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EXHIBIT 10(b)
Xxxxx 0, 0000
Xxxxxx, Inc.
0000 X. Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xx 00000
Attention: President and Chief Executive Officer
Gentlemen:
In accordance with Section 10.2 of the Stock Purchase Agreement dated
December 9, 1997 (the "Agreement"), between Xxxxxxx Grand, individually and as
Trustee of the Xxxxxxx Grand Revocable Trust dated July 5, 1979 and the Xxxxxxx
X. Grand Property Trust dated January 22, 1992, and Newcor, Inc., this letter
will confirm certain understandings between the parties to the Agreement.
Capitalized terms used but not otherwise defined in this letter will have the
meanings given to them in the Agreement.
In connection with effecting the Permitted Distribution contemplated by
Section 1.4 of the Agreement, Seller intends to cause Deco Grand to (a) form a
corporate subsidiary (the "Entity") and (b) transfer certain of the assets
constituting the Permitted Distribution to the Entity. Following the actions
referred to in the preceding sentence, Deco Grand will then, as part of the
Permitted Distribution, transfer its ownership interest in the Entity to
Seller. Seller agrees that any Taxes, including but not limited to any Taxes on
any income or gain associated with the transfers contemplated in the first and
second sentences of this paragraph (or any transaction or event deemed to occur
as a result of said transfers or any tax election made in connection with said
transfers) will be allocated to and paid solely and exclusively by Seller and
Seller shall indemnify and hold harmless the Deco Companies, Buyer and their
respective Representatives therefrom and any Losses associated therewith.
Notwithstanding anything to the contrary in the Agreement, the parties
hereto expressly intend that Seller shall defend, indemnify and hold harmless
Buyer, the Deco Companies and their respective Representatives pursuant to
Section 5.7(c) of the Agreement in respect of all Losses based upon, arising
out of or otherwise in respect of any of the following: (i) formation of the
Entity (including with respect to the filing of an election for the Entity to
be a qualified subchapter S subsidiary under the Code); (ii) transfer of
certain of the assets constituting the Permitted Distribution to the Entity;
and (iii) transfer of the ownership interest of Deco Grand in the Entity to
Seller, and the items set forth above in clauses (i), (ii) and (iii) shall be
deemed for all purposes to be included in paragraph 1 of Exhibit 53(c),
including for the purposes of survivability under Section 10.13(a)(ii) of the
Agreement and to be an Excluded Item under Section 10.140)(i) of the Agreement.
Buyer consents to Seller taking all actions necessary to (i) form the
Entity, (ii) transfer certain of the assets constituting the Permitted
Distribution to the Entity and (iii) transfer the ownership interest of Deco
Grand in the Entity to Seller.
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For purposes of clarification, the parties expressly intend and agree
that the indemnification obligations of Seller under section 5.7(c) of the
Agreement with respect to matters defined in paragraph I of Exhibit 5.7(c), as
supplemented as provided above, are intended to cover all Losses based upon,
arising out of or otherwise in respect of any of the items comprising the
Permitted Distribution as identified in Exhibit 1.4 to the Agreement or the
Additional Permitted Distribution (including but not limited to the ownership,
use or operation thereof), which Losses arise at any time whether before or
after the Closing Date, except only those liabilities expressly set forth as
liabilities on the Final Statement.
This Agreement shall be deemed to be part of. and incorporated by
reference in the Agreement.
Seller hereby represents and warrants to Buyer that the entirety of
the Permitted Distribution and the Additional Permitted Distribution has been
fully and effectively completed prior to the Closing and Seller shall
indemnify, defend and hold harmless Buyer, the Deco Companies and their
respective Representatives pursuant to Section 5.7(c) from all Losses
(including but not limited to 4 Taxes) that may be incurred by any of them from
any inaccuracy in or breach of such representation and warranty. The
indemnification obligation in this Section shall be treated as subject to
Section 10.13(a)(ii) of the Agreement (as to severability) and to be an
Excluded Item under Section 10.14(J)(i) of the Agreement.
Except as set forth above, nothing contained in this letter is a meant
to modify, amend or otherwise alter the Agreement, including Seller's
obligations under Section 5.7 of the Agreement, and the Agreement shall remain
in full force and effect in accordance with its terms.
Please indicate your agreement with the foregoing by signing this
letter in the space provided below.
Xxxxxxx X. Grand
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Xxxxxxx X. Grand, individually and
as Trustee of the Xxxxxxx Grand
Revocable Trust dated July 5, 1979
and the Xxxxxxx X. Grand Property
Trust dated January 22, 1992
Acknowledged and Agreed
to on March 4. 1998:
NEWCOR, INC.
By: /s/ W. Xxxx Xxxxxxxxx
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Its: President
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cc: Miller, Canfield, Paddock and
000 Xxxx Xxxxxxxxx', Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq,
