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Torque Acquisition Co., L.L.C.
c/o Vestar Capital Partners IV, L.P.
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November 29, 1999
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/▇ ▇▇▇▇▇▇▇ Corporation
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Dear ▇▇. ▇▇▇▇▇▇▇:
Reference is made to the proposal (the "Proposal") being submitted
concurrently with the execution and delivery of this agreement by ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, certain other members of management of ▇▇▇▇▇▇▇ Corporation (the
"Company"), and Torque Acquisition Co., L.L.C. ("Acquisition Company") to the
Special Committee of the Board of Directors of the Company (the "Special
Committee"), the terms and conditions of which are set forth in a draft merger
agreement, to be entered into by and among the Company, Acquisition Company and
Merger Subsidiary (such draft merger agreement and any definitive merger
agreement entered into as a result of the Proposal being hereafter referred to
as the "Merger Agreement"), which is being provided to the Special Committee in
connection with the Proposal. Capitalized terms used and not defined herein
shall have the meanings set forth in the Merger Agreement.
In connection with the proposed Offer by Acquisition Company and the
Company to purchase at the Offer Price all Shares tendered pursuant to the Offer
as contemplated by the Merger Agreement, we would like to confirm, among other
things, our mutual understanding with respect to determinations regarding (i)
certain amendments to the Merger Agreement and (ii) certain terms and conditions
of the proposed Offer.
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November 29, 1999
Page 2
Acquisition Company and Merger Subsidiary hereby expressly agree
that, without the prior written consent of ▇▇. ▇▇▇▇▇▇▇ (or, in the event of ▇▇.
▇▇▇▇▇▇▇'▇ death, ▇▇▇▇▇ ▇. ▇▇▇▇▇), (i) they shall not amend, modify or change the
amount or form of the Offer Price or the Merger Consideration, (ii) they shall
not amend, modify, change or waive the Minimum Condition and (iii) Acquisition
Company shall not amend the Unit Purchase Agreement.
Each of Acquisition Company and ▇▇. ▇▇▇▇▇▇▇ hereby expressly agrees
to the terms and provisions set forth in the term sheet with respect to the New
Management Option Plan and in the forms of Stockholders' Agreement and Voting
Trust Agreement attached hereto. In addition, each of Acquisition Company and
▇▇. ▇▇▇▇▇▇▇ hereby expressly agrees to the terms and provisions set forth in the
term sheet with respect to the Management Subscription Agreement attached
hereto, and ▇▇. ▇▇▇▇▇▇▇ agrees to enter into a definitive agreement with the
Company which incorporates in all material respects such terms and provisions.
Acquisition Company and ▇▇. ▇▇▇▇▇▇▇ further agree that, if necessary
to finance the transactions contemplated by the Merger Agreement, Acquisition
Company will have the right to purchase additional shares of Company Common
Stock or Series A Preferred and Warrants, up to an aggregate amount of $15
million in connection with the consummation of the Merger at the Offer Price,
provided that Acquisition Company shall provide each of the ▇▇▇▇▇▇▇ Foundation
(the "Foundation"), ▇▇. ▇▇▇▇▇▇▇ and the other Stockholders (who have executed
the Stockholders' Agreement as of such date) the preemptive right to invest a
pro rata amount in Company Common Stock on equitable terms either in cash or, in
the case of ▇▇. ▇▇▇▇▇▇▇ and the Foundation and at their option, through the
retention of shares of Company Common Stock following the consummation of the
Merger. In the event of any such purchase of additional shares of Company Common
Stock or Series A Preferred and Warrants by Acquisition Company, the number of
options to be issued under the New Management Option Plan shall be
proportionately and equitably increased in order to prevent any dilution and to
preserve the relative ownership in the Company represented by options to be
issued under such plan.
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November 29, 1999
Page 3
This agreement shall terminate if (i) the Merger Agreement has not
been executed within 30 days after the date hereof, (ii) the Offer shall expire
without Acquisition Company or the Company accepting for payment or purchasing
any shares of Company Common Stock pursuant to the Offer, (iii) the Merger
Agreement is terminated in accordance with its terms or (iv) the Merger is
consummated.
This agreement and all of the provisions hereof shall be binding
upon and inure solely to the benefit of the parties hereto and their respective
successors, personal or legal representatives, executors, administrators, heirs,
distributees, devisees, legatees and permitted assigns, but neither this
agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any party hereto (whether by operation of law or otherwise) or
confer any rights upon any other party without the prior written consent of the
other party hereto.
This agreement may not be amended, changed, supplemented, or
otherwise modified or terminated, except upon the execution and delivery of a
written agreement executed by each of the parties hereto. Any party hereto may
waive compliance by the other party hereto with any representation, agreement or
condition otherwise required to be complied with by such other party hereunder,
but any such waiver shall be effective only if in writing executed by the
waiving party.
All notices and other communications hereunder must be in writing
and are to be given (and shall be deemed to have been duly given upon receipt)
by delivery in person, by telecopy, or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
If to Acquisition Company or Merger Subsidiary:
c/o Vestar Capital Partners IV, L.P.
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Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Sander ▇. ▇▇▇▇
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November 29, 1999
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Copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
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Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
If to ▇▇. ▇▇▇▇▇▇▇:
c/o Gleason Corporation
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Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party hereto may have previously furnished to
the other party hereto in writing in accordance herewith.
Any provision of this agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without affecting the validity or
enforceability of the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. If any provision of this
agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
Each of the parties hereto acknowledges and agrees that in the event
of any breach of this agreement, the non-breaching party would be irreparably
harmed and could not be made whole by monetary damages. It is accordingly agreed
that the parties hereto (i) shall waive, in any action for specific performance,
the defense of adequacy of a remedy at law and (ii) shall be entitled, in
addition to any other remedy to which they may be entitled at law or in equity,
to compel specific performance of this agreement.
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November 29, 1999
Page 5
All rights, powers and remedies provided under this agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise of any thereof by any party hereto shall
not preclude the simultaneous or later exercise of any other such right, power
or remedy by such party. The failure of any party hereto to exercise any right,
power or remedy provided under this agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by the other party
hereto with its obligations hereunder, and any custom or practice of the parties
hereto at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
This agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without giving effect to the principles of
conflict of laws thereof.
This agreement may be signed in counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument.
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November 29, 1999
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Please confirm your agreement with the foregoing by signing where
indicated below.
Sincerely yours,
TORQUE ACQUISITION CO., L.L.C.
By: /s/ Sander ▇. ▇▇▇▇
______________________________
Name: Sander ▇. ▇▇▇▇
Title: President
TORQUE MERGER SUB, INC.
By: /s/ Sander ▇. ▇▇▇▇
______________________________
Name: Sander ▇. ▇▇▇▇
Title: President
Accepted and Agreed
this 29th day of November, 1999:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_____________________________
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