- 34 -
liability of any party to the pledge and indemnity agreement
(other than the trustee) for any year that could result in any
amount's becoming due and payable pursuant to an obligation under
that agreement; (2) no contest of any such proposed adjustment
was pending; and (3) Amax did not have any obligations under the
pledge and indemnity agreement to Alumax or the class B stock-
holders.
The pledge and indemnity agreement provided that it and the
rights and remedies thereunder were to inure to the benefit of
and were to be binding upon the heirs, successors, and assignees
to the parties thereto.
The letter agreement provided in pertinent part:
If the change currently proposed in Section 61 of H.R.
4170 (Tax Reform Act of 1984) is enacted, or if other
United States federal tax legislation is enacted relat-
ing to the relationship between voting power and equity
ownership and having a similar effect on Amax's ability
to include the Alumax Consolidated Group * * * in
Amax's consolidated federal income tax returns, and as
a result either * * * [of the parties to the letter
agreement] determine * * * that the likelihood of
successfully contesting a possible challenge by the
Internal Revenue Service to the inclusion by Amax of
the Alumax Consolidated Group * * * in Amax's consoli-
dated federal income tax return for any period is
materially reduced, * * * [the parties to the agree-
ment] agree to take such action as is necessary (in-
cluding without limitation making appropriate amend-
ments of Alumax's [1984] Restated Certificate of Incor-
poration) to convert all outstanding shares of Alumax
Class C Common Stock into shares of Alumax Class A
Common Stock upon the date which is the later of (i)
the date of such determination (or as soon as practica-
ble thereafter), or (ii) the last day preceding such
period.
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