Alumax Inc. and Consolidated Subsidiaries - Page 39

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          indemnity agreement) was entered into among the class B stock-              
          holders, the class C stockholders, and The Bank of New York as              
          trustee, and (2) a letter agreement (letter agreement) was                  
          entered into among Amax, Amax Realty, Bemax, Cemax, Amax Securi-            
          ties, Mitsui Japan, and Mitsui USA.                                         
               Pursuant to the pledge and indemnity agreement, the class C            
          stockholders pledged their Alumax class C common stock, and, in             
          the event that their Alumax class C common stock were converted             
          into the Alumax class A common stock, their Alumax class A common           
          stock, to be held in trust as security for the obligation of Amax           
          to indemnify Alumax and the class B stockholders against certain            
          tax and other costs that might arise out of the 1984 restated               
          certificate of incorporation, the 1984 stockholders agreement,              
          the tax-sharing agreement, and the transactions contemplated by             
          any such agreements.  Amax' obligation to indemnify Alumax                  
          against certain tax and other costs as set forth in section 1 of            
          the pledge and indemnity agreement was as follows:                          
                    Amax shall indemnify and hold harmless Alumax in                  
               the event that the Internal Revenue Service determines                 
               on examination of the federal income tax liability of                  
               the Alumax Consolidated Group [petitioners' group] or                  
               the Combined Consolidated Group [the Amax group and                    
               petitioners' group together] * * * for any taxable year                
               (an "Examination Year") that the inclusion of the                      
               Alumax Consolidated Group in the Combined Consolidated                 
               Group in the Examination Year or any other taxable year                
               was improper (an "Adverse Determination").  In the                     
               event of an Adverse Determination, * * * [Amax] shall                  
               repay as an indemnity to Alumax (i) the amount of any                  
               payments made by Alumax to Amax pursuant to the Tax                    
               Sharing Agreement with respect to the federal income                   
               tax liability of the Alumax Consolidated Group for such                




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