Amendment to Compromise Settlement Agreement Between City of Point Comfort, Texas and Alcoa World Alumina, L.L.C. ‘The parties hereby agree to amend the Compromise Settlement Agreement between the parties as follows: 4.b.ii, of the CSA is amended as follows: i, Vegetation. Alcoa agrees to plant viable vegetation, as reasonably determined by Alcoa, in two locations at the Plant: (1) across the berm along the top of Residue Disposal Area 4, and (2) adjacent to State Highway 35, as more particularly specified in the diagram attached hereto as Exhibit D. In the event the vegetation project contemplated herein fails, the parties agree to pursue a further solution to the containment of the red dust with the PCCP. Alcoa further agrees to provide the sum of $200,000.00 to City of Point Comfort on or before April 30, 2009 that shall be specially designated for the purpose of “Facility Improvements and Recreational Structures in the City of Point Comfort, Texas”. Signed this o4enday of march __, 2009. Alcoa World Alumina, L.L.C. City of Point Comfort, Texas By: Ke 2 Printed Name: Lew RB. NESS Pam Lambden, Mayor Title: OPERATIONS MAWVAGER:OMPROMISE, SETTLEMENT AND RELEASE AGREEMENT ‘This Compromise, Settlement and Release Agreement (this “Agreement”) is entered into by and between the City of Point Comfort, Texas (the “City”) and Alcoa World Alumina, L.L.C. (“Alcoa”) on this 22nd day of April, 2008, Hereafter, the City and Alcoa also may be referred to individually as a “Party” and collectively as the “Parties.” WHEREAS, Alcoa has operated an alumina refinery in Calhoun County, Texas (the “Plant” for many years; WHEREAS, the City is located almost immediately north of the Plant in Calhoun County, Texas; WHEREAS, on about January 22, 2007, the City filed a lawsuit against Alcoa in the United States District Court for the Souther District of Texas, Victoria Division, styled The City Civil Action No. of Point Comfort, Cathoun County, Texas v. Alcoa World Alumina, L.L. 6:07-CV-0013 (the “Lawsuit”); WHEREAS, the Lawsuit alleges causes of action against Alcoa for violating its federal operating permits, violating the Texas Clean Air Act, public nuisance, nuisance per se, nogligence, negligence per se, gross negligence, and trespass, and seeks monetary damages and injunctive relief, WHEREAS, Alcoa has denied the City’s claims and allegations as contained in the Lawsuit; and WHEREAS, the Parties desire to compromise and settle all disputes between them and provide for dismissal of the Lawsuit and release of the City’s claims alleged therein, NOW THEREFORE, for and in consideration of the mutual covenants and representations contained in this Agreement, the Parties agree as follows:1, Obligations of the City Hereunder; Dismissal of the Lawsuit. Within 30 days of the Parties’ execution of this Agreement, the City will dismiss the Lawsuit with prejudice pursuant to the Agreed Motion to Dismiss and the Agreed Order of Dismissal attached to this Agreement as Exhibits A and B, respectively. 2. Obligations of Aleon Hereunder; Payment of Certain Funds. Community Improvement. Within 30 days of the Parties’ execution of this Agreement, Alcoa will pay $30,000 to the City, such funds to be used by the City solely for its parks and reereation projects and not for general repair and maintenance projects, Alcoa’s Point Comfort Community Affairs representative will provide assistance and guidance to the City in order to assist the City in submitting appropriate project applications for consideration by the Alcoa Foundation. b. Water Tower, Alcoa will pay the City the sum total of $294,000 to the City, which the City agrees to use to repair and/or renovate its water tower. The City agrees to assume full responsibility for supervision of the contractor and for the quality of all work associated with such project. & Attorneys’ Fees, Within 30 days of the Parties” execution of this Agreement, Alcoa will reimburse the City for its reasonable attorneys” fees incurred in relation fo the Lawsuit and this Agreement, 3. “White Dust” Emissions. 8, Operational Improvements To Date. The City acknowledges that Alcoa has recently implemented a number of operational improvements specitically designed to reduce overall emissions of “white dust.” For instance, in the Plant’s barge loading operation, Alcoa has replaced certain sections of its dust collection system and improved maintenance of that system, In the railear loading operation,‘Alcoa has designed and is in the process of implementing a new railcar cover and improved the maintenance practices of the railcar baghouse, In the alumina transport system, which is a covered fluidized bed conveyor system, to ensure dust containment, Alcoa has replaced or repaited certain sections of the system, Also, because “white dust” emissions sometimes ocour during periods of startup, shutdown, and malfunetion, in order to attempt to reduce the number of those periods, Aleoa has improved the training of employees involved in caleiner operations, b. Obligations of Alcoa Hereunder; Gas Analyzer Project, In order to further address the City’s concems regarding “white dust” emissions fiom the Plant, Alcoa agtees to pursue installation of flammable gas analyzers on the facility's calciners. Alcoa believes that flammable gas analyzers have the potential to reduce the Plant's caleiner emissions by enabling electrostatic precipitators to operate for longer periods of time during shutdown and upset events, To analyze the efficacy of flammable gas analyzers, Alcoa will undertake an analyzer demonstration project at an estimated cost of $1,350,000. By no later than May 31, 2008, Alcoa will install a flammable gas analyzer on calciner R-S6-4. Alcoa will ‘measure and monitor the gas analyzer’s effectiveness for a period not to exceed 180 days. A “successful” gas analyzer demonstration project means that the analyzer, in Alcoa’s sole judgment and discretion, allows continued safe operation of the electrostatic precipitator during normal operations and startup, shutdown, and upset events. If the analyzer demonstration project is “successful,” as that term is defined immediately above, Alcoa will install flammable gas analyzers on each of the Plant’s three remaining caleiners by no later than May 31, 2009; however, notwithstanding the foregoing, ‘Alcoa will have no obligation to install a gas analyzer on a calciner that is no longer in operation, ‘The patties acknowledge that this installation schedule is based on Alcoa’s intent to install flammable gas analyzers during planned shutdowns at the Plant. Alcoa agrees that if there is an‘opportunity to expedite installation of one or more of the flammable gas analyzers, Alcoa will make a good faith effort t0 do so. In the event that the demonstration project is “successful,” and the three remaining flammable gas analyzers are not installed by May 31, 2009, Alcoa will pay a monetary penalty to the City (the “Penalty Amount”) until all three of the analyzers are installed The Penalty Amount for cach month will be calculated as 1/12 of five-percent of the uncommitted capital cost of the remaining three gas analyzers. ‘Total cost of the remaining three gas analyzers is approximately $4,000,000 and uncommitted capital costs will be determined from the project accounting system, For purposes of this paragraph, “uncommitted costs” shall mean costs not yet subject to an issued purchase order. ‘The City agrees to maintain and use the funds from the foregoing penalties exclusively for community improvement projects. Notwithstanding the foregoing, Alcoa will not be required to pay a monetary penalty if the failure to install flammable gas analyzers results from an exeused delay, which means a delay caused, in whole or in part, by a vendor, by hurricane, tomado, flood, strike, lockout, or other industrial disturbance, by fire or explosion, by any order, restraint, prohibition by any cout, administrative agency, commission or governmental body, or by any accident or other delay that is beyond the control of Alcoa, If the analyzer demonstration project is not “successful,” as that term is defined above, Alcoa will notify the City of such outcome and will provide details as to why the project is not successful. In such event, Alcoa will (i) have no obligation to pay any monetary penalties to the City, and Gi) evaluate altemative engineering solutions to calciner emissions and will implement technically feasible alternative(s), provided they do not exceed $6,000,000 in aggregate costs.4, $Red Dust” Emissions, a Operational Improvements To Date. ‘The City acknowledges that, short of Plant closure, eliminating offsite emissions of red dust in their entirety is unlikely, although both parties recognize that there are measures that potentially could result in an overall decrease in such emissions. ‘The City acknowledges that Alcoa has already implemented certain operational improvements specifically designed to reduce overall emissions of “red dust,” For instance, in Residue Disposal Area 1, Alcoa is installing a new sprinkler system. b. Obligations of Alcon Hereunder. In order to further address the City’s concerns regarding “red dust” emissions from the Plant, Alcoa will undertake the following: i, Sprinkler System Improvements, Alcoa has upgraded the sprinkler system, increased the hours of operation and improved the triggering mechanisms on all sprinkler systems currently in use at the Plant’s residue disposal areas by operation that is determined by meteorological conditions, Alcoa also will evaluate the feasibility of adding sprinkler system (riggers that are activated based on the level of moisture in the soil. If feasible, 1s that term is defined below, Alcoa will install such soil moisture triggers on all sprinkler systems curently in use at the Plant's residue disposal areas. Installation of soil moisture triggers will be considered “feasible” if they effectively and reliably provide data that correlates with the need to water the residue to prevent dusting, ii, Vegetation. Alcon agrees to plant trees and shrubs in two locations at the Plant: (1) across the berm along the top of Residue Disposal Area 4, and (2) adjacent to State Highway 35, as more particularly specified in the diagram attached hereto as Exhibit D. Alcoa will use volunteer Plant employees to assist in the planting process in order to help facilitate anexpedient completion, Alcoa will complete these vegetation measures no later than December 31, 2009. 5, Obligations of Alcoa Hereunder; Air Monitoring, Alcoa will install, and collect data from, three particulate air monitors on Plant property, Alcoa will complete installation of the three monitors within one year of the Parties’ execution of this Agreement. One of three monitors will be located in an area downwind from the calciners. The foregoing monitors (a) will be located and designed to measure total suspended particulates including “red dust”, “white dust” and background patticulate materials, anc (b) will operate continuously, less time for calibration and repairs, however, data from the monitors will be provided based on hourly averages. Alcoa will provide average and pealt value results of the foregoing monitoring activities to the PCCP, defined below, and the City Couneil each month. Obligations of Both Parties Hereunder; Point Comfort Citizens Panol, ‘Alcoa and the City, together, will formally establish and hold the first meeting of the “Point Comfort Citizens Panel” (the “PCCP”) within 30 days of the Parties” execution of this Agreement, The PCCP initially will be comprised of the following individuals: the City’s Mayor; two members of the City Council to be designated by the Council on annual basis; the Plant Manager; the Plant’s Community Relations Representative; and two citizens not already on the PCCP, ‘The PCCP will aspire to meet on a quarterly basis; however, the exact dates, times, and locations of the meetings, as well as the topies of discussion, will be determined by the PCCP as set forth in guidelines to be established by the PCCP at the first meeting, ‘The Parties agree to the appointment of a person to be determined by the PCCP to serve as a mutually agreeable, neutral third party facilitator to moderate the PCCP’s proceedings. All costs associated with the third party facilitator will be paid by Alcoa, In addition, the Parties acknowledge that in certain situations it may be appropriate to retain a technical consultant ormediator to provide expertise with respect to @ particular subject matter before the PCCP. ‘The PCCP will decide when such a consultant is warranted, All costs of a technical consultant or mediator will be paid for by Alcoa, The PCCP will monitor and help to ensure implementation of the terms of this Agreement, ‘The Parties acknowledge that the PCCP’s main purpose is to establish a forum for direct communications botween the City, its inhabitants, and Aleoa. Accordingly, on an ongoing, basis, Alcoa agrees to provide the following information to the PCCP: results of monitoring processes implemented as part of or in connection with this Agreement; environmental compliance data; and, details of any event that resulted, or might have resulted, in an off-site emission that was identified by an ageney inspection or that was reported to a state agency. 7, Dispute Resolution, During the period in which the obligations set forth in paragraphs 2(b) and 2(c) are being implemented, should any dispute arise regarding Alcoa’s compliance with the terms of this ‘Agreement, the Parties will attempt to resolve their dispute informally prior (o pursuing any judicial or administrative remedies, ‘This informal dispute resolution process will involve diroot consultation and communication between Alcoa executives and the entire City Council. Initially, the Party intending to invoke this resolution process will give written notice as follows: Notice to Alcoa Plant Manager Point Comfort Operations Point Comfort, Texas Notice to the City Mayor City of Point Comfort P.O. Box 497 Point Comfort, Texas 77979This notice will generally describe the nature of the dispute, Within 14 days of receiving such notice, the reeipient shall contact his counterpart to (1) sehedule an in-person meeting within the noxt 30 days (or at some other mutually agreeable time) (o attempt to resolve the dispute, and (2) discuss whether a technical consultant should be engaged for the City. If a technical consultant is retained, Alcoa will pay for its costs. If the Parties are unable to resolve their dispute following their in-person meeting, either side will have the right to immediately pursue any legal or administrative remedies. . Release of Claims. With the exception of any claims arising out of a breach of this Agreement or any claims or causes of action that have yet to accrue, the City hereby absolutely, unconditionally, and completely releases and discharges forever, for all purposes, and in all respects, jointly and severally, Alcoa, its respective predecessors, successors, parent corporation, affiliated corporations, and insurers, and their respective present and former officers, directors, and employees from any and all claims, demands, actions, causes of action, suits, costs, losses, damages, expenses, compensation, liabilities, and obligations of any kind or nature whatsoever (whether known or unknown or fixed or contingent) that arise out of or relate to the allegations that ate the subject matter of the Lawsuit and any claims asserted or that could have been asserted by the City arising out of or in connection with the events that are the subject matter of the Lawsuit. With the exception of any claims arising out of a breach of this Agreement or any claims ot causes of action that have yet to accrue, Alcoa hereby absolutely, unconditionally, and completely releases and discharges forever, for all purposes, and in all respects, jointly and severally, the ,, and its respective present and former council members and employees fomany and all claims, demands, actions, causes of action, suits, costs, losses, damages, expenses, compensation, liabilities, and obligations of any kind or nature whatsoever (whether known or unknown or fixed or contingent) that arise out of or relate to the allegations that are the subject matter of the Lawsuit and any claims asserted or that could have been asserted by Alcoa arising out of or in connection with the events that are the subject matter of the Lawsuit, oi Joint Press Release. Following the execution of this Agreement, the Parties will agree on and issue a mutually acceptable press release that, in substance, provides that they have amicably resolved this Lawsuit on mutually acceptable terms, 10, Ownership of Claims. ‘The Parties represent, covenant, and warrant that they are the exclusive owners and holders of all claims arising out of the Lawsuit, and that no claims have been conveyed, assigned or in any manner transferred, in whole or in part, to any third party. 11. Miscellaneous. a, The Parties agree that this Agreement is made to compromise disputed claims in the Lawsuit and is not to be considered an admission of liability, fault or wrongdoing of any nature or kind whatsoever, b. This Agreement shall be binding upon and inure to the benefit of the Parties hereto, their successors and assigns, together with their respective divisions, parents, and subsidiaries or affiliated corporations, ©. The Parties acknowledge that the covenants contained in this Agreement provide good and sufficient consideration for every promise, duty, release, obligation and right contained in this Agreement,d, The Parties hereto expressly represent and warrant that they are executing this Agreement voluntarily, with the benefit of advice of counsel, without any duress or coercion, ¢. The Parties hereto fully understand that if any facts concerning the olaims giving tise to this Agreement should be found other than or different from the facts now believed to be true, the Parties hereto expressly aceept and assume the risk of such possible difference in facts and agree that this Agreement shall be and will remain in effect notwithstanding any such difference in facts. £ Each Party warrants and represents to all other Parties that no promise, representation, conduct, or consideration by any other party to this Agreement, its owners, agents, servants, employees, attorneys, or persons in privity with them has induced the execution of this Agreement except for those representations and agreements specifically set forth herein, ‘This Agreement may be executed in multiple counterparts, each of which is deemed to be an original and all of which, when (aken together, shall constitute one agreement, b. If, for any reason, any term, condition or covenant contained in this Agreement is found null, void or otherwise unenforceable, that portion of the Agreement shall be treated as severed and the remainder of the Agreement will remain in full foree and effect as if the severed portion were never contained herein, 12, Entire Agreement, The Agreement embodies the entire agreement between the Parties, supersedes all prior agreements and understandings, if any, relating to the subject matter hereof, and may be amended only by an instrument in writing executed jointly by the Parties 13, Governing Law. It is further understood that this Agreement shall be construed and enforced in accordance with the laws of the State of Texas.14, Contractual Provisions, The Parties agree and understand that the terms hereof are contractual and are not merely recitals and that the Parties hereto intend to be and are hereby bound by its terms, Bach undersigned individual, by his signature below, warrants that he is legally competent to execute this Agreement and fully authorized by the party hereto on whose behalf he signs this Agreement to execute and enter into this Agreement on behalf of such party. In Witness Whereof, this Agreement is executed as of the date set forth above. ALCOA WORLD ALUMINA, L.L.C,.68892,000015 HW._US 252229584 CITY OF POINT COMFORT, TEXAS 2 Ceggtaet Its: Mpe}0 R= SeIN THE UNITED FOR THE SOU’ vICTt THE CITY OF POINT COMFO! CALHOUN COUNTY, TEXAS, Plaintiff, ve ALCOA WORLD ALUMINA, L.L.G. Defendant. EXHIBIT A STATES DISTRICT COURT RN DISTRICT OF TEXAS RIA DIVISION T, Civil Action No, 6:07-cv-00013 an con con con con can ea o> AGREED MOTION TO DISMISS WITH PREJUDICE Plaintiff The City of Point Comfort, Texas (the “City”) moves the Court for an Order dismissing its claims against Dy fendant Alcoa World Alumina, L.L.C. (“AWA”) with prejudice and in support shows the Court as follows: 1. The City and AWA hav its entirety. 2. Accordingly, the City n and asks the Court to enter the Agreed| Wherefore, the City respectf its claims and this lawsuit against AW1 resolved the dispute giving rise to this lawsuit in longer desires to pursue it claims against AWA. |Order of Dismissal filed along with this motion. ly requests the Court to enter an order dismissing with prejudice.Respectfully submitted, BLACKBURN CARTER, P.C. By James B. Blackburn ‘Attorney in Charge State Bar No, 02388500 4709 Austin Houston, Texas 77004 (713) 524-1012 (713) 524-5165 Fax ATTORNEYS FOR PLAINTIFF CERTIFICATE OF SERVICE On February __, 2008, a trup and correct copy of the foregoing motion was served on all counsel and/or parties Receipt Requested and/or through the if record by United States Certified Mail, Retum Court’s electronic filing system.XHIBIT B IN THE UNITED STATES DISTRICT COURT FOR THE SOU’ RN DISTRICT OF TEXAS VICTORIA DIVISION THE CITY OF POINT COMFORT, § CALHOUN COUNTY, TEXAS, Plaintiff, Civil Action No, 6:07-cv-00013 ve ALCOA WORLD ALUMINA, L.L.©., an tn cn en con a Defendant, AGREED ORDER OF DISMISSAL Before the Court is Plaintiff (ity of Point Comfort, Texas’ Agreed Motion to Dismiss With Prejudice. Having revitwed the Motion, the Court finds that it should be and hereby is GRANTED in full, ‘Accordingly, the Court hereby dismisses Plaintiff The City of Point Comfort, Texas’ lawsuit against Defendant Altoa World Alumina, L.L.C. with prejudice. The Court further orders that costs shall bejborne by the party incurring same, This is a final order. SO ORDERED. SIGNED February __, 2008, JUDGE PRESIDINGAGREED: sJames B. Blackburn. James B. Blackburn Counsel for Plaintiff The City of Point|Comfort, Texas s/Miles B. Haberer Miles B. Haberer ‘Counsel for Defendant Alcoa World Ajumina, L.L.C.rl arny) Benedetti suonezo] odid CRON Ween BAT uae) Ue Ct REC e bes LORRI OYE ED jo yuowooelg NG BAU ELAINE MOREY i Be eLO Tne eA OT BEd CR SCLING) PREECE ie] Peat terec) oy aL AIH) | puodsas pasodo.ig