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<SEC-DOCUMENT>/in/edgar/work/20000728/0000004281-00-000016/0000004281-00-000016.txt : 20000921
<SEC-HEADER>0000004281-00-000016.hdr.sgml : 20000921
ACCESSION NUMBER:		0000004281-00-000016
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20000630
FILED AS OF DATE:		20000728

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ALCOA INC
		CENTRAL INDEX KEY:			0000004281
		STANDARD INDUSTRIAL CLASSIFICATION:	 [3334
]		IRS NUMBER:				250317820
		STATE OF INCORPORATION:			PA
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		10-Q
			SEC ACT:		
			SEC FILE NUMBER:	001-03610
			FILM NUMBER:		680810
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		201 ISABELLA ST
				STREET 2:		ALCOA CORPORATE CTR
				CITY:			PITTSBURGH
				STATE:			PA
				ZIP:			15212 5858
				BUSINESS PHONE:		4125532576
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		801 ISABELLA ST
					STREET 2:		ALCOA CORPORATE CTR
					CITY:			PITTSBURGH
					STATE:			PA
					ZIP:			15212 5858
</MAIL-ADDRESS>

					FORMER COMPANY:	
						FORMER CONFORMED NAME:	ALUMINUM CO OF AMERICA
						DATE OF NAME CHANGE:	19920703
</FORMER-COMPANY>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>0001.txt
<TEXT>

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                       OR

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


For the Quarter Ended June 30, 2000     Commission File Number 1-3610

                               ALCOA INC.

         (Exact name of registrant as specified in its charter)


                             PENNSYLVANIA 25-0317820

     (State of incorporation) (I.R.S. Employer Identification No.)

        201 Isabella Street, Pittsburgh, Pennsylvania 15212-5858

          (Address of principal executive offices) (Zip Code)


                  Office of Investor Relations  412-553-3042
                  Office of the Secretary       412-553-4707

          (Registrant's telephone number including area code)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the  preceding  12 months,  and (2) has been  subject to such filing
requirements for the past 90 days.

                                        Yes  X    No

     As of July 26, 2000,  866,001,474  shares of common stock,  par value $1.00
per share, of the Registrant were outstanding.

A07-20002


<PAGE>


PART I - FINANCIAL  INFORMATION
Alcoa and subsidiaries
Condensed  Consolidated Balance Sheet
(in millions)

<TABLE>
<CAPTION>
                                                           (unaudited)
                                                       June 30    December 31
ASSETS                                                   2000        1999
                                                       --------    --------
<S>                                                    <C>         <C>
Current assets:

   Cash and cash equivalents                           $    320    $    237
   Short-term investments                                    76          77
   Receivables from customers, less allowances of
    $74 in 2000 and $58 in 1999                           3,231       2,199
   Other receivables                                        328         165
   Inventories (B)                                        2,842       1,618
   Deferred income taxes                                    284         233
   Prepaid expenses and other current assets                341         271
                                                       --------    --------
    Total current assets                                  7,422       4,800
                                                       --------    --------

Properties, plants and equipment, at cost                22,562      18,436
Less, accumulated depreciation, depletion and
 Amortization                                             9,500       9,303
                                                       --------    --------
    Net properties, plants and equipment                 13,062       9,133
                                                       --------    --------
Goodwill, net of accumulated amortization of $257 in
 2000 and $221 in 1999                                    5,005       1,328
Other assets, including assets held for sale (G)          5,343       1,805
                                                       --------    --------
    Total assets                                       $ 30,832    $ 17,066
                                                       ========    ========

LIABILITIES
Current liabilities:
   Short-term borrowings                               $  1,908    $    343
   Accounts payable, trade                                1,819       1,219
   Accrued compensation and retirement costs                860         582
   Taxes, including taxes on income                         512         368
   Other current liabilities                                904         424
   Long-term debt due within one year                       315          67
                                                       --------    --------
     Total current liabilities                            6,318       3,003
                                                       --------    --------
Long-term debt, less amount due within one year           6,095       2,657
Accrued postretirement benefits                           2,536       1,720
Other noncurrent liabilities and deferred credits         2,029       1,473
Deferred income taxes                                     1,369         437
                                                       --------    --------
     Total liabilities                                   18,347       9,290
                                                       --------    --------

MINORITY INTERESTS                                        1,445       1,458
                                                       --------    --------

CONTINGENT LIABILITIES (C)                                 --          --

SHAREHOLDERS' EQUITY
Preferred stock                                              56          56
Common stock                                                925         395
Additional capital                                        5,921       1,704
Retained earnings                                         6,592       6,061
Treasury stock, at cost                                  (1,696)     (1,260)
Accumulated other comprehensive income (D)                 (758)       (638)
                                                       --------    --------
     Total shareholders' equity                          11,040       6,318
                                                       --------    --------
      Total liabilities and shareholders' equity       $ 30,832    $ 17,066
</TABLE>
                                                       ========    ========

The accompanying notes are an integral part of the financial statements.


<PAGE>




Alcoa and subsidiaries

Condensed Statement of Consolidated Income (unaudited)
(in millions, except per share amounts)

<TABLE>
<CAPTION>
                                    Second quarter ended     Six months ended
                                           June 30               June 30
                                           -------               -------
                                       2000       1999       2000       1999

                                    --------    --------    --------    --------
<S>                                 <C>         <C>         <C>         <C>
REVENUES

Sales                               $  5,569    $  4,033    $ 10,100    $  8,017
Other income (expense)                    52          43          93          40
                                    --------    --------    --------    --------
                                       5,621       4,076      10,193       8,057
                                    --------    --------    --------    --------
COSTS AND EXPENSES
Cost of goods sold                     4,216       3,140       7,548       6,268
Selling, general administrative

 and other expenses                      272         203         499         395
Research and development expenses         48          30          87          58
Provision for depreciation,
 depletion and amortization              290         221         515         439
Interest expense                          95          50         146         102
                                    --------    --------    --------    --------
                                       4,921       3,644       8,795       7,262
                                    --------    --------    --------    --------

EARNINGS

   Income before taxes on income         700         432       1,398         795
Provision for taxes on income (E)        238         138         475         254
                                    --------    --------    --------    --------
   Income from operations                462         294         923         541
Less: Minority interests' share          (85)        (54)       (191)        (80)
                                    --------    --------    --------    --------
NET INCOME                          $    377    $    240    $    732    $    461
                                    ========    ========    ========    ========

EARNINGS PER SHARE (F)
    Basic                           $    .47    $    .33    $    .95    $    .63
                                    ========    ========    ========    ========

    Diluted                         $    .47    $    .32    $    .94    $    .62
                                    ========    ========    ========    ========

Dividends paid per common share     $   .125    $ .10063    $    .25    $ .20125
                                    ========    ========    ========    ========

</TABLE>


The accompanying notes are an integral part of the financial statements.


<PAGE>


27

Alcoa and subsidiaries

Condensed Statement of Consolidated Cash Flows (unaudited)
(in millions)
<TABLE>
<CAPTION>
                                                                Six months ended
                                                                     June 30
                                                                2000        1999
                                                               -------    -------
<S>                                                            <C>        <C>
CASH FROM OPERATIONS
Net income                                                     $   732    $   461
Adjustments to reconcile net income to cash from operations:
   Depreciation, depletion and amortization                        520        431
   Change in deferred income taxes                                  47        (10)
   Equity income before additional taxes, net of dividends         (17)        (7)
   Loss on sale or disposal of assets                                3         10
   Minority interests                                              190         79
   Other                                                            14         (1)
Changes in assets and liabilities, excluding the effects of
  acquisitions  and divestitures:

   (Increase) reduction in receivables                            (256)        43
   (Increase) reduction in inventories                             (41)       234
   (Increase) reduction in prepaid expenses and other               (3)        12
    current assets
   Reduction in accounts payable and accrued expenses             (153)      (142)
   Increase (reduction) in taxes, including taxes on income        161        (65)
   Reduction in deferred hedging gains                            --          (45)
   Net change in noncurrent assets and liabilities                 (91)       (88)
                                                               -------    -------
      CASH FROM OPERATIONS                                       1,106        912
                                                               -------    -------

FINANCING ACTIVITIES
Net changes in short-term borrowings                             1,311         (7)
Common stock issued and treasury stock so sold, excluding
 stock issued in acquisitions                                      152        427
Repurchase of common stock                                        (670)      (603)
Dividends paid to shareholders                                    (201)      (149)
Dividends paid to minority interests                              (164)       (62)
Net change in commercial paper                                  (1,453)       (70)
Additions to long-term debt                                      1,607        216
Payments on long-term debt                                       1,358       (283)
                                                               -------    -------
      CASH PROVIDED FROM (USED FOR) FINANCING ACTIVITIES         1,940       (531)
                                                               -------    -------

INVESTING ACTIVITIES
Capital expenditures                                              (408)      (388)
Acquisitions, net of cash acquired (H)                          (2,534)       (16)
Proceeds from the sale of assets                                     4         31
Net change in short-term investments                                 1        (24)
Additions to investments                                           (19)       (68)
Changes in minority interests                                        4         (4)
Other                                                               (9)        (7)
                                                               -------    -------
      CASH USED FOR INVESTING ACTIVITIES                        (2,961)      (476)
                                                               -------    -------

      EFFECT OF EXCHANGE RATE CHANGES ON CASH                       (2)        (4)
                                                               -------    -------
Net change in cash and cash equivalents                             83        (99)
Cash and cash equivalents at beginning of year                     237        342
                                                               -------    -------
      CASH AND CASH EQUIVALENTS AT END OF PERIOD               $   320    $   243
                                                               =======    =======
</TABLE>

The accompanying notes are an integral part of the financial statements.


<PAGE>


Notes to Condensed Consolidated Financial Statements
(in millions)

A. Common Stock Split - On January 10, 2000,  the board of directors  declared a
two-for-one  common stock  split.  Alcoa  shareholders  approved an amendment to
Alcoa's  Articles of  Incorporation  to increase the authorized  shares of Alcoa
common stock from 600 million to 1.8 billion at the company's  annual meeting on
May 12, 2000. As a result of the stock split,  shareholders of record on May 26,
2000 received an  additional  common share for each share held.  The  additional
shares were distributed on June 9, 2000. In this report,  all per-share  amounts
and number of shares have been restated to reflect the stock split.

B. Inventories
<TABLE>
<CAPTION>

                                                June 30        December 31
                                                 2000              1999
                                              ----------         -------
<S>                                           <C>               <C>
Finished goods                                $   870           $   363
Work in process                                   874               550
Bauxite and alumina                               319               286
Purchased raw materials                           556               267
Operating supplies                                223               152
                                              -------           -------
                                              $ 2,842           $ 1,618
                                              =======           =======
</TABLE>

     Approximately  69% of total  inventories  at June 30, 2000 were valued on a
LIFO basis.  If valued on an average cost basis,  total  inventories  would have
been $675 and $645 higher at June 30, 2000 and December 31, 1999, respectively.

C. Contingent  Liabilities - Various lawsuits,  claims and proceedings have been
or may be instituted or asserted  against Alcoa,  including those  pertaining to
environmental,  product  liability  and  safety and  health  matters.  While the
amounts  claimed  might be  substantial,  the ultimate  liability  cannot now be
determined because of the considerable  uncertainties that exist.  Therefore, it
is possible that results of operations or liquidity in a particular period could
be  materially  affected  by  certain  contingencies.  However,  based  on facts
currently  available,  management  believes that the disposition of matters that
are  pending  or  asserted  will not have a  materially  adverse  impact  on the
financial position of the company.

     Alcoa  Aluminio,  S.A.  (Aluminio)  is currently  party to a  hydroelectric
construction project in Brazil. Total estimated  construction costs are $500, of
which the company's  share is 24%. In the event that other  participants in this
project fail to fulfill their financial responsibilities, Aluminio may be liable
for its pro rata share of the deficiency.

     Alcoa of  Australia,  Ltd.  (AofA) is party to a number of natural  gas and
electricity contracts that expire between 2001 and 2022. Under these take-or-pay
contracts,  AofA is  obligated  to pay for a minimum  amount of  natural  gas or
electricity  even  if  these   commodities  are  not  required  for  operations.
Commitments related to these contracts total $190 in 2000, $182 in 2001, $179 in
2002, $176 in 2003, $176 in 2004 and $2,222 thereafter. Expenditures under these
contracts totaled $179 in 1999.

D. Comprehensive Income
<TABLE>
<CAPTION>

                                   Second quarter ended Six Months ended
                                          June 30               June 30
                                          -------               -------
                                       2000     1999     2000     1999
                                      -----    -----    -----    -----
<S>                                   <C>      <C>      <C>      <C>
Net income                            $ 377    $ 240    $ 732    $ 461
Other comprehensive loss, primarily
 translation                            (41)     (11)    (120)     (99)
                                      -----    -----    -----    -----
Comprehensive income                  $ 336    $ 229    $ 612    $ 362
                                      =====    =====    =====    =====
</TABLE>

E.  Income  Taxes - The  income  tax  provision  for the  period is based on the
expected effective tax rate adjusted for the impact of the acquisitions from the
acquisition  dates through June 30. The 2000 second  quarter rate of 34% differs
from the statutory rate primarily  because of taxes on foreign income.  The 2000
second quarter rate differs from the 1999 second quarter rate primarily  because
of higher  income  before tax in 2000.  The  effective  tax rate for the year is
currently estimated at 35%.

F.  Earnings Per Share - Basic  earnings per share (EPS) amounts are computed by
dividing  earnings  applicable to common  stockholders  by the average number of
common  shares  outstanding.  Diluted EPS amounts  assume the issuance of common
stock  for  all  potentially  dilutive  equivalents  outstanding.  Anti-dilutive
outstanding  stock options have been excluded from the diluted EPS  calculation.
The detail of basic and diluted EPS follow:
<TABLE>
<CAPTION>

                                           Second quarter ended     Six months ended
                                                  June 30               June 30
                                                  -------               -------
                                               2000       1999       2000       1999
                                              -----      -----      -----      -----
<S>                                          <C>        <C>        <C>        <C>
Net income                                   $  377     $  240     $  732     $  461
Less: Preferred stock dividends                   -          -          1          1
                                              -----      -----      -----      -----
Income available to common
 stockholders                                $  377     $  240     $  731     $  460

Average shares outstanding-basic              797.0      734.2      770.1      734.1
Effect of dilutive securities:
  Shares issuable upon exercise of
   dilutive outstanding stock options           8.0        8.4       10.1       13.9
                                              -----      -----      -----      -----
  Average diluted shares outstanding          805.0      742.6      780.2      748.0
Basic EPS                                    $  .47     $  .33     $  .95     $  .63
                                             ======     ======     ======     ======
Diluted EPS                                  $  .47     $  .32     $  .94     $  .62
                                             ======     ======     ======     ======
</TABLE>

     In April 2000, Alcoa entered into a forward share  repurchase  agreement to
partially  hedge the equity exposure  related to its stock option  program.  The
contract,  which  matures in 2002,  allows the  company to  repurchase  up to 10
million shares from financial institutions.  The company may elect to settle the
contract  on a net share  basis in lieu of  physical  settlement.  The  contract
permits  early  settlement.  As of June  30,  2000,  9,900,000  shares  had been
committed to the contract at an average price of $31.90 per share. The effect of
this repurchase agreement has been included in determining diluted EPS.

G.  Acquisitions - In August 1999, Alcoa and Reynolds Metals Company  (Reynolds)
announced  they had reached a  definitive  agreement  to merge.  On May 3, 2000,
after  approval by the U.S.  Department  of Justice  (DOJ) and other  regulatory
agencies, Alcoa and Reynolds completed their merger. Under the agreement,  Alcoa
issued 2.12 shares  post-split of Alcoa common stock for each share of Reynolds.
The exchange  resulted in Alcoa issuing  approximately  135 million  shares at a
value of $33.30  (post-split)  to Reynolds  stockholders.  The  transaction  was
valued at approximately  $5,700,  including debt assumed, and has been accounted
for using the purchase method.  The total purchase costs of the acquisition will
be  allocated to the tangible and  intangible  assets and  liabilities  acquired
based on their fair  values.  The purchase  price  includes  the  conversion  of
outstanding  Reynolds  options to Alcoa options as well as other direct costs of
the  acquisition.  The  purchase  price  allocation  is  preliminary;  the final
allocation of the purchase  price will be based upon valuation and other studies
that  have  not  been  completed.   The  preliminary   allocation   resulted  in
total goodwill of approximately  $1,300,  which will be  amortized  over a
forty-year period.

     As part of the  merger  agreement,  Alcoa  agreed to divest  the  following
Reynolds  operations:
     - Reynolds' 56% stake in its alumina refinery at Worsley, Australia,
     - Reynolds' 50% stake in its alumina refinery at Stade,  Germany,
     - 100% of  Reynolds'  alumina  refinery at Sherwin,  Texas and
     - 25% of  Reynolds' interest in its aluminum smelter at Longview,
       Washington.

     Under the agreement, these divestitures must be completed within six months
of the merger  date of May 3, 2000  (nine  months for  Worsley).  The  Unaudited
Condensed  Consolidated  Financial  Statements  have been prepared in accordance
with EITF 87-11  "Allocation of Purchase Price to Assets to be Sold." Under EITF
87-11,  the net assets to be divested have been reported as assets held for sale
in the Condensed  Consolidated Balance Sheet, and the results of operations from
these assets have not been included in the Condensed  Statement of  Consolidated
Income.

     On March 14, 2000, Alcoa and Cordant  Technologies Inc. (Cordant) announced
a definitive agreement under which Alcoa would acquire all outstanding shares of
Cordant,  a  technology-based  company  serving global  aerospace and industrial
markets.  In addition,  on April 13, 2000,  Alcoa  announced plans to commence a
cash  tender  offer for all  outstanding  shares of  Howmet  International  Inc.
(Howmet).  The  offer for  Howmet  shares  was part of  Alcoa's  acquisition  of
Cordant,  which owned  approximately 85% of Howmet. On May 25, 2000 and June 20,
2000, after approval by the DOJ and other regulatory  agencies,  Alcoa completed
the  acquisition  of Cordant and Howmet,  respectively.  Under the agreement and
tender offer,  Alcoa paid $57 for each outstanding share of Cordant common stock
and $21 for each  outstanding  share of Howmet common stock.  The total value of
the transaction was approximately $3,300, including the assumption of debt. This
transaction will be accounted for using the purchase method.  The purchase price
includes  the  conversion  of  outstanding  Cordant and Howmet  options to Alcoa
options as well as other direct  costs of the  acquisition.  The purchase  price
allocation  is  preliminary;  the final  allocation  is subject to valuation and
other studies that have not been completed.  The preliminary allocation resulted
in total goodwill of approximately $2,400, which will be amortized over periods
not to exceed forty years.

     The following presents pro forma information  assuming that the acquisition
of 100% of Reynolds and Cordant had occurred at the beginning of each respective
year.  Adjustments  that have been  included  to arrive at the pro forma  totals
primarily  include those related to acquisition  financing,  the amortization of
goodwill,  the elimination of transactions between Alcoa, Reynolds, and Cordant,
and additional  depreciation related to the increase in basis that resulted from
the  transaction.  Tax effects from the pro forma  adjustments  noted above also
have been included at the 35% statutory rate.

<TABLE>
<CAPTION>

                                                   Six months ended
                                                        June 30
                                                        -------
                                                 2000              1999
                                               -------           -------
<S>                                            <C>               <C>
Sales                                          $12,882           $11,327
Net Income                                         777               438
Basic EPS                                      $  0.90           $  0.50
                                               =======           =======
Diluted EPS                                    $  0.89           $  0.49
                                               =======           =======
</TABLE>

     The pro forma results are not necessarily indicative of what actually would
have  occurred  if the  transaction  had been in effect for the  entire  periods
presented,  are not intended to be a projection  of future  results,  and do not
reflect any cost savings that might be achieved from the combined operations.

     Debt increased $4,475 as a result of the Reynolds and Cordant acquisitions.
$1,220 of debt was assumed in the  acquisition  of Reynolds,  while $826 of debt
was assumed in the  acquisition  of Cordant.  The Cordant  acquisition  price of
$2,429,  including  the  acquisition  of the  remaining  shares of  Howmet,  was
financed with debt.

     Alcoa  completed a number of other  acquisitions  in 1999 and 2000. None of
these transactions had a material impact on Alcoa's financial statements.

H. Cash Flow Information - The details of cash payments related to
acquisitions follow.

<TABLE>
<CAPTION>

                                           Six months ended
                                             June 30, 2000

<S>                                           <C>
Fair value of assets                          $ 14,283
Liabilities                                     (7,002)
Stock issued                                    (4,649)
                                              --------
Cash paid                                        2,632
Less: cash acquired                                (98)
                                              --------
Net cash paid for acquisitions                $  2,534
                                              ========
</TABLE>

I. Recently Issued Accounting Standards - In June 1998, the Financial Accounting
Standards  Board issued SFAS 133,  "Accounting  for Derivative  Instruments  and
Hedging  Activities."  The standard  requires that entities value all derivative
instruments at fair value and record the  instruments on the balance sheet.  The
standard also  significantly  changes the requirements for hedge accounting.  In
June 1999,  the FASB  approved a delay in the  effective  date of this  standard
until January 2001,  and in June 2000,  the FASB amended the standard to provide
guidance on its  implementation.  The company  believes that the adoption of the
standard  as amended  will have a material  impact on its  balance  sheet.  Upon
adoption,  Alcoa's  commodity,  foreign  exchange and interest  rate  derivative
contracts  as well as  certain  underlying  exposures  will be  recorded  on the
balance sheet at fair value.  Management  is currently  assessing the details of
the standard and is preparing a plan of implementation.

     In December 1999, the staff of the Securities and Exchange Commission (SEC)
issued Staff Accounting  Bulletin (SAB) 101,  "Revenue  Recognition in Financial
Statements."  SAB 101 outlines the basic  criteria that must be met to recognize
revenue,  and provides  guidelines for disclosure related to revenue recognition
policies.  This guidance is required to be  implemented in the fourth quarter of
2000. The company is currently reviewing this guidance in order to determine the
impact of its provisions, if any, on the consolidated financial statements.

J. Reclassifications - Certain amounts have been reclassified to
conform to current year presentation.

K. Segment Information - Alcoa is primarily a producer of aluminum products. Its
segments  are  organized  by product on a worldwide  basis.  Alcoa's  management
reporting system evaluates  performance  based on a number of factors;  however,
the primary measure of performance is the after-tax  operating  profit (ATOI) of
each segment.  Non-operating  items such as interest income,  interest  expense,
foreign  exchange  gains/losses,  the effects of LIFO  accounting  and  minority
interest are excluded from segment profit. In addition, certain expenses such as
corporate  general  administrative  expenses,  depreciation  and amortization on
corporate assets, and certain special items are not included in segment results.

     Alcoa's products are used primarily by transportation (including aerospace,
automotive,  rail and  shipping),  packaging,  building  and  construction,  and
industrial customers  worldwide.  Alcoa's businesses that do not fall into these
categories are listed as Other. In the 2000 second quarter as a result of recent
acquisition activity,  Alcoa changed its internal management reporting structure
to add a Packaging and Consumer Products segment.  Alcoa's closures,  PET bottle
and  packaging  machinery  businesses  were moved  from the Other  group to this
segment.  Previously  reported  data from the 1999 second  quarter and six-month
periods  have been  restated  in the  schedules  below to reflect  this  change.
Reynolds' packaging and consumer businesses were also added to the new Packaging
and Consumer Products segment.  Other Reynolds and Cordant businesses were added
to the appropriate existing segments.  For more information on the segments, see
Management's Discussion and Analysis beginning on page 13.

     The following  details sales and ATOI for each  reportable  segment for the
three-month  and  six-month  periods  ended June 30,  2000 and 1999,  as well as
restated quarterly amounts for 1999 and 2000.

<TABLE>
<CAPTION>

Segment Information:   Alumina           Flat-    Engin-   Pack-
                       & Chem-  Primary  Rolled   eered    aging &
Second quarter ended   icals    Metals   Products Products Consumer Other    Total
June 30, 2000 Sales:

<S>                    <C>      <C>      <C>      <C>      <C>      <C>      <C>
  Third-party sales    $  515   $  852   $1,394   $1,296   $  524   $  988   $5,569
  Intersegment sales      832       29     --       --      1,150
                       ------   ------   ------   ------   ------   ------   ------
                                                                       274       15
                                                                    ------   ------
  Total sales          $  789   $1,684   $1,423   $1,311   $  524   $  988   $6,719
                       ======   ======   ======   ======   ======   ======   ======


After-tax operating
 income                $  140   $  225   $   74   $   62   $   35   $   46   $  582
                       ======   ======   ======   ======   ======   ======   ======

Second quarter ended
June 30, 1999 Sales:

  Third-party sales   $   456   $  519   $1,258   $  939   $  209   $  652   $4,033
  Intersegment sales      221      714       11        3     --       --        949
                      -------   ------   ------   ------   ------   ------   ------
  Total sales         $   677   $1,233   $1,269   $  942   $  209   $  652   $4,982
                      =======   ======   ======   ======   ======   ======   ======

After-tax operating
 income               $    62   $  106   $   72   $   61   $   25   $   45   $  371
                      =======   ======   ======   ======   ======   ======   ======


Segment Information:   Alumina              Flat- Engin-   Pack-
                       & Chem- Primary   Rolled   eered    aging &
Six months ended       icals    Metals   Products Products Consumer Other    Total
June 30, 2000
Sales:
  Third-party sales    $1,055   $1,463   $2,798   $2,349   $  727  $1,708   $10,100

  Intersegment sales      524    1,682       42       28       -        -     2,276
                      -------   ------   ------   ------   ------   ------   ------
  Total sales          $1,579   $3,145   $2,840   $2,377   $  727   $1,708  $12,376
                      =======   ======   ======   ======   ======   ======   ======

After-tax operating

 income                $  295   $  452   $  147   $  115   $   52   $   79  $ 1,140
                      =======   ======   ======   ======   ======   ======   ======

Six months ended June 30, 1999 Sales:

  Third-party sales    $  876   $1,053   $2,528   $1,881   $  405   $1,269   $8,012
  Intersegment sales      452    1,454       26        6     --       --      1,938
                       ------   ------   ------   ------   ------   ------   ------

  Total sales          $1,328   $2,507   $2,554   $1,887   $  405   $1,269   $9,950
                      =======   ======   ======   ======   ======   ======   ======

After-tax operating

 income                $  122   $  203   $  137   $  106   $   38   $   60   $  666
                       ======   ======   ======   ======   ======   ======   ======
</TABLE>

The following table reconciles segment information to consolidated totals.

<TABLE>
<CAPTION>

                                       Second quarter ended    Six months ended
                                              June 30                June 30
                                              -------                -------
                                          2000       1999        2000       1999
                                        -------    -------    -------    -------
<S>                                    <C>        <C>        <C>        <C>
Total after-tax operating income       $   582    $   371    $ 1,140    $   666
Elimination of intersegment (profit)
 loss                                       (5)       (10)       (25)       (19)

Unallocated amounts (net of tax):

  Interest income                           19          8         26         13
  Interest expense                         (69)       (32)      (102)       (66)
  Minority interest                        (85)       (54)      (191)       (80)
  Corporate expense                        (51)       (41)      (107)       (76)
  Other                                    (14)        (2)        (9)        23
                                       -------    -------    -------    -------
Consolidated net income                $   377    $   240    $   732    $   461
                                       =======    =======    =======    =======
</TABLE>

<TABLE>
<CAPTION>
Segment assets:                             June 30        December 31
                                             2000              1999
                                          ----------         -------
<S>                                       <C>               <C>
  Alumina and chemicals                   $ 2,922           $ 3,250
  Primary metals                            6,783             5,098
  Flat-rolled products                      3,611             3,395
  Engineered products                       6,488             2,387
  Packaging and consumer                    1,555               745
  Other                                     2,979             1,664
                                          -------           -------
Total Segment Assets                      $24,338           $16,539
                                          =======           =======
</TABLE>

The total segment assets above do not include  unallocated  purchase  accounting
adjustments or assets to be divested.

L. Subsequent  Event - On July 20, 2000,  Alcoa issued $1,500 of callable notes.
Of these notes, $1,000 mature in 10 years and carry a coupon rate of 7.375%, and
$500  mature in 5 years and carry a coupon  rate of 7.25%.  A total of $1,487 of
existing  short-term debt was reclassified in the balance sheet at June 30, 2000
as a result of this transaction.


<PAGE>




    --------------------------------

     In the opinion of the Company,  the  financial  statements  and  summarized
     financial data in this Form 10-Q report include all adjustments,  including
     those of a normal recurring  nature,  necessary to fairly state the results
     for the periods.  This Form 10-Q report should be read in conjunction  with
     the Company's  annual  report on Form 10-K for the year ended  December 31,
     1999.

     The  financial  information  required  in this Form  10-Q by Rule  10-01 of
     Regulation S-X has been subject to a review by PricewaterhouseCoopers  LLP,
     the Company's  independent  certified public  accountants,  as described in
     their report on page 12.


<PAGE>



    Independent Accountant's Review Report

    To the Shareholders and Board of Directors
    Alcoa Inc. (Alcoa)


        We have reviewed the unaudited condensed  consolidated  balance sheet of
    Alcoa  and  subsidiaries  as of  June  30,  2000,  the  unaudited  condensed
    statements of consolidated  income for the three-month and six-month periods
    ended June 30,  2000 and 1999,  and the  unaudited  condensed  statement  of
    consolidated  cash flows for the  six-month  periods ended June 30, 2000 and
    1999,  which are included in Alcoa's Form 10-Q for the period ended June 30,
    2000.  These  financial   statements  are  the   responsibility  of  Alcoa's
    management.

        We conducted our review in accordance with standards  established by the
    American  Institute of  Certified  Public  Accountants.  A review of interim
    financial information consists principally of applying analytical procedures
    to financial data and making inquiries of persons  responsible for financial
    and  accounting  matters.  It is  substantially  less in scope than an audit
    conducted in accordance with auditing  standards  generally  accepted in the
    United  States,  the  objective  of which is the  expression  of an  opinion
    regarding the financial statements taken as a whole. Accordingly,  we do not
    express such an opinion.

        Based on our review, we are not aware of any material modifications that
    should be made to the condensed  consolidated  financial statements referred
    to above for them to be in conformity with accounting  principles  generally
    accepted in the United States.

        We have previously audited, in accordance with audit standards generally
    accepted in the United States,  the consolidated  balance sheet of Alcoa and
    subsidiaries  as of  December  31,  1999,  and  the  related  statements  of
    consolidated income,  shareholders' equity, and cash flows for the year then
    ended (not presented  herein).  In our report dated January 10, 2000, except
    for Note V, for  which  the date is  February  11,  2000,  we  expressed  an
    unqualified  opinion  on those  consolidated  financial  statements.  In our
    opinion,   the   information  set  forth  in  the   accompanying   condensed
    consolidated balance sheet as of December 31, 1999, is fairly stated, in all
    material respects,  in relation to the consolidated balance sheet from which
    it has been derived.

    /s/ PricewaterhouseCoopers LLP

    PricewaterhouseCoopers LLP

    Pittsburgh, Pennsylvania
    July 10, 2000

    Except for note L, for which the date is July 20, 2000.


<PAGE>


Management's Discussion and Analysis of the
Results of Operations and Financial Condition.

(dollars in millions, except share amounts and ingot prices; shipments
in thousands of metric tons (mt))

Certain  statements  in this report under this caption and  elsewhere  relate to
future  events  and   expectations   and  as  such  constitute   forward-looking
statements.  Such  forward-looking  statements  involve known and unknown risks,
uncertainties  and other factors that may cause actual  results,  performance or
achievements  of Alcoa to be  different  from those  expressed or implied in the
forward-looking statements.

Results of Operations

 Principal income and operating data follow.

<TABLE>
<CAPTION>

                                           Second quarter ended     Six months ended
                                                  June 30               June 30
                                                  -------               -------
                                               2000       1999       2000       1999
                                           --- ------ --- ------ --- ------ --- ----
<S>                                         <C>        <C>        <C>        <C>
 Sales                                      $ 5,569    $ 4,033    $10,100    $ 8,017
 Net income                                     377        240        732        461
 Basic earnings per common share            $   .47    $   .33    $   .95    $   .63
 Diluted earnings per common share          $   .47    $   .32    $   .94    $   .62
 Shipments of aluminum products (mt)          1,361      1,117      2,494      2,249
 Shipments of alumina (mt)                    1,801      1,836      3,634      3,500
 Alcoa'a average realized ingot price       $   .74    $   .64    $   .76    $   .63
 Average 3-month LME price                  $   .68    $   .60    $   .72    $   .58
 -------------------------
</TABLE>

Earnings Summary

Alcoa reported that 2000 second  quarter  revenues rose 38% from the 1999 second
quarter to $5,569,  and revenues for the first half of 2000  increased  26% from
the 1999 six-month period to $10,100.  The increase in revenues for both periods
was due to  higher  overall  aluminum  and  alumina  prices,  as well as  higher
shipment volumes due to acquisitions.  Cost reductions  positively  impacted the
2000 second quarter and  year-to-date  results,  as net income increased to $377
for the quarter and $732 year-to-date, 57% above the 1999 second quarter and 59%
over the 1999 first half.

     Annualized  return on  shareholders'  equity was 17.0% as of June 30, 2000,
compared with 14.8% for the 1999 period. The increase was due to rising earnings
in 2000, which outpaced the increase in shareholders'  equity balances resulting
primarily from the recent acquisitions.

Segment Information

I.   Alumina and Chemicals

<TABLE>
<CAPTION>

                            Second quarter ended   Six months ended
                                    June 30           June 30
                                    -------           -------
                                 2000     1999       2000     1999
                                ------   ------     ------   ------
<S>                             <C>      <C>        <C>      <C>
Alumina production               3,495    3,306      6,972    6,518
Third-party alumina shipments    1,801    1,836      3,634    3,500

Third-party sales               $  515   $  456     $1,055   $  876
Intersegment sales                 274      221        524      452
                                ------   ------     ------   ------
  Total sales                   $  789   $  677     $1,579   $1,328
                                ======   ======     ======   ======

After-tax operating income      $  140   $   62     $  295   $  122
                                ======   ======     ======   ======
</TABLE>

This segment's  activities include the mining of bauxite,  which is then refined
into  alumina.  The  alumina is then sold to  internal  and  external  customers
worldwide,  or processed into industrial  chemical products.  Alcoa's Australian
alumina  operations  are a significant  component of this segment.  This segment
does not include the Reynolds alumina assets to be divested. The majority of the
third-party sales from this segment are derived from alumina.

     Third-party  sales  for this  segment  increased  13% from the 1999  second
quarter,  though shipments decreased 2%. Higher realized prices for alumina, 18%
over the 1999 second quarter,  drove these  increases.  For the six-month period
ending June 30, third-party sales increased 20% over the same 1999 period.  This
was due to 4% higher shipments and higher prices.

     After-tax  operating income (ATOI) for this segment  increased 126% to $140
for the 2000  second  quarter  and 142% to $295 for the  six-month  period.  The
increases were  primarily due to higher prices as well as improved  overall cost
performance. Second quarter 2000 conversion costs decreased $29 after tax versus
the  1999  second  quarter.  These  savings  were  primarily  generated  through
productivity growth and purchasing efficiencies.

II. Primary Metals

<TABLE>
<CAPTION>

                             Second quarter ended    Six months ended
                                     June 30              June 30
                                     -------              -------
                                  2000     1999      2000     1999
                                 ------   ------    ------   ------
<S>                              <C>      <C>       <C>      <C>
Aluminum production                 881      708     1,591    1,411
Third-party aluminum shipments      493      354       832      724

Third-party sales                $  852   $  519    $1,463   $1,053
Intersegment sales                  832      714     1,682    1,454
                                 ------   ------    ------   ------
  Total sales                    $1,684   $1,233    $3,145   $2,507
                                 ======   ======    ======   ======

After-tax operating income       $  225   $  106    $  452   $  203
                                 ======   ======    ======   ======
</TABLE>

This group's primary focus is Alcoa's worldwide  smelter system.  Primary Metals
receives  alumina from the alumina and chemicals  segment and produces  aluminum
ingot to be used by other Alcoa segments,  as well as sold to outside customers.
Results from  internal  hedging  contracts  and from  marking to market  certain
aluminum  commodity  contracts are also  included in this segment.  The smelting
operations  of  Reynolds  have  been  added to this  segment.  The sale of ingot
represents over 90% of this segment's  third-party sales. Revenues from the sale
of powder and scrap are also included here.

     In the 1999 fourth quarter,  Alcoa changed its internal reporting system to
include  the  results  of  aluminum  hedging  in  the  Primary  Metals  segment.
Previously these results were reported as reconciling items between segment ATOI
and net income. Segment results for the 1999 second quarter and six-month period
have been restated to reflect this change.

     In January  2000,  Alcoa  announced  that it was  restarting  approximately
200,000 mt of primary  aluminum  capacity.  The  restarted  capacity  will be in
production  by the end of  2000.  In July  2000,  Alcoa  announced  that it will
temporarily  curtail all  production  at its 121,000  metric ton per year (mtpy)
primary aluminum smelter in Troutdale,  Oregon, a former Reynolds facility which
had been operating at an 80,000 mtpy level.  Curtailment will begin immediately.
After the  scheduled  curtailment  and  restart  of  capacity,  Alcoa  will have
approximately 370,000 mtpy of idle capacity.

     Third-party  ingot  sales  for the  second  quarter  rose 64% from the 1999
second quarter on a 39% increase in shipments,  due to the addition of Reynolds'
smelters. Excluding the locations recently acquired, third-party sales increased
12% quarter-to-quarter and 13% year-to-year, as higher prices more than offset a
decline in  shipments  of 2%  quarter-to-quarter  and 3%  year-to-year.  Alcoa's
average realized third-party price for ingot rose 16% to 74 cents per pound from
the 1999 to the 2000  second  quarter  and 20% to 76 cents  from the 1999 to the
2000 six-month period,  reflecting the increase in market prices over last year.
Intersegment  sales also rose 17% in the 2000 second quarter and 16% in the 1999
six-month period as a result of these higher prices.

     Primary  metals second  quarter and six-month  ATOI rose 112% from the 1999
second quarter and 123% from the 1999 six-month period, respectively,  as higher
ingot  prices and the impact of acquired  Reynolds  facilities  beginning in May
lifted ATOI. Also  contributing  were mark to market gains of $7 for the quarter
and $6 year-to-date after tax. Partially  offsetting these positive factors were
lower  shipments  from the  locations  other than those  recently  acquired from
Reynolds,  both in the second quarter and in the six-month period. Higher energy
costs for these  locations  also  impacted  earnings,  reducing ATOI $12 for the
quarter and $17 for the six-month period.

III. Flat-Rolled Products

<TABLE>
<CAPTION>
                              Second quarter ended      Six months ended
                                      June 30              June 30
                                      -------              -------
                                   2000     1999        2000     1999
                                 ------   ------      ------   ------
<S>                              <C>      <C>         <C>      <C>
Third-party aluminum shipments      504      496       1,011      983

Third-party sales                $1,394   $1,258      $2,798   $2,528
Intersegment sales                   29       11          42       26
                                 ------   ------      ------   ------
  Total sales                    $1,423   $1,269      $2,840   $2,554
                                 ======   ======      ======   ======

After-tax operating income       $   74   $   72      $  147   $  137
                                 ======   ======      ======   ======
</TABLE>

This segment's  primary  business is the production and sale of aluminum  plate,
sheet,  and foil. This segment includes the aggregation of rigid container sheet
(RCS), which is used to produce aluminum beverage cans, and sheet and plate used
in  the  aerospace  and  distributor  markets.  Approximately  one-half  of  the
third-party  sales  from  this  segment  are  derived  from  sheet and plate and
one-third are from RCS.

     Third-party  flat-rolled product sales for the second quarter rose 11% over
the prior year  quarter,  driven by slightly  higher  overall  shipments  and 8%
higher prices.  Year-to-date  sales increased 10% over the prior year period due
to  increases  in  shipments  and  prices of 3% and 7%,  respectively.  For RCS,
third-party  sales were up 13% for the quarter and 10%  year-to-date  versus the
comparable 1999 periods due again to higher prices -- 10% for the quarter and 9%
year-to-date.  For the 2000 six-month period,  sheet and plate third-party sales
were up 12% over the 1999  period due  equally to rising  shipment  volumes  and
prices.

     Flat-rolled  products'  ATOI of $74 for the second  quarter  and $147 year-
to-date  were  3% and 7%  higher,  respectively,  than  the  corresponding  1999
periods.  RCS  ATOI  improved  20% for the  quarter  and 30% for the year due to
productivity  improvements.  Sheet and plate ATOI  decreased  4% for the quarter
while increasing 4% for the six-month  period.  After tax cost reductions of $12
for the quarter and $27  year-to-date  and  continued  improvement  in Brazilian
results were offset by lower  European ATOI from a less  profitable  product mix
and overall flat U.S. results.

IV. Engineered Products

<TABLE>
<CAPTION>

                             Second quarter ended   Six months ended
                                     June 30           June 30
                                     -------           -------
                                  2000     1999     2000     1999
                                 ------   ------   ------   ------
<S>                              <C>      <C>      <C>      <C>
Third-party aluminum shipments      282      249      548      507

Third-party sales                $1,296   $  939   $2,349   $1,881
Intersegment Sales                   15        3       28        6
                                 ------   ------   ------   ------
  Total sales                    $1,311   $  942   $2,377   $1,887
                                 ======   ======   ======   ======

After-tax operating income       $   62   $   61   $  115   $  106
                                 ======   ======   ======   ======
</TABLE>

Products  produced  by this  segment  include  hard and soft  alloy  extrusions,
including Alcoa's  architectural  extrusion  businesses,  super-alloy  castings,
steel and  aluminum  fasteners,  forgings  and wheels.  These  products are used
primarily by transportation and distribution  customers worldwide.  This segment
includes the Reynolds' wheels business acquired in May 2000, as well as the Huck
(fasteners) and Howmet (super-alloy  castings)  businesses added in June 2000 as
part of the Cordant  acquisition,  and Excel  Extrusions  acquired  from Noranda
Aluminum in January 2000.

     Including  acquisitions  engineered  products second quarter results showed
increases of 38% in  third-party  revenues and 13% in shipments  over the second
three months of 1999.  Year-to-date  third-party revenues and shipments improved
by 25% and 8%, respectively.  Excluding these recent  acquisitions,  third-party
sales  increased 7% in the second quarter and 9% in the six-month  period versus
the corresponding 1999 periods, though volumes remained stable.

     Approximately two-thirds of the revenues from this segment are derived from
the sale of extrusions.  Second quarter and  year-to-date  third-party  sales of
soft alloy extrusions were up 25% and 19%, respectively,  from the corresponding
1999 periods. Volume increases of 11% quarter-to-quarter and 7% year-to-year, as
well as higher  average prices drove this  improvement.  Hard alloy revenues for
the quarter were flat, as higher  prices  offset a 6% decline in shipments.  For
the six-month  period,  third-party sales were down 8% on 11% lower shipments as
compared with the 1999 period.

     In the 2000 second  quarter,  sales of wheels  increased  69% over the 1999
second quarter on 77% higher volumes. For the year-to-date period, revenues from
wheels increased 59% over the 2000 period on a 58% increase in shipment volumes.
Almost 26% of second quarter  revenues and 33% of shipments are  attributable to
the Reynolds' wheels business.  Excluding these, revenues increased 26% over the
1999 second  quarter and 36% over the 1999  six-month  period,  while  shipments
increased 19% quarter-over-quarter and 28% year-over-year.

     ATOI for the  segment  was $62 in the 2000  second  quarter and $115 in the
2000 six-month period, up 2% and 8%,  respectively,  over the corresponding 1999
periods.  Cost savings related to purchased  materials of $5 in the 2000 quarter
and $18 year-to-date contributed to these increases.

V. Packaging and Consumer

<TABLE>
<CAPTION>
                                         Second quarter ended  Six months ended
                                               June 30           June 30
                                               -------           -------
                                             2000   1999       2000   1999
                                             ----   ----       ----   ----
<S>                                          <C>    <C>        <C>    <C>
Third-party aluminum shipments                 32      3         34      5

Third-party sales                            $524   $209       $727   $405

After-tax operating income                   $ 35   $ 25       $ 52   $ 38
                                             ====   ====       ====   ====
</TABLE>

This segment includes closures, closure and packaging machinery,  Aluminio's PET
bottle  businesses  in Latin  America,  as well as the  packaging  and  consumer
businesses of Reynolds  acquired in the 2000 second quarter.  Alcoa's  closures,
packaging  and PET  bottle  businesses  were  previously  included  in the Other
category.

     Second quarter  third-party sales for this segment rose 151%, due primarily
to the  acquisition  of the Reynolds'  packaging and consumer  businesses in May
2000, as well as the  acquisition  of MCG Closures  Limited (MCG) in April 2000.
Excluding these recent  acquisitions,  third-party sales rose 9% versus the 1999
second  quarter and 6% versus the 1999  six-month  period.  Sales by  Aluminio's
packaging  operations  in Brazil,  which were  negatively  impacted  by the 1999
currency  devaluation  and  recession,  grew by 10% quarter over quarter and 16%
year over year.  Closures sales were up 3% and 2% for the second quarter and the
six-month period,  respectively,  versus 1999 periods,  due primarily to the MCG
acquisition.

     Segment  ATOI  was $35 in the  2000  second  quarter  and  $52 in the  2000
six-month period, up 40% and 37% over the respective 1999 periods. This increase
was  primarily  due to the  acquisitions  noted  earlier,  offset by higher  raw
materials costs for the closures and PET bottle businesses.

VI. Other
<TABLE>
<CAPTION>
                                           Second quarter ended     Six months ended
                                                  June 30               June 30
                                                  -------               -------
                                               2000       1999       2000       1999
                                           --- ------ --- ------ --- ------ --- ----
<S>                                         <C>         <C>        <C>       <C>
 Third-party aluminum shipments                    50         15         69       30

 Third-party sales                          $     988    $   652    $ 1,708  $ 1,269

 After-tax operating income                 $      46    $    45    $    79  $    60
                                            =========  =========  =========  =======
</TABLE>

This group includes Alcoa  businesses that do not fit into the categories  noted
above.  Among others,  this includes Alcoa Fujikura,  Ltd. (AFL), which produces
fiber  optic  cable  and  services  for  the  telecommunications   industry  and
electrical components for the automotive industry, Thiokol Propulsion (Thiokol),
a producer of solid rocket  propulsion  systems,  Reynolds'  metal  distribution
business (RASCO), and Alcoa's residential building products operations.  Thiokol
and RASCO were added in the 2000  second  quarter  as parts of the  Cordant  and
Reynolds acquisitions, respectively. Packaging, closures and packaging machinery
businesses which were previously  reported in this group are now included in the
Packaging and Consumer segment.

     Third-party  revenues  for this group were $988 in the 2000 second  quarter
and $1,708 in the 2000 six-month period, up 52% and 35% from the respective 1999
periods. After excluding Thiokol and RASCO, these growth rates adjust to 17% for
both quarter over quarter and year over year.

     AFL revenues  increased 19% in the 2000 second quarter and 16% in the first
six months of 2000 over the corresponding 1999 periods. These increases were due
in large part to growth in  telecommunications  sales of 95%  quarter-to-quarter
and 77% year-to-year, a significant portion of which were from acquisitions made
since  second  quarter  1999.  Revenues  from the sale of  residential  building
products  decreased 5% from the 1999 second quarter on 6% lower shipment volume,
leaving  revenue  growth for the  six-month  period flat on 4% lower  shipments.
Sales by Alcoa's automotive  operations  benefited from the acquisition,  in the
1999 third  quarter,  of the remaining 50% of the A-CMI joint venture with Hayes
Lemmerz  International.  After  excluding the second quarter 2000  acquisitions,
A-CMI, which was accounted for as an equity holding in 1999,  contributed 29% of
the overall  revenue  growth in this category  quarter over quarter and 32% year
over year.

     ATOI for this  category in the 2000 second  quarter was $46, up 2% from the
1999 second quarter,  and was $79 for the 2000 six-month period, up 32% from the
1999  six-month  period.  Increases in ATOI for the 2000 quarter versus the 1999
second  quarter  were due to the  addition  of  Thiokol  and  RASCO,  offset  by
increases in feedstock costs for the building products business of $7 after tax.
For the 2000  year-to-date  period,  productivity  improvements of $16 after tax
along with strong growth at AFL, drove ATOI results higher.

Reconciliation of ATOI to Consolidated Net Income

Items required to reconcile ATOI to consolidated  net income include:  corporate
adjustments  to eliminate any  remaining  profit or loss between  segments;  the
after-tax impact of interest income and expense at the statutory rate;  minority
interest; corporate expense, comprised of the general administrative and selling
expenses of operating the corporate headquarters and other global administrative
facilities along with depreciation on  corporate-owned  assets; and other, which
includes the impact of LIFO,  differences  between  estimated  tax rates used in
each segment and the corporate effective tax rate, and other non-operating items
such as foreign exchange.

     Intersegment profit eliminations for the 2000 six-month period exceeded the
1999 period due to overall  higher  prices for alumina  and  aluminum.  Interest
expense  increased  because  of higher  debt  related  to  recent  acquisitions.
Minority  interest  increased  quarter  over  quarter  and year over year due to
higher income at AofA, AFL, and Aluminio.  Corporate  expense increased from the
1999 second quarter and six-month period due to acquisitions. Other decreased in
the 2000 second quarter as compared to the 1999 second quarter due to a negative
swing in  foreign  exchange  losses,  offset  by  higher  equity  income.  Other
decreased in the 2000 six-month period versus the corresponding  1999 period due
to the above  mentioned  items and because the  estimated  tax rates used in the
segments in the 2000 first quarter were closer to the actual  effective rate for
the corporation as a whole than in the 1999 first quarter.

Costs and Other

Cost of Goods Sold - Cost of goods  sold  increased  $1,076 and $1,280  from the
prior year second  quarter and  six-month  period,  respectively.  The  increase
reflects  higher  volumes  including  those related to  acquisitions,  partially
offset by improved cost performance. Cost of goods sold as a percentage of sales
in the 2000 second  quarter was 76.0% versus  77.9% in the 1999 second  quarter,
and in the 2000 six-month period was 74.7% versus 78.2% in the 1999 period.  The
lower ratios in 2000 are due to higher revenues resulting from higher prices for
alumina and aluminum, higher aluminum volumes and improved cost performance.

Selling,   General  Administrative,   and  Other  Expenses  -  Selling,  general
administrative,  and  other  (SG&A)  expenses  were up $69 from the 1999  second
quarter  and  $104  from  the  1999  six-month  period,   predominantly  due  to
acquisitions.  SG&A as a  percentage  of revenue was 4.9% in 2000  year-to-date,
unchanged from the 1999 period.

Interest  Expense - Interest  expense was up $45,  or 90%,  from the 1999 second
quarter,  and $44, or 43%, for the 1999 six-month period, due to higher interest
rates and higher debt levels as a consequence of the recent acquisitions.

     On July 20, 2000,  Alcoa issued $1,500 of callable  notes.  Of these notes,
$1,000 mature in 10 years and carry a coupon rate of 7.375%,  and $500 mature in
5 years and carry a coupon rate of 7.25%.

Income Taxes - The income tax  provision for the period is based on the expected
effective tax rate adjusted for the impact of acquisitions  from the acquisition
dates  through  June 30. The 2000 second  quarter  rate of 34% differs  from the
statutory  rate  primarily  because  of taxes on foreign  income.  The 2000 rate
differs from the 1999 second  quarter rate  primarily  because of higher  income
before tax in 2000.  The effective tax rate for the year is currently  estimated
at 35%.

Other  Income/Foreign  Currency - Other income (expense) increased to $52 in the
2000 second quarter and $93 in the 2000 six-month period from $43 and $40 in the
comparable  1999 periods.  Quarterly and  year-to-date  results  benefited  from
higher equity and interest income,  gains on sales of assets,  proceeds from the
demutualization  of Met Life,  and from  acquisitions.  The positive  items were
partially  offset by higher exchange losses.  Mark-to-market  gains for the 2000
six-month period were $7 versus $6 in the prior year period.

Minority  Interests  -  Minority  interests'  share of  income  from  operations
increased 57% from the 1999 second  quarter and 139% from the 1999 first half to
$85 and $191, respectively. The increase was due primarily to earnings growth at
AofA and AFL, and a turnaround at Aluminio,  which  reported  income in the 2000
first half versus a net loss in the 1999 period.

Risk Factors

In  addition  to the risks  inherent  in its  operations,  Alcoa is  exposed  to
financial, market, political and economic risks. The following discussion, which
provides  additional  detail regarding Alcoa's exposure to the risks of changing
commodity   prices,   foreign  exchange  rates  and  interest  rates,   includes
forward-looking  statements that involve risk and uncertainties.  Actual results
could  differ   materially  from  those   projected  in  these   forward-looking
statements.

Commodity Price Risks - Alcoa is a leading global producer of aluminum ingot and
aluminum fabricated  products.  As a condition of sale,  customers often require
Alcoa to commit to fixed-price contracts that sometimes extend a number of years
into the future.  Customers  will  likely  require  Alcoa to enter into  similar
arrangements  in the  future.  These  contracts  expose  Alcoa  to the  risk  of
fluctuating  aluminum prices between the time the order is accepted and the time
that the order ships.

     In order to fulfill some of the orders noted above, Alcoa might be required
to purchase  aluminum to supplement  its internal  production.  These  purchases
expose the company to the risk of higher  aluminum  prices.  To hedge this risk,
Alcoa enters into long positions,  principally using futures and options.  Alcoa
follows a stable  pattern of purchasing  metal;  therefore,  it is highly likely
that  anticipated  metal  requirements  will be met.  At June 30, 2000 and 1999,
these  contracts  totaled  approximately  454,000 and 548,000 mt,  respectively.
These  contracts  act to  fix  the  purchase  price  for  these  metal  purchase
requirements, thereby reducing Alcoa's risk to rising metal prices.

     The  futures  and  options  contracts  noted  above  are with  creditworthy
counterparties and are further supported by cash,  treasury bills or irrevocable
letters of credit issued by carefully chosen banks.

     The  expiration  dates of the options and the delivery dates of the futures
contracts  noted above do not always  coincide  exactly  with the dates on which
Alcoa is required to purchase  metal to meet its  contractual  commitments  with
customers. Accordingly, some of the futures and options positions will be rolled
forward.  This may result in significant  cash inflows if the hedging  contracts
are "in-the-money" at the time they are rolled forward.  Conversely, there could
be  significant  cash outflows if metal prices fall below the price of contracts
being rolled forward.

     In addition to the above-noted aluminum positions, Alcoa had 157,000 mt and
75,000 mt of futures  and  options  contracts  outstanding  at June 30, 2000 and
1999,  respectively,  that cover  long-term,  fixed-price  commitments to supply
customers with metal from internal sources.  Accounting convention requires that
these contracts be marked to market,  which resulted in  year-to-date  after-tax
additions to earnings of $7 at June 30, 2000 and $6 at June 30, 1999.

     Alcoa  also sells  products  to various  third  parties at prices  that are
influenced by changes in London Metal Exchange (LME) aluminum prices.  From time
to time,  the company may elect to hedge a portion of these  exposures to reduce
the risk of  fluctuating  market prices on these sales.  Towards this end, Alcoa
may enter into short positions using futures and options contracts.  At June 30,
2000, these contracts totaled 94,000 mt. These contracts act to fix a portion of
the sales price related to these sales contracts.

     Alcoa also purchases certain other  commodities,  such as fuel oil, natural
gas and  copper,  for its  operations  and  enters  into  futures  contracts  to
eliminate volatility in the prices of such products. None of these contracts are
material.

Financial Risk - Alcoa is subject to significant  exposure from  fluctuations in
foreign  currencies.  As a matter of company policy,  foreign currency  exchange
contracts,  including forwards and options, are sometimes used to limit the risk
of fluctuating  exchange rates.  In addition,  Alcoa also attempts to maintain a
reasonable  balance  between fixed and floating rate debt and uses interest rate
swaps and caps to keep financing costs as low as possible.

Risk Management - All of the aluminum and other commodity contracts,  as well as
the various types of financial  instruments,  are  straightforward  and held for
purposes other than trading. They are used primarily to mitigate uncertainty and
volatility, and principally cover underlying exposures.

     Alcoa's commodity and derivative  activities are subject to the management,
direction and control of the Strategic Risk Management Committee (SRMC). SRMC is
composed of the chief executive  officer,  the chief financial officer and other
officers and employees that the chief executive  officer may select from time to
time.  SRMC reports to the board of directors at each of its scheduled  meetings
on the scope of its derivative activities.

Environmental Matters

Alcoa  continues to participate in  environmental  assessments and cleanups at a
number  of  locations.   These  include  approximately  24  owned  or  operating
facilities  and  adjoining  properties,  approximately  29  previously  owned or
operated facilities and adjoining  properties and approximately 90 Superfund and
other waste sites. A liability is recorded for  environmental  remediation costs
or damages when a cleanup program becomes  probable and the costs or damages can
be reasonably estimated.

     As  assessments  and cleanups  proceed,  the liability is adjusted based on
progress in  determining  the extent of remedial  actions and related  costs and
damages.  The  liability  can change  substantially  due to factors  such as the
nature  and  extent of  contamination,  changes  in  remedial  requirements  and
technological changes.  Therefore,  it is not possible to determine the outcomes
or to estimate  with any degree of accuracy the  potential  costs for certain of
these matters.  For example,  there are issues related to the Massena, New York,
Pt.  Comfort,  Texas and Troutdale,  Oregon sites that allege  natural  resource
damage or off-site contaminated sediments, where investigations are ongoing. The
following discussion provides additional details regarding the current status of
these three sites.

     MASSENA/GRASSE  RIVER.  Sediments and fish in the Grasse River  adjacent to
Alcoa's Massena,  New York plant site contain varying levels of  polychlorinated
biphenyl (PCB). Alcoa has been identified by the U.S.  Environmental  Protection
Agency (EPA) as potentially  responsible for this contamination and, since 1989,
has been conducting investigations and studies of the river under order from the
EPA issued under the  Comprehensive  Environmental  Response,  Compensation  and
Liability Act, also known as Superfund.  During 1999, Alcoa continued to perform
studies and  investigations on the Grasse River. A planned pilot test of certain
sediment capping techniques, intended for 1999, could not be completed because a
final  scope of work could not be  developed  with EPA in time to  complete  the
project  before the  construction  season  concluded.  In addition,  in the 1999
fourth quarter,  Alcoa submitted an Analysis of Alternatives to EPA. This report
identified potential courses of remedial action related to the PCB contamination
of the river.  Alcoa has  proposed to EPA that the planned  pilot scale tests be
conducted to assess the  feasibility  of  performing  certain  sediment-covering
techniques  before selection and approval of a remedial  alternative by EPA. The
costs of these pilot scale tests have been fully reserved.  The results of these
tests and  discussions  with EPA  regarding all of the  alternatives  identified
should  provide  additional  information  for the  selection and approval of the
appropriate remedial alternative.

     The Analysis of Alternatives report and the results of the pilot tests must
be reviewed and approved by EPA.  Currently,  no one of the alternatives is more
likely to be selected than any other.  The range of additional  costs associated
with the potential  courses of remedial  action is between zero and $53.  During
meetings  in March and April,  2000,  EPA  indicated  to Alcoa that it  believes
additional  remedial  alternatives  need  to be  included  in  the  Analysis  of
Alternatives. Such additional remedies involve removal of more sediment from the
river than was included in the  alternatives  provided in the recent Analysis of
Alternatives report. The cost of such potential additional remedial alternatives
can not be estimated at this time.

     In 1988,  Reynolds  discovered  that soils in the area of the heat transfer
medium system at Reynolds'  primary aluminum  production  plant in Massena,  New
York  were  contaminated  with  polychlorinated  biphenyls  ("PCBs")  and  other
contaminants. Remediation of the contaminated soils and other contaminated areas
of the plant was substantially  completed in 1998.  Portions of the St. Lawrence
River system adjacent to the plant are also  contaminated with PCBs. Since 1989,
Reynolds  has been  conducting  investigations  and studies of the river  system
under order from the EPA issued under  Superfund.  Reynolds is in the process of
working with the EPA to better define the scope of the dredging  program,  which
is planned for 2001.  Alcoa and  Reynolds  are also aware of a natural  resource
damage claim that may be asserted by certain  federal,  state and tribal natural
resource trustees at this location.

     PT. COMFORT/LAVACA BAY. In 1990, Alcoa began discussions with certain state
and federal natural  resource  trustees  concerning  alleged releases of mercury
from its Pt.  Comfort,  Texas  facility  into the adjacent  Lavaca Bay. In March
1994,  EPA listed the "Alcoa  (Point  Comfort)/Lavaca  Bay Site" on the National
Priorities  List  and,  shortly  thereafter,  Alcoa  and  EPA  entered  into  an
administrative  order on  consent  under  which  Alcoa is  obligated  to conduct
certain remedial investigations and feasibility studies. In accordance with this
order,  Alcoa  recently  submitted  a  draft  remedial  investigation,  a  draft
feasibility  study and a draft  baseline  risk  assessment  to EPA. In addition,
Alcoa recently commenced  construction of the EPA-approved project to fortify an
offshore  dredge  disposal  island.  The probable and  estimable  costs of these
actions are fully reserved.  In addition,  during March 2000,  Alcoa submitted a
Feasibility  Study to EPA providing  remedial  alternatives  for the site. Alcoa
believes it has now fully  reserved the  probable  cost of  remediation  for the
site.  Since the order with EPA,  Alcoa and the natural  resource  trustees have
continued   efforts  to  understand   natural   resource  injury  and  ascertain
appropriate restoration  alternatives.  That process is currently expected to be
completed by late 2000 or early 2001.

     TROUTDALE,  OREGON.  In 1994,  the EPA added  Reynolds'  Troutdale,  Oregon
primary aluminum  production plant to the National  Priorities List of Superfund
sites.  Reynolds is cooperating with the EPA and, under a September 1995 consent
order,  is  working  with  the  EPA  in  investigating  potential  environmental
contamination at the Troutdale site and promoting more efficient  cleanup at the
site.

     Based on the above, it is possible that Alcoa's results of operations, in a
particular period, could be materially affected by matters relating to these two
sites. However, based on facts currently available, management believes that the
disposition  of these matters will not have a materially  adverse  effect on the
financial position or liquidity of the company.

     Alcoa's remediation reserve balance at June 30, 2000 was $343 (of which $45
was  classified as a current  liability) and reflects the most probable costs to
remediate identified  environmental conditions for which costs can be reasonably
estimated. No single site represents more than 20% of the total reserve balance.
Remediation expenses charged to the reserve in the 2000 second quarter were $21.
They include expenditures  currently mandated,  as well as those not required by
any regulatory  authority or third-party.  Additions to the reserve of $189 were
made in the 2000 second quarter pertaining predominantly to Reynolds sites.

     Included in annual  operating  expenses are the recurring costs of managing
hazardous substances and environmental programs. These costs are estimated to be
about 2% of cost of goods sold.

Liquidity and Capital Resources

Cash from Operations

Cash  from  operations  during  the 2000  year-to-date  period  totaled  $1,106,
compared with $912 in the 1999 period.  The increase  reflects higher net income
and an increase in the minority interests' share of net income, partly offset by
higher working capital requirements.

Financing Activities

Financing  activities  provided $1,940 of cash in the 2000 first half,  compared
with $531 used in the 1999  period.  The increase was mainly due to the issuance
of debt to fund acquisitions. Short-term borrowings and commercial paper grew by
$1,311 and $1,453, respectively,  in the 2000 period, compared with decreases of
$7 and 70, respectively,  in the 1999 period. Long-term debt increased by $1,607
in the 2000  six-month  period,  versus an increase of $216 in the 1999  period.
Offsetting  this growth in debt was an increase in payments on  long-term  debt,
$1,358 in the 2000 period versus $283 in the 1999 period.

     Dividends paid to shareholders  were $201 in the 2000 six-month  period, an
increase  of $52 over the 1999  period.  The change was  primarily  due to a 24%
increase in Alcoa's total  dividend,  which paid out 25 cents in the 2000 period
versus 20.125 cents per share in the 1999 period.

Investing Activities

     Investing  activities used $2,961 during the 2000 first half, compared with
$476 in the 1999  period.  Acquisitions  accounted  for the bulk of the  change,
requiring  $2,534 above cash  acquired in the 2000 period versus $16 in the 1999
period.  In the 2000 first quarter Alcoa  acquired Excel  Extrusions,  Inc. from
Noranda Aluminum.  In the second quarter,  Alcoa acquired MCG from Wassall plc.,
as well as Cordant,  the portion of Howmet not owned by Cordant,  and  Reynolds.
Also in the second quarter, AofA acquired Eastern Aluminum Ltd.

     During the 1999  period,  Alcoa  acquired the bright  products  business of
Pechiney's  Rhenalu  rolling plant located near  Toulouse,  France and Reynolds'
aluminum extrusion plant in Irurzun, Spain.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

     As  previously  reported,  in March  1998,  Region  V of the  Environmental
Protection  Agency (EPA) referred  various alleged  environmental  violations at
Alcoa's  Warrick  Operations  to the civil  division of the U.S.  Department  of
Justice  (DOJ).  The  alleged  violations  stem from an April  1997  multi-media
environmental  inspection  of Warrick  Operations  by the EPA  relating to water
permit  exceedances  as  reported  on  monthly  discharge   monitoring  reports,
wastewater toxicity issues and alleged opacity  violations.  After negotiations,
the parties  reached  final  agreement  on the  language of a consent  decree in
settlement  of this  matter.  Alcoa  agreed to pay a civil  penalty  of $2.4 and
agreed to  performance of a  supplemental  environmental  project and injunctive
relief. The consent decree was signed and lodged with the court on May 13, 2000.
The court entered the consent  decree as a final  judgment on June 14, 2000, and
Alcoa paid the civil penalty on June 21, 2000.

     As previously reported, in March 1999, two search warrants were executed by
various  federal and state  agencies on the Alcoa Port Allen Works of  Discovery
Aluminas, Inc., a subsidiary in Port Allen, Louisiana.  Also in March, Discovery
Aluminas,  Inc.  was  served  with a  grand  jury  subpoena  that  required  the
production  to a federal  grand  jury of certain  company  records  relating  to
alleged  environmental issues involving wastewater  discharges and management of
solid or  hazardous  wastes at the plant.  In April  1999,  the Port Allen plant
manager was indicted  for a single  count of violating  the Clean Water Act. The
case has not been set for trial.  In October  1999, a second grand jury subpoena
for documents was issued to Alcoa requesting  information  regarding  wastewater
discharges from the Port Allen plant. Alcoa responded to the subpoena, continues
to  cooperate  with the  government,  and is engaged in  discussions  seeking to
resolve the situation.

     In late 1998,  Howmet  International  Inc.  ("Howmet")  discovered  certain
product testing and specification  non-compliance issues at the Montreal, Quebec
and  Bethlehem,   Pennsylvania   operations  of  its  Howmet  Aluminum  Castings
subsidiaries  (formerly  called Cercast).  In 1999,  Howmet  discovered  several
additional  instances of other testing and  specification  non-compliance at its
Hillsboro,  Texas  aluminum  casting  facility,  at the Montreal  and  Bethlehem
operations and, in 2000, at its Dover, New Jersey super-alloy  casting facility.
Howmet has notified  customers and the appropriate  government  agencies and has
substantially   completed  correction  of  these  issues.  Howmet  knows  of  no
in-service  problems  associated with any of these issues.  In addition,  Howmet
Aluminum  Casting  has been,  and expects to continue to be, late in delivery of
products  to certain  customers.  The  Defense  Criminal  Investigative  Service
("DCIS"),  in  conjunction  with the other agents from the Department of Defense
and the  National  Aeronautics  and  Space  Administration,  has  undertaken  an
investigation  with respect to certain of the foregoing  matters at the Montreal
and Bethlehem  facilities.  The DCIS has informed Howmet that the  investigation
concerns  possible  violations of the False Claims Act and the False  Statements
Act,  as well as  possible  criminal  penalties.  Howmet is unable to  determine
definitively  what, if any,  civil or criminal  penalties  might be imposed as a
result of the  investigation.  All  customer  claims  relating to the  foregoing
matters  either  have been  resolved  or, in the  judgment  of  Howmet,  will be
resolved  within  existing  reserves.  On August 6, 1999 Howmet  entered into an
Administrative Agreement with the U.S. Air Force terminating Notices of Proposed
Debarment issued on March 1, 1999 relating to certain of the foregoing  matters.
The  Administrative  Agreement  permitted  the  affected  facilities  to  resume
accepting  new U.S.  government  contracts and  subcontracts.  On June 20, 2000,
Alcoa completed its acquisition of Howmet.

     Effective May 17, 2000,  Article FIFTH of Alcoa's Articles of Incorporation
was amended to increase the number of shares of common  stock,  $1.00 par value,
that  Alcoa  is  authorized  to issue  from  600  million  to 1.8  billion.  The
amendment,  which had been approved by Alcoa's Board of Directors on January 10,
2000,  was  submitted  to and  approved  by Alcoa's  shareholders  at the annual
meeting  held on May 12,  2000.  (See Part II,  Item 4 below.)  Approval  of the
amendment was required to permit the two-for-one  split of the common stock that
was  distributed  on June 9, 2000 to  holders  of record  on May 26,  2000.  The
amendment  permits the issuance of  additional  shares up to the new 1.8 billion
maximum  authorization  without further action or authorization by shareholders,
except as may be required in a specific case by applicable law or stock exchange
regulations.  Such additional  authorized shares, if and when issued, would have
the same rights and  privileges  as the shares of Alcoa  common stock issued and
outstanding before the amendment became effective.

Item 4.  Submission of Matters to a Vote of Security Holders.
         ---------------------------------------------------

     At the annual meeting of Alcoa  shareholders  held on May 12, 2000, Paul H.
O'Neill was reelected a director of Alcoa to serve for a term expiring  December
31,  2000,  and Kenneth W. Dam and Judith M. Gueron were  reelected to serve for
three-year terms. Votes cast for Mr. O'Neill were 306,435,745 and votes withheld
were 2,898,561;  votes cast for Mr. Dam were 306,548,699 and votes withheld were
2,785,607;  and votes cast for Dr. Gueron were  306,522,575  and votes  withheld
were 2,811,731.

     Also at that annual meeting,  a proposal to approve an amendment to Alcoa's
Articles of Incorporation to increase the number of authorized  shares of common
stock was  adopted.  Total  votes  cast for the  amendment  to the  Articles  of
Incorporation  were  301,441,334,  votes cast against were 6,005,350,  and there
were  1,889,596  abstentions.  Abstentions  are not counted for voting  purposes
under Pennsylvania law, the jurisdiction of Alcoa's incorporation.

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

(a) Exhibits

     3(a).   Articles of Incorporation of the Registrant as amended

     10(n).  Revolving Credit Agreement (364-Day), dated as of
             April 28, 2000

     10(t).  Revolving Credit Agreement (Five-Year), dated as of
             April 28, 2000

     12.     Computation of Ratio of Earnings to Fixed Charges

     15.     Independent Accountants' letter regarding unaudited
             financial information

     27.     Financial Data Schedule

(b)  During the second  quarter of 2000,  Alcoa  filed with the  Securities  and
     Exchange Commission:

(1)      a Form 8-K, dated May 8, 2000,  reporting  under Item 5 the approval by
         the  U.S.  Department  of  Justice  and  the  European  Union,  and the
         completion  of, the merger  between Alcoa and Reynolds  Metals  Company
         ("Reynolds").  In addition,  Alcoa filed a Form 8-K/A on July 10, 2000,
         including  under  Item 2 the  approval  and  completion  of the  merger
         between  Alcoa and  Reynolds  and  including  under  Item 7  historical
         financial  statements  of Reynolds and  unaudited  pro forma  condensed
         consolidated financial information of Alcoa and Reynolds.

(2)      a Form 8-K,  dated May 15, 2000,  reporting  under Item 5 a two-for-one
         common stock split and  including  restated  financial  information  to
         reflect the stock split; and

(3)      a Form 8-K,  dated June 22, 2000,  reporting  under Item 5  information
         concerning new technology in the aluminum smelting process.


<PAGE>


                                   SIGNATURES

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

                                     Alcoa Inc.




    July 27, 2000                   By /s/ RICHARD B. KELSON
    ------------------------        ----------------------------
    Date                             Richard B. Kelson
                                     Executive Vice President and
                                     Chief Financial Officer
                                     (Principal Financial Officer)



    July 27, 2000                   By /s/ TIMOTHY S. MOCK
    ------------------------        ----------------------------
    Date                             Timothy S. Mock
                                     Vice President and Controller
                                     (Chief Accounting Officer)





<PAGE>


                                    EXHIBITS

                                                                    Page

     3(a). Articles of Incorporation of the Registrant as amended

     10(n). Revolving Credit Agreement (364-Day), dated as of
            April 28, 2000

     10(t). Revolving Credit Agreement (Five-Year), dated as of
            April 28, 2000

     12.    Computation of Ratio of Earnings to Fixed Charges         28

     15.    Independent Accountants' letter regarding unaudited       29
            financial information

     27.    Financial Data Schedule

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>2
<FILENAME>0002.txt
<TEXT>

Alcoa and subsidiaries                                            EXHIBIT 12


              Computation of Ratio of Earnings to Fixed Charges
                    For the six months ended June 30, 2000
                         (in millions, except ratio)

                                                              2000
                                                            -------
Earnings:
   Income before taxes on income                            $ 1,398
   Minority interests' share of earnings of majority-
      owned subsidiaries without fixed charges                 --
   Equity income                                                (53)
   Fixed charges                                                165
   Proportionate share of income of 50%-owned
     persons                                                     38
   Distributed income of less than 50%-owned persons              8
   Amortization of capitalized interest                           9
                                                            -------

      Total earnings                                        $ 1,565

Fixed Charges:
   Interest expense:
      Consolidated                                          $   146
      Proportionate share of 50%-owned persons                    2
                                                            -------
                                                                148

   Amount representative of the interest factor in rents:
      Consolidated                                               16
      Proportionate share of 50%-owned persons                    1
                                                            -------
                                                                 17

   Fixed charges added to earnings                              165
                                                            -------

   Interest capitalized:
      Consolidated                                                8
      Proportionate share of 50%-owned persons                 --
                                                            -------
                                                                  8

   Preferred stock dividend requirements of
      majority-owned subsidiaries                              --
                                                            -------

      Total fixed charges                                   $   173
                                                            =======

Ratio of earnings to fixed charges                                9
                                                            =======

                                       28
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-15
<SEQUENCE>3
<FILENAME>0003.txt
<TEXT>

Alcoa and subsidiaries                                EXHIBIT 15

                                                      July 10, 2000

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

RE:   Alcoa Inc.


1.   Form S-8 (Registration  Nos.33-24846,  333-32516,  333-91331 and 333-36214)
     Alcoa  Savings  Plan  for  Salaried  Employees;   Alcoa  Savings  Plan  for
     Non-Bargaining  Employees;  Alumax Inc. Thrift Plan for Salaried Employees;
     Alumax Inc.  Thrift Plan for  Collectively  Bargained  Employees;  Reynolds
     Metals Company Savings and Investment Plan for Salaried Employees; Reynolds
     Metals Company  Savings Plan for Hourly  Employees;  and Employees  Savings
     Plan

2.   Form  S-8  (Registration  Nos.33-22346,   33-49109,  33-60305,   333-27903,
     333-62663,  333-79575,  333-36208, 333-37740 and 333-39708) Long Term Stock
     Incentive  Plan;  Alumax  Inc.  Long Term  Incentive  and  Employee  Equity
     Ownership Plans;  Alcoa Stock Incentive Plan;  Reynolds Metals Company 1999
     Nonqualified  Stock Option Plan;  Reynolds Metals Company 1996 Nonqualified
     Stock Option Plan;  Reynolds Metals Company 1992 Nonqualified  Stock Option
     Plan;  Reynolds Metals Company 1987 Nonqualified Stock Option Plan; Cordant
     Technologies  Inc. 1989 Stock Awards Plan;  Cordant  Technologies Inc. 1996
     Stock Awards Plan;  Howmet  International  Inc.  Amended and Restated  1997
     Stock Awards Plan

3.   Form S-3 (Registration No. 33-60045),  Form S-3 (Registration No. 33-64353)
     and Form S-3  (Registration  No. 333-59381) Debt Securities and Warrants to
     Purchase Debt  Securities,  Preferred Stock and Common Stock of the Company
     and Trust Preferred Securities of Alcoa Trust I

4.   Form S-4 (Registration  No. 333-58227 and 333-93849)  Registration of Alcoa
     common stock, par value $1.00 per share


Ladies and gentlemen:

We are aware that our report dated July 10, 2000, accompanying interim financial
information of Alcoa Inc. and  subsidiaries  for the  three-month  and six-month
periods  ended June 30,  1999 and 2000,  is  incorporated  by  reference  in the
registration  statements  referred to above.  Pursuant to Rule 436 (c) under the
Securities  Act of 1933,  this  report  should  not be  considered  as part of a
registration  statement  prepared  or  certified  by us within  the  meaning  of
Sections 7 and 11 of that Act.

Very truly yours,


/s/  PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

                                       29
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>4
<FILENAME>0004.txt
<TEXT>

<TABLE> <S> <C>

<ARTICLE> 5
<MULTIPLIER> 1,000

<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-2000
<PERIOD-END>                               JUN-30-2000
<CASH>                                         320,000
<SECURITIES>                                    76,000
<RECEIVABLES>                                3,231,000
<ALLOWANCES>                                    74,000
<INVENTORY>                                  2,842,000
<CURRENT-ASSETS>                             7,422,000
<PP&E>                                      22,562,000
<DEPRECIATION>                               9,500,000
<TOTAL-ASSETS>                              30,832,000
<CURRENT-LIABILITIES>                        6,318,000
<BONDS>                                      6,410,000
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                     56,000
<COMMON>                                       925,000
<OTHER-SE>                                  10,059,000
<TOTAL-LIABILITY-AND-EQUITY>                30,832,000
<SALES>                                     10,100,000
<TOTAL-REVENUES>                            10,193,000
<CGS>                                        7,548,000
<TOTAL-COSTS>                                7,548,000
<OTHER-EXPENSES>                               515,000
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                             146,000
<INCOME-PRETAX>                              1,398,000
<INCOME-TAX>                                   475,000
<INCOME-CONTINUING>                            923,000
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   732,000
<EPS-BASIC>                                       0.95
<EPS-DILUTED>                                     0.94


</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>5
<FILENAME>0005.txt
<TEXT>

                                                                    EXHIBIT 3(a)

                                   ALCOA INC.

                                    ARTICLES

                              (As Amended May 2000)

      FIRST.  The name of the corporation is Alcoa Inc.

      SECOND. The location and post office address of the corporation's  current
registered office is 201 Isabella Street,  Pittsburgh,  Pennsylvania  15212-5858
[this paragraph reflects the change in the registered office address made August
14, 1998 by the filing of a Statement  of Change of  Registered  Office with the
Secretary of State of the  Commonwealth of  Pennsylvania;  the prior  registered
office   address   was  1501  Alcoa   Building,   Mellon   Square,   Pittsburgh,
Pennsylvania].

      THIRD.  The  purpose or purposes  of the  corporation  are: to acquire and
dispose of  deposits of and rights to bauxite,  clay,  ores and  minerals of any
sort or description, and to acquire, extract, treat and dispose of any materials
recovered or recoverable  therefrom;  to reduce ores of aluminum and any and all
other ores to their basic metals;  to  manufacture,  alloy and fabricate any and
all metals into articles of commerce; to acquire, produce,  transport,  trade in
and dispose of goods,  wares and merchandise of every class and description;  to
purchase,  lease,  or otherwise  acquire  improved or unimproved  real property,
leaseholds,  easements and franchises, to manage, use, deal with and improve the
same or any part thereof, and to sell, exchange,  lease,  sublease, or otherwise
dispose of any of said property or the improvements thereon or any part thereof;
to  acquire,  use and  dispose  of all  land,  minerals,  materials,  apparatus,
machinery and other agencies,  means and facilities,  to perform all operations,
and to do all things, necessary, convenient or incident to the foregoing; and to
carry  on  any  business  directly  or  indirectly  related  thereto;   and  the
corporation  shall  have  unlimited  power to engage in and to do any lawful act
concerning any or all lawful business for which corporations may be incorporated
under the Pennsylvania Business Corporation Law.

      FOURTH.  The term for which the corporation is to exist is perpetual.

      FIFTH. The authorized  capital of the corporation  shall be 660,000 shares
of Serial Preferred Stock of the par value of $100 per share,  10,000,000 shares
of Class B Serial  Preferred  Stock of the par  value  of $1.00  per  share  and
1,800,000,000 shares of Common Stock of the par value of $1.00 per share.

      Hereinafter in this Article Fifth,  the term "Preferred  Stock" shall mean
each of the Serial Preferred Stock and the Class B Serial Preferred Stock.

      A  description  of each class of shares which the  corporation  shall have
authority to issue and a statement of the rights,  voting  powers,  preferences,
qualifications,  limitations,  restrictions  and the special or relative  rights
granted to or imposed upon the shares of each class and of the authority  vested
in the  Board  of  Directors  of the  corporation  to  establish  series  of the
Preferred  Stock and to fix and determine the variations in the relative  rights
and preferences as between the series thereof are as follows:

      1.  Establishment of Series of Preferred  Stock.  Preferred Stock shall be
issued in one or more series.  Each series shall be  designated  by the Board of
Directors so as to  distinguish  the shares thereof from the shares of all other
series and classes. The Board of Directors may, by resolution, from time to time
divide shares of Preferred Stock into series and fix and determine the number of
shares and, subject to the provisions of this Article Fifth, the relative rights
and  preferences  of any  series so  established,  provided  that all  shares of
Preferred  Stock shall be identical  except as to the following  relative rights
and  preferences,  in  respect  of any or all of which  there may be  variations
between different series,  namely: the rate of dividend (including the date from
which  dividends  shall  be  cumulative  and,  with  respect  to  Class B Serial
Preferred  Stock,  whether such dividend rate shall be fixed or variable and the
methods,  procedures and formulas for the recalculation or periodic resetting of
any variable  dividend  rate);  the price at, and the terms and  conditions  on,
which  shares may be  redeemed;  the  amounts  payable on shares in the event of
voluntary or involuntary liquidation; sinking fund provisions for the redemption
or purchase of shares in the event  shares of any series are issued with sinking
fund provisions;  and the terms and conditions on which the shares of any series
may be  converted  in the event the shares of any  series  are  issued  with the
privilege of  conversion.  Each share of any series of Preferred  Stock shall be
identical  with all other  shares of such  series,  except as to date from which
dividends shall be cumulative.

      2.    Dividends.
            ---------

      (a) The holders of Serial  Preferred Stock of any series shall be entitled
to receive,  when and as declared by the Board of  Directors,  out of surplus or
net profits  legally  available  therefor,  cumulative  dividends at the rate of
dividend  fixed  by the  Board of  Directors  for such  series  as  hereinbefore
provided,  and no more,  payable  quarter  yearly on the first days of  January,
April,  July and  October in each year.  The  dividends  on any shares of Serial
Preferred  Stock shall be  cumulative  from such date as shall be fixed for that
purpose by the Board of  Directors  prior to the issue of such  shares or, if no
such date shall be so fixed by the Board of Directors,  from the quarter  yearly
dividend payment date next preceding the date of issue of such shares.

      (b) The holders of Class B Serial  Preferred  Stock of any series shall be
entitled to  receive,  when and as  declared  by the Board of  Directors  or any
authorized   committee  thereof,   out  of  funds  legally  available  therefor,
cumulative dividends at the rate of dividend fixed by the Board of Directors for
such series including any such rate which may be reset or recalculated from time
to time pursuant to procedures or formulas  established therefor by the Board of
Directors, and no more; provided, however, that no dividend shall be declared or
paid on the  Class  B  Serial  Preferred  Stock  so  long  as any of the  Serial
Preferred Stock remains outstanding, unless all quarter yearly dividends accrued
on the Serial  Preferred Stock and the dividend  thereon for the current quarter
yearly dividend period shall have been paid or declared and a sum sufficient for
the payment  thereof set apart.  The  dividends  on any shares of Class B Serial
Preferred  Stock shall be  cumulative  from such date as shall be fixed for that
purpose by the Board of  Directors  prior to the issue of such  shares or, if no
such date shall be so fixed by the Board of Directors, from the dividend payment
date for such series next  preceding  the date of issue of such shares.  If full
cumulative  dividends  on shares of a series of Class B Serial  Preferred  Stock
have not been paid or declared and a sum sufficient for the payment  thereof set
apart,  dividends  thereon shall be declared and paid pro rata to the holders of
such series entitled thereto. Accrued dividends shall not bear interest.

      (c) The holders of Common  Stock  shall be entitled to receive  dividends,
when and as  declared by the Board of  Directors,  out of surplus or net profits
legally  available  therefor,  provided,  however,  that no  dividend  shall  be
declared  or paid on the  Common  Stock  so long as any of the  Preferred  Stock
remains  outstanding,  unless all dividends  accrued on all classes of Preferred
Stock and the dividend on Serial  Preferred Stock for the current quarter yearly
dividend  period shall have been paid or declared and a sum  sufficient  for the
payment thereof set apart.

      3. Liquidation. In the event of any liquidation, dissolution or winding up
of the corporation, whether voluntary or involuntary, then before any payment or
distribution  shall be made to the  holders  of  Common  Stock or Class B Serial
Preferred  Stock the holders of Serial  Preferred  Stock shall be entitled to be
paid  such  amount  as shall  have  been  fixed by the  Board  of  Directors  as
hereinbefore  provided,  plus all  dividends  which  have  accrued on the Serial
Preferred  Stock and have not been paid or declared and a sum sufficient for the
payment thereof set apart.  Thereafter,  the holders of Class B Serial Preferred
Stock of each series shall be entitled to be paid such amount as shall have been
fixed by the Board of Directors as  hereinbefore  provided,  plus all  dividends
which have accrued on the Class B Serial  Preferred Stock and have not been paid
or declared and a sum sufficient for the payment thereof set apart.  Thereafter,
the  remaining  assets shall  belong to and be divided  among the holders of the
Common Stock.  The  consolidation  or merger of the corporation with or into any
other  corporation or corporations  or share exchange or division  involving the
corporation in pursuance of applicable statutes providing for the consolidation,
merger,   share  exchange  or  division  shall  not  be  deemed  a  liquidation,
dissolution  or winding up of the  corporation  within the meaning of any of the
provisions of this subdivision.

     4.  Voting  Rights.  The  holders of  Preferred  Stock shall have no voting
rights except as otherwise required by law or hereinafter provided:

            (a) If at any time the amount of any  dividends on  Preferred  Stock
which have accrued and which have not been paid or declared and a sum sufficient
for the payment  thereof set apart shall be at least equal to the amount of four
quarter yearly dividends, the holders of Preferred Stock shall have one vote per
share,  provided,  however,  that such voting rights of the holders of Preferred
Stock shall  continue  only until all quarter  yearly  dividends  accrued on the
Preferred  Stock have been paid or declared and a sum sufficient for the payment
thereof set apart.

            (b) Without the consent of the holders of at least a majority of the
shares of Preferred Stock at the time outstanding,  given in person or by proxy,
either in writing or by vote at a meeting  called for that  purpose at which the
holders of Preferred Stock shall vote as a class,

                    (i) no  additional  class of stock  ranking on a parity with
the  Preferred Stock as to dividends or assets shall be authorized;

                  (ii) the authorized  number of shares of Preferred Stock or of
any class of stock ranking on a parity with the Preferred  Stock as to dividends
or assets shall not be increased; and

                (iii) the  corporation  shall not merge or  consolidate  with or
into any other  corporation if the corporation  surviving or resulting from such
merger or  consolidation  would  have  after such  merger or  consolidation  any
authorized  class of stock  ranking  senior to or on a parity with the Preferred
Stock  except  the same  number  of  shares of stock  with the same  rights  and
preferences as the authorized  stock of the  corporation  immediately  preceding
such merger or consolidation.

            (c) Except in pursuance of the provisions of subdivision  4(b) (iii)
of this Article Fifth,  without the consent of the holders of at least sixty-six
and two-thirds  (66-2/3) per cent. of the number of shares of Preferred Stock at
the time  outstanding,  given in person or by proxy,  either in  writing or by a
vote at a meeting  called  for that  purpose at which the  holders of  Preferred
Stock shall vote as a class,

                  (i) no change shall be made in the rights and  preferences  of
the Preferred Stock as set forth in the Articles of Incorporation or as fixed by
the Board of Directors so as to affect such stock adversely;  provided, however,
that if any such change would affect any series of Preferred  Stock adversely as
compared with the effect  thereof upon any other series of Preferred  Stock,  no
such change shall be made without the  additional  consent given as aforesaid of
the holders of at least  sixty-six  and  two-thirds  (66-2/3)  per cent.  of the
number of shares at the time  outstanding  of the Preferred  Stock of the series
which would be so adversely affected;

                  (ii)  no additional class of stock ranking senior to the
Preferred Stock as to dividends or assets shall be authorized;

                (iii)  the  authorized  number  of  shares of any class of stock
ranking  senior to the  Preferred  Stock as to  dividends or assets shall not be
increased; and

                  (iv) the corporation shall not (a) sell, lease, convey or part
with  control of all or  substantially  all of its  property  or business or (b)
voluntarily liquidate, dissolve or wind up its affairs.

      Notwithstanding the foregoing:

                  (i) except as otherwise  required by law, the voting rights of
any series of Class B Serial Preferred Stock may be limited or eliminated by the
Board of Directors prior to the issuance thereof; and

                  (ii)  provided  no shares of Serial  Preferred  Stock are then
outstanding,  any series of Class B Serial  Preferred  Stock may be issued  with
such additional  voting rights in the event of dividend  arrearages as the Board
of Directors  may determine to be required to qualify such series for listing on
one or more securities exchanges of recognized standing.

      The  holders of Common  Stock of the  corporation  shall have one vote per
share.

      5.    Redemption.
            ----------

      (a) The corporation,  at the option of the Board of Directors,  may redeem
the whole or any part of the Serial Preferred Stock, or the whole or any part of
any series thereof,  at any time or from time to time, at such redemption  price
therefor  as shall have been  fixed by the Board of  Directors  as  hereinbefore
provided,  plus all dividends  which on the redemption  date have accrued on the
shares to be redeemed  and have not been paid or declared  and a sum  sufficient
for the payment  thereof  set apart.  Notice of every such  redemption  shall be
published  not less than thirty (30) days nor more than sixty (60) days prior to
the date  fixed for  redemption  in a daily  newspaper  printed  in the  English
language and published and of general  circulation  in the Borough of Manhattan,
City and State of New York,  and in a daily  newspaper  printed  in the  English
language and published  and of general  circulation  in the City of  Pittsburgh,
Pennsylvania. Notice of every such redemption shall also be mailed not less than
thirty  (30) days nor more than  sixty  (60)  days  prior to the date  fixed for
redemption to the holders of record of the shares of Serial  Preferred  Stock to
be redeemed at their  respective  addresses as the same appear upon the books of
the corporation;  but no failure to mail such notice or any defect therein or in
the  mailing  thereof  shall  affect the  validity  of the  proceedings  for the
redemption of any shares of Serial Preferred Stock. In case of a redemption of a
part only of any series of the Serial  Preferred Stock at the time  outstanding,
the  corporation  shall select shares so to be redeemed in such manner,  whether
pro rata or by lot,  as the Board of  Directors  may  determine.  Subject to the
provisions  herein  contained,  the Board of Directors shall have full power and
authority to prescribe the manner in which and the terms and conditions on which
the Serial  Preferred  Stock shall be redeemed  from time to time.  If notice of
redemption shall have been published as hereinbefore  provided and if before the
redemption date specified in such notice all funds necessary for such redemption
shall have been set apart so as to be available therefor,  then on and after the
date fixed for  redemption  the shares of Serial  Preferred  Stock so called for
redemption,  notwithstanding  that any certificate  therefor shall not have been
surrendered  for  cancellation,  shall no longer be deemed  outstanding  and all
rights with respect to such shares shall  forthwith  cease and terminate  except
only the right of the holders  thereof to receive upon surrender of certificates
therefor  the amount  payable upon  redemption  thereof,  but without  interest;
provided,  however,  that if the  corporation  shall,  after the  publication of
notice of any such redemption and prior to the redemption date, deposit in trust
for the account of the holders of the Serial Preferred Stock to be redeemed with
a bank or trust company in good standing,  designated in such notice,  organized
under the laws of the United States of America or of the State of New York or of
the  Commonwealth of  Pennsylvania,  doing business in the Borough of Manhattan,
The City of New York, or in the City of Pittsburgh,  Pennsylvania,  and having a
capital, undivided profits and surplus aggregating at least five million dollars
($5,000,000),  all funds necessary for such redemption,  then from and after the
time of such  deposit  the  shares  of  Serial  Preferred  Stock so  called  for
redemption,  notwithstanding  that any certificate  therefor shall not have been
surrendered  for  cancellation,  shall no longer be deemed  outstanding  and all
rights with respect to such shares shall  forthwith  cease and terminate  except
only the right of the holders of such shares to receive  from such bank or trust
company  upon  surrender  of  certificates  therefor  the  amount  payable  upon
redemption thereof, but without interest.

      All shares of Serial  Preferred  Stock so redeemed  shall be cancelled and
shall not be reissued.

      (b) The  terms  and  conditions  under  which the whole or any part of any
series  of the  Class  B  Serial  Preferred  Stock  may  be  redeemed  shall  be
established  by the Board of  Directors  prior to the issuance  thereof.  Unless
otherwise  determined  by the Board of  Directors,  all shares of Class B Serial
Preferred Stock so redeemed or otherwise  acquired by the  corporation  shall be
returned to the status of authorized but unissued shares.

     6.  Preemptive  Rights.  Neither the holders of the Preferred Stock nor the
holders of the Common  Stock shall be entitled  to  participate  in any right of
subscription to any increased or additional  capital stock of the corporation of
any kind whatsoever.

      SIXTH.  In each election of directors every  shareholder  entitled to vote
shall  have the right to cast one vote for each share of stock  standing  in his
name on the books of the Company for each of such number of  candidates as there
are directors to be elected, but no shareholder shall have any right to cumulate
his votes and cast them for one candidate or  distribute  them among two or more
candidates.

      SEVENTH.  A. In  addition to any  affirmative  vote  required by law,  the
Articles  or the  By-Laws  of the  corporation  (the  "Company"),  and except as
otherwise  expressly provided in Section B of this Article Seventh,  the Company
shall not knowingly engage, directly or indirectly,  in any Stock Repurchase (as
hereinafter  defined) from an Interested  Shareholder (as  hereinafter  defined)
without the  affirmative  vote of not less than a majority of the votes entitled
to be cast by the  holders of all then  outstanding  shares of Voting  Stock (as
hereinafter  defined)  which are  beneficially  owned by persons other than such
Interested Shareholder, voting together as a single class. Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or that
a lesser  percentage or separate  class vote may be specified,  by law or in any
agreement with any national securities exchange or otherwise.

      B. The  provisions  of  Section  A of this  Article  Seventh  shall not be
applicable to any particular  Stock  Repurchase from an Interested  Shareholder,
and such Stock Repurchase  shall require only such affirmative  vote, if any, as
is required by law or by any other  provision  of the Articles or the By-Laws of
the  Company,  or  any  agreement  with  any  national  securities  exchange  or
otherwise, if the conditions specified in either of the following Paragraphs (1)
or (2) are met:

            (1) The  Stock  Repurchase  is made  pursuant  to a tender  offer or
exchange  offer for a class of  Capital  Stock  (as  hereinafter  defined)  made
available on the same basis to all holders of such class of Capital Stock.

            (2) The Stock Repurchase is made pursuant to an open market purchase
program  approved  by a majority of the  Continuing  Directors  (as  hereinafter
defined),  provided  that such  repurchase is effected on the open market and is
not the result of a privately negotiated transaction.

      C.    For the purposes of this Article Seventh:

            (1) The term "Stock Repurchase" shall mean any repurchase,  directly
or  indirectly,  by the Company or any Subsidiary of any shares of Capital Stock
at a price greater than the then Fair Market Value of such shares.

            (2) The term  "Capital  Stock"  shall mean all capital  stock of the
Company  authorized  to be issued from time to time under  Article  FIFTH of the
Articles of the  Company,  and the term  "Voting  Stock"  shall mean all Capital
Stock which by its terms may be voted on all matters  submitted to  shareholders
of the Company generally.

            (3) The term "person" shall mean any  individual,  firm,  company or
other entity and shall  include any group  comprised of any person and any other
person with whom such person or any  Affiliate  or  Associate of such person has
any agreement,  arrangement or  understanding,  directly or indirectly,  for the
purpose of acquiring, holding, voting or disposing of Capital Stock.

            (4) The term "Interested  Shareholder"  shall mean any person (other
than the Company or any Subsidiary  and other than any savings,  profit-sharing,
employee stock  ownership or other  employee  benefit plan of the Company or any
Subsidiary  or any trustee of or  fiduciary  with  respect to any such plan when
acting in such capacity) who is on the date in question,  or who was at any time
within  the two year  period  immediately  prior to the  date in  question,  the
beneficial owner of Voting Stock  representing  five percent (5%) or more of the
votes  entitled  to be cast by the  holders  of all then  outstanding  shares of
Voting Stock.

            (5) A person shall be a "beneficial  owner" of any Capital Stock (a)
which such person or any of its  Affiliates  or  Associates  beneficially  owns,
directly  or  indirectly;  (b) which  such  person or any of its  Affiliates  or
Associates has,  directly or indirectly,  (i) the right to acquire (whether such
right is  exercisable  immediately  or  subject  only to the  passage  of time),
pursuant to any agreement,  arrangement or understanding or upon the exercise of
conversion rights,  exchange rights,  warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement,  arrangement or  understanding;  or
(c) which is  beneficially  owned,  directly or indirectly,  by any other person
with which such person or any of its Affiliates or Associates has any agreement,
arrangement or understanding  for the purpose of acquiring,  holding,  voting or
disposing  of any shares of  Capital  Stock.  For the  purposes  of  determining
whether a person is an  Interested  Shareholder  pursuant to Paragraph 4 of this
Section C, the number of shares of Capital Stock deemed to be outstanding  shall
include shares deemed  beneficially owned by such person through  application of
Paragraph 5 of this Section C, but shall not include any other shares of Capital
Stock  that  may  be  issuable   pursuant  to  any  agreement,   arrangement  or
understanding,  or upon exercise of conversion rights,  warrants or options,  or
otherwise.

            (6) The terms  "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 under the Securities  Exchange Act
of 1934 as in effect on March 8, 1985 (the term  "registrant" in said Rule 12b-2
meaning in this case the Company).

            (7) The term  "Subsidiary"  shall  mean any  corporation  of which a
majority of any class of equity security is  beneficially  owned by the Company;
provided,  however,  that  for the  purposes  of the  definition  of  Interested
Shareholder  set forth in Paragraph 4 of this  Section C, the term  "Subsidiary"
shall  mean  only a  corporation  of which a  majority  of each  class of equity
security is beneficially owned by the Company.

            (8) The term  "Continuing  Director"  shall  mean any  member of the
Board of Directors of the Company (the  "Board"),  while such person is a member
of the Board,  who is not an Affiliate or  Associate  or  representative  of the
Interested  Shareholder and was a member of the Board prior to the time that the
Interested Shareholder became an Interested Shareholder,  and any successor of a
Continuing  Director,  while such successor is a member of the Board, who is not
an Affiliate or Associate or representative of the Interested Shareholder and is
recommended  or elected to succeed  the  Continuing  Director  by a majority  of
Continuing Directors.

            (9) The term "Fair Market Value" shall mean (a) in the case of cash,
the amount of such cash; (b) in the case of stock, the closing sale price on the
trading day immediately  preceding the date in question of a share of such stock
on the Composite  Tape for New York Stock  Exchange-Listed  Stocks,  or, if such
stock is not quoted on the Composite Tape, on the New York Stock  Exchange,  or,
if such stock is not listed on such  Exchange,  on the  principal  United States
securities  exchange registered under the Act on which such stock is listed, or,
if such stock is not listed on any such exchange, the closing bid quotation with
respect to a share of such stock on the trading day  immediately  preceding  the
date in  question  on the  National  Association  of  Securities  Dealers,  Inc.
Automated  Quotations  System or any  similar  system then in use, or if no such
quotation is available, the fair market value on the date in question of a share
of such stock as  determined by a majority of the  Continuing  Directors in good
faith; and (c) in the case of property other than cash or stock, the fair market
value of such  property on the date in question as determined in good faith by a
majority of the Continuing Directors.

      D. The Board of Directors  shall have the power and duty to determine  for
the purposes of this Article Seventh,  on the basis of information known to them
after reasonable inquiry, (a) whether a person is an Interested Shareholder, (b)
the number of shares of Capital Stock or other securities  beneficially owned by
any person, (c) whether a person is an Affiliate or Associate of another and (d)
whether the  consideration  to be paid in any Stock  Repurchase has an aggregate
Fair  Market  Value in  excess of the then Fair  Market  Value of the  shares of
Capital Stock being repurchased. Any such determination made in good faith shall
be binding and conclusive on all parties.

      E. Nothing  contained in this Article Seventh shall be construed to
relieve any Interested Shareholder from any fiduciary obligation imposed by law.

      F.  Notwithstanding any other provisions of the Articles or the By-Laws of
the Company (and  notwithstanding  the fact that a lesser percentage or separate
class  vote may be  specified  by law,  these  Articles  or the  By-Laws  of the
Company),  the  affirmative  vote of the holders of not less than eighty percent
(80%) of the votes  entitled to be cast by the  holders of all then  outstanding
shares of Voting Stock,  voting together as a single class, shall be required to
amend or  repeal,  or adopt  any  provisions  inconsistent  with,  this  Article
Seventh.

      EIGHTH.  A.  The business and affairs of the corporation (the "Company")
shall be managed by a Board of Directors comprised as follows:

            (1) The Board of  Directors  shall  consist of the number of persons
fixed  from  time to time by the Board of  Directors  pursuant  to a  resolution
adopted by a majority vote of the directors then in office.

            (2)  Beginning  with the Board of  Directors  to be  elected  at the
annual meeting of shareholders held in 1985,  directors shall be classified with
respect to the time for which they shall  severally hold office by dividing them
into three classes, as nearly equal in number as possible. At such meeting, each
class of  directors  shall be elected in a separate  election.  Directors of the
first  class  shall be elected for a term of office to expire at the 1986 annual
meeting of  shareholders,  those of the second class shall be elected for a term
of office to expire at the 1987 annual meeting of shareholders, and those of the
third  class  shall be elected for a term of office to expire at the 1988 annual
meeting of  shareholders.  At each  annual  election  held after the 1985 annual
meeting of  shareholders  the class of  directors  then being  elected  shall be
elected to hold  office  for a term of office to expire at the third  succeeding
annual meeting of shareholders  after their  election.  Each director shall hold
office for the term for which elected and until his or her successor  shall have
been elected and qualified,  except in the case of earlier death, resignation or
removal.

            (3)  Nominations  for the election of directors at an annual meeting
of the  shareholders  may be made  by the  Board  of  Directors  or a  committee
appointed by the Board of Directors  or by any  shareholder  entitled to vote in
the election of directors at the meeting.  Shareholders entitled to vote in such
election may  nominate  one or more  persons for  election as directors  only if
written  notice  of  such  shareholder's  intent  to  make  such  nomination  or
nominations has been given either by personal delivery or by United States mail,
postage  prepaid,  to the  Secretary  of the  Company not later than ninety days
prior to the anniversary date of the immediately  preceding annual meeting. Such
notice shall set forth:  (a) the name and address of the shareholder who intends
to make the  nomination  and of the  persons  or person to be  nominated;  (b) a
representation  that the  shareholder  is a  holder  of  record  of stock of the
Company  entitled to vote at such  meeting and intends to appear in person or by
proxy at the meeting to nominate the person or persons  specified in the notice;
(c) a description of all arrangements or understandings  between the shareholder
and each nominee and any other person or persons (naming such person or persons)
pursuant  to  which  the  nomination  or  nominations  are  to be  made  by  the
shareholder;  (d) such other information regarding each nominee proposed by such
shareholder  as would be  required to be  included  in a proxy  statement  filed
pursuant to the proxy rules of the Securities and Exchange Commission as then in
effect;  and (e) the  consent  of each  nominee  to serve as a  director  of the
Company  if so  elected.  The  presiding  officer of the  meeting  may refuse to
acknowledge  the  nomination  of any  person  not  made in  compliance  with the
foregoing procedure.

            (4) Any  director,  any class of  directors,  or the entire Board of
Directors may be removed from office by  shareholder  vote at any time,  with or
without assigning any cause, but only if shareholders  entitled to cast at least
80% of the votes which all  shareholders  would be entitled to cast at an annual
election of directors or of such class of directors  shall vote in favor of such
removal.

            (5)  Vacancies  in  the  Board  of  Directors,  including  vacancies
resulting from an increase in the number of directors, shall be filled only by a
majority  vote of the  remaining  directors  then in office,  though less than a
quorum,  except that  vacancies  resulting from removal from office by a vote of
the  shareholders may be filled by the shareholders at the same meeting at which
such removal occurs.  All directors  elected to fill vacancies shall hold office
for a term expiring at the annual meeting of  shareholders  at which the term of
the class to which they have been elected expires.  No decrease in the number of
directors  constituting  the Board of  Directors  shall  shorten the term of any
incumbent director.

      B.  Notwithstanding any other provisions of the Articles or the By-Laws of
the Company (and  notwithstanding  the fact that a lesser percentage or separate
class  vote may be  specified  by law,  these  Articles  or the  By-laws  of the
Company),  the  affirmative  vote of not less than eighty  percent  (80%) of the
votes which all shareholders of the then outstanding  shares of capital stock of
the Company would be entitled to cast in an annual election of directors, voting
together as a single class,  shall be required to amend or repeal,  or adopt any
provisions inconsistent with, this Article Eighth.

      NINTH.  To the  fullest  extent  that  the  laws  of the  Commonwealth  of
Pennsylvania,  as in effect on May 15,  1987 or as  thereafter  amended,  permit
elimination  or limitation  of the  liability of  directors,  no director of the
corporation  shall be  personally  liable for  monetary  damages  for any action
taken, or any failure to take any action.  This Article Ninth shall not apply to
any action filed prior to May 15, 1987, nor to any breach of performance of duty
or any failure of  performance  of duty  occurring  prior to May 15,  1987.  The
provisions  of this Article  shall be deemed to be a contract with each director
of the  corporation  who serves as such at any time while such provisions are in
effect, and each such director shall be deemed to be serving as such in reliance
on the  provisions of this  Article.  Any amendment or repeal of this Article or
adoption of any other  provision of the  Articles or By-laws of the  corporation
which  has  the  effect  of   increasing   director   liability   shall  operate
prospectively only and shall not affect any action taken, or any failure to act,
prior to such amendment, repeal or adoption.

      TENTH.  Except as  prohibited  by law, the  corporation  may indemnify any
person who is or was a director,  officer,  employee or agent of the corporation
or is or was serving at the request of the  corporation as a director,  officer,
employee or agent of another corporation,  partnership,  joint venture, trust or
other enterprise (including,  without limitation, any employee benefit plan) and
may take such  steps as may be  deemed  appropriate  by the Board of  Directors,
including  purchasing  and  maintaining   insurance,   entering  into  contracts
(including,  without  limitation,   contracts  of  indemnification  between  the
corporation  and its directors and  officers),  creating a trust fund,  granting
security interests or using other means (including, without limitation, a letter
of credit) to ensure the payment of such  amounts as may be  necessary to effect
such indemnification. This Article shall be effective May 15, 1987.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>0006.txt
<TEXT>


                                                           EXHIBIT 10(n)


                                                          CONFORMED COPY















                       REVOLVING CREDIT AGREEMENT

                                (364-Day)

                       Dated as of April 28, 2000


                                  Among

                               ALCOA INC.,

                        THE LENDERS NAMED HEREIN,

               MORGAN GUARANTY TRUST COMPANY OF NEW YORK,

                          as Syndication Agent,

             CITIBANK, N.A. and CREDIT SUISSE FIRST BOSTON,

                        as Documentation Agents,

                        THE CHASE MANHATTAN BANK,

                      as Administrative Agent, and

                         CHASE SECURITIES INC.,

                    as Lead Arranger and Book Manager


<PAGE>



                            TABLE OF CONTENTS

                                                                            Page

ARTICLE I.  DEFINITIONS AND CONSTRUCTION

  SECTION 1.01.  Defined Terms.................................................1
  SECTION 1.02.  Terms Generally; Accounting Principles.......................16

ARTICLE II.  THE CREDITS

  SECTION 2.01.  Commitments..................................................17
  SECTION 2.02.  Loans........................................................18
  SECTION 2.03.  Notice of Borrowings.........................................19
  SECTION 2.04.  Evidence of Debt; Repayment of Loans.........................20
  SECTION 2.05.  Fees.........................................................21
  SECTION 2.06.  Interest on Loans............................................22
  SECTION 2.07.  Default Interest.............................................22
  SECTION 2.08.  Alternate Rate of Interest...................................23
  SECTION 2.09.  Termination and Reduction of Commitments.....................23
  SECTION 2.10.  Refinancings.................................................24
  SECTION 2.11.  Prepayment...................................................24
  SECTION 2.12.  Reserve Requirements; Change in Circumstances................25
  SECTION 2.13.  Change in Legality...........................................27
  SECTION 2.14.  Indemnity....................................................28
  SECTION 2.15.  Pro Rata Treatment...........................................29
  SECTION 2.16.  Sharing of Setoffs...........................................29
  SECTION 2.17.  Payments.....................................................30
  SECTION 2.18.  Taxes........................................................30
  SECTION 2.19.  Assignment of Commitments Under Certain Circumstances........34

ARTICLE III.  REPRESENTATIONS AND WARRANTIES

    SECTION 3.01.  Organization...............................................35
    SECTION 3.02.  Authorization..............................................35
    SECTION 3.03.  Enforceability.............................................35
    SECTION 3.04.  Governmental Approvals.....................................35
    SECTION 3.05.  No Conflict................................................36
    SECTION 3.06.  Financial Statements.......................................36
    SECTION 3.07.  No Defaults................................................36
    SECTION 3.08.  Litigation.................................................37
    SECTION 3.09.  No Material Adverse Change.................................37
    SECTION 3.10.  Employee Benefit Plans.....................................37
    SECTION 3.11.  Title to Properties; Possession Under Leases...............38
    SECTION 3.12.  Investment Company Act; Public Utility Holding Company Act.39
    SECTION 3.13.  Tax Returns................................................39
    SECTION 3.14.  Compliance with Laws and Agreements........................39
    SECTION 3.15.  No Material Misstatements..................................40
    SECTION 3.16.  Federal Reserve Regulations................................40
    SECTION 3.17.  No Trusts..................................................40
    SECTION 3.18.  Year 2000 Computer Systems Compliance......................40

ARTICLE IV. CONDITIONS OF EFFECTIVENESS, LENDING AND DESIGNATION OF
  BORROWING SUBSIDIARIES
    SECTION 4.01.  Effective Date.............................................41
    SECTION 4.02.  All Borrowings.............................................43
    SECTION 4.03.  Designation of Borrowing Subsidiaries......................44

ARTICLE V.  AFFIRMATIVE COVENANTS
    SECTION 5.01.  Financial Statements, Reports, etc.........................45
    SECTION 5.02.  Pari Passu Ranking.........................................46
    SECTION 5.03.  Maintenance of Properties..................................46
    SECTION 5.04.  Obligations and Taxes......................................47
    SECTION 5.05.  Insurance..................................................47
    SECTION 5.06.  Existence; Businesses and Properties.......................47
    SECTION 5.07.  Compliance with Laws.......................................47
    SECTION 5.08.  Litigation and Other Notices...............................49
    SECTION 5.09.  Borrowing Subsidiaries.....................................49

ARTICLE VI.  NEGATIVE COVENANTS

    SECTION 6.01.  Liens......................................................49
    SECTION  6.02.  Consolidation, Merger, Sale of Assets, etc................51
    SECTION  6.03.  Financial Undertaking.....................................51
    SECTION  6.04.  Change in Business........................................52

ARTICLE VII.  EVENTS OF DEFAULT

ARTICLE VIII.  GUARANTEE

ARTICLE IX.  THE ADMINISTRATIVE AGENT

ARTICLE X.  MISCELLANEOUS

    SECTION 10.01.  Notices...................................................62
    SECTION 10.02.  Survival of Agreement.....................................63
    SECTION 10.03.  Binding Effect............................................63
    SECTION 10.04.  Successors and Assigns; Additional Borrowing Subsidiaries.64
    SECTION 10.05.  Expenses; Indemnity.......................................68
    SECTION 10.06.  Right of Setoff...........................................69
    SECTION 10.07.  Applicable Law............................................70
    SECTION 10.08.  Waivers; Amendment........................................70
    SECTION 10.09.  Interest Rate Limitation..................................71
    SECTION 10.10.  Entire Agreement..........................................71
    SECTION 10.11.  Waiver of Jury Trial......................................71
    SECTION 10.12.  Severability..............................................72
    SECTION 10.13.  Counterparts..............................................72
    SECTION 10.14.  Headings..................................................72
    SECTION 10.15.  Jurisdiction, Consent to Service of Process...............72
    SECTION 10.16.  Conversion of Currencies..................................73



<PAGE>
                                                                  Contents, p. 4

                                                                            Page

References

Exhibit A               Assignment and Acceptance
Exhibit B               Administrative Questionnaire
Exhibit C               Form of Opinion of Counsel
Exhibit D               Designation of Borrowing Subsidiary

Schedule 2.01           Lenders and Commitments
Schedule 3.04           Governmental Approvals
Schedule 3.08           Litigation
Schedule 6.01(a)        Existing Liens


<PAGE>






                        364-DAY REVOLVING CREDIT AGREEMENT dated as of April 28,
                  2000 (as the same may be  amended,  modified  or  supplemented
                  from time to time,  the  "Agreement"),  among  ALCOA  INC.,  a
                  Pennsylvania corporation ("Alcoa"), the Lenders (such term and
                  each other capitalized term used but not defined herein having
                  the  meaning   ascribed  thereto  in  Article  I),  THE  CHASE
                  MANHATTAN   BANK,   a  New  York   banking   corporation,   as
                  Administrative  Agent for the  Lenders,  and CHASE  SECURITIES
                  INC., as Lead Arranger and Book Manager.

            Alcoa and the Borrowing  Subsidiaries  have requested the Lenders to
extend credit so as to enable them,  subject to the terms and conditions of this
Agreement,  to borrow on a  revolving  basis,  at any time and from time to time
prior  to  the  Maturity  Date,  an  aggregate  principal  amount  at  any  time
outstanding not in excess of  US$2,490,000,000.  The proceeds of such borrowings
are to be used to  provide  working  capital  and for  other  general  corporate
purposes,  including but not limited to the support of Alcoa's  commercial paper
program.  The  Lenders  are  willing  to  extend  such  credit  to Alcoa and the
Borrowing  Subsidiaries  on the terms and  subject to the  conditions  set forth
herein.

            Accordingly, the Borrowers, the Lenders and the Administrative Agent
agree as follows:

ARTICLE I.  DEFINITIONS AND CONSTRUCTION

     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:

            "ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.

            "ABR Loan" shall mean any Loan bearing interest at a rate determined
by reference to the  Alternate  Base Rate in accordance  with the  provisions of
Article II.

<PAGE>
            "Administrative  Agent" shall mean The Chase  Manhattan  Bank, a New
York  banking  corporation,  in its  capacity  as  administrative  agent for the
Lenders hereunder.

            "Administrative   Questionnaire"   shall   mean  an   Administrative
Questionnaire in the form of Exhibit B.

            "Affiliate"  shall  mean,  when used  with  respect  to a  specified
person,  another  person  that  directly,  or  indirectly  through  one or  more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified.


<PAGE>
            "Alternate  Base Rate" shall mean,  for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds  Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the rate of interest per
annum publicly  announced from time to time by the  Administrative  Agent as its
prime rate in effect at its  principal  office in New York City;  each change in
the Prime Rate shall be effective on the date such change is publicly  announced
as being effective.  "Base CD Rate" shall mean the sum of (a) the product of (i)
the  Three-Month  Secondary  CD Rate and  (ii)  Statutory  Reserves  and (b) the
Assessment  Rate.  "Three-Month  Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month  certificates of deposit reported as being
in effect on such day (or,  if such day shall not be a  Business  Day,  the next
preceding  Business Day) by the Board through the public  information  telephone
line of the Federal Reserve Bank of New York (which rate will, under the current
practices  of the Board,  be published in Federal  Reserve  Statistical  Release
H.l5(519)  during the week following such day), or, if such rate shall not be so
reported on such day or such next  preceding  Business  Day,  the average of the
secondary  market  quotations for three month  certificates  of deposit of major
money center banks in New York City received at  approximately  10:00 a.m.,  New
York City time, on such day (or, if such day shall not be a Business Day, on the
next  preceding  Business Day) by the  Administrative  Agent from three New York
City negotiable  certificate of deposit dealers of recognized  standing selected
by it.  "Federal  Funds  Effective  Rate" shall mean,  for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal  Reserve System  arranged by Federal funds brokers,  as published on the
next  succeeding  Business Day by the Federal  Reserve Bank of New York,  or, if
such rate is not so published  for any day which is a Business  Day, the average
of  the   quotations  for  the  day  of  such   transactions   received  by  the
Administrative  Agent from three Federal  funds  brokers of recognized  standing
selected by it. If for any reason the Administrative Agent shall have determined
(which  determination  shall be  conclusive  absent  manifest  error) that it is
unable to ascertain the Base CD Rate or the Federal Funds Effective Rate or both
for any reason,  including the inability of the  Administrative  Agent to obtain
sufficient  quotations in accordance with the terms thereof,  the Alternate Base
Rate shall be  determined  without  regard to clause (b) or (c), or both, of the
first  sentence of this  definition,  as  appropriate,  until the  circumstances
giving rise to such inability no longer exist.  Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds  Effective  Rate shall be effective on the effective  date of such
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate, respectively.

            "Applicable Margin" shall mean, with respect to the Eurodollar Loans
comprising any Borrowing,  the applicable  percentage set forth below based upon
the ratings by S&P and Moody's applicable on such date to the Index Debt:

            Category 1              Percentage
            ----------              ----------

             AA-/Aa3                  .1350%
            or above

            Category 2

              A+/A1                   .1400%

            Category 3

              A/A2                    .1375%

            Category 4

              A-/A3                   .1450%

            Category 5


<PAGE>


             BBB/Baa2                 .2200%

            Category 6

             BBB-/Baa3                .2700%
             or below

            For purposes of the foregoing,  (i) if neither Moody's nor S&P shall
have in  effect a  rating  for any  Index  Debt  (other  than by  reason  of the
circumstances  referred to in the last sentence of this  definition),  then both
such rating agencies shall be deemed to have established  ratings for such Index
Debt in  Category  6; (ii) if only one of Moody's and S&P shall have in effect a
rating for any Index Debt, then the Applicable  Margin, to the extent determined
by  reference  to such  Index  Debt,  shall be  determined  on the basis of such
rating;  (iii) if the ratings  established or deemed to have been established by
Moody's or S&P for any Index Debt shall fall within  different  Categories,  the
Applicable  Margin,  to the extent  determined  by reference to such Index Debt,
shall be based on the Category  corresponding to the higher rating;  and (iv) if
any  rating  established  or deemed to have been  established  by Moody's or S&P
shall be changed  (other  than as a result of a change in the  rating  system of
Moody's or S&P),  such change  shall be  effective as of the date on which it is
first announced by the applicable  rating agency.  Each change in the Applicable
Margin shall apply during the period  commencing on the  effective  date of such
change and ending on the date  immediately  preceding the effective  date of the
next such change. If the rating system of Moody's or S&P shall change, or if any
such rating  agency shall cease to be in the business of rating  corporate  debt
obligations,  Alcoa and the Lenders  shall  negotiate in good faith to amend the
references to specific ratings in this definition to reflect such changed rating
system or the  non-availability  of ratings from such rating agency, and pending
the effectiveness of any such amendment,  the ratings of such rating agency most
recently  in effect  prior to such  change or  cessation  shall be  employed  in
determining the Applicable Margin.

<PAGE>
            "Assessment  Rate" shall mean for any date the annual rate  (rounded
upwards,  if necessary,  to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment rate that will be
employed  in  determining  amounts  payable by the  Administrative  Agent to the
Federal  Deposit  Insurance  Corporation  (or any  successor)  for such date for
insurance by such  Corporation  (or such  successor)  of time  deposits  made in
dollars at the Administrative Agent's domestic offices.

            "Assignment and Acceptance"  shall mean an assignment and acceptance
entered  into by a Lender and an assignee,  and  accepted by the  Administrative
Agent,  in the form of Exhibit A or such other form as shall be  approved by the
Administrative Agent.

            "Board"  shall mean the Board of  Governors  of the Federal  Reserve
System of the United States.

            "Borrowers" shall mean Alcoa and the Borrowing Subsidiaries.

            "Borrowing"  shall mean any group of Loans of a single  Type made by
the  Lenders  on a single  date and as to which a single  Interest  Period is in
effect.

            "Borrowing  Subsidiaries"  shall mean, at any time, the wholly-owned
Subsidiaries  of  Alcoa  that  have  undertaken  the  obligations  of  Borrowing
Subsidiaries pursuant to Section 10.04(i).

            "Borrowing Subsidiary Obligations" shall mean, collectively, the due
and  punctual  payment  by any  Borrowing  Subsidiary  of the  principal  of and
interest  on the  Loans  to it,  when  and  as  due,  whether  at  maturity,  by
acceleration or otherwise,  and the due and punctual  payment and performance of
all other obligations of such Borrowing Subsidiary under this Agreement.

            "Business  Day"  shall  mean any day  (other  than a day  which is a
Saturday,  Sunday  or day on  which  banks in New York  City are  authorized  or
required  by law to  remain  closed);  provided,  however,  that,  when  used in
connection with any Eurodollar  Loan, the term "Business Day" shall in each case
also exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.

            "Code" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time.

<PAGE>
            "Commercial Paper" of any person shall mean any note, draft, bill of
exchange or other  negotiable  instrument  issued by such person (other than any
extendable  commercial  notes issued  pursuant to Section 4(2) of the Securities
Act of 1933) that has a maturity at the time of issuance not exceeding  thirteen
months, exclusive of days of grace, or any renewal thereof the maturity of which
is  likewise  limited,  pursuant  to  Section  3(a)(3)  or  Section  4(2) of the
Securities Act of 1933.

            "Commitment" shall mean, with respect to each Lender, the commitment
of such Lender to make Loans  hereunder  as set forth in Schedule  2.01,  as the
same may be  terminated,  reduced or  increased  from time to time  pursuant  to
Section 2.09.

            "Consolidated  Net  Tangible  Assets"  shall  mean at any time,  the
aggregate  amount  of  assets  (less  applicable  reserves  and  other  properly
deductible  items)  of Alcoa  and its  consolidated  Subsidiaries  adjusted  for
inventories on the basis of cost (before  application of the "last-in first-out"
method of  determining  cost) or current market value,  whichever is lower,  and
deducting  therefrom (a) all current  liabilities  of such  corporation  and its
consolidated  Subsidiaries except for (i) notes and loans payable,  (ii) current
maturities of long-term debt and (iii) current  maturities of obligations  under
capital  leases and (b) all goodwill,  trade names,  patents,  unamortized  debt
discount and expenses of such corporation and its consolidated  Subsidiaries (to
the  extent  included  in said  aggregate  amount  of  assets)  and  other  like
intangibles,  all as set forth in the most recent consolidated  balance sheet of
Alcoa and its consolidated  Subsidiaries,  delivered to the Administrative Agent
pursuant to Section 5.01, computed and consolidated in accordance with GAAP.

            "Consolidated  Net Worth"  shall mean at any time,  the net worth of
Alcoa  and its  consolidated  Subsidiaries  at  such  time  (including  minority
interests), computed and consolidated in accordance with GAAP.

            "Control" shall mean the possession,  directly or indirectly, of the
power to  direct or cause the  direction  of the  management  or  policies  of a
person, whether through the ownership of Voting Stock, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings correlative thereto.

<PAGE>
            "Default" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.

            "Designation  Date" shall have the meaning  assigned to such term in
Section 10.04(i).

            "Designation  of Borrowing  Subsidiary"  shall mean a Designation of
Borrowing Subsidiary executed by Alcoa and a wholly-owned Subsidiary in the form
of Exhibit D.

            "dollars" or "$" shall mean lawful money of the
             -------      -
United States of America.

            "Effective Date" shall mean the date of this Agreement.

            "Eligible  Transferee" shall mean (i) a commercial bank having total
assets  in  excess of  $10,000,000,000  or the  equivalent  thereof  in  another
currency,  provided that such bank or its holding company has issued obligations
which are rated investment grade by any of Moody's, S&P or International Banking
and Credit  Analysis  and (ii) any other  person  which  Alcoa  agrees may be an
Eligible Transferee.

            "Engagement  Fees" shall have the  meaning  assigned to such term in
Section 2.05(b).

            "Engagement  Letter"  shall  mean the letter  agreement  dated as of
April 3, 2000, among the Administrative Agent, Chase Securities Inc. and Alcoa.

            "ERISA" shall mean the Employee  Retirement  Income  Security Act of
1974, as the same may be amended from time to time.

            "ERISA  Affiliate" shall mean any trade or business  (whether or not
incorporated)  that is a member of a group of which any Borrower is a member and
which is treated as a single employer under Section 414 of the Code.

<PAGE>

            "ERISA Event" shall mean (i) any Reportable Event; (ii) the adoption
of any amendment to a Plan that would require the provision of security pursuant
to Section  401(a)(29) of the Code or Section 307 of ERISA;  (iii) the existence
with respect to any Plan of an "accumulated  funding  deficiency" (as defined in
Section  412 of the Code or Section 302 of ERISA),  whether or not waived;  (iv)
the filing  pursuant to Section 412(d) of the Code or Section 302(d) of ERISA of
an application for a waiver of the minimum funding  standard with respect to any
Plan; (v) the  incurrence of any liability  under Title IV of ERISA with respect
to the  termination of any Plan or the  withdrawal or partial  withdrawal of the
Borrower or any of its ERISA  Affiliates  from any Plan or  Multiemployer  Plan;
(vi) the receipt by the Borrower or any ERISA  Affiliate from the PBGC or a plan
administrator  of any notice  relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer  any Plan;  (vii) the receipt by the
Borrower or any ERISA  Affiliate  of any notice  concerning  the  imposition  of
Withdrawal  Liability or a  determination  that a  Multiemployer  Plan is, or is
expected to be, insolvent or in  reorganization,  within the meaning of Title IV
of ERISA;  (viii) the occurrence of a "prohibited  transaction"  with respect to
which the Borrower or any of its subsidiaries is a "disqualified person" (within
the meaning of Section  4975 of the Code) or with  respect to which the Borrower
or any such subsidiary  could otherwise be liable;  (ix) any other similar event
or condition with respect to a Plan or  Multiemployer  Plan that could result in
liability of the Borrowers and (x) any Foreign Benefit Event.

            "Eurodollar   Borrowing"   shall  mean  a  Borrowing   comprised  of
Eurodollar Loans.

            "Eurodollar  Loan"  shall mean any Loan  bearing  interest at a rate
determined  by reference to the LIBO Rate in accordance  with the  provisions of
Article II.

            "Event of Default"  shall have the meaning  assigned to such term in
Article VII.

            "Exchange Act Report" shall mean, collectively, the Annual Report of
Alcoa on Form 10-K for the year ended December 31, 1999, the Quarterly Report of
Alcoa on Form 10-Q for the quarter ended March 31, 2000, the Current  Reports on
Form 8-K dated  January  10,  2000,  January  18,  2000 and January 19, 2000 and
Schedules  TO  (including  amendments)  filed by Alcoa with the  Securities  and
Exchange  Commission  on March  14,  2000 and March 20,  2000,  pursuant  to the
Securities Exchange Act of 1934.

<PAGE>

            "Existing  364-Day  Credit  Agreement"  shall mean the  Amended  and
Restated  Revolving  Credit  Agreement dated as of August 13, 1999, among Alcoa,
the lenders party thereto,  The Chase Manhattan Bank, as  Administrative  Agent,
and Chase  Securities  Inc.,  as lead  arranger and book  manager.  The Existing
364-Day Credit Agreement will be terminated and replaced by this Agreement.

            "Existing  Five-Year  Credit  Agreement"  shall  mean the  Revolving
Credit Agreement  (Five-Year) dated as of August 14, 1998, among Alcoa, Alcoa of
Australia Limited,  a company  incorporated with limited liability in Australia,
the lenders party  thereto,  The Chase  Manhattan  Bank, as U.S.  agent for such
lenders,  and Chase Securities  Australia Limited,  a company  incorporated with
limited liability in Australia, as Australian agent for such lenders.

            "Facility  Fee"  shall  have the  meaning  assigned  to such term in
Section 2.05(a).

            "Facility  Fee  Percentage"  shall  mean on any date the  applicable
percentage  set  forth  below  based  upon  the  ratings  by  S&P  and  Moody's,
respectively, applicable on such date to the Index Debt:

            Category 1              Percentage
            ----------              ----------

             AA-/Aa3                  .0400%
            or above

            Category 2

              A+/A1                   .0475%

            Category 3

              A/A2                    .0500%

            Category 4

              A-/A3                   .0550%

            Category 5

             BBB/Baa2                 .0800%

<PAGE>

            Category 6

             BBB-/Baa3                .1300%
             or below

            For purposes of the foregoing,  (i) if neither Moody's nor S&P shall
have in  effect a  rating  for the  Index  Debt  (other  than by  reason  of the
circumstances  referred to in the last sentence of this  definition),  then both
such rating agencies shall be deemed to have established  ratings in Category 6;
(ii) if only one of Moody's  and S&P shall have in effect a rating for the Index
Debt, then the Facility Fee Percentage  shall be determined on the basis of such
rating;  (iii) if the ratings  established or deemed to have been established by
Moody's or S&P for the Index Debt shall fall within  different  Categories,  the
Facility  Fee  Percentage  shall be based on the Category  corresponding  to the
higher  rating;  and (iv) if any  rating  established  or  deemed  to have  been
established  by  Moody's or S&P shall be  changed  (other  than as a result of a
change in the rating  system of Moody's or S&P),  such change shall be effective
as of the date on which it is first  announced by the applicable  rating agency.
Each  change in the  Facility  Fee  Percentage  shall  apply  during  the period
commencing  on the  effective  date  of  such  change  and  ending  on the  date
immediately  preceding the effective date of the next such change. If the rating
system of  Moody's or S&P shall  change,  or if either of such  rating  agencies
shall cease to be in the business of rating  corporate debt  obligations,  Alcoa
and the  Lenders  shall  negotiate  in good  faith to amend  the  references  to
specific ratings in this definition to reflect such changed rating system or the
non-availability   of  ratings  from  such  rating   agency,   and  pending  the
effectiveness  of any such  amendment,  the ratings of such  rating  agency most
recently  in effect  prior to such  change or  cessation  shall be  employed  in
determining the Facility Fee Percentage.

            "Fees" shall mean the Facility Fees and the Engagement Fees.

            "Financial   Officer"  of  any  corporation  shall  mean  the  chief
financial officer, principal accounting officer, Treasurer or Controller of such
corporation.


<PAGE>

            "Foreign  Benefit  Event" shall mean (a) with respect to any Foreign
Pension Plan, (i) the existence of unfunded  liabilities in excess of the amount
permitted  under any  applicable  law,  or in excess of the amount that would be
permitted  absent a waiver from a  Governmental  Authority,  (ii) the failure to
make the required  contributions  or payments,  under any applicable  law, on or
before the due date for such  contributions or payments,  (iii) the receipt of a
notice by a  Governmental  Authority  relating to the intention to terminate any
such Foreign Pension Plan or to appoint a trustee to administer any such Foreign
Pension Plan, or to the insolvency of any such Foreign Pension Plan and (iv) the
incurrence of any liability of the Borrowers under  applicable law on account of
the complete or partial termination of such Foreign Pension Plan or the complete
or partial withdrawal of any participating employer therein and (b) with respect
to any Foreign Plan,  (i) the occurrence of any  transaction  that is prohibited
under any  applicable law and could result in the incurrence of any liability by
the  Borrowers,  or the  imposition on the Borrowers of any fine,  excise tax or
penalty  resulting from any  noncompliance  with any applicable law and (ii) any
other  event or  condition  that  could  reasonably  be  expected  to  result in
liability of any of the Borrowers.

            "Foreign  Plan" shall mean any plan or  arrangement  established  or
maintained  outside  the  United  States  for the  benefit  of present or former
employees of any of the Borrowers.

            "Foreign  Pension  Plan"  shall mean any  benefit  plan which  under
applicable law is required to be funded through a trust or other funding vehicle
other than a trust or funding vehicle  maintained  exclusively by a Governmental
Authority.

            "GAAP" shall mean generally accepted accounting principles,  as used
in, and applied on a basis  consistent  with, the financial  statements of Alcoa
referred to in Section 3.06.

            "Governmental  Authority"  shall mean any Federal,  state,  local or
foreign court or governmental agency,  authority,  instrumentality or regulatory
body.


<PAGE>


            "Guarantee"  of  or  by  any  person  shall  mean  any   obligation,
contingent or otherwise,  of such person  guaranteeing  any  Indebtedness of any
other person,  whether  directly or indirectly,  and including any obligation of
such person,  direct or  indirect,  to purchase or pay such  Indebtedness  or to
purchase any security for the payment of such Indebtedness;  provided,  however,
that the term  "Guarantee"  shall not include  endorsements  for  collection  or
deposit, in either case in the ordinary course of business.

            "Indebtedness"  of  any  person  at any  time  shall  mean,  without
duplication,  (a) all obligations for money borrowed or raised,  all obligations
(other than  accounts  payable and other  similar  items arising in the ordinary
course of business) for the deferred  payment of the purchase price of property,
and all capital lease  obligations  which, in each case, in accordance with GAAP
would be included in  determining  total  liabilities  as shown on the liability
side of the balance sheet of such person and (b) all Guarantees of such person.

            "Index Debt" shall mean the senior, unsecured,  non-credit enhanced,
long-term Indebtedness for borrowed money of Alcoa.

            "Interest  Payment Date" shall mean,  with respect to any Loan,  the
last day of the Interest  Period  applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar  Borrowing with an Interest Period of
more than three  months'  duration,  each day that  would have been an  Interest
Payment Date had  successive  Interest  Periods of three  months'  duration been
applicable to such  Borrowing,  and, in addition,  the date of any  refinancing,
continuation  or  conversion  of  such  Borrowing  with or to a  Borrowing  of a
different Type.


<PAGE>


            "Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period  commencing  on the  date of such  Borrowing  or on the  last  day of the
immediately preceding Interest Period applicable to such Borrowing,  as the case
may be,  and ending on the  numerically  corresponding  day (or,  if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months  thereafter,  as the  Borrower  to which  such Loan is made may
elect;  and (b) as to any ABR  Borrowing,  the period  commencing on the date of
such Borrowing or on the last day of the immediately  preceding  Interest Period
applicable to such Borrowing,  as the case may be, and ending on the earliest of
(i) the next succeeding March 31, June 30, September 30 or December 31, (ii) the
Maturity Date and (iii) the date such  Borrowing is prepaid in  accordance  with
Section 2.11; provided,  however, that if any Interest Period would end on a day
other than a Business Day,  such  Interest  Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next  succeeding  Business Day would fall in the next calendar  month,  in which
case such Interest Period shall end on the next preceding Business Day.

            "Lenders"  shall  mean  (a) the  financial  institutions  listed  on
Schedule 2.01 (other than any such financial institution that has ceased to be a
party hereto  pursuant to an Assignment  and  Acceptance)  and (b) any financial
institution  that has  become  a party  hereto  pursuant  to an  Assignment  and
Acceptance.

            "LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period,  an interest rate (rounded  upwards,  if necessary,  to the
next 1/16 of 1%) equal to the  offered  rate for  dollar  deposits  for a period
equal to the Interest Period for such  Eurodollar  Borrowing that appears on the
LIBO page on the Reuters Screen (or any page that can reasonably be considered a
replacement  page) at approximately  11:00 a.m.,  London time, two Business Days
prior to the commencement of such Interest Period. If such rate is not available
on the Reuters Screen,  the "LIBO Rate" shall be the rate (rounded  upwards,  if
necessary,  to the next  1/16 of 1%)  equal  to the  arithmetic  average  of the
respective  rates  per annum at which  dollar  deposits  approximately  equal in
principal amount to such Eurodollar  Borrowing and for a maturity  comparable to
such Interest  Period are offered in immediately  available  funds to the London
branches of the Reference Banks in the London  interbank market at approximately
11:00 a.m.,  London time,  two Business Days prior to the  commencement  of such
Interest Period. The Administrative Agent shall determine the LIBO Rate and such
determination shall be conclusive absent manifest error.

            "Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge,  encumbrance,  charge or security interest in or on such
asset,  (b) the  interest  of a vendor or a lessor  under any  conditional  sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities,  any purchase option,  call or similar right of a
third party with respect to such securities.


<PAGE>


            "Loans" shall have the meaning  assigned to it in Section 2.01. Each
Loan shall be a Eurodollar Loan or an ABR Loan.

            "Margin  Stock"  shall  have  the  meaning  given  such  term  under
Regulation U of the Board as from time to time in effect, including all official
and interpretations thereunder or thereof.

            "Material Adverse Effect" shall mean a materially  adverse effect on
the  business,  assets,  operations  or  financial  condition  of Alcoa  and its
Subsidiaries taken as a whole, or a material  impairment of the ability of Alcoa
to perform any of its obligations under this Agreement.

            "Maturity Date" shall mean April 27, 2001.

            "Moody's" shall mean Moody's Investors Service, Inc.

            "Multiemployer  Plan" shall mean a multiemployer  plan as defined in
Section  4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section  414  of  the  Code)  is  making  or  accruing  an  obligation  to  make
contributions,  or has  within  any of the  preceding  five plan  years  made or
accrued an obligation to make contributions.

            "New Five-Year Credit Agreement" shall mean the Five-Year  Revolving
Credit Agreement dated the date hereof,  among Alcoa, the lenders party thereto,
The Chase Manhattan Bank, as administrative agent, and Chase Securities Inc., as
lead arranger and book manager.

            "PBGC" shall mean the Pension Benefit Guaranty  Corporation referred
to and defined in ERISA.

            "person" shall mean any natural  person,  corporation  organization,
business trust, joint venture, association,  company, partnership or government,
or any agency or political subdivision thereof.

            "Plan" shall mean any pension plan (other than a Multiemployer Plan)
subject to the  provisions of Title IV of ERISA or Section 412 of the Code which
is maintained for employees of any Borrower or any ERISA Affiliate.


<PAGE>


            "Pro  Rata  Percentage"  of any  Lender at any time  shall  mean the
percentage  of the  Total  Commitment  that  is  represented  by  such  Lender's
Commitment.

            "Reference Banks" shall mean The Chase Manhattan Bank, Mellon Bank,
N.A. and Bank of America National Trust and Savings Association.

            "Register"  shall  have  the  meaning  given  such  term in  Section
10.04(d).

            "Reportable  Event"  shall mean any  reportable  event as defined in
Section 4043(b) of ERISA or the regulations  issued thereunder with respect to a
Plan (other than a Plan  maintained by an ERISA Affiliate which is considered an
ERISA  Affiliate  only pursuant to  subsection  (m) or (o) of Section 414 of the
Code).

            "Required Lenders" shall mean Lenders  representing at least 66-2/3%
in principal amount of the outstanding Loans and unused Commitments.

            "Responsible  Officer" of any  corporation  shall mean any executive
officer  or  Financial  Officer  of such  corporation  and any other  officer or
similar official thereof  responsible for the  administration of the obligations
of such corporation in respect of this Agreement.

            "Restricted  Subsidiary"  shall mean any consolidated  Subsidiary of
Alcoa which owns any  manufacturing  plant or manufacturing  facility located in
the United States,  except any such plant or facility  which,  in the opinion of
the Board of Directors of Alcoa,  is not of material  importance to the business
of Alcoa and its Restricted  Subsidiaries,  taken as a whole, excluding any such
Subsidiary which (a) is principally engaged in leasing or financing receivables,
(b) is principally  engaged in financing Alcoa's  operations  outside the United
States or (c) principally serves as a partner in a partnership.

            "S&P" shall mean Standard & Poor's Ratings  Services,  a Division of
the McGraw-Hill Companies Inc.


<PAGE>


            "Statutory Reserves" shall mean a fraction (expressed as a decimal),
the  numerator  of which is the number one and the  denominator  of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal,  special,  emergency or supplemental  reserves) expressed as a decimal
established  by  the  Board  and  any  other  banking  authority  to  which  the
Administrative Agent is subject for new negotiable  nonpersonal time deposits in
dollars of over $100,000 with  maturities  approximately  equal to three months.
Such reserve percentages shall include those imposed pursuant to such Regulation
D of the Board.  Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.

            "Subsidiary" shall mean, with respect to any person (herein referred
to as the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership  interests  representing more than
50% of the Voting  Stock or more than 50% of the general  partnership  interests
are, at the time any determination is being made,  owned,  controlled or held by
the parent or one or more Subsidiaries of the parent or by the parent and one or
more Subsidiaries of the parent.

            "Total  Commitment" shall mean, at any time, the aggregate amount of
the Commitments, as in effect at such time.

            "Type",  when used in respect of any Loan or Borrowing,  shall refer
to the  Rate  by  reference  to  which  interest  on such  Loan or on the  Loans
comprising such Borrowing is determined.  For purposes hereof, "Rate" shall mean
the LIBO Rate and the Alternate Base Rate.

            "Voting  Stock" with  respect to the stock of any person means stock
of any class or classes  (however  designated)  having ordinary voting power for
the election of the directors of such person, other than stock having such power
only by reason of the occurrence of a contingency.

            "Withdrawal  Liability" shall mean liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.


<PAGE>


            SECTION  1.02.   Terms   Generally;   Accounting   Principles.   The
definitions  in Section 1.01 shall apply equally to both the singular and plural
forms of the terms defined.  Whenever the context may require, any pronoun shall
include  the  corresponding  masculine,  feminine  and neuter  forms.  The words
"include",  "includes"  and  "including"  shall be deemed to be  followed by the
phrase  "without  limitation".  All  references  herein to  Articles,  Sections,
Exhibits and Schedules  shall be deemed  references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall otherwise
require.  Except  as  otherwise  expressly  provided  herein,  all  terms  of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect  from  time to time;  provided,  however,  that,  if Alcoa  notifies  the
Administrative  Agent that it requests an amendment to any  provision  hereof to
eliminate  the effect of any change in GAAP on the  operation of such  provision
(or if the Administrative Agent notifies Alcoa that the Required Lenders request
an amendment to any provision  hereof for such  purpose),  regardless of whether
any such  notice is given  before or after such  change in GAAP  (provided  such
change in GAAP  occurs  after the date  hereof),  then such  provision  shall be
interpreted on the basis of GAAP in effect immediately before such change became
effective until such notice shall have been withdrawn or such provision  amended
in accordance herewith.

ARTICLE II.  THE CREDITS



<PAGE>


            SECTION 2.01.  Commitments.  Subject to the terms and conditions and
relying upon the  representations  and warranties  herein set forth, each Lender
agrees,  severally and not jointly,  to make  revolving  credit loans in dollars
(the "Loans") to Alcoa and the Borrowing Subsidiaries, at any time and from time
to time on or after the  Effective  Date and until the  earlier of the  Maturity
Date and the termination of the Commitment of such Lender in accordance with the
terms hereof;  provided,  however, that (i) after giving effect to any Loan, the
aggregate  principal amount of the outstanding  Loans shall not exceed the Total
Commitment  and  (ii)  at  all  times  the  aggregate  principal  amount  of all
outstanding Loans made by each Lender shall equal its Pro Rata Percentage of the
aggregate  principal  amount of all  outstanding  Loans.  The Commitment of each
Lender is set forth on Schedule 2.01 to this  Agreement.  Such Commitment may be
terminated,  reduced or increased  from time to time  pursuant to Section  2.09.
Within the limits set forth in the preceding sentence, the Borrowers may borrow,
pay or prepay and reborrow Loans on or after the Effective Date and prior to the
Maturity  Date,  subject  to the terms,  conditions  and  limitations  set forth
herein.

            SECTION  2.02.  Loans.  (a)  Each  Loan  shall  be made as part of a
Borrowing  consisting of Loans made by the Lenders  ratably in  accordance  with
their respective applicable Commitments;  provided, however, that the failure of
any Lender to make any Loan shall not in itself  relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible  for the failure of any other Lender to make any Loan required to
be made by such other Lender).  The Loans  comprising each Borrowing shall be in
an aggregate  principal  amount which is an integral  multiple of $1,000,000 and
not  less  than  $10,000,000  (or an  aggregate  principal  amount  equal to the
remaining balance of the applicable Commitments, as the case may be).

            (b) Each Borrowing shall be comprised  entirely of Eurodollar  Loans
or ABR Loans, as the applicable  Borrower may request  pursuant to Section 2.03.
Each Lender may at its option fulfill its Commitment with respect to any Loan by
causing any domestic or foreign  branch or Affiliate of such Lender to make such
Loan; provided,  however,  that any exercise of such option shall not affect the
obligation of the applicable  Borrower to repay such Loan in accordance with the
terms of this Agreement.  Borrowings of more than one Type may be outstanding at
the same time; provided,  however, that no Borrower shall be entitled to request
any  Borrowing  which,  if made,  would result in an aggregate of more than five
separate  Eurodollar  Loans  of any  Lender  being  made  to the  Borrowers  and
outstanding under this Agreement at any one time. For purposes of the foregoing,
Loans having different Interest Periods,  regardless of whether they commence on
the same date, shall be considered separate Loans.


<PAGE>


            (c) Except as otherwise  provided in Section 2.10, each Lender shall
make each Loan that is (A) an ABR Loan or (B) a Eurodollar  Loan,  to be made by
it  hereunder  on the  proposed  date  thereof by wire  transfer of  immediately
available  funds to the  Administrative  Agent in New York,  New York, not later
than 1:00 p.m., New York City time, and the  Administrative  Agent shall by 3:00
p.m., New York City time,  credit the amounts so received to the general deposit
account of the Borrower to which such Loan is to be made with Mellon Bank, N.A.,
or such other account as such Borrower may designate in a written  notice to the
Administrative  Agent,  or, if such Loans are not made on such date  because any
condition  precedent to a Borrowing  herein  specified  shall not have been met,
return  the  amounts  so  received  to  the  respective   Lenders.   Unless  the
Administrative  Agent shall have received notice from a Lender prior to the date
of any Borrowing that such Lender will not make available to the  Administrative
Agent such Lender's  portion of such  Borrowing,  the  Administrative  Agent may
assume that such Lender has made such portion  available  to the  Administrative
Agent on the date of such  Borrowing in accordance  with this  paragraph (c) and
the Administrative  Agent may, in reliance upon such assumption,  make available
to the applicable  Borrower on such date a corresponding  amount.  If and to the
extent  that such  Lender  shall not have made  such  portion  available  to the
Administrative Agent, such Lender and the applicable Borrower severally agree to
repay to the Administrative  Agent forthwith on demand such corresponding amount
together with interest  thereon,  for each day from the date such amount is made
available  to such  Borrower  until  the  date  such  amount  is  repaid  to the
Administrative  Agent,  at (i) in the case of such  Borrower,  the interest rate
applicable at the time to the Loans  comprising  such  Borrowing and (ii) in the
case of such Lender, a rate determined by the Administrative  Agent to represent
its  cost of  overnight  or  short-term  funds  (which  determination  shall  be
conclusive   absent  manifest  error).   If  such  Lender  shall  repay  to  the
Administrative  Agent such  corresponding  amount,  such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.

            (d)  Notwithstanding  any  other  provision  of this  Agreement,  no
Borrower  shall be entitled  to request any  Borrowing  if the  Interest  Period
requested with respect thereto would end after the Maturity Date.


<PAGE>


            SECTION 2.03. Notice of Borrowings. In order to request a Borrowing,
a Borrower shall give written or telecopy  notice (or telephone  notice promptly
confirmed in writing or by telecopy) (a) in the case of an ABR Borrowing, to the
Administrative  Agent not later than  12:00  noon,  New York City  time,  on the
Business  Day of  such  proposed  Borrowing,  (b) in the  case  of a  Eurodollar
Borrowing,  to the Administrative Agent not later than 10:00 a.m., New York City
time, three Business Days before such proposed  Borrowing.  Such notice shall be
irrevocable  and  shall in each  case  refer  to this  Agreement,  identify  the
applicable Borrower and specify (i) whether such Borrowing is to be a Eurodollar
Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a
Business  Day) and the amount  thereof;  and (iii) if such  Borrowing is to be a
Eurodollar  Borrowing,  the Interest Period with respect thereto. If no election
as to the Type of Borrowing is specified in any such notice,  then the requested
Borrowing  shall be an ABR Borrowing.  If no Interest Period with respect to any
Eurodollar  Borrowing is specified in any such notice,  then the Borrower giving
the notice of Borrowing  shall be deemed to have selected an Interest  Period of
one month's  duration.  If a Borrower  shall not have given notice in accordance
with this Section 2.03 of its election to refinance a Borrowing prior to the end
of the Interest  Period in effect for such  Borrowing,  then the Borrower  shall
(unless such  Borrowing is repaid at the end of such Interest  Period) be deemed
to have given  notice of an election to  refinance  such  Borrowing  with an ABR
Borrowing.  The  Administrative  Agent shall promptly  advise the Lenders of any
notice given  pursuant to this Section 2.03 and of each Lender's  portion of the
requested Borrowing.

            SECTION  2.04.  Evidence  of  Debt;  Repayment  of  Loans.  (a)  The
outstanding  principal  balance of each Loan shall be payable on the  earlier of
the last day of the  Interest  Period  applicable  to such Loan or the  Maturity
Date.

            (b) Each Lender shall maintain in accordance with its usual practice
an account or accounts  evidencing  the  indebtedness  of each  Borrower to such
Lender resulting from each Loan made by such Lender from time to time, including
the amounts of principal and interest  payable and paid such Lender from time to
time under this Agreement.


<PAGE>


            (c) The  Administrative  Agent shall  maintain  accounts in which it
will record (i) the amount of each Loan made to a Borrower  hereunder,  (ii) the
Type of each such Loan and the Interest  Period  applicable  thereto,  (iii) the
amount of any principal or interest due and payable or to become due and payable
from the applicable Borrower to each Lender hereunder and (iv) the amount of any
sum received by the  Administrative  Agent  hereunder from any Borrower and each
Lender's share thereof.

            (d)  The  entries  made  in  the  accounts  maintained  pursuant  to
paragraphs  (b) and (c) above shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the failure
of any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner  affect the  obligation of any Borrower to repay
the Loans in accordance with their terms.

            (e)  Notwithstanding  any other provision of this Agreement,  in the
event any Lender shall request a promissory note evidencing the Loans made by it
hereunder to Alcoa or any Borrowing Subsidiary,  the Borrower shall deliver such
a note, satisfactory to the Administrative Agent, payable to such Lender and its
registered  assigns,  and the  interests  represented  by such note shall at all
times (including after any assignment of all or part of such interests  pursuant
to Section 10.04) be represented by one or more promissory  notes payable to the
payee named therein or its registered assigns.

            SECTION 2.05.  Fees. (a) Alcoa will pay to each Lender,  through the
Administrative  Agent, on the last day of March, June, September and December in
each  year,  and on the date on which the  Commitment  of such  Lender  shall be
terminated as provided herein, a facility fee (the "Facility Fee") at a rate per
annum equal to the  Facility Fee  Percentage  from time to time in effect on the
aggregate amount of the Commitment of such Lender,  whether used or unused, from
time  to time  in  effect  during  the  preceding  quarter  (or  shorter  period
commencing  with the date hereof or ending with the Maturity Date or the date on
which the  Commitment  of such Lender shall be  terminated).  All Facility  Fees
shall be computed on the basis of the actual number of days elapsed in a year of
360 days.  The Facility  Fee due to each Lender shall  commence to accrue on the
date  hereof and shall  cease to accrue on the date on which the  Commitment  of
such Lender shall be terminated as provided herein.

            (b) Alcoa  agrees to pay to the  Administrative  Agent,  for its own
account,  the fees provided for in the Engagement Letter (the "Engagement Fees")
at the times provided therein.


<PAGE>


            (c) All  Fees  shall  be  paid  on the  dates  due,  in  immediately
available  funds,  to the  Administrative  Agent,  for  distribution,  if and as
appropriate,  among the  Lenders.  Once paid,  the Fees shall not be  refundable
except in the case of an error which results in the payment of Fees in excess of
those due and payable as of such date,  in which case the  Administrative  Agent
shall cause a refund in the amount of such excess to be paid to Alcoa.

            SECTION 2.06.  Interest on Loans.  (a) Subject to the  provisions of
Section  2.07,  the unpaid  principal  amount of the Loans  comprising  each ABR
Borrowing  shall bear interest for each day (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days,  as the case may be, when
the Alternate  Base Rate is determined by reference to the Prime Rate and over a
year of 360 days at all other times) at a rate per annum equal to the  Alternate
Base Rate.

            (b) Subject to the provisions of Section 2.07, the unpaid  principal
amount of the Loans  comprising  each  Eurodollar  Borrowing shall bear interest
(computed  on the basis of the actual  number of days elapsed over a year of 360
days) at a rate per  annum  equal to the LIBO  Rate for the  Interest  Period in
effect for such Borrowing plus the Applicable Margin.

            (c) Interest on each Loan shall be payable on the  Interest  Payment
Dates  applicable to such Loan except as otherwise  provided in this  Agreement.
Interest shall accrue from and including the first day of an Interest  Period to
but excluding the last day of such Interest Period.  The applicable LIBO Rate or
Alternate Base Rate for each Interest  Period or day within an Interest  Period,
as the case may be, shall be determined by the  Administrative  Agent,  and such
determination shall be conclusive absent manifest error.


<PAGE>


            SECTION 2.07. Default Interest. If any Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise,  such Borrower shall on demand from
time to time pay  interest,  to the extent  permitted by law, on such  defaulted
amount up to (but not  including)  the date of actual  payment (after as well as
before  judgment)  at a rate  per  annum  equal  to (a) in the  case of  overdue
principal of any Loan, the rate otherwise applicable to such Loan as provided in
Section 2.06 plus 2% per annum, or (b) in the case of any other amount, the rate
applicable to ABR Borrowings plus 2% per annum.

            SECTION 2.08. Alternate Rate of Interest.  In the event, and on each
occasion,  that on the day two Business  Days prior to the  commencement  of any
Interest  Period for a  Eurodollar  Loan,  the  Administrative  Agent shall have
determined in good faith that dollar  deposits in the  principal  amounts of the
Loans  comprising  such  Borrowing  are not  generally  available  in the London
interbank  market or other market in which Lenders  ordinarily  raise dollars to
fund  Loans of the  requested  Type,  or that the  rates  at which  such  dollar
deposits are being offered will not  adequately  and fairly  reflect the cost to
any Lender of making or  maintaining  its  Eurodollar  Loan during such Interest
Period,  or that reasonable  means do not exist for  ascertaining the LIBO Rate,
then the  Administrative  Agent shall, as soon as practicable  thereafter,  give
written or telecopy notice of such  determination  to the relevant  Borrower and
Lenders. In the event of any such determination,  any request made by a Borrower
after the date of such  notice for a  Eurodollar  Borrowing  pursuant to Section
2.03 or 2.10  shall,  until the  Administrative  Agent  shall have  advised  the
Borrowers and the Lenders that the  circumstances  giving rise to such notice no
longer exist, be deemed to be a request for an ABR Borrowing. Each determination
by the Administrative Agent hereunder shall be conclusive absent manifest error.

            SECTION 2.09.  Termination and Reduction of Commitments.  (a)  The
Commitments shall be automatically terminated on the Maturity Date.

            (b) Upon at least 10 Business  Days' prior  irrevocable,  written or
telecopy  notice  to the  Administrative  Agent,  Alcoa may at any time in whole
permanently  terminate,  or from time to time in part  permanently  reduce,  the
Total Commitment; provided, however, that (i) each partial reduction shall be in
an  integral  multiple  of  $1,000,000  and in a  minimum  principal  amount  of
$10,000,000 and (ii) the Total Commitment shall not be reduced to an amount that
is less than the  aggregate  principal  amount of the  outstanding  Loans (after
giving effect to any simultaneous prepayment pursuant to Section 2.11).


<PAGE>


            (c) Each  reduction in Commitments  hereunder  shall be made ratably
among the Lenders in accordance  with each such Lender's Pro Rata  Percentage of
the  Total  Commitment.  Alcoa  shall  pay to the  Administrative  Agent for the
account  of the  applicable  Lenders,  on the date of each such  termination  or
reduction,  the Facility Fees on the amount of the  Commitments so terminated or
reduced accrued to the date of such termination or reduction.

            SECTION  2.10.  Refinancings.  Any Borrower may refinance all or any
part of any Loan  made to it with a Loan of the same or a  different  Type  made
pursuant to the same Commitments,  subject to the conditions and limitations set
forth in this  Agreement.  Any Borrowing or part thereof so refinanced  shall be
deemed to have been repaid or prepaid in  accordance  with Section 2.04 or 2.11,
as applicable, with the proceeds of a new Borrowing; and the proceeds of the new
Borrowing,  to the  extent  they  do not  exceed  the  principal  amount  of the
Borrowing being refinanced,  shall not be paid by the applicable  Lenders to the
Administrative  Agent or by the Administrative  Agent to the applicable Borrower
pursuant to Section 2.02(c).

            SECTION 2.11. Prepayment.  (a) Each Borrower shall have the right at
any time and from time to time to  prepay  any  Borrowing,  in whole or in part,
upon at least  three  Business  Days'  prior  written  or  telecopy  notice  (or
telephone  notice  promptly  confirmed  by  written or  telecopy  notice) to the
Administrative Agent;  provided,  however, that each partial prepayment shall be
in an amount  which is an  integral  multiple  of  $1,000,000  and not less than
$10,000,000.

            (b) On the date of any  termination or reduction of any  Commitments
pursuant  to  Section  2.09,  the  Borrowers  shall pay or prepay so much of the
Loans,  as shall be  necessary  in  order  that,  after  giving  effect  to such
reduction or  termination,  the aggregate  principal  amount of the  outstanding
Loans shall not exceed the Total Commitment.


<PAGE>


            (c) Each notice of prepayment  shall specify the prepayment date and
the principal amount of each Loan (or portion  thereof) to be prepaid,  shall be
irrevocable and shall commit the applicable Borrower to prepay the Loan to which
such notice relates by the amount stated therein on the date stated therein. All
prepayments  under this  Section  2.11  shall be  subject  to  Section  2.14 but
otherwise  without premium or penalty.  All prepayments  under this Section 2.11
shall be accompanied by accrued  interest on the principal  amount being prepaid
to the date of payment.

            SECTION 2.12.  Reserve  Requirements;  Change in Circumstances.  (a)
Notwithstanding  any other provision herein other than Section 2.14(c), if after
the date of this  Agreement any change in applicable law or regulation or in the
interpretation or administration  thereof by any Governmental  Authority charged
with the  interpretation  or  administration  thereof (whether or not having the
force of law) shall  change the basis of  taxation  of payments to any Lender of
the principal of or interest on any  Eurodollar  Loan made by such Lender or any
Fees or other amounts payable  hereunder (other than changes in respect of taxes
imposed on the overall net income of such  Lender by the  jurisdiction  in which
such Lender has its principal  office or by any political  subdivision or taxing
authority  therein),  or shall impose,  modify or deem  applicable  any reserve,
special deposit or similar  requirement  against assets of, deposits with or for
the  account of or credit  extended  by such  Lender  (except  any such  reserve
requirement  which is  reflected  in the LIBO Rate or the Base CD Rate) or shall
impose on such Lender or the London  interbank  market or other  market in which
Lenders  ordinarily  raise dollars to fund Loans of the requested Type any other
condition  affecting this Agreement or Eurodollar Loans made by such Lender, and
the result of any of the foregoing  shall be to increase the cost to such Lender
of funding, making or maintaining any Eurodollar Loan or to reduce the amount of
any sum received or receivable by such Lender  hereunder  (whether of principal,
interest or otherwise)  by an amount deemed by such Lender to be material,  then
Alcoa will pay or cause the other  Borrowers  to pay to such  Lender upon demand
such  additional  amount or  amounts  as will  compensate  such  Lender for such
additional costs incurred or reduction suffered.


<PAGE>


            (b) If any Lender shall have  determined that the  applicability  of
any law, rule, regulation, agreement or guideline adopted after the date of this
Agreement  pursuant  to the July 1988 report of the Basle  Committee  on Banking
Regulations and Supervisory  Practices  entitled  "International  Convergence of
Capital  Measurement  and Capital  Standards",  or the  adoption  after the date
hereof of any other law,  rule,  regulation,  agreement or  guideline  regarding
capital adequacy, or any change in any of the foregoing or in the interpretation
or administration of any of the foregoing by any governmental authority, central
bank or comparable  agency  charged with the  interpretation  or  administration
thereof,  or compliance by any Lender (or any lending  office of such Lender) or
any Lender's  holding  company with any request or directive  regarding  capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable  agency, has or would have the effect of reducing the rate of
return on such  Lender's  capital  or on the  capital of such  Lender's  holding
company,  if any, as a consequence  of this  Agreement or the Loans made by such
Lender  pursuant hereto to a level below that which such Lender or such Lender's
holding company could have achieved but for such applicability, adoption, change
or compliance (taking into consideration such Lender's policies and the policies
of such Lender's holding company with respect to capital  adequacy) by an amount
deemed by such Lender to be material,  then from time to time Alcoa shall pay or
cause  the other  Borrowers  to pay to such  Lender  such  additional  amount or
amounts as will compensate such Lender or such Lender's  holding company for any
such reduction suffered.

            (c) A  certificate  of each  Lender  setting  forth  such  amount or
amounts as shall be necessary to compensate  such Lender or its holding  company
as specified in paragraph (a) or (b) above,  as the case may be, together with a
statement  of reasons  for such  demand and  showing  the  calculation  for such
amounts  shall be delivered  to Alcoa and shall be  conclusive  absent  manifest
error.  Alcoa shall pay or cause to be paid to each  Lender the amount  shown as
due on any such certificate  delivered by it within 10 days after its receipt of
the same.


<PAGE>


            (d) Except as provided in this paragraph, failure on the part of any
Lender to demand  compensation  for any increased  costs or reduction in amounts
received or  receivable  or  reduction  in return on capital with respect to any
period  shall  not  constitute  a  waiver  of  such  Lender's  right  to  demand
compensation with respect to such period or any other period.  The protection of
this Section 2.12 shall be available to each Lender  regardless  of any possible
contention of the invalidity or  inapplicability  of the law, rule,  regulation,
guideline  or other  change or  condition  which  shall  have  occurred  or been
imposed. No Lender shall be entitled to compensation under this Section 2.12 for
any costs  incurred or  reductions  suffered  with respect to any date unless it
shall have  notified  Alcoa that it will demand  compensation  for such costs or
reductions  under  paragraph  (c) above not more than 60 days after the later of
(i) such date and (ii) the date on which it shall have or reasonably should have
become  aware  of such  costs  or  reductions.  In the  event a  Borrower  shall
reimburse  any Lender  pursuant to this Section 2.12 for any cost and the Lender
shall  subsequently  receive a refund in respect  thereof,  the Lender  shall so
notify such  Borrower and shall pay to such  Borrower the portion of such refund
which  it  shall  determine  in  good  faith  to be  allocable  to the  cost  so
reimbursed.

            SECTION  2.13.  Change in Legality.  (a)  Notwithstanding  any other
provision  herein  other  than  Section  2.14(c),  if any  change  in any law or
regulation  or in  the  interpretation  thereof  by any  Governmental  Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar  Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written or telecopy notice to Alcoa and the  Administrative  Agent,  such Lender
may:

                  (i) declare that Eurodollar  Loans will not thereafter be made
            by such Lender hereunder,  whereupon any request by a Borrower for a
            Eurodollar  Borrowing  shall,  as to such Lender  only,  be deemed a
            request  for  an  ABR  Loan  unless   such   declaration   shall  be
            subsequently withdrawn; and

                  (ii) require that all outstanding  Eurodollar Loans made by it
            be converted to ABR Loans, in which event all such Eurodollar  Loans
            shall automatically be so converted as of the effective date of such
            notice as provided in paragraph (b) below.


<PAGE>


In the event any  Lender  shall  exercise  its rights  under  clause (i) or (ii)
above, all payments and prepayments of principal which would otherwise have been
applied to repay the  Eurodollar  Loans that would have been made by such Lender
or the  converted  Eurodollar  Loans of such Lender shall  instead be applied to
repay the Loans made by such Lender in lieu of, or resulting from the conversion
of, such Eurodollar Loans.

            (b) For purposes of this Section  2.13, a notice by any Lender shall
be  effective  as to each  Eurodollar  Loan,  if lawful,  on the last day of the
Interest  Period  applicable  to such  Eurodollar  Loan; in all other cases such
notice shall be effective on the date of receipt.


<PAGE>


            SECTION 2.14.  Indemnity.  Alcoa shall  indemnify or cause the other
Borrowers to indemnify each Lender against any loss or expense which such Lender
may sustain or incur as a consequence  of (a) any failure to fulfill on the date
of any borrowing  hereunder the  applicable  conditions set forth in Article IV,
(b) any failure by a Borrower to borrow or refinance  any Loan  hereunder  after
irrevocable  notice of such borrowing or refinancing  has been given pursuant to
Section 2.03, (c) any payment,  prepayment or  refinancing of a Eurodollar  Loan
required by any other  provision of this  Agreement or otherwise  made or deemed
made on a date  other  than  the  last  day of the  Interest  Period  applicable
thereto, other than any loss of profit resulting from any event, circumstance or
condition  set forth in  Section  2.12 or 2.13,  (d) any  default  in payment or
prepayment of the  principal  amount of any Loan or any part thereof or interest
accrued thereon,  as and when due and payable (at the due date thereof,  whether
by  scheduled  maturity,  acceleration,  irrevocable  notice  of  prepayment  or
otherwise)  or (e) the  occurrence of any Event of Default,  including,  in each
such  case,  any loss or  reasonable  expense  sustained  or  incurred  or to be
sustained or incurred in  liquidating  or employing  deposits from third parties
acquired to effect or  maintain  such Loan or any part  thereof as a  Eurodollar
Loan.  Such loss or  reasonable  expense  shall  include an amount  equal to the
excess,  if any, as  reasonably  determined  by such Lender,  of (i) its cost of
obtaining the funds for the Loan being paid, prepaid, refinanced or not borrowed
(assumed to be the LIBO Rate applicable thereto) for the period from the date of
such payment,  prepayment,  refinancing or failure to borrow or refinance to the
last day of the  Interest  Period for such Loan (or, in the case of a failure to
borrow or refinance the Interest Period for such Loan which would have commenced
on the date of such  failure)  over (ii) the amount of interest  (as  reasonably
determined by such Lender) that would be realized by such Lender in  reemploying
the funds so paid,  prepaid or not  borrowed  or  refinanced  for such period or
Interest  Period,  as the case may be. A certificate of any Lender setting forth
any amount or amounts which such Lender is entitled to receive  pursuant to this
Section together with a statement of reasons for such demand and the calculation
of such amount or amounts  shall be delivered  to Alcoa and shall be  conclusive
absent manifest error.

            SECTION 2.15. Pro Rata  Treatment.  Except as required under Section
2.13, each Borrowing,  each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans,  each payment of the Facility Fees,  each
reduction of Commitments  and each  conversion or  continuation of any Borrowing
with a Borrowing  of any Type shall be  allocated  pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such Commitments
shall  have  expired  or been  terminated,  in  accordance  with the  respective
principal  amounts of their applicable  outstanding  Loans).  Each Lender agrees
that in computing such Lender's  portion of any Borrowing to be made  hereunder,
the Administrative Agent may, in its discretion,  round each Lender's percentage
of such Borrowing, computed in accordance with Schedule 2.01, to the next higher
or lower whole dollar amount.


<PAGE>


            SECTION  2.16.  Sharing of Setoffs.  Each  Lender  agrees that if it
shall,  through the exercise of a right of banker's lien, setoff or counterclaim
against any Borrower,  or pursuant to a secured claim under Section 506 of Title
11 of the United States Code or other  security or interest  arising from, or in
lieu of,  such  secured  claim,  received by such  Lender  under any  applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
obtain payment  (voluntary or  involuntary) in respect of any Loan or Loans as a
result  of  which  the  unpaid   principal   portion  of  its  Loans   shall  be
proportionately less than the unpaid principal portion of the Loans of any other
Lender,  it shall be deemed  simultaneously  to have  purchased  from such other
Lender at face value,  and shall  promptly pay to such other Lender the purchase
price  for,  a  participation  in the Loans of such  other  Lender,  so that the
aggregate unpaid principal amount of the Loans and  participations in Loans held
by each Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Loans then  outstanding as the principal amount of its Loans prior
to such exercise of banker's lien,  setoff or counterclaim or other event was to
the principal amount of all Loans outstanding prior to such exercise of banker's
lien,  setoff or counterclaim or other event;  provided,  however,  that, if any
such purchase or purchases or adjustments shall be made pursuant to this Section
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or  adjustments  shall be rescinded to the extent of such  recovery
and the purchase price or prices or adjustment restored without interest.  Alcoa
and each other  Borrower  expressly  consent to the foregoing  arrangements  and
agree that any Lender holding a  participation  in a Loan deemed to have been so
purchased  may  exercise  any  and  all  rights  of  banker's  lien,  setoff  or
counterclaim  with  respect to any and all  moneys  owing by Alcoa or such other
Borrower to such Lender by reason  thereof as fully as if such Lender had made a
Loan directly to Alcoa or such Borrower in the amount of such participation.

            SECTION  2.17.  Payments.  (a) Each  payment  or  prepayment  by any
Borrower of the  principal of or interest on any Loans,  any Fees payable to the
Administrative  Agent or the Lenders or any other amounts due  hereunder  (other
than amounts referred to in clause (b) below) shall be made not later than 12:00
(noon),   New  York  City  time,  on  the  date  when  due  in  dollars  to  the
Administrative  Agent at its offices at 270 Park Avenue,  New York, New York, in
immediately available funds.

            (b) Whenever any payment (including  principal of or interest on any
Borrowing or any Fees or other amounts) hereunder shall become due, or otherwise
would occur,  on a day that is not a Business  Day,  such payment may be made on
the next succeeding  Business Day, and such extension of time shall in such case
be included in the computation of interest or Fees, if applicable.


<PAGE>


            SECTION 2.18.  Taxes.  (a) Any and all payments by or on behalf of a
Borrower hereunder shall be made free and clear of and without deduction for any
and all  present  or future  taxes,  levies,  imposts,  deductions,  charges  or
withholdings,  and all liabilities with respect thereto, excluding taxes imposed
on the net income of the  Administrative  Agent or any Lender (or any transferee
or  assignee  thereof,  including  a  participation  holder  (any such  entity a
"Transferee"))  and franchise taxes imposed on the  Administrative  Agent or any
Lender (or  Transferee)  in each case by the United  States or any  jurisdiction
under  the laws of  which  the  Administrative  Agent  or any  such  Lender  (or
Transferee)  is  organized  or  any  political  subdivision  thereof  (all  such
nonexcluded  taxes,  levies,  imposts,  deductions,  charges,  withholdings  and
liabilities,  collectively or individually,  "Taxes").  If any Borrower shall be
required  by law to  deduct  any Taxes  from or in  respect  of any sum  payable
hereunder to the Lenders (or any Transferee) or the  Administrative  Agent,  (i)
the sum payable shall be increased by the amount  necessary so that after making
all required  deductions  (including  deductions  applicable to additional  sums
payable   under  this  Section  2.18)  such  Lender  (or   Transferee)   or  the
Administrative  Agent (as the case may be) shall  receive an amount equal to the
sum it would have received had no such  deductions been made, (ii) such Borrower
shall make such  deductions  and (iii) such  Borrower  shall pay the full amount
deducted to the relevant  taxing  authority or other  Governmental  Authority in
accordance  with applicable law;  provided,  however,  that no Transferee of any
Lender shall be entitled to receive any greater payment under this paragraph (a)
than such  Lender  would  have  been  entitled  to  receive  immediately  before
assignment, participation or other transfer with respect to the rights assigned,
participated or transferred  unless such  assignment,  participation or transfer
shall  have been made (A) prior to the  occurrence  of an event  (including  any
change in treaty,  law or regulation) giving rise to such greater payment or (B)
at the request of Alcoa.

            (b) In addition,  each Borrower  agrees to pay any present or future
stamp or  documentary  taxes or any other excise or property  taxes,  charges or
similar  levies  which  arise  from  any  payment  made  hereunder  or from  the
execution,  delivery or  registration  of, or  otherwise  with  respect to, this
Agreement (hereinafter referred to as "Other Taxes").


<PAGE>


            (c) Each Borrower will indemnify each Lender (or Transferee) and the
Administrative  Agent for the full  amount of Taxes and Other Taxes paid by such
Lender (or Transferee) or the Administrative  Agent, as the case may be, and any
liability (including penalties, interest and expenses) arising therefrom or with
respect  thereto,  whether or not such Taxes or Other  Taxes were  correctly  or
legally  asserted  by  the  relevant  taxing  authority  or  other  Governmental
Authority.  Such indemnification shall be made within 30 days after the date any
Lender (or  Transferee) or the  Administrative  Agent, as the case may be, makes
written  demand  therefor,  together with a statement of reasons for such demand
and the calculations of such amount.

            (d) Within 30 days  after the date of any  payment of Taxes or Other
Taxes  withheld  by any  Borrower  in respect  of any  payment to any Lender (or
Transferee)  or the  Administrative  Agent,  such  Borrower  will furnish to the
Administrative  Agent, at its address referred to in Section 10.01, the original
or a certified copy of a receipt evidencing payment thereof.

            (e)  Without  prejudice  to  the  survival  of any  other  agreement
contained herein, the agreements and obligations  contained in this Section 2.18
shall  survive the payment in full of the principal of and interest on all Loans
made hereunder.

            (f) Each Lender (or  Transferee)  represents  to Alcoa that,  on the
date such Lender (or such Transferee)  becomes a party to this Agreement,  it is
eligible to receive  payments of interest  hereunder from Alcoa or any Borrowing
Subsidiary without  withholding in respect of United States Federal  withholding
tax  (except,  in the case of a  Transferee  of any  Lender,  as a result of the
occurrence of an event (including a change in treaty,  law or regulation)  after
the date of this Agreement giving rise to withholding to which such Lender would
be subject).


<PAGE>


            (g) Each Lender (or Transferee, other than a Transferee described in
the  exception  in  Section  2.18(f))  that is  organized  under  the  laws of a
jurisdiction outside the United States shall, on or before the date it becomes a
party to this Agreement (or, in the case of a Transferee that is a participation
holder,  on or before the date such Transferee  becomes a  participation  holder
hereunder),  deliver to Alcoa and the  Administrative  Agent such  certificates,
documents  or other  evidence,  as required by the Code or Treasury  Regulations
issued  pursuant  thereto,  including  Internal  Revenue Service Form 1001, Form
4224,  W8BEN,  or any other  certificate  or statement of exemption  required by
Treasury Regulation Section 1.1441-1,  1.1441-4 or 1.1441-6(c) or any subsequent
version thereof or successors  thereto,  properly completed and duly executed by
such  Lender (or  Transferee)  establishing  that  payment is (i) not subject to
United States Federal  withholding  tax under the Code because such payments are
effectively connected with the conduct by such Lender (or Transferee) of a trade
or  business in the United  States or (ii)  totally  exempt  from United  States
Federal  withholding  tax under a provision  of an  applicable  tax  treaty.  In
addition, each such Lender (or such Transferee) shall, if legally able to do so,
thereafter deliver such  certificates,  documents or other evidence from time to
time  establishing  that  payments  received  hereunder  are not subject to such
withholding  upon  receipt  of a  written  request  therefor  from  Alcoa or the
Administrative  Agent.  Unless Alcoa and the Administrative  Agent have received
forms or other documents satisfactory to them indicating that payments hereunder
are  not  subject  to  United  States  Federal  withholding  tax,  Alcoa  or the
Administrative  Agent  shall  withhold  such  taxes  from such  payments  at the
applicable statutory rate, subject to Section 2.18(a).

            (h) None of the  Borrowers  shall be required to pay any  additional
amounts to any  Lender (or  Transferee)  in  respect  of United  States  Federal
withholding  tax  pursuant  to  paragraph  (a)  above  to the  extent  that  the
obligation  to pay such  additional  amounts  would  not have  arisen  but for a
failure by such Lender (or Transferee) to deliver the certificates, documents or
other evidence  specified in the preceding  paragraph (g) unless such failure is
attributable  to  (i)  a  change  in  applicable  law,  regulation  or  official
interpretation  thereof or (ii) an amendment or  modification to or a revocation
of any  applicable  tax treaty or a change in official  position  regarding  the
application or  interpretation  thereof,  in each case on or after the date such
Lender (or Transferee) became a party to this Agreement.

            (i) Any Lender  (or  Transferee)  claiming  any  additional  amounts
payable pursuant to this Section 2.18 shall use reasonable  efforts  (consistent
with legal and  regulatory  restrictions)  to file any  certificate  or document
requested in writing by the relevant  Borrower or to change the  jurisdiction of
its  applicable  lending  office if the making of such a filing or change  would
avoid the need for or reduce the amount of any such additional amounts which may
thereafter  accrue and would not, in the sole  determination  of such Lender (or
Transferee), be otherwise disadvantageous to such Lender (or Transferee).


<PAGE>


            (j) If a Lender (or  Transferee) or the  Administrative  Agent shall
become  aware that it may be entitled to receive a refund in respect of Taxes or
Other Taxes as to which it has been  indemnified by a Borrower  pursuant to this
Section 2.18, it shall promptly notify Alcoa of the  availability of such refund
and shall,  within 30 days after  receipt of a request by Alcoa,  apply for such
refund at Alcoa's expense.  If any Lender (or Transferee) or the  Administrative
Agent  receives a refund in  respect of any Taxes or Other  Taxes as to which it
has been  indemnified  by a Borrower  pursuant to this  Section  2.18,  it shall
promptly  repay such refund to such Borrower (to the extent of amounts that have
been paid by such Borrower under this Section 2.18 with respect to such refund),
net of all out-of-pocket  expenses (including taxes imposed with respect to such
refund) of such Lender (or Transferee) or the  Administrative  Agent and without
interest; provided, however, that such Borrower, upon the request of such Lender
(or Transferee) or the Administrative  Agent, agrees to return such refund (plus
penalties,  interest or other  charges) to such  Lender (or  Transferee)  or the
Administrative   Agent  in  the  event  such  Lender  (or   Transferee)  or  the
Administrative Agent is required to repay such refund.

            (k) Nothing  contained in this Section 2.18 shall require any Lender
(or  Transferee)  or the  Administrative  Agent to make available any of its tax
returns  (or any other  information  relating  to its taxes which it deems to be
confidential).

            (l) No  Borrower  shall be  required  to  reimburse  any  Lender (or
Transferee)  or the  Administrative  Agent with  respect to any Tax or Other Tax
unless  such  Lender,  Transferee  or the  Administrative  Agent  notifies  such
Borrower  of the  amount  of such  Tax or  Other  Tax on or  before  the  second
anniversary of the date such Lender, Transferee or the Administrative Agent pays
such Tax or Other Tax.


<PAGE>


            SECTION 2.19. Assignment of Commitments Under Certain Circumstances.
In the event  that any  Lender  shall  have  delivered  a notice or  certificate
pursuant  to Section  2.12 or 2.13,  or a  Borrower  shall be  required  to make
additional  payments  to any Lender  under  Section  2.18,  Alcoa shall have the
right,  at its own  expense,  upon notice to such Lender and the  Administrative
Agent,  to require  such  Lender to transfer  and assign  without  recourse  (in
accordance with and subject to the restrictions  contained in Section 10.04) all
its interests,  rights and obligations under this Agreement to another financial
institution which shall assume such obligations;  provided, however, that (i) no
such assignment  shall conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) Alcoa or the assignee, as the case may be, shall
pay (or, in the case of Alcoa,  cause  another  Borrower to pay) to the affected
Lender  in  immediately  available  funds  on the  date of such  termination  or
assignment  the principal of and interest  accrued to the date of payment on the
Loans made by it hereunder and all other amounts accrued for its account or owed
to it hereunder.

ARTICLE III.  REPRESENTATIONS AND WARRANTIES

            Each  Borrower  represents  and warrants to each of the Lenders with
respect to itself as follows  (except that the  Borrowing  Subsidiaries  make no
representations or warranties under Section 3.06 or 3.09:

            SECTION 3.01.  Organization.   Such Borrower is a corporation duly
organized, validly existing and, where  applicable,  in good standing under the
laws of its jurisdiction of  incorporation  and is duly qualified to do business
as a foreign corporation and, where applicable, is in good standing in all other
jurisdictions  in which the  ownership  of its  properties  or the nature of its
activities or both makes such qualification necessary, except to the extent that
failure to be so qualified would not result in a Material Adverse Effect.

            SECTION 3.02.  Authorization.  Such Borrower has corporate power and
authority to execute,  deliver and carry out the provisions of this Agreement to
which  it is a  party,  to  borrow  hereunder  and to  perform  its  obligations
hereunder  and all such  action  has been  duly and  validly  authorized  by all
necessary corporate proceedings on its part.

            SECTION 3.03. Enforceability.  This Agreement has been duly executed
and  delivered by such  Borrower and  constitutes  the legal,  valid and binding
obligation of such Borrower  enforceable  in accordance to its terms,  except as
limited by bankruptcy,  insolvency or other similar laws of general  application
affecting  the  enforcement  of  creditors'  rights or by general  principles of
equity limiting the availability of equitable remedies.


<PAGE>


            SECTION 3.04.  Governmental  Approvals.  No authorization,  consent,
approval,   license   exemption  or  other  action  by,  and  no   registration,
qualification,   designation,  declaration  or  filing  with,  any  Governmental
Authority is necessary in connection with such Borrower's execution and delivery
of  this  Agreement,  the  consummation  by any  Borrower  of  the  transactions
contemplated  hereby or such  Borrower's  performance of or compliance  with the
terms and conditions hereof, except as set forth on Schedule 3.04.

            SECTION  3.05.  No Conflict.  None of the  execution and delivery by
such  Borrower  of this  Agreement,  the  consummation  by such  Borrower of the
transactions   contemplated  hereby  or  performance  by  such  Borrower  of  or
compliance by such Borrower with the terms and conditions hereof or thereof will
(a) violate any law, constitution, statute, treaty, regulation, rule, ordinance,
order, injunction,  writ, decree or award of any Governmental Authority to which
it is  subject,  (b)  conflict  with or result in a breach or default  under its
charter or Memorandum and Articles of Association or by-laws, as applicable, (c)
conflict  with or result in a breach or default which is material in the context
of this Agreement  under any agreement or instrument to which such Borrower is a
party or by which it or any of its  properties,  whether now owned or  hereafter
acquired, may be subject or bound or (d) result in the creation or imposition of
any Lien  prohibited  by Section 6.01 upon any  property or assets,  whether now
owned or hereafter acquired, of such Borrower.

            SECTION 3.06.  Financial  Statements.  In the case of Alcoa,  it has
furnished to the Lenders copies of its consolidated balance sheet as of December
31, 1999,  and the related  consolidated  statements of income and cash flow for
the year then ended,  all  examined  and  certified  by  PricewaterhouseCoopers,
L.L.P.  Such financial  statements  (including the notes thereto) present fairly
the financial  condition of Alcoa and its  Subsidiaries as of such dates and the
results of their  operations for the periods then ended,  all in conformity with
GAAP,  subject (in the case of the  interim  financial  statements)  to year-end
audit adjustments.


<PAGE>


            SECTION 3.07.  No Defaults.  No event has occurred and is continuing
and no  condition  exists  which  constitutes  a  Default  or Event  of  Default
hereunder.  Such  Borrower is not in violation of (i) any term of its charter or
Constitution  or by-laws,  as  applicable,  or (ii) any  material  agreement  or
instrument to which it is a party or by which it or any of its properties may be
subject or bound where such violation is likely to result in a Material  Adverse
Effect.

            SECTION  3.08.  Litigation.  Except  as set  forth in the  financial
statements  referred to in Section  3.06 or any Exchange Act Report or otherwise
disclosed on Schedule  3.08,  there is no pending or, to the knowledge of any of
its Responsible  Officers,  threatened  proceeding by or before any Governmental
Authority  against it which in the opinion of its counsel is likely to result in
a  Material  Adverse  Effect.  Except as set forth in the  financial  statements
referred to in Section 3.06 or any Exchange Act Report or otherwise disclosed in
Schedule  3.08,  there  is no  pending  or,  to  the  knowledge  of  any  of its
Responsible  Officers,  threatened  proceeding  by or  before  any  Governmental
Authority against any of its Subsidiaries which in the opinion of its counsel is
likely to result in a Material Adverse Effect.

            SECTION 3.09.  No Material  Adverse  Change.  As of the date of this
Agreement,  there has been no material  adverse change in the business,  assets,
operations  or financial  condition of itself and its  Subsidiaries,  taken as a
whole except, in the case of Alcoa and the Borrowing Subsidiaries,  as disclosed
in any Exchange Act Report since December 31, 1999.


<PAGE>


            SECTION 3.10. Employee Benefit Plans. (a) U.S. Plans. It and each of
its  ERISA  Affiliates  is in  compliance  in all  material  respects  with  the
applicable provisions of ERISA and the regulations and published interpretations
thereunder.  No  Reportable  Event has occurred as to which such Borrower or any
ERISA  Affiliate  was  required  to file a report  with the PBGC  that  alone or
together with any other  Reportable Event would reasonably be expected to result
in a liability of such Borrower to the PBGC in an aggregate  amount in excess of
$25,000,000.  The aggregate  present value of all benefit  liabilities under the
Plans (based on the assumptions used to fund such Plans) did not, as of the last
annual  valuation dates  applicable  thereto,  exceed the aggregate value of the
assets of the Plans by more than 10% of  Consolidated  Net Worth.  Neither  such
Borrower nor any ERISA  Affiliate  has incurred any  Withdrawal  Liability  that
would  reasonably be expected to result in a Material  Adverse  Effect.  Neither
such  Borrower nor any ERISA  Affiliate has received any  notification  that any
Multiemployer  Plan is in  reorganization  or has  been  terminated  within  the
meaning of Title IV of ERISA,  and no  Responsible  Officer of any  Borrower has
knowledge  of any fact  which  would  reasonably  be  expected  to result in the
reorganization or termination of a Multiemployer Plan where such  reorganization
or termination has resulted or would  reasonably be expected to result,  through
increases in the contributions required to be made to such Plan or otherwise, in
a Material Adverse Effect.

            (b)  Foreign  Plans.  Each  Foreign  Plan  is in  compliance  in all
material  respects  with all  requirements  of law  applicable  thereto  and the
respective  requirements of the governing  documents for such plan except to the
extent  such  non-compliance  could not  reasonably  be  expected to result in a
Material Adverse Effect.  With respect to each Foreign Pension Plan, none of the
Borrowers,  their  respective  Affiliates or any of their  directors,  officers,
employees or agents has engaged in a transaction  which would subject any of the
Borrowers,  directly or  indirectly,  to a material tax or civil  penalty  which
could  reasonably  be  expected  to result in a Material  Adverse  Effect.  With
respect to each Foreign  Pension Plan, none of the Borrowers,  their  respective
Affiliates or any of their directors,  officers, employees or agents has engaged
in a  transaction  which  would  subject  any  of  the  Borrowers,  directly  or
indirectly,  to a  material  tax or civil  penalty  which  could  reasonably  be
expected to result in a Material  Adverse  Effect.  With respect to each Foreign
Plan,  adequate  reserves  have been  established  in the  financial  statements
furnished to Lenders in respect of any unfunded  liabilities in accordance  with
applicable law and prudent business  practice or, where required,  in accordance
with ordinary  accounting  practices in the  jurisdiction  in which such Foreign
Plan is maintained.  The aggregate unfunded liabilities,  after giving effect to
any such reserves for such liabilities, with respect to such Foreign Plans could
not reasonably be expected to result in a Material Adverse Effect.  There are no
material  actions,  suits or claims  (other than  routine  claims for  benefits)
pending or threatened  against any of the  Borrowers or any of their  Affiliates
with  respect  to  any  Foreign  Plan  which  could   reasonably   be  expected,
individually or in the aggregate, to result in a Material Adverse Effect.


<PAGE>


            SECTION 3.11. Title to Properties; Possession Under Leases. (a) Such
Borrower  and each of its  Subsidiaries  have good and  marketable  title to, or
valid leasehold interests in, all its material properties and assets, except for
minor  defects in title that do not  materially  interfere  with its  ability to
conduct its business as currently  conducted or to utilize such  properties  and
assets for their intended purposes.

            (b) Such  Borrower and each of its  Subsidiaries  have complied with
all material  obligations  under all material  leases to which it is a party and
all such leases are in full force and effect. Such Borrower and its Subsidiaries
enjoy peaceful and undisturbed possession under all such material leases.

            SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act. None of Alcoa or any Borrowing  Subsidiary  is an  "investment  company" as
defined in, or subject to regulation under, the Investment  Company Act of 1940.
Alcoa is exempted as, and no  Borrowing  Subsidiary  is, a "holding  company" as
defined in, or subject to regulation  under,  the Public Utility Holding Company
Act of 1935.

            SECTION 3.13. Tax Returns.  Such Borrower and its Subsidiaries  have
filed or caused to be filed all  Federal,  state,  local and foreign tax returns
required  to have been  filed by it and have paid or caused to be paid all taxes
shown to be due and payable on such  returns or on any  assessments  received by
it,  except  taxes  that  are  being  contested  in good  faith  by  appropriate
proceedings  and for which adequate  reserves are maintained in accordance  with
GAAP.

            SECTION 3.14. Compliance with Laws and Agreements.  (a) Neither such
Borrower  nor  any of its  Subsidiaries  is in  violation  of any  law,  rule or
regulation,  or in default with respect to any  judgment,  writ,  injunction  or
decree of any  Governmental  Authority,  where such  violation or default  would
reasonably be expected to result in a Material Adverse Effect.


<PAGE>


            (b) Neither such Borrower nor any of its  Subsidiaries is in default
in any material  manner under any provision of any indenture or other  agreement
or  instrument  evidencing  Indebtedness,  or any other  material  agreement  or
instrument  to which it is a party  or by which it or any of its  properties  or
assets are or may be bound,  where such default  would be  reasonably  likely to
result in a Material Adverse Effect.

            SECTION 3.15. No Material Misstatements.  Except for information not
prepared  by Alcoa  and  expressly  disclaimed  thereby,  no  report,  financial
statement, exhibit or schedule furnished by or on behalf of such Borrower to the
Administrative  Agent or any Lender in connection  with the  negotiation of this
Agreement or included herein or delivered pursuant thereto contained or contains
any material misstatement of fact or omitted or omits to state any material fact
necessary  to make the  statements  therein,  in the light of the  circumstances
under which they were or are made, not misleading.

            SECTION 3.16. Federal Reserve Regulations.  The proceeds of any Loan
will be used to provide working capital or for other general corporate purposes,
including but not limited to the support of Alcoa's Commercial Paper program. No
part of the proceeds of any Loan to such Borrower will be used, whether directly
or indirectly,  and whether  immediately,  incidentally  or ultimately,  for any
purpose  that  entails  a  violation  of any of the  Regulations  of the  Board,
including Regulations U and X.

            SECTION 3.17.  No Trusts.  Such Borrower is not entering into this
Agreement in its capacity as trustee of any trust.

            SECTION 3.18. Year 2000 Computer Systems Compliance.  As of the date
of this Agreement,  there has not occurred, and Alcoa does not expect that there
will occur,  any material  disruption in the  operations or business  systems of
Alcoa or its  Subsidiaries,  taken as a whole,  resulting  from the inability of
computer systems of Alcoa and its Subsidiaries or equipment  containing embedded
microchips to recognize or properly process dates in or following the year 2000.

ARTICLE IV. CONDITIONS OF EFFECTIVENESS, LENDING AND DESIGNATION OF BORROWING
   SUBSIDIARIES



<PAGE>


            The  obligations  of the  Lenders  to  make  Loans  to any  Borrower
hereunder  are  subject  to the  satisfaction  of the  conditions  set  forth in
Sections  4.01  and 4.02  below  (and,  in the  case of  Loans to any  Borrowing
Subsidiary, the satisfaction, as to such Borrowing Subsidiary, of the conditions
set forth in Section 4.03 below):

            SECTION 4.01.  Effective Date.  On the Effective Date:

            (a) The  Administrative  Agent shall have received a written opinion
of Denis A.  Demblowski,  Senior  Counsel  and  Secretary  of  Alcoa,  dated the
Effective Date and addressed to the Lenders,  to the effect set forth in Exhibit
C hereto.

            (b) All legal matters  incident to this Agreement and the borrowings
hereunder shall be  satisfactory to the Lenders and to Cravath,  Swaine & Moore,
counsel for the Administrative Agent.


<PAGE>


            (c)  The  Administrative  Agent  shall  have  received  (i) a  copy,
including all  amendments  thereto,  of the charter of Alcoa,  certified as of a
recent  date by the  Secretary  of State or other  appropriate  official  of its
jurisdiction of incorporation and a certificate as to the good standing of Alcoa
as of a recent  date,  from such  Secretary of State or other  official;  (ii) a
certificate of the Secretary or Assistant Secretary of Alcoa dated the Effective
Date and certifying (A) that attached thereto is a true and complete copy of the
by-laws of such  corporation  as in effect on the  Effective  Date  showing  all
amendments  thereto  since the date of the  resolutions  described in clause (B)
below, (B) that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such corporation authorizing the execution,
delivery  and   performance  of  this  Agreement  and  the  borrowings  by  such
corporation  hereunder,  and that  such  resolutions  have  not  been  modified,
rescinded  or amended and are in full force and effect,  (C) that the charter of
Alcoa has not been amended since the date of the last amendment thereto shown on
the certificate of good standing  furnished pursuant to clause (i) above and (D)
as to the  incumbency  and specimen  signature of each  officer  executing  this
Agreement or any other  document  delivered in connection  herewith on behalf of
such  corporation;   (iii)  a  certificate  of  another  officer  of  each  such
corporation  as to the  incumbency  and specimen  signature of the  Secretary or
Assistant Secretary  executing the certificate  pursuant to (ii) above; and (iv)
such other documents as the Lenders or Cravath,  Swaine & Moore, counsel for the
Administrative Agent may reasonably request.

            (d) The Administrative Agent shall have received  certificates dated
the Effective  Date and signed by a Financial  Officer of Alcoa  confirming  the
satisfaction of the conditions  precedent set forth in paragraphs (b) and (c) of
Section 4.02.

            (e) The Administrative  Agent shall have received all Fees and other
amounts due and payable on or prior to the  Effective  Date,  including all Fees
accrued to the date hereof under the Existing 364-Day Credit Agreement.

            (f) The  commitments  under the Existing  364-Day  Credit  Agreement
shall have been terminated and no loans thereunder shall be outstanding.

            (g) The Administrative  Agent shall have received  certificates of a
Responsible Officer of Alcoa, each dated the Effective Date and stating that (i)
except as disclosed  in the  Exchange Act Report or otherwise  disclosed in such
certificate,  Alcoa and each of its  Subsidiaries  have complied in all respects
with all  Federal,  state,  local  and  foreign  statutes,  ordinances,  orders,
judgments,  rulings and regulations  relating to  environmental  pollution or to
environmental  regulation or control except to the extent any such failure so to
comply would not,  alone or together with any other such failure,  be reasonably
likely to result in a Material Adverse Effect; (ii) neither Alcoa nor any of its
Subsidiaries  has  received  notice of any  failure so to comply  which alone or
together with any other such failure  would be reasonably  likely to result in a
Material  Adverse Effect;  and (iii) the plants of Alcoa and its Subsidiaries do
not manage any  hazardous  wastes,  toxic  pollutants  or  substances  similarly
denominated  in  violation  of any  applicable  law or  regulations  promulgated
pursuant  thereto  including,  for  operations  within  the United  States,  the
Resource Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Hazardous Materials  Transportation Act, the
Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or any other
applicable  law,  where such  violation  would be  reasonably  likely to result,
individually or together with any such other  violations,  in a Material Adverse
Effect.


<PAGE>


            SECTION 4.02.  All Borrowings.  On the date of each Borrowing:

            (a) Such  Borrower  shall have  provided  the notice as  required by
Section 2.03.

            (b) The  representations  and  warranties  set forth in Article  III
hereof (except,  in the case of a refinancing of any Loan that does not increase
the  aggregate  principal  amount  of  Loans  of  any  Lender  outstanding,  the
representations  set forth in Sections  3.08 and 3.10) shall be true and correct
in all material  respects on and as of the date of such  Borrowing with the same
effect  as  though  made on and as of  such  date,  except  to the  extent  such
representations and warranties expressly relate to an earlier date.

            (c) Each Borrower  shall be in  compliance in all material  respects
with all the terms and provisions set forth herein on its part to be observed or
performed,  and at the time of and immediately  after such Borrowing no Event of
Default or Default shall have occurred and be continuing.

            (d) In the case of any  Borrowing  which would  cause the  aggregate
principal  amount of outstanding  loans under this Agreement,  the New Five-Year
Credit  Agreement,  the Existing  Five-Year  Credit  Agreement and any other New
Credit  Arrangement (as defined in the resolutions  duly adopted by the Board of
Directors  of Alcoa on  March  10,  2000) to  exceed  $6,000,000,000  minus  the
aggregate  outstanding  principal  amount of Commercial Paper issued by Alcoa or
issued by  Subsidiaries  and  guaranteed by Alcoa or other loans or notes issued
under any New Credit  Arrangement (other than Commercial Paper or other loans or
notes being repaid with the proceeds of such  Borrowing),  such Borrowing  shall
have been duly  authorized  by Alcoa and the  Administrative  Agent  shall  have
received a true and complete  copy of  resolutions  duly adopted by the Board of
Directors of Alcoa authorizing such Borrowing.

Each  Borrowing by any Borrower  shall be deemed to constitute a  representation
and warranty by such Borrower and, in the case of a Borrowing Subsidiary,  Alcoa
on the date of such Borrowing as to the matters specified in paragraphs (b), (c)
and (d) of this Section 4.02.


<PAGE>


            SECTION 4.03.  Designation of Borrowing Subsidiaries.  On each
Designation Date:

            (a) The  Administrative  Agent shall have received (i) a copy of the
charter,   including  all  amendments  thereto,  of  each  applicable  Borrowing
Subsidiary,  certified  as of a  recent  date by the  Secretary  of State or the
appropriate  foreign  governmental  official  of the  state  or  country  of its
organization,  and a  certificate  as to the  good  standing  of such  Borrowing
Subsidiary  as of a recent  date from  such  Secretary  of State or  appropriate
foreign  governmental  official,  as  applicable;  (ii)  a  certificate  of  the
Secretary  or  Assistant  Secretary  of  such  Borrowing  Subsidiary  dated  the
Designation  Date  and  certifying  (A)  that  attached  thereto  is a true  and
completed copy of the by-laws of such  Borrowing  Subsidiary as in effect on the
Designation  Date  showing  all  amendments   thereto  since  the  date  of  the
resolutions  described in clause (B) below,  (B) that attached thereto is a true
and complete copy of resolutions  duly adopted by the Board of Directors of such
Borrowing Subsidiary authorizing the execution, delivery and performance of this
Agreement and the borrowings hereunder,  and that such resolutions have not been
modified,  rescinded  or amended and are in full force and effect,  (C) that the
charter of such Borrowing  Subsidiary has not been amended since the date of the
last  amendment  thereto shown on the  certificate  of good  standing  furnished
pursuant  to  clause  (i)  above,  and  (D) as to the  incumbency  and  specimen
signature  of  each  officer  executing  or  any  other  document  delivered  in
connection  herewith  on  behalf  of  such  Borrowing  Subsidiary;  and  (iii) a
certificate of another  officer as to the  incumbency and specimen  signature of
the Secretary or Assistant Secretary executing the certificate  pursuant to (ii)
above.

            (b) The  Administrative  Agent shall have received a Designation  of
Borrowing  Subsidiary  of each  applicable  Borrowing  Subsidiary as provided in
Section 10.04(i).

ARTICLE V.  AFFIRMATIVE COVENANTS



<PAGE>


            So long as this Agreement shall remain in effect or the principal of
or interest on any Loan,  any Fees or any other  expenses or amounts  payable in
connection herewith shall be unpaid, unless the Required Lenders shall otherwise
consent in writing:

            SECTION  5.01.  Financial  Statements,  Reports,  etc.  Alcoa  shall
furnish to the  Administrative  Agent the following,  with sufficient copies for
the Administrative Agent to provide a copy to each Lender:

            (a)  within  120 days  after the end of each  fiscal  year,  (i) its
consolidated  balance  sheet and  related  statements  of  income  and cash flow
audited by  independent  public  accountants  of recognized  national  standing,
accompanied by an opinion of such  accountants  (which shall not be qualified as
to scope of audit or in any  manner  calling  into  question  the  status of its
business  as a going  concern) to the effect  that such  consolidated  financial
statements fairly present its financial  condition and results of operations and
that of its consolidated Subsidiaries, taken as a whole, in accordance with GAAP
and (ii) the  balance  sheet  and  related  statements  of income of each of its
Subsidiaries  which has been designated  pursuant to Section 10.04(i) as, and as
long  as  such  Subsidiary  remains,  a  Borrowing  Subsidiary,  certified  by a
Financial Officer of such Subsidiary;

            (b) within 60 days after the end of each of the first  three  fiscal
quarters of each fiscal year,  its Form 10-Q as prescribed by the Securities and
Exchange Commission (or any successor agency);

            (c) concurrently with any delivery of financial statements under (a)
above and  promptly  at the  request of the  Administrative  Agent (but not more
often  than once  with  respect  to any  fiscal  quarter),  a  certificate  of a
Financial  Officer  (i)  certifying  that no Event of  Default  or  Default  has
occurred  and is  continuing  or, if such an Event of  Default  or  Default  has
occurred and is  continuing,  specifying  the nature and extent  thereof and any
corrective  action taken or proposed to be taken with  respect  thereto and (ii)
setting  forth   computations   in  reasonable   detail   satisfactory   to  the
Administrative  Agent  demonstrating  compliance with the covenant  contained in
Section 6.03;


<PAGE>


            (d) promptly after the same become publicly available, copies of all
periodic and other reports,  proxy  statements and other  materials  filed by it
(other than  registration  statements and  prospectuses  related to offerings to
directors, officers or employees) with the Securities and Exchange Commission or
any  Governmental  Authority  succeeding  to any of or all the functions of such
Commission,  or with any national  securities  exchange,  or  distributed to its
shareholders, as the case may be; and

            (e) promptly,  from time to time, such other  information  regarding
its operations, business affairs and financial condition, or compliance with the
terms  of  this  Agreement,  as  the  Administrative  Agent  or any  Lender  may
reasonably request.

            Alcoa  shall be  deemed  to have  fulfilled  its  obligations  under
paragraph (a), (b) or (d) above when the  Administrative  Agent receives a paper
or an electronic  version of the documents  required to be delivered pursuant to
paragraph (a), (b) or (d) above,  in a format  acceptable to the  Administrative
Agent; provided that (i) such paper or electronic version must be accompanied by
a  certificate  delivered  pursuant to paragraph (c) above and (ii) the Borrower
shall deliver paper copies of the information referred to in paragraph (d) above
to any Lender which requests such delivery.

            SECTION 5.02.  Pari Passu  Ranking.  Each Borrower shall ensure that
any amounts  payable by it hereunder  will at all times rank at least pari passu
with all other unsecured, unsubordinated Indebtedness of such Borrower except to
the extent any such Indebtedness may be preferred by law.

            SECTION 5.03.  Maintenance of Properties.  Each Borrower shall,  and
shall  cause its  Subsidiaries  to,  maintain  and keep its  properties  in such
repair,  working  order  and  condition,  and  make or cause to be made all such
needful  and  proper  repairs,  renewals  and  replacements  thereto,  as in the
judgment of such Borrower are  necessary and in the interests of such  Borrower;
provided, however, that nothing in this Section 5.03 shall prevent such Borrower
(or any Subsidiary  thereof) from selling,  abandoning or otherwise disposing of
any of its  respective  properties  or  discontinuing  a part of its  respective
businesses  from time to time if, in the judgment of such  Borrower,  such sale,
abandonment, disposition or discontinuance is advisable.


<PAGE>


            SECTION 5.04.  Obligations  and Taxes.  Each Borrower  shall pay its
Indebtedness and other obligations that, if not paid, would result in a Material
Adverse  Effect before the same shall become  delinquent or in default,  and pay
and discharge all taxes upon or against it, or against its  properties,  in each
case  prior to the date on which  penalties  attach  thereto,  unless and to the
extent  that any such  obligation  or tax is being  contested  in good faith and
adequate reserves with respect thereto are maintained in accordance with GAAP.

            SECTION 5.05.  Insurance.  Each Borrower shall,  and shall cause its
consolidated  Subsidiaries  to,  insure  and keep  insured,  in each  case  with
reputable insurance companies,  so much of its respective  properties to such an
extent and against such risks, or in lieu thereof,  in the case of any Borrower,
maintain or cause to be maintained a system or systems of self-insurance,  as is
customary in the case of corporations engaged in the same or similar business or
having similar properties similarly situated.

            SECTION  5.06.  Existence;   Businesses  and  Properties.  (a)  Each
Borrower  shall do or cause to be done all things  necessary to preserve,  renew
and keep in full force and effect its legal  existence  in its  jurisdiction  of
incorporation, except as otherwise expressly permitted under Section 6.02.

            (b) Each Borrower shall do or cause to be done all things  necessary
to obtain, preserve, renew, extend and keep in full force and effect the rights,
licenses, permits, franchises,  authorizations,  patents, copyrights, trademarks
and  trade  names  material  to the  conduct  of its  business  as its  Board of
Directors shall determine in its judgment.

            SECTION 5.07.  Compliance  with Laws. (a) Each Borrower shall comply
in all material respects with all applicable laws, rules, regulations and orders
of any Governmental  Authority to which it is subject,  whether now in effect or
hereafter enacted,  such that no failure so to comply will result in the levy of
any penalty or fine which shall have a Material Adverse Effect.


<PAGE>


            (b) Each  Borrower  shall comply in all material  respects  with the
applicable provisions of ERISA and all other related applicable laws and furnish
to the Administrative Agent and each Lender (i) as soon as possible,  and in any
event within 30 days after any Responsible Officer of such Borrower or any ERISA
Affiliate  either  knows or has reason to know that any ERISA Event has occurred
that alone or together  with any other ERISA Event would  reasonably be expected
to result in  liability  of such  Borrower  to the PBGC in an  aggregate  amount
exceeding $25,000,000,  a statement of a Financial Officer setting forth details
as to such ERISA Event and the action proposed to be taken with respect thereto,
together  with a copy of the  notice,  if any,  of such ERISA Event given to the
PBGC or other  Governmental  Authority,  (ii) promptly after receipt thereof,  a
copy of any notice such  Borrower or any ERISA  Affiliate  may receive  from the
PBGC or other  Governmental  Authority  relating to the intention of the PBGC or
other  Governmental  Authority to terminate any Plan or Plans (other than a Plan
maintained by an ERISA  Affiliate  which is considered an ERISA  Affiliate  only
pursuant to  subsection  (m) or (o) of Section 414 of the Code),  or any Foreign
Plan or Foreign Plans,  or to appoint a trustee to administer any Plan or Plans,
or any Foreign  Plan or Foreign  Plans,  (iii) within 10 days after the due date
for filing with the PBGC  pursuant to Section  412(n) of the Code of a notice of
failure to make a required  installment or other payment with respect to a Plan,
a statement of a Financial  Officer setting forth details as to such failure and
the action  proposed to be taken with respect  thereto,  together with a copy of
such notice given to the PBGC and (iv)  promptly and in any event within 30 days
after receipt  thereof by such Borrower or any ERISA  Affiliate from the sponsor
of a  Multiemployer  Plan,  a copy of each notice  received by such  Borrower or
ERISA Affiliate  concerning (A) the imposition of Withdrawal Liability in excess
of  $25,000,000  or (B) a  determination  that a  Multiemployer  Plan is,  or is
expected to be, terminated or in reorganization, in each case within the meaning
of Title IV of ERISA, if such termination or reorganization  would reasonably be
expected to result,  alone or with any other such termination or reorganization,
in increases in excess of $25,000,000 in the  contributions  required to be made
to the relevant Plan or Plans.


<PAGE>


            SECTION 5.08.  Litigation and Other Notices.  Each Borrower shall
furnish to the  Administrative  Agent  prompt  written  notice upon its becoming
aware of any of the following:

            (a) any Event of  Default  or  Default,  specifying  the  nature and
extent  thereof  and the  corrective  action (if any)  proposed to be taken with
respect thereto;

            (b) the  filing  or  commencement  of,  or any  threat  or notice of
intention of any person to file or  commence,  any action,  suit or  proceeding,
whether at law or in equity or by or before any Governmental Authority,  against
it or any of its Subsidiaries  which would reasonably be expected to result in a
Material Adverse Effect; and

            (c) any other  development that has resulted in, or would reasonably
be expected to result in, a Material Adverse Effect.

            SECTION 5.09.  Borrowing Subsidiaries.  Alcoa shall cause each
Borrowing Subsidiary at all times to be a wholly-owned Subsidiary.


ARTICLE VI.  NEGATIVE COVENANTS

            Each Borrower covenants and agrees with each Lender that, so long as
this  Agreement  shall  remain in effect or the  principal of or interest on any
Loan, any Fees or any other expenses or amounts  payable in connection  herewith
shall be unpaid, unless the Required Lenders shall otherwise consent in writing,
such Borrower will not:

            SECTION 6.01.  Liens.  (a) Create or incur, or permit any Restricted
Subsidiary  to create or incur,  any Lien on its  property or assets  (including
stock or other securities of any person,  including any of its Subsidiaries) now
or  hereafter  acquired  by it or on any income or revenues or rights in respect
thereof,  securing Indebtedness for borrowed money, without ratably securing the
Loans; provided, however, that the foregoing shall not apply to the following:

          (i) Liens on  property  or assets of any  corporation  existing at the
     time such corporation becomes a Restricted Subsidiary;


<PAGE>


          (ii)  Liens  existing  on any  property  or  asset  at or prior to the
     acquisition thereof by such Borrower or a Restricted  Subsidiary,  Liens on
     any  property  or  asset  securing  the  payment  of all or any part of the
     purchase  price of such  property or asset,  Liens on any property or asset
     securing any  Indebtedness  incurred prior to, at the time of or within 180
     days after the  acquisition  of such  property  or asset for the purpose of
     financing  all or any part of the  purchase  price  thereof or Liens on any
     property or asset  securing  any  Indebtedness  incurred for the purpose of
     financing  all or any  part  of the  cost to such  Borrower  or  Restricted
     Subsidiary of improvements thereto;

          (iii) Liens securing  Indebtedness of a Restricted Subsidiary owing to
     Alcoa or to another Restricted Subsidiary;

          (iv) Liens  existing  at the date of this  Agreement  and set forth on
     Schedule 6.01(a);

          (v) Liens on property of a person  existing (or, in the case of Alumax
     Inc.,  that shall have  existed)  at the time such person is merged into or
     consolidated  with  Alcoa or a  Restricted  Subsidiary  or at the time such
     person  becomes a  subsidiary  of Alcoa  through  the  direct  or  indirect
     acquisition  of capital  stock of such  person by Alcoa or at the time of a
     sale,  lease or  other  disposition  of the  properties  of a person  as an
     entirety  or  substantially  as  an  entirety  to  Alcoa  or  a  Restricted
     Subsidiary;

          (vi)  Liens  on  any  property   owned  by  Alcoa  or  any  Restricted
     Subsidiary,  in favor of the United States of America or any state thereof,
     or any department,  agency or instrumentality  or political  subdivision of
     the United States of America or any State thereof, or in favor of any other
     country, or any political subdivision thereof, to secure partial, progress,
     advance or other payments  pursuant to any contract or statute or to secure
     any  Indebtedness  incurred for the purpose of financing all or any part of
     the purchase price or the cost of construction  of the property  subject to
     such Liens; and


<PAGE>


          (vii) any extension, renewal or replacement (or successive extensions,
     renewals or  replacements)  in whole or in part of the Liens referred to in
     clauses (i) through (vi) of this Section 6.01(a);  provided,  however, that
     each such extension,  renewal or replacement is limited to all or a part of
     the property  which secured the Lien so extended,  renewed or replaced (and
     any improvements thereon).

            (b)  Notwithstanding  paragraph  (a) of  this  Section  6.01  and in
addition to the Liens  permitted  thereunder,  each Borrower and any  Restricted
Subsidiary  may create or incur Liens which  would  otherwise  be subject to the
foregoing restrictions to secure Indebtedness for borrowed money in an aggregate
amount  which does not at the time exceed 10% of the  Consolidated  Net Tangible
Assets of Alcoa and its consolidated Subsidiaries at such time.

            SECTION  6.02.   Consolidation,   Merger,   Sale  of  Assets,   etc.
Consolidate  or merge with or into any other  person or sell,  lease or transfer
all or substantially  all of its property and assets,  or agree to do any of the
foregoing,  unless  (a) no  Default  or Event of  Default  has  occurred  and is
continuing or would result immediately after giving effect thereto,  (b) if such
Borrower is not the surviving  corporation or if such Borrower sells,  leases or
transfers  all or  substantially  all of its property and assets,  the surviving
corporation  or person  purchasing or being leased the assets agrees to be bound
by the terms and provisions applicable to such Borrower hereunder, and (c)(i) in
the case of Alcoa,  immediately  after such  transaction,  individuals  who were
directors of Alcoa during the twelve month period prior to such merger,  sale or
lease (together with any replacement or additional  directors whose election was
recommended  by or who were elected by a majority of  directors  then in office)
constitute  the Board of Directors of the  surviving  corporation  or the person
purchasing  or being  leased  the  assets  and  (ii) in the case of a  Borrowing
Subsidiary,  (A) the  surviving  corporation  or the person  purchasing or being
leased the assets is a wholly-owned Subsidiary of Alcoa and (B) if the surviving
corporation or such person is not Alcoa,  Alcoa agrees to guarantee  pursuant to
Article VIII the obligations of such person under this Agreement.


<PAGE>


            SECTION 6.03.  Financial  Undertaking.  In the case of Alcoa, permit
the  aggregate  principal  amount  of (a)  the  Indebtedness  of  Alcoa  and its
consolidated  Subsidiaries,  after eliminating  intercompany items, plus (b) all
other liabilities of Alcoa and its consolidated Subsidiaries,  after eliminating
intercompany  items,  in respect of any  guarantee  or  endorsement  (except the
endorsement  of  negotiable  instruments  for deposit or  collection  or similar
transactions in the normal course of business) of the Indebtedness of any person
to  exceed  150% of  Consolidated  Net  Worth  of  Alcoa  and  its  consolidated
Subsidiaries.

            SECTION  6.04.  Change in  Business.  In the case of Alcoa,  make or
permit any substantial  change in the general nature of the business  carried on
by Alcoa and its consolidated  Subsidiaries as at the date hereof, including any
such alteration arising from an acquisition,  which would reasonably be expected
to result in a Material Adverse Effect.

ARTICLE VII.  EVENTS OF DEFAULT

            In case of the happening of any of the following  events ("Events of
Default"):

            (a) any  Borrower  shall  default  in the  payment  when  due of any
principal of any Loan and, if such default  shall result from the failure of any
third party payments  system used by such Borrower,  such default shall continue
for a period of two Business Days;

            (b) any  Borrower  shall fail to pay when due any  interest,  Fee or
other amount  payable under this Agreement or Alcoa shall fail to pay any amount
due under  Article VIII upon demand  therefor,  and, in each case,  such failure
shall continue for a period of five Business Days;


<PAGE>


            (c) any  representation or warranty made in Section 3.09 shall prove
to have been false or  misleading  in any  material  respect as of the time when
made  (including  by  omission of material  information  necessary  to make such
representation  or warranty  not  misleading);  or any other  representation  or
warranty  made by a Borrower  under this  Agreement or any  statement  made by a
Borrower in any financial statement,  certificate,  report,  exhibit or document
furnished by or on behalf of such  Borrower in  connection  with this  Agreement
shall prove to have been false or misleading  in any material  respect as of the
time when made and, if such  representation or warranty is able to be corrected,
such  representation  or  warranty  is not  corrected  within 20 days after such
Borrower's knowledge that it was false or misleading;

            (d) any Borrower shall default in the performance or observance of
any covenant contained in Section 5.02, 5.06(a), Section 5.08(a) or Article VI;

            (e) any Borrower  shall default in the  performance or observance of
any covenant or agreement  under this Agreement  (other than those  specified in
paragraphs  (a), (b) and (d) above) and such default shall continue for a period
of 10 Business Days, in the case of a default with respect to Section 5.08(b) or
(c),  or in  any  other  case  a  period  of  30  days  after  notice  from  the
Administrative Agent;

            (f) any Borrower  shall (i) default in the payment of any  principal
or interest  beyond any period of grace  provided with respect  thereto,  due in
respect of any Indebtedness in a principal  amount in excess of $20,000,000;  or
(ii) fail to observe or perform any other term, covenant, condition or agreement
contained  in any  agreement or  instrument  evidencing  or  governing  any such
Indebtedness if the effect of any such failure referred to in this paragraph (f)
is to cause such Indebtedness to become due prior to its stated maturity;

            (g) a proceeding shall have been instituted or a petition filed in
respect of a Borrower

            (i)  seeking to have an order for relief  entered in respect of such
      Borrower,  or  seeking a  declaration  or  entailing  a finding  that such
      Borrower is  insolvent  or a similar  declaration  or finding,  or seeking
      dissolution, winding-up, revocation or forfeiture of charter or Memorandum
      and Articles of  Association,  liquidation,  reorganization,  arrangement,
      adjustment, composition or other relief with respect to such Borrower, its
      assets or its debts  under any law  relating  to  bankruptcy,  insolvency,
      relief  of  debtors  or  protection  of  creditors,  termination  of legal
      entities or any other similar law now or hereafter in effect, or


<PAGE>


            (ii)  seeking  appointment  of  a  receiver,   trustee,   custodian,
      liquidator,  assignee,   sequestrator,   administrator  or  other  similar
      official  for  such  Borrower  or for all or any  substantial  part of its
      property,

and such  proceeding  or petition  shall remain  undismissed  for a period of 90
consecutive  days or an order or decree  approving any of the foregoing shall be
entered;

            (h) any Borrower  shall  become  insolvent,  shall become  generally
unable  to  pay  its  debts  as  they  become  due,  shall  voluntarily  suspend
transaction  of its  business  generally  or as a whole,  shall  make a  general
assignment for the benefit of creditors,  shall institute a proceeding described
in  clause  (g)(i)  above or shall  consent  to any  order or  decree  described
therein, shall institute a proceeding described in clause (g)(ii) above or shall
consent  to any such  appointment  or to the  taking of  possession  by any such
official of all or any substantial  part of its property whether or not any such
proceeding is instituted,  shall  dissolve,  wind-up or liquidate  itself or any
substantial  part of its property or shall take any action in furtherance of any
of the foregoing;


<PAGE>


            (i) any of the  following  shall  have  occurred:  (i) any person or
group of persons  shall have  acquired  beneficial  ownership  of a majority  in
interest of the outstanding Voting Stock of Alcoa (within the meaning of Section
13(d) or 14(d) of the Securities  Exchange Act of 1934 and the applicable  rules
and regulations  thereunder),  (ii) during any period of 25 consecutive  months,
commencing  before or after the date of this  Agreement,  individuals who at the
beginning of such 25 month period were  directors  of Alcoa  (together  with any
replacement or additional  directors  whose  election was  recommended by or who
were elected by a majority of directors  then in office)  cease to  constitute a
majority  of the Board of  Directors  of Alcoa or (iii)  any  person or group of
related persons shall acquire all or  substantially  all of the assets of Alcoa;
provided, however, that a change in control of Alcoa shall not be deemed to have
occurred  pursuant  to clause  (iii) of this  paragraph  (i) if Alcoa shall have
merged or  consolidated  with or  transferred  all or  substantially  all of its
assets to another  person in compliance  with the provisions of Section 6.02 and
the ratio represented by the total assets of the surviving person,  successor or
transferee  divided  by such  person's  stockholders'  equity,  in each  case as
determined and as would be shown in a consolidated  balance sheet of such person
prepared in  accordance  with GAAP (the  "Leverage  Ratio" of such person) is no
greater than the then Leverage Ratio of Alcoa immediately prior to such event;

            (j) an ERISA Event or ERISA Events shall have  occurred with respect
to any Plan or Plans,  or any Foreign  Plan or Foreign  Plans,  that  reasonably
could be expected to result in  liability  of any  Borrower to the PBGC or other
Governmental  Authority  or to a Plan or  Foreign  Plan in an  aggregate  amount
exceeding  $25,000,000 and, within 30 days after the reporting of any such ERISA
Event to the  Administrative  Agent or after the  receipt by the  Administrative
Agent of the statement required pursuant to Section 5.07(b),  the Administrative
Agent shall have notified the Borrower in writing that (i) the Required  Lenders
have made a determination that, on the basis of such ERISA Event or ERISA Events
or the failure to make a required payment,  there are reasonable grounds (A) for
the termination of such Plan or Plans, or such Foreign Plan or Foreign Plans, by
the PBGC or other Governmental Authority,  (B) for the appointment either by the
appropriate United States District Court of a trustee to administer such Plan or
Plans or by an applicable court of law outside the United States of a trustee to
administer  such Foreign Plan or Foreign  Plans or (C) for the  imposition  of a
lien in favor of a Plan or Foreign Plan and (ii) as a result thereof an Event of
Default  exists  hereunder;  or a trustee  shall be appointed by a United States
District Court to administer any such Plan or Plans or by an applicable court of
law outside the United  States of a trustee to  administer  such Foreign Plan or
Foreign  Plans;  or the PBGC or other  Governmental  Authority  shall  institute
proceedings to terminate any Plan or Plans or any Foreign Plan or Foreign Plans;


<PAGE>


            (k) (i) any Borrower or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability
to such Multiemployer  Plan, (ii) such Borrower or such ERISA Affiliate does not
have reasonable  grounds for contesting  such Withdrawal  Liability or is not in
fact contesting such Withdrawal Liability in a timely and appropriate manner and
does not have adequate reserves set aside against such Withdrawal  Liability and
(iii) the amount of the  Withdrawal  Liability  specified in such  notice,  when
aggregated with all other amounts required to be paid to Multiemployer  Plans in
connection  with Withdrawal  Liabilities  (determined as of the date or dates of
such   notification),   exceeds   $25,000,000  or  requires  payments  exceeding
$25,000,000 in any calendar year;

            (l) any Borrower or any ERISA  Affiliate shall have been notified by
the  sponsor  of a  Multiemployer  Plan  that  such  Multiemployer  Plan  is  in
reorganization or is being terminated,  within the meaning of Title IV of ERISA,
if solely as a result of such reorganization or termination the aggregate annual
contributions  of such Borrower and its ERISA  Affiliates  to all  Multiemployer
Plans that are then in  reorganization or have been or are being terminated have
been or will be increased  over the amounts  required to be  contributed to such
Multiemployer  Plans for their most recently  completed  plan years by an amount
exceeding $25,000,000;

            (m) one or more  judgments  for the payment of money in an aggregate
amount in excess of  $50,000,000  shall be rendered  against any Borrower or any
Subsidiary of any Borrower or any combination  thereof and the same shall remain
undischarged  for a period of 45 consecutive  days during which  execution shall
not be  effectively  stayed  (unless  an appeal or writ of  certiorari  is being
diligently  prosecuted),  or any  action  shall be  legally  taken by a judgment
creditor  or  creditors   holding   judgments  which  in  the  aggregate  exceed
$50,000,000  to levy upon assets or properties of any Borrower or any Subsidiary
of a Borrower to enforce any such judgment; or

            (n) Any "Event of  Default" as defined in the New  Five-Year  Credit
Agreement or the Existing  Five-Year  Credit  Agreement (other than an "Event of
Default"  as defined in each of clauses  (o),  (p) or (q) of Article  VII of the
Existing Five-Year Credit Agreement) shall occur and be continuing;


<PAGE>


then, and in every such event (other than an event described in paragraph (g) or
(h) above), and at any time thereafter during the continuance of such event, the
Administrative Agent, at the request of the Required Lenders,  shall, by written
notice to Alcoa,  take either or both of the following  actions,  at the same or
different times: (i) terminate the Commitments,  and (ii) declare the Loans then
outstanding  to be forthwith due and payable in whole or in part,  whereupon the
principal of the Loans so declared to be due and payable,  together with accrued
interest thereon and any unpaid accrued Fees and all other  liabilities  accrued
hereunder, shall become forthwith due and payable, without presentment,  demand,
protest  or any  other  notice of any kind,  all of which are  hereby  expressly
waived  by  each   Borrower,   anything   contained   herein  to  the   contrary
notwithstanding;  and in any event described in paragraph (g) or (h) above,  the
Commitments  of the Lenders shall  automatically  terminate and the principal of
the Loans then  outstanding,  together  with  accrued  interest  thereon and any
unpaid  accrued  Fees  and  all  other  liabilities  accrued  hereunder,   shall
automatically become due and payable,  without presentment,  demand,  protest or
any other notice of any kind, all of which are hereby  expressly  waived by each
Borrower, anything contained herein to the contrary notwithstanding.

ARTICLE VIII.  GUARANTEE

            Alcoa  unconditionally  and irrevocably  guarantees,  as a principal
obligor and not merely as a surety, the due and punctual payment and performance
of all Borrowing Subsidiary Obligations. Alcoa further agrees that the Borrowing
Subsidiary  Obligations may be extended or renewed, in whole or in part, without
notice  or  further  assent  from it,  and that it will  remain  bound  upon the
provisions of this Article VIII  notwithstanding any extension or renewal of any
Borrowing Subsidiary Obligation.

            Alcoa waives  presentation to, demand of payment from and protest to
any Borrowing  Subsidiary of any of the Borrowing  Subsidiary  Obligations,  and
also waives notice of acceptance of the guarantee set forth in this Article VIII
and notice of protest for  nonpayment.  The obligations of Alcoa hereunder shall
not be affected by (a) the failure of the Administrative  Agent or any Lender to
assert  any claim or  demand or to  enforce  any  right or  remedy  against  any
Borrowing  Subsidiary  under the  provisions of this Agreement or any guarantee;
(b)  any  extension  or  renewal  of any  provision  of  this  Agreement  or any
guarantee;  or (c) any rescission,  waiver,  amendment or modification of any of
the  terms  or  provisions  of this  Agreement  or any  guarantee  or any  other
agreement.


<PAGE>


            Alcoa  further  agrees that the  guarantee set forth in this Article
VIII  constitutes  a guarantee  of payment  when due and not of  collection  and
waives any right to require that any resort be had by the  Administrative  Agent
or any Lender to the  balance of any  deposit  account or credit on the books of
the Administrative Agent or the relevant Lender, as applicable,  in favor of any
Borrowing Subsidiary or any other person.

            The  obligations  of Alcoa  hereunder  shall not be  subject  to any
reduction,  limitation,  impairment or termination for any reason, including any
claim or waiver, release, surrender,  alteration or compromise, and shall not be
subject to any  defense  of  setoff,  counterclaim,  recoupment  or  termination
whatsoever by reason of the invalidity,  illegality or  unenforceability  of the
Borrowing Subsidiary  Obligations or otherwise.  Without limiting the generality
of the foregoing,  the obligations of Alcoa hereunder shall not be discharged or
impaired or otherwise affected by the failure of the Administrative Agent or any
Lender  to  assert  any claim or demand or to  enforce  any  remedy  under  this
Agreement, by any waiver or modification of any thereof, by any default, failure
or delay,  wilful or otherwise,  in the performance of the Borrowing  Subsidiary
Obligations  or by any other act or omission which may or might in any manner or
to any extent vary the risk of Alcoa or would  otherwise  operate as a discharge
of Alcoa as a matter of law or equity.

            Alcoa  further  agrees  that this  guarantee  shall  continue  to be
effective  or be  reinstated,  as the case may be, if at any time payment by any
Borrowing  Subsidiary  to the  Administrative  Agent or any Lender,  or any part
thereof, of principal of or interest on such Borrowing Subsidiary  Obligation is
rescinded  or must  otherwise  be  restored by the  Administrative  Agent or any
Lender or any holder of any Borrowing Subsidiary  Obligation upon the bankruptcy
or reorganization of such Borrowing Subsidiary or otherwise.


<PAGE>


            In  furtherance  of the foregoing and not in limitation of any other
right which the Administrative  Agent or any Lender may have at law or in equity
against Alcoa by virtue hereof, upon the failure of any Borrowing  Subsidiary to
pay any Borrowing  Subsidiary  Obligation when and as the same shall become due,
whether at maturity,  by acceleration,  after notice of prepayment or otherwise,
Alcoa  hereby  promises  to and will,  upon  receipt  of  written  demand by the
Administrative  Agent,  promptly pay, or cause to be paid, to such Agent in cash
the amount of such unpaid Borrowing  Subsidiary  Obligation,  and thereupon such
Agent  shall  assign,  in any  reasonable  manner,  the amount of the  Borrowing
Subsidiary  Obligation  paid by Alcoa pursuant to this guarantee to Alcoa,  such
assignment  to be pro  tanto to the  extent to which  the  Borrowing  Subsidiary
Obligation in question was discharged by Alcoa,  or make such other  disposition
thereof as Alcoa shall direct (all without recourse to the Administrative  Agent
or any Lender and without any  representation or warranty by the  Administrative
Agent or Lender).

            Upon  payment  by Alcoa of any sums to the  Administrative  Agent as
provided above, all rights of Alcoa against the Borrowing  Subsidiaries  arising
as a result  thereof by way of right of  subrogation  or otherwise  shall in all
respects be subordinate and junior in right of payment to the prior indefeasible
payment in full of all the Borrowing Subsidiary Obligations.

ARTICLE IX.  THE ADMINISTRATIVE AGENT

            In  order  to  expedite  the   transactions   contemplated  by  this
Agreement,  The  Chase  Manhattan  Bank  is  hereby  appointed  to  act  as  the
Administrative  Agent on behalf of the  Lenders.  Each of the  Lenders  and each
assignee of any such Lender hereby  irrevocably  authorizes  the  Administrative
Agent to take such  actions on behalf of such Lender or assignee and to exercise
such  powers  as are  specifically  delegated  to such  Agent by the  terms  and
provisions  hereof,  together  with such  actions  and powers as are  reasonably
incidental thereto.  The Administrative  Agent is hereby expressly authorized by
the Lenders,  without hereby limiting any implied  authority,  (a) to receive on
behalf of the Lenders all payments of principal of and interest on the Loans and
all other  amounts due to the Lenders  hereunder,  and promptly to distribute to
each Lender its proper share of each payment so received;  (b) to give notice on
behalf of each of the Lenders to the  relevant  Borrower of any Event of Default
specified  in this  Agreement  of which  the  Administrative  Agent  has  actual
knowledge  acquired  in  connection  with  its  agency  hereunder;  and  (c)  to
distribute to each Lender copies of all notices,  financial statements and other
materials  delivered by any Borrower  pursuant to this  Agreement as received by
such Agent.


<PAGE>


            None of the Administrative Agent or any of its directors,  officers,
employees  or agents  shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct,  or
be  responsible  for any  statement,  warranty or  representation  herein or the
contents of any document  delivered in  connection  herewith,  or be required to
ascertain or to make any inquiry concerning the performance or observance by any
Borrower of any of the terms,  conditions,  covenants  or  agreements  contained
herein. The Administrative  Agent shall not be responsible to the Lenders or any
assignee thereof for the due execution, genuineness, validity, enforceability or
effectiveness  of  this  Agreement  or  other  instruments  or  agreements.  The
Administrative  Agent  shall in all  cases  be fully  protected  in  acting,  or
refraining from acting,  in accordance with written  instructions  signed by the
Required Lenders and, except as otherwise  specifically  provided  herein,  such
instructions and any action or inaction  pursuant hereto shall be binding on all
the  Lenders and each  assignee of any such  Lender.  The  Administrative  Agent
shall,  in the absence of knowledge to the contrary,  be entitled to rely on any
instrument  or  document  believed by it in good faith to be genuine and correct
and to have been  signed or sent by the proper  person or  persons.  None of the
Administrative  Agent or any of its  directors,  officers,  employees  or agents
shall have any  responsibility  to any  Borrower on account of the failure of or
delay in  performance  or breach by any other  Lender or any  Borrower of any of
their  respective   obligations   hereunder  or  in  connection  herewith.   The
Administrative  Agent may  execute  any and all duties  hereunder  by or through
agents or  employees  and  shall be  entitled  to rely upon the  advice of legal
counsel  selected by it with respect to all matters arising  hereunder and shall
not be liable for any action taken or suffered in good faith by it in accordance
with the advice of such counsel.

            The Lenders hereby acknowledge that the  Administrative  Agent shall
not be under any duty to take any discretionary  action permitted to be taken by
it pursuant to the provisions of this Agreement  unless it shall be requested in
writing to do so by the Required Lenders.


<PAGE>


            Subject  to  the   appointment   and   acceptance   of  a  successor
Administrative  Agent as provided below, the Administrative  Agent may resign at
any time by notifying the Lenders and the Borrowers.  Upon any such resignation,
the  Required  Lenders  shall have the right to appoint a  successor;  provided,
however,  that  Alcoa  has  approved  such  successor  (such  consent  not to be
unreasonably  withheld).  If no  successor  shall have been so  appointed by the
Required Lenders and shall have accepted such  appointment  within 30 days after
the  retiring  Administrative  Agent gives notice of its  resignation,  then the
retiring Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent,  subject  to  the  prior  approval  of  Alcoa  (such  consent  not  to be
unreasonably  withheld),  which shall be a bank with an office in New York,  New
York,  having total assets in excess of  $10,000,000,000  or an Affiliate of any
such bank.  Upon the acceptance of any appointment as the  Administrative  Agent
hereunder by a successor bank, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent and the
retiring Agent shall be discharged  from its duties and  obligations  hereunder.
After the Agent's  resignation  hereunder  the  provisions  of this  Article and
Section 10.05 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.

            With respect to the Loans made by it hereunder,  the  Administrative
Agent in its individual capacity and not as Agent shall have the same rights and
powers as any other  Lender and may  exercise  the same as though it were not an
Administrative  Agent,  and such Agent and its  Affiliates  may accept  deposits
from,  lend  money to and  generally  engage  in any kind of  business  with any
Borrower  or any  Subsidiary  or other  Affiliate  of Alcoa as if it were not an
Agent.


<PAGE>


            Each Lender agrees (i) to reimburse  the  Administrative  Agent,  on
demand, in the amount of its pro rata share (based on its Commitment  hereunder)
of any expenses incurred for the benefit of the Lenders by such Agent, including
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders,  which shall not have been reimbursed by the Borrowers
and (ii) to indemnify and hold harmless the Administrative  Agent and any of its
directors,  officers,  employees, agents or Affiliates, on demand, in the amount
of such pro  rata  share,  from  and  against  any and all  liabilities,  taxes,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or disbursements of any kind or nature  whatsoever which may be imposed
on,  incurred by or  asserted  against it in its  capacity as an  Administrative
Agent or any of them in any way relating to or arising out of this  Agreement or
any action  taken or omitted by it or any of them under this  Agreement,  to the
extent the same shall not have been  reimbursed by the Borrowers;  provided that
no Lender  shall be liable to the  Administrative  Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or disbursements  resulting from the gross negligence or wilful
misconduct of such Agent or any of its directors, officers, employees, agents or
Affiliates.

            Each  Lender  acknowledges  that it has,  independently  and without
reliance  upon  the  Administrative  Agent  or other  Lender  and  based on such
documents  and  information  as it has deemed  appropriate,  made its own credit
analysis  and  decision  to  enter  into  this   Agreement.   Each  Lender  also
acknowledges  that  it  will,   independently  and  without  reliance  upon  the
Administrative Agent or other Lender and based on such documents and information
as it  shall  from  time to time  deem  appropriate,  continue  to make  its own
decisions in taking or not taking action under or based upon this Agreement, any
related agreement or any document furnished hereunder or thereunder.

            Each Lender hereby  acknowledges that the documentation agent has no
liability as a documentation agent other than in its capacity as a Lender.

ARTICLE X.  MISCELLANEOUS

            SECTION 10.01.  Notices.  Notices and other communications  provided
for  herein  shall be in writing  and shall be  delivered  by hand or  overnight
courier  service,  mailed by certified or registered mail or sent by telecopy as
follows:

            (a) if to Alcoa or a Borrowing Subsidiary, to Alcoa Inc. at 201
Isabella Street, Pittsburgh, PA 15212-5858, Attention of Vice President &
Treasurer (Telecopy No. 412-553-3640);



<PAGE>


            (b) if to the  Administrative  Agent, to The Chase Manhattan Bank at
One Chase Plaza, New York, New York 10081, Attention of Linda Hill (Telecopy No.
212-552-7490),  with a copy to The Chase Manhattan Bank at 270 Park Avenue,  New
York, New York 10017, Attention of James Ramage (Telecopy No. 212-270-4724);

            (c) if to a Lender,  to it at its address (or  telecopy  number) set
forth in Schedule 2.01 or in the  Assignment  and  Acceptance  pursuant to which
such Lender shall have become a party hereto.

All notices and other  communications  given to any party  hereto in  accordance
with the provisions of this Agreement  shall be deemed to have been given on the
date of receipt if  delivered by hand or  overnight  courier  service or sent by
telecopy  or on the date five  Business  Days after  dispatch  by  certified  or
registered  mail if mailed,  in each case  delivered,  sent or mailed  (properly
addressed) to such party as provided in this Section 10.01 or in accordance with
the latest unrevoked  direction from such party to the Administrative  Agent and
each Borrower given in accordance with this Section 10.01.

            Any notice hereunder shall be effective upon receipt.  Any notice or
other  communication  received  on a day  which is not a  Business  Day or after
business  hours in the place of receipt shall be deemed to be served on the next
following  Business Day in such place. Any notice given to Alcoa shall be deemed
to have been duly given to each other  Borrower at the same time and in the same
manner.

            SECTION 10.02.  Survival of Agreement.  All  covenants,  agreements,
representations   and  warranties  made  by  any  Borrower  herein  and  in  the
certificates  or other  instruments  prepared or delivered in connection with or
pursuant to this  Agreement  shall be considered to have been relied upon by the
Lenders and shall survive the making by the Lenders of the Loans,  regardless of
any investigation  made by the Lenders or on their behalf, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any Fee or any other amount  payable under this Agreement is outstanding
and unpaid and so long as the Commitments have not been terminated.


<PAGE>


            SECTION 10.03. Binding Effect. This Agreement shall become effective
when it shall have been executed by Alcoa and the Administrative  Agent and when
the  Administrative  Agent shall have received  copies hereof which,  when taken
together,  bear the signatures of each Lender,  and thereafter  shall be binding
upon and inure to the benefit of the  Borrowers,  the  Administrative  Agent and
each Lender and their respective successors and assigns, except that none of the
Borrowers  shall have the right to assign its rights  hereunder  or any interest
herein without the prior consent of all the Lenders.

            SECTION  10.04.   Successors  and  Assigns;   Additional   Borrowing
Subsidiaries.  (a)  Whenever  in this  Agreement  any of the  parties  hereto is
referred  to,  such  reference  shall be deemed to include  the  successors  and
assigns of such party;  and all  covenants,  promises  and  agreements  by or on
behalf  of the  Borrowers,  the  Administrative  Agent or the  Lenders  that are
contained  in this  Agreement  shall  bind  and  inure to the  benefit  of their
respective successors and assigns.


<PAGE>


            (b) Each Lender may assign to one or more Eligible  Transferees  all
or a portion of its  interests,  rights  and  obligations  under this  Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided, however, that (i) except in the case of an assignment to a Lender
or an  Affiliate of such Lender,  Alcoa and the  Administrative  Agent must give
their prior  written  consent to such  assignment  (which  consent  shall not be
unreasonably  withheld),  (ii) the  amount of the  Commitment  of the  assigning
Lender subject to each such assignment (determined as of the date the Assignment
and   Acceptance   with  respect  to  such   assignment   is  delivered  to  the
Administrative  Agent)  shall not be less than  $12,500,000,  (iii) the  parties
(other than the Borrowers) to each such assignment  shall execute and deliver to
the  Administrative  Agent  an  Assignment  and  Acceptance,   together  with  a
processing and recordation fee of $2,500 and (iv) the assignee,  if it shall not
be a  Lender,  shall  deliver  to the  Administrative  Agent  an  Administrative
Questionnaire.  Upon acceptance and recording  pursuant to paragraph (e) of this
Section 10.04,  from and after the effective  date specified in each  Assignment
and Acceptance,  which effective date shall be at least five Business Days after
the execution  and recording  thereof,  (A) the assignee  thereunder  shall be a
party hereto and, to the extent of the interest  assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement and
(B) the  assigning  Lender  thereunder  shall,  to the  extent  of the  interest
assigned by such  Assignment and  Acceptance,  be released from its  obligations
under this Agreement (and, in the case of an Assignment and Acceptance  covering
all or the remaining  portion of an assigning  Lender's  rights and  obligations
under this  Agreement,  such Lender  shall cease to be a party  hereto but shall
continue to be entitled to the benefits of Sections 2.12,  2.14, 2.18 and 10.05,
as well as to any Fees accrued for its account and not yet paid).


<PAGE>


            (c) By executing and  delivering an Assignment and  Acceptance,  the
assigning  Lender  thereunder  and the  assignee  thereunder  shall be deemed to
confirm to and agree with each other and the other  parties  hereto as  follows:
(i) such assigning  Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment and the  outstanding  balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance,  (ii) except as set forth in (i) above,
such  assigning  Lender  makes no  representation  or  warranty  and  assumes no
responsibility  with respect to any  statements,  warranties or  representations
made in or in  connection  with  this  Agreement,  or the  execution,  legality,
validity, enforceability,  genuineness,  sufficiency or value of this Agreement,
or any other instrument or document  furnished pursuant hereto, or the financial
condition of any Borrower or any  Subsidiary of any Borrower or the  performance
or  observance  by any Borrower or any  Subsidiary of any Borrower of any of its
obligations  under this Agreement or any other instrument or document  furnished
pursuant hereto;  (iii) such assignee represents and warrants that it is legally
authorized and has obtained any necessary consents to enter into such Assignment
and Acceptance;  (iv) such assignee confirms that it has received a copy of this
Agreement,  together  with  copies  of  the  most  recent  financial  statements
delivered  pursuant to Section 5.01 and such other  documents and information as
it has deemed  appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance;  (v) such assignee will  independently  and
without  reliance upon the  Administrative  Agent,  such assigning Lender or any
other  Lender  and based on such  documents  and  information  as it shall  deem
appropriate at the time,  continue to make its own credit decisions in taking or
not  taking  action  under  this  Agreement;  (vi) such  assignee  appoints  and
authorizes the  Administrative  Agent to take such action as agent on its behalf
and to  exercise  such  powers  under this  Agreement  as are  delegated  to the
Administrative  Agent by the terms  hereof,  together  with  such  powers as are
reasonably  incidental  thereto;  and (vii) such  assignee  agrees  that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.

            (d) The  Administrative  Agent,  on  behalf of and  solely  for this
purpose as an agent for the  Borrowers,  shall maintain at one of its offices in
The City of New York a copy of each  Assignment and  Acceptance  delivered to it
and a register for the  recordation  of the names and  addresses of the Lenders,
and the Commitment of, and principal  amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register").  The entries in
the  Register  shall be  conclusive  in the  absence of  manifest  error and the
Borrowers,  the Administrative Agent and the Lenders may treat each person whose
name is  recorded  in the  Register  pursuant  to the  terms  hereof as a Lender
hereunder  for all  purposes of this  Agreement,  notwithstanding  notice to the
contrary. The Register shall be available for inspection by any Borrower and any
Lender  at any  reasonable  time and from  time to time  upon  reasonable  prior
notice.

            (e) Upon its receipt of a duly  completed  Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee  (unless the  assignee  shall  already be a
Lender  hereunder),  the processing and recordation fee referred to in paragraph
(b) above and, if required,  the written consent of Alcoa and the Administrative
Agent to such  assignment,  the  Administrative  Agent  shall  (i)  accept  such
Assignment and Acceptance,  (ii) record the information contained therein in the
Register  and (iii) give prompt  notice  thereof to the  Lenders  and Alcoa.  No
assignment shall be effective unless recorded in the Register.


<PAGE>


            (f) Each  Lender may  without  the  consent of any  Borrower  or the
Administrative  Agent sell participations to one or more banks or other entities
in  all  or a  portion  of its  rights  and  obligations  under  this  Agreement
(including  all or a  portion  of its  Commitment  and the  Loans  owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged,  (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,  (iii) the participating
banks or other entities shall be entitled to the benefit of the cost  protection
provisions  contained in Sections  2.12,  2.14 and 2.18 to the same extent as if
they were Lenders and (iv) the  Borrowers,  the  Administrative  Agent,  and the
other  Lenders  shall  continue to deal solely and directly  with such Lender in
connection with such Lender's rights and obligations  under this Agreement,  and
such  Lender  shall  retain  the sole right to enforce  the  obligations  of the
Borrowers  relating to the Loans and to approve any amendment,  modification  or
waiver of any provision of this Agreement  (provided that the participating bank
or  other  entity  may  be  provided  with  the  right  to  approve  amendments,
modifications  or waivers  affecting  it with respect to (A) any decrease in the
Fees payable hereunder with respect to Loans in which the participating  bank or
other  entity has  purchased  a  participation,  (B) any change in the amount of
principal of, or decrease in the rate at which interest is payable on, the Loans
in which the participating bank or other entity has purchased a participation or
(C) any  extension  of the dates  fixed for  scheduled  payments  of a Fee or of
principal of or interest on the Loans in which the  participating  bank or other
entity has purchased a participation).

            (g) Any Lender or participant may, in connection with any assignment
or  participation  or  proposed  assignment  or  participation  pursuant to this
Section 10.04,  disclose to the assignee or participant or proposed  assignee or
participant any information relating to any Borrower furnished to such Lender by
or on  behalf  of such  Borrower;  provided,  however,  that,  prior to any such
disclosure  of  information  designated  by Alcoa  as  confidential,  each  such
assignee or  participant or proposed  assignee or  participant  shall execute an
agreement whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the  confidentiality  of such confidential  information.
Notwithstanding the foregoing,  no Lender or participant shall disclose any such
information to any person known to it to compete with Alcoa and its Subsidiaries
in any of the  principal  businesses  of Alcoa and its  Subsidiaries  taken as a
whole, without the prior written consent of Alcoa.


<PAGE>


            (h) Any  Lender  may at any time  assign  all or any  portion of its
rights under this  Agreement to a Federal  Reserve  Bank;  provided that no such
assignment  shall  release a Lender from any of its  obligations  hereunder.  In
order to facilitate  such an assignment to a Federal Reserve Bank, each Borrower
shall, at the request of the assigning  Lender,  duly execute and deliver to the
assigning  Lender a promissory  note or notes  evidencing the Loans made to such
Borrower by the assigning Lender hereunder.

            (i) None of Borrowers  shall assign or delegate any of its rights or
obligations  hereunder;  provided,  however, that unless an Event of Default has
occurred  and is  continuing,  Alcoa  at any  time  and  from  time to time  may
designate  any  wholly-owned  Subsidiary to be a Borrowing  Subsidiary  upon the
completion of the following:  (i) each of Alcoa and such  Subsidiary  shall have
executed and delivered to the  Administrative  Agent a Designation  of Borrowing
Subsidiary  and (ii) such  Subsidiary  shall have  complied  with Section  4.03,
whereupon  (A) such  Subsidiary  shall  become a party hereto and shall have the
rights  and  obligations  of  a  Borrowing  Subsidiary  hereunder  and  (B)  the
obligations  of such  Subsidiary  shall become part of the Borrowing  Subsidiary
Obligations  and the  guarantee  of Alcoa  pursuant to Article VIII hereof shall
apply  thereto  to the  same  extent  that it  applies  to the  other  Borrowing
Subsidiary  Obligations,  if any (the date on which any such  designation  shall
occur being called a "Designation Date").


<PAGE>


            (j)  Notwithstanding  anything to the contrary contained herein, any
Lender (a "Granting  Lender") may grant to a special  purpose funding vehicle (a
"SPC")  identified as a SPC in writing from time to time by the Granting  Lender
to the  Administrative  Agent and Alcoa and  being  either an  Affiliate  of the
Granting Lender or an entity approved by Alcoa and the Administrative Agent, the
option to provide to the Borrower all or any part of any Loan that such Granting
Lender would  otherwise  be  obligated to make to the Borrower  pursuant to this
Agreement; provided that (i) nothing herein shall constitute a commitment by any
SPC to make any Loan and (ii) if a SPC elects  not to  exercise  such  option or
otherwise  fails to provide all or any part of such Loan,  the  Granting  Lender
shall be obligated to make such Loan pursuant to the terms hereof. The making of
a Loan by a SPC hereunder shall utilize the Commitment of the Granting Lender to
the same extent,  and as if, such Loan were made by such Granting  Lender.  Each
party  hereto  hereby  agrees that no SPC shall be liable for any  indemnity  or
similar payment  obligation  under this Agreement (all liability for which shall
remain with the Granting  Lender).  In furtherance of the foregoing,  each party
hereto hereby  agrees (which  agreement  shall survive the  termination  of this
Agreement)  that,  prior to the date  that is one  year  and one day  after  the
payment in full of all outstanding commercial paper or other senior indebtedness
of any  SPC,  it will  not  institute  against,  or join  any  other  person  in
instituting  against,  such  SPC any  bankruptcy,  reorganization,  arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. In addition,  notwithstanding  anything to the contrary contained
in this Section 10.04(j),  any SPC may (i) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without paying
any  processing  fee  therefor,  assign all or a portion of its interests in any
Loans to the Granting Lender or to any financial  institutions  (consented to by
the Borrower and Administrative Agent) providing liquidity and/or credit support
to or for the account of such SPC to support the funding or maintenance of Loans
and (ii) disclose on a confidential basis any non-public information relating to
its Loans to any rating  agency,  commercial  paper  dealer or  provider  of any
surety,  guarantee or credit or liquidity  enhancement to such SPC. This section
may not be amended without the written consent of the SPC.


<PAGE>


            SECTION 10.05. Expenses; Indemnity. (a) Alcoa agrees to pay or cause
one or more other Borrowers to pay all  out-of-pocket  expenses  incurred by the
Administrative  Agent in connection with the preparation of this Agreement or in
connection  with any  amendments,  modifications  or waivers  of the  provisions
hereof or thereof (whether or not the transactions  hereby contemplated shall be
consummated) or incurred by the Administrative Agent or any Lender in connection
with the  enforcement  of their rights in connection  with this  Agreement or in
connection  with the Loans  made  hereunder,  including  the fees,  charges  and
disbursements of Cravath,  Swaine & Moore, counsel for the Administrative Agent,
and,  in  connection  with  any  such   enforcement,   the  fees,   charges  and
disbursements of any other counsel for the  Administrative  Agent or any Lender.
Alcoa  further  agrees to  indemnify  or cause one or more  other  Borrowers  to
indemnify the Lenders from and hold them harmless against any documentary taxes,
assessments  or  charges  made by any  Governmental  Authority  by reason of the
execution and delivery of this Agreement.

            (b) Alcoa agrees to  indemnify or cause one or more other  Borrowers
to indemnify the Administrative  Agent, its Affiliates,  each Lender and each of
their  respective  directors,  officers,  employees and agents (each such person
being called an  "Indemnitee")  against,  and to hold or cause one or more other
Borrowers to hold each  Indemnitee  harmless from,  any and all losses,  claims,
damages,  liabilities and related expenses,  including  reasonable counsel fees,
charges  and  disbursements,  incurred by or  asserted  against  any  Indemnitee
arising out of, in any way  connected  with, or as a result of (i) the execution
or  delivery of this  Agreement  or any  agreement  or  instrument  contemplated
hereby,  the performance by the parties thereto of their respective  obligations
thereunder or the consummation of the transactions  contemplated  thereby,  (ii)
the  use  of  the  proceeds  of  the  Loans  or  (iii)  any  claim,  litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee,  be  available  to the extent  that such  losses,  claims,  damages,
liabilities  or  related  expenses  are  determined  by  a  court  of  competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee. The Administrative Agent and
each Lender  agrees to promptly  notify Alcoa of any claims  relating to clauses
(i), (ii) or (iii) of the next preceding sentence;  provided,  however, that any
failure to deliver any such notice shall not relieve Alcoa from its  obligations
under this paragraph (b).

            (c) The provisions of this Section 10.05 shall remain  operative and
in full  force  and  effect  regardless  of the  expiration  of the term of this
Agreement,  the  consummation  of  the  transactions  contemplated  hereby,  the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement,  or any  investigation  made by or on behalf of the
Administrative  Agent or Lender.  All amounts due under this Section 10.05 shall
be payable on written demand therefor.


<PAGE>


            SECTION  10.06.  Right of Setoff.  If an Event of Default shall have
occurred and be  continuing,  each Lender is hereby  authorized  at any time and
from time to time, to the fullest extent  permitted by law, to set off and apply
any and all deposits (general or special, time or demand,  provisional or final)
at any time held and other  indebtedness at any time owing by such Lender or its
Affiliates  to or for the credit or the account of any  Borrower  against any of
and all the  obligations of such Borrower (or, in the case of Alcoa,  any of and
all the obligations of any Borrowing Subsidiary) now or hereafter existing under
this Agreement held by such Lender,  irrespective  of whether or not such Lender
shall have made any demand under this  Agreement or otherwise  and although such
obligations  may be unmatured.  The rights of each Lender under this Section are
in addition to other  rights and  remedies  (including  other  rights of setoff)
which such Lender may have.

            SECTION 10.07.  Applicable Law.  THIS AGREEMENT  SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

            SECTION 10.08.  Waivers;  Amendment.  (a) No failure or delay of the
Administrative  Agent or any Lender in exercising  any power or right  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such  right or  power,  or any  abandonment  or  discontinuance  of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the  exercise  of any other  right or power.  The  rights  and  remedies  of the
Administrative  Agent  and the  Lenders  hereunder  are  cumulative  and are not
exclusive of any rights or remedies which they would  otherwise  have. No waiver
of any  provision of this  Agreement or consent to any departure by any Borrower
therefrom shall in any event be effective  unless the same shall be permitted by
paragraph (b) below,  and then such waiver or consent shall be effective only in
the specific  instance and for the purpose for which given.  No notice or demand
on any Borrower in any case shall entitle such Borrower to any further notice or
shall entitle such Borrower or any other Borrower to notice or demand in similar
or other circumstances.


<PAGE>


            (b) Neither this  Agreement nor any provision  hereof may be waived,
amended or modified  except  pursuant to an agreement or  agreements  in writing
entered into by the Borrowers and the Required Lenders; provided,  however, that
no such  agreement  shall (i)  decrease the  principal  amount of, or extend the
maturity of or any scheduled  principal  payment date or date for the payment of
any interest on any Loan or date fixed for payment of any Facility Fee, or waive
or excuse any such payment or any part thereof, or decrease the rate of interest
on any Loan,  without the prior written consent of each Lender affected thereby,
(ii) change or extend the Commitment or decrease the Facility Fees of any Lender
without  the prior  written  consent of such  Lender,  (iii) amend or modify the
provisions of Section 2.14,  the provisions of this Section or the definition of
"Required  Lenders",  without the prior  written  consent of each Lender or (iv)
amend,  modify or  otherwise  affect the rights or duties of the  Administrative
Agent hereunder without the prior written consent of such Agent. Each Lender and
each  assignee  thereof  shall be bound by any  waiver,  consent,  amendment  or
modification authorized by this Section.

            SECTION 10.09.  Interest Rate Limitation.  Notwithstanding  anything
herein to the contrary,  if at any time the applicable  interest rate,  together
with all fees and charges  which are treated as interest  under  applicable  law
(collectively  the  "Charges"),  as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or  reserved  by any Lender,  shall  exceed the  maximum  lawful rate (the
"Maximum  Rate")  which may be  contracted  for,  charged,  taken,  received  or
reserved by such Lender in accordance  with applicable law, the rate of interest
payable to such Lender,  together with all Charges payable to such Lender, shall
be limited to the Maximum Rate.

            SECTION 10.10.  Entire Agreement.  This Agreement and the Engagement
Letter  constitute  the entire  contract  between  the  parties  relative to the
subject matter hereof.  Any previous agreement among the parties with respect to
the subject  matter hereof is superseded  by this  Agreement and the  Engagement
Letter.  Nothing  in this  Agreement  or the  Engagement  Letter,  expressed  or
implied,  is intended to confer upon any party other than the parties hereto and
thereto any rights,  remedies,  obligations or liabilities under or by reason of
this Agreement or the Engagement Letter.


<PAGE>


            SECTION  10.11.  Waiver of Jury  Trial.  Each  party  hereto  hereby
waives, to the fullest extent permitted by applicable law, any right it may have
to a trial by jury in respect of any litigation  directly or indirectly  arising
out of,  under or in  connection  with this  Agreement.  Each  party  hereto (a)
certifies  that no  representative,  agent or  attorney  of any other  party has
represented,  expressly  or  otherwise,  that such other party would not, in the
event of litigation,  seek to enforce the foregoing  waiver and (b) acknowledges
that it and the other  parties  hereto  have  been  induced  to enter  into this
Agreement,  as  applicable,  by,  among  other  things,  the mutual  waivers and
certifications in this Section 10.11.

            SECTION  10.12.  Severability.  In the  event any one or more of the
provisions  contained  in this  Agreement  should be held  invalid,  illegal  or
unenforceable in any respect,  the validity,  legality and enforceability of the
remaining  provisions  contained  herein  and  therein  shall  not in any way be
affected  or  impaired  thereby.   The  parties  shall  endeavor  in  good-faith
negotiations to replace the invalid,  illegal or  unenforceable  provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

            SECTION 10.13.  Counterparts.  This Agreement may be executed in two
or more  counterparts,  each of which shall  constitute  an original  but all of
which when taken  together shall  constitute but one contract,  and shall become
effective as provided in Section 10.03.

            SECTION 10.14. Headings.  Article and Section headings and the Table
of Contents used herein are for  convenience of reference  only, are not part of
this  Agreement and are not to affect the  construction  of, or to be taken into
consideration in interpreting, this Agreement.


<PAGE>


            SECTION 10.15. Jurisdiction, Consent to Service of Process. (a) Each
Borrower hereby  irrevocably  and  unconditionally  submits,  for itself and its
property,  to the  nonexclusive  jurisdiction  of any New  York  State  court or
Federal court of the United States of America  sitting in New York City, and any
appellate court from any thereof,  in any action or proceeding arising out of or
relating to this  Agreement,  or for recognition or enforcement of any judgment,
and each of the parties hereto hereby  irrevocably  and  unconditionally  agrees
that all  claims in respect of any such  action or  proceeding  may be heard and
determined  in such New York State or, to the extent  permitted  by law, in such
Federal  court.  Each of the parties  hereto agrees that a final judgment in any
such  action or  proceeding  shall be  conclusive  and may be  enforced in other
jurisdictions  by suit on the judgment or in any other  manner  provided by law.
Nothing in this  Agreement  shall affect any right that any Lender may otherwise
have to bring any action or proceeding  relating to this  Agreement  against any
Borrower or its properties in the courts of any jurisdiction.

            (b) Each Borrower hereby irrevocably and unconditionally  waives, to
the fullest extent it may legally and  effectively do so, any objection which it
may now or  hereafter  have to the  laying  of  venue  of any  suit,  action  or
proceeding arising out of or relating to this Agreement in any New York State or
Federal court.  Each of the parties  hereto hereby  irrevocably  waives,  to the
fullest  extent  permitted by law, the defense of an  inconvenient  forum to the
maintenance of such action or proceeding in any such court.

            (c) Each party to this Agreement  irrevocably consents to service of
process in the manner  provided  for notices in Section  10.01.  Nothing in this
Agreement  will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

            SECTION 10.16. Conversion of Currencies.  (a) If, for the purpose of
obtaining  judgment in any court, it is necessary to convert a sum due hereunder
in dollars into  another  currency,  the parties  hereto  agree,  to the fullest
extent that they may legally  and  effectively  do so, that the rate of exchange
used shall be that at which in accordance  with normal  banking  procedures  the
Administrative Agent could purchase dollars with such other currency in The City
of New York,  on the Business Day  immediately  preceding the day on which final
judgment is given.


<PAGE>


            (b) The obligation of each Borrower in respect of any sum due to any
Lender  hereunder in dollars shall,  to the extent  permitted by applicable law,
notwithstanding  any judgment in a currency  other than  dollars,  be discharged
only to the  extent  that  on the  Business  Day  following  receipt  of any sum
adjudged to be so due in the  judgment  currency  such Lender may in  accordance
with normal banking procedures  purchase dollars in the amount originally due to
such Lender with the judgment currency. If the amount of dollars so purchased is
less than the sum  originally  due to such Lender,  such Borrower  agrees,  as a
separate  obligation and  notwithstanding  any such judgment,  to indemnify such
Lender against the resulting loss.


<PAGE>


      IN WITNESS WHEREOF, the Borrower, the Administrative Agent and the Lenders
have caused this  Agreement to be duly executed by their  respective  authorized
officers as of the day and year first above written.

                              ALCOA INC.,

                                by
                                  /s/  Robert G. Wennemer
                                  Name: Robert G. Wennemer
                                  Title:Vice President and
                                           Treasurer

                              THE CHASE MANHATTAN BANK,
                              individually and as
                              Administrative Agent,

                                by
                                  /s/ James H. Ramage
                                  Name: James H. Ramage
                                  Title: Managing Director

                              ABN AMRO BANK N.V.,

                                by
                                  /s/ Andre Neil
                                  Name: Andre Neil
                                  Title: Senior Vice President

                                by

                                  /s/ Helen Clarke-Hepp
                                  Name: Helen Clarke-Hepp
                                  Title: Asst. Vice President



                              AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED,

                                by
                                  /s/ Peter N. Gray
                                  Name: Peter N. Gray
                                  Title: Director-Natural Resources


<PAGE>


                              BANCO BILBAO VIZCAYA ARGENTARIA, S.A.,

                                by
                                  /s/ Manuel Sanchez
                                  Name: Manuel Sanche
                                  Title: Global Rel. Manager
                                         Corporate Banking

                                by
                                  /s/ John Martini
                                  Name: John Martini
                                  Title: Vice President
                                         Corporate Banking

                              BANK OF AMERICA, N.A.,

                                by
                                  /s/ Bianca Hemmen
                                  Name: Bianca Hemmen
                                  Title: Managing Director

                              BANK OF MONTREAL,

                                by
                                 /s/ Ian Plester
                                 Name: Ian Plester
                                 Title: Director

                              BANK ONE, N.A.,

                                by
                                  /s/  William J. McCaffrey
                                  Name: William J. McCaffrey
                                  Title: First Vice President

                              CITIBANK, N.A.,

                                by
                                  /s/  Raymond G. Dunning
                                  Name: Raymond G. Dunning
                                  Title: Managing Director
                                         As Attorney in Fact


<PAGE>


                          COMMERZBANK AG, New York and
                          Grand Cayman Branches,

                                by
                                  /s/  Robert S. Taylor, Jr.
                                  Name: Robert S. Taylor, Jr.
                                  Title: Senior Vice President

                                by
                                  /s/ Andrew P. Lusk
                                  Name: Andrew P. Lusk
                                  Title: Assistant Treasurer

                              CREDIT SUISSE FIRST BOSTON,

                                by
                                 /s/ Thomas G. Muoio
                                 Name: Thomas G. Muoio
                                 Title:Vice President

                                by
                                 /s/ Vitaly G. Butenko
                                 Name: Vitaly G. Butenko
                                 Title: Asst. Vice President


                             DEUTSCHE BANK AG NEW YORK BRANCH
                             and/or CAYMAN ISLANDS BRANCH,

                                by
                                 /s/ Oliver Schwartz
                                 Name: Oliver Schwartz
                                 Title: Vice President

                                by
                                 /s/ Hans-Josef Thiele
                                 Name: Hans-Josef Thiele
                                 Title: Director

                              MELLON BANK, N.A.,

                                by
                                 /s/ Edward L. McGrath
                                 Name: Edward L. McGrath
                                 Title: Vice President


<PAGE>




                              MORGAN GUARANTY TRUST COMPANY OF NEW YORK,

                                by
                                  /s/ Dennis Wilczek
                                  Name: Dennis Wilczek
                                  Title: Associate

                              NATIONAL AUSTRALIA BANK LTD.,

                                by
                                  /s/ Bill Schmid
                                  Name: Bill Schmid
                                  Title: Vice President

                              SANPAOLO IMI S.p.A,

                                by
                                  /s/  Giuseppe Cuccurese
                                  Name: Giuseppe Cuccurese
                                  Title: Executive Vice
                                         President & Group
                                         Manager

                             BANK OF TOKYO-MITSUBISHI TRUST COMPANY,

                                by
                                  /s/ Mark O'Connor
                                  Name: Mark O'Connor
                                  Title:Vice President


<PAGE>




                                                              EXHIBIT A
                                                    TO CREDIT AGREEMENT

                                [FORM OF]

                        ASSIGNMENT AND ACCEPTANCE

     Reference is made to the 364-Day  Revolving  Credit  Agreement  dated as of
April 28, 2000 (as amended  from time to time,  the "Credit  Agreement"),  among
Alcoa Inc. ("Alcoa"), a Pennsylvania corporation, certain subsidiaries of Alcoa,
the Lenders,  and The Chase Manhattan Bank, as the Administrative  Agent for the
Lenders.  Terms  defined in the Credit  Agreement  are used herein with the same
meanings.

     1.  The  Assignor  hereby  sells  and  assigns,  without  recourse,  to the
Assignee, and the Assignee hereby purchases and assumes,  without recourse, from
the Assignor,  effective as of the  Assignment  Effective  Date set forth on the
reverse  hereof,  the interests set forth on the reverse  hereof (the  "Assigned
Interest") in the Assignor's  rights and obligations under the Credit Agreement,
including,  without limitation, the Commitment of the Assignor on the Assignment
Effective Date and the Loans owing to the Assignor which are  outstanding on the
Assignment Effective Date, together with unpaid interest accrued on the assigned
Loans to the Assignment  Effective Date and the amount, if any, set forth on the
reverse  hereof of the Fees  accrued to the  Assignment  Effective  Date for the
account of the Assignor.  Each of the Assignor and the Assignee hereby makes and
agrees to be bound by all the  representations,  warranties  and  agreements set
forth in  Section  10.04(c)  of the Credit  Agreement,  a copy of which has been
received by each such party.  From and after the  Assignment  Effective Date (i)
the Assignee  shall be a party to and be bound by the  provisions  of the Credit
Agreement  and, to the extent of the interests  assigned by this  Assignment and
Acceptance,  have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall,  to the extent of the interests  assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement.


<PAGE>
                                                                               3

     2. This Assignment and Acceptance is being delivered to the  Administrative
Agent  together with (i) if the Assignee is a Lender and is organized  under the
laws of a jurisdiction outside the United States, the forms specified in Section
2.18(g) of the Credit  Agreement,  duly completed and executed by such Assignee,
(ii) if the  Assignee is not  already a Lender  under the Credit  Agreement,  an
Administrative  Questionnaire  in the form of Exhibit B to the Credit  Agreement
and (iii) a processing and recordation fee of $2,500.

     3. This  Assignment  and  Acceptance  shall be governed by and construed in
accordance with the laws of the State of New York.



<PAGE>


Date of Assignment:

Legal Name of Assignor:

Legal Name of Assignee:

Assignee's Address for Notices:



<PAGE>


Assignment Effective Date of Assignment (may
not be fewer than 5 Business Days
after the Date of Assignment):


<PAGE>


                                      Percentage Assigned of Applicable
                                      Facility/Commitment(set forth, to

                                          at least 8 decimals, as a
                                        percentage of the Facility and
    Facility/          Principal         the aggregate Commitments of
    Commitment      Amount Assigned        all Lenders thereunder)


Commitment          $                                  %

Loan:               $                                  %

Fees Assigned (if
any):               $                                  %



<PAGE>


            The terms set forth above and on the reverse  side hereof are hereby
agreed to:


<PAGE>



                                   Accepted*/

_______________, as Assignor      ALCOA INC.,




                                          by:______________________
by:_________________________              Name:
Name:                                     Title:
Title:



<PAGE>



_______________, as Assignee              THE CHASE MANHATTAN BANK




by:_________________________              by:______________________
Name:                                     Name:
Title:                                    Title:




<PAGE>

- ---------
*/ To be completed to the extent consents are required under Section 10.04(b) of
the Credit Agreement.


<PAGE>


                                                              EXHIBIT B
                                                    TO CREDIT AGREEMENT


                          ADMINISTRATIVE QUESTIONNAIRE

                                   ALCOA INC.

Please accurately  complete the following  information and return via FAX to the
attention  of Linda  Hill  (212)  552-7935  at Chase  Manhattan  Bank as soon as
possible.

PHONE NUMBER:                  FAX NUMBER:

LEGAL NAME OF LENDER (TO APPEAR ON THE SIGNATURE LINE IN DOCUMENTATION):


GENERAL INFORMATION - DOMESTIC LENDING OFFICE:

   Institution Name:____________________________

   Street Address:____________________________

   City, State, Zip Code:____________________________

GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:

   Institution Name:   ____________________________

   Street Address:  ____________________________

   City, State, Zip Code:____________________________

TAX WITHHOLDING:

   Non-Resident Alien:_____ Yes*   ______ No*

   *Form 4224 Enclosed

   Tax ID Number:____________________________

CONTACTS/NOTIFICATION METHODS:

   CREDIT CONTACTS:

   Primary Contact:____________________________

   Street Address:____________________________

   City, State, Zip Code:____________________________

   Phone Number:____________________________


<PAGE>


                                                                               5

   FAX Number:____________________________

   Backup Contact:____________________________

   Street Address:____________________________

   City, State, Zip Code:      __________________________

   Phone Number:____________________________

   FAX Number:____________________________

   ADMINISTRATIVE CONTACTS - BORROWING, PAYMENTS, INTEREST, ETC...

   Contact(s):____________________________

   Street Address:____________________________

   City, State, Zip Code:____________________________

   Phone Number:____________________________

   FAX Number:____________________________

ACCOUNT  INFORMATION - Please provide only one set of instructions for all types
of payments:

   Name of Bank where funds are to be transferred:

   --------------------------------------------------

   Routing Transit/ABA number of Bank where funds are to be transferred:

   --------------------------------------------------

   Name of Account:____________________________

   Account Number:____________________________

   Additional Information:___________________________

                          ___________________________

It is very important that all of the above  information is accurately  filled in
and  promptly  returned.  If there is  someone  other than  yourself  who should
receive this questionnaire, please notify us of their name and FAX number and we
will FAX them a copy of the questionnaire.


<PAGE>



                                                                    EXHIBIT C
                                                          TO CREDIT AGREEMENT

                                [Letterhead of]

                                     ALCOA

April 28, 2000


The  Chase  Manhattan  Bank,  as  Agent  and  each of the  Lenders  party to the
Agreement referred to below 270 Park Avenue

New York, NY  10017


Ladies and Gentlemen:

I am Secretary and a Senior Counsel of Alcoa Inc. ("Alcoa") and in such capacity
have represented Alcoa in connection with the 364-Day Revolving Credit Agreement
dated as of April 28, 2000 (the "Agreement"),  among Alcoa, certain subsidiaries
of Alcoa, the Lenders and The Chase Manhattan Bank, as the Administrative Agent.
This  opinion is rendered to you pursuant to Section  4.01(a) of the  Agreement.
Capitalized  terms used but not defined herein shall have the meanings  assigned
to them in the Agreement.

In rendering the opinion expressed below, I have examined,  either personally or
indirectly  through  lawyers  who report to me or  through  other  counsel,  the
originals  or  conformed  copies  of  such  corporate  records,  agreements  and
instruments of Alcoa and its Subsidiaries,  certificates of public officials and
of officers of Alcoa and its Subsidiaries,  and such other documents and records
as I have deemed appropriate as a basis for the opinions hereinafter expressed.

Based upon the foregoing and subject to the  qualifications  stated herein, I am
of the opinion that:

1. Alcoa is a corporation duly organized,  validly existing and in good standing
under the laws of the  Commonwealth of Pennsylvania  and is duly qualified to do
business  as a  foreign  corporation  and  is in  good  standing  in  all  other
jurisdictions  in which the  ownership  of its  properties  or the nature of its
activities or both makes such qualification necessary, except to the extent that
failure to be so qualified would not result in a Material Adverse Effect.


<PAGE>


                                                                               3

2. Alcoa has corporate power and authority to execute, deliver and carry out the
provisions  of the  Agreement,  to borrow under the Agreement and to perform its
obligations  thereunder and all such action has been duly and validly authorized
by all necessary corporate proceedings on its part.

3. The Agreement  has been duly executed and delivered by Alcoa and  constitutes
the legal,  valid and binding  obligation of Alcoa enforceable  against Alcoa in
accordance with its terms, except as limited by bankruptcy,  insolvency or other
similar laws of general  application  affecting  the  enforcement  of creditors'
rights or by general principles of equity limiting the availability of equitable
remedies.

4. No authorization,  consent, approval,  license, exemption or other action by,
and no registration, qualification, designation, declaration or filing with, any
Government  Authority is  necessary in  connection  with Alcoa's  execution  and
delivery  of the  Agreement,  the  consummation  by  Alcoa  of the  transactions
contemplated  therein or Alcoa's performance of or compliance with the terms and
conditions thereof, except as set forth on Schedule 3.04 to the Agreement.

5. The execution and delivery by Alcoa of the  Agreement,  the  consummation  by
Alcoa of the  transactions  contemplated  thereby or  performance by Alcoa of or
compliance  with the terms and conditions  thereof will not (a) violate any law,
constitution,  statute, treaty, regulation,  rule, ordinance, order, injunction,
writ, decree or award of any Governmental  Authority to which it is subject, (b)
conflict with or result in a breach or default under its charter or by-laws, (c)
to the best of my  knowledge,  conflict  with or result  in a breach or  default
which is  material  in the  context  of the  Agreement  under any  agreement  or
instrument  to which  Alcoa is a party or by which it or any of its  properties,
whether now owned or hereafter  acquired,  may be subject or bound or (d) result
in the  creation or  imposition  of any Lien  prohibited  by Section 6.01 of the
Agreement  upon any property or assets of Alcoa,  whether now owned or hereafter
acquired.

6. Except as set forth in the financial  statements  referred to in Section 3.06
of the  Agreement,  any Exchange  Act Report or otherwise  disclosed on Schedule
3.08 to the  Agreement,  there is no  pending  or, to my  knowledge,  threatened
proceeding by or before any Governmental  Authority  against Alcoa or any of its
Subsidiaries  which in my  opinion  is likely to  result in a  Material  Adverse
Effect.


<PAGE>


7. Alcoa is not an "investment  company" as defined in, or subject to regulation
under,  the Investment  Company Act of 1940, and Alcoa is exempted as a "holding
company" as defined in the Public Utility Holding Company Act of 1935.

I am a member of the bar of the  Commonwealth of Pennsylvania  and my opinion is
limited  to the laws of the  Commonwealth  of  Pennsylvania  and the laws of the
United  States of  America.  I express no  opinion  herein as to whether a court
would apply New York law to any particular  subject matter hereof. To the extent
that the laws of the  State of New York or,  contrary  to the  agreement  of the
parties, the laws of any other State govern the documents referenced herein, you
may rely on my opinion  with respect to such laws to the extent that the laws of
such state or states are  substantially the same as the laws of the Commonwealth
of Pennsylvania, as to which sameness I express no opinion.

                                        Very truly yours,



                                        Denis A. Demblowski


<PAGE>



                                                                    EXHIBIT D
                                                          TO CREDIT AGREEMENT

[FORM OF]

                      DESIGNATION OF BORROWING SUBSIDIARY

        Reference is made to the 364-Day  Revolving Credit Agreement dated as of
April 28, 2000 (as amended  from time to time,  the "Credit  Agreement"),  among
Alcoa Inc. ("Alcoa"), a Pennsylvania corporation, certain subsidiaries of Alcoa,
the Lenders and The Chase  Manhattan Bank, as the  Administrative  Agent for the
Lenders.  Terms  defined in the Credit  Agreement  are used herein with the same
meanings.

        1. Alcoa hereby  designates [ ], a [ ] corporation  (the  "Subsidiary"),
effective as of [ ], 20[ ] (the "Designation  Date"), as a Borrowing  Subsidiary
under the Credit  Agreement.  The Subsidiary hereby makes and agrees to be bound
by all the representations,  warranties and agreements set forth in Article III,
V and VI of the  Credit  Agreement.  From and after the  Designation  Date,  the
Subsidiary  shall  become a party to the  Credit  Agreement  and shall  have the
rights and obligations of a Borrowing Subsidiary  thereunder.  Alcoa agrees that
its guarantee  pursuant to Article VIII of the Credit  Agreement  shall apply to
the Borrowings of the Subsidiary.

        2. This  Designation of Borrowing  Subsidiary is being  delivered to the
Administrative Agent together with the documents set forth in Section 4.03(a).

        3.  This Designation of Borrowing Subsidiary shall be governed by and
construed in accordance with the laws of the State of New York.

        The terms set forth above are hereby agreed to:


<PAGE>


                      [                       ], as Subsidiary,

                        by

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


                      ALCOA INC.,

                        by

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


Accepted:

THE CHASE MANHATTAN BANK, as the Administrative Agent

  by

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


<PAGE>



                                                                SCHEDULE 2.01



                                   Contact Person
       Name and Address            and Telephone
        of the Lenders           and Telecopy Numbers    Commitment (U.S.$)
        --------------           --------------------    ------------------



The Chase Manhattan Bank       James Ramage                   $234,375,000.00
270 Park Avenue                Tel:  212-270-1373
New York, NY  10017            Fax:  212-270-4724

- ------------------------------------------------------------------------------

ABN AMRO Bank, N.V.            Evelyn Lazala                  $187,500,000.00
500 Park Avenue                Tel:  212-446-4269
New York, NY 10022             Fax:  212-446-4237
- ------------------------------------------------------------------------------

Australian & New Zealand Bkg.  Peter Gray                     $125,000,000.00
Group                          Tel: 212-801-9739
1177 Ave. of the Americas      Fax: 212-536-9233
New York, NY  10036
- ------------------------------------------------------------------------------

Banco Bilbao Vizcaya           Miguel Lara                     $57,500,000.00
Argentaria, S.A.               Tel:  212-728-1664
1345 Avenue of The Americas    Fax:  212-333-2904
New York, NY 10105
- ------------------------------------------------------------------------------

Bank of America, N.A.          Amy Kravocheck                 $187,500,000.00
901 Main St., 67th Flr.        Tel: 214-209-0193
Dallas, TX  75202              Fax: 214-209-0980
- ------------------------------------------------------------------------------

Bank of Montreal               Ian Plester                     $57,500,000.00
430 Park Avenue                Tel: 212-605-1417
New York, NY 10022             Fax: 212-605-1451
- ------------------------------------------------------------------------------

Bank of                        Mark O'Connor                   $62,500,000.00
Tokyo-Mitsubishi Trust Company Tel: 212-782-4717
1251 Avenue of the Americas    Fax: 212-782-6440
New York, NY 10022
- ------------------------------------------------------------------------------

Bank One, Michigan             William McCaffrey              $125,000,000.00
611 Woodward Ave.,             Tel: 313-225-3444
2nd Flr.                       Fax: 313-225-1212
Detroit, MI  48226
- ------------------------------------------------------------------------------

Citibank, N.A.                 Ray Dunning                    $234,375,000.00
399 Park Avenue                Tel: 212-559-1034
New York, NY 10043             Fax: 212-832-9857
- ------------------------------------------------------------------------------

COMMERZBANK AG,                Robert Taylor                  $187,500,000.00
2 World Financial Center       Tel: 212-266-7501
New York, NY 10281-1050        Fax: 212-266-7594

- ------------------------------------------------------------------------------

Credit Suisse First Boston     Tom Muoio                      $234,375,000.00
11 Madison Ave.,               Tel:  212-325-9098
20th Flr.                      Fax:  212-325-8319
New York, NY 10010
- ------------------------------------------------------------------------------

Deutsche Bank AG               Wolf-D Knigge                  $187,500,000.00
31 West 52nd Street, 24th      Tel:  212-469-8625
Floor                          Fax:  212-469-2930
New York, NY 10019
- ------------------------------------------------------------------------------

Mellon Bank, N.A.              Robert Reichenbach             $187,500,000.00
One Mellon Bank Center         Tel:  412-236-0567
Pittsburgh, PA                 Fax:  412-234-8888
15258-0001
- ------------------------------------------------------------------------------

Morgan Guaranty Trust Company  Dennis Wilzcek                 $234,375,000.00
of New York                    Tel:  212-648-1265
60 Wall Street                 Fax:  212-648-5018
New York, NY 10260
- ------------------------------------------------------------------------------

National Australia Bank Ltd.   Bill Schmid                    $125,000,000.00
200 Park Ave., 34th Flr.       Tel:  212-916-9596
New York, NY  10166            Fax:  212-983-1969
- ------------------------------------------------------------------------------

SanPaolo IMI S.p.A             Luca Sacchi                     $62,500,000.00
245 Park Ave., 35th Flr.       Tel: 212-692-3130
New York, NY  10167            Fax: 212-599-5303
- ------------------------------------------------------------------------------

                                        Total:              $2,490,000,000.00
                                                            =================
- ------------------------------------------------------------------------------



<PAGE>



                                                                SCHEDULE 3.04


                             Government Approvals

International Capital Form S filed with the Federal Reserve Bank of New York.


<PAGE>



                                                                SCHEDULE 3.08






                                  Litigation

                                     None.


<PAGE>




                                                             SCHEDULE 6.01(a)



                                     Liens

Liens related to the following tax-exempt municipal bond (and other) issues:

Saline County, Arkansas                    1999                      4,650,000
St. Lawrence County, New York              Series A 1999             9,640,000
Milam County, Texas                        Series 1999              16,855,000
Indiana Development Finance
 Authority                                 Series 1999              13,905,000
St. Lawrence County, New York              Series A 1998            22,800,000
Yankton, South Dakota                      Series 1997               9,000,000
Hutchinson, Kansas HUD UDAG Loan           1996                        399,301
Berkeley County, South Carolina            Series 1996              27,450,000
St. Louis, Missouri                        Series 1992               4,840,000
Frederick County, Maryland                 Series 1992               9,880,000
Warrick County, Indiana                    Series 1992              12,475,000
Blount County, Tennessee                   Series 1992               2,450,000
Lebanon County, Pennsylvania               Series 1992               1,020,000
Lebanon County, Pennsylvania               Series 1992               1,000,000
Grayson County, Texas                      Series 1992               9,000,000
Milam County, Texas                        Series 1995              11,000,000
Calhoun Cunty Navigation District, Texas

                                           Series 1995               7,700,000
State of Ohio                              Series 1996               2,150,000
Chelan County, Washington                  Series 1995              14,000,000
Vidalia, Louisiana                         Series 1995              10,000,000
Tifton, Georgia                            Series 1996              10,000,000
Frederick County, Maryland                 Series 1978               2,145,000
Saline County, Arkansas                    Series 1977                 900,000
St. Lawrence County, New York              Series 1977                 900,000
Blount County, Tennessee                   Series 1977               2,010,000

                   TOTAL                                          $206,169,301
                                                                  ------------


<PAGE>


Leased Equipment:
Alcoa Manufacturing (G.B.) Limited                                 $7,818,701
Shibazaki Seisakusho Limited                                        1,968,659
Alumax Europe N.V.        3,562
Alcoa Transformacion S.A.                                             $34,977

                       TOTAL                                        9,825,899
                                                                    ---------


Mortgages and Capital Leases:
Alcoa Inc.                                         $32,865,442
Alcoa Automotive Castings                               15,179
A-CMI                                                              15,520,000

                   TOTAL              $48,400,621
                                       ----------


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>7
<FILENAME>0007.txt
<TEXT>


                                                                   EXHIBIT 10(t)


                                                          CONFORMED COPY















                       REVOLVING CREDIT AGREEMENT

                               (Five-Year)

                       Dated as of April 28, 2000


                                  Among

                               ALCOA INC.,

                        THE LENDERS NAMED HEREIN,

                MORGAN GUARANTY TRUST COMPANY OF NEW YORK,

                          as Syndication Agent,

             CITIBANK, N.A. and CREDIT SUISSE FIRST BOSTON,

                        as Documentation Agents,

                        THE CHASE MANHATTAN BANK,

                      as Administrative Agent, and

                         CHASE SECURITIES INC.,

                    as Lead Arranger and Book Manager


<PAGE>



                            TABLE OF CONTENTS

                                                                            Page

ARTICLE I.  DEFINITIONS AND CONSTRUCTION

      SECTION 1.01.  Defined Terms.....................................1
      SECTION 1.02.  Terms Generally; Accounting
                          Principles..................................16


ARTICLE II.  THE CREDITS

      SECTION 2.01.  Commitments......................................17
      SECTION 2.02.  Loans............................................17
      SECTION 2.03.  Notice of Borrowings.............................19
      SECTION 2.04.  Evidence of Debt; Repayment
                          of Loans....................................20
      SECTION 2.05.  Fees.............................................21
      SECTION 2.06.  Interest on Loans................................22
      SECTION 2.07.  Default Interest.................................22
      SECTION 2.08.  Alternate Rate of Interest.......................22
      SECTION 2.09.  Termination and Reduction of
                          Commitments.................................23
      SECTION 2.10.  Refinancings.....................................24
      SECTION 2.11.  Prepayment.......................................24
      SECTION 2.12.  Reserve Requirements;
                          Change in Circumstances.....................25
      SECTION 2.13.  Change in Legality...............................27
      SECTION 2.14.  Indemnity........................................28
      SECTION 2.15.  Pro Rata Treatment...............................29
      SECTION 2.16.  Sharing of Setoffs...............................29
      SECTION 2.17.  Payments.........................................30
      SECTION 2.18.  Taxes............................................30
      SECTION 2.19.  Assignment of Commitments Under Certain ...........
                          Circumstances...............................34


ARTICLE III.  REPRESENTATIONS AND WARRANTIES

      SECTION 3.01.  Organization.....................................35
      SECTION 3.02.  Authorization....................................35
      SECTION 3.03.  Enforceability...................................35
      SECTION 3.04.  Governmental Approvals...........................35
      SECTION 3.05.  No Conflict......................................36
      SECTION 3.06.  Financial Statements.............................36
      SECTION 3.07.  No Defaults......................................36
      SECTION 3.08.  Litigation.......................................37
      SECTION 3.09.  No Material Adverse Change.......................37
      SECTION 3.10.  Employee Benefit Plans...........................37
      SECTION 3.11.  Title to Properties; Possession
                          Under Leases................................38
      SECTION 3.12.  Investment Company Act; Public Utility   ..........
                          Holding Company Act.........................39
      SECTION 3.13.  Tax Returns......................................39
      SECTION 3.14.  Compliance with Laws and Agreements..............39
      SECTION 3.15.  No Material Misstatements........................40
      SECTION 3.16.  Federal Reserve Regulations......................40
      SECTION 3.17.  No Trusts........................................40
      SECTION 3.18.  Year 2000 Computer Systems
                          Compliance..................................40


ARTICLE IV. CONDITIONS OF EFFECTIVENESS, LENDING AND DESIGNATION OF BORROWING
                  SUBSIDIARIES

      SECTION 4.01.  Effective Date...................................41
      SECTION 4.02.  All Borrowings...................................43
      SECTION 4.03.  Designation of Borrowing
                          Subsidiaries................................44


ARTICLE V.  AFFIRMATIVE COVENANTS
      SECTION 5.01.  Financial Statements, Reports, etc...............45
      SECTION 5.02.  Pari Passu Ranking...............................46
      SECTION 5.03.  Maintenance of Properties........................46
      SECTION 5.04.  Obligations and Taxes............................47
      SECTION 5.05.  Insurance........................................47
      SECTION 5.06.  Existence; Businesses and
                          Properties..................................47
      SECTION 5.07.  Compliance with Laws.............................47
      SECTION 5.08.  Litigation and Other Notices.....................49
      SECTION 5.09.  Borrowing Subsidiaries...........................49


ARTICLE VI.  NEGATIVE COVENANTS

      SECTION 6.01.  Liens............................................49
      SECTION 6.02.  Consolidation, Merger,
                          Sale of Assets, etc.........................51
      SECTION 6.03.  Financial Undertaking............................51
      SECTION 6.04.  Change in Business...............................52


ARTICLE VII.  EVENTS OF DEFAULT

ARTICLE VIII.  GUARANTEE


ARTICLE IX.  THE ADMINISTRATIVE AGENT


ARTICLE X.  MISCELLANEOUS

      SECTION 10.01.  Notices.........................................62
      SECTION 10.02.  Survival of Agreement...........................63
      SECTION 10.03.  Binding Effect..................................63
      SECTION 10.04.  Successors and Assigns; Additional
                           Borrowing Subsidiaries.....................64
      SECTION 10.05.  Expenses; Indemnity.............................68
      SECTION 10.06.  Right of Setoff.................................69
      SECTION 10.07.  Applicable Law..................................70
      SECTION 10.08.  Waivers; Amendment..............................70
      SECTION 10.09.  Interest Rate Limitation........................71
      SECTION 10.10.  Entire Agreement................................71
      SECTION 10.11.  Waiver of Jury Trial............................71
      SECTION 10.12.  Severability....................................72
      SECTION 10.13.  Counterparts....................................72
      SECTION 10.14.  Headings........................................72
      SECTION 10.15.  Jurisdiction, Consent to Service of
                           Process....................................72
      SECTION 10.16.  Conversion of Currencies........................73



<PAGE>


                                                                  Contents, p. 5

                                                                            Page


<PAGE>




References

Exhibit A               Assignment and Acceptance
Exhibit B               Administrative Questionnaire
Exhibit C               Form of Opinion of Counsel
Exhibit D               Designation of Borrowing Subsidiary

Schedule 2.01           Lenders and Commitments
Schedule 3.04           Governmental Approvals
Schedule 3.08           Litigation
Schedule 6.01(a)        Existing Liens


<PAGE>






                        FIVE-YEAR  REVOLVING  CREDIT AGREEMENT dated as of April
                  28, 2000 (as the same may be amended, modified or supplemented
                  from time to time,  the  "Agreement"),  among  ALCOA  INC.,  a
                  Pennsylvania corporation ("Alcoa"), the Lenders (such term and
                  each other capitalized term used but not defined herein having
                  the  meaning   ascribed  thereto  in  Article  I),  THE  CHASE
                  MANHATTAN   BANK,   a  New  York   banking   corporation,   as
                  Administrative  Agent for the  Lenders,  and CHASE  SECURITIES
                  INC., as Lead Arranger and Book Manager.

            Alcoa and the Borrowing  Subsidiaries  have requested the Lenders to
extend  credit in order to enable them,  subject to the terms and  conditions of
this  Agreement,  to borrow on a revolving  basis,  at any time and from time to
time prior to the  Maturity  Date,  an  aggregate  principal  amount at any time
outstanding not in excess of US$510,000,000. The proceeds of such borrowings are
to be used to provide working capital and for other general corporate  purposes,
including but not limited to the support of Alcoa's  commercial  paper  program.
The  Lenders  are  willing  to extend  such  credit  to Alcoa and the  Borrowing
Subsidiaries on the terms and subject to the conditions set forth herein.

            Accordingly, the Borrowers, the Lenders and the Administrative Agent
agree as follows:

ARTICLE I.  DEFINITIONS AND CONSTRUCTION

            SECTION 1.01.  Defined Terms.  As used in this Agreement, the
following terms shall have the meanings set forth below:

            "ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.

            "ABR Loan" shall mean any Loan bearing interest at a rate determined
by reference to the  Alternate  Base Rate in accordance  with the  provisions of
Article II.


<PAGE>



            "Administrative  Agent" shall mean The Chase  Manhattan  Bank, a New
York  banking  corporation,  in its  capacity  as  administrative  agent for the
Lenders hereunder.

            "Administrative   Questionnaire"   shall   mean  an   Administrative
Questionnaire in the form of Exhibit B.

            "Affiliate"  shall  mean,  when used  with  respect  to a  specified
person,  another  person  that  directly,  or  indirectly  through  one or  more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified.


<PAGE>


            "Alternate  Base  Rate"  shall  mean,  for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds  Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the rate of interest per
annum publicly  announced from time to time by the  Administrative  Agent as its
prime rate in effect at its  principal  office in New York City;  each change in
the Prime Rate shall be effective on the date such change is publicly  announced
as being effective.  "Base CD Rate" shall mean the sum of (a) the product of (i)
the  Three-Month  Secondary  CD Rate and  (ii)  Statutory  Reserves  and (b) the
Assessment  Rate.  "Three-Month  Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month  certificates of deposit reported as being
in effect on such day (or,  if such day shall not be a  Business  Day,  the next
preceding  Business Day) by the Board through the public  information  telephone
line of the Federal Reserve Bank of New York (which rate will, under the current
practices  of the Board,  be published in Federal  Reserve  Statistical  Release
H.l5(519)  during the week following such day), or, if such rate shall not be so
reported on such day or such next  preceding  Business  Day,  the average of the
secondary  market  quotations for three month  certificates  of deposit of major
money center banks in New York City received at  approximately  10:00 a.m.,  New
York City time, on such day (or, if such day shall not be a Business Day, on the
next  preceding  Business Day) by the  Administrative  Agent from three New York
City negotiable  certificate of deposit dealers of recognized  standing selected
by it.  "Federal  Funds  Effective  Rate" shall mean,  for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal  Reserve System  arranged by Federal funds brokers,  as published on the
next  succeeding  Business Day by the Federal  Reserve Bank of New York,  or, if
such rate is not so published  for any day which is a Business  Day, the average
of  the   quotations  for  the  day  of  such   transactions   received  by  the
Administrative  Agent from three Federal  funds  brokers of recognized  standing
selected by it. If for any reason the Administrative Agent shall have determined
(which  determination  shall be  conclusive  absent  manifest  error) that it is
unable to ascertain the Base CD Rate or the Federal Funds Effective Rate or both
for any reason,  including the inability of the  Administrative  Agent to obtain
sufficient  quotations in accordance with the terms thereof,  the Alternate Base
Rate shall be  determined  without  regard to clause (b) or (c), or both, of the
first  sentence of this  definition,  as  appropriate,  until the  circumstances
giving rise to such inability no longer exist.  Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds  Effective  Rate shall be effective on the effective  date of such
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate, respectively.

            "Applicable Margin" shall mean, with respect to the Eurodollar Loans
comprising any Borrowing,  the applicable  percentage set forth below based upon
the ratings by S&P and Moody's applicable on such date to the Index Debt:

            Category 1                    Percentage
            ----------                    ----------

             AA-/Aa3                        .1150%
            or above

            Category 2

              A+/A1                         .1250%

            Category 3

              A/A2                          .1225%

            Category 4

              A-/A3                         .1300%



<PAGE>


            Category 5

             BBB/Baa2                       .2000%

            Category 6

             BBB-/Baa3                      .2500%
             or below

            For purposes of the foregoing,  (i) if neither Moody's nor S&P shall
have in  effect a  rating  for any  Index  Debt  (other  than by  reason  of the
circumstances  referred to in the last sentence of this  definition),  then both
such rating agencies shall be deemed to have established  ratings for such Index
Debt in  Category  6; (ii) if only one of Moody's and S&P shall have in effect a
rating for any Index Debt, then the Applicable  Margin, to the extent determined
by  reference  to such  Index  Debt,  shall be  determined  on the basis of such
rating;  (iii) if the ratings  established or deemed to have been established by
Moody's or S&P for any Index Debt shall fall within  different  Categories,  the
Applicable  Margin,  to the extent  determined  by reference to such Index Debt,
shall be based on the Category  corresponding to the higher rating;  and (iv) if
any  rating  established  or deemed to have been  established  by Moody's or S&P
shall be changed  (other  than as a result of a change in the  rating  system of
Moody's or S&P),  such change  shall be  effective as of the date on which it is
first announced by the applicable  rating agency.  Each change in the Applicable
Margin shall apply during the period  commencing on the  effective  date of such
change and ending on the date  immediately  preceding the effective  date of the
next such change. If the rating system of Moody's or S&P shall change, or if any
such rating  agency shall cease to be in the business of rating  corporate  debt
obligations,  Alcoa and the Lenders  shall  negotiate in good faith to amend the
references to specific ratings in this definition to reflect such changed rating
system or the  non-availability  of ratings from such rating agency, and pending
the effectiveness of any such amendment,  the ratings of such rating agency most
recently  in effect  prior to such  change or  cessation  shall be  employed  in
determining the Applicable Margin.


<PAGE>


            "Assessment  Rate" shall mean for any date the annual rate  (rounded
upwards,  if necessary,  to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment rate that will be
employed  in  determining  amounts  payable by the  Administrative  Agent to the
Federal  Deposit  Insurance  Corporation  (or any  successor)  for such date for
insurance by such  Corporation  (or such  successor)  of time  deposits  made in
dollars at the Administrative Agent's domestic offices.

            "Assignment and Acceptance"  shall mean an assignment and acceptance
entered  into by a Lender and an assignee,  and  accepted by the  Administrative
Agent,  in the form of Exhibit A or such other form as shall be  approved by the
Administrative Agent.

            "Board"  shall mean the Board of  Governors  of the Federal  Reserve
System of the United States.

            "Borrowers" shall mean Alcoa and the Borrowing Subsidiaries.

            "Borrowing"  shall mean any group of Loans of a single  Type made by
the  Lenders  on a single  date and as to which a single  Interest  Period is in
effect.

            "Borrowing  Subsidiaries"  shall mean, at any time, the wholly-owned
Subsidiaries  of  Alcoa  that  have  undertaken  the  obligations  of  Borrowing
Subsidiaries pursuant to Section 10.04(i).

            "Borrowing Subsidiary Obligations" shall mean, collectively, the due
and  punctual  payment  by any  Borrowing  Subsidiary  of the  principal  of and
interest  on the  Loans  to it,  when  and  as  due,  whether  at  maturity,  by
acceleration or otherwise,  and the due and punctual  payment and performance of
all other obligations of such Borrowing Subsidiary under this Agreement.

            "Business  Day"  shall  mean any day  (other  than a day  which is a
Saturday,  Sunday  or day on  which  banks in New York  City are  authorized  or
required  by law to  remain  closed);  provided,  however,  that,  when  used in
connection with any Eurodollar  Loan, the term "Business Day" shall in each case
also exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.

            "Code" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time.


<PAGE>


            "Commercial Paper" of any person shall mean any note, draft, bill of
exchange or other  negotiable  instrument  issued by such person (other than any
extendable  commercial  notes issued  pursuant to Section 4(2) of the Securities
Act of 1933) that has a maturity at the time of issuance not exceeding  thirteen
months, exclusive of days of grace, or any renewal thereof the maturity of which
is  likewise  limited,  pursuant  to  Section  3(a)(3)  or  Section  4(2) of the
Securities Act of 1933.

            "Commitment" shall mean, with respect to each Lender, the commitment
of such Lender to make Loans  hereunder  as set forth in Schedule  2.01,  as the
same may be  terminated,  reduced or  increased  from time to time  pursuant  to
Section 2.09.

            "Consolidated  Net  Tangible  Assets"  shall  mean at any time,  the
aggregate  amount  of  assets  (less  applicable  reserves  and  other  properly
deductible  items)  of Alcoa  and its  consolidated  Subsidiaries  adjusted  for
inventories on the basis of cost (before  application of the "last-in first-out"
method of  determining  cost) or current market value,  whichever is lower,  and
deducting  therefrom (a) all current  liabilities  of such  corporation  and its
consolidated  Subsidiaries except for (i) notes and loans payable,  (ii) current
maturities of long-term debt and (iii) current  maturities of obligations  under
capital  leases and (b) all goodwill,  trade names,  patents,  unamortized  debt
discount and expenses of such corporation and its consolidated  Subsidiaries (to
the  extent  included  in said  aggregate  amount  of  assets)  and  other  like
intangibles,  all as set forth in the most recent consolidated  balance sheet of
Alcoa and its consolidated  Subsidiaries,  delivered to the Administrative Agent
pursuant to Section 5.01, computed and consolidated in accordance with GAAP.

            "Consolidated  Net Worth"  shall mean at any time,  the net worth of
Alcoa  and its  consolidated  Subsidiaries  at  such  time  (including  minority
interests), computed and consolidated in accordance with GAAP.


<PAGE>


            "Control" shall mean the possession,  directly or indirectly, of the
power to  direct or cause the  direction  of the  management  or  policies  of a
person, whether through the ownership of Voting Stock, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings correlative thereto.

            "Default" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.

            "Designation  Date" shall have the meaning  assigned to such term in
Section 10.04(i).

            "Designation  of Borrowing  Subsidiary"  shall mean a Designation of
Borrowing Subsidiary executed by Alcoa and a wholly-owned Subsidiary in the form
of Exhibit D.

            "dollars" or "$" shall mean lawful money of the United States of
America.

            "Effective Date" shall mean the date of this Agreement.

            "Eligible  Transferee" shall mean (i) a commercial bank having total
assets  in  excess of  $10,000,000,000  or the  equivalent  thereof  in  another
currency,  provided that such bank or its holding company has issued obligations
which are rated investment grade by any of Moody's, S&P or International Banking
and Credit  Analysis  and (ii) any other  person  which  Alcoa  agrees may be an
Eligible Transferee.

            "Engagement  Fees" shall have the  meaning  assigned to such term in
Section 2.05(b).

            "Engagement  Letter"  shall  mean the letter  agreement  dated as of
April 3, 2000, among the Administrative Agent, Chase Securities Inc. and Alcoa.

            "ERISA" shall mean the Employee  Retirement  Income  Security Act of
1974, as the same may be amended from time to time.

            "ERISA  Affiliate" shall mean any trade or business  (whether or not
incorporated)  that is a member of a group of which any Borrower is a member and
which is treated as a single employer under Section 414 of the Code.


<PAGE>


            "ERISA Event" shall mean (i) any Reportable Event; (ii) the adoption
of any amendment to a Plan that would require the provision of security pursuant
to Section  401(a)(29) of the Code or Section 307 of ERISA;  (iii) the existence
with respect to any Plan of an "accumulated  funding  deficiency" (as defined in
Section  412 of the Code or Section 302 of ERISA),  whether or not waived;  (iv)
the filing  pursuant to Section 412(d) of the Code or Section 302(d) of ERISA of
an application for a waiver of the minimum funding  standard with respect to any
Plan; (v) the  incurrence of any liability  under Title IV of ERISA with respect
to the  termination of any Plan or the  withdrawal or partial  withdrawal of the
Borrower or any of its ERISA  Affiliates  from any Plan or  Multiemployer  Plan;
(vi) the receipt by the Borrower or any ERISA  Affiliate from the PBGC or a plan
administrator  of any notice  relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer  any Plan;  (vii) the receipt by the
Borrower or any ERISA  Affiliate  of any notice  concerning  the  imposition  of
Withdrawal  Liability or a  determination  that a  Multiemployer  Plan is, or is
expected to be, insolvent or in  reorganization,  within the meaning of Title IV
of ERISA;  (viii) the occurrence of a "prohibited  transaction"  with respect to
which the Borrower or any of its subsidiaries is a "disqualified person" (within
the meaning of Section  4975 of the Code) or with  respect to which the Borrower
or any such subsidiary  could otherwise be liable;  (ix) any other similar event
or condition with respect to a Plan or  Multiemployer  Plan that could result in
liability of the Borrowers and (x) any Foreign Benefit Event.

            "Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.

            "Eurodollar  Loan"  shall mean any Loan  bearing  interest at a rate
determined  by reference to the LIBO Rate in accordance  with the  provisions of
Article II.

            "Event of Default"  shall have the meaning  assigned to such term in
Article VII.


<PAGE>


            "Exchange Act Report" shall mean, collectively, the Annual Report of
Alcoa on Form 10-K for the year ended December 31, 1999, the Quarterly Report of
Alcoa on Form 10-Q for the quarter ended March 31, 2000, the Current  Reports on
Form 8-K dated  January  10,  2000,  January  18,  2000 and January 19, 2000 and
Schedules  TO  (including  amendments)  filed by Alcoa with the  Securities  and
Exchange  Commission  on March  14,  2000 and March 20,  2000,  pursuant  to the
Securities Exchange Act of 1934.

            "Existing  364-Day  Credit  Agreement"  shall mean the  Amended  and
Restated  Revolving  Credit  Agreement dated as of August 13, 1999, among Alcoa,
the lenders party thereto,  The Chase Manhattan Bank, as  Administrative  Agent,
and Chase  Securities  Inc.,  as lead  arranger and book  manager.  The Existing
364-Day Credit  Agreement shall be terminated and replaced by the 364-Day Credit
Agreement.

            "Existing  Five-Year  Credit  Agreement"  shall  mean the  Revolving
Credit Agreement  (Five-Year) dated as of August 14, 1998, among Alcoa, Alcoa of
Australia Limited,  a company  incorporated with limited liability in Australia,
the lenders party  thereto,  The Chase  Manhattan  Bank, as U.S.  agent for such
lenders,  and Chase Securities  Australia Limited,  a company  incorporated with
limited liability in Australia, as Australian agent for such lenders.

            "Facility  Fee"  shall  have the  meaning  assigned  to such term in
Section 2.05(a).

            "Facility  Fee  Percentage"  shall  mean on any date the  applicable
percentage  set  forth  below  based  upon  the  ratings  by  S&P  and  Moody's,
respectively, applicable on such date to the Index Debt:

            Category 1                     Percentage
            ----------                     ----------

             AA-/Aa3                        .0600%
            or above

            Category 2

              A+/A1                         .0625%

            Category 3

              A/A2                          .0650%

            Category 4

              A-/A3                         .0700%



<PAGE>


            Category 5

             BBB/Baa2                       .1000%

            Category 6

             BBB-/Baa3                      .1500%
             or below

            For purposes of the foregoing,  (i) if neither Moody's nor S&P shall
have in  effect a  rating  for the  Index  Debt  (other  than by  reason  of the
circumstances  referred to in the last sentence of this  definition),  then both
such rating agencies shall be deemed to have established  ratings in Category 6;
(ii) if only one of Moody's  and S&P shall have in effect a rating for the Index
Debt, then the Facility Fee Percentage  shall be determined on the basis of such
rating;  (iii) if the ratings  established or deemed to have been established by
Moody's or S&P for the Index Debt shall fall within  different  Categories,  the
Facility  Fee  Percentage  shall be based on the Category  corresponding  to the
higher  rating;  and (iv) if any  rating  established  or  deemed  to have  been
established  by  Moody's or S&P shall be  changed  (other  than as a result of a
change in the rating  system of Moody's or S&P),  such change shall be effective
as of the date on which it is first  announced by the applicable  rating agency.
Each  change in the  Facility  Fee  Percentage  shall  apply  during  the period
commencing  on the  effective  date  of  such  change  and  ending  on the  date
immediately  preceding the effective date of the next such change. If the rating
system of  Moody's or S&P shall  change,  or if either of such  rating  agencies
shall cease to be in the business of rating  corporate debt  obligations,  Alcoa
and the  Lenders  shall  negotiate  in good  faith to amend  the  references  to
specific ratings in this definition to reflect such changed rating system or the
non-availability   of  ratings  from  such  rating   agency,   and  pending  the
effectiveness  of any such  amendment,  the ratings of such  rating  agency most
recently  in effect  prior to such  change or  cessation  shall be  employed  in
determining the Facility Fee Percentage.

            "Fees" shall mean the Facility Fees and the Engagement Fees.


<PAGE>


            "Financial   Officer"  of  any  corporation  shall  mean  the  chief
financial officer, principal accounting officer, Treasurer or Controller of such
corporation.

            "Foreign  Benefit  Event" shall mean (a) with respect to any Foreign
Pension Plan, (i) the existence of unfunded  liabilities in excess of the amount
permitted  under any  applicable  law,  or in excess of the amount that would be
permitted  absent a waiver from a  Governmental  Authority,  (ii) the failure to
make the required  contributions  or payments,  under any applicable  law, on or
before the due date for such  contributions or payments,  (iii) the receipt of a
notice by a  Governmental  Authority  relating to the intention to terminate any
such Foreign Pension Plan or to appoint a trustee to administer any such Foreign
Pension Plan, or to the insolvency of any such Foreign Pension Plan and (iv) the
incurrence of any liability of the Borrowers under  applicable law on account of
the complete or partial termination of such Foreign Pension Plan or the complete
or partial withdrawal of any participating employer therein and (b) with respect
to any Foreign Plan,  (i) the occurrence of any  transaction  that is prohibited
under any  applicable law and could result in the incurrence of any liability by
the  Borrowers,  or the  imposition on the Borrowers of any fine,  excise tax or
penalty  resulting from any  noncompliance  with any applicable law and (ii) any
other  event or  condition  that  could  reasonably  be  expected  to  result in
liability of any of the Borrowers.

            "Foreign  Plan" shall mean any plan or  arrangement  established  or
maintained  outside  the  United  States  for the  benefit  of present or former
employees of any of the Borrowers.

            "Foreign  Pension  Plan"  shall mean any  benefit  plan which  under
applicable law is required to be funded through a trust or other funding vehicle
other than a trust or funding vehicle  maintained  exclusively by a Governmental
Authority.

            "GAAP" shall mean generally accepted accounting principles,  as used
in, and applied on a basis  consistent  with, the financial  statements of Alcoa
referred to in Section 3.06.


<PAGE>


            "Governmental  Authority"  shall mean any Federal,  state,  local or
foreign court or governmental agency,  authority,  instrumentality or regulatory
body.

            "Guarantee"  of  or  by  any  person  shall  mean  any   obligation,
contingent or otherwise,  of such person  guaranteeing  any  Indebtedness of any
other person,  whether  directly or indirectly,  and including any obligation of
such person,  direct or  indirect,  to purchase or pay such  Indebtedness  or to
purchase any security for the payment of such Indebtedness;  provided,  however,
that the term  "Guarantee"  shall not include  endorsements  for  collection  or
deposit, in either case in the ordinary course of business.

            "Indebtedness"  of  any  person  at any  time  shall  mean,  without
duplication,  (a) all obligations for money borrowed or raised,  all obligations
(other than  accounts  payable and other  similar  items arising in the ordinary
course of business) for the deferred  payment of the purchase price of property,
and all capital lease  obligations  which, in each case, in accordance with GAAP
would be included in  determining  total  liabilities  as shown on the liability
side of the balance sheet of such person and (b) all Guarantees of such person.

            "Index Debt" shall mean the senior, unsecured,  non-credit enhanced,
long-term Indebtedness for borrowed money of Alcoa.

            "Interest  Payment Date" shall mean,  with respect to any Loan,  the
last day of the Interest  Period  applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar  Borrowing with an Interest Period of
more than three  months'  duration,  each day that  would have been an  Interest
Payment Date had  successive  Interest  Periods of three  months'  duration been
applicable to such  Borrowing,  and, in addition,  the date of any  refinancing,
continuation  or  conversion  of  such  Borrowing  with or to a  Borrowing  of a
different Type.


<PAGE>


            "Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period  commencing  on the  date of such  Borrowing  or on the  last  day of the
immediately preceding Interest Period applicable to such Borrowing,  as the case
may be,  and ending on the  numerically  corresponding  day (or,  if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months  thereafter,  as the  Borrower  to which  such Loan is made may
elect;  and (b) as to any ABR  Borrowing,  the period  commencing on the date of
such Borrowing or on the last day of the immediately  preceding  Interest Period
applicable to such Borrowing,  as the case may be, and ending on the earliest of
(i) the next succeeding March 31, June 30, September 30 or December 31, (ii) the
Maturity Date and (iii) the date such  Borrowing is prepaid in  accordance  with
Section 2.11; provided,  however, that if any Interest Period would end on a day
other than a Business Day,  such  Interest  Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next  succeeding  Business Day would fall in the next calendar  month,  in which
case such Interest Period shall end on the next preceding Business Day.

            "Lenders"  shall  mean  (a) the  financial  institutions  listed  on
Schedule 2.01 (other than any such financial institution that has ceased to be a
party hereto  pursuant to an Assignment  and  Acceptance)  and (b) any financial
institution  that has  become  a party  hereto  pursuant  to an  Assignment  and
Acceptance.

            "LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period,  an interest rate (rounded  upwards,  if necessary,  to the
next 1/16 of 1%) equal to the  offered  rate for  dollar  deposits  for a period
equal to the Interest Period for such  Eurodollar  Borrowing that appears on the
LIBO page on the Reuters Screen (or any page that can reasonably be considered a
replacement  page) at approximately  11:00 a.m.,  London time, two Business Days
prior to the commencement of such Interest Period. If such rate is not available
on the Reuters Screen,  the "LIBO Rate" shall be the rate (rounded  upwards,  if
necessary,  to the next  1/16 of 1%)  equal  to the  arithmetic  average  of the
respective  rates  per annum at which  dollar  deposits  approximately  equal in
principal amount to such Eurodollar  Borrowing and for a maturity  comparable to
such Interest  Period are offered in immediately  available  funds to the London
branches of the Reference Banks in the London  interbank market at approximately
11:00 a.m.,  London time,  two Business Days prior to the  commencement  of such
Interest Period. The Administrative Agent shall determine the LIBO Rate and such
determination shall be conclusive absent manifest error.


<PAGE>


            "Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge,  encumbrance,  charge or security interest in or on such
asset,  (b) the  interest  of a vendor or a lessor  under any  conditional  sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities,  any purchase option,  call or similar right of a
third party with respect to such securities.

            "Loans" shall have the meaning  assigned to it in Section 2.01. Each
Loan shall be a Eurodollar Loan or an ABR Loan.

            "Margin  Stock"  shall  have  the  meaning  given  such  term  under
Regulation U of the Board as from time to time in effect, including all official
and interpretations thereunder or thereof.

            "Material Adverse Effect" shall mean a materially  adverse effect on
the  business,  assets,  operations  or  financial  condition  of Alcoa  and its
Subsidiaries taken as a whole, or a material  impairment of the ability of Alcoa
to perform any of its obligations under this Agreement.

            "Maturity Date" shall mean April 28, 2005.

            "Moody's" shall mean Moody's Investors Service, Inc.

            "Multiemployer  Plan" shall mean a multiemployer  plan as defined in
Section  4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section  414  of  the  Code)  is  making  or  accruing  an  obligation  to  make
contributions,  or has  within  any of the  preceding  five plan  years  made or
accrued an obligation to make contributions.

            "PBGC" shall mean the Pension Benefit Guaranty  Corporation referred
to and defined in ERISA.

            "person" shall mean any natural  person,  corporation  organization,
business trust, joint venture, association,  company, partnership or government,
or any agency or political subdivision thereof.


<PAGE>


            "Plan" shall mean any pension plan (other than a Multiemployer Plan)
subject to the  provisions of Title IV of ERISA or Section 412 of the Code which
is maintained for employees of any Borrower or any ERISA Affiliate.

            "Pro  Rata  Percentage"  of any  Lender at any time  shall  mean the
percentage  of the  Total  Commitment  that  is  represented  by  such  Lender's
Commitment.

            "Reference Banks" shall mean The Chase Manhattan Bank, Mellon
             ---------------
Bank, N.A. and Bank of America National Trust and Savings Association.

            "Register"  shall  have  the  meaning  given  such  term in  Section
10.04(d).

            "Reportable  Event"  shall mean any  reportable  event as defined in
Section 4043(b) of ERISA or the regulations  issued thereunder with respect to a
Plan (other than a Plan  maintained by an ERISA Affiliate which is considered an
ERISA  Affiliate  only pursuant to  subsection  (m) or (o) of Section 414 of the
Code).

            "Required Lenders" shall mean Lenders  representing at least 66-2/3%
in principal amount of the outstanding Loans and unused Commitments.

            "Responsible  Officer" of any  corporation  shall mean any executive
officer  or  Financial  Officer  of such  corporation  and any other  officer or
similar official thereof  responsible for the  administration of the obligations
of such corporation in respect of this Agreement.

            "Restricted  Subsidiary"  shall mean any consolidated  Subsidiary of
Alcoa which owns any  manufacturing  plant or manufacturing  facility located in
the United States,  except any such plant or facility  which,  in the opinion of
the Board of Directors of Alcoa,  is not of material  importance to the business
of Alcoa and its Restricted  Subsidiaries,  taken as a whole, excluding any such
Subsidiary which (a) is principally engaged in leasing or financing receivables,
(b) is principally  engaged in financing Alcoa's  operations  outside the United
States or (c) principally serves as a partner in a partnership.

            "S&P" shall mean Standard & Poor's Ratings  Services,  a Division of
the McGraw-Hill Companies Inc.


<PAGE>


            "Statutory Reserves" shall mean a fraction (expressed as a decimal),
the  numerator  of which is the number one and the  denominator  of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal,  special,  emergency or supplemental  reserves) expressed as a decimal
established  by  the  Board  and  any  other  banking  authority  to  which  the
Administrative Agent is subject for new negotiable  nonpersonal time deposits in
dollars of over $100,000 with  maturities  approximately  equal to three months.
Such reserve percentages shall include those imposed pursuant to such Regulation
D of the Board.  Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.

            "Subsidiary" shall mean, with respect to any person (herein referred
to as the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership  interests  representing more than
50% of the Voting  Stock or more than 50% of the general  partnership  interests
are, at the time any determination is being made,  owned,  controlled or held by
the parent or one or more Subsidiaries of the parent or by the parent and one or
more Subsidiaries of the parent.

            "364-Day Credit  Agreement" shall mean the 364-Day  Revolving Credit
Agreement  dated as of the date hereof among Alcoa,  the lenders party  thereto,
The Chase Manhattan Bank, as administrative agent, and Chase Securities Inc., as
lead arranger and book manager.

            "Total  Commitment" shall mean, at any time, the aggregate amount of
the Commitments, as in effect at such time.

            "Type",  when used in respect of any Loan or Borrowing,  shall refer
to the  Rate  by  reference  to  which  interest  on such  Loan or on the  Loans
comprising such Borrowing is determined.  For purposes hereof, "Rate" shall mean
the LIBO Rate and the Alternate Base Rate.

            "Voting  Stock" with  respect to the stock of any person means stock
of any class or classes  (however  designated)  having ordinary voting power for
the election of the directors of such person, other than stock having such power
only by reason of the occurrence of a contingency.


<PAGE>


            "Withdrawal  Liability" shall mean liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.

            SECTION  1.02.   Terms   Generally;   Accounting   Principles.   The
definitions  in Section 1.01 shall apply equally to both the singular and plural
forms of the terms defined.  Whenever the context may require, any pronoun shall
include  the  corresponding  masculine,  feminine  and neuter  forms.  The words
"include",  "includes"  and  "including"  shall be deemed to be  followed by the
phrase  "without  limitation".  All  references  herein to  Articles,  Sections,
Exhibits and Schedules  shall be deemed  references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall otherwise
require.  Except  as  otherwise  expressly  provided  herein,  all  terms  of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect  from  time to time;  provided,  however,  that,  if Alcoa  notifies  the
Administrative  Agent that it requests an amendment to any  provision  hereof to
eliminate  the effect of any change in GAAP on the  operation of such  provision
(or if the Administrative Agent notifies Alcoa that the Required Lenders request
an amendment to any provision  hereof for such  purpose),  regardless of whether
any such  notice is given  before or after such  change in GAAP  (provided  such
change in GAAP  occurs  after the date  hereof),  then such  provision  shall be
interpreted on the basis of GAAP in effect immediately before such change became
effective until such notice shall have been withdrawn or such provision  amended
in accordance herewith.

ARTICLE II.  THE CREDITS



<PAGE>


            SECTION 2.01.  Commitments.  Subject to the terms and conditions and
relying upon the  representations  and warranties  herein set forth, each Lender
agrees,  severally and not jointly,  to make  revolving  credit loans in dollars
(the "Loans") to Alcoa and the Borrowing Subsidiaries, at any time and from time
to time on or after the  Effective  Date and until the  earlier of the  Maturity
Date and the termination of the Commitment of such Lender in accordance with the
terms hereof;  provided,  however, that (i) after giving effect to any Loan, the
aggregate  principal amount of the outstanding  Loans shall not exceed the Total
Commitment  and  (ii)  at  all  times  the  aggregate  principal  amount  of all
outstanding Loans made by each Lender shall equal its Pro Rata Percentage of the
aggregate  principal  amount of all  outstanding  Loans.  The Commitment of each
Lender is set forth on Schedule 2.01 to this  Agreement.  Such Commitment may be
terminated,  reduced or increased  from time to time  pursuant to Section  2.09.
Within the limits set forth in the preceding sentence, the Borrowers may borrow,
pay or prepay and reborrow Loans on or after the Effective Date and prior to the
Maturity  Date,  subject  to the terms,  conditions  and  limitations  set forth
herein.

            SECTION  2.02.  Loans.  (a)  Each  Loan  shall  be made as part of a
Borrowing  consisting of Loans made by the Lenders  ratably in  accordance  with
their respective applicable Commitments;  provided, however, that the failure of
any Lender to make any Loan shall not in itself  relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible  for the failure of any other Lender to make any Loan required to
be made by such other Lender).  The Loans  comprising each Borrowing shall be in
an aggregate  principal  amount which is an integral  multiple of $1,000,000 and
not  less  than  $10,000,000  (or an  aggregate  principal  amount  equal to the
remaining balance of the applicable Commitments, as the case may be).

            (b) Each Borrowing shall be comprised  entirely of Eurodollar  Loans
or ABR Loans, as the applicable  Borrower may request  pursuant to Section 2.03.
Each Lender may at its option fulfill its Commitment with respect to any Loan by
causing any domestic or foreign  branch or Affiliate of such Lender to make such
Loan; provided,  however,  that any exercise of such option shall not affect the
obligation of the applicable  Borrower to repay such Loan in accordance with the
terms of this Agreement.  Borrowings of more than one Type may be outstanding at
the same time; provided,  however, that no Borrower shall be entitled to request
any  Borrowing  which,  if made,  would result in an aggregate of more than five
separate  Eurodollar  Loans  of any  Lender  being  made  to the  Borrowers  and
outstanding under this Agreement at any one time. For purposes of the foregoing,
Loans having different Interest Periods,  regardless of whether they commence on
the same date, shall be considered separate Loans.


<PAGE>


            (c) Except as otherwise  provided in Section 2.10, each Lender shall
make each Loan that is (A) an ABR Loan or (B) a Eurodollar  Loan,  to be made by
it  hereunder  on the  proposed  date  thereof by wire  transfer of  immediately
available  funds to the  Administrative  Agent in New York,  New York, not later
than 1:00 p.m., New York City time, and the  Administrative  Agent shall by 3:00
p.m., New York City time,  credit the amounts so received to the general deposit
account of the Borrower to which such Loan is to be made with Mellon Bank, N.A.,
or such other account as such Borrower may designate in a written  notice to the
Administrative  Agent,  or, if such Loans are not made on such date  because any
condition  precedent to a Borrowing  herein  specified  shall not have been met,
return  the  amounts  so  received  to  the  respective   Lenders.   Unless  the
Administrative  Agent shall have received notice from a Lender prior to the date
of any Borrowing that such Lender will not make available to the  Administrative
Agent such Lender's  portion of such  Borrowing,  the  Administrative  Agent may
assume that such Lender has made such portion  available  to the  Administrative
Agent on the date of such  Borrowing in accordance  with this  paragraph (c) and
the Administrative  Agent may, in reliance upon such assumption,  make available
to the applicable  Borrower on such date a corresponding  amount.  If and to the
extent  that such  Lender  shall not have made  such  portion  available  to the
Administrative Agent, such Lender and the applicable Borrower severally agree to
repay to the Administrative  Agent forthwith on demand such corresponding amount
together with interest  thereon,  for each day from the date such amount is made
available  to such  Borrower  until  the  date  such  amount  is  repaid  to the
Administrative  Agent,  at (i) in the case of such  Borrower,  the interest rate
applicable at the time to the Loans  comprising  such  Borrowing and (ii) in the
case of such Lender, a rate determined by the Administrative  Agent to represent
its  cost of  overnight  or  short-term  funds  (which  determination  shall  be
conclusive   absent  manifest  error).   If  such  Lender  shall  repay  to  the
Administrative  Agent such  corresponding  amount,  such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.

            (d)  Notwithstanding  any  other  provision  of this  Agreement,  no
Borrower  shall be entitled  to request any  Borrowing  if the  Interest  Period
requested with respect thereto would end after the Maturity Date.


<PAGE>


            SECTION 2.03. Notice of Borrowings. In order to request a Borrowing,
a Borrower shall give written or telecopy  notice (or telephone  notice promptly
confirmed in writing or by telecopy) (a) in the case of an ABR Borrowing, to the
Administrative  Agent not later than  12:00  noon,  New York City  time,  on the
Business  Day of  such  proposed  Borrowing,  (b) in the  case  of a  Eurodollar
Borrowing,  to the Administrative Agent not later than 10:00 a.m., New York City
time, three Business Days before such proposed  Borrowing.  Such notice shall be
irrevocable  and  shall in each  case  refer  to this  Agreement,  identify  the
applicable Borrower and specify (i) whether such Borrowing is to be a Eurodollar
Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a
Business  Day) and the amount  thereof;  and (iii) if such  Borrowing is to be a
Eurodollar  Borrowing,  the Interest Period with respect thereto. If no election
as to the Type of Borrowing is specified in any such notice,  then the requested
Borrowing  shall be an ABR Borrowing.  If no Interest Period with respect to any
Eurodollar  Borrowing is specified in any such notice,  then the Borrower giving
the notice of Borrowing  shall be deemed to have selected an Interest  Period of
one month's  duration.  If a Borrower  shall not have given notice in accordance
with this Section 2.03 of its election to refinance a Borrowing prior to the end
of the Interest  Period in effect for such  Borrowing,  then the Borrower  shall
(unless such  Borrowing is repaid at the end of such Interest  Period) be deemed
to have given  notice of an election to  refinance  such  Borrowing  with an ABR
Borrowing.  The  Administrative  Agent shall promptly  advise the Lenders of any
notice given  pursuant to this Section 2.03 and of each Lender's  portion of the
requested Borrowing.

            SECTION  2.04.  Evidence  of  Debt;  Repayment  of  Loans.  (a)  The
outstanding  principal  balance of each Loan shall be payable on the  earlier of
the last day of the  Interest  Period  applicable  to such Loan or the  Maturity
Date.

            (b) Each Lender shall maintain in accordance with its usual practice
an account or accounts  evidencing  the  indebtedness  of each  Borrower to such
Lender resulting from each Loan made by such Lender from time to time, including
the amounts of principal and interest  payable and paid such Lender from time to
time under this Agreement.


<PAGE>


            (c) The  Administrative  Agent shall  maintain  accounts in which it
will record (i) the amount of each Loan made to a Borrower  hereunder,  (ii) the
Type of each such Loan and the Interest  Period  applicable  thereto,  (iii) the
amount of any principal or interest due and payable or to become due and payable
from the applicable Borrower to each Lender hereunder and (iv) the amount of any
sum received by the  Administrative  Agent  hereunder from any Borrower and each
Lender's share thereof.

            (d)  The  entries  made  in  the  accounts  maintained  pursuant  to
paragraphs  (b) and (c) above shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the failure
of any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner  affect the  obligation of any Borrower to repay
the Loans in accordance with their terms.

            (e)  Notwithstanding  any other provision of this Agreement,  in the
event any Lender shall request a promissory note evidencing the Loans made by it
hereunder to Alcoa or any Borrowing Subsidiary,  the Borrower shall deliver such
a note, satisfactory to the Administrative Agent, payable to such Lender and its
registered  assigns,  and the  interests  represented  by such note shall at all
times (including after any assignment of all or part of such interests  pursuant
to Section 10.04) be represented by one or more promissory  notes payable to the
payee named therein or its registered assigns.


<PAGE>


            SECTION 2.05.  Fees. (a) Alcoa will pay to each Lender,  through the
Administrative  Agent, on the last day of March, June, September and December in
each  year,  and on the date on which the  Commitment  of such  Lender  shall be
terminated as provided herein, a facility fee (the "Facility Fee") at a rate per
annum equal to the  Facility Fee  Percentage  from time to time in effect on the
aggregate amount of the Commitment of such Lender,  whether used or unused, from
time  to time  in  effect  during  the  preceding  quarter  (or  shorter  period
commencing  with the date hereof or ending with the Maturity Date or the date on
which the  Commitment  of such Lender shall be  terminated).  All Facility  Fees
shall be computed on the basis of the actual number of days elapsed in a year of
360 days.  The Facility  Fee due to each Lender shall  commence to accrue on the
date  hereof and shall  cease to accrue on the date on which the  Commitment  of
such Lender shall be terminated as provided herein.

            (b) Alcoa  agrees to pay to the  Administrative  Agent,  for its own
account,  the fees provided for in the Engagement Letter (the "Engagement Fees")
at the times provided therein.

            (c) All  Fees  shall  be  paid  on the  dates  due,  in  immediately
available  funds,  to the  Administrative  Agent,  for  distribution,  if and as
appropriate,  among the  Lenders.  Once paid,  the Fees shall not be  refundable
except in the case of an error which results in the payment of Fees in excess of
those due and payable as of such date,  in which case the  Administrative  Agent
shall cause a refund in the amount of such excess to be paid to Alcoa.

            SECTION 2.06.  Interest on Loans.  (a) Subject to the  provisions of
Section  2.07,  the unpaid  principal  amount of the Loans  comprising  each ABR
Borrowing  shall bear interest for each day (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days,  as the case may be, when
the Alternate  Base Rate is determined by reference to the Prime Rate and over a
year of 360 days at all other times) at a rate per annum equal to the  Alternate
Base Rate.

            (b) Subject to the provisions of Section 2.07, the unpaid  principal
amount of the Loans  comprising  each  Eurodollar  Borrowing shall bear interest
(computed  on the basis of the actual  number of days elapsed over a year of 360
days) at a rate per  annum  equal to the LIBO  Rate for the  Interest  Period in
effect for such Borrowing plus the Applicable Margin.

            (c) Interest on each Loan shall be payable on the  Interest  Payment
Dates  applicable to such Loan except as otherwise  provided in this  Agreement.
Interest shall accrue from and including the first day of an Interest  Period to
but excluding the last day of such Interest Period.  The applicable LIBO Rate or
Alternate Base Rate for each Interest  Period or day within an Interest  Period,
as the case may be, shall be determined by the  Administrative  Agent,  and such
determination shall be conclusive absent manifest error.


<PAGE>


            SECTION 2.07. Default Interest. If any Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise,  such Borrower shall on demand from
time to time pay  interest,  to the extent  permitted by law, on such  defaulted
amount up to (but not  including)  the date of actual  payment (after as well as
before  judgment)  at a rate  per  annum  equal  to (a) in the  case of  overdue
principal of any Loan, the rate otherwise applicable to such Loan as provided in
Section 2.06 plus 2% per annum, or (b) in the case of any other amount, the rate
applicable to ABR Borrowings plus 2% per annum.

            SECTION 2.08. Alternate Rate of Interest.  In the event, and on each
occasion,  that on the day two Business  Days prior to the  commencement  of any
Interest  Period for a  Eurodollar  Loan,  the  Administrative  Agent shall have
determined in good faith that dollar  deposits in the  principal  amounts of the
Loans  comprising  such  Borrowing  are not  generally  available  in the London
interbank  market or other market in which Lenders  ordinarily  raise dollars to
fund  Loans of the  requested  Type,  or that the  rates  at which  such  dollar
deposits are being offered will not  adequately  and fairly  reflect the cost to
any Lender of making or  maintaining  its  Eurodollar  Loan during such Interest
Period,  or that reasonable  means do not exist for  ascertaining the LIBO Rate,
then the  Administrative  Agent shall, as soon as practicable  thereafter,  give
written or telecopy notice of such  determination  to the relevant  Borrower and
Lenders. In the event of any such determination,  any request made by a Borrower
after the date of such  notice for a  Eurodollar  Borrowing  pursuant to Section
2.03 or 2.10  shall,  until the  Administrative  Agent  shall have  advised  the
Borrowers and the Lenders that the  circumstances  giving rise to such notice no
longer exist, be deemed to be a request for an ABR Borrowing. Each determination
by the Administrative Agent hereunder shall be conclusive absent manifest error.

            SECTION 2.09.  Termination and Reduction of Commitments.
(a)  The Commitments shall be automatically terminated on the Maturity Date.



<PAGE>


            (b) Upon at least 10 Business  Days' prior  irrevocable,  written or
telecopy  notice  to the  Administrative  Agent,  Alcoa may at any time in whole
permanently  terminate,  or from time to time in part  permanently  reduce,  the
Total Commitment; provided, however, that (i) each partial reduction shall be in
an  integral  multiple  of  $1,000,000  and in a  minimum  principal  amount  of
$10,000,000 and (ii) the Total Commitment shall not be reduced to an amount that
is less than the  aggregate  principal  amount of the  outstanding  Loans (after
giving effect to any simultaneous prepayment pursuant to Section 2.11).

            (c) Each  reduction in Commitments  hereunder  shall be made ratably
among the Lenders in accordance  with each such Lender's Pro Rata  Percentage of
the  Total  Commitment.  Alcoa  shall  pay to the  Administrative  Agent for the
account  of the  applicable  Lenders,  on the date of each such  termination  or
reduction,  the Facility Fees on the amount of the  Commitments so terminated or
reduced accrued to the date of such termination or reduction.

            SECTION  2.10.  Refinancings.  Any Borrower may refinance all or any
part of any Loan  made to it with a Loan of the same or a  different  Type  made
pursuant to the same Commitments,  subject to the conditions and limitations set
forth in this  Agreement.  Any Borrowing or part thereof so refinanced  shall be
deemed to have been repaid or prepaid in  accordance  with Section 2.04 or 2.11,
as applicable, with the proceeds of a new Borrowing; and the proceeds of the new
Borrowing,  to the  extent  they  do not  exceed  the  principal  amount  of the
Borrowing being refinanced,  shall not be paid by the applicable  Lenders to the
Administrative  Agent or by the Administrative  Agent to the applicable Borrower
pursuant to Section 2.02(c).

            SECTION 2.11. Prepayment.  (a) Each Borrower shall have the right at
any time and from time to time to  prepay  any  Borrowing,  in whole or in part,
upon at least  three  Business  Days'  prior  written  or  telecopy  notice  (or
telephone  notice  promptly  confirmed  by  written or  telecopy  notice) to the
Administrative Agent;  provided,  however, that each partial prepayment shall be
in an amount  which is an  integral  multiple  of  $1,000,000  and not less than
$10,000,000.


<PAGE>


            (b) On the date of any  termination or reduction of any  Commitments
pursuant  to  Section  2.09,  the  Borrowers  shall pay or prepay so much of the
Loans,  as shall be  necessary  in  order  that,  after  giving  effect  to such
reduction or  termination,  the aggregate  principal  amount of the  outstanding
Loans shall not exceed the Total Commitment.

            (c) Each notice of prepayment  shall specify the prepayment date and
the principal amount of each Loan (or portion  thereof) to be prepaid,  shall be
irrevocable and shall commit the applicable Borrower to prepay the Loan to which
such notice relates by the amount stated therein on the date stated therein. All
prepayments  under this  Section  2.11  shall be  subject  to  Section  2.14 but
otherwise  without premium or penalty.  All prepayments  under this Section 2.11
shall be accompanied by accrued  interest on the principal  amount being prepaid
to the date of payment.


<PAGE>


            SECTION 2.12.  Reserve  Requirements;  Change in Circumstances.  (a)
Notwithstanding  any other provision herein other than Section 2.14(c), if after
the date of this  Agreement any change in applicable law or regulation or in the
interpretation or administration  thereof by any Governmental  Authority charged
with the  interpretation  or  administration  thereof (whether or not having the
force of law) shall  change the basis of  taxation  of payments to any Lender of
the principal of or interest on any  Eurodollar  Loan made by such Lender or any
Fees or other amounts payable  hereunder (other than changes in respect of taxes
imposed on the overall net income of such  Lender by the  jurisdiction  in which
such Lender has its principal  office or by any political  subdivision or taxing
authority  therein),  or shall impose,  modify or deem  applicable  any reserve,
special deposit or similar  requirement  against assets of, deposits with or for
the  account of or credit  extended  by such  Lender  (except  any such  reserve
requirement  which is  reflected  in the LIBO Rate or the Base CD Rate) or shall
impose on such Lender or the London  interbank  market or other  market in which
Lenders  ordinarily  raise dollars to fund Loans of the requested Type any other
condition  affecting this Agreement or Eurodollar Loans made by such Lender, and
the result of any of the foregoing  shall be to increase the cost to such Lender
of funding, making or maintaining any Eurodollar Loan or to reduce the amount of
any sum received or receivable by such Lender  hereunder  (whether of principal,
interest or otherwise)  by an amount deemed by such Lender to be material,  then
Alcoa will pay or cause the other  Borrowers  to pay to such  Lender upon demand
such  additional  amount or  amounts  as will  compensate  such  Lender for such
additional costs incurred or reduction suffered.

            (b) If any Lender shall have  determined that the  applicability  of
any law, rule, regulation, agreement or guideline adopted after the date of this
Agreement  pursuant  to the July 1988 report of the Basle  Committee  on Banking
Regulations and Supervisory  Practices  entitled  "International  Convergence of
Capital  Measurement  and Capital  Standards",  or the  adoption  after the date
hereof of any other law,  rule,  regulation,  agreement or  guideline  regarding
capital adequacy, or any change in any of the foregoing or in the interpretation
or administration of any of the foregoing by any governmental authority, central
bank or comparable  agency  charged with the  interpretation  or  administration
thereof,  or compliance by any Lender (or any lending  office of such Lender) or
any Lender's  holding  company with any request or directive  regarding  capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable  agency, has or would have the effect of reducing the rate of
return on such  Lender's  capital  or on the  capital of such  Lender's  holding
company,  if any, as a consequence  of this  Agreement or the Loans made by such
Lender  pursuant hereto to a level below that which such Lender or such Lender's
holding company could have achieved but for such applicability, adoption, change
or compliance (taking into consideration such Lender's policies and the policies
of such Lender's holding company with respect to capital  adequacy) by an amount
deemed by such Lender to be material,  then from time to time Alcoa shall pay or
cause  the other  Borrowers  to pay to such  Lender  such  additional  amount or
amounts as will compensate such Lender or such Lender's  holding company for any
such reduction suffered.

            (c) A  certificate  of each  Lender  setting  forth  such  amount or
amounts as shall be necessary to compensate  such Lender or its holding  company
as specified in paragraph (a) or (b) above,  as the case may be, together with a
statement  of reasons  for such  demand and  showing  the  calculation  for such
amounts  shall be delivered  to Alcoa and shall be  conclusive  absent  manifest
error.  Alcoa shall pay or cause to be paid to each  Lender the amount  shown as
due on any such certificate  delivered by it within 10 days after its receipt of
the same.


<PAGE>


            (d) Except as provided in this paragraph, failure on the part of any
Lender to demand  compensation  for any increased  costs or reduction in amounts
received or  receivable  or  reduction  in return on capital with respect to any
period  shall  not  constitute  a  waiver  of  such  Lender's  right  to  demand
compensation with respect to such period or any other period.  The protection of
this Section 2.12 shall be available to each Lender  regardless  of any possible
contention of the invalidity or  inapplicability  of the law, rule,  regulation,
guideline  or other  change or  condition  which  shall  have  occurred  or been
imposed. No Lender shall be entitled to compensation under this Section 2.12 for
any costs  incurred or  reductions  suffered  with respect to any date unless it
shall have  notified  Alcoa that it will demand  compensation  for such costs or
reductions  under  paragraph  (c) above not more than 60 days after the later of
(i) such date and (ii) the date on which it shall have or reasonably should have
become  aware  of such  costs  or  reductions.  In the  event a  Borrower  shall
reimburse  any Lender  pursuant to this Section 2.12 for any cost and the Lender
shall  subsequently  receive a refund in respect  thereof,  the Lender  shall so
notify such  Borrower and shall pay to such  Borrower the portion of such refund
which  it  shall  determine  in  good  faith  to be  allocable  to the  cost  so
reimbursed.

            SECTION  2.13.  Change in Legality.  (a)  Notwithstanding  any other
provision  herein  other  than  Section  2.14(c),  if any  change  in any law or
regulation  or in  the  interpretation  thereof  by any  Governmental  Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar  Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written or telecopy notice to Alcoa and the  Administrative  Agent,  such Lender
may:

                  (i) declare that Eurodollar  Loans will not thereafter be made
            by such Lender hereunder,  whereupon any request by a Borrower for a
            Eurodollar  Borrowing  shall,  as to such Lender  only,  be deemed a
            request  for  an  ABR  Loan  unless   such   declaration   shall  be
            subsequently withdrawn; and


<PAGE>


                  (ii) require that all outstanding  Eurodollar Loans made by it
            be converted to ABR Loans, in which event all such Eurodollar  Loans
            shall automatically be so converted as of the effective date of such
            notice as provided in paragraph (b) below.

In the event any  Lender  shall  exercise  its rights  under  clause (i) or (ii)
above, all payments and prepayments of principal which would otherwise have been
applied to repay the  Eurodollar  Loans that would have been made by such Lender
or the  converted  Eurodollar  Loans of such Lender shall  instead be applied to
repay the Loans made by such Lender in lieu of, or resulting from the conversion
of, such Eurodollar Loans.

            (b) For purposes of this Section  2.13, a notice by any Lender shall
be  effective  as to each  Eurodollar  Loan,  if lawful,  on the last day of the
Interest  Period  applicable  to such  Eurodollar  Loan; in all other cases such
notice shall be effective on the date of receipt.


<PAGE>


            SECTION 2.14.  Indemnity.  Alcoa shall  indemnify or cause the other
Borrowers to indemnify each Lender against any loss or expense which such Lender
may sustain or incur as a consequence  of (a) any failure to fulfill on the date
of any borrowing  hereunder the  applicable  conditions set forth in Article IV,
(b) any failure by a Borrower to borrow or refinance  any Loan  hereunder  after
irrevocable  notice of such borrowing or refinancing  has been given pursuant to
Section 2.03, (c) any payment,  prepayment or  refinancing of a Eurodollar  Loan
required by any other  provision of this  Agreement or otherwise  made or deemed
made on a date  other  than  the  last  day of the  Interest  Period  applicable
thereto, other than any loss of profit resulting from any event, circumstance or
condition  set forth in  Section  2.12 or 2.13,  (d) any  default  in payment or
prepayment of the  principal  amount of any Loan or any part thereof or interest
accrued thereon,  as and when due and payable (at the due date thereof,  whether
by  scheduled  maturity,  acceleration,  irrevocable  notice  of  prepayment  or
otherwise)  or (e) the  occurrence of any Event of Default,  including,  in each
such  case,  any loss or  reasonable  expense  sustained  or  incurred  or to be
sustained or incurred in  liquidating  or employing  deposits from third parties
acquired to effect or  maintain  such Loan or any part  thereof as a  Eurodollar
Loan.  Such loss or  reasonable  expense  shall  include an amount  equal to the
excess,  if any, as  reasonably  determined  by such Lender,  of (i) its cost of
obtaining the funds for the Loan being paid, prepaid, refinanced or not borrowed
(assumed to be the LIBO Rate applicable thereto) for the period from the date of
such payment,  prepayment,  refinancing or failure to borrow or refinance to the
last day of the  Interest  Period for such Loan (or, in the case of a failure to
borrow or refinance the Interest Period for such Loan which would have commenced
on the date of such  failure)  over (ii) the amount of interest  (as  reasonably
determined by such Lender) that would be realized by such Lender in  reemploying
the funds so paid,  prepaid or not  borrowed  or  refinanced  for such period or
Interest  Period,  as the case may be. A certificate of any Lender setting forth
any amount or amounts which such Lender is entitled to receive  pursuant to this
Section together with a statement of reasons for such demand and the calculation
of such amount or amounts  shall be delivered  to Alcoa and shall be  conclusive
absent manifest error.

            SECTION 2.15. Pro Rata  Treatment.  Except as required under Section
2.13, each Borrowing,  each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans,  each payment of the Facility Fees,  each
reduction of Commitments  and each  conversion or  continuation of any Borrowing
with a Borrowing  of any Type shall be  allocated  pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such Commitments
shall  have  expired  or been  terminated,  in  accordance  with the  respective
principal  amounts of their applicable  outstanding  Loans).  Each Lender agrees
that in computing such Lender's  portion of any Borrowing to be made  hereunder,
the Administrative Agent may, in its discretion,  round each Lender's percentage
of such Borrowing, computed in accordance with Schedule 2.01, to the next higher
or lower whole dollar amount.


<PAGE>


            SECTION  2.16.  Sharing of Setoffs.  Each  Lender  agrees that if it
shall,  through the exercise of a right of banker's lien, setoff or counterclaim
against any Borrower,  or pursuant to a secured claim under Section 506 of Title
11 of the United States Code or other  security or interest  arising from, or in
lieu of,  such  secured  claim,  received by such  Lender  under any  applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
obtain payment  (voluntary or  involuntary) in respect of any Loan or Loans as a
result  of  which  the  unpaid   principal   portion  of  its  Loans   shall  be
proportionately less than the unpaid principal portion of the Loans of any other
Lender,  it shall be deemed  simultaneously  to have  purchased  from such other
Lender at face value,  and shall  promptly pay to such other Lender the purchase
price  for,  a  participation  in the Loans of such  other  Lender,  so that the
aggregate unpaid principal amount of the Loans and  participations in Loans held
by each Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Loans then  outstanding as the principal amount of its Loans prior
to such exercise of banker's lien,  setoff or counterclaim or other event was to
the principal amount of all Loans outstanding prior to such exercise of banker's
lien,  setoff or counterclaim or other event;  provided,  however,  that, if any
such purchase or purchases or adjustments shall be made pursuant to this Section
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or  adjustments  shall be rescinded to the extent of such  recovery
and the purchase price or prices or adjustment restored without interest.  Alcoa
and each other  Borrower  expressly  consent to the foregoing  arrangements  and
agree that any Lender holding a  participation  in a Loan deemed to have been so
purchased  may  exercise  any  and  all  rights  of  banker's  lien,  setoff  or
counterclaim  with  respect to any and all  moneys  owing by Alcoa or such other
Borrower to such Lender by reason  thereof as fully as if such Lender had made a
Loan directly to Alcoa or such Borrower in the amount of such participation.

            SECTION  2.17.  Payments.  (a) Each  payment  or  prepayment  by any
Borrower of the  principal of or interest on any Loans,  any Fees payable to the
Administrative  Agent or the Lenders or any other amounts due  hereunder  (other
than amounts referred to in clause (b) below) shall be made not later than 12:00
(noon),   New  York  City  time,  on  the  date  when  due  in  dollars  to  the
Administrative  Agent at its offices at 270 Park Avenue,  New York, New York, in
immediately available funds.

            (b) Whenever any payment (including  principal of or interest on any
Borrowing or any Fees or other amounts) hereunder shall become due, or otherwise
would occur,  on a day that is not a Business  Day,  such payment may be made on
the next succeeding  Business Day, and such extension of time shall in such case
be included in the computation of interest or Fees, if applicable.


<PAGE>


            SECTION 2.18.  Taxes.  (a) Any and all payments by or on behalf of a
Borrower hereunder shall be made free and clear of and without deduction for any
and all  present  or future  taxes,  levies,  imposts,  deductions,  charges  or
withholdings,  and all liabilities with respect thereto, excluding taxes imposed
on the net income of the  Administrative  Agent or any Lender (or any transferee
or  assignee  thereof,  including  a  participation  holder  (any such  entity a
"Transferee"))  and franchise taxes imposed on the  Administrative  Agent or any
Lender (or  Transferee)  in each case by the United  States or any  jurisdiction
under  the laws of  which  the  Administrative  Agent  or any  such  Lender  (or
Transferee)  is  organized  or  any  political  subdivision  thereof  (all  such
nonexcluded  taxes,  levies,  imposts,  deductions,  charges,  withholdings  and
liabilities,  collectively or individually,  "Taxes").  If any Borrower shall be
required  by law to  deduct  any Taxes  from or in  respect  of any sum  payable
hereunder to the Lenders (or any Transferee) or the  Administrative  Agent,  (i)
the sum payable shall be increased by the amount  necessary so that after making
all required  deductions  (including  deductions  applicable to additional  sums
payable   under  this  Section  2.18)  such  Lender  (or   Transferee)   or  the
Administrative  Agent (as the case may be) shall  receive an amount equal to the
sum it would have received had no such  deductions been made, (ii) such Borrower
shall make such  deductions  and (iii) such  Borrower  shall pay the full amount
deducted to the relevant  taxing  authority or other  Governmental  Authority in
accordance  with applicable law;  provided,  however,  that no Transferee of any
Lender shall be entitled to receive any greater payment under this paragraph (a)
than such  Lender  would  have  been  entitled  to  receive  immediately  before
assignment, participation or other transfer with respect to the rights assigned,
participated or transferred  unless such  assignment,  participation or transfer
shall  have been made (A) prior to the  occurrence  of an event  (including  any
change in treaty,  law or regulation) giving rise to such greater payment or (B)
at the request of Alcoa.

            (b) In addition,  each Borrower  agrees to pay any present or future
stamp or  documentary  taxes or any other excise or property  taxes,  charges or
similar  levies  which  arise  from  any  payment  made  hereunder  or from  the
execution,  delivery or  registration  of, or  otherwise  with  respect to, this
Agreement (hereinafter referred to as "Other Taxes").


<PAGE>


            (c) Each Borrower will indemnify each Lender (or Transferee) and the
Administrative  Agent for the full  amount of Taxes and Other Taxes paid by such
Lender (or Transferee) or the Administrative  Agent, as the case may be, and any
liability (including penalties, interest and expenses) arising therefrom or with
respect  thereto,  whether or not such Taxes or Other  Taxes were  correctly  or
legally  asserted  by  the  relevant  taxing  authority  or  other  Governmental
Authority.  Such indemnification shall be made within 30 days after the date any
Lender (or  Transferee) or the  Administrative  Agent, as the case may be, makes
written  demand  therefor,  together with a statement of reasons for such demand
and the calculations of such amount.

            (d) Within 30 days  after the date of any  payment of Taxes or Other
Taxes  withheld  by any  Borrower  in respect  of any  payment to any Lender (or
Transferee)  or the  Administrative  Agent,  such  Borrower  will furnish to the
Administrative  Agent, at its address referred to in Section 10.01, the original
or a certified copy of a receipt evidencing payment thereof.

            (e)  Without  prejudice  to  the  survival  of any  other  agreement
contained herein, the agreements and obligations  contained in this Section 2.18
shall  survive the payment in full of the principal of and interest on all Loans
made hereunder.

            (f) Each Lender (or  Transferee)  represents  to Alcoa that,  on the
date such Lender (or such Transferee)  becomes a party to this Agreement,  it is
eligible to receive  payments of interest  hereunder from Alcoa or any Borrowing
Subsidiary without  withholding in respect of United States Federal  withholding
tax  (except,  in the case of a  Transferee  of any  Lender,  as a result of the
occurrence of an event (including a change in treaty,  law or regulation)  after
the date of this Agreement giving rise to withholding to which such Lender would
be subject).


<PAGE>


            (g) Each Lender (or Transferee, other than a Transferee described in
the  exception  in  Section  2.18(f))  that is  organized  under  the  laws of a
jurisdiction outside the United States shall, on or before the date it becomes a
party to this Agreement (or, in the case of a Transferee that is a participation
holder,  on or before the date such Transferee  becomes a  participation  holder
hereunder),  deliver to Alcoa and the  Administrative  Agent such  certificates,
documents  or other  evidence,  as required by the Code or Treasury  Regulations
issued  pursuant  thereto,  including  Internal  Revenue Service Form 1001, Form
4224, W8EBN, or and any other certificate or statement of exemption  required by
Treasury Regulation Section 1.1441-1,  1.1441-4 or 1.1441-6(c) or any subsequent
version thereof or successors  thereto,  properly completed and duly executed by
such  Lender (or  Transferee)  establishing  that  payment is (i) not subject to
United States Federal  withholding  tax under the Code because such payments are
effectively connected with the conduct by such Lender (or Transferee) of a trade
or  business in the United  States or (ii)  totally  exempt  from United  States
Federal  withholding  tax under a provision  of an  applicable  tax  treaty.  In
addition, each such Lender (or such Transferee) shall, if legally able to do so,
thereafter deliver such  certificates,  documents or other evidence from time to
time  establishing  that  payments  received  hereunder  are not subject to such
withholding  upon  receipt  of a  written  request  therefor  from  Alcoa or the
Administrative  Agent.  Unless Alcoa and the Administrative  Agent have received
forms or other documents satisfactory to them indicating that payments hereunder
are  not  subject  to  United  States  Federal  withholding  tax,  Alcoa  or the
Administrative  Agent  shall  withhold  such  taxes  from such  payments  at the
applicable statutory rate, subject to Section 2.18(a).

            (h) None of the  Borrowers  shall be required to pay any  additional
amounts to any  Lender (or  Transferee)  in  respect  of United  States  Federal
withholding  tax  pursuant  to  paragraph  (a)  above  to the  extent  that  the
obligation  to pay such  additional  amounts  would  not have  arisen  but for a
failure by such Lender (or Transferee) to deliver the certificates, documents or
other evidence  specified in the preceding  paragraph (g) unless such failure is
attributable  to  (i)  a  change  in  applicable  law,  regulation  or  official
interpretation  thereof or (ii) an amendment or  modification to or a revocation
of any  applicable  tax treaty or a change in official  position  regarding  the
application or  interpretation  thereof,  in each case on or after the date such
Lender (or Transferee) became a party to this Agreement.


<PAGE>


            (i) Any Lender  (or  Transferee)  claiming  any  additional  amounts
payable pursuant to this Section 2.18 shall use reasonable  efforts  (consistent
with legal and  regulatory  restrictions)  to file any  certificate  or document
requested in writing by the relevant  Borrower or to change the  jurisdiction of
its  applicable  lending  office if the making of such a filing or change  would
avoid the need for or reduce the amount of any such additional amounts which may
thereafter  accrue and would not, in the sole  determination  of such Lender (or
Transferee), be otherwise disadvantageous to such Lender (or Transferee).

            (j) If a Lender (or  Transferee) or the  Administrative  Agent shall
become  aware that it may be entitled to receive a refund in respect of Taxes or
Other Taxes as to which it has been  indemnified by a Borrower  pursuant to this
Section 2.18, it shall promptly notify Alcoa of the  availability of such refund
and shall,  within 30 days after  receipt of a request by Alcoa,  apply for such
refund at Alcoa's expense.  If any Lender (or Transferee) or the  Administrative
Agent  receives a refund in  respect of any Taxes or Other  Taxes as to which it
has been  indemnified  by a Borrower  pursuant to this  Section  2.18,  it shall
promptly  repay such refund to such Borrower (to the extent of amounts that have
been paid by such Borrower under this Section 2.18 with respect to such refund),
net of all out-of-pocket  expenses (including taxes imposed with respect to such
refund) of such Lender (or Transferee) or the  Administrative  Agent and without
interest; provided, however, that such Borrower, upon the request of such Lender
(or Transferee) or the Administrative  Agent, agrees to return such refund (plus
penalties,  interest or other  charges) to such  Lender (or  Transferee)  or the
Administrative   Agent  in  the  event  such  Lender  (or   Transferee)  or  the
Administrative Agent is required to repay such refund.

            (k) Nothing  contained in this Section 2.18 shall require any Lender
(or  Transferee)  or the  Administrative  Agent to make available any of its tax
returns  (or any other  information  relating  to its taxes which it deems to be
confidential).


<PAGE>


            (l) No  Borrower  shall be  required  to  reimburse  any  Lender (or
Transferee)  or the  Administrative  Agent with  respect to any Tax or Other Tax
unless  such  Lender,  Transferee  or the  Administrative  Agent  notifies  such
Borrower  of the  amount  of such  Tax or  Other  Tax on or  before  the  second
anniversary of the date such Lender, Transferee or the Administrative Agent pays
such Tax or Other Tax.

            SECTION 2.19. Assignment of Commitments Under Certain Circumstances.
In the event  that any  Lender  shall  have  delivered  a notice or  certificate
pursuant  to Section  2.12 or 2.13,  or a  Borrower  shall be  required  to make
additional  payments  to any Lender  under  Section  2.18,  Alcoa shall have the
right,  at its own  expense,  upon notice to such Lender and the  Administrative
Agent,  to require  such  Lender to transfer  and assign  without  recourse  (in
accordance with and subject to the restrictions  contained in Section 10.04) all
its interests,  rights and obligations under this Agreement to another financial
institution which shall assume such obligations;  provided, however, that (i) no
such assignment  shall conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) Alcoa or the assignee, as the case may be, shall
pay (or, in the case of Alcoa,  cause  another  Borrower to pay) to the affected
Lender  in  immediately  available  funds  on the  date of such  termination  or
assignment  the principal of and interest  accrued to the date of payment on the
Loans made by it hereunder and all other amounts accrued for its account or owed
to it hereunder.

ARTICLE III.  REPRESENTATIONS AND WARRANTIES

            Each  Borrower  represents  and warrants to each of the Lenders with
respect to itself as follows  (except that the  Borrowing  Subsidiaries  make no
representations or warranties under Section 3.06 or 3.09:

            SECTION 3.01.  Organization.   Such Borrower is a corporation
duly organized, validly existing and, where applicable, in good standing
under the laws of its jurisdiction of incorporation and is duly qualified to
do business as a foreign corporation and, where applicable, is in good
standing in all other jurisdictions in which the ownership of its properties
or the nature of its activities or both makes such qualification necessary,
except to the extent that failure to be so qualified would not result in a
Material Adverse Effect.



<PAGE>


            SECTION 3.02.  Authorization.  Such Borrower has corporate power and
authority to execute,  deliver and carry out the provisions of this Agreement to
which  it is a  party,  to  borrow  hereunder  and to  perform  its  obligations
hereunder  and all such  action  has been  duly and  validly  authorized  by all
necessary corporate proceedings on its part.

            SECTION 3.03. Enforceability.  This Agreement has been duly executed
and  delivered by such  Borrower and  constitutes  the legal,  valid and binding
obligation of such Borrower  enforceable  in accordance to its terms,  except as
limited by bankruptcy,  insolvency or other similar laws of general  application
affecting  the  enforcement  of  creditors'  rights or by general  principles of
equity limiting the availability of equitable remedies.

            SECTION 3.04.  Governmental  Approvals.  No authorization,  consent,
approval,   license   exemption  or  other  action  by,  and  no   registration,
qualification,   designation,  declaration  or  filing  with,  any  Governmental
Authority is necessary in connection with such Borrower's execution and delivery
of  this  Agreement,  the  consummation  by any  Borrower  of  the  transactions
contemplated  hereby or such  Borrower's  performance of or compliance  with the
terms and conditions hereof, except as set forth on Schedule 3.04.

            SECTION  3.05.  No Conflict.  None of the  execution and delivery by
such  Borrower  of this  Agreement,  the  consummation  by such  Borrower of the
transactions   contemplated  hereby  or  performance  by  such  Borrower  of  or
compliance by such Borrower with the terms and conditions hereof or thereof will
(a) violate any law, constitution, statute, treaty, regulation, rule, ordinance,
order, injunction,  writ, decree or award of any Governmental Authority to which
it is  subject,  (b)  conflict  with or result in a breach or default  under its
charter or Memorandum and Articles of Association or by-laws, as applicable, (c)
conflict  with or result in a breach or default which is material in the context
of this Agreement  under any agreement or instrument to which such Borrower is a
party or by which it or any of its  properties,  whether now owned or  hereafter
acquired, may be subject or bound or (d) result in the creation or imposition of
any Lien  prohibited  by Section 6.01 upon any  property or assets,  whether now
owned or hereafter acquired, of such Borrower.


<PAGE>


            SECTION 3.06.  Financial  Statements.  In the case of Alcoa,  it has
furnished to the Lenders copies of its consolidated balance sheet as of December
31, 1999,  and the related  consolidated  statements of income and cash flow for
the year then ended,  all  examined  and  certified  by  PricewaterhouseCoopers,
L.L.P.  Such financial  statements  (including the notes thereto) present fairly
the financial  condition of Alcoa and its  Subsidiaries as of such dates and the
results of their  operations for the periods then ended,  all in conformity with
GAAP,  subject (in the case of the  interim  financial  statements)  to year-end
audit adjustments.

            SECTION 3.07.  No Defaults.  No event has occurred and is continuing
and no  condition  exists  which  constitutes  a  Default  or Event  of  Default
hereunder.  Such  Borrower is not in violation of (i) any term of its charter or
Constitution  or by-laws,  as  applicable,  or (ii) any  material  agreement  or
instrument to which it is a party or by which it or any of its properties may be
subject or bound where such violation is likely to result in a Material  Adverse
Effect.

            SECTION  3.08.  Litigation.  Except  as set  forth in the  financial
statements  referred to in Section  3.06 or any Exchange Act Report or otherwise
disclosed on Schedule  3.08,  there is no pending or, to the knowledge of any of
its Responsible  Officers,  threatened  proceeding by or before any Governmental
Authority  against it which in the opinion of its counsel is likely to result in
a  Material  Adverse  Effect.  Except as set forth in the  financial  statements
referred to in Section 3.06 or any Exchange Act Report or otherwise disclosed in
Schedule  3.08,  there  is no  pending  or,  to  the  knowledge  of  any  of its
Responsible  Officers,  threatened  proceeding  by or  before  any  Governmental
Authority against any of its Subsidiaries which in the opinion of its counsel is
likely to result in a Material Adverse Effect.

            SECTION 3.09.  No Material  Adverse  Change.  As of the date of this
Agreement,  there has been no material  adverse change in the business,  assets,
operations  or financial  condition of itself and its  Subsidiaries,  taken as a
whole except, in the case of Alcoa and the Borrowing Subsidiaries,  as disclosed
in any Exchange Act Report since December 31, 1999.


<PAGE>


            SECTION 3.10. Employee Benefit Plans. (a) U.S. Plans. It and each of
its  ERISA  Affiliates  is in  compliance  in all  material  respects  with  the
applicable provisions of ERISA and the regulations and published interpretations
thereunder.  No  Reportable  Event has occurred as to which such Borrower or any
ERISA  Affiliate  was  required  to file a report  with the PBGC  that  alone or
together with any other  Reportable Event would reasonably be expected to result
in a liability of such Borrower to the PBGC in an aggregate  amount in excess of
$25,000,000.  The aggregate  present value of all benefit  liabilities under the
Plans (based on the assumptions used to fund such Plans) did not, as of the last
annual  valuation dates  applicable  thereto,  exceed the aggregate value of the
assets of the Plans by more than 10% of  Consolidated  Net Worth.  Neither  such
Borrower nor any ERISA  Affiliate  has incurred any  Withdrawal  Liability  that
would  reasonably be expected to result in a Material  Adverse  Effect.  Neither
such  Borrower nor any ERISA  Affiliate has received any  notification  that any
Multiemployer  Plan is in  reorganization  or has  been  terminated  within  the
meaning of Title IV of ERISA,  and no  Responsible  Officer of any  Borrower has
knowledge  of any fact  which  would  reasonably  be  expected  to result in the
reorganization or termination of a Multiemployer Plan where such  reorganization
or termination has resulted or would  reasonably be expected to result,  through
increases in the contributions required to be made to such Plan or otherwise, in
a Material Adverse Effect.


<PAGE>


            (b)  Foreign  Plans.  Each  Foreign  Plan  is in  compliance  in all
material  respects  with all  requirements  of law  applicable  thereto  and the
respective  requirements of the governing  documents for such plan except to the
extent  such  non-compliance  could not  reasonably  be  expected to result in a
Material Adverse Effect.  With respect to each Foreign Pension Plan, none of the
Borrowers,  their  respective  Affiliates or any of their  directors,  officers,
employees or agents has engaged in a transaction  which would subject any of the
Borrowers,  directly or  indirectly,  to a material tax or civil  penalty  which
could  reasonably  be  expected  to result in a Material  Adverse  Effect.  With
respect to each Foreign  Pension Plan, none of the Borrowers,  their  respective
Affiliates or any of their directors,  officers, employees or agents has engaged
in a  transaction  which  would  subject  any  of  the  Borrowers,  directly  or
indirectly,  to a  material  tax or civil  penalty  which  could  reasonably  be
expected to result in a Material  Adverse  Effect.  With respect to each Foreign
Plan,  adequate  reserves  have been  established  in the  financial  statements
furnished to Lenders in respect of any unfunded  liabilities in accordance  with
applicable law and prudent business  practice or, where required,  in accordance
with ordinary  accounting  practices in the  jurisdiction  in which such Foreign
Plan is maintained.  The aggregate unfunded liabilities,  after giving effect to
any such reserves for such liabilities, with respect to such Foreign Plans could
not reasonably be expected to result in a Material Adverse Effect.  There are no
material  actions,  suits or claims  (other than  routine  claims for  benefits)
pending or threatened  against any of the  Borrowers or any of their  Affiliates
with  respect  to  any  Foreign  Plan  which  could   reasonably   be  expected,
individually or in the aggregate, to result in a Material Adverse Effect.

            SECTION 3.11. Title to Properties; Possession Under Leases. (a) Such
Borrower  and each of its  Subsidiaries  have good and  marketable  title to, or
valid leasehold interests in, all its material properties and assets, except for
minor  defects in title that do not  materially  interfere  with its  ability to
conduct its business as currently  conducted or to utilize such  properties  and
assets for their intended purposes.

            (b) Such  Borrower and each of its  Subsidiaries  have complied with
all material  obligations  under all material  leases to which it is a party and
all such leases are in full force and effect. Such Borrower and its Subsidiaries
enjoy peaceful and undisturbed possession under all such material leases.

            SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act. None of Alcoa or any Borrowing  Subsidiary  is an  "investment  company" as
defined in, or subject to regulation under, the Investment  Company Act of 1940.
Alcoa is exempted as, and no  Borrowing  Subsidiary  is, a "holding  company" as
defined in, or subject to regulation  under,  the Public Utility Holding Company
Act of 1935.


<PAGE>


            SECTION 3.13. Tax Returns.  Such Borrower and its Subsidiaries  have
filed or caused to be filed all  Federal,  state,  local and foreign tax returns
required  to have been  filed by it and have paid or caused to be paid all taxes
shown to be due and payable on such  returns or on any  assessments  received by
it,  except  taxes  that  are  being  contested  in good  faith  by  appropriate
proceedings  and for which adequate  reserves are maintained in accordance  with
GAAP.

            SECTION 3.14. Compliance with Laws and Agreements.  (a) Neither such
Borrower  nor  any of its  Subsidiaries  is in  violation  of any  law,  rule or
regulation,  or in default with respect to any  judgment,  writ,  injunction  or
decree of any  Governmental  Authority,  where such  violation or default  would
reasonably be expected to result in a Material Adverse Effect.

            (b) Neither such Borrower nor any of its  Subsidiaries is in default
in any material  manner under any provision of any indenture or other  agreement
or  instrument  evidencing  Indebtedness,  or any other  material  agreement  or
instrument  to which it is a party  or by which it or any of its  properties  or
assets are or may be bound,  where such default  would be  reasonably  likely to
result in a Material Adverse Effect.

            SECTION 3.15. No Material Misstatements.  Except for information not
prepared  by Alcoa  and  expressly  disclaimed  thereby,  no  report,  financial
statement, exhibit or schedule furnished by or on behalf of such Borrower to the
Administrative  Agent or any Lender in connection  with the  negotiation of this
Agreement or included herein or delivered pursuant thereto contained or contains
any material misstatement of fact or omitted or omits to state any material fact
necessary  to make the  statements  therein,  in the light of the  circumstances
under which they were or are made, not misleading.

            SECTION 3.16. Federal Reserve Regulations.  The proceeds of any Loan
will be used to provide working capital or for other general corporate purposes,
including but not limited to the support of Alcoa's Commercial Paper program. No
part of the proceeds of any Loan to such Borrower will be used, whether directly
or indirectly,  and whether  immediately,  incidentally  or ultimately,  for any
purpose  that  entails  a  violation  of any of the  regulations  of the  Board,
including Regulations U and X.

            SECTION 3.17.  No Trusts.  Such Borrower is not entering into
this Agreement in its capacity as trustee of any trust.



<PAGE>


            SECTION 3.18. Year 2000 Computer Systems Compliance.  As of the date
of this Agreement,  there has not occurred, and Alcoa does not expect that there
will occur,  any material  disruption in the  operations or business  systems of
Alcoa or its  Subsidiaries,  taken as a whole,  resulting  from the inability of
computer systems of Alcoa and its Subsidiaries or equipment  containing embedded
microchips to recognize or properly process dates in or following the year 2000.

ARTICLE IV. CONDITIONS OF EFFECTIVENESS, LENDING AND DESIGNATION OF BORROWING
                  SUBSIDIARIES

            The  obligations  of the  Lenders  to  make  Loans  to any  Borrower
hereunder  are  subject  to the  satisfaction  of the  conditions  set  forth in
Sections  4.01  and 4.02  below  (and,  in the  case of  Loans to any  Borrowing
Subsidiary, the satisfaction, as to such Borrowing Subsidiary, of the conditions
set forth in Section 4.03 below):

            SECTION 4.01.  Effective Date.  On the Effective Date:

            (a) The  Administrative  Agent shall have received a written opinion
of Denis A.  Demblowski,  Senior  Counsel  and  Secretary  of  Alcoa,  dated the
Effective Date and addressed to the Lenders,  to the effect set forth in Exhibit
C hereto.

            (b) All legal matters  incident to this Agreement and the borrowings
hereunder shall be  satisfactory to the Lenders and to Cravath,  Swaine & Moore,
counsel for the Administrative Agent.


<PAGE>


            (c)  The  Administrative  Agent  shall  have  received  (i) a  copy,
including all  amendments  thereto,  of the charter of Alcoa,  certified as of a
recent  date by the  Secretary  of State or other  appropriate  official  of its
jurisdiction of incorporation and a certificate as to the good standing of Alcoa
as of a recent  date,  from such  Secretary of State or other  official;  (ii) a
certificate of the Secretary or Assistant Secretary of Alcoa dated the Effective
Date and certifying (A) that attached thereto is a true and complete copy of the
by-laws of such  corporation  as in effect on the  Effective  Date  showing  all
amendments  thereto  since the date of the  resolutions  described in clause (B)
below, (B) that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such corporation authorizing the execution,
delivery  and   performance  of  this  Agreement  and  the  borrowings  by  such
corporation  hereunder,  and that  such  resolutions  have  not  been  modified,
rescinded  or amended and are in full force and effect,  (C) that the charter of
Alcoa has not been amended since the date of the last amendment thereto shown on
the certificate of good standing  furnished pursuant to clause (i) above and (D)
as to the  incumbency  and specimen  signature of each  officer  executing  this
Agreement or any other  document  delivered in connection  herewith on behalf of
such  corporation;   (iii)  a  certificate  of  another  officer  of  each  such
corporation  as to the  incumbency  and specimen  signature of the  Secretary or
Assistant Secretary  executing the certificate  pursuant to (ii) above; and (iv)
such other documents as the Lenders or Cravath,  Swaine & Moore, counsel for the
Administrative Agent may reasonably request.

            (d) The Administrative Agent shall have received  certificates dated
the Effective  Date and signed by a Financial  Officer of Alcoa  confirming  the
satisfaction of the conditions  precedent set forth in paragraphs (b) and (c) of
Section 4.02.

            (e) The Administrative  Agent shall have received all Fees and other
amounts due and payable on or prior to the  Effective  Date,  including all Fees
accrued to the date hereof under the Existing 364-Day Credit Agreement.

            (f) The  commitments  under the Existing  364-Day  Credit  Agreement
shall have been terminated and no loans thereunder shall be outstanding.


<PAGE>


            (g) The Administrative  Agent shall have received  certificates of a
Responsible Officer of Alcoa, each dated the Effective Date and stating that (i)
except as disclosed  in the  Exchange Act Report or otherwise  disclosed in such
certificate,  Alcoa and each of its  Subsidiaries  have complied in all respects
with all  Federal,  state,  local  and  foreign  statutes,  ordinances,  orders,
judgments,  rulings and regulations  relating to  environmental  pollution or to
environmental  regulation or control except to the extent any such failure so to
comply would not,  alone or together with any other such failure,  be reasonably
likely to result in a Material Adverse Effect; (ii) neither Alcoa nor any of its
Subsidiaries  has  received  notice of any  failure so to comply  which alone or
together with any other such failure  would be reasonably  likely to result in a
Material  Adverse Effect;  and (iii) the plants of Alcoa and its Subsidiaries do
not manage any  hazardous  wastes,  toxic  pollutants  or  substances  similarly
denominated  in  violation  of any  applicable  law or  regulations  promulgated
pursuant  thereto  including,  for  operations  within  the United  States,  the
Resource Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Hazardous Materials  Transportation Act, the
Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or any other
applicable  law,  where such  violation  would be  reasonably  likely to result,
individually or together with any such other  violations,  in a Material Adverse
Effect.

            SECTION 4.02.  All Borrowings.  On the date of each Borrowing:

            (a) Such  Borrower  shall have  provided  the notice as  required by
Section 2.03.

            (b) The  representations  and  warranties  set forth in Article  III
hereof (except,  in the case of a refinancing of any Loan that does not increase
the  aggregate  principal  amount  of  Loans  of  any  Lender  outstanding,  the
representations  set forth in Sections  3.08 and 3.10) shall be true and correct
in all material  respects on and as of the date of such  Borrowing with the same
effect  as  though  made on and as of  such  date,  except  to the  extent  such
representations and warranties expressly relate to an earlier date.

            (c) Each Borrower  shall be in  compliance in all material  respects
with all the terms and provisions set forth herein on its part to be observed or
performed,  and at the time of and immediately  after such Borrowing no Event of
Default or Default shall have occurred and be continuing.


<PAGE>


            (d) In the case of any  Borrowing  which would  cause the  aggregate
principal amount of outstanding  loans under this Agreement,  the 364-Day Credit
Agreement,  the Existing  Five-Year  Credit  Agreement  and any other New Credit
Arrangement  (as  defined  in the  resolutions  duly  adopted  by the  Board  of
Directors  of Alcoa on  March  10,  2000) to  exceed  $6,000,000,000  minus  the
aggregate  outstanding  principal  amount of Commercial Paper issued by Alcoa or
issued by  Subsidiaries  and  guaranteed by Alcoa or other loans or notes issued
under any New Credit  Arrangement (other than Commercial Paper or other loans or
notes being repaid with the proceeds of such  Borrowing),  such Borrowing  shall
have been duly  authorized  by Alcoa and the  Administrative  Agent  shall  have
received a true and complete  copy of  resolutions  duly adopted by the Board of
Directors of Alcoa authorizing such Borrowing.

Each  Borrowing by any Borrower  shall be deemed to constitute a  representation
and warranty by such Borrower and, in the case of a Borrowing Subsidiary,  Alcoa
on the date of such Borrowing as to the matters specified in paragraphs (b), (c)
and (d) of this Section 4.02.

            SECTION 4.03.  Designation of Borrowing Subsidiaries.  On each
Designation Date:



<PAGE>


            (a) The  Administrative  Agent shall have received (i) a copy of the
charter,   including  all  amendments  thereto,  of  each  applicable  Borrowing
Subsidiary,  certified  as of a  recent  date by the  Secretary  of State or the
appropriate  foreign  governmental  official  of the  state  or  country  of its
organization,  and a  certificate  as to the  good  standing  of such  Borrowing
Subsidiary  as of a recent  date from  such  Secretary  of State or  appropriate
foreign  governmental  official,  as  applicable;  (ii)  a  certificate  of  the
Secretary  or  Assistant  Secretary  of  such  Borrowing  Subsidiary  dated  the
Designation  Date  and  certifying  (A)  that  attached  thereto  is a true  and
completed copy of the by-laws of such  Borrowing  Subsidiary as in effect on the
Designation  Date  showing  all  amendments   thereto  since  the  date  of  the
resolutions  described in clause (B) below,  (B) that attached thereto is a true
and complete copy of resolutions  duly adopted by the Board of Directors of such
Borrowing Subsidiary authorizing the execution, delivery and performance of this
Agreement and the borrowings hereunder,  and that such resolutions have not been
modified,  rescinded  or amended and are in full force and effect,  (C) that the
charter of such Borrowing  Subsidiary has not been amended since the date of the
last  amendment  thereto shown on the  certificate  of good  standing  furnished
pursuant  to  clause  (i)  above,  and  (D) as to the  incumbency  and  specimen
signature  of  each  officer  executing  or  any  other  document  delivered  in
connection  herewith  on  behalf  of  such  Borrowing  Subsidiary;  and  (iii) a
certificate of another  officer as to the  incumbency and specimen  signature of
the Secretary or Assistant Secretary executing the certificate  pursuant to (ii)
above.

            (b) The  Administrative  Agent shall have received a Designation  of
Borrowing  Subsidiary  of each  applicable  Borrowing  Subsidiary as provided in
Section 10.04(i).

ARTICLE V.  AFFIRMATIVE COVENANTS

            So long as this Agreement shall remain in effect or the principal of
or interest on any Loan,  any Fees or any other  expenses or amounts  payable in
connection herewith shall be unpaid, unless the Required Lenders shall otherwise
consent in writing:

            SECTION  5.01.  Financial  Statements,  Reports,  etc.  Alcoa  shall
furnish to the  Administrative  Agent the following,  with sufficient copies for
the Administrative Agent to provide a copy to each Lender:

            (a)  within  120 days  after the end of each  fiscal  year,  (i) its
consolidated  balance  sheet and  related  statements  of  income  and cash flow
audited by  independent  public  accountants  of recognized  national  standing,
accompanied by an opinion of such  accountants  (which shall not be qualified as
to scope of audit or in any  manner  calling  into  question  the  status of its
business  as a going  concern) to the effect  that such  consolidated  financial
statements fairly present its financial  condition and results of operations and
that of its consolidated Subsidiaries, taken as a whole, in accordance with GAAP
and (ii) the  balance  sheet  and  related  statements  of income of each of its
Subsidiaries  which has been designated  pursuant to Section 10.04(i) as, and as
long  as  such  Subsidiary  remains,  a  Borrowing  Subsidiary,  certified  by a
Financial Officer of such Subsidiary;

            (b) within 60 days after the end of each of the first  three  fiscal
quarters of each fiscal year,  its Form 10-Q as prescribed by the Securities and
Exchange Commission (or any successor agency);


<PAGE>


            (c) concurrently with any delivery of financial statements under (a)
above and  promptly  at the  request of the  Administrative  Agent (but not more
often  than once  with  respect  to any  fiscal  quarter),  a  certificate  of a
Financial  Officer  (i)  certifying  that no Event of  Default  or  Default  has
occurred  and is  continuing  or, if such an Event of  Default  or  Default  has
occurred and is  continuing,  specifying  the nature and extent  thereof and any
corrective  action taken or proposed to be taken with  respect  thereto and (ii)
setting  forth   computations   in  reasonable   detail   satisfactory   to  the
Administrative  Agent  demonstrating  compliance with the covenant  contained in
Section 6.03;

            (d) promptly after the same become publicly available, copies of all
periodic and other reports,  proxy  statements and other  materials  filed by it
(other than  registration  statements and  prospectuses  related to offerings to
directors, officers or employees) with the Securities and Exchange Commission or
any  Governmental  Authority  succeeding  to any of or all the functions of such
Commission,  or with any national  securities  exchange,  or  distributed to its
shareholders, as the case may be; and

            (e) promptly,  from time to time, such other  information  regarding
its operations, business affairs and financial condition, or compliance with the
terms  of  this  Agreement,  as  the  Administrative  Agent  or any  Lender  may
reasonably request.

            Alcoa  shall be  deemed  to have  fulfilled  its  obligations  under
paragraph (a), (b) or (d) above when the  Administrative  Agent receives a paper
or an electronic  version of the documents  required to be delivered pursuant to
paragraph (a), (b) or (d) above,  in a format  acceptable to the  Administrative
Agent; provided that (i) such paper or electronic version must be accompanied by
a  certificate  delivered  pursuant to paragraph (c) above and (ii) the Borrower
shall deliver paper copies of the information referred to in paragraph (d) above
to any Lender which requests such delivery.

            SECTION 5.02.  Pari Passu  Ranking.  Each Borrower shall ensure that
any amounts  payable by it hereunder  will at all times rank at least pari passu
with all other unsecured, unsubordinated Indebtedness of such Borrower except to
the extent any such Indebtedness may be preferred by law.


<PAGE>


            SECTION 5.03.  Maintenance of Properties.  Each Borrower shall,  and
shall  cause its  Subsidiaries  to,  maintain  and keep its  properties  in such
repair,  working  order  and  condition,  and  make or cause to be made all such
needful  and  proper  repairs,  renewals  and  replacements  thereto,  as in the
judgment of such Borrower are  necessary and in the interests of such  Borrower;
provided, however, that nothing in this Section 5.03 shall prevent such Borrower
(or any Subsidiary  thereof) from selling,  abandoning or otherwise disposing of
any of its  respective  properties  or  discontinuing  a part of its  respective
businesses  from time to time if, in the judgment of such  Borrower,  such sale,
abandonment, disposition or discontinuance is advisable.

            SECTION 5.04.  Obligations  and Taxes.  Each Borrower  shall pay its
Indebtedness and other obligations that, if not paid, would result in a Material
Adverse  Effect before the same shall become  delinquent or in default,  and pay
and discharge all taxes upon or against it, or against its  properties,  in each
case  prior to the date on which  penalties  attach  thereto,  unless and to the
extent  that any such  obligation  or tax is being  contested  in good faith and
adequate reserves with respect thereto are maintained in accordance with GAAP.

            SECTION 5.05.  Insurance.  Each Borrower shall,  and shall cause its
consolidated  Subsidiaries  to,  insure  and keep  insured,  in each  case  with
reputable insurance companies,  so much of its respective  properties to such an
extent and against such risks, or in lieu thereof,  in the case of any Borrower,
maintain or cause to be maintained a system or systems of self-insurance,  as is
customary in the case of corporations engaged in the same or similar business or
having similar properties similarly situated.

            SECTION  5.06.  Existence;   Businesses  and  Properties.  (a)  Each
Borrower  shall do or cause to be done all things  necessary to preserve,  renew
and keep in full force and effect its legal  existence  in its  jurisdiction  of
incorporation, except as otherwise expressly permitted under Section 6.02.


<PAGE>


            (b) Each Borrower shall do or cause to be done all things  necessary
to obtain, preserve, renew, extend and keep in full force and effect the rights,
licenses, permits, franchises,  authorizations,  patents, copyrights, trademarks
and  trade  names  material  to the  conduct  of its  business  as its  Board of
Directors shall determine in its judgment.

            SECTION 5.07.  Compliance  with Laws. (a) Each Borrower shall comply
in all material respects with all applicable laws, rules, regulations and orders
of any Governmental  Authority to which it is subject,  whether now in effect or
hereafter enacted,  such that no failure so to comply will result in the levy of
any penalty or fine which shall have a Material Adverse Effect.


<PAGE>


            (b) Each  Borrower  shall comply in all material  respects  with the
applicable provisions of ERISA and all other related applicable laws and furnish
to the Administrative Agent and each Lender (i) as soon as possible,  and in any
event within 30 days after any Responsible Officer of such Borrower or any ERISA
Affiliate  either  knows or has reason to know that any ERISA Event has occurred
that alone or together  with any other ERISA Event would  reasonably be expected
to result in  liability  of such  Borrower  to the PBGC in an  aggregate  amount
exceeding $25,000,000,  a statement of a Financial Officer setting forth details
as to such ERISA Event and the action proposed to be taken with respect thereto,
together  with a copy of the  notice,  if any,  of such ERISA Event given to the
PBGC or other  Governmental  Authority,  (ii) promptly after receipt thereof,  a
copy of any notice such  Borrower or any ERISA  Affiliate  may receive  from the
PBGC or other  Governmental  Authority  relating to the intention of the PBGC or
other  Governmental  Authority to terminate any Plan or Plans (other than a Plan
maintained by an ERISA  Affiliate  which is considered an ERISA  Affiliate  only
pursuant to  subsection  (m) or (o) of Section 414 of the Code),  or any Foreign
Plan or Foreign Plans,  or to appoint a trustee to administer any Plan or Plans,
or any Foreign  Plan or Foreign  Plans,  (iii) within 10 days after the due date
for filing with the PBGC  pursuant to Section  412(n) of the Code of a notice of
failure to make a required  installment or other payment with respect to a Plan,
a statement of a Financial  Officer setting forth details as to such failure and
the action  proposed to be taken with respect  thereto,  together with a copy of
such notice given to the PBGC and (iv)  promptly and in any event within 30 days
after receipt  thereof by such Borrower or any ERISA  Affiliate from the sponsor
of a  Multiemployer  Plan,  a copy of each notice  received by such  Borrower or
ERISA Affiliate  concerning (A) the imposition of Withdrawal Liability in excess
of  $25,000,000  or (B) a  determination  that a  Multiemployer  Plan is,  or is
expected to be, terminated or in reorganization, in each case within the meaning
of Title IV of ERISA, if such termination or reorganization  would reasonably be
expected to result,  alone or with any other such termination or reorganization,
in increases in excess of $25,000,000 in the  contributions  required to be made
to the relevant Plan or Plans.

            SECTION 5.08.  Litigation and Other Notices.  Each Borrower shall
furnish to the Administrative Agent prompt written notice upon its becoming
aware of any of the following:

            (a) any Event of  Default  or  Default,  specifying  the  nature and
extent  thereof  and the  corrective  action (if any)  proposed to be taken with
respect thereto;

            (b) the  filing  or  commencement  of,  or any  threat  or notice of
intention of any person to file or  commence,  any action,  suit or  proceeding,
whether at law or in equity or by or before any Governmental Authority,  against
it or any of its Subsidiaries  which would reasonably be expected to result in a
Material Adverse Effect; and

            (c) any other  development that has resulted in, or would reasonably
be expected to result in, a Material Adverse Effect.

            SECTION 5.09.  Borrowing Subsidiaries.  Alcoa shall cause each
Borrowing Subsidiary at all times to be a wholly-owned Subsidiary.


ARTICLE VI.  NEGATIVE COVENANTS

            Each Borrower covenants and agrees with each Lender that, so long as
this  Agreement  shall  remain in effect or the  principal of or interest on any
Loan, any Fees or any other expenses or amounts  payable in connection  herewith
shall be unpaid, unless the Required Lenders shall otherwise consent in writing,
such Borrower will not:


<PAGE>


            SECTION 6.01.  Liens.  (a) Create or incur, or permit any Restricted
Subsidiary  to create or incur,  any Lien on its  property or assets  (including
stock or other securities of any person,  including any of its Subsidiaries) now
or  hereafter  acquired  by it or on any income or revenues or rights in respect
thereof,  securing Indebtedness for borrowed money, without ratably securing the
Loans; provided, however, that the foregoing shall not apply to the following:

            (i) Liens on property or assets of any corporation existing at
      the time such corporation becomes a Restricted Subsidiary;

            (ii)  Liens  existing  on any  property  or asset at or prior to the
      acquisition thereof by such Borrower or a Restricted Subsidiary,  Liens on
      any  property  or asset  securing  the  payment  of all or any part of the
      purchase  price of such property or asset,  Liens on any property or asset
      securing any Indebtedness  incurred prior to, at the time of or within 180
      days after the  acquisition  of such  property or asset for the purpose of
      financing  all or any part of the purchase  price  thereof or Liens on any
      property or asset  securing any  Indebtedness  incurred for the purpose of
      financing  all or any  part of the  cost to such  Borrower  or  Restricted
      Subsidiary of improvements thereto;

            (iii) Liens securing Indebtedness of a Restricted Subsidiary
      owing to Alcoa or to another Restricted Subsidiary;

            (iv) Liens existing at the date of this Agreement and set forth
      on Schedule 6.01(a);

            (v)  Liens on  property  of a person  existing  (or,  in the case of
      Alumax  Inc.,  that shall have  existed) at the time such person is merged
      into or consolidated with Alcoa or a Restricted  Subsidiary or at the time
      such person  becomes a subsidiary  of Alcoa through the direct or indirect
      acquisition  of capital  stock of such person by Alcoa or at the time of a
      sale,  lease or other  disposition  of the  properties  of a person  as an
      entirety  or  substantially  as  an  entirety  to  Alcoa  or a  Restricted
      Subsidiary;


<PAGE>


            (vi)  Liens  on any  property  owned  by  Alcoa  or  any  Restricted
      Subsidiary, in favor of the United States of America or any state thereof,
      or any department,  agency or instrumentality or political  subdivision of
      the  United  States of America  or any State  thereof,  or in favor of any
      other country,  or any political  subdivision  thereof, to secure partial,
      progress, advance or other payments pursuant to any contract or statute or
      to secure any  Indebtedness  incurred for the purpose of financing  all or
      any part of the purchase price or the cost of construction of the property
      subject to such Liens; and

            (vii)  any  extension,   renewal  or   replacement   (or  successive
      extensions,  renewals  or  replacements)  in whole or in part of the Liens
      referred to in clauses (i) through (vi) of this Section 6.01(a); provided,
      however,  that each such  extension,  renewal or replacement is limited to
      all or a part of the property which secured the Lien so extended,  renewed
      or replaced (and any improvements thereon).

            (b)  Notwithstanding  paragraph  (a) of  this  Section  6.01  and in
addition to the Liens  permitted  thereunder,  each Borrower and any  Restricted
Subsidiary  may create or incur Liens which  would  otherwise  be subject to the
foregoing restrictions to secure Indebtedness for borrowed money in an aggregate
amount  which does not at the time exceed 10% of the  Consolidated  Net Tangible
Assets of Alcoa and its consolidated Subsidiaries at such time.


<PAGE>


            SECTION  6.02.   Consolidation,   Merger,   Sale  of  Assets,   etc.
Consolidate  or merge with or into any other  person or sell,  lease or transfer
all or substantially  all of its property and assets,  or agree to do any of the
foregoing,  unless  (a) no  Default  or Event of  Default  has  occurred  and is
continuing or would result immediately after giving effect thereto,  (b) if such
Borrower is not the surviving  corporation or if such Borrower sells,  leases or
transfers  all or  substantially  all of its property and assets,  the surviving
corporation  or person  purchasing or being leased the assets agrees to be bound
by the terms and provisions applicable to such Borrower hereunder, and (c)(i) in
the case of Alcoa,  immediately  after such  transaction,  individuals  who were
directors of Alcoa during the twelve month period prior to such merger,  sale or
lease (together with any replacement or additional  directors whose election was
recommended  by or who were elected by a majority of  directors  then in office)
constitute  the Board of Directors of the  surviving  corporation  or the person
purchasing  or being  leased  the  assets  and  (ii) in the case of a  Borrowing
Subsidiary,  (A) the  surviving  corporation  or the person  purchasing or being
leased the assets is a wholly-owned Subsidiary of Alcoa and (B) if the surviving
corporation or such person is not Alcoa,  Alcoa agrees to guarantee  pursuant to
Article VIII the obligations of such person under this Agreement.

            SECTION 6.03.  Financial  Undertaking.  In the case of Alcoa, permit
the  aggregate  principal  amount  of (a)  the  Indebtedness  of  Alcoa  and its
consolidated  Subsidiaries,  after eliminating  intercompany items, plus (b) all
other liabilities of Alcoa and its consolidated Subsidiaries,  after eliminating
intercompany  items,  in respect of any  guarantee  or  endorsement  (except the
endorsement  of  negotiable  instruments  for deposit or  collection  or similar
transactions in the normal course of business) of the Indebtedness of any person
to  exceed  150% of  Consolidated  Net  Worth  of  Alcoa  and  its  consolidated
Subsidiaries.

            SECTION  6.04.  Change in  Business.  In the case of Alcoa,  make or
permit any substantial  change in the general nature of the business  carried on
by Alcoa and its consolidated  Subsidiaries as at the date hereof, including any
such alteration arising from an acquisition,  which would reasonably be expected
to result in a Material Adverse Effect.

ARTICLE VII.  EVENTS OF DEFAULT

            In case of the happening of any of the following  events ("Events of
Default"):

            (a) any  Borrower  shall  default  in the  payment  when  due of any
principal of any Loan and, if such default  shall result from the failure of any
third party payments  system used by such Borrower,  such default shall continue
for a period of two Business Days;

            (b) any  Borrower  shall fail to pay when due any  interest,  Fee or
other amount  payable under this Agreement or Alcoa shall fail to pay any amount
due under  Article VIII upon demand  therefor,  and, in each case,  such failure
shall continue for a period of five Business Days;


<PAGE>


            (c) any  representation or warranty made in Section 3.09 shall prove
to have been false or  misleading  in any  material  respect as of the time when
made  (including  by  omission of material  information  necessary  to make such
representation  or warranty  not  misleading);  or any other  representation  or
warranty  made by a Borrower  under this  Agreement or any  statement  made by a
Borrower in any financial statement,  certificate,  report,  exhibit or document
furnished by or on behalf of such  Borrower in  connection  with this  Agreement
shall prove to have been false or misleading  in any material  respect as of the
time when made and, if such  representation or warranty is able to be corrected,
such  representation  or  warranty  is not  corrected  within 20 days after such
Borrower's knowledge that it was false or misleading;

            (d) any Borrower shall default in the performance or observance
of any covenant contained in Section 5.02, 5.06(a), Section 5.08(a) or
Article VI;

            (e) any Borrower  shall default in the  performance or observance of
any covenant or agreement  under this Agreement  (other than those  specified in
paragraphs  (a), (b) and (d) above) and such default shall continue for a period
of 10 Business Days, in the case of a default with respect to Section 5.08(b) or
(c),  or in  any  other  case  a  period  of  30  days  after  notice  from  the
Administrative Agent;

            (f) any Borrower  shall (i) default in the payment of any  principal
or interest  beyond any period of grace  provided with respect  thereto,  due in
respect of any Indebtedness in a principal  amount in excess of $20,000,000;  or
(ii) fail to observe or perform any other term, covenant, condition or agreement
contained  in any  agreement or  instrument  evidencing  or  governing  any such
Indebtedness if the effect of any such failure referred to in this paragraph (f)
is to cause such Indebtedness to become due prior to its stated maturity;

            (g) a proceeding shall have been instituted or a petition filed
in respect of a Borrower



<PAGE>


            (i)  seeking to have an order for relief  entered in respect of such
      Borrower,  or  seeking a  declaration  or  entailing  a finding  that such
      Borrower is  insolvent  or a similar  declaration  or finding,  or seeking
      dissolution, winding-up, revocation or forfeiture of charter or Memorandum
      and Articles of  Association,  liquidation,  reorganization,  arrangement,
      adjustment, composition or other relief with respect to such Borrower, its
      assets or its debts  under any law  relating  to  bankruptcy,  insolvency,
      relief  of  debtors  or  protection  of  creditors,  termination  of legal
      entities or any other similar law now or hereafter in effect, or

            (ii)  seeking  appointment  of  a  receiver,   trustee,   custodian,
      liquidator,  assignee,   sequestrator,   administrator  or  other  similar
      official  for  such  Borrower  or for all or any  substantial  part of its
      property,

and such  proceeding  or petition  shall remain  undismissed  for a period of 90
consecutive  days or an order or decree  approving any of the foregoing shall be
entered;

            (h) any Borrower  shall  become  insolvent,  shall become  generally
unable  to  pay  its  debts  as  they  become  due,  shall  voluntarily  suspend
transaction  of its  business  generally  or as a whole,  shall  make a  general
assignment for the benefit of creditors,  shall institute a proceeding described
in  clause  (g)(i)  above or shall  consent  to any  order or  decree  described
therein, shall institute a proceeding described in clause (g)(ii) above or shall
consent  to any such  appointment  or to the  taking of  possession  by any such
official of all or any substantial  part of its property whether or not any such
proceeding is instituted,  shall  dissolve,  wind-up or liquidate  itself or any
substantial  part of its property or shall take any action in furtherance of any
of the foregoing;


<PAGE>


            (i) any of the  following  shall  have  occurred:  (i) any person or
group of persons  shall have  acquired  beneficial  ownership  of a majority  in
interest of the outstanding Voting Stock of Alcoa (within the meaning of Section
13(d) or 14(d) of the Securities  Exchange Act of 1934 and the applicable  rules
and regulations  thereunder),  (ii) during any period of 25 consecutive  months,
commencing  before or after the date of this  Agreement,  individuals who at the
beginning of such 25 month period were  directors  of Alcoa  (together  with any
replacement or additional  directors  whose  election was  recommended by or who
were elected by a majority of directors  then in office)  cease to  constitute a
majority  of the Board of  Directors  of Alcoa or (iii)  any  person or group of
related persons shall acquire all or  substantially  all of the assets of Alcoa;
provided, however, that a change in control of Alcoa shall not be deemed to have
occurred  pursuant  to clause  (iii) of this  paragraph  (i) if Alcoa shall have
merged or  consolidated  with or  transferred  all or  substantially  all of its
assets to another  person in compliance  with the provisions of Section 6.02 and
the ratio represented by the total assets of the surviving person,  successor or
transferee  divided  by such  person's  stockholders'  equity,  in each  case as
determined and as would be shown in a consolidated  balance sheet of such person
prepared in  accordance  with GAAP (the  "Leverage  Ratio" of such person) is no
greater than the then Leverage Ratio of Alcoa immediately prior to such event;

            (j) an ERISA Event or ERISA Events shall have  occurred with respect
to any Plan or Plans,  or any Foreign  Plan or Foreign  Plans,  that  reasonably
could be expected to result in  liability  of any  Borrower to the PBGC or other
Governmental  Authority  or to a Plan or  Foreign  Plan in an  aggregate  amount
exceeding  $25,000,000 and, within 30 days after the reporting of any such ERISA
Event to the  Administrative  Agent or after the  receipt by the  Administrative
Agent of the statement required pursuant to Section 5.07(b),  the Administrative
Agent shall have notified the Borrower in writing that (i) the Required  Lenders
have made a determination that, on the basis of such ERISA Event or ERISA Events
or the failure to make a required payment,  there are reasonable grounds (A) for
the termination of such Plan or Plans, or such Foreign Plan or Foreign Plans, by
the PBGC or other Governmental Authority,  (B) for the appointment either by the
appropriate United States District Court of a trustee to administer such Plan or
Plans or by an applicable court of law outside the United States of a trustee to
administer  such Foreign Plan or Foreign  Plans or (C) for the  imposition  of a
lien in favor of a Plan or Foreign Plan and (ii) as a result thereof an Event of
Default  exists  hereunder;  or a trustee  shall be appointed by a United States
District Court to administer any such Plan or Plans or by an applicable court of
law outside the United  States of a trustee to  administer  such Foreign Plan or
Foreign  Plans;  or the PBGC or other  Governmental  Authority  shall  institute
proceedings to terminate any Plan or Plans or any Foreign Plan or Foreign Plans;


<PAGE>


            (k) (i) any Borrower or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability
to such Multiemployer  Plan, (ii) such Borrower or such ERISA Affiliate does not
have reasonable  grounds for contesting  such Withdrawal  Liability or is not in
fact contesting such Withdrawal Liability in a timely and appropriate manner and
does not have adequate reserves set aside against such Withdrawal  Liability and
(iii) the amount of the  Withdrawal  Liability  specified in such  notice,  when
aggregated with all other amounts required to be paid to Multiemployer  Plans in
connection  with Withdrawal  Liabilities  (determined as of the date or dates of
such   notification),   exceeds   $25,000,000  or  requires  payments  exceeding
$25,000,000 in any calendar year;

            (l) any Borrower or any ERISA  Affiliate shall have been notified by
the  sponsor  of a  Multiemployer  Plan  that  such  Multiemployer  Plan  is  in
reorganization or is being terminated,  within the meaning of Title IV of ERISA,
if solely as a result of such reorganization or termination the aggregate annual
contributions  of such Borrower and its ERISA  Affiliates  to all  Multiemployer
Plans that are then in  reorganization or have been or are being terminated have
been or will be increased  over the amounts  required to be  contributed to such
Multiemployer  Plans for their most recently  completed  plan years by an amount
exceeding $25,000,000;

            (m) one or more  judgments  for the payment of money in an aggregate
amount in excess of  $50,000,000  shall be rendered  against any Borrower or any
Subsidiary of any Borrower or any combination  thereof and the same shall remain
undischarged  for a period of 45 consecutive  days during which  execution shall
not be  effectively  stayed  (unless  an appeal or writ of  certiorari  is being
diligently  prosecuted),  or any  action  shall be  legally  taken by a judgment
creditor  or  creditors   holding   judgments  which  in  the  aggregate  exceed
$50,000,000  to levy upon assets or properties of any Borrower or any Subsidiary
of a Borrower to enforce any such judgment; or

            (n)  Any  "Event  of  Default"  as  defined  in the  364-Day  Credit
Agreement or the Existing  Five-Year  Credit  Agreement (other than an "Event of
Default"  as defined in each of clauses  (o),  (p) or (q) of Article  VII of the
Existing Five-Year Credit Agreement) shall occur and be continuing;


<PAGE>


then, and in every such event (other than an event described in paragraph (g) or
(h) above), and at any time thereafter during the continuance of such event, the
Administrative Agent, at the request of the Required Lenders,  shall, by written
notice to Alcoa,  take either or both of the following  actions,  at the same or
different times: (i) terminate the Commitments,  and (ii) declare the Loans then
outstanding  to be forthwith due and payable in whole or in part,  whereupon the
principal of the Loans so declared to be due and payable,  together with accrued
interest thereon and any unpaid accrued Fees and all other  liabilities  accrued
hereunder, shall become forthwith due and payable, without presentment,  demand,
protest  or any  other  notice of any kind,  all of which are  hereby  expressly
waived  by  each   Borrower,   anything   contained   herein  to  the   contrary
notwithstanding;  and in any event described in paragraph (g) or (h) above,  the
Commitments  of the Lenders shall  automatically  terminate and the principal of
the Loans then  outstanding,  together  with  accrued  interest  thereon and any
unpaid  accrued  Fees  and  all  other  liabilities  accrued  hereunder,   shall
automatically become due and payable,  without presentment,  demand,  protest or
any other notice of any kind, all of which are hereby  expressly  waived by each
Borrower, anything contained herein to the contrary notwithstanding.

ARTICLE VIII.  GUARANTEE

            Alcoa  unconditionally  and irrevocably  guarantees,  as a principal
obligor and not merely as a surety, the due and punctual payment and performance
of all Borrowing Subsidiary Obligations. Alcoa further agrees that the Borrowing
Subsidiary  Obligations may be extended or renewed, in whole or in part, without
notice  or  further  assent  from it,  and that it will  remain  bound  upon the
provisions of this Article VIII  notwithstanding any extension or renewal of any
Borrowing Subsidiary Obligation.


<PAGE>


            Alcoa waives  presentation to, demand of payment from and protest to
any Borrowing  Subsidiary of any of the Borrowing  Subsidiary  Obligations,  and
also waives notice of acceptance of the guarantee set forth in this Article VIII
and notice of protest for  nonpayment.  The obligations of Alcoa hereunder shall
not be affected by (a) the failure of the Administrative  Agent or any Lender to
assert  any claim or  demand or to  enforce  any  right or  remedy  against  any
Borrowing  Subsidiary  under the  provisions of this Agreement or any guarantee;
(b)  any  extension  or  renewal  of any  provision  of  this  Agreement  or any
guarantee;  or (c) any rescission,  waiver,  amendment or modification of any of
the  terms  or  provisions  of this  Agreement  or any  guarantee  or any  other
agreement.

            Alcoa  further  agrees that the  guarantee set forth in this Article
VIII  constitutes  a guarantee  of payment  when due and not of  collection  and
waives any right to require that any resort be had by the  Administrative  Agent
or any Lender to the  balance of any  deposit  account or credit on the books of
the Administrative Agent or the relevant Lender, as applicable,  in favor of any
Borrowing Subsidiary or any other person.

            The  obligations  of Alcoa  hereunder  shall not be  subject  to any
reduction,  limitation,  impairment or termination for any reason, including any
claim or waiver, release, surrender,  alteration or compromise, and shall not be
subject to any  defense  of  setoff,  counterclaim,  recoupment  or  termination
whatsoever by reason of the invalidity,  illegality or  unenforceability  of the
Borrowing Subsidiary  Obligations or otherwise.  Without limiting the generality
of the foregoing,  the obligations of Alcoa hereunder shall not be discharged or
impaired or otherwise affected by the failure of the Administrative Agent or any
Lender  to  assert  any claim or demand or to  enforce  any  remedy  under  this
Agreement, by any waiver or modification of any thereof, by any default, failure
or delay,  wilful or otherwise,  in the performance of the Borrowing  Subsidiary
Obligations  or by any other act or omission which may or might in any manner or
to any extent vary the risk of Alcoa or would  otherwise  operate as a discharge
of Alcoa as a matter of law or equity.

            Alcoa  further  agrees  that this  guarantee  shall  continue  to be
effective  or be  reinstated,  as the case may be, if at any time payment by any
Borrowing  Subsidiary  to the  Administrative  Agent or any Lender,  or any part
thereof, of principal of or interest on such Borrowing Subsidiary  Obligation is
rescinded  or must  otherwise  be  restored by the  Administrative  Agent or any
Lender or any holder of any Borrowing Subsidiary  Obligation upon the bankruptcy
or reorganization of such Borrowing Subsidiary or otherwise.


<PAGE>


            In  furtherance  of the foregoing and not in limitation of any other
right which the Administrative  Agent or any Lender may have at law or in equity
against Alcoa by virtue hereof, upon the failure of any Borrowing  Subsidiary to
pay any Borrowing  Subsidiary  Obligation when and as the same shall become due,
whether at maturity,  by acceleration,  after notice of prepayment or otherwise,
Alcoa  hereby  promises  to and will,  upon  receipt  of  written  demand by the
Administrative  Agent,  promptly pay, or cause to be paid, to such Agent in cash
the amount of such unpaid Borrowing  Subsidiary  Obligation,  and thereupon such
Agent  shall  assign,  in any  reasonable  manner,  the amount of the  Borrowing
Subsidiary  Obligation  paid by Alcoa pursuant to this guarantee to Alcoa,  such
assignment  to be pro  tanto to the  extent to which  the  Borrowing  Subsidiary
Obligation in question was discharged by Alcoa,  or make such other  disposition
thereof as Alcoa shall direct (all without recourse to the Administrative  Agent
or any Lender and without any  representation or warranty by the  Administrative
Agent or Lender).

            Upon  payment  by Alcoa of any sums to the  Administrative  Agent as
provided above, all rights of Alcoa against the Borrowing  Subsidiaries  arising
as a result  thereof by way of right of  subrogation  or otherwise  shall in all
respects be subordinate and junior in right of payment to the prior indefeasible
payment in full of all the Borrowing Subsidiary Obligations.

ARTICLE IX.  THE ADMINISTRATIVE AGENT



<PAGE>


            In  order  to  expedite  the   transactions   contemplated  by  this
Agreement,  The  Chase  Manhattan  Bank  is  hereby  appointed  to  act  as  the
Administrative  Agent on behalf of the  Lenders.  Each of the  Lenders  and each
assignee of any such Lender hereby  irrevocably  authorizes  the  Administrative
Agent to take such  actions on behalf of such Lender or assignee and to exercise
such  powers  as are  specifically  delegated  to such  Agent by the  terms  and
provisions  hereof,  together  with such  actions  and powers as are  reasonably
incidental thereto.  The Administrative  Agent is hereby expressly authorized by
the Lenders,  without hereby limiting any implied  authority,  (a) to receive on
behalf of the Lenders all payments of principal of and interest on the Loans and
all other  amounts due to the Lenders  hereunder,  and promptly to distribute to
each Lender its proper share of each payment so received;  (b) to give notice on
behalf of each of the Lenders to the  relevant  Borrower of any Event of Default
specified  in this  Agreement  of which  the  Administrative  Agent  has  actual
knowledge  acquired  in  connection  with  its  agency  hereunder;  and  (c)  to
distribute to each Lender copies of all notices,  financial statements and other
materials  delivered by any Borrower  pursuant to this  Agreement as received by
such Agent.

            None of the Administrative Agent or any of its directors,  officers,
employees  or agents  shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct,  or
be  responsible  for any  statement,  warranty or  representation  herein or the
contents of any document  delivered in  connection  herewith,  or be required to
ascertain or to make any inquiry concerning the performance or observance by any
Borrower of any of the terms,  conditions,  covenants  or  agreements  contained
herein. The Administrative  Agent shall not be responsible to the Lenders or any
assignee thereof for the due execution, genuineness, validity, enforceability or
effectiveness  of  this  Agreement  or  other  instruments  or  agreements.  The
Administrative  Agent  shall in all  cases  be fully  protected  in  acting,  or
refraining from acting,  in accordance with written  instructions  signed by the
Required Lenders and, except as otherwise  specifically  provided  herein,  such
instructions and any action or inaction  pursuant hereto shall be binding on all
the  Lenders and each  assignee of any such  Lender.  The  Administrative  Agent
shall,  in the absence of knowledge to the contrary,  be entitled to rely on any
instrument  or  document  believed by it in good faith to be genuine and correct
and to have been  signed or sent by the proper  person or  persons.  None of the
Administrative  Agent or any of its  directors,  officers,  employees  or agents
shall have any  responsibility  to any  Borrower on account of the failure of or
delay in  performance  or breach by any other  Lender or any  Borrower of any of
their  respective   obligations   hereunder  or  in  connection  herewith.   The
Administrative  Agent may  execute  any and all duties  hereunder  by or through
agents or  employees  and  shall be  entitled  to rely upon the  advice of legal
counsel  selected by it with respect to all matters arising  hereunder and shall
not be liable for any action taken or suffered in good faith by it in accordance
with the advice of such counsel.


<PAGE>


            The Lenders hereby acknowledge that the  Administrative  Agent shall
not be under any duty to take any discretionary  action permitted to be taken by
it pursuant to the provisions of this Agreement  unless it shall be requested in
writing to do so by the Required Lenders.

            Subject  to  the   appointment   and   acceptance   of  a  successor
Administrative  Agent as provided below, the Administrative  Agent may resign at
any time by notifying the Lenders and the Borrowers.  Upon any such resignation,
the  Required  Lenders  shall have the right to appoint a  successor;  provided,
however,  that  Alcoa  has  approved  such  successor  (such  consent  not to be
unreasonably  withheld).  If no  successor  shall have been so  appointed by the
Required Lenders and shall have accepted such  appointment  within 30 days after
the  retiring  Administrative  Agent gives notice of its  resignation,  then the
retiring Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent,  subject  to  the  prior  approval  of  Alcoa  (such  consent  not  to be
unreasonably  withheld),  which shall be a bank with an office in New York,  New
York,  having total assets in excess of  $10,000,000,000  or an Affiliate of any
such bank.  Upon the acceptance of any appointment as the  Administrative  Agent
hereunder by a successor bank, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent and the
retiring Agent shall be discharged  from its duties and  obligations  hereunder.
After the Agent's  resignation  hereunder  the  provisions  of this  Article and
Section 10.05 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.

            With respect to the Loans made by it hereunder,  the  Administrative
Agent in its individual capacity and not as Agent shall have the same rights and
powers as any other  Lender and may  exercise  the same as though it were not an
Administrative  Agent,  and such Agent and its  Affiliates  may accept  deposits
from,  lend  money to and  generally  engage  in any kind of  business  with any
Borrower  or any  Subsidiary  or other  Affiliate  of Alcoa as if it were not an
Agent.


<PAGE>


            Each Lender agrees (i) to reimburse  the  Administrative  Agent,  on
demand, in the amount of its pro rata share (based on its Commitment  hereunder)
of any expenses incurred for the benefit of the Lenders by such Agent, including
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders,  which shall not have been reimbursed by the Borrowers
and (ii) to indemnify and hold harmless the Administrative  Agent and any of its
directors,  officers,  employees, agents or Affiliates, on demand, in the amount
of such pro  rata  share,  from  and  against  any and all  liabilities,  taxes,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or disbursements of any kind or nature  whatsoever which may be imposed
on,  incurred by or  asserted  against it in its  capacity as an  Administrative
Agent or any of them in any way relating to or arising out of this  Agreement or
any action  taken or omitted by it or any of them under this  Agreement,  to the
extent the same shall not have been  reimbursed by the Borrowers;  provided that
no Lender  shall be liable to the  Administrative  Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or disbursements  resulting from the gross negligence or wilful
misconduct of such Agent or any of its directors, officers, employees, agents or
Affiliates.

            Each  Lender  acknowledges  that it has,  independently  and without
reliance  upon  the  Administrative  Agent  or other  Lender  and  based on such
documents  and  information  as it has deemed  appropriate,  made its own credit
analysis  and  decision  to  enter  into  this   Agreement.   Each  Lender  also
acknowledges  that  it  will,   independently  and  without  reliance  upon  the
Administrative Agent or other Lender and based on such documents and information
as it  shall  from  time to time  deem  appropriate,  continue  to make  its own
decisions in taking or not taking action under or based upon this Agreement, any
related agreement or any document furnished hereunder or thereunder.

            Each Lender hereby  acknowledges that the documentation agent has no
liability  hereunder  as a  documentation  agent other than in its capacity as a
Lender.

ARTICLE X.  MISCELLANEOUS

            SECTION 10.01.  Notices.  Notices and other communications  provided
for  herein  shall be in writing  and shall be  delivered  by hand or  overnight
courier  service,  mailed by certified or registered mail or sent by telecopy as
follows:


<PAGE>


            (a) if to Alcoa or a Borrowing Subsidiary, to Alcoa Inc. at 201
Isabella Street, Pittsburgh, PA 15212-5858, Attention of Vice President &
Treasurer (Telecopy No. 412-553-3640);

            (b) if to the  Administrative  Agent, to The Chase Manhattan Bank at
One Chase Plaza, New York, New York 10081, Attention of Linda Hill (Telecopy No.
212-552-7490),  with a copy to The Chase Manhattan Bank at 270 Park Avenue,  New
York, New York 10017, Attention of James Ramage (Telecopy No. 212-270-4724);

            (c) if to a Lender,  to it at its address (or  telecopy  number) set
forth in Schedule 2.01 or in the  Assignment  and  Acceptance  pursuant to which
such Lender shall have become a party hereto.

All notices and other  communications  given to any party  hereto in  accordance
with the provisions of this Agreement  shall be deemed to have been given on the
date of receipt if  delivered by hand or  overnight  courier  service or sent by
telecopy  or on the date five  Business  Days after  dispatch  by  certified  or
registered  mail if mailed,  in each case  delivered,  sent or mailed  (properly
addressed) to such party as provided in this Section 10.01 or in accordance with
the latest unrevoked  direction from such party to the Administrative  Agent and
each Borrower given in accordance with this Section 10.01.

            Any notice hereunder shall be effective upon receipt.  Any notice or
other  communication  received  on a day  which is not a  Business  Day or after
business  hours in the place of receipt shall be deemed to be served on the next
following  Business Day in such place. Any notice given to Alcoa shall be deemed
to have been duly given to each other  Borrower at the same time and in the same
manner.


<PAGE>


            SECTION 10.02.  Survival of Agreement.  All  covenants,  agreements,
representations   and  warranties  made  by  any  Borrower  herein  and  in  the
certificates  or other  instruments  prepared or delivered in connection with or
pursuant to this  Agreement  shall be considered to have been relied upon by the
Lenders and shall survive the making by the Lenders of the Loans,  regardless of
any investigation  made by the Lenders or on their behalf, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any Fee or any other amount  payable under this Agreement is outstanding
and unpaid and so long as the Commitments have not been terminated.

            SECTION 10.03. Binding Effect. This Agreement shall become effective
when it shall have been executed by Alcoa and the Administrative  Agent and when
the  Administrative  Agent shall have received  copies hereof which,  when taken
together,  bear the signatures of each Lender,  and thereafter  shall be binding
upon and inure to the benefit of the  Borrowers,  the  Administrative  Agent and
each Lender and their respective successors and assigns, except that none of the
Borrowers  shall have the right to assign its rights  hereunder  or any interest
herein without the prior consent of all the Lenders.

            SECTION  10.04.   Successors  and  Assigns;   Additional   Borrowing
Subsidiaries.  (a)  Whenever  in this  Agreement  any of the  parties  hereto is
referred  to,  such  reference  shall be deemed to include  the  successors  and
assigns of such party;  and all  covenants,  promises  and  agreements  by or on
behalf  of the  Borrowers,  the  Administrative  Agent or the  Lenders  that are
contained  in this  Agreement  shall  bind  and  inure to the  benefit  of their
respective successors and assigns.


<PAGE>


            (b) Each Lender may assign to one or more Eligible  Transferees  all
or a portion of its  interests,  rights  and  obligations  under this  Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided, however, that (i) except in the case of an assignment to a Lender
or an  Affiliate of such Lender,  Alcoa and the  Administrative  Agent must give
their prior  written  consent to such  assignment  (which  consent  shall not be
unreasonably  withheld),  (ii) the  amount of the  Commitment  of the  assigning
Lender subject to each such assignment (determined as of the date the Assignment
and   Acceptance   with  respect  to  such   assignment   is  delivered  to  the
Administrative  Agent)  shall not be less than  $12,500,000,  (iii) the  parties
(other than the Borrowers) to each such assignment  shall execute and deliver to
the  Administrative  Agent  an  Assignment  and  Acceptance,   together  with  a
processing and recordation fee of $2,500 and (iv) the assignee,  if it shall not
be a  Lender,  shall  deliver  to the  Administrative  Agent  an  Administrative
Questionnaire.  Upon acceptance and recording  pursuant to paragraph (e) of this
Section 10.04,  from and after the effective  date specified in each  Assignment
and Acceptance,  which effective date shall be at least five Business Days after
the execution  and recording  thereof,  (A) the assignee  thereunder  shall be a
party hereto and, to the extent of the interest  assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement and
(B) the  assigning  Lender  thereunder  shall,  to the  extent  of the  interest
assigned by such  Assignment and  Acceptance,  be released from its  obligations
under this Agreement (and, in the case of an Assignment and Acceptance  covering
all or the remaining  portion of an assigning  Lender's  rights and  obligations
under this  Agreement,  such Lender  shall cease to be a party  hereto but shall
continue to be entitled to the benefits of Sections 2.12,  2.14, 2.18 and 10.05,
as well as to any Fees accrued for its account and not yet paid).


<PAGE>


            (c) By executing and  delivering an Assignment and  Acceptance,  the
assigning  Lender  thereunder  and the  assignee  thereunder  shall be deemed to
confirm to and agree with each other and the other  parties  hereto as  follows:
(i) such assigning  Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment and the  outstanding  balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance,  (ii) except as set forth in (i) above,
such  assigning  Lender  makes no  representation  or  warranty  and  assumes no
responsibility  with respect to any  statements,  warranties or  representations
made in or in  connection  with  this  Agreement,  or the  execution,  legality,
validity, enforceability,  genuineness,  sufficiency or value of this Agreement,
or any other instrument or document  furnished pursuant hereto, or the financial
condition of any Borrower or any  Subsidiary of any Borrower or the  performance
or  observance  by any Borrower or any  Subsidiary of any Borrower of any of its
obligations  under this Agreement or any other instrument or document  furnished
pursuant hereto;  (iii) such assignee represents and warrants that it is legally
authorized and has obtained any necessary consents to enter into such Assignment
and Acceptance;  (iv) such assignee confirms that it has received a copy of this
Agreement,  together  with  copies  of  the  most  recent  financial  statements
delivered  pursuant to Section 5.01 and such other  documents and information as
it has deemed  appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance;  (v) such assignee will  independently  and
without  reliance upon the  Administrative  Agent,  such assigning Lender or any
other  Lender  and based on such  documents  and  information  as it shall  deem
appropriate at the time,  continue to make its own credit decisions in taking or
not  taking  action  under  this  Agreement;  (vi) such  assignee  appoints  and
authorizes the  Administrative  Agent to take such action as agent on its behalf
and to  exercise  such  powers  under this  Agreement  as are  delegated  to the
Administrative  Agent by the terms  hereof,  together  with  such  powers as are
reasonably  incidental  thereto;  and (vii) such  assignee  agrees  that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.

            (d) The  Administrative  Agent,  on  behalf of and  solely  for this
purpose as an agent for the  Borrowers,  shall maintain at one of its offices in
The City of New York a copy of each  Assignment and  Acceptance  delivered to it
and a register for the  recordation  of the names and  addresses of the Lenders,
and the Commitment of, and principal  amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register").  The entries in
the  Register  shall be  conclusive  in the  absence of  manifest  error and the
Borrowers,  the Administrative Agent and the Lenders may treat each person whose
name is  recorded  in the  Register  pursuant  to the  terms  hereof as a Lender
hereunder  for all  purposes of this  Agreement,  notwithstanding  notice to the
contrary. The Register shall be available for inspection by any Borrower and any
Lender  at any  reasonable  time and from  time to time  upon  reasonable  prior
notice.

            (e) Upon its receipt of a duly  completed  Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee  (unless the  assignee  shall  already be a
Lender  hereunder),  the processing and recordation fee referred to in paragraph
(b) above and, if required,  the written consent of Alcoa and the Administrative
Agent to such  assignment,  the  Administrative  Agent  shall  (i)  accept  such
Assignment and Acceptance,  (ii) record the information contained therein in the
Register  and (iii) give prompt  notice  thereof to the  Lenders  and Alcoa.  No
assignment shall be effective unless recorded in the Register.


<PAGE>


            (f) Each  Lender may  without  the  consent of any  Borrower  or the
Administrative  Agent sell participations to one or more banks or other entities
in  all  or a  portion  of its  rights  and  obligations  under  this  Agreement
(including  all or a  portion  of its  Commitment  and the  Loans  owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged,  (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,  (iii) the participating
banks or other entities shall be entitled to the benefit of the cost  protection
provisions  contained in Sections  2.12,  2.14 and 2.18 to the same extent as if
they were Lenders and (iv) the  Borrowers,  the  Administrative  Agent,  and the
other  Lenders  shall  continue to deal solely and directly  with such Lender in
connection with such Lender's rights and obligations  under this Agreement,  and
such  Lender  shall  retain  the sole right to enforce  the  obligations  of the
Borrowers  relating to the Loans and to approve any amendment,  modification  or
waiver of any provision of this Agreement  (provided that the participating bank
or  other  entity  may  be  provided  with  the  right  to  approve  amendments,
modifications  or waivers  affecting  it with respect to (A) any decrease in the
Fees payable hereunder with respect to Loans in which the participating  bank or
other  entity has  purchased  a  participation,  (B) any change in the amount of
principal of, or decrease in the rate at which interest is payable on, the Loans
in which the participating bank or other entity has purchased a participation or
(C) any  extension  of the dates  fixed for  scheduled  payments  of a Fee or of
principal of or interest on the Loans in which the  participating  bank or other
entity has purchased a participation).


<PAGE>


            (g) Any Lender or participant may, in connection with any assignment
or  participation  or  proposed  assignment  or  participation  pursuant to this
Section 10.04,  disclose to the assignee or participant or proposed  assignee or
participant any information relating to any Borrower furnished to such Lender by
or on  behalf  of such  Borrower;  provided,  however,  that,  prior to any such
disclosure  of  information  designated  by Alcoa  as  confidential,  each  such
assignee or  participant or proposed  assignee or  participant  shall execute an
agreement whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the  confidentiality  of such confidential  information.
Notwithstanding the foregoing,  no Lender or participant shall disclose any such
information to any person known to it to compete with Alcoa and its Subsidiaries
in any of the  principal  businesses  of Alcoa and its  Subsidiaries  taken as a
whole, without the prior written consent of Alcoa.

            (h) Any  Lender  may at any time  assign  all or any  portion of its
rights under this  Agreement to a Federal  Reserve  Bank;  provided that no such
assignment  shall  release a Lender from any of its  obligations  hereunder.  In
order to facilitate  such an assignment to a Federal Reserve Bank, each Borrower
shall, at the request of the assigning  Lender,  duly execute and deliver to the
assigning  Lender a promissory  note or notes  evidencing the Loans made to such
Borrower by the assigning Lender hereunder.

            (i) None of Borrowers  shall assign or delegate any of its rights or
obligations  hereunder;  provided,  however, that unless an Event of Default has
occurred  and is  continuing,  Alcoa  at any  time  and  from  time to time  may
designate  any  wholly-owned  Subsidiary to be a Borrowing  Subsidiary  upon the
completion of the following:  (i) each of Alcoa and such  Subsidiary  shall have
executed and delivered to the  Administrative  Agent a Designation  of Borrowing
Subsidiary  and (ii) such  Subsidiary  shall have  complied  with Section  4.03,
whereupon  (A) such  Subsidiary  shall  become a party hereto and shall have the
rights  and  obligations  of  a  Borrowing  Subsidiary  hereunder  and  (B)  the
obligations  of such  Subsidiary  shall become part of the Borrowing  Subsidiary
Obligations  and the  guarantee  of Alcoa  pursuant to Article VIII hereof shall
apply  thereto  to the  same  extent  that it  applies  to the  other  Borrowing
Subsidiary  Obligations,  if any (the date on which any such  designation  shall
occur being called a "Designation Date").


<PAGE>


            (j)  Notwithstanding  anything to the contrary contained herein, any
Lender (a "Granting  Lender") may grant to a special  purpose funding vehicle (a
"SPC"),  identified as a SPC in writing from time to time by the Granting Lender
to the  Administrative  Agent and Alcoa and  being  either an  Affiliate  of the
Granting Lender or an entity approved by Alcoa and the Administrative Agent, the
option to provide to the Borrower all or any part of any Loan that such Granting
Lender would  otherwise  be  obligated to make to the Borrower  pursuant to this
Agreement; provided that (i) nothing herein shall constitute a commitment by any
SPC to make any Loan and (ii) if a SPC elects  not to  exercise  such  option or
otherwise  fails to provide all or any part of such Loan,  the  Granting  Lender
shall be obligated to make such Loan pursuant to the terms hereof. The making of
a Loan by a SPC hereunder shall utilize the Commitment of the Granting Lender to
the same extent,  and as if, such Loan were made by such Granting  Lender.  Each
party  hereto  hereby  agrees that no SPC shall be liable for any  indemnity  or
similar payment  obligation  under this Agreement (all liability for which shall
remain with the Granting  Lender).  In furtherance of the foregoing,  each party
hereto hereby  agrees (which  agreement  shall survive the  termination  of this
Agreement)  that,  prior to the date  that is one  year  and one day  after  the
payment in full of all outstanding commercial paper or other senior indebtedness
of any  SPC,  it will  not  institute  against,  or join  any  other  person  in
instituting  against,  such  SPC any  bankruptcy,  reorganization,  arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. In addition,  notwithstanding  anything to the contrary contained
in this Section 10.04(j),  any SPC may (i) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without paying
any  processing  fee  therefor,  assign all or a portion of its interests in any
Loans to the Granting Lender or to any financial  institutions  (consented to by
the Borrower and Administrative Agent) providing liquidity and/or credit support
to or for the account of such SPC to support the funding or maintenance of Loans
and (ii) disclose on a confidential basis any non-public information relating to
its Loans to any rating  agency,  commercial  paper  dealer or  provider  of any
surety,  guarantee or credit or liquidity  enhancement to such SPC. This section
may not be amended without the written consent of the SPC.


<PAGE>


            SECTION 10.05. Expenses; Indemnity. (a) Alcoa agrees to pay or cause
one or more other Borrowers to pay all  out-of-pocket  expenses  incurred by the
Administrative  Agent in connection with the preparation of this Agreement or in
connection  with any  amendments,  modifications  or waivers  of the  provisions
hereof or thereof (whether or not the transactions  hereby contemplated shall be
consummated) or incurred by the Administrative Agent or any Lender in connection
with the  enforcement  of their rights in connection  with this  Agreement or in
connection  with the Loans  made  hereunder,  including  the fees,  charges  and
disbursements of Cravath,  Swaine & Moore, counsel for the Administrative Agent,
and,  in  connection  with  any  such   enforcement,   the  fees,   charges  and
disbursements of any other counsel for the  Administrative  Agent or any Lender.
Alcoa  further  agrees to  indemnify  or cause one or more  other  Borrowers  to
indemnify the Lenders from and hold them harmless against any documentary taxes,
assessments  or  charges  made by any  Governmental  Authority  by reason of the
execution and delivery of this Agreement.

            (b) Alcoa agrees to  indemnify or cause one or more other  Borrowers
to indemnify the Administrative  Agent, its Affiliates,  each Lender and each of
their  respective  directors,  officers,  employees and agents (each such person
being called an  "Indemnitee")  against,  and to hold or cause one or more other
Borrowers to hold each  Indemnitee  harmless from,  any and all losses,  claims,
damages,  liabilities and related expenses,  including  reasonable counsel fees,
charges  and  disbursements,  incurred by or  asserted  against  any  Indemnitee
arising out of, in any way  connected  with, or as a result of (i) the execution
or  delivery of this  Agreement  or any  agreement  or  instrument  contemplated
hereby,  the performance by the parties thereto of their respective  obligations
thereunder or the consummation of the transactions  contemplated  thereby,  (ii)
the  use  of  the  proceeds  of  the  Loans  or  (iii)  any  claim,  litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee,  be  available  to the extent  that such  losses,  claims,  damages,
liabilities  or  related  expenses  are  determined  by  a  court  of  competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee. The Administrative Agent and
each Lender  agrees to promptly  notify Alcoa of any claims  relating to clauses
(i), (ii) or (iii) of the next preceding sentence;  provided,  however, that any
failure to deliver any such notice shall not relieve Alcoa from its  obligations
under this paragraph (b).


<PAGE>


            (c) The provisions of this Section 10.05 shall remain  operative and
in full  force  and  effect  regardless  of the  expiration  of the term of this
Agreement,  the  consummation  of  the  transactions  contemplated  hereby,  the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement,  or any  investigation  made by or on behalf of the
Administrative  Agent or Lender.  All amounts due under this Section 10.05 shall
be payable on written demand therefor.

            SECTION  10.06.  Right of Setoff.  If an Event of Default shall have
occurred and be  continuing,  each Lender is hereby  authorized  at any time and
from time to time, to the fullest extent  permitted by law, to set off and apply
any and all deposits (general or special, time or demand,  provisional or final)
at any time held and other  indebtedness at any time owing by such Lender or its
Affiliates  to or for the credit or the account of any  Borrower  against any of
and all the  obligations of such Borrower (or, in the case of Alcoa,  any of and
all the obligations of any Borrowing Subsidiary) now or hereafter existing under
this Agreement held by such Lender,  irrespective  of whether or not such Lender
shall have made any demand under this  Agreement or otherwise  and although such
obligations  may be unmatured.  The rights of each Lender under this Section are
in addition to other  rights and  remedies  (including  other  rights of setoff)
which such Lender may have.

            SECTION 10.07.  Applicable Law.  THIS AGREEMENT  SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.



<PAGE>


            SECTION 10.08.  Waivers;  Amendment.  (a) No failure or delay of the
Administrative  Agent or any Lender in exercising  any power or right  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such  right or  power,  or any  abandonment  or  discontinuance  of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the  exercise  of any other  right or power.  The  rights  and  remedies  of the
Administrative  Agent  and the  Lenders  hereunder  are  cumulative  and are not
exclusive of any rights or remedies which they would  otherwise  have. No waiver
of any  provision of this  Agreement or consent to any departure by any Borrower
therefrom shall in any event be effective  unless the same shall be permitted by
paragraph (b) below,  and then such waiver or consent shall be effective only in
the specific  instance and for the purpose for which given.  No notice or demand
on any Borrower in any case shall entitle such Borrower to any further notice or
shall entitle such Borrower or any other Borrower to notice or demand in similar
or other circumstances.

            (b) Neither this  Agreement nor any provision  hereof may be waived,
amended or modified  except  pursuant to an agreement or  agreements  in writing
entered into by the Borrowers and the Required Lenders; provided,  however, that
no such  agreement  shall (i)  decrease the  principal  amount of, or extend the
maturity of or any scheduled  principal  payment date or date for the payment of
any interest on any Loan or date fixed for payment of any Facility Fee, or waive
or excuse any such payment or any part thereof, or decrease the rate of interest
on any Loan,  without the prior written consent of each Lender affected thereby,
(ii) change or extend the Commitment or decrease the Facility Fees of any Lender
without  the prior  written  consent of such  Lender,  (iii) amend or modify the
provisions of Section 2.14,  the provisions of this Section or the definition of
"Required  Lenders",  without the prior  written  consent of each Lender or (iv)
amend,  modify or  otherwise  affect the rights or duties of the  Administrative
Agent hereunder without the prior written consent of such Agent. Each Lender and
each  assignee  thereof  shall be bound by any  waiver,  consent,  amendment  or
modification authorized by this Section.

            SECTION 10.09.  Interest Rate Limitation.  Notwithstanding  anything
herein to the contrary,  if at any time the applicable  interest rate,  together
with all fees and charges  which are treated as interest  under  applicable  law
(collectively  the  "Charges"),  as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or  reserved  by any Lender,  shall  exceed the  maximum  lawful rate (the
"Maximum  Rate")  which may be  contracted  for,  charged,  taken,  received  or
reserved by such Lender in accordance  with applicable law, the rate of interest
payable to such Lender,  together with all Charges payable to such Lender, shall
be limited to the Maximum Rate.


<PAGE>


            SECTION 10.10.  Entire Agreement.  This Agreement and the Engagement
Letter  constitute  the entire  contract  between  the  parties  relative to the
subject matter hereof.  Any previous agreement among the parties with respect to
the subject  matter hereof is superseded  by this  Agreement and the  Engagement
Letter.  Nothing  in this  Agreement  or the  Engagement  Letter,  expressed  or
implied,  is intended to confer upon any party other than the parties hereto and
thereto any rights,  remedies,  obligations or liabilities under or by reason of
this Agreement or the Engagement Letter.

            SECTION  10.11.  Waiver of Jury  Trial.  Each  party  hereto  hereby
waives, to the fullest extent permitted by applicable law, any right it may have
to a trial by jury in respect of any litigation  directly or indirectly  arising
out of,  under or in  connection  with this  Agreement.  Each  party  hereto (a)
certifies  that no  representative,  agent or  attorney  of any other  party has
represented,  expressly  or  otherwise,  that such other party would not, in the
event of litigation,  seek to enforce the foregoing  waiver and (b) acknowledges
that it and the other  parties  hereto  have  been  induced  to enter  into this
Agreement,  as  applicable,  by,  among  other  things,  the mutual  waivers and
certifications in this Section 10.11.

            SECTION  10.12.  Severability.  In the  event any one or more of the
provisions  contained  in this  Agreement  should be held  invalid,  illegal  or
unenforceable in any respect,  the validity,  legality and enforceability of the
remaining  provisions  contained  herein  and  therein  shall  not in any way be
affected  or  impaired  thereby.   The  parties  shall  endeavor  in  good-faith
negotiations to replace the invalid,  illegal or  unenforceable  provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

            SECTION 10.13.  Counterparts.  This Agreement may be executed in two
or more  counterparts,  each of which shall  constitute  an original  but all of
which when taken  together shall  constitute but one contract,  and shall become
effective as provided in Section 10.03.

            SECTION 10.14. Headings.  Article and Section headings and the Table
of Contents used herein are for  convenience of reference  only, are not part of
this  Agreement and are not to affect the  construction  of, or to be taken into
consideration in interpreting, this Agreement.


<PAGE>


            SECTION 10.15. Jurisdiction, Consent to Service of Process. (a) Each
Borrower hereby  irrevocably  and  unconditionally  submits,  for itself and its
property,  to the  nonexclusive  jurisdiction  of any New  York  State  court or
Federal court of the United States of America  sitting in New York City, and any
appellate court from any thereof,  in any action or proceeding arising out of or
relating to this  Agreement,  or for recognition or enforcement of any judgment,
and each of the parties hereto hereby  irrevocably  and  unconditionally  agrees
that all  claims in respect of any such  action or  proceeding  may be heard and
determined  in such New York State or, to the extent  permitted  by law, in such
Federal  court.  Each of the parties  hereto agrees that a final judgment in any
such  action or  proceeding  shall be  conclusive  and may be  enforced in other
jurisdictions  by suit on the judgment or in any other  manner  provided by law.
Nothing in this  Agreement  shall affect any right that any Lender may otherwise
have to bring any action or proceeding  relating to this  Agreement  against any
Borrower or its properties in the courts of any jurisdiction.

            (b) Each Borrower hereby irrevocably and unconditionally  waives, to
the fullest extent it may legally and  effectively do so, any objection which it
may now or  hereafter  have to the  laying  of  venue  of any  suit,  action  or
proceeding arising out of or relating to this Agreement in any New York State or
Federal court.  Each of the parties  hereto hereby  irrevocably  waives,  to the
fullest  extent  permitted by law, the defense of an  inconvenient  forum to the
maintenance of such action or proceeding in any such court.

            (c) Each party to this Agreement  irrevocably consents to service of
process in the manner  provided  for notices in Section  10.01.  Nothing in this
Agreement  will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

            SECTION 10.16. Conversion of Currencies.  (a) If, for the purpose of
obtaining  judgment in any court, it is necessary to convert a sum due hereunder
in dollars into  another  currency,  the parties  hereto  agree,  to the fullest
extent that they may legally  and  effectively  do so, that the rate of exchange
used shall be that at which in accordance  with normal  banking  procedures  the
Administrative Agent could purchase dollars with such other currency in The City
of New York,  on the Business Day  immediately  preceding the day on which final
judgment is given.


<PAGE>


            (b) The obligation of each Borrower in respect of any sum due to any
Lender  hereunder in dollars shall,  to the extent  permitted by applicable law,
notwithstanding  any judgment in a currency  other than  dollars,  be discharged
only to the  extent  that  on the  Business  Day  following  receipt  of any sum
adjudged to be so due in the  judgment  currency  such Lender may in  accordance
with normal banking procedures  purchase dollars in the amount originally due to
such Lender with the judgment currency. If the amount of dollars so purchased is
less than the sum  originally  due to such Lender,  such Borrower  agrees,  as a
separate  obligation and  notwithstanding  any such judgment,  to indemnify such
Lender against the resulting loss.


<PAGE>


      IN WITNESS WHEREOF, the Borrower, the Administrative Agent and the Lenders
have caused this  Agreement to be duly executed by their  respective  authorized
officers as of the day and year first above written.

                              ALCOA INC.,

                                by

                                    /s/  Robert G. Wennemer
                                    Name: Robert G. Wennemer
                                    Title: Vice President and
                                           Treasurer

                              THE CHASE MANHATTAN BANK,
                              individually and as
                              Administrative Agent,

                                by
                                  /s/  James H. Ramage
                                  Name: James H. Ramage
                                  Title: Managing Director

                              ABN AMRO BANK N.V.,

                                by
                                  /s/  Andre Neil
                                  Name: Andre Neil
                                  Title: Senior Vice President

                                by
                                  /s/  Helen Clarke-Hepp
                                  Name: Helen Clarke-Hepp
                                  Title:Asst. Vice President


<PAGE>



                              AUSTRALIA AND NEW ZEALAND BANKING
                                GROUP LIMITED,
                                by
                                  /s/  Peter N. Gray
                                  Name: Peter N. Gray
                                  Title: Director-Natural
                                           Resources

                              BANK OF AMERICA, N.A.,

                                by
                                  /s/  Bianca Hemmen
                                  Name: Bianca Hemmen
                                  Title: Managing Director

                              BANK ONE, N.A.,

                                by
                                  /s/  William J. McCaffrey
                                  Name: William J. McCaffrey
                                  Title: First Vice President

                              CITIBANK, N.A.,

                                by
                                  /s/  Raymond G. Dunning
                                  Name: Raymond G. Dunning
                                  Title: Managing Director
                                         As Attorney in Fact


<PAGE>



                              COMMERZBANK AG, New York and Grand
                                Cayman Branches,

                                by
                                  /s/  Robert S. Taylor, Jr.
                                  Name: Robert S. Taylor, Jr.
                                  Title: Senior Vice President

                                by
                                  /s/  Andrew P. Lusk
                                  Name: Andrew P. Lusk
                                  Title: Assistant Treasurer

                              CREDIT SUISSE FIRST BOSTON,

                                 by
                                  /s/  Thomas G. Muoio
                                  Name: Thomas G. Muoio
                                  Title: Vice President

                                 by
                                  /s/  Vitaly G. Butenko
                                  Name: Vitaly G. Butenko
                                  Title: Asst. Vice President


                              DEUTSCHE BANK AG NEW YORK BRANCH
                                and/or CAYMAN ISLANDS BRANCH,

                                 by
                                   /s/  Oliver Schwartz
                                   Name: Oliver Schwartz
                                   Title: Vice President

                                 by
                                   /s/  Hans-Josef Thiele
                                   Name: Hans-Josef Thiele
                                   Title:Director

                              MELLON BANK, N.A.,

                                 by
                                   /s/  Edward L. McGrath
                                   Name: Edward L. McGrath
                                   Title:Vice President

     REVOLVING COMMITMENT VEHICLE CORPORATION, by: Morgan Guaranty Trust Company
of New York, as Attorney-in-fact  for Revolving  Commitment Vehicle Corporation,
By: Morgan Guaranty Trust Company of New York, as Attorney-in-fact for Revolving
Commitment Vehicle Corporation,

                                 by
                                   /s/  Eric Wise
                                   Name: Eric Wise
                                   Title:Vice President

                              NATIONAL AUSTRALIA BANK LTD.,

                                 by
                                   /s/  Bill Schmid
                                   Name: Bill Schmid
                                   Title:Vice President

                              SANPAOLO IMI S.p.A,

                                 by
                                   /s/  Guiseppe Cuccurese
                                   Name: Guiseppe Cuccurese
                                   Title: Executive Vice President
                                          & General Manager

                                 by
                                   /s/  Luca Sacchi
                                   Name: Luca Sacchi
                                   Title: Vice President


                              BANK OF TOKYO-MITSUBISHI TRUST COMPANY,

                                 by
                                   /s/  Mark O'Connor
                                   Name: Mark O'Connor
                                   Title: Vice President


<PAGE>




                                                               EXHIBIT A
                                                     TO CREDIT AGREEMENT

                                [FORM OF]

                        ASSIGNMENT AND ACCEPTANCE

            Reference is made to the Five-Year  Revolving Credit Agreement dated
as of April 28, 2000 (as  amended  from time to time,  the "Credit  Agreement"),
among Alcoa Inc. ("Alcoa"), a Pennsylvania corporation,  certain subsidiaries of
Alcoa, the Lenders,  and The Chase Manhattan Bank, as the  Administrative  Agent
for the Lenders.  Terms defined in the Credit Agreement are used herein with the
same meanings.

1. The Assignor hereby sells and assigns, without recourse, to the Assignee, and
the Assignee hereby purchases and assumes,  without recourse, from the Assignor,
effective as of the Assignment  Effective Date set forth on the reverse  hereof,
the interests set forth on the reverse hereof (the  "Assigned  Interest") in the
Assignor's rights and obligations under the Credit Agreement, including, without
limitation,  the Commitment of the Assignor on the Assignment Effective Date and
the  Loans  owing  to the  Assignor  which  are  outstanding  on the  Assignment
Effective Date,  together with unpaid interest  accrued on the assigned Loans to
the Assignment  Effective Date and the amount,  if any, set forth on the reverse
hereof of the Fees accrued to the  Assignment  Effective Date for the account of
the Assignor.  Each of the Assignor and the Assignee  hereby makes and agrees to
be bound by all the  representations,  warranties  and  agreements  set forth in
Section 10.04(c) of the Credit  Agreement,  a copy of which has been received by
each such party.  From and after the Assignment  Effective Date (i) the Assignee
shall be a party to and be bound by the provisions of the Credit  Agreement and,
to the extent of the interests assigned by this Assignment and Acceptance,  have
the rights and  obligations of a Lender  thereunder and (ii) the Assignor shall,
to the extent of the  interests  assigned  by this  Assignment  and  Acceptance,
relinquish  its rights and be  released  from its  obligations  under the Credit
Agreement.

2. This Assignment and Acceptance is being delivered to the Administrative Agent
together with (i) if the Assignee is a Lender and is organized under the laws of
a jurisdiction outside the United States, the forms specified in Section 2.18(g)
of the Credit Agreement,  duly completed and executed by such Assignee,  (ii) if
the  Assignee  is  not  already  a  Lender  under  the  Credit   Agreement,   an
Administrative  Questionnaire  in the form of Exhibit B to the Credit  Agreement
and (iii) a processing and recordation fee of $2,500. 1.


3.    This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.



Date of Assignment:

Legal Name of Assignor:

Legal Name of Assignee:

Assignee's Address for Notices:



Assignment  Effective Date of Assignment  (may not be fewer than 5 Business Days
after the Date of Assignment):



                                      Percentage Assigned of Applicable
                                      Facility/Commitment(set forth, to
                                          at least 8 decimals, as a
                                        percentage of the Facility and
    Facility/          Principal         the aggregate Commitments of
     Commitment      Amount Assigned        all Lenders thereunder)
    ----------      ---------------            ------------------

Commitment          $                                  %

Loan:               $                                  %

Fees Assigned (if
any):               $                                  %


<PAGE>


            The terms set forth above and on the reverse  side hereof are hereby
agreed to:


<PAGE>



                                          Accepted*/
                                                  -

_______________, as Assignor              ALCOA INC.,




                                          by:______________________
by:_________________________              Name:
Name:                                     Title:
Title:



<PAGE>



_______________, as Assignee              THE CHASE MANHATTAN BANK




by:_________________________              by:______________________
Name:                                     Name:
Title:                                    Title:




<PAGE>



















- ---------
*/ To be completed to the extent consents are required under Section 10.04(b) of
the Credit Agreement.


<PAGE>


                                                               EXHIBIT B
                                                     TO CREDIT AGREEMENT


                         ADMINISTRATIVE QUESTIONNAIRE
                                  ALCOA INC.


Please accurately  complete the following  information and return via FAX to the
attention  of Linda  Hill  (212)  552-7935  at Chase  Manhattan  Bank as soon as
possible.

PHONE NUMBER:                  FAX NUMBER:

LEGAL NAME OF LENDER (TO APPEAR ON THE SIGNATURE LINE IN DOCUMENTATION):

GENERAL INFORMATION - DOMESTIC LENDING OFFICE:

   Institution Name:____________________________

   Street Address:____________________________

   City, State, Zip Code:____________________________

GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:

   Institution Name:   ____________________________

   Street Address:  ____________________________

   City, State, Zip Code:____________________________

TAX WITHHOLDING:

   Non-Resident Alien:_____ Yes*   ______ No*

   *Form 4224 Enclosed

   Tax ID Number:____________________________

CONTACTS/NOTIFICATION METHODS:

   CREDIT CONTACTS:

   Primary Contact:____________________________

   Street Address:____________________________

   City, State, Zip Code:____________________________

   Phone Number:____________________________


<PAGE>


                                                                               5

   FAX Number:____________________________

   Backup Contact:____________________________

   Street Address:____________________________

   City, State, Zip Code:____________________________

   Phone Number:____________________________

   FAX Number:____________________________

   ADMINISTRATIVE CONTACTS - BORROWING, PAYMENTS, INTEREST, ETC...

   Contact(s):____________________________

   Street Address:____________________________

   City, State, Zip Code:____________________________

   Phone Number:____________________________

   FAX Number:____________________________

ACCOUNT  INFORMATION - Please provide only one set of instructions for all types
of payments:

   Name of Bank where funds are to be transferred:

   --------------------------------------------------

   Routing Transit/ABA number of Bank where funds are to be transferred:

   --------------------------------------------------

   Name of Account:____________________________

   Account Number:____________________________

   Additional Information:___________________________

 ---------------------------

It is very important that all of the above  information is accurately  filled in
and  promptly  returned.  If there is  someone  other than  yourself  who should
receive this questionnaire, please notify us of their name and FAX number and we
will FAX them a copy of the questionnaire.


<PAGE>



                                                                     EXHIBIT C
                                                           TO CREDIT AGREEMENT

                                [Letterhead of]

                                     ALCOA

April 28, 2000


The  Chase  Manhattan  Bank,  as  Agent  and  each of the  Lenders  party to the
Agreement referred to below 270 Park Avenue

New York, NY  10017


Ladies and Gentlemen:

I am Secretary and a Senior Counsel of Alcoa Inc. ("Alcoa") and in such capacity
have  represented  Alcoa in  connection  with  the  Five-Year  Revolving  Credit
Agreement  dated as of April 28, 2000 (the  "Agreement"),  among Alcoa,  certain
subsidiaries  of  Alcoa,  the  Lenders  and The  Chase  Manhattan  Bank,  as the
Administrative  Agent.  This  opinion is  rendered  to you  pursuant  to Section
4.01(a) of the  Agreement.  Capitalized  terms used but not defined herein shall
have the meanings assigned to them in the Agreement.

In rendering the opinion expressed below, I have examined,  either personally or
indirectly  through  lawyers  who report to me or  through  other  counsel,  the
originals  or  conformed  copies  of  such  corporate  records,  agreements  and
instruments of Alcoa and its Subsidiaries,  certificates of public officials and
of officers of Alcoa and its Subsidiaries,  and such other documents and records
as I have deemed appropriate as a basis for the opinions hereinafter expressed.

Based upon the foregoing and subject to the  qualifications  stated herein, I am
of the opinion that:

1. Alcoa is a corporation duly organized,  validly existing and in good standing
under the laws of the  Commonwealth of Pennsylvania  and is duly qualified to do
business  as a  foreign  corporation  and  is in  good  standing  in  all  other
jurisdictions  in which the  ownership  of its  properties  or the nature of its
activities or both makes such qualification necessary, except to the extent that
failure to be so qualified would not result in a Material Adverse Effect.


<PAGE>


2. Alcoa has corporate power and authority to execute, deliver and carry out the
provisions  of the  Agreement,  to borrow under the Agreement and to perform its
obligations  thereunder and all such action has been duly and validly authorized
by all necessary corporate proceedings on its part.

3. The Agreement  has been duly executed and delivered by Alcoa and  constitutes
the legal,  valid and binding  obligation of Alcoa enforceable  against Alcoa in
accordance with its terms, except as limited by bankruptcy,  insolvency or other
similar laws of general  application  affecting  the  enforcement  of creditors'
rights or by general principles of equity limiting the availability of equitable
remedies.

4. No authorization,  consent, approval,  license, exemption or other action by,
and no registration, qualification, designation, declaration or filing with, any
Government  Authority is  necessary in  connection  with Alcoa's  execution  and
delivery  of the  Agreement,  the  consummation  by  Alcoa  of the  transactions
contemplated  therein or Alcoa's performance of or compliance with the terms and
conditions thereof, except as set forth on Schedule 3.04 to the Agreement.

5. The execution and delivery by Alcoa of the  Agreement,  the  consummation  by
Alcoa of the  transactions  contemplated  thereby or  performance by Alcoa of or
compliance  with the terms and conditions  thereof will not (a) violate any law,
constitution,  statute, treaty, regulation,  rule, ordinance, order, injunction,
writ, decree or award of any Governmental  Authority to which it is subject, (b)
conflict with or result in a breach or default under its charter or by-laws, (c)
to the best of my  knowledge,  conflict  with or result  in a breach or  default
which is  material  in the  context  of the  Agreement  under any  agreement  or
instrument  to which  Alcoa is a party or by which it or any of its  properties,
whether now owned or hereafter  acquired,  may be subject or bound or (d) result
in the  creation or  imposition  of any Lien  prohibited  by Section 6.01 of the
Agreement  upon any property or assets of Alcoa,  whether now owned or hereafter
acquired.

6. Except as set forth in the financial  statements  referred to in Section 3.06
of the  Agreement,  any Exchange  Act Report or otherwise  disclosed on Schedule
3.08 to the  Agreement,  there is no  pending  or, to my  knowledge,  threatened
proceeding by or before any Governmental  Authority  against Alcoa or any of its
Subsidiaries  which in my  opinion  is likely to  result in a  Material  Adverse
Effect.


<PAGE>


7. Alcoa is not an "investment  company" as defined in, or subject to regulation
under,  the Investment  Company Act of 1940, and Alcoa is exempted as a "holding
company" as defined in the Public Utility Holding Company Act of 1935.

I am a member of the bar of the  Commonwealth of Pennsylvania  and my opinion is
limited  to the laws of the  Commonwealth  of  Pennsylvania  and the laws of the
United  States of  America.  I express no  opinion  herein as to whether a court
would apply New York law to any particular  subject matter hereof. To the extent
that the laws of the  State of New York or,  contrary  to the  agreement  of the
parties, the laws of any other State govern the documents referenced herein, you
may rely on my opinion  with respect to such laws to the extent that the laws of
such state or states are  substantially the same as the laws of the Commonwealth
of Pennsylvania, as to which sameness I express no opinion.

                                        Very truly yours,



                                        Denis A. Demblowski



<PAGE>



                                                                       EXHIBIT D

                                                           TO CREDIT AGREEMENT

                                   [FORM OF]
                      DESIGNATION OF BORROWING SUBSIDIARY

        Reference is made to the Five-Year  Revolving  Credit Agreement dated as
of April 28, 2000 (as amended from time to time, the "Credit Agreement"),  among
Alcoa Inc. ("Alcoa"), a Pennsylvania corporation, certain subsidiaries of Alcoa,
the Lenders and The Chase  Manhattan Bank, as the  Administrative  Agent for the
Lenders.  Terms  defined in the Credit  Agreement  are used herein with the same
meanings.

        1. Alcoa hereby  designates [ ], a [ ] corporation  (the  "Subsidiary"),
effective as of [ ], 20[ ] (the "Designation  Date"), as a Borrowing  Subsidiary
under the Credit  Agreement.  The Subsidiary hereby makes and agrees to be bound
by all the representations,  warranties and agreements set forth in Article III,
V and VI of the  Credit  Agreement.  From and after the  Designation  Date,  the
Subsidiary  shall  become a party to the  Credit  Agreement  and shall  have the
rights and obligations of a Borrowing Subsidiary  thereunder.  Alcoa agrees that
its guarantee  pursuant to Article VIII of the Credit  Agreement  shall apply to
the Borrowings of the Subsidiary.

        2. This  Designation of Borrowing  Subsidiary is being  delivered to the
Administrative Agent together with the documents set forth in Section 4.03(a).

        3.  This Designation of Borrowing Subsidiary shall be governed by and
construed in accordance with the laws of the State of New York.

        The terms set forth above are hereby agreed to:


<PAGE>


                                                                               2

                      [                       ], as Subsidiary,

                        by

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


                      ALCOA INC.,

                        by

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


Accepted:

THE CHASE MANHATTAN BANK, as the Administrative Agent

  by

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


<PAGE>



                                                                   SCHEDULE 2.01

                                     Contact Person
       Name and Address              and Telephone
        of the Lenders            and Telecopy Numbers    Commitment (U.S.$)
        --------------            --------------------    ------------------


The Chase Manhattan Bank        James Ramage                    $38,125,000.00
270 Park Avenue                 Tel:  212-270-1373
New York, NY  10017             Fax:  212-270-4724


ABN AMRO Bank, N.V.             Evelyn Lazala                    $8,250,000.00
One PPG Place,                  Tel: 212-446-4269
Suite 2950                      Fax: 212-446-4237
Pittsburgh, PA 15222

Australian & New Zealand Bkg.   Peter Gray                      $32,500,000.00
Group                           Tel: 212-536-9739
1177 Ave. of the Americas       Fax: 212-536-9233
New York, NY  10036

Bank of America, N.A.           Amy Kravocheck                  $33,250,000.00
901 Main St., 67th Flr.         Tel: 214-209-0193
Dallas, TX  75202               Fax: 214-209-0980

Bank of                         Mark O'Connor                   $37,500,000.00
Tokyo-Mitsubishi Trust Company  Tel: 212-782-4717
1251 Avenue of the Americas     Fax: 212-782-6440
New York, NY 10022

Bank One, Michigan              William McCaffrey               $32,500,000.00
611 Woodward Ave.,              Tel: 313-225-3444
2nd Flr.                        Fax: 313-225-1212
Detroit, MI  48226

Citibank, N.A.                  Ray Dunning                     $40,625,000.00
399 Park Avenue                 Tel: 212-559-1034
New York, NY 10043              Fax: 212-832-9857

COMMERZBANK AG,                 Robert Taylor                   $33,250,000.00
2 World Financial Center        Tel: 212-266-7501
New York, NY 10281-1050         Fax: 212-266-7594


Credit Suisse First Boston      Tom Muoio                       $65,625,000.00
11 Madison Ave.,                Tel:  212-325-9098
20th Flr.                       Fax:  212-325-8319
New York, NY 10010


Deutsche Bank AG                Wolf-D Knigge                   $65,750,000.00
31 West 52nd Street, 24th Floor Tel:  212-469-8625
New York, NY 10019              Fax:  212-469-2930

Mellon Bank, N.A.               Robert Reichenbach              $33,250,000.00
One Mellon Bank Center          Tel:  412-236-0567
Pittsburgh, PA                  Fax:  412-234-5018
15258-0001

Morgan Guaranty Trust Company   Dennis Wilczek                  $40,625,000.00
of New York                     Tel:  212-648-1265
60 Wall Street                  Fax:  212-648-5018
New York, NY 10260

National Australia Bank Ltd.    Bill Schmid                     $32,500,000.00
200 Park Ave., 34th Flr.        Tel:  212-916-9596
New York, NY  10166             Fax:  212-983-1969

SanPaolo IMI S.p.A              Luca Sacchi                     $16,250,000.00
245 Park Ave., 35th Flr.        Tel: 212-692-3130
New York, NY  10167             Fax: 212-599-5303

                                         Total:                $510,000,000.00
                                                               ===============




<PAGE>



                                                                 SCHEDULE 3.04


                             Government Approvals

International Capital Form S filed with the Federal Reserve Bank of New York.


<PAGE>



                                                                 SCHEDULE 3.08



                                  Litigation

                                     None.


<PAGE>




                                                              SCHEDULE 6.01(a)



                                     Liens

Liens related to the following tax-exempt municipal bond (and other) issues:

- -------------------------------------------------------------------------------
Saline County, Arkansas                    1999                      4,650,000
St. Lawrence County, New York              Series A 1999             9,640,000
Milam County, Texas                        Series 1999              16,855,000
Indiana Development Finance
 Authority                                 Series 1999              13,905,000
St. Lawrence County, New York              Series A 1998            22,800,000
Yankton, South Dakota                      Series 1997               9,000,000
Hutchinson, Kansas HUD UDAG Loan           1996                        399,301
Berkeley County, South Carolina            Series 1996              27,450,000
St. Louis, Missouri                        Series 1992               4,840,000
Frederick County, Maryland                 Series 1992               9,880,000
Warrick County, Indiana                    Series 1992              12,475,000
Blount County, Tennessee                   Series 1992               2,450,000
Lebanon County, Pennsylvania               Series 1992               1,020,000
Lebanon County, Pennsylvania               Series 1992               1,000,000
Grayson County, Texas                      Series 1992               9,000,000
Milam County, Texas                        Series 1995              11,000,000
Calhoun Cunty Navigation District,   Texas

                                           Series 1995               7,700,000
State of Ohio                              Series 1996               2,150,000
Chelan County, Washington                  Series 1995              14,000,000
Vidalia, Louisiana                         Series 1995              10,000,000
Tifton, Georgia                            Series 1996              10,000,000
Frederick County, Maryland                 Series 1978               2,145,000
Saline County, Arkansas                    Series 1977                 900,000
St. Lawrence County, New York              Series 1977                 900,000
Blount County, Tennessee                   Series 1977               2,010,000

                   TOTAL                                          $206,169,301
                                                                  ------------




Leased Equipment:
Alcoa Manufacturing (G.B.) Limited                                  $7,818,701
Shibazaki Seisakusho Limited                                         1,968,659
Alumax Europe N.V.        3,562
Alcoa Transformacion S.A.                                              $34,977

                       TOTAL                                         9,825,899
                                                                     ---------


Mortgages and Capital Leases:
Alcoa Inc.                                         $32,865,442
Alcoa Automotive Castings                               15,179
A-CMI                                                               15,520,000

                   TOTAL            $48,400,621
                                     ----------

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
