyer without registration under the Securities Act of 1933, as amended, or pursuant to an exemption from such registration requirements.

     7.7 Brokers and Finders. None of Buyers or their Affiliates have employed any broker or finder or incurred any liability for any brokerage fees, commissions or finders fees in connection with the transactions contemplated hereby.

ARTICLE VIII
CERTAIN COVENANTS

     8.1 Conduct of the Business; Transition Planning.

          8.1.1 Certain Restrictions. During the period between the signing of this Agreement by the parties hereto and Closing, Sellers shall use their commercially reasonable efforts to ensure that, except as otherwise contemplated by this Agreement, as required by the Bankruptcy Court, as required by Law, or as listed or described on Schedule 8.1.1(a), (a) the Combined Operations are conducted in the ordinary course thereof consistent with past practices, including with respect to maintenance of insurance relating to the Combined Operations, (b) material relationships related to the Combined Operations, including those with employees and suppliers, are preserved, and (c) the condition of the Purchased Assets is materially preserved. Without limiting the generality of the foregoing, during the period between the signing of this Agreement by the parties hereto and Closing, except as listed or described on Schedule 8.1.1(a) or with the prior consent of Buyers, which consent shall not be unreasonably withheld, Sellers shall not cause, and shall direct the members of KJBC’s executive committee appointed by Sellers not to cause:

               (i) the taking of any action or the exercise of any of the powers described in Article XIII of the Partnership Agreement;

               (ii) any arrangement with any contractor for such contractor to perform any of the acts or exercise any of the powers described in Article XIII of the Partnership Agreement;

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               (iii) the taking of any action described in Section 4.03 of the Management Agreement;

               (iv) the creation, termination or amendment of any KJBC Material Contract, KBC Material Contract or Gramercy Material Contract, including those set forth on Schedules 5.12.1(a), 5.12.2(a) and 6.6.1(a);

               (v) any acquisition or disposition of any KJBC Assets, the KBC Purchased Assets or Gramercy Purchased Assets outside the ordinary course of conduct of the Gramercy Operations or the KJBC Operations (as applicable) or any acquisition or disposition that is reasonably likely to involve consideration in excess of $250,000;

               (vi) any capital expenditures to be made by or on behalf of KJBC except as contemplated in the KJBC Capital Spending Plan 2004 — 2005 attached hereto as Schedule 8.1.1(b);

               (vii) any capital expenditures to be made with respect to Gramercy except as contemplated in the 2004 GBU Capital Spending Plan attached hereto as Schedule 8.1.1(c);

               (viii) either Seller to grant or otherwise suffer to exist any Lien on any of the Purchased Assets, other than Permitted Liens;

               (ix) the creation of any agreement or arrangement with any Governmental Entity that is competent to impose or collect amounts payable in respect of any Taxes relating to the Purchased Assets arising after the Closing Date;

               (x) any offer to be made by or on behalf of KBC to employ any individual not currently employed by KBC for a salary or fee in excess of $100,000 per annum or any offer to be made by or on behalf of Kaiser to employ any individual with respect to the Gramercy Operations not currently employed by Kaiser for a salary or fee in excess of $100,000 per annum;

               (xi) the termination, other than for cause, of any KBC Employee who is material to the KJBC Operations or any Gramercy Employee who is material to the Gramercy Operations;

               (xii) the termination, other than for cause, of all or substantially all KBC Employees in any department that is material to the KJBC Operations or all or substantially all Gramercy Employees in any department that is material to the Gramercy Operations;

               (xiii) a material increase in the aggregate number of KBC Employees or in the aggregate number of Gramercy Employees;

               (xiv) the amendment of any of the material terms of employment of or benefits made available to, or the increase in pay and benefits of, any KBC Employee, Gramercy Employee or Seller Employee, except for (A) in the case of KBC Represented Employees, increases in pay or benefits required under the terms of the applicable KBC Labor Agreement and KBC Plans, (B) in the case of Gramercy Employees subject to the Gramercy Labor

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Agreement, increases in pay or benefits required under the terms of the Gramercy Labor Agreement and Gramercy Plans, and (C) in the case of the Seller Employees, increases in pay or benefits required under employment or benefits agreements in effect on the date hereof or discretionary bonuses in amounts, and payable on dates, consistent with past practice and otherwise in the ordinary course of business;

               (xv) the filing of any renditions with the local property tax authorities of the State of Louisiana prior to the applicable filing date related to any such rendition;

               (xvi) the creation of any Intercompany Obligations other than Intercompany Obligations between KJBC and KBC and Intercompany Obligations between KJBC and Alpart, consistent with past practice and otherwise in the ordinary course of business; or

               (xvii) either Seller or KJBC to enter into any agreement to do any of the foregoing.

Buyers shall respond to any request by Sellers for a consent required under this Section 8.1.1 within three business days of delivery of such request, or such shorter period of time as Sellers reasonably requested.

          8.1.2 Transition Planning. During the period between the signing of this Agreement by the parties hereto and Closing, Sellers shall supply to Buyers, promptly after they are produced, copies of (a) all regular management accounts relating to the Gramercy Operations or the KJBC Operations, (b) all senior management reports relating to the Gramercy Operations or the KJBC Operations, and (c) all other material reports and information provided to Sellers by KJBC’s executive committee. Solely for the purpose of effecting an orderly transition of ownership of the Purchased Assets and the operation of the Combined Operations, the parties shall form a transition committee comprised of one or two individuals selected by Sellers and one or two individuals selected by Buyers (the “Transition and Shared Services Committee”), which shall meet (in person or by telephone) at least twice a week (and on any other occasion reasonably requested by a member of the Transition and Shared Services Committee) during the period prior to Closing to discuss issues relating to the operation of the Combined Operations, including identification of specific post-closing transition services to be provided by Sellers and their Affiliates to Buyers, on the one hand, and by Buyers and their Affiliates to Sellers and their assignees, on the other hand, in each case, for a term of not more than six months on a cost reimbursement basis consistent with Kaiser’s historical intercompany cost reimbursement practices. The Transition and Shared Services Committee shall also (a) discuss and report to Kaiser and Gramercy Buyer as to whether particular items of property located at or used in the Gramercy Operations are primarily used in the Gramercy Operations, for the purposes of the definition of “Gramercy Purchased Assets” and (b) with respect to personnel and property that are used in both the Gramercy Operations and other Kaiser operations, make recommendations to the parties as to the manner and terms on which the party that will not employ such personnel or own such property after Closing shall continue to receive the benefit of such personnel and/or the use of such property, to the same extent as currently employed or used in the Gramercy Operations or Kaiser’s other operations, as the case may be, until such non-employer or non-owner party is able to make reasonable alternative arrangements. Sellers and Buyers shall use

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commercially reasonable efforts to agree upon the terms and provisions of a transition and shared services agreement prior to the Pre-Hearing Termination Date. Neither the Transition and Shared Services Committee nor any member thereof in such member’s capacity as such shall have the power to amend this Agreement, waive any provisions hereof, or bind either Seller, either Buyer, or any of their respective Affiliates.

     8.2 Access to Information; Confidentiality. Sellers shall afford to Buyers (and each of their employees, representatives and agents) reasonable access (subject, however, to existing confidentiality and similar non-disclosure obligations, in which case, if requested by Buyers, Sellers shall use commercially reasonable efforts to obtain necessary consents of third parties to allow disclosure of the requested information to Buyers), during normal business hours and upon reasonable notice during the period between the signing of this Agreement by the parties hereto and Closing, to all of KJBC’s properties, books and records and personnel and Sellers’ properties, books and records that are or relate to the Purchased Assets and the Combined Operations and, during that period, Sellers shall furnish as promptly as practicable to Buyers any information (subject, however, to existing confidentiality and similar nondisclosure obligations, in which case, if requested by Buyers, Sellers shall use commercially reasonable efforts to obtain necessary consents of third parties to allow disclosure of the requested information to Buyers) concerning KJBC, the Purchased Assets and the Combined Operations that Buyers may from time to time reasonably request. Each Buyer shall hold, and shall cause its employees, representatives, agents and Affiliates to hold, any nonpublic information obtained from Sellers in confidence to the extent required by, and in accordance with the provisions of, the Confidentiality Agreement as if such Buyer were a party thereto and each reference therein to “Century” was a reference to such Buyer.

     8.3 Commercially Reasonable Efforts; Regulatory Matters.

          8.3.1 Efforts to Close. On the terms and subject to the conditions set forth in this Agreement, each of the parties shall use its commercially reasonable efforts to take, or cause to be taken, all actions, and do, or cause to be done, and assist and cooperate with the other party or parties, as the case may be, in doing, all things necessary, proper or advisable to consummate, in the most expeditious manner practicable, the transactions contemplated hereby on the terms and subject to the conditions set forth in this Agreement, including the satisfaction of the conditions set forth in Article IX and arranging and coordinating contacts with third parties to facilitate obtaining the Consents contemplated by this Agreement. Without limiting the generality or effect of the foregoing, each of the parties hereto shall (a) if required, make promptly its respective HSR Filing, and thereafter make any other required submissions, with respect to the transactions contemplated hereby under the HSR Act, and (b) use its commercially reasonable efforts to take, or cause to be taken, all other appropriate actions, and to do, or cause to be done, all other things necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated by this Agreement, including using its commercially reasonable efforts to obtain all Consents of Governmental Entities, if any, that are necessary for the consummation of the transactions contemplated hereby and to fulfill the conditions thereto and to procure in the name of Buyers, or effect the transfer to Buyers of, all permits (other than permits held directly by KJBC) that relate to, or are required in connection with the ownership and operation of the KJBC Assets and the Purchased Assets or in the conduct of the Combined Operations.

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          8.3.2 Notice of Breaches. During the period between the signing of this Agreement by the parties hereto and Closing, Sellers, on the one hand, and Buyers, on the other hand, shall promptly notify the other in writing of all events, circumstances, facts and occurrences which (a) result in any breach of the notifying party’s covenants in this Agreement or which have the effect of making any of its representations or warranties in this Agreement untrue or incorrect; (b) will or are reasonably likely to prevent any of the conditions precedent set forth in Article IX from being satisfied; or (c) challenge the transactions contemplated hereby or the entry of the Bidding Procedures Order or the Sales Order. Sellers shall promptly notify Buyers of the commencement of any investigation, inquiry or review by any Governmental Entity with respect to the KJBC Operations or the Gramercy Operations or if any such investigation, inquiry or review, to the knowledge of either Seller, becomes contemplated.

     8.4 Bankruptcy Court Approval.

          8.4.1 Sales Process and Approval Motion. Sellers shall file a motion in substantially the form attached hereto as Exhibit G (the “Sales Process and Approval Motion”) with the Bankruptcy Court seeking, among other things, (i) the entry of an order of the Bankruptcy Court (the “Bidding Procedures Order”) that approves the Bidding and Auction Procedures, and (ii) the entry of an order of the Bankruptcy Court that authorizes the sale of the Purchased Assets to the Prevailing Bidder in the event of an Auction or to Buyers without conducting an Auction if no Qualified Bid is received. Seller shall file the Sales Process and Approval Motion with the Bankruptcy Court as promptly as practicable on or after the date hereof, subject to first obtaining a written statement of counsel for the UCC indicating that the UCC supports the filing of the Sales Process and Approval Motion; provided, however, that such written statement of counsel for the UCC may reserve the right of the UCC to make a contingent objection if (i) KJBC Buyer shall have not obtained GOJ Approval or (ii) Gramercy Buyer has not agreed with the USWA regarding a New Labor Agreement, in each case, prior to the objection deadline related to the entry of the Bidding Procedures Order.

          8.4.2 Hearing for the Bidding Procedures Order. Promptly after the filing of the Sales Process and Approval Motion, Sellers shall use their commercially reasonable efforts to obtain a hearing (the “Bidding Procedures Hearing”) on the entry of the Bidding Procedures Order at the earliest permissible date on which the Bankruptcy Court has previously scheduled an omnibus hearing in the Bankruptcy Case and will hear the matter after expiration of the applicable notice period, which notice period shall not be less than 35 calendar days, unless a shorter period is approved by the Bankruptcy Court. Promptly after obtaining such hearing date, Sellers shall give notice of the Sales Process and Approval Motion and the Bidding Procedures Hearing as and when required by applicable provisions of the Bankruptcy Laws and orders of the Bankruptcy Court. Sellers shall promptly, but in any event within 48 hours of giving such notice, deliver to Buyers a copy of that notice, and Sellers shall provide Buyers with copies of any and all objections or other Bankruptcy Pleadings related to the entry of the Bidding Procedures Order promptly after Sellers’ receipt thereof. Sellers shall use their commercially reasonable efforts to obtain the prompt entry of the Bidding Procedures Order.

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     8.5 Sales Order; Cooperation.

          8.5.1 Sales Order. If, in accordance with the Bidding and Auction Procedures, Buyers are determined to be the Prevailing Bidder, Sellers shall use their commercially reasonable efforts to obtain a hearing (the “Sales Hearing”) on the entry of an order of the Bankruptcy Court (the “Sales Order”) authorizing and approving the sale to Buyers of the Purchased Assets (on the terms set forth in this Agreement or such improved terms as Buyers may have offered in any Auction or otherwise pursuant to the Bidding and Auction Procedures) on the first day that the Bankruptcy Court is available to hold such hearing on or after July 19, 2004. The Sales Order shall be in the form attached hereto as Exhibit H, with such changes as shall be reasonably acceptable to Buyers. Sellers shall provide Buyers with copies of any and all objections or other Bankruptcy Pleadings related to the entry of the Sales Order promptly after Sellers’ receipt thereof. If, in accordance with the Bidding and Auction Procedures, Buyers are determined to be the Prevailing Bidder, Sellers shall use their commercially reasonable efforts to obtain to prompt approval and entry of the Sales Order.

          8.5.2 Cooperation. If, in accordance with the Bidding and Auction Procedures, Buyers are determined to be the Prevailing Bidder, (a) Sellers shall actively support, not oppose, not object to, and use their commercially reasonable efforts to seek and obtain the approval of the Sales Order by the Bankruptcy Court, and (b) without limiting the foregoing, Sellers shall cooperate with Buyers and their representatives in connection with seeking entry of the Sales Order. Buyers shall use commercially reasonable efforts to assist Sellers with responding to, and providing evidence with respect to, objections or challenges to the transactions contemplated by this Agreement. In the event that there is an Auction and Buyers are not the Prevailing Bidder, Buyers acknowledge and agree that the sale of the Purchased Assets by Sellers to the Prevailing Bidder may be consummated as contemplated by the Bidding and Auction Procedures, whereupon Buyers’ sole right will be to receive the Termination Fee as contemplated by Section 10.3. Seller acknowledges that (a) Buyers’ agreement that the Auction shall be conducted in accordance with the Bidding and Auction Procedures does not constitute the agreement of Buyers or their direct or indirect shareholders that the assignment to and assumption by persons selected as Eligible Participants of contracts for the sale of alumina from Sellers to such shareholders would involve adequate assurance to such shareholders of performance of such contracts as required by Section 365 of the Bankruptcy Code and (b) Buyers shall not be deemed to have waived their right to receive adequate assurance of performance as required by Section 365 of the Bankruptcy Code by virtue of Buyers’ right to receive the Termination Fee.

     8.6 Public Announcements. Buyers, on the one hand, and Sellers, on the other hand, shall provide each other the opportunity to review and comment upon, any press release or other public statement with respect to the transactions contemplated hereby, and shall not issue any such press release or make any such public statement prior to obtaining each other’s consent, except as may be required by applicable Law or by the Bankruptcy Court. In the event a press release or public statement is required by applicable Law or by the Bankruptcy Court, Buyers, on the one hand, or Sellers, on the other hand, shall nevertheless consult with the other parties prior to issuing such press release or making such public announcement if reasonably practicable.

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     8.7 Tax Matters.

          8.7.1 Cooperation. Buyers, on the one hand, and Sellers, on the other hand, shall (a) provide each other, upon request, with any assistance that may reasonably be requested by any of them in connection with the preparation of any Tax Return (including those contemplated by Section 8.7.5(a)), audit or other examination by any taxing authority or judicial or administrative proceedings relating to liability for Taxes, (b) provide each other, upon request, with any records or other information in their respective possession that may be relevant to that Tax Return, audit, examination or proceeding, (c) provide each other with any final determination of any such audit, examination or proceeding that affects any amount required to be shown on any Tax Return of the other for any period, and (d) use their commercially reasonable efforts, upon request, to obtain any certificate or other document from any Governmental Entity or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed on any party in connection with the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, Buyers, on the one hand, and Sellers, on the other hand, shall retain, until the applicable statutes of limitations (including any extensions) have expired, copies of all records or information that may be relevant to Tax Returns filed by the other party for all Tax periods or portions thereof ending before or including the Effective Time.

          8.7.2 Treatment of Payments. Sellers and Buyers agree to treat all payments made under Section 3.3 and Article XI as purchase price adjustments for Tax purposes, unless otherwise required by Law.

          8.7.3 Tax Elections. From and after the date of this Agreement, Sellers shall not without the prior written consent of Buyers (which consent may not be unreasonably withheld) make, or cause or permit to be made, any Tax election not consistent with prior practices that could be reasonably expected to result in an increase in either Buyers’ or KJBC’s Tax obligations or to have a Material Adverse Effect.

          8.7.4 Allocation of Taxes. In the case of any Tax payable with respect to a taxable period that begins before the Effective Time and ends after the Effective Time, the portion of any such Tax that is allocable to the ownership or use of the Purchased Assets or the operation of the Combined Operations prior to the Effective Time:

               (a) in the case of Taxes that are either (x) based upon or related to income, receipts, production, shipments or similar items or (y) imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible) (other than conveyances pursuant to this Agreement governed by Section 12.4), shall be deemed equal to the amount which would be payable if the taxable period ended on the Effective Time; and

               (b) in the case of Taxes imposed on a periodic basis shall be deemed to be the amount of such Taxes for the entire period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period) multiplied by a fraction the numerator of which is the number of calendar days in the taxable period ending on the Effective Time and the denominator of which is the number of calendar days in the entire taxable period.

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          8.7.5 Tax Returns and Payments.

               (a) From the date of this Agreement through and after the Effective Time, Sellers shall prepare and file or otherwise furnish in proper form to the appropriate Governmental Entity (or cause to be prepared and filed or so furnished) in a timely manner all Tax Returns relating to the Purchased Assets and the Combined Operations that are due on or before or relate to any taxable period ending on or before the Effective Time. Buyers shall prepare and file or otherwise furnish in proper form to the appropriate Governmental Entity (or cause to be prepared or so furnished) in a timely manner all Tax Returns (excluding those of Sellers) relating to the Purchased Assets and the Combined Operations for any taxable period that begins prior to the Effective Time and ends after the Effective Time and that are not yet filed. The Tax Returns described in the preceding two sentences, and the Tax Returns of the Sellers insofar as they relate to the Purchased Assets and the Combined Operations, shall be prepared in a manner consistent with past practices or in accordance with KBC’s new Jamaican fiscal regime effective beginning January 1, 2003, provided that such Tax Returns may be prepared in a manner not consistent with past practices, but only to the extent that preparation in such a manner does not materially and adversely affect the non-filing party. Buyers shall prepare and file or cause to be prepared and filed all Tax Returns with respect to any taxable period relating to the Purchased Assets and the Combined Operations for any taxable period that begins after the Effective Time. No Tax Return relating to the Purchased Assets or the Combined Operations covering any period (a) ending on or before the Effective Time or (b) beginning before the Effective Time and ending after the Effective Time shall be amended by Buyers without the prior written consent of Sellers, which consent shall not be unreasonably withheld.

               (b) With respect to any Tax Return required to be filed by Buyers with respect to the Purchased Assets or the Combined Operations and as to which an amount of Tax is allocable to the other party under Section 8.7.4, Buyers shall provide Sellers and their authorized representatives with a copy of such completed Tax Return and a statement setting forth the amount of Tax shown on such Tax Return that is so allocable to Sellers, together with appropriate supporting information and schedules at least 30 calendar days prior to the due date (including any extension thereof) for the filing of such Tax Return, and Sellers and their authorized representatives shall have the right to review and comment on such Tax Return and statement prior to the filing of such Tax Return. Sellers and Buyers agree to consult and resolve in good faith any issue arising out of the review of any such Tax Return. In the event the parties are unable to resolve any dispute within 15 calendar days following the delivery of such Tax Return by Buyers to Sellers, Sellers and Buyers shall submit the items remaining in dispute to the Independent Auditor to be chosen as provided by Section 3.4. The decision of the Independent Auditor shall be final and binding on the parties. The fees and expenses of the Independent Auditor will be borne equally by Buyers, on the one hand, and Sellers, on the other hand. The Independent Auditor shall make any such determination no later than five calendar days before the Tax Return is due.

          8.7.6 Contests. Inquiries, claims, assessments, audits or similar events with respect to Taxes for which the Sellers may be liable under Article XI shall be governed in accordance with the procedures set forth in Section 11.5.

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     8.8 KBC Employees.

          8.8.1 Employment Offers for KBC Represented Employees. As of the Effective Time, KJBC Buyer shall offer employment to all of the individuals who are employees of KBC (including employees on sick leave, short or long term disability or leave of absence due to work related injury or illness) as of the Effective Time and covered by a KBC Labor Agreement (the “KBC Represented Employees”). The offer for each such KBC Represented Employee shall be for pay and benefits satisfying KJBC Buyer’s obligations under this Section 8.8.

          8.8.2 Employment Offers for Non-Represented KBC Employees. As of the Effective Time, KJBC Buyer in its sole discretion may offer employment to any or all of the individuals who are employees of KBC (including temporary and part time employees, employees of Kaiser who have been seconded to KBC and employees on sick leave, short or long term disability or leave of absence due to work related injury or illness) not covered by a KBC Labor Agreement (the “Other KBC Employees” and together with the KBC Represented Employees, the “KBC Employees”) as of the Effective Time. The terms of the offer, if any, for each such Other KBC Employee shall be determined in the sole discretion of KJBC Buyer.

          8.8.3 KBC Labor Agreements and Pension Plans. As of the Effective Time, KJBC Buyer shall assume (a) the KBC Labor Agreements and (b) each KBC Plan for the benefit of KBC Employees and provide benefits to the KBC Represented Employees in compliance with the KBC Labor Agreements and KBC Plans, as applicable, and the requirements of applicable Laws. If the KBC Pension Plans are underfunded by more than $2,000,000 as of the Effective Time, as determined under Statement of Financial Accounting Standards No. 132 utilizing the assumptions outlined on Schedule 8.8.3, consistently applied, then KBC shall pay KJBC Buyer any such underfunded amount in excess of $2,000,000 promptly after the amount of underfunding is determined.

          8.8.4 Benefits Maintenance for KBC Represented Employees. Commencing as of the Effective Time and continuing until expiration of the applicable KBC Labor Agreement, KJBC Buyer shall provide base pay, incentive compensation and employee benefits to each KBC Represented Employee that are comparable in the aggregate to the base pay, incentive compensation and employee benefits provided by KBC to such KBC Represented Employees immediately prior to the Effective Time.

          8.8.5 No Employment Guarantee. Except as otherwise provided in this Section 8.8, nothing contained herein shall be deemed to be a commitment on the part of KJBC Buyer or KJBC to provide employment to any KBC Represented Employee for any period of time.

          8.8.6 No Prohibition on Amendment of Plans. Except as otherwise provided in this Section 8.8, nothing contained herein shall be deemed to prevent KJBC Buyer or KJBC from amending or terminating any KBC Plan in accordance with its terms.

          8.8.7 Elimination of Severance and Redundancy Obligations.

               (a) KBC and KJBC Buyer shall cooperate to reduce or eliminate to the fullest extent possible any severance or redundancy liability arising as a result of the migration of

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the KBC Employees from KBC to KJBC Buyer. Without limiting the generality or effect of the foregoing, KBC and KJBC Buyer will cooperate in the preparation and delivery to the KBC Employees as promptly as practicable of an appropriate joint notice of the termination of employment by KBC and the offer of employment by KJBC Buyer as of the Effective Time.

               (b) To the extent a KBC Employee has received an appropriate joint notice of the termination of employment by KBC and the offer of employment by KJBC Buyer but cannot be terminated by KBC as of the Effective Time without resulting in severance or redundancy liability because the applicable notice period has not then expired, nothing in this Agreement shall constitute a termination of such KBC Employee prior to the expiration of such notice period. In such circumstances, KBC and KJBC Buyer shall cooperate in any reasonable and lawful arrangement designed to provide the services of the affected KBC Employee to KJBC Buyer during the period between the Effective Time and the expiration of the applicable notice period. KJBC Buyer shall be responsible for paying base pay, incentive compensation and employee benefits to be provided to such KBC Employee during the period between the Effective Time and the expiration of the applicable notice period. Upon expiration of the applicable notice period, the employment of such KBC Employee with KBC shall terminate and such KBC Employee may accept the offer of employment by KJBC Buyer.

     8.9 Seller Employees.

          8.9.1 Employment Offer to Seller Employees. KJBC Buyer may, in its sole discretion, offer employment to any one or more of the individuals listed on Schedule 8.9.1 (the “Seller Employees”). Within 45 calendar days after the date of this Agreement, KJBC Buyer shall deliver to Sellers a notice listing each Seller Employee to which KJBC Buyer intends to make an offer of employment and the terms of such offer. The terms of the offer, if any, for each such Seller Employee shall be determined in the sole discretion of KJBC Buyer.

          8.9.2 Release of Seller Employees; No Solicitation. Kaiser shall release from any and all employment obligations to or from Kaiser, any Seller Employee who accepts an offer made by KJBC Buyer, and for two years following the Effective Time, no Seller nor any of their Affiliates shall, directly or indirectly, on its own behalf or otherwise, solicit or make any offer of employment or otherwise offer any incentive to any Seller Employee who is hired by KJBC Buyer or to any Seller Employee to leave the employ of KJBC Buyer or KJBC while such person remains an employee of KJBC Buyer or KJBC; provided, however, that the foregoing shall not apply to any such Seller Employee who (a) initiates discussions regarding such employment without any direct or indirect solicitation by either Seller or any of their Affiliates, or (b) responds to any public advertisement placed by either Seller or any of their Affiliates.

     8.10 Gramercy Employees.

          8.10.1 Employment Offers to Gramercy Salaried Employees. Gramercy Buyer may, in its sole discretion, offer employment to any one or more of the individuals listed on Schedule 8.10.1 (the “Gramercy Salaried Employees”). Within 45 calendar days after the date of this Agreement, Gramercy Buyer shall deliver to Sellers a notice listing each Gramercy Salaried Employee to which Gramercy Buyer intends to make an offer of employment and the terms of

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such offer. The terms of the offer, if any, for such Gramercy Salaried Employee shall be determined in the sole discretion of Gramercy Buyer.

          8.10.2 Release of Gramercy Salaried Employees; No Solicitation. Kaiser shall release from any and all employment obligations to or from Kaiser, any Gramercy Salaried Employee who accepts an offer made by Gramercy Buyer, and for two years following the Effective Time, no Seller nor any of their Affiliates shall, directly or indirectly, on its own behalf or otherwise, solicit or make any offer of employment or otherwise offer any incentive to any Gramercy Salaried Employee who is hired by Gramercy Buyer or to any Gramercy Salaried Employee to leave the employ of Gramercy Buyer while such person remains an employee of Gramercy Buyer; provided, however, that the foregoing shall not apply to any such Gramercy Salaried Employee who (a) initiates discussions regarding such employment without any direct or indirect solicitation by either Seller or any of their Affiliates, or (b) responds to any public advertisement placed by either Seller or any of their Affiliates.

          8.10.3 Collective Bargaining. Gramercy Buyer may engage in discussions with the United Steelworkers of America AFL-CIO (the “USWA”) regarding a new collective bargaining agreement (a “New Labor Agreement”) that would cover employees represented by the USWA and employed at the Gramercy site (the “Gramercy Represented Employees”) from and after the Effective Time. As of the Effective Time, Gramercy Buyer shall offer the Gramercy Represented Employees as of the Effective Time employment, pay and benefits in accordance with the New Labor Agreement.

          8.10.4 Form W-2. Pursuant to the “Alternative Procedure” provided in section 5 of Revenue Procedure 96-60, 1996-2 C.B. 399, (a) Gramercy Buyer and Kaiser shall report on a predecessor/successor basis set forth therein, (b) Kaiser shall be relieved from filing a Form W-2 with respect to each Gramercy Employee, and (c) Gramercy Buyer shall undertake to file (or cause to be filed) a Form W-2 for each Gramercy Employee for the year that includes the Closing Date (including the portion of such year that such Gramercy Employee was employed by Kaiser). Kaiser shall provide Gramercy Buyer on a timely basis with all payroll and employment-related information with respect to each Gramercy Employee.

          8.10.5 No Employment Guarantee. Nothing contained in this Section 8.10 shall be deemed to be a commitment on the part of Gramercy Buyer to provide employment to any Gramercy Employee for any period of time.

          8.10.6 WARN Act. For a period of 90 days upon and after the Effective Time, Gramercy Buyer shall not cause any of the Gramercy Employees to suffer “employment loss” for purposes of the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101-2109, and related regulations (the “WARN Act”), if such employment loss would create any liability under the WARN Act for Kaiser or any of its Affiliates.

     8.11 Plan of Reorganization. Sellers shall take such actions as are necessary to provide that their plan of reorganization or plan of liquidation in conjunction with the Bankruptcy Cases will not alter the rights and obligations of the parties under this Agreement, or affect the validity and continuing force and effect of this Agreement.

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     8.12 Financial Statements. Sellers will cause to be prepared, upon Buyers’ request, (a) consolidated statements of income and cash flows for the Combined Operations for the fiscal years ended December 31, 2001, December 31, 2002 and December 31, 2003 and consolidated balance sheets for the Combined Operations as of December 31, 2002 and December 31, 2003, in each case audited by Kaiser’s certified public accountants and (b) unaudited consolidated statements of income and cash flows and a balance sheet for the Combined Operations as of and for an interim period (to be specified by Buyers) ended on or prior to the Closing Date; provided that Sellers shall have first received a written undertaking from Buyers (in form and substance reasonably acceptable to Sellers) that Buyers shall promptly reimburse Sellers for all costs and expenses related to the preparation of such financial statements. If requested by a shareholder of either Buyer, Sellers will use reasonable efforts to cause their auditors to consent to the inclusion of the audited financial statements described in clause (a) of this Section 8.12 in the filings of a shareholder of either Buyer with the Securities and Exchange Commission; provided, however, Sellers shall not be required to incur any out-of-pocket expense with respect to their efforts to obtain such consent.

     8.13 Insurance. Prior to the Effective Time, Kaiser shall maintain, and cause KBC to maintain, all insurance policies and self-insurance arrangements currently in effect with respect to the Gramercy Operations and the KJBC Operations, respectively. Buyers acknowledge that Kaiser and its Affiliates intend to terminate coverage with respect to KJBC, the KJBC Operations, the Gramercy Site and the Gramercy Operations under all KJBC Listed Insurance Policies and Gramercy Listed Insurance Policies held by Kaiser or any of its Affiliates (other than KJBC) for periods from and after the Effective Time. To the extent any such termination of insurance coverage results in a refund of insurance premiums to KJBC (either directly or indirectly), Buyers shall cause KJBC to pay to Sellers the entire amount of such refund promptly upon receipt thereof.

     8.14 Confidential Information. Without the prior written consent of Buyers, Sellers shall not (a) for a period of three years following the Effective Time, reveal or make accessible to any Person any confidential information relating to the Combined Operations or (b) for a period of three years following the date of this Agreement, reveal or make accessible to any Person any confidential information relating to either Buyer (or any Affiliate of either Buyer), including confidential information prepared or developed by the Buyers in connection with the negotiation of this Agreement and the transactions contemplated hereby (“confidential information”). For purposes of this Section, the term “confidential information” shall not include information (a) which is already available to the public or becomes available to the public other than as a result of a breach of this Section 8.14, (b) which is the proprietary information of either Seller, or (c) which is used by either Seller or any of their Affiliates in conjunction with any of its or their respective businesses, including the operations conducted at the alumina refinery owned by Queensland Alumina Limited in Queensland, Australia; provided that information relating exclusively to KJBC and which is not already available to the public shall be included in the term “confidential information” until such time as such information becomes available to the public other than in breach of this Section 8.14. Notwithstanding the foregoing, Sellers may disclose such confidential information to the extent permitted by Section 8.2 or required to comply with any valid or effective subpoena or order issued by a Governmental Entity, with applicable Law or with any requirement of any exchange upon which the securities of either of the Sellers or any of their Affiliates are traded; provided that in the event either Seller receives

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any such request or demand to disclose all or any part of the confidential information, such Seller shall promptly notify Buyers of the existence and terms of such request or demand, and, at Buyers’ request and expense, shall cooperate with Buyers to obtain a protective order or other appropriate remedy to maintain the confidentiality of such information; and, provided further, if such Seller is required to disclose confidential information for any such reason, such Seller shall disclose only such portion thereof which, in the opinion of its legal counsel, it is legally required to disclose, and shall use its commercially reasonable efforts to obtain confidential treatment of such disclosed information. Nothing contained in this Agreement, including this Section 8.14, shall preclude any Seller or any Affiliate of any Seller from disclosing confidential information (a) to the Bankruptcy Court or any court in which appeals or other applications for review of orders or judgments of such Bankruptcy Court may be made so long as the disclosure made to the court is filed under seal or is otherwise disclosed to the court only after the implementation of appropriate court measures (such as in camera proceedings) to ensure that the confidential information so disclosed will remain confidential, (b) to members of the statutory committee of unsecured creditors appointed in the Bankruptcy Cases (the “UCC”), to members of the statutory committee of asbestos claimants appointed in the Bankruptcy Cases (the “ACC”), to the legal representative of the class of future asbestos personal injury claimants appointed in the Bankruptcy Cases (the “Futures Representative”), to advisers to the UCC, the ACC or the Futures Representative, in each case, so long as they are contractually obligated to any Seller or any Affiliate of any Seller to keep confidential any such confidential information.

     8.15 Gramercy Environmental Conditions.

          8.15.1 Scheduled Environmental Conditions. Schedule 8.15.1 specifies the sites at the Gramercy Site comprising the “Gramercy Scheduled Environmental Conditions.” Gramercy Buyer shall take the actions indicated on Schedule 8.15.1 with respect to each of the Gramercy Scheduled Environmental Conditions, including obtaining a NFA designation for sites 1 through 4 as listed on Schedule 8.15.1. Gramercy Buyer shall have no obligation, however, with regard to any other environmental conditions at the Gramercy Site, including any Pre-Closing Environmental Release, except as set forth on Schedule 8.15.1 or otherwise provided in Section 8.17 in connection with Gramercy Buyer’s efforts to obtain the BFPP letter.

          8.15.2 Environmental Escrow Agreement. At or prior to Closing, Kaiser, Gramercy Buyer and the Environmental Escrow Agent shall execute and deliver the Environmental Escrow Agreement. At Closing, $2,500,000 (the “Environmental Deposit”) of the Estimated Purchase price shall be deposited with the Environmental Escrow Agent as contemplated by the Environmental Escrow Agreement. Application of the Environmental Deposit shall be governed by the terms and provisions of the Environmental Escrow Agreement.

          8.15.3 Environmental Insurance. Gramercy Buyer acknowledges that Kaiser intends to purchase an insurance policy (the “PLL Policy”), to be effective as of the Effective Time naming Gramercy Buyer as the named insured and Kaiser as an additional insured and having a deductible of up to $100,000 per occurrence, covering third party claims for personal injury or property damage relating to, or asserting a legal duty to perform an investigation or remediation of all Gramercy environmental conditions, whether known or unknown. Coverage shall be effective for the sites listed as 1 through 4 on Schedule 8.15.1 from and only after the time at which Gramercy Buyer obtains an NFA designation with respect to those sites. Kaiser

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shall use commercially reasonable efforts in obtaining the PLL Policy with terms and conditions reasonable acceptable to Kaiser but obtaining a PLL Policy shall not be a condition of Closing. Kaiser shall give Gramercy Buyer full access to the insurer during the application process and shall make full disclosure to insurer of all environmental conditions known to Kaiser and shall allow Gramercy Buyer the opportunity to make full disclosure to the insurer of all environmental conditions known to Gramercy Buyer. Kaiser shall pay the premium. To the extent that a claim is made under the PLL Policy by either party, Gramercy Buyer shall be responsible for the payment of the deductible, which deductible shall be paid from the Environmental Deposit to the extent available.

          8.15.4 Release. Buyers forever release and discharge the Sellers from all claims, including contribution claims, Buyers would otherwise have against Sellers for Losses resulting from or arising out of Environmental Laws and relating to any environmental conditions at the Gramercy Site (excluding any Pre-Closing Environmental Release), whether known or unknown. The foregoing release shall be without prejudice to (a) any rights which Buyers may have not to proceed with Closing under this Agreement, and (b) any rights or claims which Kaiser or Gramercy Buyer may have under the PLL Policy.

     8.16 Demolition of La Roche Site. As of the Effective Time, Gramercy Buyer shall assume the La Roche Demolition Contract.

     8.17 Procurement of BFPP Letter.

          8.17.1 Kaiser Assistance. Gramercy Buyer may engage in discussions with LDEQ in an effort to obtain a BFPP Letter and Kaiser shall assist and cooperate with such effort to the extent reasonably requested by Gramercy Buyer. Gramercy Buyer (or any Person on behalf of Gramercy Buyer) may not engage, however, in any additional sampling or testing at the Gramercy Site or the installation of new monitoring wells at the Gramercy Site whether requested by LDEQ or otherwise, without the prior written consent of Kaiser (such consent not to be unreasonably withheld). Notwithstanding the foregoing Gramercy Buyer (or any person on behalf of Gramercy Buyer) may, without the prior written consent of Kaiser, engage in additional sampling or testing at the Gramercy Site with respect to Gramercy Scheduled Environmental Conditions, to further characterize or delineate, at the request of LDEQ, a particular Gramercy Scheduled Environmental Condition.

          8.17.2 Gramercy Environmental History. Gramercy Buyer, in connection with its efforts to obtain the BFPP Letter, shall inform the LDEQ of all Gramercy Scheduled Environmental Conditions, including those conditions for which NFA designation has previously been obtained. As part of its submittal to LDEQ, Gramercy Buyer shall provide LDEQ a Phase I environmental survey that describes the environmental history of the Gramercy Site known to Gramercy Buyer.

          8.17.3 Coordination with Kaiser. Reasonably in advance of any substantive discussions between Gramercy Buyer and LDEQ or the provision of any written materials by Gramercy Buyer to LDEQ, including a Phase I environmental survey, Gramercy Buyer shall notify Kaiser of the planned discussions or submissions and the subject matter thereof, including proposed sampling plans and protocols, and provide Kaiser with an opportunity to share its

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views with Gramercy Buyer. Promptly (and, in any event, within 24 hours following) any substantive discussions between Gramercy Buyer and LDEQ regarding the BFPP Letter, Gramercy Buyer shall notify Kaiser of such discussions and describe to Kaiser the substance of such discussions in reasonable detail. All costs and expenses associated with the effort to obtain the BFPP Letter shall be borne by Gramercy Buyer, and Gramercy Buyer shall promptly, upon written request, reimburse Kaiser for any reasonable out-of-pocket costs or expenses incurred by Kaiser in connection with any request by Gramercy Buyer for cooperation and assistance in connection with the effort to obtain the BFPP Letter. Upon request by Kaiser, Gramercy Buyer shall promptly inform Kaiser with respect to the progress and status of Gramercy Buyer’s efforts to obtain a NFA designation for Sites 1 through 4 as listed on Schedule 8.15.1.

          8.17.4 LDEQ Approval. Gramercy Buyer shall use commercially reasonable efforts to obtain the approval of the LDEQ , before the Effective Time, of Gramercy Buyer’s BFPP proposal and the reasonable steps contained therein and listed on Schedule 8.15.1, which reasonable steps Gramercy Buyer shall perform at its sole expense. To the extent that Gramercy Buyer obtains the BFPP Letter, it shall further perform at its sole cost and expense any action which may be required by LDEQ as a condition of issuing the BFPP Letter.

          8.17.5 Alternative Measures. If Gramercy Buyer does not obtain the BFPP Letter, Gramercy Buyer shall commence at its own expense, within 90 calendar days after Closing, the appropriate regulatory process to obtain a NFA designation under the LDEQ’s Risk Evaluation/Corrective Action Program, for sites 1 through 4 as listed on Schedule 8.15.1 and shall comply with Section 8.18 of this Agreement but shall not be obligated to perform other steps with respect to the other Gramercy Scheduled Environmental Conditions except as provided in Schedule 8.15.1.

     8.18 LDEQ Compliance. Gramercy Buyer acknowledges that Kaiser maintains spent bauxite, or “red mud,” and other solid-wastes in various impoundments and facilities situated on the Gramercy Site and that Kaiser is required to demonstrate financial responsibility for liability coverage, closure and post-closure for all such facilities, as specified in LAC 33:VII.727.A.1 and A.2. Prior to Closing, Kaiser and Gramercy Buyer will cooperate in securing LDEQ’s consent to the substitution of Gramercy Buyer for Kaiser for all purposes under the these requirements, effective as of the Effective Time. In connection therewith, Gramercy Buyer shall provide to LDEQ as promptly as practicable (and, in any event within 30 days) after the Effective Time (a) the required proof of financial assurance for the solid waste facilities at the Gramercy Site, as required by LAC 33:VII.727.A.1 and A.2, and (b) the information required in LAC 33:I.1701, and Gramercy Buyer shall use commercially reasonable efforts to cause LDEQ to release Kaiser’s existing demonstration of financial assurance as promptly as practicable.

     8.19 Trade Names. To the extent the “Kaiser” or “Kaiser Jamaica Bauxite Company” names (the “Retained Names”) appear on (a) any plant, building or equipment, or (b) any stationary, business forms, packaging, container, sign or other property (real or personal) included in the Purchased Assets, Kaiser grants, and/or confirms the grant by its Affiliates of, a royalty free license to Buyers to use the Retained Names on such Purchased Assets until removal can be effected from such Purchased Assets or until such materials are used and exhausted (provided any such stationary or business forms so utilized are marked or stickered so as to clearly indicate that the Buyers and KJBC are not affiliated with Kaiser); provided that Buyers

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shall use reasonable efforts in a timely fashion to effect obliteration of the Retained Names from all Purchased Assets and, in any event, cease using the Retained Names no later than six months after Closing. Nothing contained in this Section 8.19 shall preclude the use of the name “Gramercy” by Buyers.

     8.20 Name Change. KJBC Buyer shall, within 30 days following the Effective Time, deliver to Seller evidence of an amendment to the Partnership Agreement to change its name from Kaiser Jamaica Bauxite Company to a name which is not deceptively similar to “Kaiser Jamaica Bauxite Company” or “Kaiser.” KJBC shall, within 60 days following the Effective Time, take such actions and file such documents as shall be necessary to reflect such name change in all jurisdictions in which KJBC is qualified to do business as a foreign corporation, and shall deliver to Sellers copies of such documents evidencing such name change filings.

     8.21 Further Assurances. From time to time after the Effective Time, without further consideration, the parties shall cooperate with each other and shall execute and deliver such documents and instruments and do such other commercially reasonable acts and things, as may be reasonably necessary for the purpose of carrying out the intent of this Agreement. Without limiting the generality of the foregoing, the parties shall cooperate to procure any Consents that are required to be obtained in connection with the transactions contemplated hereby, and which have not been obtained prior to Closing.

ARTICLE IX
CONDITIONS TO CLOSING

     9.1 Conditions to the Obligations of Each Party. The obligations of each Buyer and each Seller to consummate the Transfer of the Purchased Assets are subject to the satisfaction of the following conditions:

          9.1.1 No Injunction. There shall not have been entered a preliminary or permanent injunction, temporary restraining order or other judicial or administrative order or decree issued by any Governmental Entity having proper jurisdiction, the effect of which prohibits Closing.

          9.1.2 HSR. Any applicable waiting period under the HSR Act shall have expired or been terminated.

          9.1.3 Third Party Consents. The Consents identified on Schedule 9.1.3 shall have been obtained.

          9.1.4 Bankruptcy Court Approval. The Sales Order shall have been entered and not been vacated, and no stay of the Sales Order pending appeal shall have been entered.

          9.1.5 Consent Under DIP Facility. Sellers shall have received all Consents required under the DIP Facility.

     9.2 Conditions to the Obligations of Sellers. The obligation of Sellers to consummate the Transfer of the Purchased Assets is subject to the satisfaction (or written waiver by Sellers) of each of the following further conditions:

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          9.2.1 Compliance by Buyers. Each Buyer shall have performed and complied, in all material respects, with all obligations required to be performed or complied with by it under this Agreement at or prior to the Closing, and Sellers shall have received a certificate signed by an executive officer of such Buyer to the foregoing effect.

          9.2.2 Accuracy of Buyers’ Representations. The representations and warranties of each Buyer contained in this Agreement that are qualified as to materiality shall be true in all respects, and those that are not so qualified shall be true in all material respects, at and as of the Effective Time as if made at and as of that time (other than representations and warranties made as of a specific time or date which will speak at and as of that specific time or date), and Sellers shall have received a certificate signed by an executive officer or other comparable authorized representative of such Buyer to the foregoing effect.

          9.2.3 Assumption Documents. Buyers shall have executed and delivered such Assumption Documents as Sellers reasonably request, each of which shall be in form and substance reasonably satisfactory to Sellers.

          9.2.4 Payment of Purchase Price. Buyers shall have paid, via wire transfer of immediately available funds (a) to an account or accounts designated by Sellers, cash in an amount equal to the Estimated Purchase Price less (i) the amount of the Deposit (including the deduction of any Fees (as defined in the Escrow Agreement)) as of the close of business on the last business day immediately preceding the Closing Date and (ii) the amount of the Environmental Deposit, and (b) to the Environmental Escrow Agent, cash in an amount equal to the Environmental Deposit as contemplated by the Environmental Escrow Agreement, and the Escrow Agent shall have distributed the Deposit to Sellers in accordance with the Escrow Agreement.

          9.2.5 Resolutions of Buyers. Sellers shall have received from each Buyer a copy of the resolutions adopted by its Managers or Directors (as appropriate) approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, certified by the secretary, assistant secretary or other authorized representative of such Buyer.

     9.3 Conditions to the Obligations of Buyers. The obligation of Buyers to consummate the Transfer of the Purchased Assets is subject to the satisfaction (or written waiver by Buyers) of each of the following further conditions:

          9.3.1 Compliance by Sellers. Each Seller shall have performed and complied, in all material respects, with all obligations required to be performed or complied with by it under this Agreement at or prior to the Closing, and Buyers shall have received a certificate signed by an executive officer of such Seller to the foregoing effect.

          9.3.2 Accuracy of Each Seller’s Representations. The representations and warranties of each Seller contained in this Agreement that are qualified as to materiality shall be true in all respects, and those that are not so qualified shall be true in all material respects, at and as of the Effective Time as if made at and as of that time (other than representations and warranties made as of a specific time or date which will speak at and as of that specific time or

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date), and Buyers shall have received a certificate signed by an executive officer of such Seller to the foregoing effect.

          9.3.3 Transfer Documents. Each Seller shall have executed and delivered Transfer Documents, together with certificates of title or other appropriate documentation for unregistered lands, with respect to the KJBC Owned Real Property, in recordable form, and such other Transfer Documents as Buyers reasonably request, each of which shall be in form and substance reasonably satisfactory to Buyers; it being understood that, Sellers’ obligations to deliver Transfer Documents for the KJBC Owned Real Property shall be deemed satisfied notwithstanding Sellers’ failure to deliver Transfer Documents with respect to one or more parcels of KJBC Owned Real Property, provided that the failure to transfer legal title to such parcels of KJBC Owned Real Property, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

          9.3.4 Environmental Escrow Agreement. Kaiser and the Environmental Escrow Agent shall have executed and delivered the Environmental Escrow Agreement, and the Environmental Escrow Agent shall have received the Environmental Deposit as contemplated thereby.

          9.3.5 No Material Adverse Change. Since the date of this Agreement, no event shall have occurred and no circumstances shall have come into existence that has had, or reasonably would be expected to have, a Material Adverse Effect.

          9.3.6 Sales Order. The Sales Order shall have become a Final Order.

          9.3.7 KBC Contracts and Gramercy Contracts. All defaults of Sellers under each KBC Contract and Gramercy Contract in existence as of Closing (other than defaults or breaches that arise solely from the filing of Sellers’ petitions to commence the Bankruptcy Cases) shall have been cured by Sellers, or Sellers shall have provided adequate assurance that any such defaults shall be promptly cured by Sellers (which defaults, as between Buyers and all parties to the KBC Contracts and Gramercy Contracts in existence as of Closing other than Sellers, shall for all purposes be deemed irrevocably cured by Sellers’ provision of adequate assurance).

          9.3.8 Resolutions of Sellers. Buyers shall have received from each Seller a copy of the resolutions adopted by its board of directors approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, certified by the corporate secretary of such Seller.

          9.3.9 Technology Licenses. Kaiser, KBC and KJBC Buyer shall have entered into a technology license agreement, in substantially the form attached hereto as Exhibit I, and Kaiser and Gramercy Buyer shall have entered into a technology license agreement, in substantially the form attached hereto as Exhibit J (together, the “Technology Licenses”).

          9.3.10 Alcan License. Gramercy Buyer shall have received an assignment, in form and substance reasonably satisfactory to Gramercy Buyer, of Kaiser’s rights under the License Agreement, dated May 16, 2000, by and between Kaiser and Alcan International Limited (the “Alcan License”).

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          9.3.11 Property Taxes. Kaiser shall have made arrangements for the 2002 property tax liabilities of Kaiser described on Schedule 6.14.1 to be paid to the appropriate tax authorities of St. James Parish, Louisiana and St. John Parish, Louisiana contemporaneously with Closing and for any Lien related to such Taxes to be extinguished.

ARTICLE X
TERMINATION

     10.1 Termination.

          10.1.1 Mutual Consent. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to Closing by mutual written consent of Sellers and Buyers.

          10.1.2 Sellers Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to Closing by Sellers upon written notice to Buyers,

               (a) if Closing has not occurred on or before September 30, 2004, so long as failure to close is not due to a material breach of this Agreement by Sellers;

               (b) so long as no Seller is then in material breach of any of its representations, warranties or covenants in this Agreement, if Buyers are in material breach of any of its representations, warranties or covenants contained in this Agreement and such breach shall be incapable of being cured, or if capable of being cured, shall not have been cured within 30 calendar days following delivery to Buyers of written notice of such breach (specifying in reasonable detail the claimed breach and demand of its cure or satisfaction);

               (c) if termination is directed pursuant to an order of the Bankruptcy Court;

               (d) if Buyers are the Prevailing Bidder, prior to entry of the Sales Order if the Sales Order has not been entered by (i) the date that is 30 calendar days after the date on which the Sales Hearing concludes or (ii) such later date as is agreed to in writing by the parties to this Agreement;

               (e) prior to receipt by Sellers of written evidence, in form and substance satisfactory to Sellers, that KJBC Buyer has obtained GOJ Approval, if, on or prior to the Pre-Hearing Termination Date, KJBC Buyer has not obtained GOJ Approval and Sellers have not received written evidence thereof in form and substance reasonably satisfactory to Sellers (provided that Sellers have given written notice to Buyers of their intention to terminate pursuant to this clause (e) at least three business days in advance of such termination);

               (f) prior to receipt by Sellers of written evidence, in form and substance reasonably satisfactory to Sellers, that Gramercy Buyer has agreed with the USWA regarding a New Labor Agreement (and such agreement has been ratified by the Gramercy Represented Employees), if, on or prior to the Pre-Hearing Termination Date, Gramercy Buyer has not agreed with the USWA regarding a New Labor Agreement (or such agreement has not been ratified by

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the Gramercy Represented Employees) and Sellers have not received written evidence thereof in form and substance reasonably satisfactory to Sellers (provided that Sellers have given written notice to Buyers of their intention to terminate pursuant to this clause (f) at least three business days in advance of such termination);

               (g) if on or prior to the Pre-Hearing Termination Date, Kaiser has not reached agreement with the USWA with respect to the release of Sellers from any obligations arising from or relating to the Gramercy Labor Agreement from and after the Effective Time with respect to employees represented by the USWA and employed at the Gramercy Site (the “Gramercy Exit Agreement”) (provided that Sellers may no longer exercise their rights of termination under this clause (g) after Kaiser has reached agreement with the USWA with respect to a Gramercy Exit Agreement);

               (h) if on or prior to the Pre-Hearing Termination Date, Sellers shall not have obtained from the applicable Governmental Entities of Jamaica agreement with respect to the release of Sellers from any obligations to such Governmental Entities arising from or relating to the operation of the KJBC Operations (the “GOJ Release”) from and after the Effective Time (provided that Sellers may no longer exercise their rights of termination under this clause (h) after Sellers have obtained the GOJ Release); or

               (i) if in accordance with the Bidding and Auction Procedures a Qualified Bidder submits the Prevailing Bid; it being expressly understood that, subject to clauses (h) and (i) of Section 10.1.3 and without prejudice to any other rights Buyers may have to terminate this Agreement if the transactions contemplated by the Prevailing Bid are subsequently abandoned and Sellers determine to consummate the sale of the Purchased Assets to Buyers, Buyers shall remain bound by the terms of this Agreement (including the Final Purchase Price set forth herein or the highest amount that Buyers bid at the Auction) until the delivery of a written termination notice in accordance with this Section 10.1.2.

Buyers hereby acknowledge that, as contemplated by the Bidding and Auction Procedures, in the circumstances contemplated by clause (i) of the immediately preceding sentence, (a) Sellers may, prior to any termination hereof, enter into agreements with respect to the Prevailing Bid, and (b) Sellers are not required to deliver a written termination notice to Buyers until the consummation of the transaction contemplated by the Prevailing Bid.

          10.1.3 Buyers Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to Closing by Buyers, upon written notice to Sellers,

               (a) if Closing has not occurred on or before September 30, 2004, so long as the failure to close is not due to a material breach of this Agreement by Buyers;

               (b) so long as Buyers are not then in material breach of any of its representations, warranties or covenants contained in this Agreement, if Sellers are in material breach of any of their representations, warranties or covenants contained in this Agreement and such breach shall be incapable of being cured, or if capable of being cured, shall not have been

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cured within 30 calendar days following delivery to Sellers of written notice of such breach (specifying in reasonable detail the claimed breach and demand of its cure or satisfaction);

               (c) if Buyers are the Prevailing Bidder, (i) prior to conclusion of the Sales Hearing if the Sales Hearing has not concluded by (A) the date that is 90 calendar days after the date of this Agreement or (B) such later date as is agreed to in writing by the parties to this Agreement, or (ii) prior to entry of the Sales Order if the Sales Order has not been entered by (A) the date that is ten business days after the date on which the Sales Hearing concludes or (B) such later date as is agreed to in writing by the parties to this Agreement;

               (d) if termination is directed pursuant to an order of the Bankruptcy Court;

               (e) if on or prior to the Pre-Hearing Termination Date, (i) Gramercy Buyer has not obtained the BFPP Letter, (ii) KJBC Buyer shall not have obtained GOJ Approval, or (iii) Gramercy Buyer has not agreed with the USWA regarding a New Labor Agreement (or such agreement has not been ratified by the Gramercy Represented Employees); provided, that in the case of clause (e)(i) of this sentence, the Buyers must exercise their right of termination no later than the second business day following the Pre-Hearing Termination Date or it shall be irrevocably waived and, in the case of clauses (e)(ii) and (iii), respectively, the Buyers may no longer exercise their rights of termination after GOJ Approval has been obtained and a New Labor Agreement has been agreed to (and ratified by the Gramercy Represented Employees), respectively;

               (f) prior to the earlier of (i) receipt by Buyers of written evidence, in form and substance reasonably satisfactory to Buyers, that Kaiser has agreed with the USWA regarding a Gramercy Exit Agreement and (ii) waiver by Sellers of their right to terminate pursuant to clause (g) of Section 10.1.2, if, on or prior to the Pre-Hearing Termination Date, Kaiser has not agreed with the USWA regarding a Gramercy Exit Agreement and Buyers have not received evidence thereof in form and substance reasonably satisfactory to Buyers (provided that Buyers have given written notice to Sellers of their intention to terminate pursuant to this clause (f) at least three business days in advance of such termination);

               (g) prior to the earlier of (i) receipt by Buyers of written evidence, in form and substance reasonably satisfactory to Buyers, that Sellers have obtained the GOJ Release and (ii) waiver by Sellers of their right to terminate pursuant to clause (h) of Section 10.1.2, if, on or prior to the Pre-Hearing Termination Date, Sellers have not obtained the GOJ Release and Buyers have not received evidence thereof in form and substance reasonably satisfactory to Buyers (provided that Buyers have given written notice to Sellers of their intention to terminate pursuant to this clause (g) at least three business days in advance of such termination);

               (h) if in accordance with the Bidding and Auction Procedures (i) a Qualified Bidder submits the Prevailing Bid, (ii) at the Auction, Buyers make Election A, and (iii) the Bankruptcy Court enters an order approving the sale contemplated by the Prevailing Bid; or

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               (i) if (i) in accordance with the Bidding and Auction Procedures (A) a Qualified Bidder submits the Prevailing Bid, (B) at the Auction, Buyers makes Election B, and (C) the Bankruptcy Court enters an order approving the sale contemplated by the Prevailing Bid and (ii) Closing has not occurred on or before the date that is 30 calendar days after entry of the Bankruptcy Court order approving the sale contemplated by the Prevailing Bid.

     10.2 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 10.1, this Agreement, except for the provisions of this Section 10.2 and Sections 8.14, 8.17.3 (the last sentence only), 10.3, 12.4, 12.5, 12.7, 12.8, and 12.11, will forthwith become null and void and have no effect, without any liability on the part of any party to this Agreement or their respective Affiliates. Nothing in this Article X will, however, relieve any party to this Agreement of liability for breach of this Agreement occurring prior to that termination, or for breach of any provision of this Agreement which specifically survives termination hereunder. Moreover, notwithstanding the termination of this Agreement, the Escrow Agreement shall remain in full force and effect in accordance with its terms, including with respect to the distributions of the escrow funds held thereunder. Nothing in this Agreement shall require that the Bankruptcy Court approve the termination of this Agreement in order for such termination to be effective.

     10.3 Termination Fee. Subject to the provisions of any order of the Bankruptcy Court, if (a) at the Auction Buyers make Election B or makes neither Election A nor Election B and this Agreement is terminated either by Sellers pursuant to clause (i) of the first sentence of Section 10.1.2 or by Buyers pursuant to clause (i) of Section 10.1.3 and (b) no later than 120 calendar days after the entry of the Bankruptcy Court order approving the sale contemplated by the Prevailing Bid in accordance with the Bidding and Auction Procedures such sale is consummated, then Sellers shall pay to Buyers promptly (and, in any event, within two business days) following such consummation of such transaction a fee of $1,050,000 (the “Termination Fee”).

ARTICLE XI
INDEMNIFICATION

     11.1 Survival of Representations and Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THERE ARE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND (INCLUDING ANY REPRESENTATIONS OR WARRANTIES AS TO THE QUALITY OR FITNESS OF THE PURCHASED ASSETS OR THE ASSETS OF KJBC FOR THEIR INTENDED PURPOSES OR ANY PARTICULAR PURPOSE), EXPRESSED OR IMPLIED, WITH RESPECT TO SELLERS, KJBC, THE COMBINED BUSINESS, THE PURCHASED ASSETS OR THE ASSUMED LIABILITIES. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLERS MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO (a) ANY PROJECTIONS, ESTIMATES OR BUDGETS DELIVERED TO OR MADE AVAILABLE TO BUYERS OR THEIR REPRESENTATIVES RELATING TO THE FUTURE RESULTS OF OPERATIONS, CASH FLOWS OR FINANCIAL CONDITION (OR ANY COMPONENT OF ANY OF THEM) OF KJBC OR THE COMBINED BUSINESS OR (b) ANY OTHER INFORMATION OR DOCUMENTS MADE AVAILABLE TO BUYERS OR THEIR REPRESENTATIVES REGARDING SELLERS, KJBC, THE COMBINED BUSINESS, THE PURCHASED ASSETS

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OR THE ASSUMED LIABILITIES. The representations and warranties of the parties contained in this Agreement (or in any certificate delivered pursuant hereto) other than those contained in Section 5.22, Section 6.11 or Section 6.14 will expire 24 months after the Closing Date (the “General Termination Date”), except with respect to claims asserted with respect to those representations and warranties prior to the General Termination Date in which case they will survive until the resolution of those claims in accordance with this Article XI. The representations and warranties of the parties contained in Section 6.11 will expire at Closing (the “Environmental Termination Date”). The representations and warranties of the parties contained in Section 5.22 and Section 6.14 will expire 30 days after expiration of the applicable statutes of limitations on assessment of Taxes that would be indemnifiable by Sellers under this Agreement (the end of such period, the “Tax Termination Date” and together with the General Termination Date and the Environmental Termination Date, the “Termination Dates”). The covenants of the parties contained in this Agreement which by their terms require performance in whole or in part, after Closing will remain operative and in full force and effect without any time limitation, except as any such covenant is limited in duration by the express terms of this Agreement.

     11.2 Indemnification by Buyers. From and after Closing, Buyers shall indemnify, defend and hold Sellers and their Affiliates, and their respective directors, officers, partners, managers, members, representatives, employees and agents (collectively the “Sellers Indemnified Parties”), harmless from and against any and all claims, actions, suits, demands, assessments, judgments, losses, liabilities, damages, costs, royalties, payments, license fees and expenses (including interest, penalties, attorneys’ fees, accounting fees and investigation costs) (collectively, “Losses”) resulting from or arising out of (a) any breach of any representation or warranty of Buyers contained herein or in any certificate delivered by Buyers pursuant hereto (provided that Sellers properly notify Buyers of the claim that a representation or warranty has been breached and that notice is given by Sellers in writing prior to the applicable Termination Date), (b) any breach of any covenant of Buyers contained herein (including those contained in Section 8.15.1), unless such breach occurred at or prior to Closing and was specified in the certificate delivered by Buyers pursuant to Section 9.2.1, (c) any of the Assumed Liabilities, or (d) the operation by Buyers of the Combined Operations or the ownership or use by Buyers of the Purchased Assets after Closing, except to the extent Sellers are obligated to indemnify Buyers with respect thereto.

     11.3 Indemnification by Sellers. From and after Closing, Sellers shall indemnify, defend and hold Buyers and their Affiliates, and their respective directors, officers, partners, managers, members, representatives, employees and agents (collectively, the “Buyer Indemnified Parties”), harmless from and against any and all Losses resulting from or arising out of (a) any breach of any representation or warranty of Sellers contained herein or in any certificate delivered by Sellers pursuant hereto (provided that Buyers properly notify Sellers of the claim that a representation or warranty has been breached and that notice is given to Sellers in writing prior to the applicable Termination Date), (b) any breach of any covenant of Sellers contained herein, unless such breach occurred at or prior to Closing and was specified in the certificate delivered by Sellers pursuant to Section 9.3.1, or (c) any of the Retained Liabilities. Notwithstanding anything to the contrary herein contained, Sellers shall not be obligated to indemnify, defend or hold any Buyer Indemnified Party harmless from or against Losses resulting from or arising out of Environmental Laws and relating to any environmental conditions at the Gramercy Site (excluding any Pre-Closing Environmental Release), whether known or unknown.

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Notwithstanding any of the foregoing, the exclusions from the indemnity obligations of Sellers hereunder shall not limit any rights or claims which Kaiser or Gramercy Buyer may have under the PLL Policy, and no limitation on rights, claims or recoveries under the PLL Policy shall affect any exclusion from the indemnity obligations of Sellers hereunder.

     11.4 Limitations.

          11.4.1 Basket and Cap. Notwithstanding anything to the contrary contained in this Agreement, no indemnified party shall be entitled to receive any amount in respect of breaches of representations and warranties made by the indemnifying parties in this Agreement except to the extent, and only to the extent, that the aggregate amount of all Losses suffered by the Buyer Indemnified Parties or the Seller Indemnified Parties, as applicable, exceeds $500,000 (the “Basket”), in which case the indemnifying parties will only be liable for that excess. The aggregate liability of Sellers and Buyers, respectively, with respect to Losses suffered by Buyer Indemnified Parties or the Seller Indemnified Parties, as applicable, as a result of breaches of representations and warranties shall not exceed $5,000,000.

          11.4.2 Netting of Insurance Proceeds. Except in the case of fraud, no indemnified party shall be entitled to indemnification from Sellers for any Losses (a) unless and until such indemnified party or, if such indemnified party is not a party hereto, the party hereto through whom the indemnifying party derives its rights to indemnification, and its Affiliates have taken reasonable steps to pursue all claims for insurance available with respect to those Losses and (b) to the extent of the amount of insurance recovered by such party or its Affiliates with respect to those Losses.

     11.5 Procedures.

          11.5.1 Notice of Claim; Information. After obtaining knowledge of any facts that have given rise to, or could reasonably give rise to, a claim for indemnification under this Article XI (an “Indemnification Claim”), an indemnified party shall give written notice to the indemnifying party of such Indemnification Claim (“Notice of Claim”); provided, however, that the failure to give a Notice of Claim to the indemnifying party shall not relieve the indemnifying party from any liability that it may have to an indemnified party hereunder to the extent the indemnifying party is not prejudiced by such failure. The Notice of Claim shall set forth the amount (or a reasonable estimate, if then practicable) of the Losses suffered, or which may be suffered, by an indemnified party as a result of such Indemnification Claim. The indemnified party will furnish to the indemnifying party such information (in reasonable detail) it may have with respect to such Indemnification Claim (including copies of any summons, complaint or other pleading that may have been served on it and any written claim, demand, invoice, billing or other document evidencing or asserting the same).

          11.5.2 Right to Defense. In the event any claim set forth in the Notice of Claim is a claim asserted against an indemnified party by a third party, upon delivery by the indemnifying party to the indemnified party of written notice, the indemnifying party may assume and control the defense thereof with counsel of its choice, and thereafter the indemnifying party will not be liable to the indemnified party hereunder for any fees of other counsel subsequently accrued by the indemnified party in connection with the defense thereof.

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In the event a Notice of Claim is delivered under this Article XI, so long as there is no actual or reasonably anticipated conflict, the indemnifying party and the indemnified party will cooperate fully with each other, at the indemnifying parties’ cost and expense, in connection with the defense, negotiation or settlement of the claim covered by such Notice of Claim. If the indemnifying party assumes the defense of an action, (a) the indemnified party will be entitled to participate therein at its sole cost and expense and (b) no settlement or compromise thereof which involves an admission of guilt or liability on the part of the indemnified party or which does not include a full and unconditional release of the indemnified party in connection with the subject matter of the action such assessment or claim may be effected by the indemnifying party without the consent of the indemnified party. If the indemnifying party does not assume the defense of an action, the indemnified party may defend, compromise or settle the action, but no compromise or settlement thereof may be effected at the expense of the indemnifying party without the written consent of the indemnifying party; provided, however, that if it is ultimately determined in a proceeding in accordance with Section 12.9 that the indemnifying party has liability with respect to such action pursuant to the terms of this Agreement, the indemnifying party shall be bound by such compromise or settlement notwithstanding that the indemnifying party did not consent in writing to such compromise or settlement.

     11.6 Exclusive Remedies. From and after Closing, (a) except in the case of fraud, the parties’ right to indemnification under this Article XI with respect to any Losses shall be its sole and exclusive remedy for damages under or with respect to this Agreement or the transactions contemplated hereby, and it shall not be entitled to pursue, and hereby expressly waives, any and all rights that may otherwise be available either at law or in equity with respect thereto and (b) without limiting the generality of the foregoing, each party waives to the fullest extent permitted by law any claim or cause of action which it might otherwise assert, including under the common law or federal or state securities, trade regulations or other Laws, by reason of this Agreement or the transactions contemplated hereby, except for claims and causes of action brought pursuant to this Article XI.

ARTICLE XII
MISCELLANEOUS

     12.1 Entire Agreement. This Agreement, including the Schedules and Exhibits to this Agreement, the Escrow Agreement and the Confidentiality Agreement constitute the entire agreement of the parties to this Agreement with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, with respect to the subject matter hereof and thereof.

     12.2 Notices. All notices, requests, claims, demands and other communications to any party hereunder must be in writing and must be given by hand delivery, by courier service or by facsimile to the applicable party at the following address or facsimile number:

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     if to Sellers or either Seller, to:

Kaiser Aluminum & Chemical Corporation
5847 San Felipe, Suite 2500
Houston, Texas 77057-3010
Facsimile: (713) 332-4605
Attention: General Counsel

     with copies to:

Jones Day
2727 North Harwood Street
Dallas, Texas 75201
Facsimile: (214) 969-5100
Attention: Troy B. Lewis, Esq.

     and

Official Committee of Unsecured Creditors
of Kaiser Aluminum & Chemical Corporation
c/o Akin Gump Strauss Hauer & Feld LLP
590 Madison Avenue
New York, New York 10022
Facsimile: (212) 872-1002
Attention: Lisa G. Beckerman, Esq.

     if to Buyers or either Buyer, to:

c/o Century Aluminum Company
2511 Garden Road
Building A, Suite 200
Monterey, CA 93940
Facsimile: (831) 642-9328
Attention: General Counsel

     and

c/o Noranda, Inc.
181 Bay Street, Suite 200
Toronto M5J 2T3
Ontario, Canada
Facsimile: (416) 982-7490
Attention: Martin Schady, Senior Vice President

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     with copies to:

Curtis, Mallet-Prevost, Colt & Mosle LLP
101 Park Avenue
New York, NY 10178
Facsimile: (212) 697-1559
Attention: Matias A. Vega, Esq. &

 Roman A. Bninski, Esq.

     and

Kirksey & McNamee PLC
5250 Virginia Way, Suite 240
Brentwood, TN 37027
Facsimile: (615) 371-8810
Attention: Gerald B. Kirksey, Esq.

or any other address or facsimile number as a party may hereafter specify by notice to the other parties to this Agreement in accordance with this Section 12.2. Delivery of each notice, request or other communication will be effective (a) if given by hand delivery or courier service, when delivered at the address specified in this Section 12.2, or (b) if given by facsimile transmission, when the facsimile is transmitted to the facsimile number specified in this Section 12.2 and the appropriate confirmation is received.

     12.3 Amendments and Waivers.

          12.3.1 Writing Required. Any provision of this Agreement may be amended or waived if, and only if, the amendment or waiver is in writing and signed, in the case of an amendment, by Sellers and Buyers, or in the case of a waiver, by the party against whom the waiver is to be effective.

          12.3.2 No Implied Waiver. No failure or delay by any party hereto in exercising any right, power or privilege hereunder will operate as a waiver thereof nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

     12.4 Expenses.

          12.4.1 Expenses Relating to this Agreement. Except as otherwise provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the consummation of the transactions contemplated hereby will be paid by the party incurring the cost or expense.

          12.4.2 Consents and Transfers. All filing fees associated with Consents of Governmental Entities necessary to consummate the Transfers contemplated hereby (including those associated with any HSR Filings) will be borne solely by Buyers.

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          12.4.3 Certain Other Obligations. All transfer, documentary, sales, use, stamp, registration and other similar transaction type Taxes, and all duties, conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with consummation of the transactions contemplated by this Agreement (collectively “Transfer Taxes”), shall be paid by Buyers when due, and, except to the extent Sellers receive refunds of Transfer Taxes paid by Buyers (either directly or indirectly as reimbursement to Sellers) under this Section 12.4, notwithstanding any provision of the Laws of Jamaica which may entitle them to do so, Buyers shall not seek recovery or reimbursement from Sellers by any means. Buyers will, at their own expense, file all necessary Tax Returns and other documentation with respect to all such Transfer Taxes.

          12.4.4 Certain Jamaican Filings. If, under the Laws of Jamaica, Sellers are required to actually pay or remit any Transfer Taxes referred to in Section 12.4.3 to the applicable Tax authorities, Sellers and Buyers shall work jointly to prepare and file the necessary Tax Returns and other documentation (at Buyers’ sole expense), and Buyers shall reimburse Sellers for the same amounts Sellers paid to such Tax authorities on the same day(s) as such payment(s).

          12.4.5 Rights to Refunds. Any and all refunds of filing fees and Transfer Taxes paid by Buyers (either directly or indirectly as reimbursement to Sellers) under this Section 12.4 shall be for the account of Buyers, and Sellers acknowledge and agree that any and all such refunds shall be deemed the legal property of Buyers, and that no right, title or interest in the proceeds of any such refunds shall vest with or be conferred upon Sellers. Sellers shall act as Buyers’ agent with respect to any such refunds received by Sellers, and shall hold all such amounts in trust for Buyers until transferred to Buyers in accordance with Buyers’ instructions (which shall occur within five business days of Sellers’ receipt thereof). Upon Buyers’ request, and at Buyers’ sole expense, Sellers shall assist Buyers (including the filing of any Tax Returns required to be filed by Sellers) with such actions as are reasonably necessary to obtain the refund of any Transfer Taxes paid by Buyers (either directly or indirectly as reimbursement to Sellers) pursuant to this Section 12.4.

          12.4.6 Certain Prohibitions. Prior to Closing, no Buyer or Seller shall carry, deliver or ship an original of this Agreement into Jamaica. Following Closing no Seller shall carry, deliver or ship an original of this Agreement into Jamaica without the prior written consent of Buyers.

     12.5 Damages. No party will be liable for punitive, exemplary, consequential or special damages for violation of the terms of this Agreement under any circumstances.

     12.6 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and permitted assigns. No Seller or Buyer may sell, assign, transfer, convey or delegate any of its rights or obligations under this Agreement without the prior written consent of Buyers in the case of assignments by a Seller or Sellers in the case of assignments by a Buyer. Notwithstanding anything to the contrary contained in this Agreement, except as provided in Article XI (which Article is intended to confer a benefit on, and be enforceable by, the third parties referred to therein as express third party beneficiaries of this Agreement), nothing in this Agreement,

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expressed or implied, is intended to confer on any Person, other than the parties to this Agreement or their respective successors and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

     12.7 Governing Law. This Agreement shall be construed in accordance with and governed by the internal substantive law of the State of Delaware regardless of the laws that might otherwise govern under principles of conflict of laws applicable thereto. This Agreement is subject to any order or act of the Bankruptcy Court applicable hereto.

     12.8 Bulk Sales. Buyers waive compliance by Sellers with the provisions of the so-called “bulk sales” Laws of any jurisdiction.

     12.9 Knowledge. For purposes of this Agreement, references to “knowledge” of Sellers or Kaiser refer to the actual knowledge of the individuals listed on Schedule 12.9 after due inquiry.

     12.10 Consent to Jurisdiction; Arbitration.

          12.10.1 During Bankruptcy Cases. The Bankruptcy Court will have jurisdiction over any dispute arising out of or in connection with the transactions contemplated by this Agreement through the date of entry of the order approving the final decree in one or more of Sellers’ Bankruptcy Cases. The parties to this Agreement consent to the exclusive jurisdiction of the Bankruptcy Court (and of the appropriate appellate courts therefrom) in any such dispute and irrevocably waive, to the fullest extent permitted by Law, any objection that they may now or hereafter have to the laying of the venue of any such dispute in the Bankruptcy Court or that any such dispute brought in the Bankruptcy Court has been brought in an inconvenient forum.

          12.10.2 Post-Bankruptcy. Any dispute which remains unresolved or which arises following approval of Sellers’ plan of reorganization and emergence from bankruptcy, shall be submitted to and resolved by arbitration conducted in the State of Delaware, County of New Castle, in accordance with the then existing Commercial Rules of the American Arbitration Association. Judgment on any arbitration award may be entered in any court having jurisdiction.

          12.10.3 Disputes as to Arbitration. Any dispute as to the interpretation of the arbitration clause of the Agreement will be submitted only to a federal or state court of competent jurisdiction sitting in the State of Delaware, County of New Castle.

          12.10.4 Service of Process. Process may be served on any party anywhere in the world, whether within or without the jurisdiction of any court to which the parties have submitted herein. Without limiting the foregoing, each party to this Agreement agrees that service of process on that party may be made upon the designated Person at the address provided in Section 12.2 and will be deemed to be effective service of process on that party.

     12.11 Severability. If any provision of this Agreement is determined by a Governmental Entity to be invalid, void or unenforceable, the remainder of the provisions of this Agreement will remain in full force and effect and will in no way be affected, impaired or invalidated.

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     12.12 Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts, each of which will be an original, with the same effect as if the signatures thereto were upon the same instrument. Subject to the Bankruptcy Court entering the Sales Order, this Agreement will become effective when each party to this Agreement shall have received counterparts hereof signed by the other parties to this Agreement.

[SIGNATURES ON NEXT PAGE]

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     IN WITNESS WHEREOF, the parties to this Agreement have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

SELLERS:
KAISER ALUMINUM & CHEMICAL CORPORATION
By:	/s/ Edward F. Houf
Name:	Edward F. Houf
Title:	Vice President, Secretary and General Counsel
KAISER BAUXITE COMPANY
By:	/s/ Edward F. Houf
Name:	Edward F. Houf
Title:	Vice President, Secretary and General Counsel
BUYERS:
GRAMERCY ALUMINA LLC
By:	/s/ Gerald J. Kitchen
Name:	Gerald J. Kitchen
Title:	Manager
ST. ANN BAUXITE LIMITED
By:	/s/ Gerald J. Kitchen
Name:	Gerald J. Kitchen
Title:	Manager

EX-10.2

Exhibit 10.2

GLENCORE Ltd.

August 1, 2004

Jack Gates
Century Aluminum Company
2511 Garden Road
Monterey, CA 93940

Dear Jack:

We are pleased to present the following revised offer with validity until August 2, 2004:

Quantity:	174’150 MT +/-5% of alumina to be supplied CIF Grundartangi per annum and 90’000 MT +/-5% of aluminum to be returned FOB stowed Grundartangi per annum. Conversion ratio of 1.935 MT of alumina per MT of aluminum to apply throughout the life of contract.
Duration:	10 years with the start date to match the commissioning of Line 2 at Nordural, but no earlier than July 2006.
Alumina:	Acceptable origins to include Aughinish, eurAllumina, San Ciprian, Alunorte, Bauxilum, Suriname, and any Jamaican in Glencore’s option.
Tolling Charge:	* % of the LME plus Metal Premium except for the first 90’000 MT of aluminum in which case the tolling charge shall be 71% of the LME plus Metal Premium.
Metal Premium:	a) If duty is in place:
	Metal Premium = * % of the LME
	b) If the duty is removed or reduced:
	Metal Premium = A or B, whichever is higher.
	*
	*
	*
	*
	*
	*
LME:	The official London Metal Exchange High Grade cash settlement quotation in US dollars averaged over the quotational period (QP).
QP:	Month prior month of delivery.

Three Stamford Plaza • 301 Tresser Boulevard • Stamford, CT 06901-3244 • U.S.A.
Telephone (203) 328-4900 • Telefax (203) 328-3177 • Telex 6819406

GLENCORE Page 2

Aluminum:	Standard ingots with piece weight between 12-26 kgs each, strapped in bundles. A maximum of 10% is allowed as sow with maximum piece weight of 750 kgs each.
Quality:	Primary unalloyed aluminium, 99.7 percent aluminium minimum, FE 0.20 percent maximum, SI 0.10 percent maximum, according to P1020 specifications.
Payment Terms:	The tolling charge shall be paid within 5 days after receipt of weekly invoice.

We look forward to your favorable response to the above offer. Please don’t hesitate to contact me at (203) 328-2468 should you wish to discuss any aspect of this offer.

Regards,

/s/ Matt Lucke

ACCEPTED as of this 1st day of August 2004

CENTURY ALUMINUM COMPANY

By:	/s/ Gerald J. Kitchen
	Gerald J. Kitchen
	Executive Vice President, General Counsel
	and Chief Administrative Officer

* Confidential information has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission

EX-10.4

EXHIBIT 10.4

CONSENT AND THIRD AMENDMENT TO

REVOLVING CREDIT AGREEMENT

     This CONSENT AND THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT, dated as of August 4, 2004 (this “Amendment”), is by and among (a) Century Aluminum Company, a Delaware corporation (“Century Aluminum”), Berkeley Aluminum, Inc., a Delaware corporation (“Berkeley”), Century Aluminum of West Virginia, Inc., a Delaware corporation (“Century WV”), Century Kentucky, Inc., a Delaware corporation (“Century K”), Metalsco, Ltd., a Georgia company (“Metalsco”) and NSA Ltd., a Kentucky limited partnership (“NSA” and, together with Century Aluminum, Berkeley, Century WV, Century K and Metalsco, collectively, the “Borrowers” and each individually a “Borrower”), (b) the lending institutions which are or may become parties to the Credit Agreement (as defined below) from time to time (collectively, the “Lenders”) and (c) Fleet Capital Corporation as agent (“Agent”) for the Lenders. Capitalized terms used herein without definition shall have the meanings assigned to such terms in the Credit Agreement referred to below.

     WHEREAS, the Borrowers, the Lenders and the Agent are parties to a Revolving Credit Agreement, dated as of April 2, 2001 (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Credit Agreement”), pursuant to which the Lenders have committed to make loans or otherwise extend credit to the Borrowers on the terms and subject to the conditions set forth therein.

     WHEREAS, Century Aluminum intends (i) to issue unsecured convertible notes and unsecured senior notes in private offerings, the terms of which may provide for the repayment of principal upon conversion and other repayment and redemption provisions (together, the “Debt Offering”) with estimated net proceeds of up to $500 million (the “Debt Offering Proceeds”), and (ii) to use a portion of the Debt Offering Proceeds to purchase the First Mortgage Notes pursuant to a tender offer and consent solicitation and, if applicable, a mandatory redemption or other repurchase (together with the Debt Offering, the “Debt Offering and Note Repurchase”).

     WHEREAS, Gramercy Alumina (as hereinafter defined) and St. Ann Bauxite (as hereinafter defined), Kaiser Aluminum & Chemical Corporation, a Delaware corporation, and Kaiser Bauxite Company, a Nevada corporation (“KBC”), have entered into that certain Purchase Agreement, dated as of May 17, 2004, a copy of which is attached hereto as Exhibit A (the “Purchase Agreement”), pursuant to which Gramercy Alumina and St. Ann Bauxite will consummate the Gramercy Acquisition (as hereinafter defined).

     WHEREAS, the total consideration for the Gramercy Acquisition will be $23 million, as adjusted for working capital changes and payable in cash at the closing, of which Century Aluminum will indirectly be responsible for fifty percent (i.e., approximately $11.5 million) (the “Century Purchase Price”).

     WHEREAS, Century Aluminum intends to contribute or lend to the Gramercy Acquisition Subsidiary (as hereinafter defined) (i) the Century Purchase Price and (ii) up to $8.5 million to provide working capital to the Gramercy Acquisition Subsidiary, Gramercy Alumina and St. Ann Bauxite (together with the Century Purchase Price, the “Gramercy Investment”).

     WHEREAS, from time to time during the two-year period after the date hereof, Century Aluminum (directly or indirectly) intends to contribute or lend up to $100 million in the aggregate to the Nordural Acquisition Subsidiary (or directly to Nordural) to finance a planned expansion by Nordural and to provide working capital to Nordural (the “Additional Nordural Investment”).

     WHEREAS, under the Credit Agreement, the Gramercy Investment, the Debt Offering and Note Repurchase and the Additional Nordural Investment are not permitted.

     WHEREAS, in accordance with the terms hereof, the Lenders and the Agent have agreed to consent to the Gramercy Investment, the Debt Offering and Note Repurchase and the Additional Nordural Investment and to specify that the Gramercy Acquisition Subsidiary is not a Subsidiary of the Borrowers or the Guarantors.

     NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrowers, the Lenders and the Agent hereby agree as follows:

     §1. Amendment to Section 1.1 of the Credit Agreement.

          (a) Section 1.1 of the Credit Agreement is hereby amended by adding the following new definitions to such Section 1.1 in the appropriate alphabetical order:

               “Gramercy Acquisition.” The purchase, pursuant to the terms of the Purchase Agreement, (i) by Gramercy Alumina of the assets comprising and relating to the alumina refinery in Gramercy, Louisiana and (ii) by St. Ann Bauxite of the partnership interest of KBC in the bauxite mining operation on the north coast of Jamaica, the drying, storage and shipping facilities in Port Rhoades, Discovery Bay, Jamaica and related assets.

               “Gramercy Acquisition Documents.” All agreements, documents and instruments executed and/or delivered in connection with the Gramercy Acquisition (other than the Purchase Agreement), in form and substance consistent with the Purchase Agreement.

               “Gramercy Acquisition Subsidiary.” One or more direct or indirect subsidiaries of Century Aluminum (which are not Borrowers or Guarantors) formed for the purpose of, and used to consummate, the Gramercy Acquisition or the Gramercy Investment, or which are used from time to time to hold direct or indirect ownership interests in the respective assets and businesses to be acquired pursuant to the Gramercy Acquisition.

               “Gramercy Alumina.” Gramercy Alumina LLC, a Delaware limited liability company in which Century Aluminum holds an indirect fifty percent ownership interest.

               “St. Ann Bauxite.” St. Ann Bauxite Limited, a Jamaican private limited company in which Century Aluminum holds an indirect fifty percent ownership interest.

               “2004 Notes.” Up to $500 million in aggregate principal amount of unsecured convertible notes and unsecured senior notes to be issued by Century Aluminum.

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          (b) The definition of “Subsidiary” is hereby amended by deleting such definition in its entirety and substituting the following definition in lieu thereof:

               “Subsidiary Any corporation, association, trust, or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes) of the outstanding Voting Stock; provided, however, that when used with respect to the Borrowers and the Guarantors, the term Subsidiary shall not include the European Subsidiary, the Nordural Acquisition Subsidiary or the Gramercy Acquisition Subsidiary”.

     §2. Amendment to Section 9.1 of the Credit Agreement.

          (a) Section 9.1(m) of the Credit Agreement is hereby amended by deleting the word “and” at the end of Section 9.1(m).

          (b) Section 9.1(n) of the Credit Agreement is hereby amended by inserting the word “and” at the end of Section 9.1(n).

          (c) Section 9.1 of the Credit Agreement is hereby amended by inserting the following new paragraph (o) immediately following paragraph (n):

     “(o) Indebtedness pursuant to the 2004 Notes including any unsecured guarantees thereof by any Domestic Company Subsidiary of Century Aluminum.”

     §3. Amendment to Section 9.2 of the Credit Agreement.

          (a) Section 9.2(l) of the Credit Agreement is hereby amended by deleting the word “and” at the end of Section 9.2(l).

          (b) Section 9.2(m) of the Credit Agreement is hereby amended by inserting the word “and” at the end of Section 9.2(m).

          (c) Section 9.2 of the Credit Agreement is hereby amended by inserting the following new paragraph immediately following paragraph (m):

     “(n) restrictions in the 2004 Notes which would otherwise be prohibited by Section 9.2(vi).”

     §4. Amendment to Section 9.3 of the Credit Agreement.

          (a) Section 9.3(t) of the Credit Agreement is hereby amended by deleting the word “and” at the end of Section 9.3(t).

          (b) Section 9.3(u) of the Credit Agreement is hereby amended by (1) adding after the words “including pursuant to the security documents with respect thereto” the words “or consisting of unsecured guarantees of the 2004 Notes” and (2) replacing the period at the end of Section 9.3(u) with a semicolon.

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          (c) Section 9.3 of the Credit Agreement is hereby amended by inserting the following new paragraph (v) immediately following paragraph (u):

     ”(v) (1) any repurchase or redemption of 2004 Notes, including through conversion of such 2004 Notes, as required by the terms thereof, for cash, stock or any combination thereof pursuant to the terms of indentures governing the 2004 Notes.”

     §5. Consent to Transactions. The Borrowers have requested that the Agent and the Lenders consent to the Gramercy Investment, the Debt Offering and Note Repurchase and the Additional Nordural Investment. Notwithstanding the provisions of Sections 9.1, 9.2 and 9.3 of the Credit Agreement which might limit or prohibit the Borrowers’ ability to make the Gramercy Investment, the Debt Offering and Note Repurchase and the Additional Nordural Investment, the Agent and the Lenders hereby consent to (i) the Gramercy Investment; provided that (A) no Default or Event of Default has occurred and is continuing or would result therefrom, (B) the amount of the Gramercy Investment shall not exceed $20 million, (C) no Letters of Credit are issued in connection with the Gramercy Acquisition and (D) for the three (3) days immediately following the closing of the Gramercy Acquisition, no Loans are outstanding, (ii) the Debt Offering and Note Repurchase; provided that (A) no Default or Event of Default has occurred and is continuing or would result therefrom, (B) the principal amount of the 2004 Notes shall not exceed $500 million, and (C) the 2004 Notes are and remain unsecured at all times and (iii) the Additional Nordural Investment; provided that (A) the amount of the Additional Nordural Investment shall not exceed $100 million in the aggregate, (B) at the time of any advance of the Additional Nordural Investment, no Default or Event of Default has occurred and is continuing or would result therefrom, and (C) at the time of any advance of the Additional Nordural Investment, and after giving effect to such advance, the Borrowing Availability shall not be less than $20 million.

     §6. Application of Section 10.1 of the Credit Agreement. For the avoidance of doubt, the Agent and the Lenders confirm and agree that neither the Gramercy Investment nor the Additional Nordural Investment will be considered to be a Capital Expenditure which would otherwise be restricted under the terms of Section 10.1 of the Credit Agreement.

     §7. Conditions to Effectiveness. This Amendment shall become effective at such time as the Agent shall have received (i) a counterpart signature page to this Amendment duly executed and delivered by each of the Borrowers and the Majority Lenders and (ii) payment from the Borrowers, for the pro rata account of each Lender which returns an executed counterpart signature page to this Amendment to the Agent on or prior to 5:00 p.m. (Chicago time) on August 4, 2004, of an amendment fee equal to $50,000; provided that (i) if the Purchase Agreement is terminated by Buyers or Sellers (as defined therein), this Amendment shall be null and void with respect to the Gramercy Investment, (ii) if the Debt Offering and Note Repurchase shall not have been completed on or before April 30, 2005, this Amendment shall be null and void with respect to the Debt Offering and Note Repurchase and (iii) if the Additional Nordural Investment shall not have been completed on or before the date which is two years from the date hereof, this Amendment shall be null and void with respect to any uncompleted portion of the Additional Nordural Investment.

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     §8. Affirmation of the Borrowers. Each of the Borrowers hereby affirms all of its Obligations under the Credit Agreement and under each of the other Loan Documents to which it is a party and hereby affirms its absolute and unconditional promise to pay to the Lenders such Loans and other amounts as may be due under the Credit Agreement (as amended hereby) and the other Loan Documents.

     §9. Representations and Warranties. Each of the Borrowers hereby represents and warrants to the Lenders and the Agent as follows:

          (a) Representations and Warranties. Each of the representations and warranties contained in Section 7 of the Credit Agreement were true and correct in all material respects when made, and, after giving effect to this Amendment, are true and correct in all material respects on and as of the date hereof, except to the extent of changes resulting from transactions contemplated or permitted by the Credit Agreement (as amended hereby) and the other Loan Documents, changes occurring in the ordinary course of business that singly or in the aggregate do not result in a Material Adverse Effect and to the extent that such representations and warranties relate specifically to a prior date.

          (b) Enforceability. The execution and delivery by each of the Borrowers of this Amendment, and the performance by each of the Borrowers of this Amendment and the Credit Agreement, as amended hereby, are within the corporate authority of such Borrower and have been duly authorized by all necessary corporate proceedings. This Amendment and the Credit Agreement, as amended hereby, constitute valid and legally binding obligations of each of the Borrowers, enforceable against it in accordance with their terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors’ rights in general.

          (c) No Default. No Default or Event of Default has occurred and is continuing, and no Default or Event of Default will result from the execution, delivery and performance by each of the Borrowers of this Amendment or from the consummation of the transactions contemplated herein.

     §10. No Amendments, etc. Except as expressly provided in this Amendment, (a) all of the terms and conditions of the Credit Agreement and the other Loan Documents remain unchanged, and (b) all of the terms and conditions of the Credit Agreement, as amended hereby, are hereby ratified and confirmed by each of the Borrowers and remain in full force and effect. Nothing herein shall be construed to be an amendment, consent or a waiver of any requirements of any of the Borrowers or of any other Person under the Credit Agreement or any of the other Loan Documents except as expressly set forth herein. Nothing in this Amendment shall be construed to imply any willingness on the part of the Agent or the Lenders to grant any similar or future amendment, consent or waiver of any of the terms and conditions of the Credit Agreement or the other Loan Documents.

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     §11. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, but all of which together shall constitute one instrument. In proving this Amendment, it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought.

     §12. Governing Law. This Amendment shall for all purposes be construed in accordance with and governed by the laws of the State of New York (excluding the laws applicable to conflict of laws, other than Section 5-1401 of the New York General Obligations Law).

     §13. Miscellaneous. The captions in this Amendment are for convenience of reference only and shall not define or limit the provisions hereof.

     §14. Fees and Expenses. Each of the Borrowers agrees to pay to the Agent, on demand by the Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by the Agent in connection with the preparation of this Amendment, including reasonable legal fees.

     §15. Copies of Gramercy Acquisition Documents. Century Aluminum covenants and agrees to deliver to the Agent copies of (i) the executed material Gramercy Acquisition Documents promptly after the execution and delivery thereof and (ii) the material documents executed in connection with the Debt Offering and Note Repurchase.

[Remainder of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, the undersigned have duly executed this Amendment as a sealed instrument as of the date first set forth above.

	CENTURY ALUMINUM COMPANY
By:	/s/ Peter C. McGuire
	Name: Peter C. McGuire
	Title: Vice President
	CENTURY ALUMINUM OF WEST VIRGINIA, INC.
By:	/s/ Peter C. McGuire
	Name: Peter C. McGuire
	Title: Vice President
	BERKELEY ALUMINUM, INC.
By:	/s/ Peter C. McGuire
	Name: Peter C. McGuire
	Title: Vice President
	CENTURY KENTUCKY, INC.
By:	/s/ Peter C. McGuire
	Name: Peter C. McGuire
	Title: Vice President
	METALSCO, LTD.
By:	/s/ Peter C. McGuire
	Name: Peter C. McGuire
	Title: Vice President

	NSA, Ltd., by Metalsco, Ltd., its General Partner
By:	/s/ Peter C. McGuire
	Name: Peter C. McGuire
	Title: Vice President

	FLEET CAPITAL CORPORATION, individually and as Agent
By:	/s/ Robert J. Lund
	Name: Robert J. Lund
	Title: Senior Vice President

	THE CIT GROUP/BUSINESS CREDIT, INC.
By:	/s/ Juan R. Ramirez
	Name:	Juan R. Ramirez
	Title:	Assistant Vice President

CONGRESS FINANCIAL CORPORATION
By:	/s/ Gerard C. Wordell
	Name:	Gerard C. Wordell
	Title:	Vice President

	LASALLE BUSINESS CREDIT, LLC
By:	/s/ Beht Hammeleff
	Name:	Beht Hammeleff
	Title:	Vice President

	GE BUSINESS CAPITAL CORPORATION (formerly known as, TRANSAMERICA BUSINESS CAPITAL CORPORATION)
By:	/s/ Matthew N. McAlpine
	Name:	Matthew N. McAlpine
	Title:	Duly Authorized Signatory

	CREDIT SUISSE FIRST BOSTON
By:	/s/ Alain Daoust
	Name:	Alain Daoust
	Title:	Director

By:	/s/ Peter Chauvin
	Name:	Peter Chauvin
	Title:	Vice President

	CITIZENS BUSINESS CREDIT COMPANY, a Division of Citizens Leasing, Inc., a Massachusetts Corporation
By:	/s/ Paul A. Rebholz
	Name:	Paul A. Rebholz
	Title:	Vice President

     Each of the undersigned Guarantors hereby acknowledges and consents to the foregoing Amendment and agrees that the Guarantee, dated as of April 2, 2001, in favor of the Agent and the Lenders remains in full force and effect and each Guarantor ratifies and confirms all of its obligations thereunder.

SKYLINER, INC.

By:    /s/ Peter C. McGuire

Name: Peter C. McGuire

Title: Vice President

VIRGIN ISLANDS ALUMINA

CORPORATION LLC

By:    /s/ Peter C. McGuire

Name: Peter C. McGuire

Title: Vice President

HANCOCK ALUMINUM LLC

By:    /s/ Peter C. McGuire

Name: Peter C. McGuire

Title: Vice President

EX-31.1

Exhibit 31.1

I, Craig A. Davis, Chairman and Chief Executive Officer of Century Aluminum Company (the “registrant”) certify that:

1) I have reviewed this quarterly report on Form 10-Q of the registrant;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2004

/s/ CRAIG A. DAVIS  

Title: Chairman and Chief 

          Executive Officer 

EX-31.2

Exhibit 31.2

I, David W. Beckley, Executive Vice President and Chief Financial Officer of Century Aluminum Company (the “registrant”), certify that:

1)	I have reviewed this quarterly report on Form 10-Q of the registrant;
2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2004

/s/ DAVID W. BECKLEY
Name:	David W. Beckley
Title:	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of
the Chief Executive Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. 1350)

     In connection with the quarterly report on Form 10-Q of Century Aluminum Company (the “Company”) for the quarter ended September 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Craig A. Davis, as Chief Executive Officer of the Company, and David W. Beckley, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

1.	This Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Craig A. Davis	/s/ David W. Beckley
By: Craig A. Davis	By: David W. Beckley
Title: Chief Executive Officer	Title: Chief Financial Officer
Date: November 9, 2004	Date: November 9, 2004

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.