XXXXXXX X. SMALL
0000 XXXXX XXXXX XXXXX XXXXX
XXXXXXX XXXXX, XXXXXXX 00000
September 19, 1996
Tri-Star Aerospace Inc.
00000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Tri-Star Aerospace Co.
0000 Xxxxxxxxxx
Xxxxx Xxxx, Xxxxx 00000
Re: AGREEMENT REGARDING LIFE INSURANCE
Gentlemen:
In consideration of my being permitted to purchase the cash value
life insurance policy on my life (the "Policy") from the Tri-Star Aerospace
Welfare Benefit Trust (the "Trust") at a price equal to the cash value, I
agree to accept the assignment of the Policy with its cash value as the full
benefit to which I am entitled under the Trust and agree to indemnify and
hold harmless Tri-Star Aerospace Co. ("Aerospace") and Tri-State Aerospace,
Inc. ("Tri-Star") their successors and assigns, from any and all liabilities
and expenses arising from claims brought by myself or anyone on behalf of
myself, my estate or my beneficiaries in connection with benefits due me from
the Trust or any claim I might have that I am entitled to residual assets of
the Trust.
I understand that such purchase must comply with Department of
Labor PTE 92-6.
Further, I understand that Aerospace or Tri-Star will cause the
Trust to pay medical, disability or other appropriate benefits for active
employees of Aerospace, either in lieu of, or in addition to life insurance
benefits, and that the initial payment of such benefits shall be from the
assets of the Trust. In addition, I understand that Aerospace or Tri-Star
will reimburse me up to the amount paid by me to the Trust for the Policy,
such reimbursement to be paid
Tri-Star Aerospace Co.
September 19, 1996
Page 2
as payments are made out of the assets of the Trust for medical, disability
or other benefits pursuant to the foregoing sentence or, in advance of such
payments to the extent that Tri-Star determines that it will receive, within
the fiscal year in which such amounts are paid to me, the benefits of such
payments.
Independent of the indemnifications set forth in the Agreement and
Plan of Merger, dated as of August 28, 1996, by and among Maple Leaf
Aerospace, Inc., Aerospace Merger Sub I, Inc., Tri-Star Aerospace, Inc. and
others (the "Merger Agreement"), and not subject to the limitations of the
indemnifications set forth therein, I agree to indemnify Aerospace and
Tri-Star if the use of the cash payment received by the Trust for the cash
value of life insurance on my life to pay such medical, disability or other
appropriate benefits for active employees of Aerospace is determined to be a
reversion subject to excise tax under Section 4976 of the Internal Revenue
Code. The amount of such indemnification shall be equal to the amount by
which such excise tax payable by Aerospace or Tri-Star would exceed 60% of
the assets of the Trust at the closing of the merger in excess of the cash
value of the life insurance on my life.
In order to avoid any issue as to the sufficiency of the
consideration received for this indemnification, this indemnification is
provided to induce consummation of the transactions contemplated by the
Merger Agreement.
Very truly yours,
/s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx
AGREED AND ACCEPTED:
Tri-Star Aerospace, Inc.
By: /s/ Xxxxxxx Xxxxxxxxxx
---------------------------
Tri-Star Aerospace Co.
By: /s/ Xxxxxxx Xxxxxxxxxx
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