HD Systems, Inc. and Harmonic Drive Technologies, Nabtesco Inc. are committed to providing harmonic drive gearing and motion control products of the highest quality together with world class customer service and support. Our goal is to deliver products and supply services which consistently exceed the needs and expectations of our customers. In continuing with this tradition, the two companies are pleased to announce that they plan to merge January 1st, 2006. The newly formed joint company is named Harmonic Drive LLC. The office locations are as follows:

Head Office: Harmonic Drive LLC 247 Lynnfield Street Peabody, MA 01960 Tel: 978-532-1800 Fax: 978-532-9406

New York Office: Harmonic Drive LLC 89 Cabot Court Hauppauge, NY 11788 Tel: 631-231-6630 Fax: 631-231-6803

Harmonic Drive LLC will employ approximately 90 people and be jointly owned by HD Systems, Inc. (51%) and Nabtesco USA, Inc. (49%).

The combined resources and technology of both companies will allow us to continue to make advances in the areas of service, manufacturing, and engineering of harmonic drive and related motion control products.

We are deeply committed in our effort to improve our service to you, our customer. The people you have worked with over the years will continue to serve you. Orders may still be placed through your normal contacts; however, purchase orders placed after December 31, 2005 as well as remittance for open invoices should be made to Harmonic Drive LLC addressed to the appropriate location as shown above.

We will provide additional details in early January and look forward to serving you and earning your business.