FORM OF PURCHASE AGREEMENT

Exhibit 1.1

8,000,000 SHARES

KAISER ALUMINUM CORPORATION
(A DELAWARE CORPORATION)

-----% PRIDES, CONVERTIBLE PREFERRED STOCK

PURCHASE AGREEMENT


February --, 1994


MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
C/O MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1305

LADIES & GENTLEMEN:

Kaiser Aluminum Corporation, a Delaware corporation (the "Company"),
confirms its agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Bear, Stearns & Co. Inc., Donaldson, Lufkin & Jenrette
Securities Corporation, PaineWebber Incorporated and Salomon Brothers Inc
(collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 10) with respect to
the sale by the Company and the purchase by the Underwriters, acting severally
and not jointly, of 8,000,000 shares of the Company's Preferred Redeemable
Increased Dividend Equity Securities, ----% PRIDES, Convertible Preferred
Stock, par value $.05 per share (the "PRIDES") and the grant by the Company to
the Underwriters of the option described in Section 2 hereof to purchase all or
any part of up to an additional 1,200,000 shares of PRIDES, to cover
over-allotments. The aforesaid 8,000,000 shares of PRIDES (the "Initial
Securities"), together with all or any part of the 1,200,000 shares of PRIDES
subject to the option described in Section 2 hereof (the "Option Securities")
are collectively hereinafter called the "Securities."

Prior to the purchase and public offering of the Securities by the
Underwriters, the Company and the Underwriters shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication among the Company and the Underwriters and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Securities will be governed by this Purchase Agreement (this
"Agreement"), as supplemented by the Pricing Agreement. From and after the
date of the execution and delivery of the Pricing Agreement, this Agreement
shall be deemed to incorporate the Pricing Agreement.

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-51391) and a related


preliminary prospectus for the registration of the PRIDES and the shares of
common stock of the Company, par value $.01 per share (the "Common Stock"),
issuable upon conversion or redemption of the PRIDES, under the Securities Act
of 1933, as amended (the "1933 Act"). The Company has also filed such
amendments thereto, if any, and such amended preliminary prospectuses as may
have been required to the date hereof, and will file such additional amendments
thereto and such amended prospectuses as may hereafter be required under the
1933 Act. Such registration statement (as amended, if applicable) and the form
of prospectus constituting a part thereof (including in each case all
documents, if any, incorporated by reference therein and the information, if
any, deemed to be part thereof pursuant to Rule 430A(b) of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")),
as from time to time amended or supplemented pursuant to the 1933 Act or
otherwise, are hereinafter referred to as the "Registration Statement" and the
"Prospectus," respectively, except that if any revised Prospectus shall be
provided to the Underwriters by the Company for use in connection with the
offering of the Securities which differs from the form of such prospectus on
file at the Commission at the time the Registration Statement becomes effective
(whether or not such revised prospectus is required to be filed by the Company
pursuant to Rule 424(b) of the 1933 Act Regulations), the term "Prospectus"
shall refer to such revised prospectus from and after the time it is first
provided to the Underwriters for such use.

The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after the
Registration Statement becomes effective and the Pricing Agreement has been
executed and delivered.

Section 1. REPRESENTATIONS AND WARRANTIES.

(a) The Company represents and warrants to each Underwriter as of the
date hereof and as of the date of the Pricing Agreement (such latter date being
hereinafter referred to as the "Representation Date") as follows:

(i) At the time the Registration Statement becomes effective
and at the Representation Date, the Registration Statement will comply
in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
The Prospectus, at the Representation Date (unless the term
"Prospectus" refers to a prospectus which has been provided to the
Underwriters by the Company for use in connection with the offering of
the Securities which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective,
in which case at the time it is first provided to the Underwriters for
such use) at the Closing Time referred to in Section 2 hereof and of
the Delivery Date referred to in Section 2 hereof, will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by the Underwriters
expressly for use in the Registration Statement or Prospectus.

(ii) The firm of accountants who certified the audited
financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.

(iii) The consolidated financial statements and the notes
thereto included in the Registration Statement and the Prospectus
present fairly, in all material respects, the financial position of

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the Company and its subsidiaries as of the dates indicated and the
results of their operations and cash flows for the periods specified;
except as otherwise stated in the Registration Statement, the
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis; and the
supporting schedules included in the Registration Statement present
fairly, in all material respects, the information required to be
stated therein.

(iv) Except as disclosed in the Registration Statement, since
the date of the most recent audited financial statements included
therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, (B) there have been no transactions entered into
by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise and (C)
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock, in each case
required to be disclosed therein that have not been so disclosed.

(v) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware
with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify could not reasonably be expected to have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.

(vi) Each subsidiary of the Company listed in Exhibit 21 to
the Registration Statement (incorporated by reference to Exhibit 22 to
Form 10-K for the period ended December 31, 1992, filed by the
Company, File No. 1-9447) (a "Significant Subsidiary" and
collectively, the "Significant Subsidiaries") has been duly organized,
is validly existing and, if applicable, is in good standing under the
laws of the jurisdiction of its organization, has corporate (or
partnership) power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation (or partnership) to
transact business and, if applicable, is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or, if applicable, be
in good standing could not reasonably be expected to have a material
adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise. All of the issued and
outstanding capital stock of each Significant Subsidiary that is a
corporation has been duly authorized and validly issued, is fully paid
and non-assessable and the shares of capital stock of each such
Significant Subsidiary owned by the Company, directly or through
subsidiaries, are owned free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity (collectively,
"Liens"), except for (a) the pledge of all or a portion of the shares
of the capital stock of certain subsidiaries owned by the Company to
Mellon Bank, N.A., as Collateral Agent under the Credit Agreement,
dated December 13, 1989, by and among the Company and the banks named
therein, as amended to date (the "Credit Agreement"), which shares of
capital stock shall be pledged to Bank of America National Trust and
Savings Association [BankAmerica Business Credit, Inc.], as Collateral
Agent under the credit agreement to be entered into at the Closing
Time, by and among the Company and the banks named therein (the "New


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Credit Agreement"), (b) non- material Liens that have arisen in the
ordinary course of business and (c) Liens in favor of joint-venture
partners of the Company with respect to foreign Significant
Subsidiaries.

(vii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization;"
the shares of issued and outstanding Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable;
the Common Stock conforms in all material respects to all statements
relating thereto contained in the Prospectus; the shares of PRIDES
have been duly authorized; when issued, sold and delivered by the
Company in the manner contemplated by the Registration Statement, the
PRIDES will be validly issued, fully paid and nonassessable; the
issuance of the PRIDES is not subject to preemptive or other similar
rights; and the PRIDES conform in all material respects to all
statements relating thereto contained in the Prospectus.

(viii) The shares of Common Stock issuable upon conversion or
redemption of the PRIDES have been duly authorized and have been
validly reserved for issuance upon such conversion or redemption, as
the case may be; such shares, when issued and delivered upon such
conversion or redemption in accordance with the provisions of the
Certificate of Designations, will be validly issued, fully paid and
nonassessable and free of any Lien or adverse claim; and the issuance
of such shares upon such conversion or redemption will not be subject
to preemptive or other similar rights.

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

(x) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or partnership agreement,
as the case may be, or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
indenture, mortgage, loan agreement or note or in any other material
contract, lease or other instrument to which the Company or any of its
Significant Subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or
any of its Significant Subsidiaries is subject, except for defaults
that could not reasonably be expected to have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise. The execution, delivery
and performance of this Agreement and the Pricing Agreement and the
consummation of the transactions contemplated herein and therein have
been duly authorized by all necessary corporate action and do not, as
of the date hereof, the Representation Date, the Closing Time or the
Delivery Date, as the case may be, conflict with or constitute a
breach of, or default under, or result in the creation or imposition
of any Lien, charge or encumbrance upon any property or assets of the
Company or any of its Significant Subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its Significant Subsidiaries
is a party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any of its Significant
Subsidiaries is subject, nor does such action violate, as of the date
hereof, the Representation Date, the Closing Time or the Delivery
Date, as the case may be, the provisions of the charter or by-laws, or
partnership agreement, as the case may be, of the Company or any of
its Significant Subsidiaries or any applicable law, administrative
regulation or administrative or court decree entered against or
applicable to the Company or any of its Significant Subsidiaries.

(xi) No labor dispute with the employees of the Company or
any of its Significant Subsidiaries exists or, to the knowledge of the
Company, is imminent, other than routine disciplinary and grievance



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matters. The Company is not aware (without any independent
verification) of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or
contractors which could reasonably be expected to result in any
material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.

(xii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened, against or
affecting the Company or any of its subsidiaries, which is required to
be disclosed in the Registration Statement (other than as disclosed
therein), or which could reasonably be expected to materially and
adversely affect the consummation of this Agreement or the Pricing
Agreement. There are no contracts or documents of the Company or any
of its subsidiaries which are required by the 1933 Act or by the 1933
Act Regulations to be filed as exhibits to the Registration Statement
which have not been so filed.

(xiii) The Company and its Significant Subsidiaries own or
possess licenses or other rights to use, or can acquire the same on
reasonable terms, the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names presently
employed by them in connection with the business now operated by them,
and neither the Company nor any of its Significant Subsidiaries has
received any written notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which,
singly or in the aggregate, could reasonably be expected to result in
any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.

(xiv) No authorization, approval or consent of any court or
governmental authority or agency is legally necessary in connection
with the issuance and sale of the Securities to the Underwriters
hereunder or the consummation by the Company of any of the other
transactions contemplated hereby, except such as may be required under
the 1933 Act, the 1933 Act Regulations and state securities laws.

(xv) The Company and its Significant Subsidiaries possess
such certificates, authorizations or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them, and neither the Company nor
any of its Significant Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the
aggregate, could reasonably be expected to materially and adversely
affect the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.

(xvi) The Company and its Significant Subsidiaries have good
title to all properties owned by them that are material to the Company
and its Significant Subsidiaries considered as one enterprise, in each
case free and clear of all Liens, encumbrances and defects except (a)
as do not materially interfere with the use made and proposed to be
made of such properties, (b) as referred to in the Registration
Statement (including the Notes to the Financial Statements included
therein) or (c) as could not reasonably be expected to materially and
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.



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(xvii) There are no holders of securities of the Company who
have the right to request the Company to register securities held by
them under the 1933 Act.

(xviii) The PRIDES and the Common Stock issuable in respect
of the PRIDES being sold to the public have been approved for listing
on the New York Stock Exchange, subject to official notice of
issuance.

(xix) Except as disclosed in the Registration Statement, the
Company and its Significant Subsidiaries are in material compliance
with all applicable existing federal, state, local and foreign laws
and regulations relating to protection of human health or the
environment or imposing liability or standards of conduct concerning
any Hazardous Material (as hereinafter defined) ("Environmental
Laws"), and to the Company's best knowledge, after due inquiry, there
are no circumstances that may prevent or interfere with such
compliance in the future except, in each case, where such
noncompliance, singly or in the aggregate, could not reasonably be
expected to have a material and adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise. The term "Hazardous Material" means (a) any "hazardous
substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (b) any "hazardous
waste" as defined by the Resource Conservation and Recovery Act, as
amended, (c) any petroleum or petroleum product, (d) any
polychlorinated biphenyl and (e) any pollutant or contaminant or
hazardous, dangerous, or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environmental Law.

(xx) Except as disclosed in the Registration Statement,
neither the Company nor any of its Significant Subsidiaries has
received any written notice from any person or entity alleging
potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages, personal
injuries, or penalties) of the Company or any of its Significant
Subsidiaries arising out of, based on or resulting from (a) the
presence or release into the environment of any Hazardous Material at
any location, whether or not owned by the Company or any of its
Significant Subsidiaries or (b) any violation or alleged violation of
any Environmental Law, except, in each case, where such potential
liability, singly or in the aggregate, could not reasonably be
expected to have a material and adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.

(xxi) Except as disclosed in the Registration Statement, to
the best knowledge of the Company after due inquiry, there are no past
or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission,
discharge or disposal of any Hazardous Material, that could
reasonably be expected to form the basis under any Environmental Law
of any liability of, or requirement to take (or refrain from taking)
any action by, (a) the Company or any of its


6
Significant Subsidiaries or (b) any person or entity whose liability
for any claim the Company or any of its Significant Subsidiaries has
retained or assumed either contractually or by operation of law,
except, in each case, where such liability or requirement to take (or
refrain from taking) action, singly or in the aggregate, could not
reasonably be expected to have a material and adverse effect on the
condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company and its subsidiaries considered
as one enterprise.

(xxii) The Company has not, directly or indirectly, paid or
delivered any fee, commission or other sum of money or item or
property, however characterized, to any finder, agent, government
official or other party, in the United States or any other country,
which is in any manner related to the business or operations of the
Company, which the Company knows or has reason to believe to have been
illegal under any federal, state or local laws of the United States or
any other country having jurisdiction; and the Company has not
participated, directly or indirectly, in any boycotts or other similar
practices in contravention of law affecting any of its actual or
potential customers.

(xxiii) The Initial Intercompany Note (as defined in the
Prospectus) has been duly authorized by Kaiser Aluminum & Chemical
Corporation ("KACC") and when executed and delivered by KACC as
described in the Prospectus under "Use of Proceeds," the Initial
Intercompany Note will constitute a valid and binding obligation of
KACC, enforceable against KACC in accordance with its terms.

(xxiv) The Additional Intercompany Note (as defined in the
Prospectus), if issued, will have been duly authorized by KACC, and
when executed and delivered by KACC as described in the Prospectus
under "Use of Proceeds," the Additional Intercompany Note will
constitute a valid and binding obligation of KACC, enforceable against
KACC in accordance with its terms.

(b) Any certificate required hereunder, which is signed by any
officer of the Company and delivered to the Underwriters or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.

Section 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.

(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price set forth in the Pricing Agreement, the number of Initial Securities
set forth in Schedule A hereto opposite the name of such Underwriter (except as
otherwise provided in the Pricing Agreement), plus any additional number of
Initial Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof. If the Company elects to rely
upon Rule 430A under the 1933 Act Regulations, Schedule A may be attached to
the Pricing Agreement.

(1) If the Company has elected not to rely upon Rule 430A
under the 1933 Act Regulations, the initial public offering price of
the Securities, the purchase price to be paid by the several
Underwriters for the Securities, the dividend rate, the call price
(including the related premium) payable upon redemption and the
conversion price, in each case in respect of the Securities
(collectively, the "Pricing Terms") have each been determined and set
forth in the Pricing Agreement, dated the date hereof, and an
amendment to the Registration Statement and the Prospectus will be
filed before the Registration Statement becomes effective.

(2) If the Company has elected to rely upon Rule 430A under
the 1933 Act Regulations, the purchase price to be paid by the several
Underwriters for the Securities shall be an amount equal to the
initial public offering price, less an amount to be determined by
agreement between the Underwriters and the Company. The other Pricing
Terms likewise shall be determined by agreement between the
Underwriters and the Company. The Pricing Terms, when so determined,
shall be set forth in the Pricing Agreement. In the event that such
Pricing Terms have not been agreed upon and the Pricing Agreement has
not been executed and delivered by all parties thereto by the close of
business on the fourth business day following the date of this
Agreement, this



7
Agreement shall terminate forthwith, without liability of any party to
any other party, unless otherwise agreed to by the Company and the
Underwriters.

(b) In addition, on the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set forth, the
Company hereby grants to the Underwriters, severally and not jointly, an option
to purchase from it any or all of the Option Securities at the purchase price
set forth in the Pricing Agreement. The option granted hereby will expire 30
days after the date upon which the Registration Statement becomes effective or,
if the Company has elected to rely upon Rule 430A under the 1933 Act
Regulations, 30 days after the date of the Pricing Agreement, and may be
exercised from time to time, in whole or in part, only for the purpose of
covering over-allotments that may be made in connection with the offering and
distribution of the Initial Securities, upon notice by the Underwriters to the
Company setting forth the aggregate number of Option Securities as to which the
several Underwriters are exercising the option, and the time and date of
payment and delivery thereof. Such time and date of delivery (the "Delivery
Date") shall be determined by the Underwriters but shall not be later than five
full business days after the exercise of such option, nor in any event prior to
the Closing Time (as defined in paragraph (c) below). If the option is
exercised as to all or any portion of the Option Securities, the Option
Securities as to which the option is exercised shall be sold by the Company,
and each Underwriter, severally and not jointly, shall purchase that proportion
of the total number of Option Securities then being purchased which the total
number of Initial Securities set forth in Schedule A hereto opposite the name
of such Underwriter bears to the total number of Initial Securities (except as
otherwise set forth in the Pricing Agreement), subject in each case to such
adjustments as the Underwriters in their discretion shall make to eliminate any
sales or purchases of fractional shares.

(c) Payment of the purchase price and delivery of certificates
evidencing the Initial Securities shall be made at the office of Latham &
Watkins, 885 Third Avenue, Suite 1000, New York, New York, or at such other
place as shall be agreed upon by the Underwriters and the Company, at 10:00
A.M. on the fifth business day (unless postponed in accordance with the
provisions of Section 10) following the date the Registration Statement becomes
effective (or, if the Company has elected to rely upon Rule 430A, the fifth
business day after execution of the Pricing Agreement), or such other time not
later than ten business days after such date as shall be agreed upon by the
Underwriters and the Company (such time and date of payment and delivery being
herein called the "Closing Time"). In addition, in the event that any or all
of the Option Securities are purchased by the Underwriters, payment of the
purchase price and delivery of certificates evidencing such Option Securities
shall be made at the office of Latham & Watkins or such other place as the
Company and the Underwriters shall determine, on the Delivery Date as specified
in the notice from the Underwriters to the Company. Payment shall be made to
the Company by certified or official bank check or checks drawn in New York
Clearing House funds or similar next day funds payable to the order of the
Company, against delivery of certificates evidencing the Securities to the
Underwriters. Certificates evidencing the Initial Securities and the Option
Securities shall be in such denominations and registered in such names as the
Underwriters may request in writing at least two business days before the
Closing Time or a Delivery Date, as the case may be. The certificates
evidencing the Initial Securities and Option Securities will be made available
for examination and packaging by the Underwriters not later than 10:00 A.M. on
the last business day prior to the Closing Time or a Delivery Date, as the case
may be, at such place as the Underwriters may designate in New York, New York.



8
Section 3. COVENANTS OF THE COMPANY.

The Company covenants with each Underwriter as follows:

(a) The Company will notify the Underwriters immediately, in
writing, of (i) the effectiveness of the Registration Statement and
any amendment thereto (including any post-effective amendment), (ii)
the receipt of any comments from the Commission, (iii) any request by
the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional
information, and (iv) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose or the suspension of
the qualification of the PRIDES or the Common Stock issuable upon
conversion or redemption of the PRIDES for offering or sale in any
jurisdiction, or the threatening or initiation of any proceeding for
that purpose. The Company will make every reasonable effort to
prevent the issuance of any stop order or any order preventing or
suspending the use of any preliminary prospectus or suspending such
qualification and, if any stop order or any order preventing or
suspending the use of any preliminary prospectus or suspending such
qualification is issued, to obtain the lifting thereof at the earliest
possible moment.

(b) The Company will give the Underwriters notice of its
intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment) or any amendment or
supplement to the Prospectus (including any revised prospectus which
the Company proposes for use by the Underwriters in connection with
the offering of the Securities which differs from the prospectus on
file at the Commission at the time the Registration Statement becomes
effective, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) of the 1933 Act Regulations), will
furnish the Underwriters with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing
or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Underwriters shall
reasonably object.

(c) The Company will deliver to the Underwriters as many
conformed copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) as the Underwriters may reasonably
request.

(d) The Company will furnish to each Underwriter, from time
to time during the period when the Prospectus is required to be
delivered under the 1933 Act, such number of copies of the Prospectus
as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act or the applicable rules and regulations
of the Commission thereunder.

(e) If during the period specified in Section 3(d) any event
shall occur as a result of which it is necessary, in the opinion of
counsel for the Underwriters, to amend or supplement the Prospectus in
order to make the Prospectus not misleading in light of the
circumstances existing at the time it is delivered to a purchaser, or
if for any other reason it shall be necessary to amend or supplement
the Prospectus in order to comply with the 1933 Act and the 1933 Act
Regulations, the Company will, as promptly as practicable, amend or
supplement the Prospectus (in form and substance reasonably
satisfactory to counsel for the Underwriters) so that, as so amended
or supplemented, the Prospectus will not include an untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances existing
at the time it is delivered to a purchaser, not misleading and will
comply




9
with the 1933 Act and 1933 Act Regulations, and the Company will
furnish to the Underwriters a reasonable number of copies of such
amendment or supplement.

(f) The Company will endeavor, in cooperation with the
Underwriters, to qualify the PRIDES and the Common Stock issuable upon
conversion or redemption of the PRIDES for offering and sale under the
applicable securities laws of such states and other jurisdictions of
the United States as the Underwriters may designate; provided,
however, that the Company shall not be obligated to qualify as a
foreign corporation in any jurisdiction in which it is not so
qualified or to take any action that would subject it to general
consent to service of process in any jurisdiction in which it is not
now so subject. In each jurisdiction in which the PRIDES and such
Common Stock have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for so long as
may be required by applicable law.

(g) The Company will make generally available to its security
holders as soon as reasonably practicable, but not later than 90 days
after the close of the period covered thereby, an earnings statement
(in form complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve-month period beginning not later than
the first day of the Company's fiscal quarter next following the
"effective date" (as defined in Rule 158) of the Registration
Statement. The Company shall be deemed to have complied with this
covenant if it complies with the requirements of Rule 158(b) of the
1933 Act Regulations.

(h) The Company will apply the net proceeds received by it
from the sale of the Securities as set forth in the Prospectus under
"Use of Proceeds."

(i) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in
reliance upon Rule 430A of the 1933 Act Regulations, then immediately
following the execution of the Pricing Agreement, the Company will
prepare, and file or transmit for filing with the Commission in
accordance with such Rule 430A and Rule 424(b) of the 1933 Act
Regulations, copies of an amended Prospectus, or, if required by such
Rule 430A, a post-effective amendment to the Registration Statement
(including an amended Prospectus), containing all information so
omitted.

(j) The Company will file with the Commission such reports on
Form SR as may be required pursuant to Rule 463 under the 1933 Act.

(k) During a period of 90 days from the date of the
Prospectus, the Company will not, without the prior written consent of
Merrill Lynch, directly or indirectly, offer to sell, sell, grant any
option for the sale of, or otherwise issue or dispose of, any shares
of PRIDES, the Company's $.65 Depositary Shares (the "Depositary
Shares"), the Series A Mandatory Conversion Premium Dividend Preferred
Stock, par value $.05 per share represented thereby (the "Series A
Shares") or Common Stock, or any securities similar to the PRIDES, the
Depositary Shares, the Series A Shares or the Common Stock, or any
security convertible into or exchangeable or exercisable for any such
securities or any such similar securities, except (i) offers to sell
and sales to the Underwriters pursuant to this Agreement, (ii) the
issuance of up to 500,000 shares of Common Stock pursuant to employee
benefit arrangements of the Company and (iii) the issuance of Common
Stock upon the conversion or redemption of PRIDES or Series A Shares.
In addition, the Company will cause to be delivered to the
Underwriters an agreement between the Underwriters and MAXXAM to the
effect that MAXXAM will not, and will not permit any of its
subsidiaries (other than the Company and its subsidiaries) (each, a
"MAXXAM




10
Subsidiary") to, without the prior written consent of Merrill Lynch,
directly or indirectly, offer to sell, sell, grant any option for the
sale of or otherwise dispose of (A) any Depositary Shares or the
Series A Shares or any security convertible into or exercisable for
Depositary Shares or Series A Shares, during a period of 90 days from
the date of the Prospectus or (B) any Common Stock, or any security
convertible into or exercisable into Common Stock (other than the
Series A Shares), during a period of 180 days from the date of the
Prospectus, except that MAXXAM or any MAXXAM Subsidiary may pledge or
otherwise encumber Depositary Shares, Series A Shares or Common Stock,
as the case may be, to unaffiliated persons or entities solely in
connection with financing activities of MAXXAM or its subsidiaries and
MAXXAM or any MAXXAM Subsidiary may transfer Depositary Shares, Series
A Shares or Common Stock, as the case may be, to MAXXAM or any MAXXAM
Subsidiary.

(l) The Company will use its best efforts to effect the
listing of the PRIDES and the shares of Common Stock issuable upon
conversion or redemption of the PRIDES on the New York Stock Exchange.

(m) The Company will reserve and keep, at all times, free of
preemptive or other similar rights and Liens and adverse claims,
sufficient shares of Common Stock to satisfy any obligations to issue
shares of Common Stock upon conversion or redemption of all of the
PRIDES outstanding from time to time.

(n) The Company has complied and will comply with all of the
provisions of Florida H.B. 1771, chapter 92-198 of the Florida
statutes, and all regulations promulgated thereunder relating to
issuers doing business in Cuba.

Section 4. PAYMENT OF EXPENSES.

The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the printing and filing, and
delivery to the Underwriters of copies, of the Registration Statement as
originally filed and of each amendment thereto, (ii) the printing of this
Agreement and the Pricing Agreement, (iii) the preparation, issuance and
delivery of the Securities to the Underwriters, (iv) the fees and disbursements
of the Company's counsel and accountants, (v) the expenses in connection with
the qualification of the PRIDES and the shares of Common Stock issuable upon
conversion or redemption of the PRIDES under securities laws in accordance with
the provisions of Section 3(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of preliminary and final Blue Sky
Surveys, (vi) the printing and delivery to the Underwriters of copies of the
preliminary prospectuses and of the Prospectus and any amendments or
supplements thereto, (vii) the printing and delivery to the Underwriters of
copies of the Blue Sky Surveys, (viii) any fees payable in connection with the
rating of the Securities, (ix) the fee of the National Association of
Securities Dealers, Inc. and (x) the fees and expenses incurred in connection
with the listing of the PRIDES and the shares of Common Stock issuable upon
conversion or redemption of the PRIDES on the New York Stock Exchange.

If this Agreement is terminated by the Underwriters in accordance with
the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.




11
Section 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.

The obligations of the Underwriters hereunder are subject to the
accuracy in all material respects of the representations and warranties of the
Company herein contained, to the performance in all material respects by the
Company of its obligations hereunder and to the following further conditions:

(a) The Registration Statement shall have become effective
not later than 5:30 P.M. on the date hereof, or, with the consent of
the Underwriters, at a later time and date, not later, however, than
5:30 P.M. on the first business day following the date hereof, or at
such later time and date as may be approved by a majority in interest
of the Underwriters. At the Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission. If the Company has elected to rely upon Rule 430A of
the 1933 Act Regulations, the Pricing Terms and any other
price-related information previously omitted from the effective
Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of
the 1933 Act Regulations within the prescribed time period, and prior
to the Closing Time the Company shall have provided evidence
satisfactory to the Underwriters of such timely filing, or a
post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the
requirements of Rule 430A of the 1933 Act Regulations.

(b) At the Closing Time the Underwriters shall have received:

(1) The favorable opinion, dated as of the Closing
Time, of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel,
counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:

(i) The Company is a corporation validly
organized and existing and in good standing under
the laws of the State of Delaware.

(ii) The Company has the requisite corporate
power and authority to own, lease and operate its
properties and to conduct its business as described
in the Registration Statement.

(iii) This Agreement and the Pricing
Agreement have each been duly authorized,
executed and delivered by the Company.

(iv) The issuance of the PRIDES has been
duly authorized. The PRIDES, when issued, sold and
delivered by the Company in the manner contemplated
by the Registration Statement, will be validly
issued, fully paid and non-assessable.

(v) The issuance of the PRIDES is not
subject to preemptive or other similar rights
arising by law.

(vi) The shares of Common Stock issuable
upon conversion or redemption of the PRIDES have been
duly authorized and validly reserved for issuance
upon such conversion or redemption, and such shares,
when issued and delivered upon such conversion or
redemption in the manner provided in the Certificate
of Designations, will be validly issued, fully paid
and non-assessable; and the issuance of such shares
upon such conversion or redemption will not be
subject to preemptive or other similar rights arising
by law.


12

(vii) The PRIDES and the Common Stock
conform in all material respects to the description
thereof contained in the Prospectus and the
Registration Statement.

(viii) The Registration Statement has become
effective under the 1933 Act and, to the best of
their knowledge, no stop order suspending the
effectiveness of the Registration Statement has been
issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission.

(ix) At the time the Registration Statement
became effective and at the Representation Date, the
Registration Statement (other than the financial
statements and the notes thereto and related
schedules and other financial, numerical, statistical
or accounting data included therein or omitted
therefrom, as to which no opinion is expressed)
complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act
Regulations.

(x) To their knowledge, without any
independent inquiry, there are no legal or
governmental proceedings pending or threatened
against the Company which are required to be
disclosed in the Registration Statement, other than
those disclosed therein.

(xi) The descriptions of the Company's
principal indebtedness contained in the Prospectus
under "Description of Principal Indebtedness" (other
than numerical computations, as to which no opinion
is expressed) conform in all material respects to the
terms of such indebtedness.

(xii) No authorization, approval, consent or
order of any court or governmental authority or
agency is legally required to be obtained by the
Company in connection with the issuance and sale of
the Securities to the Underwriters hereunder, except
such as may be required under the 1933 Act, the 1933
Act Regulations or state securities or Blue Sky laws
or regulations, as to which no opinion is expressed
in this paragraph. The execution and delivery by the
Company of this Agreement and the Pricing Agreement
and the consummation by the Company of the
transactions herein and therein contemplated do not
violate the provisions of the certificate of
incorporation or bylaws of the Company, as in effect
on the date of the opinion, or, to the best knowledge
of such counsel, any applicable law or administrative
regulation (other than state securities or Blue Sky
laws or regulations, as to which no opinion is
expressed) or administrative or court decree entered
against or applicable to the Company as of the date
of the opinion. It is understood that in rendering
the opinion expressed in this subsection (xii) with
respect to any law or administrative regulation, such
counsel has assumed that none of the Agreement, the
Pricing Agreement, the Registration Statement, the
Prospectus, any prospectus subject to completion used
in connection with the offering of the Securities or
any other information provided to the Underwriters or
any other person by the Company pursuant thereto or
in connection therewith contains any untrue statement







13
of a material fact or omits to state a material fact
required to be stated therein or necessary to make
the statements therein (in the case of the Prospectus
or any prospectus subject to completion used in
connection with the offering of the Securities, in
light of the circumstances under which they were
made) not misleading.

(xiii) The discussion contained in the
Prospectus under "Federal Income Tax Considerations"
sets forth the material federal income tax
consequences applicable to the holders of the
Securities.

(xiv) The Initial Intercompany Note has been
duly authorized by KACC, and when executed and
delivered by KACC as described in the Prospectus
under "Use of Proceeds," the Initial Intercompany
Note will constitute a valid and binding obligation
of KACC, enforceable against KACC in accordance with
its terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium,
reorganization, fraudulent conveyance and other laws
and court decisions relating to or affecting
creditors' rights and remedies generally and general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in
equity or law).

(2) The favorable opinion, dated as of the Closing
Time, of Anthony R. Pierno, Esq., General Counsel of the
Company, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:

(i) To the best of his knowledge, the
Company is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which such qualification is required,
except where the failure to so qualify or be in good
standing could not reasonably be expected to have a
material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or
business prospects of the Company and its
subsidiaries considered as one enterprise.

(ii) The issuance of the PRIDES has been
duly authorized. The PRIDES, when issued, sold and
delivered by the Company in the manner contemplated
by the Registration Statement, will be validly
issued, fully paid and non-assessable.

(iii) The issuance of the PRIDES is not
subject to preemptive or other similar
rights arising by law.

(iv) The shares of Common Stock issuable
upon conversion or redemption of the PRIDES have been
duly authorized and validly reserved for issuance
upon such conversion or redemption, and such shares,
when issued and delivered upon such conversion or
redemption in the manner provided in the Certificate
of Designations, will be validly issued, fully paid
and non-assessable; and the issuance of such shares
upon such conversion or redemption will not be
subject to preemptive or other similar rights arising
by law.

(v) To the best of his knowledge, there are
no legal or governmental proceedings pending or
threatened against the Company or any Significant







14

Subsidiary which are required to be disclosed in the
Registration Statement, other than those disclosed
therein.

(vi) Each domestic Significant Subsidiary of
the Company, and each of Anglesey Aluminium Limited,
Kaiser Jamaica Bauxite Company, Queensland Alumina
Limited and Volta Aluminium Company Limited, has been
duly organized and is validly existing and, if
applicable, is in good standing under the laws of the
jurisdiction of its organization, has the requisite
corporate (or partnership) power and authority to
own, lease and operate its properties and to conduct
its business as described in the Prospectus and, to
the best of his knowledge, is duly qualified as a
foreign corporation (or partnership) to transact
business and, if applicable, is in good standing in
each jurisdiction in which such qualification is
required, except where the failure to so qualify and
be in good standing could not reasonably be expected
to have a material adverse effect on the condition,
financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise. All of
the issued and outstanding capital stock of each such
Significant Subsidiary that is a corporation has been
duly authorized and validly issued, is fully paid and
non-assessable and, to the best of his knowledge the
shares of capital stock of each such Significant
Subsidiary owned by the Company, directly or through
subsidiaries, are owned free and clear of any Lien,
except for (i) the pledge of all or a portion of the
capital stock of certain such subsidiaries to Mellon
Bank, N.A., as Collateral Agent under the Credit
Agreement, which shares of capital stock shall be
pledged to Bank of America National Trust and Savings
Association [BankAmerica Business Credit, Inc.], as
Collateral Agent under the New Credit Agreement, (ii)
non-material Liens that have arisen in the ordinary
course of business and (iii) Liens in favor of
joint-venture partners of the Company with respect to
foreign Significant Subsidiaries.

(vii) To the best of his knowledge, (A)
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments to
which the Company or any Significant Subsidiary is a
party or by which any of them may be bound that are
required to be described in the Registration
Statement or to be filed as exhibits thereto other
than those described therein or filed or incorporated
by reference as exhibits thereto, and (B) no default
exists in the due performance or observance of any
material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so
described, filed or incorporated by reference, except
for defaults which could not reasonably be expected
to have a material adverse effect on the condition,
financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.

(viii) No authorization, approval, consent
or order of any court or governmental authority or
agency is legally required to be obtained by the
Company in connection with the issuance and sale of
the Securities to the Underwriters hereunder, except
such as may be required under the 1933 Act, the 1933
Act Regulations or state securities or Blue Sky laws
or regulations, as to which no opinion is expressed.
To the best of his knowledge, the execution and
delivery by the Company of this Agreement and the
Pricing Agreement and the





15
consummation by the Company of the transactions
contemplated herein and therein do not conflict with
or constitute a breach of, or default under, or
result in the creation or imposition of any Lien,
charge or encumbrance upon any property or assets of
the Company or any of its Significant Subsidiaries
pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument listed as
an exhibit to the Registration Statement to which the
Company or any of its Significant Subsidiaries is a
party or by which any of them may be bound, nor does
such action conflict with or constitute a breach of,
or default under, or result in any violation of the
provisions of the charter or bylaws, or partnership
agreement, as the case may be, of the Company or any
of its Significant Subsidiaries, as in effect on the
date of the opinion, or any applicable law or
administrative regulation (other than state
securities or Blue Sky laws or regulations, as to
which no opinion is expressed) or administrative or
court decree entered against or applicable to the
Company or any of its Significant Subsidiaries as of
the date of the opinion. It is understood that in
rendering the opinion expressed in this subsection
(viii) with respect to any law or administrative
regulation, such counsel has assumed that none of the
Agreement, the Pricing Agreement, the Registration
Statement, the Prospectus, any prospectus subject to
completion used in connection with the offering of
the Securities or any other information provided to
the Underwriters or any other person by the Company
pursuant thereto or in connection therewith contains
any untrue statement of a material fact or omits to
state a material fact required to be stated therein
or necessary to make the statements therein (in the
case of the Prospectus or any prospectus subject to
completion used in connection with the offering of
the Securities, in light of the circumstances under
which they were made) not misleading.

(ix) The authorized, issued and outstanding
capital stock of the Company is as set forth in the
Prospectus under "Capitalization," and such shares
have been duly authorized and validly issued and are
fully paid and non-assessable.

(x) The descriptions of documents and legal
proceedings contained in the Prospectus under
"Management -- Executive Compensation; and --
Employment Contracts and Termination of Employment
and Change-in-Control Arrangements" and "Business --
Environmental Matters; and -- Legal Proceedings"
(other than numerical computations, as to which no
opinion is expressed) conform in all material
respects to the terms of the applicable documents or
the relevant legal proceedings, as the case may be.

(3) The favorable opinion, dated as of the Closing
Time, of Latham & Watkins, counsel for the Underwriters, with
respect to the matters set forth in (i), (iii) to (vi),
inclusive, (viii) and (ix) of subsection (b)(1) of this
section.

(4) In giving their opinions required by subsections
(b)(1), (b)(2) and (b)(3), respectively, of this section,
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, Anthony R.
Pierno, Esq. and Latham & Watkins shall each additionally
state that although such counsel has not undertaken to
determine independently the accuracy and completeness of the
statements contained in the Registration Statement or in the
Prospectus, such counsel have obtained information as a result
of discussions and meetings with officers and other
representatives of the Company and discussions with the







16
auditors for the Company in connection with the preparation of
the Registration Statement and the Prospectus, responses to
various questions raised by such counsel regarding the
business of the Company, and the examination of other
information and documents requested by such counsel. Such
counsel have not, however, undertaken to determine
independently and, therefore, do not assume any
responsibility, explicitly or implicitly, for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and such counsel can
give the Underwriters no assurance that the procedures
described in the first sentence of this paragraph would
necessarily reveal matters of significance with respect to the
following comments. Nothing has come to their attention
during the course of the procedures described above that has
caused them to believe that (i) the Registration Statement, at
the time it became effective or at the Representation Date,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
(ii) the Prospectus, at the Representation Date (unless the
term "Prospectus" refers to a prospectus which has been
provided to the Underwriters by the Company for use in
connection with the offering of the Securities which differs
from the Prospectus on file at the Commission at the
Representation Date, in which case at the time it is first
provided to the Underwriters for such use) and at the Closing
Time, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading (it being understood that
such counsel need express no opinion with respect to the
financial statements and notes thereto and related schedules
and other financial, numerical, statistical and accounting
data contained in or omitted from the Registration Statement
or Prospectus).

(c) At the Closing Time there shall not have been, since the
date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business, and the Underwriters shall have received a certificate of
the President or a Vice President and the chief financial or chief
accounting officer of the Company, dated as of the Closing Time, to
the effect that (i) there has been no such material adverse change,
(ii) the representations and warranties in Section 1 of this Agreement
are true and correct in all material respects with the same force and
effect as though expressly made at and as of the Closing Time, (iii)
the Company has complied in all material respects with all agreements
in this Agreement and satisfied all conditions in this Agreement on
its part to be performed or satisfied at or prior to the Closing Time,
and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the best of their
knowledge, no proceedings for that purpose have been initiated or
threatened by the Commission. As used in this Section 5(c), the term
"Prospectus" means the Prospectus in the form first used to confirm
sales of the Securities.

(d) At the time of the execution of this Agreement, the
Underwriters shall have received from Arthur Andersen & Co. a letter
dated such date, in form and substance reasonably satisfactory to the
Underwriters, to the effect that (i) they are independent public
accountants with respect to the Company and its subsidiaries within
the meaning of the 1933 Act and the 1933 Act Regulations, (ii) it is
their opinion that the financial statements and supporting schedules
included in the Registration Statement and covered by their opinions
therein comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations,
(iii) based upon limited procedures set forth in detail in such
letter, nothing has


17
come to their attention which causes them to believe that (A) the
unaudited financial statements and supporting schedules of the Company
and its subsidiaries included in the Registration Statement do not
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations
or are not presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited financial statements included in the Registration
Statement, (B) the unaudited amounts of revenues, net income and net
income per share set forth under "Selected Consolidated Financial
Data" in the Prospectus were not determined on a basis substantially
consistent with that used in determining the corresponding amounts in
the audited financial statements included in the Registration
Statement or (C) at a specified date not more than five days prior to
the date of this Agreement, there has been any change in the capital
stock of the Company or any increase in the consolidated long term
debt of the Company and its subsidiaries or any decrease in
consolidated net current assets or net assets as compared with the
amounts shown in the September 30, 1993 balance sheet included in the
Registration Statement or, during the period from September 30, 1993
to a specified date not more than five days prior to the date of this
Agreement, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated revenues,
net income or net income per share of the Company and its
subsidiaries, except in all instances for changes, increases or
decreases which the Registration Statement and the Prospectus disclose
have occurred or may occur and (iv) in addition to the examination
referred to in their opinions and the limited procedures referred to
in clause (iii) above, they have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included in
the Registration Statement and Prospectus and which are specified by
the Underwriters, and have found such amounts, percentages and
financial information to be in agreement with the relevant accounting,
financial and other records of the Company and its subsidiaries
identified in such letter.

(e) At the Closing Time the Underwriters shall have received
from Arthur Andersen & Co. a letter, dated as of the Closing Time, to
the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this section, except that the
specified date referred to shall be a date not more than five days
prior to the Closing Time.

(f) At the Closing Time, the PRIDES shall have a rating of at
least b3 from Moody's Investors Service, Inc. and B- from Standard &
Poor's Corporation, and the Company shall have delivered to the
Underwriters a letter from each such rating agency or other evidence
satisfactory to the Underwriters confirming such ratings. Subsequent
to the execution of this Agreement, no downgrading shall have occurred
in the rating accorded any of the Company's debt securities by Moody's
Investors Service, Inc. or Standard & Poor's Corporation, and neither
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating accorded any of the Company's debt securities, if in the
reasonable judgment of the Underwriters any such development is so
material and adverse as to make it impracticable or inadvisable to
consummate the sale and delivery of the Securities by the Underwriters
as contemplated in the Prospectus.

(g) At the Closing Time, the PRIDES and the Common Stock
issuable in respect of the PRIDES being sold to the public shall have
been approved for listing on the New York Stock Exchange, subject to
official notice of issuance.

(h) At the Closing Time counsel for the Underwriters shall
have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them




18
to pass upon the issuance and sale of the Securities as herein
contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained. All
proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.

(i) At the Closing Time, KACC shall have consummated the
offering of $175,000,000 aggregate principal amount of KACC's --- %
Senior Notes due 2002.

(j) At the Closing Time, the Company shall have entered into
the New Credit Agreement, in form and substance satisfactory to the
Underwriters in the Underwriters' sole discretion, and counterparts,
conformed as executed, of such agreement and all related agreements
shall have been delivered to the Underwriters.

(k) In the event the Underwriters exercise their option
provided in Section 2 hereof to purchase all or any portion of the
Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by
the Company hereunder shall be true and correct in all material
respects as of each Delivery Date, and the Underwriters shall have
received:

(1) A certificate, dated such Delivery Date, of the
President or a Vice President of the Company and the chief
financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time
pursuant to Section 5(c) hereof remains true as of such
Delivery Date.

(2) The favorable opinions of Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel, counsel for the Company,
and Anthony R. Pierno, Esq., General Counsel of the Company,
in form and substance satisfactory to counsel for the
Underwriters, dated such Delivery Date, relating to the Option
Securities and otherwise to the same effect as the opinions
required by Section 5(b)(1) and 5(b)(2) hereof, respectively;
provided, however, that references in clause (xiv) of Section
5(b)(1) to the Initial Intercompany Note shall be changed to
the Additional Intercompany Note.

(3) The favorable opinion of Latham & Watkins,
counsel for the Underwriters, dated such Delivery Date, to the
same effect as the opinion required by Section 5(b)(3) hereof.

(4) A letter from Arthur Andersen & Co. in form and
substance satisfactory to the Underwriters, dated such
Delivery Date, substantially the same in scope and substance
as the letter furnished to the Underwriters pursuant to
Section 5(e) hereof except that the "specified date" in the
letter furnished pursuant to this section shall be a date not
more than five days prior to such Delivery Date.


If any condition specified in this section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to the Company at any time at or prior
to the Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4 hereof.





19
Section 6. INDEMNIFICATION.

(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act and each officer and director of each
Underwriter and of any such controlling person to the extent and in the manner
set forth in clauses (i), (ii) and (iii) below:

(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be part of
the Registration Statement pursuant to Rule 430A(b) of the 1933 Act
Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if and only if such settlement is effected with the written
consent of the Company; and

(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements
of counsel chosen by the Underwriters), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;

provided, however, that (A) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Underwriters expressly for use in the Registration Statement or
any preliminary prospectus or the Prospectus and (B) with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, this indemnity agreement shall not inure to the benefit
of any indemnified party to the extent that such loss, liability, claim, damage
or expense of the indemnified party results from the fact that the Underwriters
sold Securities to a person to whom there was not sent or given by the
Underwriters or on the Underwriters' behalf at or prior to the written
confirmation of sale of the Securities to such person, a copy of the
Prospectus, if required by law to have been delivered, and if the Prospectus
would have cured the defect giving rise to such loss, liability, claim, damage
or expense.

(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement, or any preliminary prospectus or the Prospectus in reliance upon and
in




20
conformity with written information furnished to the Company by such
Underwriter expressly for use in the Registration Statement, such preliminary
prospectus or the Prospectus.

(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action, proceeding or
investigation commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve
such indemnifying party from any liability which it may have otherwise than on
account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of any such action. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances.

Section 7. CONTRIBUTION.

In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 6 hereof
is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Underwriters shall
contribute to the aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by such indemnity agreement incurred by the Company
and one or more of the Underwriters, as incurred, in such proportions that the
Underwriters are responsible for that portion represented by the percentage
that the underwriting discount appearing on the cover page of the Prospectus
bears to the initial public offering price appearing thereon and the Company
shall be responsible for the balance; provided, however, that no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. Notwithstanding the provisions of this
Section, no Underwriter shall be required to contribute any amount in excess of
the amounts by which the total fees received by it with respect to the
Securities underwritten by it and distributed to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay in
respect to such losses, liabilities, claims, damages and expenses. For
purposes of this section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act, and each officer or director
of an Underwriter and of any such control person, shall have the same rights to
contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Company.

Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.

All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers
of the Company submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.

Section 9. TERMINATION OF AGREEMENT.

(a) The Underwriters may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Time (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its






21
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, in the reasonable judgment of the Underwriters, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States, Europe or elsewhere, or any new outbreak of hostilities
or material escalation thereof or other calamity or crisis, the effect of which
is such as to make it, in the judgment of the Underwriters, impracticable to
market the Securities or to enforce contracts for the sale of the Securities,
or (iii) if trading in the securities of the Company has been suspended by the
Commission, or if trading generally on either the American Stock Exchange or
the New York Stock Exchange has been suspended, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities have
been required, by either of the American or New York Stock Exchanges or by
order of the Commission or any other governmental authority, or if a general
banking moratorium has been declared by Federal, New York, Texas or California
authorities or (iv) if there has occurred any change or development involving a
prospective change in national or international political, financial or
economic conditions or currency exchange rates or exchange controls which, in
the opinion of the Underwriters, is likely to have a materially adverse effect
on the market for the Securities. As used in this Section 9(a), the term
"Prospectus" means the Prospectus in the form first used to confirm sales of
the Securities.

(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except
as provided in Sections 4 and 6 hereof, and provided further that Sections 6
and 7 hereof shall survive such termination.

Section 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS.

If one or more of the Underwriters shall fail at the Closing Time to
purchase the Securities which it or they are obligated to purchase under this
Agreement and the Pricing Agreement (the "Defaulted Securities"), the remaining
Underwriter or Underwriters shall have the right, within 24 hours thereafter,
to purchase or to make arrangements for any other underwriters to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth. If, however, the remaining
Underwriter or Underwriters shall not have completed such arrangements within
such 24-hour period, then:

(a) if the number of Defaulted Securities does not exceed 10%
of the Securities, the non-defaulting Underwriters shall be obligated
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters; or

(b) if the number of Defaulted Securities exceeds 10% of the
Securities, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.

No action taken pursuant to this section shall relieve any defaulting
Underwriter from liability in respect of its default.

In the event of any such default which does not result in a
termination of this Agreement, the non-defaulting Underwriters or the Company
shall have the right to postpone the Closing Time for a period not exceeding
five business days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements.

The Underwriters shall also have the right to amend Schedule A hereto
by making such substitutions or corrections as indicated in the Pricing
Agreement.





22
Section 11. NOTICES.

All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Underwriters shall be
directed to the Underwriters in care of Merrill Lynch at Merrill Lynch World
Headquarters, North Tower, World Financial Center, New York, New York
10281-1305, attention of Theodore D. Sands, Managing Director, telecopy number
(212) 449-3150, with a copy to Latham & Watkins, 885 Third Avenue, New York,
New York 10022, attention of Beth R. Neckman, Esq., telecopy number (212)
751-4864; notices to the Company shall be directed to it at 5847 San Felipe,
Suite 2600, Houston, Texas 77057, attention of John T. La Duc, telecopy number
(713) 267-3710 or Anthony R. Pierno, Esq., telecopy number (713) 267-3702, with
a copy to Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, 919 Third Avenue,
New York, New York 10022, attention of Howard A. Sobel, Esq., telecopy number
(212) 688-2119.

Section 12. PARTIES.

This Agreement and the Pricing Agreement shall each inure to the
benefit of and be binding upon the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement or the
Pricing Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Company and their respective
successors, and the controlling persons, officers, and directors referred to in
Sections 6 and 7 hereof and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or the
Pricing Agreement or any provision herein or therein contained. This Agreement
and the Pricing Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the Underwriters and
the Company and their respective successors, and such controlling persons,
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.

Section 13. GOVERNING LAW AND TIME.

This Agreement and the Pricing Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
giving effect to principles of conflict of laws. Specified times of day refer
to New York City time.





23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its
terms.

Very truly yours,

KAISER ALUMINUM CORPORATION


By:
-----------------------------
Name:
Title:

Confirmed and Accepted,
as of the date first above written:

MERRILL LYNCH & CO.
MERRILL, LYNCH, PIERCE, FENNER & SMITH INCORPORATED
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC

By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED


By:
--------------------------
Name:
Title:





24
SCHEDULE A