Document:

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                                                                     Exhibit 4.1

                          [Bank of America Letterhead]

                               September 29, 2004

Kaiser Aluminum & Chemical Corporation
5847 San Felipe, Suite 2500
Houston, Texas 77057
Attention:  Kerry A. Shiba,
                Vice President, Chief Financial Officer and Treasurer

                     Re:   Kaiser Aluminum & Chemical Corporation
                           $285,000,000 Post-Petition Credit Agreement

Dear Mr. Shiba:

      Reference is made to (i) that certain $285,000,000 Post-Petition Credit
Agreement, dated as of February 12, 2002 (as amended, the "Credit Agreement"),
among Kaiser Aluminum & Chemical Corporation, Kaiser Aluminum Corporation, Bank
of America, N.A., and the other lenders that are or may from time to time become
parties to the Credit Agreement and (ii) that certain Amended and Restated
Purchase Agreement, dated as of April 20, 2004, among Kaiser Aluminum & Chemical
Corporation, Kaiser Aluminium International, Inc., Kaiser Bauxite Company,
Kaiser Jamaica Corporation and Alpart Jamaica, Inc. and RUAL Trade Limited, as
amended by the Amendment to Amended and Restated Purchase Agreement, dated as of
April 26, 2004 (as so amended, the "RUAL Purchase Agreement"). Unless otherwise
defined herein, capitalized terms used herein shall have the meanings given to
such terms in the Credit Agreement.

      In consideration for the agreements between the Obligors and the Lenders
set forth herein, but subject to the conditions set forth herein, the Agent and
the Lenders hereby (A) waive, through and including the Sale Waiver Termination
Date (as defined below), any noncompliance with the provisions of Section 9.2.11
of the Credit Agreement restricting the sale of the interests of the Company,
KAII, KBC, AJI and KJC (collectively, the "Sellers") in or related to ALPART,
which interests are comprised of (x) each Seller's entire right, title and
interest in, to and under ALPART, including all right, title and interest of
such Seller in, to and under the partnership agreement of ALPART and (y) the
rights of the Sellers in, to and under the

<PAGE>

"Other Purchased Assets" as described on Schedule A hereto (collectively, the
"Sale"); provided, however, that such waiver shall be limited solely to permit
the transactions contemplated under (i) the RUAL Purchase Agreement, (ii) if the
RUAL Purchase Agreement is terminated, any purchase agreement that may be
entered into between the Sellers and Glencore AG and Glencore Alumina Jamaica II
Limited or an affiliate thereof (collectively, "Glencore") reflecting Glencore's
final bid at the auction held pursuant to the Bidding Procedures (as defined in
the RUAL Purchase Agreement) that does not provide for any greater Contingent
Liabilities of the Debtors than are provided for in the RUAL Purchase Agreement
and provides for a cash purchase price payable by Glencore to the Sellers in at
least the amount reflected in Glencore's final bid (the "Glencore Purchase
Agreement"), or (iii) if Hydro Aluminum Jamaica a.s. exercises its right of
first refusal, a purchase agreement (the "Hydro Purchase Agreement" and,
collectively with the RUAL Purchase Agreement and the Glencore Purchase
Agreement, the "Purchase Agreements") on substantially the same terms (except
for nonmaterial changes resulting from changes in parties) as the RUAL Purchase
Agreement or the Glencore Purchase Agreement, as applicable, (B) waive, through
and including the Sale Waiver Termination Date, any restriction in Section 9.2
of the Credit Agreement that would prohibit the repayment of the Indebtedness of
ALPART owed to the Caribbean Basin Projects Financing Authority in the manner
contemplated by the RUAL Purchase Agreement, including, without limitation, the
making of the Carifa Repayment Loans (as defined in the RUAL Purchase Agreement)
so long as the Company is immediately repaid in full in cash out of the proceeds
of the Sale for any Carifa Repayment Loans made by the Company (including,
without limitation, any loans made by the Company, the proceeds of which will be
used to satisfy any letter of credit reimbursement obligations in connection
with the Carifa Debt, as defined in the RUAL Purchase Agreement), and (C) extend
the effectiveness of the prior limited waiver, dated March 29, 2004 (the "EBITDA
Limited Waiver"), through and including the EBITDA Waiver Termination Date
(defined below), with respect to the minimum EBITDA test in Section 9.2.4 of the
Credit Agreement for the measurement periods ending December 31, 2003 and March
31, 2004 and, if Section 9.2.4(b) of the Credit Agreement is then applicable,
March 31, 2004, April 30, 2004 and May 31, 2004. Notwithstanding the foregoing,
the limited waivers in clauses (A) and (B) of this paragraph shall be effective
only through the earliest of (x) prior to the closing of the Sale, the earlier
of the date that (i) none of the Purchase Agreements is in effect or (ii) any
material term of the then currently effective Purchase Agreement is modified in
a manner materially adverse to the Debtors, (y) after the consummation of the
Sale, the earliest of the date that (i) the Sale closes if the proceeds of the
Sale (excluding the amounts to be repaid to the Company for any Carifa Repayment
Loans made by the Company (including, without limitation, any loans made by the
Company, the proceeds of which will be used to satisfy any letter of credit
reimbursement obligations in connection with the Carifa Debt)) are not wired
directly from the buyer to the Blocked Accounts (defined below) on such date,
(ii) a Debtor files a motion (other than a motion to approve a Seventh Amendment
(defined below) agreed to and executed by the Lenders), or a Debtor otherwise
seeks, to use any cash in the Blocked Accounts, (iii) any other Person files
such a motion or otherwise seeks to use any cash in the Blocked Accounts and the
Debtors fail to object thereto in good faith and in a timely manner, (iv) the
Bankruptcy Court enters an order authorizing the use or withdrawal of any cash
in the Blocked Accounts or (v) any amounts are withdrawn from the Blocked
Accounts other than in accordance with the terms of a Seventh Amendment agreed
to and executed by the Lenders, or (z) June 30, 2004 (such earliest date, the

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"Sale Waiver Termination Date"); provided, however, the Sale Waiver Termination
Date shall not occur under clause (z) above if (i) on or before June 30, 2004,
the Debtors shall have filed a motion with the Bankruptcy Court seeking
authority to (a) pursuant to section 364(c)(2) of the Bankruptcy Code, grant the
Agent, for its benefit and benefit of the Secured Lenders, first-priority Liens
on the proceeds of the Sale (excluding the amounts to be repaid to the Company
for any Carifa Repayment Loans made by the Company (including, without
limitation, any loans made by the Company, the proceeds of which will be used to
satisfy any letter of credit reimbursement obligations in connection with the
Carifa Debt)) and (b) pay the Agent and the Lenders a $500,000 fee (the "Waiver
Fee") as compensation for the limited waivers provided for herein (the "Lien
Motion") and (ii) on or before July 30, 2004, (a) the Lien Motion shall have
been approved by the Bankruptcy Court (pursuant to a final order that is
satisfactory to Agent in its sole discretion) and (b) the Waiver Fee shall have
been paid to the Agent and the Lenders. Notwithstanding the foregoing or
anything else herein to the contrary, the limited waiver in clause (C) of this
paragraph shall be effective only through June 30, 2004 (the "EBITDA Waiver
Termination Date"); provided, however, that (x) the EBITDA Waiver Termination
Date shall be automatically extended to July 30, 2004 if the Debtors shall have
filed the Lien Motion with the Bankruptcy Court on or before June 30, 2004, and
(y) if the EBITDA Waiver Termination Date is so extended, the effectiveness of
the EBITDA Limited Waiver with respect to the minimum EBITDA test in Section
9.2.4 of the Credit Agreement shall likewise be extended to apply to the
measurement period ending on June 30, 2004.

      The parties hereto anticipate entering into a Seventh Amendment to the
Credit Agreement (the "Seventh Amendment") to effect a more comprehensive and
permanent modification of the Credit Agreement to permit the transactions
contemplated hereby and provide for the modifications of certain covenants
contained in the Credit Agreement. If the Waiver Fee is paid to the Agent and
the Lenders pursuant to the preceding paragraph, the entire amount thereof shall
be credited to and applied against any amendment or similar fees payable by the
Obligors to the Agent and the Lenders under the Seventh Amendment. The foregoing
limited waivers shall be null and void ab initio and an Event of Default shall
immediately occur: (i) in the case of the waiver contained in clause (C) of the
preceding paragraph, on the EBITDA Waiver Termination Date and (ii) in the case
of the waivers contained in clauses (A) and (B) of the preceding paragraph, on
the earlier of (x) the Sale Waiver Termination Date, if the same has occurred
due to the occurrence of any event described in clause (y) or clause (z) of the
penultimate sentence of the preceding paragraph (but giving effect to the
proviso at the end of such clause (z)), and (y) the date the Sale is closed, if
the Sale Waiver Termination Date has occurred due to the occurrence of an event
described in clause (x)(ii) of the penultimate sentence of the preceding
paragraph, unless, in the case of either clause (i) or clause (ii) above, on or
prior to such dates, the Obligors and the Lenders shall have entered into, and
the Bankruptcy Court shall have entered an order (which order shall have become
a final order not later than July 15, 2004) approving the Seventh Amendment
agreed to and executed by the Lenders.

      The Obligors and the Lenders hereby agree that (i) as a condition to the
continued effectiveness of the limited waivers contained herein, the proceeds of
the Sale less the aggregate amount of the Carifa Repayment Loans (including,
without limitation, any loans made by the Company, the proceeds of which will be
used to satisfy any letter of credit reimbursement

<PAGE>

obligations in connection with the Carifa Debt) shall be deposited, and remain
on deposit at all times pending further order of the Bankruptcy Court, in one or
more blocked accounts with Agent (collectively, the "Blocked Accounts") pursuant
to blocked account agreements in form and substance satisfactory to the Agent,
from which Blocked Accounts no Obligor or any other party (other than the Agent)
shall have the right to withdraw funds and (ii) until the Sale Waiver
Termination Date, (a) the definition of the term "PPE Subcomponent Reduction"
shall exclude the Net Disposition Proceeds from the Sale and (b) the Sale shall
not count against the $25,000,000 basket referred to in clause (i) of Section
9.2.11 of the Credit Agreement.

      This limited waiver shall be limited precisely as written and shall not be
deemed or otherwise construed to constitute a waiver of any other Default or
Event of Default, amend or modify any provision of any Loan Document or
constitute a course of dealing or any other basis for altering the Obligations
of any Obligor. Except as expressly waived hereby, the Credit Agreement and the
other Loan Documents, including the Liens granted thereunder, shall remain in
full force and effect, and all terms and provisions thereof are hereby ratified
and confirmed.

      This limited waiver shall be effective only if and when signed by, and
when counterparts hereof shall have been delivered to the Agent (by hand
delivery, mail or telecopy) by, the Company, the Parent Guarantor, each
Subsidiary Guarantor and the Lenders holding at least 86% of the Revolving
Credit Outstandings. This limited waiver may be executed by one or more of the
parties on any number of separate counterparts (including by telecopy), all of
which taken together shall constitute by one and the same instrument.

      This limited waiver shall be deemed to be a contract made under and
governed by the internal laws of the State of New York, without giving effect to
such laws relating to conflicts of laws to the extent not preempted by federal
bankruptcy law, provided that the Agent and the Lenders shall retain all rights
arising under federal law.

      If you have any questions about this letter, please contact me at the
number above.

                                         Sincerely,

                                         Bank of America, N.A., as Agent

                                                /s/Robert M. Dalton
                                         ---------------------------------------
                                         Name:     Robert M. Dalton
                                         Title:    Vice President

cc: Kaiser - General Counsel

<PAGE>

AGREED AND CONSENTED TO

as of this 21st day of May, 2004

BANK OF AMERICA, N.A.

By:  /s/Robert M. Dalton
     ------------------------
Name:  Robert M. Dalton
Title: Vice President

GENERAL ELECTRIC CAPITAL CORPORATION

By:  /s/John Dale
     ------------------------
Name:  John Dale
Title: Duly Authorized Signatory

WELLS FARGO FOOTHILL, INC.

By:  /s/Eunnie Kim
     ------------------------
Name:  Eunnie Kim
Title: Vice President

THE CIT GROUP/BUSINESS CREDIT, INC.

By:  /s/Grant Weiss
     ------------------------
Name:  Grant Weiss
Title: Vice President

MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.

By:  /s/Michele Kouatchis
     ------------------------
Name:  Michele Kouatchis
Title: Director

PNC BANK, NATIONAL ASSOCIATION

By:  /s/Sandra Sha Kenyon
     ------------------------
Name:  Sandra Sha Kenyon
Title: Vice President

GMAC COMMERCIAL FINANCE, LLC

By:  /s/Thomas Brent
     ------------------------
Name:  Thomas Brent
Title: Vice President

<PAGE>

KAISER ALUMINUM CORPORATION

By:  /s/David A. Cheadle
     ------------------------
Name:  David A. Cheadle
Title: Assistant Treasurer

KAISER ALUMINUM & CHEMICAL CORPORATION

By:  /s/David A. Cheadle
     ------------------------
Name:  David A. Cheadle
Title: Assistant Treasurer

AKRON HOLDING CORPORATION
ALPART JAMAICA INC.
KAISER ALUMINA AUSTRALIA CORPORATION
KAISER BELLWOOD CORPORATION
KAISER ALUMINUM & CHEMICAL INVESTMENT, INC.
KAISER ALUMINIUM INTERNATIONAL, INC.
KAISER ALUMINUM PROPERTIES, INC.
KAISER ALUMINUM TECHNICAL SERVICES, INC.
KAISER FINANCE CORPORATION
KAISER JAMAICA CORPORATION
KAISER MICROMILL HOLDINGS, LLC
KAISER SIERRA MICROMILLS, LLC
KAISER TEXAS SIERRA MICROMILLS, LLC
KAISER TEXAS MICROMILL HOLDINGS, LLC
OXNARD FORGE DIE COMPANY, INC.
ALWIS LEASING LLC
KAISER BAUXITE COMPANY
KAISER CENTER, INC.
KAISER CENTER PROPERTIES
KAE TRADING, INC.
KAISER EXPORT COMPANY

By:  /s/David A. Cheadle
     ------------------------
Name:  David A. Cheadle
Title: Assistant Treasurer

<PAGE>

                                   SCHEDULE A

                            "OTHER PURCHASED ASSETS"

      1. all assets and property of every kind and nature that are owned by
ALPART, including alumina and other inventory, or by its partners as tenants in
common for the use and benefit of ALPART and all other assets and property owned
by any Seller or any affiliate of any Seller and used exclusively in ALPART's
business;

      2. 5,000 shares of common stock, par value $1.00 per share ("Alpart Farms
Common Stock"), of Alpart Farms (Jamaica), Ltd., a Delaware corporation, owned
by KBC;

      3. 5,000 shares of Alpart Farms Common Stock owned by the Company;

      4. all shares of Alpart Farms Common Stock acquired after the date of the
RUAL Purchase Agreement and prior to the closing date of the Sale by any Seller
or any affiliate of any Seller;

      5. the loan made by the Company to ALPART in the original principal amount
of $22,100,000 as evidenced by that certain Promissory Note dated March 1, 2001;

      6. the loan to be made by the Company to ALPART on or prior to the closing
date of the Sale in the original principal amount of 65% of the Carifa Repayment
Loan, as evidenced by a promissory note;

      7. amounts due from ALPART to its partners for funds advanced to ALPART to
cover costs of operations, including interest, but excluding depreciation; and

      8. contracts (a) by and among ALPART and the partners of ALPART related to
the operation of ALPART, (b) by and among the Company and its affiliates and the
Government of Jamaica related to the Company's fiscal system in Jamaica and (c)
alumina supply contracts by and between KAII and third parties related to the
sale of alumina produced at ALPART.<PAGE>

                                                                     Exhibit 4.2

                              SEVENTH AMENDMENT TO
                    POST-PETITION CREDIT AGREEMENT, AMENDMENT
                  TO SUBSIDIARY GUARANTY, CONSENT OF GUARANTORS
                        AND ACKNOWLEDGMENT AND AGREEMENT
                         OF AJI, KJC, KFC, KAAC AND KBC

            This SEVENTH AMENDMENT TO POST-PETITION CREDIT AGREEMENT, AMENDMENT
TO SUBSIDIARY GUARANTY, CONSENT OF GUARANTORS AND ACKNOWLEDGMENT AND AGREEMENT
OF AJI, KJC, KFC, KAAC AND KBC (this "Amendment") is dated as of October 28,
2004, and entered into by and among KAISER ALUMINUM CORPORATION, a Delaware
corporation, as debtor and debtor-in-possession (the "Parent Guarantor"), KAISER
ALUMINUM & CHEMICAL CORPORATION, a Delaware corporation, as debtor and
debtor-in-possession (the "Company"), the banks and other financial institutions
signatory hereto that are parties as Lenders to the Credit Agreement referred to
below (the "Lenders"), BANK OF AMERICA, N.A., as agent (in such capacity, the
"Agent") for the Lenders, GENERAL ELECTRIC CAPITAL CORPORATION ("GE Capital") as
Documentation Agent, THE CIT GROUP/BUSINESS CREDIT, INC. ("CIT"), as
Co-Syndication Agent, WELLS FARGO FOOTHILL, INC. (fka Foothill Capital
Corporation) ("Foothill"), as Co-Syndication Agent (GE Capital, CIT and
Foothill, collectively, the "Co-Agents"), and solely with respect to the
provisions of Section 1.12 of this Amendment (and Section 9.1.21 of the Credit
Agreement, as defined below and amended hereby), BANK OF AMERICA, N.A. ("Bank of
America"), in its capacity as depository bank with respect to the Cash
Collateral Accounts (as hereinafter defined and, in such capacity, "Depository
Bank").

                                    RECITALS

            WHEREAS, the Parent Guarantor, the Company, the Lenders, and the
Agent have entered into that certain Post-Petition Credit Agreement dated as of
February 12, 2002, as amended by that certain First Amendment to Post-Petition
Credit Agreement and Post-Petition Pledge and Security Agreement and Consent of
Guarantors dated as of March 21, 2002, that certain Second Amendment to
Post-Petition Credit Agreement and Consent of Guarantors dated as of March 21,
2002, that certain Third Amendment to Post-Petition Credit Agreement, Second
Amendment to Post-Petition Pledge and Security Agreement and Consent of
Guarantors dated as of December 19, 2002, that certain Fourth Amendment to
Post-Petition Credit Agreement and Consent of Guarantors dated as of March 17,
2003, that certain Consent and Fifth Amendment to Post-Petition Credit Agreement
and Consent of Guarantors dated as of June 6, 2003, and that certain Sixth
Amendment to Post-Petition Credit Agreement and Consent of Guarantors dated as
of August 1, 2003, and as further modified by that certain Waiver and Consent
with Respect to Post-Petition Credit Agreement dated as of October 9, 2002, that
certain Second Waiver and Consent With Respect to Post-Petition Credit Agreement
dated as of January 13, 2003, and limited waivers dated March 24, 2003, May 5,
2003, March 29, 2004, May 21, 2004, July 29, 2004, and September 29, 2004 (as so
amended and modified, the "Credit Agreement"; capitalized terms used in this
Amendment without definition shall have the meanings given such terms in the
Credit Agreement); and

<PAGE>

            WHEREAS, the Company has requested that the Lenders agree to amend
certain provisions of the Credit Agreement and the Lenders are willing to agree
to such amendments on the terms and conditions set forth herein;

            NOW THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the Parent Guarantor, the Company, the Lenders, the
Agent and, with respect to Section 1.12 hereof, Bank of America, as Depository
Bank, agree as follows:

      1. AMENDMENTS TO CREDIT AGREEMENT. Subject to the conditions and upon the
terms set forth in this Amendment, the Credit Agreement is hereby amended as
follows:

            1.1 Amendments to Section 1.1 (Definitions).

                  (a) The following definition of "2004 Financial Forecast" is
added in proper alphabetical order:

            ""2004 Financial Forecast" means the financial forecast on a monthly
      basis for the fiscal period ending December 31, 2004, prepared by the
      Company's management and delivered to the Agent and the Lenders on May 5,
      2004."

                  (b) The definitions of "Actual VALCO EBITDA Amount", "Forecast
VALCO EBITDA Amount," "Kaiser Center Assets," "Mead Charges," "VALCO Adjusted
Net Earnings from Operations," and "VALCO PPE Reduction" are deleted in their
entirety.

                  (c) The definition of "Adjusted Net Earnings from Operations"
is deleted in its entirety and replaced with the following:

            ""Adjusted Net Earnings from Operations" means, with respect to any
      fiscal period of the Company, the Company's consolidated net income after
      provision for income taxes for such fiscal period, as determined in
      accordance with GAAP and reported on the consolidated financial statements
      for such period, excluding the consolidated impact of any and all of the
      following included in such consolidated net income (without duplication):
      (a) gain or loss in an amount greater than $150,000 arising from the sale
      of any capital assets; (b) gain arising from any write-up in the book
      value of any asset; (c) earnings of any Person, substantially all the
      assets of which have been acquired in any manner, to the extent realized
      by such other Person prior to the date of acquisition; (d) earnings of any
      Person (other than a Subsidiary of the Company) in which the Company or
      any of its Subsidiaries has an ownership interest to the extent that such
      earnings exceed the sum of (i) the amount received in cash by the Company
      and its Subsidiaries and (ii) $3,000,000; (e) earnings of any Person to
      which assets of the Company or any of its Subsidiaries shall have been
      sold, transferred or disposed of, or into which the Company or any of its
      Subsidiaries shall have been merged, or which has been a party with the
      Company or any of its Subsidiaries to any consolidation or other form of
      reorganization, prior to the date of such transaction; (f) gain arising
      from the acquisition of debt or equity securities of the Company or any of
      its Subsidiaries from cancellation or forgiveness of Indebtedness; (g)
      gain arising from extraordinary items, as determined in

                                       2
<PAGE>

      accordance with GAAP, or from any other non-recurring transaction
      resulting in gain in an amount greater than $150,000; (h) any gain that
      arises from the reversal of expenses in respect of power payments to the
      extent reflected in the Financial Forecast; (i) non-cash LIFO inventory
      valuation charges in aggregate amounts not to exceed $20,000,000 after May
      31, 2004; (j) non-cash pension expenses in aggregate amounts not to exceed
      $68,000,000 in Fiscal Year 2004; (k) non-cash special charges relating to
      pension expenses in aggregate amounts not to exceed $25,000,000 in any
      Fiscal Year; (l) non-cash impairment charges relating to fixed assets or
      Investments in aggregate amounts not to exceed $100,000,000 after May 31,
      2004, except for any such charges which reduce the book value of any
      Eligible Fixed Asset to an amount less than the OLV In-Place Value of such
      Eligible Fixed Asset (such exception to apply only to the amount by which
      the book value of such Eligible Fixed Asset is less than such OLV In-Place
      Value as a result of such charges); (m) non-cash charges related to the
      write down of the value of Inventory located outside the United States in
      aggregate amounts not to exceed $10,000,000 after May 31, 2004; and (n)
      the recording of accruals for the following items, but only to the extent
      that such accruals are non-cash during the term of this Agreement and
      arise solely out of pre-petition liabilities: (i) in aggregate amounts not
      to exceed $80,000,000 after May 31, 2004, in respect of the rejection of
      the Bonneville Power Administration contract, (ii) in aggregate amounts
      not to exceed $250,000,000 after May 31, 2004, in respect of the unfair
      labor practices claims arising in connection with the United Steelworkers
      of America strike and subsequent lockout, (iii) in aggregate amounts not
      to exceed $250,000,000 after May 31, 2004, in respect of liabilities to
      the PBGC relating to Pension Plans, (iv) in aggregate amounts not to
      exceed $400,000,000 after May 31, 2004, in respect of curtailment or
      settlement charges related to retiree medical obligations, (v) all claims
      relating to liabilities for asbestos exposure and any other personal
      injury claims intended to ultimately be settled as a part of a Plan of
      Reorganization by transferring the liability and certain rights against
      certain insurance policies to a trust and (vi) other pre-petition
      liabilities in aggregate amounts not to exceed $100,000,000 after May 31,
      2004."

                  (d) The following definitions of "ALPART Claims," "ALPART
Collateral" and "ALPART Plan Event" are added in proper alphabetical order:

            ""ALPART Claims" means the Agent's and the Secured Lenders'
      superpriority secured claims against AJI and KJC in the amount of
      $20,000,000 (plus an amount equal to the interest accruing on and
      investments of, and the earnings on and proceeds of investments of, the
      ALPART Collateral)."

            ""ALPART Collateral" means $20,000,000 (plus an amount equal to the
      interest accruing thereon and investments thereof, and the earnings on and
      proceeds of investments with respect thereto) of the Net Disposition
      Proceeds from the sale of AJI's and KJC's interests in ALPART, which
      amount is deposited in Cash Collateral Accounts as security for the
      Obligations under the Loan Documents, and all interest accruing on and
      investments of, and the earnings on and proceeds of investments of, such
      amount."

                                       3
<PAGE>

            ""ALPART Plan Event" means the effective date of a Subsidiary Plan
      for AJI/KJC, which plan shall provide for cash payment to the Company and
      deposits to Cash Collateral Accounts and confirmation of guaranty
      obligations (if applicable) upon such effective date in the amounts and as
      otherwise required by Section 9.1.19."

                  (e) The definition of "Availability Reserve" is deleted in its
entirety and replaced with the following:

            ""Availability Reserve" means a reserve against availability under
      the Borrowing Base in an amount equal to the lesser of (i) $20,000,000 and
      (ii) ten percent (10%) of the Revolving Commitment Amount."

                  (f) The definition of "Borrowing Base" is amended to delete
clauses (b) and (c) thereof in their entirety and to replace them with the
following:

            "(b) (i) the lesser of (A) $125,000,000 and (B) 65% of all Eligible
      Inventory as at such time or (ii) at any time following Agent's receipt of
      a satisfactory appraisal pursuant to Section 9.1.18(a), the least of (A)
      $125,000,000, (B) 65% of all Eligible Inventory as at such time and (C)
      85% of the Net Recovery Percentage (as determined by the most recent
      Inventory appraisal delivered to the Agent pursuant to Section 9.1.18(a))
      of all Eligible Inventory as at such time;

            plus

            (c) the lesser of (i) $50,000,000 and (ii) 50% of the OLV In-Place
      Value of Eligible Fixed Assets (such lesser number, the "PPE
      Subcomponent"); provided, that the PPE Subcomponent shall be permanently
      reduced in an amount equal to each PPE Subcomponent Reduction; and
      provided further that the PPE Subcomponent shall at no time be less than
      zero."

                  (g) The definition of "Carve-Out Reserve" is amended to insert
the following before the final period of the first sentence thereof:

      "; provided that the Carve-Out Reserve shall not include Professional Fees
      specifically relating to the administration of the Bankruptcy Cases of
      AJI, KJC, KFC, KAAC or KBC incurred after June 30, 2004, which costs shall
      be charged to AJI, KJC, KAAC (both on behalf of itself and KFC) or KBC, as
      applicable, and paid by such estate or estates."

                  (h) The following definitions of "Cash Collateral Accounts"
and "Claims" are added in the proper alphabetical order:

            ""Cash Collateral Accounts" means each of those certain blocked
      deposit and/or securities accounts established with Bank of America, N.A.,
      by the Company, AJI, KJC, KAAC, KBC and any other Obligor receiving the
      ALPART Collateral, the QAL Collateral, the KACC Available Amount or the
      KBC

                                       4
<PAGE>

      Allocable Amount, which accounts are subject to the exclusive dominion and
      control of the Agent, for its benefit and the benefit of the Secured
      Lenders, and held as Collateral for the Obligations, all pursuant to
      documentation in form and substance satisfactory to the Agent in its sole
      discretion."

            ""Claims" has the meaning set forth in Section 101(5) of the
      Bankruptcy Code."

                  (i) The definition of "Eligible Fixed Assets" is amended to
insert "identified on Schedule I hereto" immediately after "manufacturing
facility" in the second line thereof.

                  (j) The definition of "Excluded Assets" is amended to add the
following at the end thereof:

      "Notwithstanding anything herein or in any other Loan Document to the
      contrary, "Excluded Assets" shall not include the ALPART Collateral or the
      QAL Collateral, or the proceeds of any Asset Disposition of the VALCO
      Interests or the Gramercy/KJBC Interests."

                  (k) The definition of "Final Order" is deleted in its entirety
      and replaced with the following:

            ""Final Order" means the Third Amended and Restated Final Order
      Authorizing Secured Post-Petition Financing on a Super Priority Basis
      Pursuant to 11 U.S.C. Sections 363, 364, and 507(b) and Granting Relief
      from the Automatic Stay Pursuant to 11 U.S.C. Section 362 entered in the
      Bankruptcy Cases approving the Seventh Amendment and the granting of Liens
      as provided therein, and as the same may hereafter be further amended,
      supplemented or otherwise modified, in each case with the prior written
      consent of the Agent."

                  (l) The following definitions of "Gramercy/KJBC Debt,"
"Gramercy/KJBC Interests" and "Gramercy/KJBC Proceeds" are added in proper
alphabetical order:

            ""Gramercy/KJBC Debt" means an amount equal to the Indebtedness
      owing to the Company or any other Obligor by KJBC that is not indefeasibly
      repaid in full in cash immediately upon an Asset Disposition of the
      Gramercy/KJBC Interests."

            ""Gramercy/KJBC Interests" means the Company's or any other
      Obligor's interests in (i) the real property and other assets associated
      with the facility in Gramercy, Louisiana and/or (ii) KJBC or the assets of
      KJBC."

            ""Gramercy/KJBC Proceeds" means (i) the amount of Net Disposition
      Proceeds from an Asset Disposition with respect to the Gramercy/KJBC
      Interests, to the extent such proceeds are received by the Company or any
      other Obligor, net of (ii) any amounts required by any governmental
      authority or regulatory body or

                                       5
<PAGE>

      by the terms of any agreement or contract with any Person relating to the
      Gramercy/KJBC Interests or by an order of the Bankruptcy Court to pay, or
      deposited into escrow to pay, liabilities associated with such assets and
      business (in each case for so long as such proceeds remain in escrow or
      the same have been applied to such liabilities); provided that no amounts
      shall be netted from the full Net Disposition Proceeds pursuant to this
      clause (ii) until the Agent has received a written request from the
      Company for such netting, describing (and providing documentation, as
      applicable) the requirements of such governmental authority or regulatory
      body, or terms and requirements of any such agreement or contract with any
      Person, in each case with respect to such payments or escrowed funds and
      the liabilities relating thereto, and the same in each case are reasonably
      acceptable to the Agent (including without limitation as to amounts)."

                  (m) The following definition of "KACC Available Amount" is
added in proper alphabetical order:

            ""KACC Available Amount" means the $28,000,000 deposited in a Cash
      Collateral Account in the name of the Company established at Bank of
      America, N.A., in connection with the consummation of the sale of the
      interests in ALPART."

                  (n) The following definition of "KBC Allocable Amount" is
added in proper alphabetical order:

            ""KBC Allocable Amount" means the portion of the Net Disposition
      Proceeds from an Asset Disposition of the Gramercy/KJBC Interests that is
      allocable to KBC pursuant to the Settlement and Release Agreement or, if
      the Settlement Effective Date has not occurred, then pursuant to the
      Purchase Agreement dated as of May 17, 2004, for the sale of the
      Gramercy/KJBC Interests."

                  (o) The definition of "Maximum Letter of Credit Amount" is
amended to change the number "$125,000,000" to "$100,000,000".

                  (p) The following definition of "Minimum Aggregate Proceeds
Collateral" is added in proper alphabetical order:

            ""Minimum Aggregate Proceeds Collateral" means the aggregate of the
      ALPART Collateral and the QAL Collateral; provided that (i) prior to a QAL
      Triggering Event, the Minimum Aggregate Proceeds Collateral shall consist
      of (x) the ALPART Collateral, maintained in Cash Collateral Accounts in
      accordance herewith, plus (y) the QAL Claims, and (ii) after the
      occurrence of a QAL Triggering Event, the Minimum Aggregate Proceeds
      Collateral shall consist of the ALPART Collateral and the QAL Collateral,
      in each case maintained in Cash Collateral Accounts in accordance
      herewith."

                  (q) The definition of "New Domestic Debtor" is deleted in its
entirety and replaced with the following:

                                       6
<PAGE>

            ""New Domestic Debtor" means, each of Alwis, KAE Trading, Kaiser
Center Properties, KBC, KCI and KEC, and "New Domestic Debtors" means all of
them collectively."

                  (r) The definition of "OLV In-Place Value" is deleted in its
entirety and replaced with the following:

            ""OLV In-Place Value" means the appraised value of the Eligible
      Fixed Assets then owned, reduced by such Environmental Compliance Reserve,
      if any, as the Agent, after consultation with the Company, deems
      appropriate in its commercially reasonable discretion."

                  (s) The definition of "Permitted Asset Dispositions" is
deleted in its entirety and replaced with the following:

            ""Permitted Asset Dispositions" means (i) an Asset Disposition of
      the QAL Interests so long as (a) the QAL Collateral is immediately
      deposited in the applicable Cash Collateral Accounts at Bank of America,
      N.A., by the purchaser of the QAL Interests upon consummation of such sale
      and maintained on deposit thereafter in accordance with Sections 9.1.20
      and 9.1.21, (b) the Debtors are released from any further obligation to
      make Investments with respect to QAL and from any Contingent Liabilities
      with respect to QAL other than such indemnification and post-closing
      obligations and liabilities as are customarily found in purchase
      agreements and agreed with the ultimate purchaser of the QAL Interests and
      set forth in the definitive documentation therefor; provided that the
      aggregate amount of such indemnification and post-closing obligations and
      liabilities for which the Company reasonably believes the Debtors may be
      liable shall not exceed an amount that is reasonably acceptable to the
      Required Lenders, all as set forth in a letter agreement between the
      Company and the Agent (acting at the direction of the Required Lenders),
      to be entered into prior to the execution and delivery of a purchase
      agreement relating to the QAL Interests, and (c) all Net Disposition
      Proceeds from such Asset Disposition shall be allocated to KAAC, the
      Company and/or KAII; (ii) an Asset Disposition of the VALCO Interests;
      provided that the terms of any such Asset Disposition and disposition of
      the proceeds thereof are substantially as generally described to the Agent
      and the Lenders prior to the effective date of the Seventh Amendment; and
      (iii) an Asset Disposition of the Gramercy/KJBC Interests pursuant to the
      Purchase Agreement dated as of May 17, 2004, among the Company, KBC,
      Gramercy Alumina LLC and St. Ann Bauxite Limited which was approved by the
      Bankruptcy Court on July 19, 2004."

                  (t) The definition of "PPE Subcomponent Reduction" is deleted
in its entirety and replaced with the following:

            ""PPE Subcomponent Reduction" shall mean an amount equal to (a) the
      aggregate of all Net Disposition Proceeds received by the Parent
      Guarantor, the Company or any Subsidiary from any Asset Dispositions
      effected after the effective date of the Sixth Amendment, except (1) Asset
      Dispositions permitted

                                       7
<PAGE>

      under Sections 9.2.11(a), (b), (c), (d), (f) and (i); (2) sales of
      Accounts owned by the Company, KAII or Kaiser Bellwood; (3) the Asset
      Disposition of the interests in ALPART and certain assets owned by ALPART,
      the sellers of interests in ALPART or their affiliates in the transaction
      that closed on July 1, 2004; and (4) except as hereinafter provided,
      Permitted Asset Dispositions; provided that in the case of any Asset
      Disposition by a less than wholly owned Subsidiary, only the proportionate
      amount of Net Disposition Proceeds received in connection therewith which
      corresponds to the Company's direct or indirect percentage ownership
      interest in such Subsidiary shall be included in a PPE Subcomponent
      Reduction; plus (b) after the occurrence of a Threshold Event, an amount
      equal to $5,000,000 upon each such occurrence, provided that (i) any
      reductions under this clause (b) shall occur no more frequently than once
      each calendar month and (ii) the aggregate reductions under this clause
      (b) shall not cause the PPE Subcomponent to be less than $25,000,000; plus
      (c) at any time on or after the date on which the first reduction of the
      PPE Subcomponent under clause (b) above has occurred, (1) if an Asset
      Disposition of the Gramercy/KJBC Interests has occurred or a Subsidiary
      Plan for KBC has been confirmed, an amount equal to the greater of (i) the
      KBC Allocable Amount and (ii) $3,000,000, plus an amount equal to 50% of
      the Gramercy/KJBC Proceeds (excluding the KBC Allocable Amount) in excess
      of $3,000,000, plus (2) if an Asset Disposition of the VALCO Interests has
      occurred, an amount equal to $7,000,000, plus an amount equal to 50% of
      the VALCO Proceeds in excess of $7,000,000, in each case whether such
      proceeds were received prior to or after a reduction of the PPE
      Subcomponent pursuant to clause (b); provided that any reductions pursuant
      to this clause (c) shall be effective on the later of (x) the Threshold
      Event giving rise to a reduction under clause (b) above and (y)(A) the
      consummation of such Asset Disposition or confirmation of such Subsidiary
      Plan (as applicable) and (B) thereafter upon receipt of any subsequent
      cash payment on notes or deferred payment obligations or purchase price
      adjustments pursuant to clause (i) of the following proviso; provided
      further that (i) any reductions based on the Gramercy/KJBC Proceeds or the
      VALCO Proceeds, as applicable, under this clause (c) shall be made only to
      the extent such proceeds are received directly by the Company or any other
      Obligor, or any Affiliate of an Obligor, in cash or cash equivalents,
      including in respect of cash payments on any promissory notes received as
      part of the consideration for such Asset Disposition and in respect of
      cash payments of deferred payment obligations or purchase price
      adjustments received as consideration in such Asset Disposition, and (ii)
      any subsequent repayment of the Gramercy/KJBC Debt or the VALCO Debt, as
      applicable, shall not increase or otherwise affect the PPE Subcomponent,
      nor shall it reduce or otherwise affect the PPE Subcomponent Reduction;
      plus (d) an amount equal to 100% of the Indebtedness owing to the Company
      or any other Obligor by AJI, KJC and/or KAAC, as applicable, pursuant to
      the Settlement and Release Agreement (whether or not the Settlement
      Effective Date has occurred) that is not indefeasibly repaid in full in
      cash by (1) AJI and KJC immediately upon, or in connection with, an ALPART
      Plan Event or (2) KAAC immediately upon, or in connection with, a QAL Plan
      Event; plus (e) an amount equal to 100% of the

                                       8
<PAGE>

      Indebtedness owing to the Company or any other Obligor by QAL that is not
      indefeasibly repaid in full in cash by QAL immediately upon a QAL Sale
      Event."

                  (u) The following definitions of "QAL Claims," "QAL
Collateral," "QAL Interests," "QAL Plan Event," "QAL Sale Event" and "QAL
Triggering Event" are added in the proper alphabetical order:

            ""QAL Claims" means the Agent's and the Secured Lenders'
      superpriority secured claims against KAAC in the amount of (i) the
      Obligations prior to the Settlement Effective Date and (ii) after the
      Settlement Effective Date, $40,000,000 (plus interest, if any, accruing on
      and investments of, and earnings on and proceeds of investments of, the
      QAL Collateral after a QAL Triggering Event)."

            ""QAL Collateral" means the Net Disposition Proceeds of a QAL Sale
      Event and any other distributions in respect of the QAL Interests
      (including pursuant to a plan of reorganization or liquidation or the
      Settlement and Release Agreement); provided that following the occurrence
      of both the Settlement Effective Date and a QAL Triggering Event in
      accordance with the terms and provisions of this Agreement, the QAL
      Collateral shall be fixed at a principal amount of $40,000,000, and shall
      include such amount, interest accruing thereon and all investments
      thereof, and earnings on and proceeds of investments with respect
      thereto."

            ""QAL Interests" means the ownership interests of the Company, KAAC
      and any other Obligor in QAL, certain contracts, rights and interests or
      loans owned by any Obligor relating to QAL, and any inventory held at QAL
      and owned by any Obligor."

            ""QAL Plan Event" means the effective date of a Subsidiary Plan for
      KAAC, which plan shall provide for cash payments to the Company and
      deposits to Cash Collateral Accounts upon such effective date in the
      amounts required by Section 9.1.20."

            ""QAL Sale Event" means the consummation of an Asset Disposition of
      the QAL Interests."

            ""QAL Triggering Event" means either a QAL Sale Event or a QAL Plan
      Event."

                  (v) The definition of "Secured Guarantor" is deleted in its
entirety and replaced with the following:

            ""Secured Guarantor" means each of Kaiser Bellwood, KAII, Parent
      Guarantor, Akron, KAAC, KACI, KAP, KATSI, KBC, KFC, KMH, KSM, Oxnard,
      Texas Holdings, Texas Sierra, AJI and KJC, and "Secured Guarantors" means
      all of them, collectively."

                                       9
<PAGE>

                  (w) The following definition of "Settlement and Release
Agreement" is added in proper alphabetical order:

            ""Settlement and Release Agreement" means the Settlement and Release
      Agreement dated as of October 5, 2004, among the Obligors and the
      Unsecured Creditors' Committee, in the form attached as Exhibit A to the
      Seventh Amendment."

                  (x) The following definition of "Settlement Effective Date" is
added in proper alphabetical order:

            ""Settlement Effective Date" means the date on which the Settlement
      and Release Agreement becomes effective in accordance with its terms;
      provided that for purposes of the following definitions and sections:

                  "KBC Allocable Amount"
                  "QAL Claims"
                  "QAL Collateral"
                  Section 9.1.20

      the Settlement Effective Date shall be deemed not to have occurred if the
      Approval Order (as defined in the Settlement and Release Agreement) is
      overturned, vacated or otherwise reversed on appeal."

                  (y) The following definition of "Seventh Amendment" is added
in the proper alphabetical order:

            ""Seventh Amendment" means the Seventh Amendment to Post-Petition
      Credit Agreement, Amendment to Subsidiary Guaranty and Consent of
      Guarantors and Acknowledgment and Agreement of AJI, KJC, KFC, KAAC and
      KBC, dated as of ___________, 2004, by and among the Parent Guarantor, the
      Company, the Lenders, the Agent, the Co-Agents and, with respect to
      Section 1.12 thereof, Bank of America, N.A., as depository bank for the
      Cash Collateral Accounts, and acknowledged by AJI, KJC, KFC, KAAC and
      KBC."

                  (z) The following definition of "Subsidiary Plan" is added in
proper alphabetical order:

            "Subsidiary Plan" means a separate standalone plan or plans of
      reorganization or liquidation for AJI, KJC, KAAC, KFC and/or KBC as
      applicable."

                  (aa) The following definitions of "Threshold" and "Threshold
Event" are added in proper alphabetical order:

            ""Threshold" means, as of any date of determination, an amount equal
      to 85% of the Borrowing Base attributable to the sum of (i) amounts
      included under

                                       10
<PAGE>

      clause (a) of the definition of Borrowing Base and (ii) amounts included
      under clause (b) of the definition of Borrowing Base."

            "Threshold Event" means at any time after August 31, 2004, the
      earlier to occur of either of the following events: (x) Revolving Credit
      Outstandings exceed the Threshold for five (5) consecutive Business Days
      or (y) Revolving Credit Outstandings exceed the Threshold for any five (5)
      Business Days in any calendar month; provided that with respect to Section
      9.2.4, the time period for determining whether a "Threshold Event" shall
      have occurred shall be, in the case of clause (x) above, three (3)
      consecutive Business Days and, in the case of clause (y) above, any three
      (3) Business Days."

                  (bb) The following definition of "Unsecured Creditors
Committee" is added in proper alphabetical order:

            ""Unsecured Creditors' Committee" means the Official Committee of
      Unsecured Creditors which was appointed in the Bankruptcy Cases on
      February 22, 2002, as such appointment may be amended from time to time."

                  (cc) The definition of "Unsecured Guarantor" is deleted in its
entirety and replaced with the following:

            "Unsecured Guarantor" means each of the New Domestic Debtors (other
      than KBC) and "Unsecured Guarantors" means all of them, collectively.

                  (dd) The following definitions of "VALCO Debt," "VALCO
Interests" and "VALCO Proceeds" are added in proper alphabetical order:

            ""VALCO Debt" means an amount equal to the Indebtedness owing to the
      Company or any other Obligor by VALCO that is not indefeasibly repaid in
      full in cash upon an Asset Disposition of the VALCO Interests."

            ""VALCO Interests" means the Company's or any other Obligor's
      ownership interests in VALCO and any alumina inventory held at VALCO and
      owned by the Company or any other Obligor."

            ""VALCO Proceeds" means (i) the Net Disposition Proceeds from the
      sale or other disposition of the VALCO Interests, to the extent such
      proceeds are received by the Company or any other Obligor, net of (ii) any
      amounts required by any governmental authority or regulatory body or by
      the terms of any agreement or contract with any Person relating to the
      VALCO Interests or by an order of the Bankruptcy Court to pay, or
      deposited into escrow to pay, liabilities associated with such assets and
      business (in each case for so long as such proceeds remain in escrow or
      the same have been applied to such liabilities; provided that no amounts
      shall be netted from the full Net Disposition Proceeds pursuant to this
      clause (ii) until the Agent has received a written request from the
      Company for such netting, describing (and providing documentation, as
      applicable) the requirements of such governmental authority or regulatory
      body,

                                       11
<PAGE>

      or terms and requirements of any such agreement or contract with any
      Person, in each case with respect to such payments or escrowed funds and
      the liabilities relating thereto, and the same in each case are reasonably
      acceptable to the Agent (including without limitation as to amounts)."

            1.2 AMENDMENT TO SECTION 2.1.1 (REVOLVING COMMITMENT). Section
2.1.1(b) of the Credit Agreement is amended (i) to delete the reference to
"$285,000,000" in clause (x) thereof and to replace it with "$200,000,000" and
(ii) to delete the two references in the last sentence of such Section to the
"Sixth Amendment" and replace them with "Seventh Amendment".

            1.3 AMENDMENT TO SECTION 3.5.1 (COMMITMENT FEE). Section 3.5.1 of
the Credit Agreement is amended to delete the reference to "1/2 of 1% per annum"
and replace it with "0.625% per annum".

            1.4 AMENDMENT TO SECTION 7.4 (ALL CREDIT EXTENSIONS). Section 7.4 of
the Credit Agreement is amended to delete the first sentence thereof and to
replace it with the following:

            "The obligation of each Lender to fund any Loan on the occasion of
      any Credit Extension (including the initial Credit Extension), the
      obligation of Agent to fund any Swingline Loan, the obligation of any
      Issuer Bank to issue any Letter of Credit and the obligation of Agent to
      consent to the withdrawal of the KACC Available Amount from a Cash
      Collateral Account, as the case may be, shall, except as provided in
      Sections 2.1.2(b) and (c), be subject to the prior or concurrent
      satisfaction (or waiver) of each of the conditions precedent set forth in
      this Section 7.4."

            1.5 AMENDMENT TO SECTION 8.1 (ORGANIZATION, ETC.). Section 8.1 of
the Credit Agreement is amended to delete the first sentence thereof and to
replace it with the following:

            "Each of (i) the Obligors, (ii) the Canadian Subsidiaries, (iii)
      Anglesey, (iv) prior to a QAL Sale Event, QAL, (v) prior to a sale of the
      VALCO Interests, VALCO, and (vi) each other Significant Subsidiary of the
      Company is a corporation, partnership, or other entity validly organized
      and existing and (in the case of non-Domestic Subsidiaries and Joint
      Venture Affiliates, to the extent that "good standing" is recognized under
      applicable law) in good standing under the laws of the jurisdiction of its
      incorporation or organization, as the case may be; is duly qualified to do
      business and (in the case of non-Domestic Subsidiaries and Joint Venture
      Affiliates, to the extent that "good standing" is recognized under
      applicable law) in good standing as a foreign corporation, partnership, or
      other entity in each jurisdiction where the nature of its business or
      activities requires such qualification; and has full corporate,
      partnership, or other organizational power and authority and holds all
      requisite governmental licenses, permits, and other approvals to own,
      lease, and operate its Properties and to conduct its business
      substantially as now being operated and conducted, except where the
      failure to be so qualified and in good standing or to have such power,
      authority,

                                       12
<PAGE>

      licenses, permits, and other approvals has no reasonable possibility of
      having a Materially Adverse Effect."

            1.6 AMENDMENT TO SECTION 8.5 (FINANCIAL INFORMATION). Section 8.5 of
the Credit Agreement is amended to add the following clause (d) at the end
thereof:

            "(d) The 2004 Financial Forecast was prepared on the basis of the
      estimates and assumptions stated therein and represented, at May 5, 2004,
      the Company's good faith forecasts and projections of its future financial
      performance prepared after duly diligent investigations; and such 2004
      Financial Forecast, if prepared as of the effective date of the Seventh
      Amendment, would contain estimates of the future financial performance of
      the Company and its Subsidiaries which would not materially and adversely
      differ from the respective estimates contained in the 2004 Financial
      Forecast. As of the effective date of the Seventh Amendment, no material
      developments have occurred since May 5, 2004, which would lead the Company
      to believe that such 2004 Financial Forecast, taken as a whole, is not
      reasonably attainable, subject to the uncertainties and approximations
      inherent in any projections. It is understood by the Agent and the Lenders
      that all of the estimates and assumptions on which such 2004 Financial
      Forecast is based may not prove to be correct, that actual future
      financial performance may vary from that projected, and that nothing
      contained in this clause (d) shall be construed as a warranty, or
      guarantee, of future financial performance."

            1.7 AMENDMENT TO SECTION 8.18 (JOINT VENTURE CONTINGENT
LIABILITIES). Section 8.18 of the Credit Agreement is deleted in its entirety
and replaced with the following:

            "SECTION 8.18. JOINT VENTURE CONTINGENT LIABILITIES. Item 10 ("Joint
      Venture Contingent Liabilities") of the Disclosure Schedule contains a
      fair summary of the types of the material Contingent Liabilities of the
      Company and its Subsidiaries in respect of the businesses, operations, and
      financial obligations of (i) Anglesey, (ii) prior to a QAL Sale Event,
      QAL, and (iii) prior to a sale of the VALCO Interests, VALCO."

            1.8 AMENDMENT TO SECTION 9.1.1 (FINANCIAL INFORMATION, REPORTS,
NOTICES, ETC.). Section 9.1.1 of the Credit Agreement is amended to add the
following clause (o) at the end thereof:

            "(o) as soon as available, but in any event no later than (x) if a
      Threshold Event has occurred or is reasonably expected to occur as a
      result of any of the following, or if the Revolving Credit Outstandings
      exceed the Threshold or are reasonably expected to exceed the Threshold
      after giving effect to any of the following, five (5) Business Days prior
      thereto, and (y) otherwise, as soon as available but in no event later
      than one (1) Business Day thereafter: (i) any Asset Disposition of the QAL
      Interests or the VALCO Interests or (ii) any ALPART Plan Event, a QAL Plan
      Event or the effective date of a Subsidiary Plan for KBC or KFC, the
      Company shall deliver to the Agent a schedule setting forth (1) if an

                                       13
<PAGE>

      Asset Disposition, a detailed description (including an itemized schedule)
      of the use of sale proceeds with respect thereto, (2) in any case, a
      schedule of all Indebtedness and liabilities owing to any (other) Obligor
      by the subject (or owner, as applicable) of such Asset Disposition or
      Subsidiary Plan, as applicable, and (3) a schedule of all such
      Indebtedness and liabilities that shall remain unpaid after consummation
      of such Asset Disposition or effective date of such Subsidiary Plan, as
      applicable, together with a certificate of a Financial Authorized Officer
      of the Company certifying to the Agent and the Lenders that such matters
      are true and correct in all material respects."

            1.9 AMENDMENT TO SECTION 9.1.18 (INVENTORY APPRAISALS). Section
9.1.18 of the Credit Agreement is amended by (a) deleting the caption thereto in
its entirety and replacing it with "SECTION 9.1.18. (APPRAISALS)." and (b)
inserting "(a)" immediately prior to the text thereof and (c) adding a new
paragraph (b) to read as follows:

            "(b) If at any time the Revolving Credit Outstandings exceed eighty
      percent (80%) of the Borrowing Base, the Agent may, at its option and at
      the expense of the Company, obtain an updated appraisal of the Net
      Recovery Percentage of Eligible Fixed Assets to establish the OLV In-Place
      Value, which appraisal shall be from an appraisal firm satisfactory to
      Agent and shall be in scope, form and substance satisfactory to Agent;
      provided that such updated appraisal will be required no more frequently
      than once in every 180-day period, unless a Default or an Event of Default
      shall have occurred and be continuing, in which case the Agent may require
      more frequent appraisals, but in any event no more frequently than
      monthly."

            1.10 ADDITION OF SECTION 9.1.19 (ALPART COLLATERAL). A new Section
9.1.19 is added to the Credit Agreement to read as follows: "SECTION 9.1.19
ALPART COLLATERAL.

            (a) Prior to an ALPART Plan Event, the ALPART Collateral shall, at
      all times, (i) serve as Collateral for the Obligations and (ii) be
      deposited in Cash Collateral Accounts of AJI and KJC, free and clear of
      Liens, claims and encumbrances other than first-priority Liens in favor of
      Agent for its benefit and the benefit of the Secured Lenders, and claims
      which are junior to the Agent's and the Secured Lenders' claims.

            (b) After an ALPART Plan Event, the ALPART Collateral shall, at all
      times, (i) serve as Collateral for the Obligations and (ii) be deposited
      in Cash Collateral Accounts of AJI, KJC and/or the Company, free and clear
      of Liens, claims and encumbrances other than first-priority Liens in favor
      of Agent for its benefit and the benefit of the Secured Lenders, the Lien
      permitted by Section 9.2.3(z) and claims which are junior to the Agent's
      and the Secured Lenders' claims."

                                       14
<PAGE>

            1.11 ADDITION OF SECTION 9.1.20 (QAL TRIGGERING EVENT PAYMENTS). A
new Section 9.1.20 is added to the Credit Agreement to read as follows:

            "9.1.20 QAL TRIGGERING EVENT PAYMENTS. Upon the occurrence of a QAL
      Triggering Event, the following payments will be made from the Net
      Disposition Proceeds of an Asset Disposition of the QAL Interests if a QAL
      Sale Event has occurred, or from payments to the Company in respect of a
      Subsidiary Plan for KAAC if a QAL Plan Event has occurred, and, in either
      case, deposited in a Cash Collateral Account of the applicable Obligor,
      free and clear of Liens, claims and encumbrances other than first-priority
      Liens in favor of Agent for its benefit and the benefit of the Secured
      Lenders, the Lien permitted by Section 9.2.3(z), and claims which are
      junior to the Agent's and the Secured Lenders' claims:

            (a) Upon a QAL Sale Event, the QAL Collateral shall be deposited by
      KAAC and/or such other Obligor, as applicable, in a Cash Collateral
      Account of such Obligor(s); and

            (b) Upon a QAL Plan Event, the QAL Collateral shall be paid to the
      Company and deposited in a Cash Collateral Account of the Company and upon
      such deposit, any amounts held by the Agent pursuant to the preceding
      clause (a) (if any) shall be released as such Obligor(s) direct Agent in
      writing.

      For purposes of clarification, until the Settlement Effective Date, (i)
      any and all proceeds from any Asset Disposition of the QAL Interests
      received by KAAC, the Company or any other Secured Guarantor and (ii) any
      and all amounts paid by KAAC to the Company or any other Secured Guarantor
      in connection with a QAL Plan Event, in each case, shall be part of the
      Collateral and subject to the Lien in favor of the Agent, for the benefit
      of itself and the Secured Lenders. After the Settlement Effective Date,
      the QAL Collateral shall serve as Collateral for the Obligations."

            1.12 ADDITION OF SECTION 9.1.21 (CASH COLLATERAL ACCOUNTS; GRANT OF
SECURITY INTERESTS). The following Section 9.1.21 is added to the Credit
Agreement:

            "SECTION 9.1.21 CASH COLLATERAL ACCOUNTS; GRANT OF SECURITY
      INTERESTS. (a) Agent shall deposit all funds paid to Agent pursuant to
      Sections 9.1.19, 9.1.20 and 9.2.18 and the KACC Available Amount as cash
      collateral to the credit of a Cash Collateral Account owned by the
      applicable Obligor. As security for the payment of all Obligations, the
      Company hereby grants, conveys, assigns, pledges, sets over, and transfers
      to the Agent, and creates in the Agent's favor, a first-priority Lien on
      and security interest in the ALPART Collateral, the QAL Collateral, the
      KBC Allocable Amount, the Cash Collateral Accounts and all money,
      instruments, securities, financial assets, investment property and other
      property at any time deposited in, held in, credited to or acquired in
      connection with the Cash Collateral Accounts, together with all proceeds
      of any of the foregoing (including without limitation dividends payable in
      cash or stock and

                                       15
<PAGE>

      shares or other proceeds of conversions or splits of any securities in the
      Cash Collateral Accounts), and all interest accruing thereon and
      investments thereof, and earnings on and proceeds of investments with
      respect thereto, for the benefit of the Agent and the Secured Lenders. The
      Company shall cause each of AJI, KJC, KAAC, KBC and each other Obligor, as
      applicable, to execute and deliver to the Agent a security agreement or
      cash collateral account agreement in form and substance satisfactory to
      the Agent pursuant to which each of AJI, KJC, KAAC, KBC and/or such other
      Obligor shall, as security for the payment of all Guarantied Obligations
      (as defined in the Subsidiary Guaranty), grant, convey, assign, pledge,
      set over, and transfer to the Agent, and create in the Agent's favor, a
      first-priority Lien on and security interest in the ALPART Collateral, the
      QAL Collateral, the KBC Allocable Amount, the Cash Collateral Accounts and
      all money, instruments, securities, financial assets, investment property
      and other property at any time deposited in, held in, credited to or
      acquired in connection with the Cash Collateral Accounts, together with
      all proceeds of any of the foregoing (including without limitation
      dividends payable in cash or stock and shares or other proceeds of
      conversions or splits of any securities in the Cash Collateral Accounts),
      and all interest accruing thereon and investments thereof, and earnings on
      and proceeds of investments with respect thereto, for the benefit of the
      Agent and the Secured Lenders. None of the Company, AJI, KJC, KAAC, KBC or
      any other Obligor shall have any right to withdraw or to cause the Agent
      to withdraw any funds deposited in the Cash Collateral Accounts, except
      that, (w) upon satisfaction of the conditions set forth in Section 7.4,
      the Company may request that Agent permit withdrawal of amounts up to the
      then-outstanding KACC Available Amount and the Agent will permit such
      withdrawal, (x) funds on deposit in any deposit or securities accounts of
      AJI and KJC maintained at Bank of America, N.A., or its affiliates, other
      than the ALPART Collateral, may be withdrawn by AJI and KJC (and, at the
      request of AJI or KJC, the Agent will take any action reasonably necessary
      to permit such withdrawal) to pay the Professional Fees specifically
      relating to the Bankruptcy Cases of AJI, KJC and KBC or to make
      distributions under a Subsidiary Plan for AJI and KJC; provided that with
      respect to KBC, any withdrawal shall only be to the extent that the
      Company has not previously advanced funds for the Professional Fees of KBC
      pursuant to Section 9.2.14 hereof, (y) the ALPART Collateral and the QAL
      Collateral may be transferred from the Cash Collateral Accounts of AJI,
      KJC and KAAC, as applicable, to Cash Collateral Accounts of the Company in
      accordance with Sections 9.1.19 and 9.1.20 hereof and (z) the KBC
      Allocable Amount may be transferred to AJI and/or KJC in accordance with
      Section 9.2.18 hereof. Amounts held in the Cash Collateral Accounts may be
      invested from time to time in Cash Equivalent Investments as directed by
      the applicable Obligor and at such Obligor's sole investment risk, but
      held in the name of the Agent. At any time and from time to time, upon the
      Agent's request, the Company promptly shall, and shall cause AJI, KJC,
      KAAC, KBC and each other Obligor, as applicable, to, execute and deliver
      any and all such further instruments and documents (including financing
      statements and bond powers executed in blank) as may be necessary,
      appropriate, or desirable in the Agent's judgment to obtain the full

                                       16
<PAGE>

      benefits (including perfection and priority) of this Section 9.1.21 and of
      the rights and powers herein granted. None of the Company, AJI, KJC, KAAC,
      KBC or any other Obligor shall create or suffer to exist any Lien on any
      amounts or investments held in the Cash Collateral Accounts other than (i)
      the first-priority Liens granted under this Section 9.1.21 and the
      Acknowledgment and Agreement of AJI, KJC, KFC, KAAC and KBC executed in
      connection with the Seventh Amendment and (ii) the junior Liens permitted
      under Section 9.2.3(z). Notwithstanding anything herein or in any other
      Loan Document to the contrary, neither the Agent nor any Secured Lender
      shall be under any obligation to marshal any assets in favor of any
      Obligor or any other party or against or in payment of any or all of the
      Obligations, including without limitation the Cash Collateral Accounts or
      any money, instruments, securities, financial assets, investment property
      or other property at any time deposited in, held in, credited to or
      acquired in connection with the Cash Collateral Accounts or any proceeds
      thereof. Each of the Agent, the Company, AJI, KJC, KAAC, KBC, each other
      Obligor and, by its execution of a counterpart of the Seventh Amendment,
      Bank of America, N.A., as depository bank with respect to the Cash
      Collateral Accounts, agree that Bank of America, N.A., will comply with
      all instructions and entitlement orders originated by the Agent directing
      disposition of the funds and investments in the Cash Collateral Accounts
      without further consent by the Company, AJI, KJC, KAAC, KBC or any other
      Obligor, and the Agent shall have sole and exclusive dominion and control
      over the Cash Collateral Accounts.

            (b) On or at any time after the Settlement Effective Date, AJI and
      KJC may request that the Agent permit withdrawal from any deposit or
      securities accounts maintained by AJI and KJC at Bank of America, N.A., or
      its affiliates any amounts on deposit in excess of the amount of the
      ALPART Collateral and the Agent will permit such withdrawal; provided that
      if the Approval Order (as defined in the Settlement and Release Agreement)
      is overturned, vacated or otherwise reversed on appeal, all rights of
      withdrawal of AJI and KJC pursuant to this clause (b) shall terminate
      immediately.

            (c) AJI, KJC, KAAC, KBC and any other Obligor, as applicable, shall
      pay to Bank of America, N.A., fees and investment charges, if any, charged
      by Bank of America, N.A., or its affiliates with respect to the Cash
      Collateral Accounts and other deposit or securities accounts, which
      charges (if any) shall be consistent with those customarily charged by
      Bank of America, N.A., with respect to the maintenance of accounts similar
      to the Cash Collateral Accounts."

            1.13 AMENDMENT TO SECTION 9.2.3 (LIENS). Section 9.2.3 of the Credit
Agreement is amended:

            (a) to delete clause (t) thereof and to replace it with the
      following:

            "(t) Liens consisting of rights to (but not a security interest in)
      proceeds of Asset Dispositions held in escrow in connection with such
      Asset Disposition;"

                                       17
<PAGE>

            (b) to delete the word "and" at the end of clause (x),

            (c) to delete the period at the end of clause (y) and replace it
      with "; and"

            and (d) to add the following clause (z) at the end of such Section:

            "(z) if all or any portion of the ALPART Collateral and/or QAL
      Collateral is, pursuant to the Settlement and Release Agreement,
      transferred by AJI, KJC and/or KAAC to the Company in connection with a
      ALPART Plan Event and/or QAL Plan Event, a Lien in favor of AJI, KJC
      and/or KAAC, as applicable, on the ALPART Collateral and/or QAL
      Collateral, as applicable, securing (and solely to the extent of) any such
      amount(s) so transferred, which Lien is junior and subordinate to the Lien
      in favor of the Agent and the Secured Lenders and is subject to an
      intercreditor agreement, in form and substance satisfactory to the Agent
      in its sole discretion."

            1.14 AMENDMENT TO SECTION 9.2.4 (MINIMUM EBITDA). Section 9.2.4 of
the Credit Agreement is deleted in its entirety and replaced with the following:

            "SECTION 9.2.4 MINIMUM EBITDA. Commencing with the first month in
      which a Threshold Event occurs and continuing through the then-remaining
      term of this Agreement, the Company and its Subsidiaries, on a
      consolidated basis, shall have a minimum EBITDA of not less than the
      following amounts, measured as of the last day of such month and each
      month thereafter for the period specified below:

<TABLE>
<CAPTION>
         Period                                EBITDA
------------------------                    -------------
<C>                                         <C>
1 month ending 10/31/04                     $(22,500,000)
2 months ending 11/30/04                    $(20,500,000)
3 months ending 12/31/04                    $(19,500,000)
</TABLE>

      The minimum EBITDA amounts set forth above include the expected EBITDA
      amounts attributable to the Gramercy/KJBC Interests, the QAL Interests and
      the VALCO Interests for each month in the period from October 1, 2004
      through December 31, 2004, as agreed in writing by the Company and the
      Required Lenders prior to the effective date of the Seventh Amendment (the
      "Attributable EBITDA Amounts"). Upon consummation of a QAL Triggering
      Event and/or an Asset Disposition of the Gramercy/KJBC Interests and/or
      the VALCO Interests, the minimum EBITDA amounts set forth above for each
      period ending after the QAL Triggering Event or such Asset Disposition is
      consummated will automatically be reduced by an amount equal to the
      product of (i) the Attributable EBITDA Amount attributable to the
      Gramercy/KJBC Interests, the QAL Interests and/or the VALCO Interests,
      respectively, for the applicable period, times (ii) a fraction, the
      numerator of which is the number of days remaining in such period and the
      denominator of which is the total number of days in such period. All

                                       18
<PAGE>

      reductions to the minimum EBITDA amounts pursuant to the foregoing
      sentence will be cumulative for all such Asset Dispositions."

            1.15 AMENDMENT TO SECTION 9.2.11 (ASSET DISPOSITIONS). Section
9.2.11 of the Credit Agreement is amended to delete the last sentence of such
Section.

            1.16 AMENDMENT TO SECTION 9.2.14 (TRANSACTIONS WITH AFFILIATES).
Section 9.2.14 of the Credit Agreement is amended to add the following paragraph
immediately after the second paragraph of that Section:

            "Notwithstanding any other provision of this Agreement, on and after
      the effective date of the Seventh Amendment, the Company will not, and
      will not permit any of its Subsidiaries to, enter into, or cause, suffer
      or permit to exist any transaction, arrangement, or contract between any
      Obligor and any of AJI, KJC, KFC, ALPART, KAAC, KBC and/or QAL requiring,
      constituting or involving any payments or other transfers of Property to
      be made by any Obligor to or for the benefit of, or pursuant to which any
      Obligor incurs a Contingent Liability in respect of any obligation of, or
      incurs a contractual obligation for the benefit of, AJI, KJC, KFC, ALPART,
      KAAC, KBC and/or QAL other than transactions, arrangements and contracts
      entered into in the ordinary course of business consistent with past
      practice and on a basis no less favorable to any Obligor than would be
      obtained in an arm's length transaction with a Person that is not an
      Affiliate of such Obligor; provided that the foregoing shall not restrict
      or otherwise be deemed to prohibit (i) the transactions contemplated under
      the Seventh Amendment and consummated in accordance therewith (including,
      without limitation, those transactions set forth in the definition of
      "Permitted Asset Dispositions,") or (ii) the transactions under the
      Settlement and Release Agreement (whether or not the Settlement Effective
      Date has occurred); and provided further that all costs and expenses
      (including Professional Fees) relating to the Bankruptcy Cases of AJI,
      KJC, KFC, KAAC and KBC incurred after June 30, 2004, shall be payable only
      by AJI, KJC, KAAC (on behalf of itself and KFC) and KBC (or by AJI and/or
      KJC on behalf of KBC), as applicable, and shall not be charged to or paid
      by any other Obligor or assessed against the Collateral, except that (a)
      the Company may advance payments for Professional Fees of KFC and KAAC
      incurred after June 30, 2004, but prior to the occurrence of a QAL
      Triggering Event and shall be reimbursed for such payments immediately
      upon a QAL Triggering Event from the Net Disposition Proceeds (other than
      the QAL Collateral) of a QAL Sale Event or distributions (other than the
      QAL Collateral) to the Company pursuant to a Subsidiary Plan for KAAC, and
      (b) the Company may advance payments for Professional Fees of KBC incurred
      after June 30, 2004, but prior to the closing of the Asset Disposition of
      the Gramercy/KJBC Interests, and the Company shall be reimbursed for such
      payments (with interest at a rate equal to the sum of (x) the Reference
      Rate from time to time in effect and (y) a margin of 1-1/2%) immediately
      (and in any event prior to the transfer of any portion of the KBC
      Allocable Amount, or the making of any other distributions or transfers,
      to AJI and/or KJC) from the KBC Allocable Amount prior to the transfer of
      such amount to AJI and/or KJC pursuant to Section 9.2.18 hereof;

                                       19
<PAGE>

      provided that KACC shall not be obligated to pay Professional Fees of KBC
      in excess of the KBC Allocable Amount; provided further that all costs and
      expenses (including Professional Fees) incurred by KBC after the Asset
      Disposition of the Gramercy/KJBC Interests shall be charged to KBC and
      payable by KBC's estate or, if necessary, by AJI and KJC out of funds
      other than the ALPART Collateral."

            1.17 AMENDMENT TO SECTION 9.2.18 (INTERCOMPANY TRANSFERS OF
PROPERTY). Section 9.2.18 of the Credit Agreement is amended to add the
following clause (ix) at the end thereof:

            "(ix) in connection with an Asset Disposition with respect to the
      Gramercy/KJBC Interests in compliance with this Agreement, the KBC
      Allocable Amount may be transferred by KBC to AJI and/or KJC in accordance
      with the terms of the Settlement and Release Agreement; provided that the
      foregoing permitted transfer shall only take place after making any
      required reimbursement to the Company pursuant to Section 9.2.14 (together
      with interest thereon as provided therein), and the amount so transferred
      shall be reduced accordingly by all such amounts; provided further that
      until such permitted transfer, the KBC Allocable Amount shall be
      Collateral and deposited and maintained in a Cash Collateral Account of
      KBC; provided further that the KBC Allocable Amount shall not (a) exceed
      $7,000,000 or (b) be funded directly or indirectly from the proceeds of
      any Loans. Neither KBC nor any other Obligor shall have any right to
      withdraw any funds deposited in such account except as provided in the
      immediately preceding sentence or to reimburse the Company in accordance
      with Section 9.2.14 (together with interest thereon as provided therein)."

            1.18 AMENDMENT TO SECTION 9.2.20 (ADDITIONAL INVESTMENTS IN PERSONS
OTHER THAN DEBTORS). Section 9.2.20 of the Credit Agreement is deleted in its
entirety and replaced with the following:

                  "SECTION 9.2.20 ADDITIONAL INVESTMENTS IN PERSONS OTHER THAN
            DEBTORS. Notwithstanding anything to the contrary contained in
            Sections 9.2.2, 9.2.5 and 9.2.18 hereof, after the effective date of
            the Seventh Amendment, the Company and the Parent Guarantor shall
            not (or apply to the Bankruptcy Court to do so), and will not permit
            any Guarantor to (or permit any Guarantor to apply to the Bankruptcy
            Court to), make any cash Investments in, or incur any Contingent
            Liabilities to pay the Indebtedness of, any Person other than a
            Debtor except (i) Investments and Contingent Liabilities to the
            extent reflected in the 2004 Financial Forecast (other than with
            respect to Investments in, and Contingent Liabilities incurred on
            behalf of, QAL); provided that solely with respect to Investments
            in, and Contingent Liabilities incurred on behalf of, QAL (and
            without duplication of any amounts in the 2004 Financial Forecast),
            the Company may make Investments in KAAC or QAL, and KAAC may make
            Investments in QAL, in each case, solely to pay capital expenditures
            of QAL in an aggregate amount not to exceed $15,000,000 in Fiscal
            Year 2004; provided further that upon a QAL

                                       20
<PAGE>

            Triggering Event, any Investments in, or Contingent Liabilities
            incurred on behalf of, KAAC or QAL on or after June 30, 2004, shall
            be immediately repaid in full in cash by QAL and KAAC to the
            respective Obligor, (ii) Investments made in, or Contingent
            Liabilities incurred on behalf of, Anglesey or VALCO not reflected
            in the 2004 Financial Forecast in an amount not to exceed
            $10,000,000 per annum (so long as, after giving effect to any
            Investment made or Contingent Liability incurred pursuant to this
            clause (ii), an Event of Cash Dominion shall not have occurred and
            be continuing by reason thereof), and (iii) Investments in or
            Contingent Liabilities in respect of Kaiser Aluminum and Chemical of
            Canada Limited not reflected in the 2004 Financial Forecast for the
            purpose of Capital Expenditures not to exceed $5,000,000 per annum,
            in each case to the extent permitted under Section 9.2.7.
            Notwithstanding the foregoing or anything in the 2004 Financial
            Forecast to the contrary, the Company and the Parent Guarantor shall
            not (or apply to the Bankruptcy Court to do so), and will not permit
            any Guarantor to (or permit any Guarantor to apply to the Bankruptcy
            Court to), make any cash Investments in, or incur any Contingent
            Liabilities to pay the Indebtedness of (i) ALPART, AJI, KJC or KFC,
            (ii) on and following a QAL Triggering Event, QAL or KAAC, (iii) on
            and after an Asset Disposition of the VALCO Interests, VALCO, and
            (iv) KJBC or KBC."

            1.19 ADDITION OF SECTION 9.2.25 (SETTLEMENT AND RELEASE AGREEMENT).
A new Section 9.2.25 is added to read as follows:

            "SECTION 9.2.25 SETTLEMENT AND RELEASE AGREEMENT. The Obligors shall
      not enter into any agreement for the settlement or release of intercompany
      claims except an agreement in form and substance identical to the
      Settlement and Release Agreement, with such modifications thereto (or to
      the Settlement and Release Agreement, as applicable) as may be approved by
      the Agent and the Lenders holding at least 86% of the then aggregate
      outstanding principal amount of the Revolving Credit Outstandings or, if
      no such principal amount is then outstanding, Lenders having at least 86%
      of the Revolving Commitments. In the case of any inconsistency between the
      Settlement and Release Agreement and the Seventh Amendment (and this
      Agreement as amended thereby), the provisions of the Seventh Amendment
      (and this Agreement as amended thereby) shall control."

            1.20 AMENDMENT TO SECTION 10.1.3 (NON-PERFORMANCE OF CERTAIN
COVENANTS AND OBLIGATIONS). Section 10.1.3 is amended to insert "9.1.1 or"
before "9.2.20" in the sixth line thereof.

            1.21 AMENDMENT TO SECTION 10.1.10 (BANKRUPTCY CASES). Section
10.1.10 is amended to (a) add the following clauses:

            "(i) any Debtor files a motion seeking to use any cash collateral
      held by the Agent or withdraw any amounts from any Cash Collateral Account
      (including to fund any adjustments to the net cash proceeds received with
      respect to a QAL

                                       21
<PAGE>

      Triggering Event), except as provided in Sections 9.1.21 and 9.2.18, or
      any other Person files such a motion and the Debtors fail to object
      thereto in good faith and in a timely manner, or

            (j) an order is entered by the Bankruptcy Court authorizing use of
      such cash collateral described in the preceding clause (i), or, except as
      provided in Sections 7.4 and 9.1.21 with respect to the KACC Available
      Amount or except as provided in Sections 9.1.21(b) and 9.2.18, withdrawal
      of any amounts from any Cash Collateral Account, other than to transfer to
      another Cash Collateral Account as expressly permitted by this Agreement,
      or

            (k) a QAL Triggering Event occurs and the Minimum Aggregate Proceeds
      Collateral are less than $60,000,000; or

            (l) a Plan(s) of Reorganization with respect to all Debtors is not
      filed on or before February 13, 2005, or any such Plan of Reorganization
      filed with respect to the Debtors does not provide for termination of all
      Revolving Commitments and indefeasible payment in full in cash of all
      Obligations (and cancellation of all Letters of Credit or provision of
      cash collateral or a Supporting Letter of Credit for all Letters of Credit
      in accordance with the requirements of this Agreement) on or before the
      effective date of such Plan(s) of Reorganization, or any such Plan of
      Reorganization with respect to the Company does not include an agreement
      that (i) with respect to any amounts effectively loaned to the Company
      (such amounts, the "Affiliate Loans") by any of AJI, KJC and/or KAAC (or
      any other Person, as applicable) (each of the foregoing for purposes of
      this Section 10.1.10(l), an "Affiliate Lender") in accordance with the
      Settlement and Release Agreement, such Affiliate Loans shall be capped at
      a maximum of $55,000,000, and (ii) if the repayment of any portion of such
      Affiliate Loans cannot be paid at the time of consummation of such Plan of
      Reorganization (due to insufficient liquid assets of the Company), then
      the repayment of such portion of the Affiliate Loan shall be deferred
      until such time, not later than eighteen (18) months after the effective
      date of such Plan of Reorganization, as reasonably determined by the
      Company and the Unsecured Creditors Committee in conjunction with such
      Plan of Reorganization, at which time such claim shall be paid in full
      together with interest at the rate of twelve percent (12%) per annum."

            And (b) to add the following proviso at the end of clause (c):

      "provided, however, that separate Subsidiary Plans may be proposed by (i)
      AJI and KJC, jointly, so long as such Subsidiary Plan (x) provides that
      AJI and KJC shall each affirm their Subsidiary Guaranty (or execute a
      replacement guaranty that is satisfactory to Agent in its sole discretion)
      in an amount equal to the portion of the ALPART Collateral that has not
      been transferred to a Cash Collateral Account of the Company pursuant to
      such Subsidiary Plan, (y) provides that the ALPART Collateral shall remain
      in Cash Collateral Accounts maintained by AJI, KJC and/or the Company
      until the Obligations are indefeasibly repaid in full in cash and the
      Agreement is terminated and (z) is consistent with the terms

                                       22
<PAGE>

      of the Settlement and Release Agreement (whether or not the Settlement
      Effective Date has occurred), (ii) KAAC so long as such Subsidiary Plan
      (x) provides for a cash payment (from funds that do not directly or
      indirectly come from borrowings under the Loan Documents) to the Company
      upon the effective date of such Subsidiary Plan in an amount equal to the
      QAL Collateral and the deposit thereof in a Cash Collateral Account in
      accordance herewith, (y) provides for a cash payment (from funds that do
      not directly or indirectly come from borrowings under the Loan Documents)
      to the Company in an amount equal to the Professional Fees and
      disbursements paid by the Company on behalf of KAAC and KFC pursuant to
      Section 9.2.14 and (z) is consistent with the terms of the Settlement and
      Release Agreement (whether or not the Settlement Effective Date has
      occurred), (iii) KBC, so long as (x) a cash payment (from funds that do
      not directly or indirectly come from borrowings under the Loan Documents)
      is made to the Company in an amount equal to the Professional Fees and
      disbursements paid by the Company on behalf of KBC pursuant to Section
      9.2.14 and not previously reimbursed (together with interest thereon as
      provided therein) and (y) such Subsidiary Plan is consistent with the
      terms of the Settlement and Release Agreement (whether or not the
      Settlement Effective Date has occurred), and (iv) KFC, so long as such
      Subsidiary Plan is consistent with the terms of the Settlement and Release
      Agreement (whether or not the Settlement Effective Date has occurred);
      provided further that, in the case of clauses (i) and (ii) above, the
      Debtors shall have been released from any further obligation to make
      Investments with respect to, or incur any Contingent Liabilities with
      respect to, ALPART or QAL (as applicable) and, in the case of a Subsidiary
      Plan for AJI and KJC, all claims of AJI and KJC against the Company or any
      other Obligor are released and discharged (other than such claims as are
      contemplated in the Settlement and Release Agreement, subject to Section
      10.1.10(l) hereof);"

            1.22 ADDITION OF SECTION 10.1.13 (EXCESS PAYMENT TO PBGC). A new
Section 10.1.13 is added to read as follows:

            "SECTION 10.1.13 EXCESS PAYMENT TO PBGC. Any Obligor, or any other
      Person on behalf of any Obligor, shall make any payment to the PBGC (or
      any other third-party, including without limitation a replacement Plan)
      with respect to any Claims of the PBGC (including without limitation any
      Claims under Section 365 or 503 of the Bankruptcy Code) which payment,
      when aggregated with all such other similar payments made prior to or
      concurrently therewith, shall cause the aggregate of all such payments to
      exceed $25,000,000; provided, however, that after the Settlement Effective
      Date, each of AJI, KJC and KAAC may make such payments in connection with
      its Subsidiary Plan so long as such payments are not (i) funded directly
      or indirectly from the proceeds of any Loans or (ii) made from the
      Collateral, including without limitation the ALPART Collateral or the QAL
      Collateral."

            1.23 AMENDMENT TO SECTION 12.3 (PAYMENT OF COSTS AND EXPENSES). The
last paragraph of Section 12.3 of the Credit Agreement is amended to add at the
end of such Section "or the definition of Borrowing Base."

                                       23
<PAGE>

            1.24 AMENDMENT TO TABLE OF CONTENTS (SCHEDULES). Page vii of the
Table of Contents is amended to replace "Schedule I [Intentionally Omitted]"
with "Schedule I Eligible Fixed Assets".

            1.25 ADDITION OF SCHEDULE I (ELIGIBLE FIXED ASSETS). A new Schedule
I (Eligible Fixed Assets) is added to the Credit Agreement in the form of
Schedule I (Eligible Fixed Assets) hereto.

      2. AMENDMENT TO SUBSIDIARY GUARANTY. Reference is made to (i) that certain
Subsidiary Guaranty dated as of February 12, 2002, made by certain Subsidiaries
of the Company, including, inter alia, AJI, KJC, KAAC and KFC, in favor of the
Agent (as amended prior to the date hereof, the "Original Guaranty"), and (ii)
that certain Subsidiary Guaranty dated as of March 17, 2003, made by certain
Subsidiaries of the Company, including, inter alia, AJI, KJC and KBC, in favor
of the Agent (as amended prior to the date hereof, the "Additional Guaranty").
Subject to the conditions and upon the terms set forth in this Amendment, the
Subsidiary Guaranty is hereby amended as follows:

            2.1 ADDITION OF SECTION 2.11 (LIMITATIONS ON RECOURSE AS TO CERTAIN
SUBSIDIARIES) TO THE ORIGINAL GUARANTY. A new Section 2.11 is added to the
Original Guaranty to read as follows:

            "SECTION 2.11 LIMITATIONS ON RECOURSE AS TO CERTAIN SUBSIDIARIES.
      Notwithstanding anything herein to the contrary, the following limitations
      on recourse to AJI, KJC, KFC and KAAC under this Guaranty shall apply:

            (a) The recourse liability of AJI and KJC under this Guaranty shall
      be limited, on an aggregate basis, to an amount equal to the ALPART
      Claims; provided that AJI's and KJC's liability under this Guaranty,
      including with respect to this Section 2.11(a), shall continue to be joint
      and several at all times.

            (b) After the occurrence of the Settlement Effective Date in
      compliance with the terms and conditions of the Credit Agreement, the
      recourse liability of KAAC under this Guaranty shall be limited to the QAL
      Claims.

            (c) After the occurrence of both the Settlement Effective Date and a
      QAL Plan Event and transfer of the QAL Collateral to the Company in
      compliance with the terms of the Credit Agreement, KAAC shall have no
      liability under this Guaranty.

            (d) After the occurrence of both the Settlement Effective Date and
      the effective date of a Subsidiary Plan for KFC, KFC shall have no
      liability under this Guaranty.

      Notwithstanding anything herein or in any other Loan Document to the
      contrary, the Settlement Effective Date shall be deemed not to have
      occurred, and the limitations and releases of this Section 2.11 shall be
      of no force or effect and

                                       24
<PAGE>

      deemed void ab initio, if the Approval Order (as defined in the Settlement
      and Release Agreement) is overturned, vacated or otherwise reversed on
      appeal."

            2.2 ADDITION OF SECTION 2.11 (LIMITATIONS ON RECOURSE AS TO CERTAIN
SUBSIDIARIES) TO THE ADDITIONAL GUARANTY. A new Section 2.11 is added to the
Additional Guaranty to read as follows:

            "SECTION 2.11 LIMITATIONS ON RECOURSE AS TO CERTAIN SUBSIDIARIES.
      Notwithstanding anything herein to the contrary, the following limitations
      on recourse of AJI, KJC and KBC under this Guaranty shall apply:

            (a) The recourse liability of AJI and KJC under this Guaranty shall
      be limited, on an aggregate basis, to an amount equal to the ALPART
      Claims; provided that AJI's and KJC's liability under this Guaranty,
      including with respect to this Section 2.11(a), shall continue to be joint
      and several at all times.

            (b) After the occurrence of both the Settlement Effective Date and
      the effective date of a Subsidiary Plan for KBC, KBC shall have no
      liability under this Guaranty.

      Notwithstanding anything herein or in any other Loan Document to the
      contrary, the Settlement Effective Date shall be deemed not to have
      occurred, and the limitations and releases of this Section 2.11 shall be
      of no force or effect and deemed void ab initio, if the Approval Order (as
      defined in the Settlement and Release Agreement) is overturned, vacated or
      otherwise reversed on appeal."

      3. RELEASE OF CLAIMS. Following the Settlement Effective Date, each of the
Agent and each Secured Lender agrees to, and hereby does, release any and all
claims arising under the Credit Agreement and the other Loan Documents and held
by the Agent or such Secured Lender as against AJI, KJC, KFC, KAAC and/or KBC,
as applicable, but, with respect to AJI, KJC and KAAC, only to the extent such
claim is in excess of the ALPART Claims and/or the QAL Claims, as applicable,
all as more fully and expressly provided herein (and in the Credit Agreement, as
amended hereby), and subject to all of the conditions and terms hereof and
thereof; provided, however, the releases provided for in this Section 3 shall
not apply to (i) KAAC until the occurrence of a QAL Triggering Event and the
deposit of the QAL Collateral in the Cash Collateral Accounts as required by the
Credit Agreement, as amended hereby, (ii) KBC until the effective date of a
Subsidiary Plan for KBC in accordance with the terms of the Credit Agreement, as
amended hereby, and (iii) KFC until the effective date of a Subsidiary Plan for
KFC in accordance with the terms of the Credit Agreement, as amended hereby.
Notwithstanding anything herein or in any other Loan Document to the contrary,
the Settlement Effective Date shall be deemed not to have occurred, and the
limitations and releases of this Section 3 shall be of no force or effect and
deemed void ab initio, if the Approval Order (as defined in the Settlement and
Release Agreement) is overturned, vacated or otherwise reversed on appeal.

      4. REPRESENTATIONS AND WARRANTIES OF PARENT GUARANTOR AND THE COMPANY.
Each of the Parent Guarantor and the Company represents and

                                       25
<PAGE>

warrants to each Lender and the Agent that the following statements are true,
correct and complete:

            4.1 POWER AND AUTHORITY. Each of the Parent Guarantor, the Company
and each other Obligor has all corporate or other organizational power and
authority to enter into this Amendment and, as applicable, the Consent of
Guarantors attached hereto (the "Consent"), and to carry out the transactions
contemplated by, and to perform its obligations under or in respect of, the
Credit Agreement, as amended hereby.

            4.2 DUE AUTHORIZATION, NON-CONTRAVENTION. The execution, delivery
and performance by the applicable Obligor of this Amendment and the Consent and
the performance of the obligations of each Obligor under or in respect of the
Credit Agreement as amended hereby have been duly authorized by all necessary
corporate or other organizational action, and do not (a) contravene such
Obligor's Organic Documents, (b) contravene any contractual restriction entered
into after the Petition Date where such a contravention has a reasonable
possibility of having a Materially Adverse Effect, or contravene any law or
governmental regulation or court order binding on or affecting such Obligor, or
(c) result in, or require the creation or imposition of, any Lien on any of such
Obligor's properties.

            4.3 EXECUTION, DELIVERY AND ENFORCEABILITY. This Amendment and the
Consent have been duly executed and delivered by each Obligor which is a party
thereto and constitute the legal, valid and binding obligations of such Obligor,
enforceable in accordance with their terms.

            4.4 NO DEFAULT OR EVENT OF DEFAULT. After giving effect to this
Amendment, no event has occurred and is continuing or will result from the
execution and delivery of this Amendment or the Consent that would constitute a
Default or an Event of Default.

            4.5 REPRESENTATIONS AND WARRANTIES, ETC. All of the conditions set
forth in Section 7.4 of the Credit Agreement, giving effect to this Amendment,
have been met on and as of the date hereof and as of the effective date of this
Amendment.

      5. CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT. This Amendment shall be
effective only if and when (a) this Amendment has been signed by, and when
counterparts hereof shall have been delivered to the Agent (by hand delivery,
mail or telecopy) by, the Parent Guarantor, the Company and all Lenders, and
counterparts of the Consent have been delivered to the Agent by the Parent
Guarantor and each Subsidiary Guarantor; (b) each of AJI, KJC, KFC, KAAC and KBC
shall have executed and delivered to the Agent an acknowledgement confirming its
obligations under this Amendment and the agreements set forth herein; (c) this
Amendment shall have been approved by the Bankruptcy Court in the Chapter 11
Cases pursuant to the Final Order, all in form and substance satisfactory to the
Agent and its counsel and on notice satisfactory to them, in each case in their
sole discretion, and the Agent shall have received a copy of the Final Order
entered by the Bankruptcy Court, which order shall have become final; (d) the
Company has paid to the Agent, for the ratable benefit of the Lenders, an
amendment fee equal to 0.00875 times the Revolving Commitment Amount (after
giving effect to this Amendment); (e) the Company has paid to the Agent and the
Lenders, as applicable, all fees and expenses due to the Agent and the Lenders

                                       26
<PAGE>

under the Loan Documents; and (f) each of the Company, AJI, KJC, KFC, KAAC and
KBC shall have executed and delivered to the Agent agreements (including control
agreements), in form and substance satisfactory to the Agent, (i) granting to
the Agent Liens on the ALPART Collateral, the QAL Collateral, the KBC Allocable
Amount, the Cash Collateral Accounts and all funds, instruments, securities,
financial assets, investment property and other property deposited therein, held
therein, credited thereto or acquired in connection therewith and (ii)
perfecting the same.

      6. EFFECT OF AMENDMENT; RATIFICATION. This Amendment is a Loan Document.
From and after the date on which this Amendment becomes effective, all
references in the Loan Documents to the Credit Agreement shall mean the Credit
Agreement as amended hereby, and to the Subsidiary Guaranty shall mean the
Subsidiary Guaranty as amended hereby. Except as expressly amended hereby, the
Credit Agreement and the other Loan Documents, including the Liens and
superpriority claims granted thereunder, shall remain in full force and effect,
and all terms and provisions thereof are hereby ratified and confirmed. Each of
the Parent Guarantor and the Company confirms that as amended hereby, each of
the Loan Documents is in full force and effect.

      7. APPLICABLE LAW. THE VALIDITY, INTERPRETATIONS AND ENFORCEMENT OF THIS
AMENDMENT AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS AMENDMENT,
WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY
THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK; PROVIDED THAT THE
AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

      8. COMPLETE AGREEMENT. This Amendment sets forth the complete agreement of
the parties in respect of any amendment to any of the provisions of any Loan
Document. The execution, delivery and effectiveness of this Amendment do not
constitute a waiver of any Default or Event of Default, amend or modify any
provision of any Loan Document except as expressly set forth herein or
constitute a course of dealing or any other basis for altering the Obligations
of any Obligor.

      9. CAPTIONS; COUNTERPARTS. The catchlines and captions herein are intended
solely for convenience of reference and shall not be used to interpret or
construe the provisions hereof. This Amendment may be executed by one or more of
the parties to this Amendment on any number of separate counterparts (including
by telecopy), all of which taken together shall constitute but one and the same
instrument.

      10. GENERAL RELEASE. By signing below and/or the Consent of Guarantors
hereto and/or the Acknowledgment and Agreement of AJI, KJC, KFC, KAAC and KBC
hereto, each of the Company and the other Obligors, on behalf of itself and each
other Obligor, and each of their respective predecessors, successors and
assigns, hereby fully, finally, irrevocably, forever and unconditionally
releases, discharges and acquits the Agent, each of the Secured Lenders, and
each of the foregoing's officers, employees and agents, from all Released Claims
(as hereinafter defined). As used herein the term "Released Claims" means all
claims of the Company and the other Obligors, on the one hand, against the Agent
or any Secured Lender, on the other hand, including but not limited to all
claims, demands, obligations, liabilities,

                                       27
<PAGE>

indebtedness, responsibilities, disputes, breaches of contract, breaches of duty
or any relationship, acts, omissions, misfeasance, malfeasance, cause or causes
of action (whether at law or in equity), debts, sums of money, accounts,
compensations, contracts, controversies, promises, damages, costs, rights of
offset, losses and expenses, of every type, kind, nature, description or
character, known and unknown, whensoever arising and occurring at any time up to
and through the date hereof, whether known or unknown, suspected or unsuspected,
liquidated or unliquidated, matured or unmatured, fixed or contingent, which in
any way arise out of, are connected with or relate to this Amendment or any of
the other Loan Documents (including as amended hereby) or any transactions
thereunder or the administration of the lender-borrower relationship provided in
the Loan Documents. Each of the parties hereto intends that the foregoing
releases shall be effective as a full and final accord and satisfaction of
Released Claims, and each of the Company and the other Obligors hereby agrees,
represents and warrants that, to the extent permitted by applicable law, the
matters released herein are not limited to matters which are known or disclosed.
In this connection, each of the Company and the other Obligors hereby agrees,
represents and warrants that it realizes and acknowledges that (a) factual
matters now existing and unknown to it may have given or may hereafter give rise
to Released Claims which are presently unknown, unsuspected, unliquidated,
unmatured and/or contingent, (b) such Released Claims may be unknown,
unsuspected, unliquidated, unmatured and/or contingent due to ignorance,
oversight, error, negligence or otherwise, and (c) if such Released Claims had
been known, suspected, liquidated, matured and/or unconditional, its decision to
enter into this release may have been materially affected. Each of the Company
and the other Obligors further agrees, represents and warrants that this release
has been negotiated and agreed upon in view of these realizations. Nevertheless,
each of the Company and the other Obligors hereby intends to release, discharge,
and acquit each other of and from any such unknown, unsuspected, unliquidated,
unmatured and/or contingent Released Claims which are in any way set forth in or
related to the matters identified hereinabove.

                            [signature pages follow]

                                       28
<PAGE>

            IN WITNESS WHEREOF, each of the undersigned has duly executed this
Seventh Amendment to Post-Petition Credit Agreement, Amendment to Guaranties and
Consent of Guarantors as of the date set forth above.

"PARENT GUARANTOR"                     KAISER ALUMINUM CORPORATION

                                       By:     /s/David A. Cheadle
                                               --------------------------------
                                       Name:   David A. Cheadle
                                       Title:  Assistant Treasurer

"THE COMPANY"                          KAISER ALUMINUM & CHEMICAL
                                       CORPORATION

                                       By:     /s/David A. Cheadle
                                               --------------------------------
                                       Name:   David A. Cheadle
                                       Title:  Assistant Treasurer

                                       BANK OF AMERICA, N.A.,
                                       as the Agent and a Lender

                                       By:     /s/Robert M. Dalton
                                               --------------------------------
                                       Name:   Robert M. Dalton
                                       Title:  Vice President

                                       GENERAL ELECTRIC CAPITAL
                                       CORPORATION, as Documentation Agent and
                                       as a Lender

                                       By:     /s/James O'Donnell
                                               --------------------------------
                                       Name:   James O'Donnell
                                       Title:  Duly Authorized Signatory

                                       WELLS FARGO FOOTHILL, INC.
                                       (fka Foothill Capital Corporation),
                                       as Co-Syndication Agent and as a Lender

                                       By:     /s/Eunnie Kim
                                               --------------------------------
                                       Name:   Eunnie Kim
                                       Title:  Vice President

                                       S-1
<PAGE>

                                       THE CIT GROUP/BUSINESS CREDIT, INC., as
                                       Co-Syndication Agent and as a Lender

                                       By:     /s/Grant Weiss
                                               --------------------------------
                                       Name:   Grant Weiss
                                       Title:  Vice President

                                       MERRILL LYNCH BUSINESS FINANCIAL
                                       SERVICES INC., as a Lender

                                       By:     /s/Emily L. Koehn
                                               --------------------------------
                                       Name:   Emily L. Koehn
                                       Title:  Assistant Vice President

                                       PNC BANK, NATIONAL ASSOCIATION,
                                       as a Lender

                                       By:     /s/Sandra Sha Kenyon
                                               --------------------------------
                                       Name:   Sandra Sha Kenyon
                                       Title:  Vice President

                                       GMAC COMMERCIAL FINANCE, LLC,
                                       as successor by merger to GMAC Business
                                       Credit, LLC, as a Lender

                                       By:     /s/Thomas Brent
                                               --------------------------------
                                       Name:   Thomas Brent
                                       Title:  Vice President

                                      S-2
<PAGE>

                                      BANK OF AMERICA, N.A.,
                                      as Depository Bank for the Cash Collateral
                                      Accounts, solely with respect to Section
                                      1.12 of the foregoing Amendment (and
                                      Section 9.1.21 of the Credit Agreement,
                                      as amended hereby)

                                      By:   ___________________________________
                                      Name: ___________________________________
                                      Title:___________________________________

                                      S-3
<PAGE>

                              CONSENT OF GUARANTORS

            Each of the undersigned is a Guarantor of the Obligations of the
Company under the Credit Agreement and each other Loan Document and hereby (a)
consents to the foregoing Amendment, (b) acknowledges that notwithstanding the
execution and delivery of the foregoing Amendment, the obligations of each of
the undersigned Guarantors are not impaired or affected and the Parent Guaranty
and the Subsidiary Guaranties, as amended by the Amendment, continue in full
force and effect, and (c) ratifies the Parent Guaranty or the Subsidiary
Guaranty or Guaranties, each as amended by the Amendment, to which it is a
party, as applicable, and each of the Loan Documents, as amended by the
Amendment, to which it is a party and further ratifies the Security Interests
(if any) and superpriority claims granted by it to the Agent for its benefit and
the benefit of the Secured Lenders.

       [signatures following; remainder of page intentionally left blank]

<PAGE>

IN WITNESS WHEREOF, each of the undersigned has executed and delivered this
          CONSENT OF GUARANTORS as of the date first set forth above.

                                    AKRON HOLDING CORPORATION
                                    ALPART JAMAICA INC.
                                    KAISER ALUMINA AUSTRALIA CORPORATION
                                    KAISER BELLWOOD CORPORATION
                                    KAISER ALUMINUM & CHEMICAL INVESTMENT, INC.
                                    KAISER ALUMINIUM INTERNATIONAL, INC.
                                    KAISER ALUMINUM PROPERTIES, INC.
                                    KAISER ALUMINUM TECHNICAL SERVICES, INC.
                                    KAISER FINANCE CORPORATION
                                    KAISER JAMAICA CORPORATION
                                    KAISER MICROMILL HOLDINGS, LLC
                                    KAISER SIERRA MICROMILLS, LLC
                                    KAISER TEXAS SIERRA MICROMILLS, LLC
                                    KAISER TEXAS MICROMILL HOLDINGS, LLC
                                    OXNARD FORGE DIE COMPANY, INC.
                                    KAISER ALUMINUM CORPORATION
                                    ALWIS LEASING LLC
                                    KAISER BAUXITE COMPANY
                                    KAISER CENTER, INC.
                                    KAISER CENTER PROPERTIES
                                    KAE TRADING, INC.
                                    KAISER EXPORT COMPANY

                                    By    ___________________________________
                                    Name: ___________________________________
                                    Title:___________________________________

                                      S-1
<PAGE>

          ACKNOWLEDGEMENT AND AGREEMENT OF AJI, KJC, KFC, KAAC AND KBC

            Each of the undersigned Obligors has reviewed the foregoing
Amendment, and the Loan Documents to be amended thereby, and as of the date
first set forth above (i) acknowledges and agrees to the agreements set forth in
the Amendment and the Loan Documents, as amended by the Amendment, and (ii)
confirms and agrees to be bound by its respective obligations under the
Amendment and the Loan Documents as amended thereby, including without
limitation such Obligor's obligation to make the deposits into the respective
Cash Collateral Accounts contemplated by and in accordance with Sections 9.1.19,
9.1.20, 9.1.21 and 9.2.18 as applicable, of the Credit Agreement (as amended by
the Amendment).

            In furtherance of the foregoing, each of the undersigned Obligors,
as security for the payment of all Guaranteed Obligations (as defined in each
Subsidiary Guaranty to which such Obligor is a party), hereby grants, conveys,
assigns, pledges, sets over, and transfers to the Agent, and creates in the
Agent's favor, a first-priority Lien on and security interest in all of such
Obligor's right title and interest in (and whether now or hereafter existing)
the ALPART Collateral, the QAL Collateral, the KBC Allocable Amount, the Cash
Collateral Accounts and all money, instruments, securities, financial assets,
investment property and other property at any time deposited in, held in,
credited to or acquired in connection with the Cash Collateral Accounts,
together with all proceeds of any of the foregoing (including without limitation
dividends payable in cash or stock and shares or other proceeds of conversions
or splits of any securities in the Cash Collateral Accounts), and all interest
accruing thereon and investments thereof, and earnings on and proceeds of
investments with respect thereto, for the benefit of the Agent and the Secured
Lenders.

            IN WITNESS WHEREOF, each of the undersigned has executed and
delivered this ACKNOWLEDGEMENT AND AGREEMENT OF AJI, KJC, KFC, KAAC and KBC as
of the date first set forth above

                                       ALPART JAMAICA INC.
                                       KAISER ALUMINA AUSTRALIA CORPORATION
                                       KAISER FINANCE CORPORATION
                                       KAISER JAMAICA CORPORATION
                                       KAISER BAUXITE CORPORATION

                                       By:  ___________________________________
                                       Name:
                                       Title:

<PAGE>

                                   SCHEDULE A
                                       to
              SEVENTH AMENDMENT TO POST-PETITION CREDIT AGREEMENT,
                        AMENDMENT TO SUBSIDIARY GUARANTY,
                              CONSENT OF GUARANTORS
        AND ACKNOWLEDGEMENT AND AGREEMENT OF AJI, KJC, KFC, KAAC AND KBC

<TABLE>
<CAPTION>
                NAME                                REVOLVING COMMITMENT             PERCENTAGE
---------------------------------------------       --------------------             ----------
<S>                                                 <C>                              <C>
Bank Of America, N.A.                                    $ 38,597,000                 19.2985%
General Electric Capital Corporation                       38,597,000                 19.2985%
The Cit Group/Business Credit, Inc.,                       28,070,000                 14.0350%
Wells Fargo Foothill, Inc.
(fka Foothill Capital Corporation)                         31,578,000                 15.7890%
Merrill Lynch Business Financial Services Inc              24,562,000                 12.2810%
GMAC Commercial Finance LLC                                21,052,000                 10.5260%
PNC Bank, National Association                             17,544,000                  8.7720%
                                                         ------------                --------
TOTAL                                                    $200,000,000                100.0000%
                                                         ------------                --------
</TABLE>

<PAGE>

                                   SCHEDULE I

                             (ELIGIBLE FIXED ASSETS)

Trentwood Works
West Euclid Avenue
Trentwood, Washington

Bellwood Extrusion
1901 Reymet Road
Richmond, Virginia

Greenwood
1508 Highway 246 South
Greenwood, South Carolina

Tennalum
309 Industrial Drive
Jackson, Tennessee

Los Angeles
6250 East Bandini Boulevard
Los Angeles, California

Newark
600 Kaiser Drive
Heath, Ohio

Sherman
4300 Highway 75 South
Sherman, Texas

Tulsa
4111 South 74th Avenue
Tulsa, Oklahoma

Richland
2425 Stevens Drive
Richland, Washington

<PAGE>

                                    EXHIBIT A

                        Settlement and Release Agreement

                                   [attached]

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