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Examination Year * * *, reduced by (ii) the amount of
any payments made by Amax to Alumax pursuant to the Tax
Sharing Agreement with respect to the federal income
tax liability of the Alumax Consolidated Group for such
Examination Year * * * plus interest thereon * * *.
Amax shall further pay to Alumax the amount of any
penalties or additions to tax paid by the Alumax Con-
solidated Group as a result of such Adverse Determina-
tion, including any interest payable by Alumax with
respect thereto * * *. * * *
This Section 1 shall apply with equal force and
effect to any state or local tax based on or measured
by net income with respect to which Alumax makes pay-
ments to Amax pursuant to the * * * Tax Sharing Agree-
ment.
Amax' obligation to indemnify the class B stockholders
against certain tax and other costs as set forth in section 2 of
the pledge and indemnity agreement was as follows:
Amax shall indemnify and hold harmless Mitsui
U.S.A., Mitsui Japan and Nippon [Steel] jointly and
severally against any federal, state or local taxes
based on or measured by income, which would not have
applied, or which are in excess of those which would
have been imposed, if the * * * [1984 restructuring]
had not occurred (other than: * * * [inter alia,
Federal income taxes relating to certain distributions
by Alumax that were subject to the dividends-received
deduction in the case of Mitsui USA and certain distri-
butions of dividends that were taxed at a specified
rate under the Income Tax Treaty between Japan and the
United States]), including set-offs, expenses (includ-
ing attorneys' fees), penalties, additions to tax, or
interest to which any such indemnitee may become sub-
ject or for which any such indemnitee may become liable
* * * with respect to or arising out of, directly or
indirectly, * * * [the 1984 restructuring], the [1984]
Stockholders agreement, the Tax Sharing Agreement, or
any transaction contemplated by either of the above-
named Agreements.
Pursuant to the pledge and indemnity agreement, Amax, and
not Alumax or any other member of petitioners' group, was to have
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