EXHIBIT 7
Form of Letter Agreement To Be Executed by
Management Purchasers Who Are Not Parties to
the Stockholders Agreement
March 20, 1997
Vestar Equity Partners, L.P.
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Harvard Private Capital Holdings, Inc.
c/o Harvard Private Capital Group, Inc.
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
American Industrial Partners Capital
Fund II, L.P.
c/o American Industrial Partners
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Westinghouse Air Brake Company
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Re: Stock Purchase Agreement dated as of March 5, 1997
(the "Purchase Agreement")
Ladies and Gentlemen:
The undersigned is a Management Purchaser under the Purchase
Agreement. The undersigned will not be subject to the Amended and Restated
Stockholders Agreement dated as of March 5, 1997 (the "Stockholders Agreement")
and is delivering this letter agreement to you in order to induce you to enter
into the Purchase Agreement. The undersigned agrees that prior to April 1, 1998
the SIH shares being purchased by the undersigned pursuant to the Purchase
Agreement ("Acquired Shares") shall not be sold, transferred, assigned,
mortgaged, hypothecated, given away, changed or otherwise disposed of after such
purchase except in the circumstances described in the first sentence of Section
5.2.1 of the Stockholders Agreement; provided that Acquired Shares may be
pledged as collateral to a bona fide financial institution to secure a loan
obtained for the purpose of financing the undersigned's purchase of Acquired
Shares. Thereafter, the Acquired Shares shall not be transferred except as
follows: (i) to immediate family members, a corporation controlled by the
undersigned or his immediate family, or grantor or other trusts or other
vehicles (including individual retirement accounts) for tax, estate or financial
planning purposes; (ii) as collateral security for a loan or other credit; (iii)
in the event of personal hardship; (iv) up to one-third of the Acquired Shares
can be sold and/or released from this letter agreement each calendar year*; and
(v) following termination of employment with WABCO for any reason. However, the
undersigned intends to hold the Acquired Shares for investment purposes and has
no present intention to sell the Acquired Shares. Transferees of Acquired Shares
pursuant to transfers permitted hereby will agree to be bound in the aggregate
by this letter agreement prior to transfer and subject to the provisions hereof.
This letter agreement shall continue in effect until the earlier to occur of (x)
March 31, 2001 and (y) the termination of the Stockholders Agreement.
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* For Management Purchasers who are also corporate officers listed in the
1996 WABCO Annual Report this exception shall be limited to 5% of the
Acquired Shares each year rather than one-third.
Sincerely,
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[Signature of Management Purchaser]
