Tax Indemnification Agreement

TAX INDEMNIFICATION AGREEMENT


This Tax Indemnification Agreement ("Agreement") is made as of December 21, 1998, between Golden Northwest Aluminum, Inc. ("GNA"), Northwest Aluminum Company ("Northwest"), Northwest Aluminum Specialties, Inc. ("Specialties") and Brett E. Wilcox ("Shareholder").


WHEREAS, Northwest and Shareholder believe that Northwest has been an "S corporation" (within the meaning of Section 1361 of the Internal Revenue Code of 1986, as amended ("IRC")) for federal and Oregon income tax purposes since September 1987;


WHEREAS, Specialties and Shareholder believe that Specialties has been an "S corporation" (within the meaning of Section 1361 of the Internal Revenue Code of 1986, as amended ("IRC")) for federal and Oregon income tax purposes since 1991;


WHEREAS, GNA has elected to be an "S corporation" (within the meaning of Section 1361 of the Internal Revenue Code of 1986, as amended ("IRC")) effective on the date of its organization June 26, 1998;


WHEREAS, Shareholder is the sole shareholder of Northwest and Specialties;


WHEREAS, Northwest and Specialties have taken certain positions on income tax information returns for prior years with which auditors for the Internal Revenue Service have disagreed, and Northwest and Specialties are contesting the proposed adjustments;


WHEREAS, Shareholder intends to contribute all the stock of Northwest and Specialties to GNA as an equity contribution to GNA;


WHEREAS, GNA intends to elect for Northwest and Specialties to be qualified subchapter S subsidiaries under Section 1361(b)(3) of the Internal Revenue Code, effective on the date of the contribution of their stock to GNA;


NOW, THEREFORE, the parties agree as follows:


A. Consistent Reporting by Northwest and Specialties. GNA shall not, on
behalf of Northwest or Specialties, without the consent of
Shareholder, file any amended income tax return or change any election
or accounting method if such filing or change would increase any
federal, state, local (including but not limited to city or county) or
foreign income tax liability (including interest and penalties, if
any) (collectively, "Tax Liability" ...