Document:

<PAGE>
                                                                  EXHIBIT 10(gg)

                    SPACE ABOVE THIS LINE FOR RECORDER'S USE

                                              After recording, please return to:
                                              M. Arthur Gambill, Esq.
                                              Kilpatrick Stockton LLP
                                              1100 Peachtree Street, Suite 2800
                                              Atlanta, Georgia 30309-4530

STATE OF GEORGIA

COUNTY OF DECATUR

STATE OF GEORGIA                                                 CROSS REFERENCE

COUNTY OF FULTON                                          Deed Book Z22, Page 21
                                                 Decatur County, Georgia Records

                                                         Deed Book A 26, Page 79
                                                 Decatur County, Georgia Records

                               SECOND AMENDMENT TO
                           SECURITY DEED AND AGREEMENT

                  THIS SECOND AMENDMENT TO SECURITY DEED AND AGREEMENT (this
"SECOND AMENDMENT") is made effective as of the 4th day of August, 2003, by and
between LYNCH SYSTEMS, INC., a South Dakota corporation ("GRANTOR"), and
SUNTRUST BANK, a Georgia banking corporation ("GRANTEE").

                                   WITNESSETH:

                  WHEREAS, Grantor executed and delivered to Grantee that
certain Security Deed and Agreement dated as of March 30, 2001, and recorded in
Deed Book Z22, beginning at Page 21, in the Office of the Clerk of the Superior
Court of Decatur County, Georgia (the "SECURITY DEED"), covering and conveying
all right, title and interest of Grantor in and to all that tract of land
described on Exhibit "A" thereto located in Decatur County, Georgia (the
"ORIGINAL

<PAGE>

ENCUMBERED PROPERTY") and securing Grantor's payment and performance of that
certain promissory note dated March 30, 2001, made by Grantor in favor of
Grantee, in the original principal amount of Ten Million and No/100 Dollars
($10,000,000.00), bearing interest and being due and payable as therein
provided, with a final payment being due thereunder on August 30, 2002
(hereinafter called the "2001 REVOLVER NOTE");

                  WHEREAS, Grantor also made and delivered to Grantee that
certain promissory note dated June 10, 2002, in the original principal amount of
Seven Million and No/100 Dollars ($7,000,000.00), bearing interest and being due
and payable as therein provided, which promissory note was issued in replacement
of and substitution for the 2001 Revolver Note with a final payment being due
thereunder on May 30, 2003 (the "2002 REVOLVER NOTE");

                  WHEREAS, in order to modify and amend the Security Deed to
reflect that the indebtedness secured by the Security Deed was evidenced by the
2002 Revolver Note, Grantor and Grantee executed that certain First Amendment to
Security Deed and Agreement dated June 10, 2002, which was recorded in Deed Book
A-26, beginning at Page 79, in the Office of the Clerk of the Superior Court of
Decatur County, Georgia (the "FIRST AMENDMENT");

                  WHEREAS, Grantor also made and delivered to Grantee that
certain promissory note dated May 30, 2003, in the original principal amount of
Seven Million and No/100 Dollars ($7,000,000.00), bearing interest and being due
and payable as therein provided, which promissory note was issued in replacement
of and substitution for the 2002 Revolver Note with a final payment being due
thereunder on May 29, 2004 (the "2003 REVOLVER NOTE");

                  WHEREAS, Grantor contemporaneously with the execution and
delivery of this Second Amendment, has also made and delivered to Grantee that
certain promissory note dated as of August 4, 2003, in favor of Grantee, in the
original principal amount of Four Hundred Ninety-Eight Thousand And No/100
Dollars ($498,000.00), bearing interest and being due and payable as therein
provided, with a final payment being due thereunder on August 1, 2013 (the "TERM
NOTE");

                  WHEREAS, after the recording of the First Amendment, Grantor
and Grantee determined that certain tracts or parcels of land in the City of
Bainbridge, Georgia lying in Land Lot 223 of the 15th Land District of Decatur
County, Georgia were inadvertently omitted from Exhibit "A" attached to the
Security Deed (such inadvertently omitted tracts or parcels of land are
described in Exhibit "A" attached hereto and made a part hereof by reference and
are hereinafter referred to as the "ADDITIONAL ENCUMBERED PROPERTY");

                  WHEREAS, Grantor and Grantee now desire to modify and amend
the Security Deed in order to reflect that: (i) the lien and security title of
the Security Deed shall also cover and convey the Additional Encumbered
Property; and (ii) to reflect that the indebtedness secured by the Security Deed
is now evidenced by the 2003 Revolver Note and the Term Note.

                  NOW THEREFORE, for and in consideration of the foregoing
premises and the sum of Ten and No/100 Dollars ($10.00) cash in hand paid by
each party hereto to the other, and

<PAGE>

other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Grantor and Grantee hereby agree as follows:

1.       AMENDMENT TO DEFINITION OF NOTE. The Security Deed, as previously
modified and amended by the First Amendment, is hereby further modified and
amended (i) by deleting the following from the third page thereof:

                  "THIS INSTRUMENT IS A DEED passing legal title pursuant to the
         laws of the State of Georgia governing deeds to secure debt, and is
         also a security agreement granting a present and continuing security
         interest and security title in the portion of the Premises constituting
         personal property or fixtures, pursuant to the Uniform Commercial Code
         of the State of Georgia, and it is not a mortgage. This security deed
         and agreement is made and intended to secure payment and performance of
         the following: (i) any indebtedness of Grantor to Grantee evidenced by
         that certain Promissory Note dated as of June 10, 2002, made by Grantor
         and payable to the order of Grantee, in the original principal amount
         of SEVEN MILLION AND NO/100 DOLLARS ($7,000,000.00), bearing interest
         and being due and payable as therein provided, with a final payment
         being due thereunder on May 30, 2003 (hereinafter called the "Note");
         (ii) any and all renewal or renewals, extension or extensions,
         replacement or replacements, modification or modifications thereof, and
         substitution or substitutions therefor, either in whole or in part;
         (iii) all advances, if any, made by Grantee pursuant to the terms of
         this security deed and agreement; (iv) all expenses incident to the
         collection of the indebtedness secured by this security deed and
         agreement; and (v) all duties and obligations of Grantor under this
         security deed and agreement. The obligations and indebtedness which
         this security deed and agreement is given to secure are hereinafter
         sometimes collectively called the "Indebtedness". This security deed
         and agreement is hereinafter sometimes called this "Security Deed".

and (ii) by simultaneously substituting in lieu thereof the following:

                  "THIS INSTRUMENT IS A DEED passing legal title pursuant to the
         laws of the State of Georgia governing deeds to secure debt, and is
         also a security agreement granting a present and continuing security
         interest and security title in the portion of the Premises constituting
         personal property or fixtures, pursuant to the Uniform Commercial Code
         of the State of Georgia, and it is not a mortgage. This security deed
         and agreement is made and intended to secure payment and performance of
         the following: (i) any indebtedness of Grantor to Grantee evidenced by
         (1) that certain promissory note dated as of May 30, 2003 in the
         principal amount of SEVEN MILLION AND NO/100 DOLLARS ($7,000,000.00)
         bearing interest as provided therein, and providing, among other
         things, for final payment of principal and interest thereunder, if
         not sooner paid, to be due on or before May 29, 2004 (the "Revolver
         Note") and (2) and that certain promissory note dated August 4, 2003
         in the principal amount of FOUR HUNDRED NINETY EIGHT THOUSAND AND
         NO/100 DOLLARS ($498,000.00) bearing interest as

<PAGE>

         provided therein, and providing, among other things, for final
         payment of principal and interest thereunder, if not sooner paid or
         payable as provided therein, to be due on or before August 1, 2013
         (the "Term Note" ) (the Revolver Note and the Term Note, together
         with all notes issued and accepted in substitution or exchange
         therefor, and as any of the foregoing may from time to time be
         modified, extended, renewed, consolidated, restated or replaced, are
         hereinafter sometimes collectively referred to as the "Note"), the
         Note by this reference thereto being incorporated herein; (ii) any
         and all renewal or renewals, extension or extensions, replacement or
         replacements, modification or modifications thereof, and substitution
         or substitutions therefor, either in whole or in part; (iii) all
         advances, if any, made by Grantee pursuant to the terms of this
         security deed and agreement; (iv) all expenses incident to the
         collection of the indebtedness secured by this security deed and
         agreement; and (v) all duties and obligations of Grantor under this
         security deed and agreement. The obligations and indebtedness which
         this security deed and agreement is given to secure are hereinafter
         sometimes collectively called the "Indebtedness". This security deed
         and agreement is hereinafter sometimes called this "Security Deed".

2.       ADDITIONAL ENCUMBERED PROPERTY.

         (a)      The security lien, security interest, security title and
assignments created and conveyed by the Security Deed are hereby extended and
spread to cover the Additional Encumbered Property described in EXHIBIT "A"
attached hereto.

         (b)      The Security Deed is hereby modified and amended by (i)
deleting in its entirety the description of the Original Encumbered Property
contained in EXHIBIT "A" attached thereto, and (ii) substituting in lieu thereof
the description of real property contained in EXHIBIT "B", attached hereto and
incorporated herein by reference, which description includes the Original
Encumbered Property and the Additional Encumbered Property.

         (c)      All references in the Security Deed to "Property" shall from
and after the date hereof be deemed references to the Original Encumbered
Property and the Additional Encumbered Property as described in EXHIBIT "B"
attached hereto.

         (d)      Grantor hereby irrevocably and absolutely does by these
presents GRANT, BARGAIN, CONVEY, TRANSFER, ASSIGN AND SELL to Grantee, its
successors and assigns, with all powers of sale (if any) and all statutory
rights under the laws of the State of Georgia, and grants to Grantee a security
interest in, all of Grantor's present and hereafter acquired estate, right,
title and interest in, to and under the Additional Encumbered Property, together
with: (i) all buildings, structures and other improvements now or hereafter
located on the Additional Encumbered Property or on any part or parcel of the
Additional Encumbered Property, hereinafter called the "Additional
Improvements"; (ii) all and singular the tenements, hereditaments, easements and
appurtenances belonging to the Additional Encumbered Property or in anywise
appertaining to the Additional Encumbered Property, and the reversion or
reversions, remainder or remainders thereof; (iii) all leases, undertakings to
lease, contracts to rent, usufructs and other agreements for use, occupancy or
possession now or hereafter in force with respect to the

<PAGE>

Additional Encumbered Property or any part or parcel of the Additional
Encumbered Property or any of the Additional Improvements, and any and all other
agreements, contracts, licenses, permits and arrangements now or hereafter
affecting the Additional Encumbered Property or any part or parcel of the
Additional Encumbered Property or any of the Additional Improvements, whether
written or oral and whether now or hereafter made or executed and delivered,
hereinafter collectively called the "Additional Leases"; (iv) all rents, issues,
income, revenues and profits now or hereafter accruing from, and all accounts
and contract rights now or hereafter arising in connection with, the Additional
Encumbered Property or any part or parcel of the Additional Encumbered Property
or any of the Additional Improvements, including without limitation all rents,
issues, income, revenues and profits accruing from, and all accounts and
contract rights arising in connection with, the Additional Leases, together with
all monies and proceeds now or hereafter due or payable with respect thereto or
on account thereof, and all security deposits, damage deposits and other funds
paid by any lessee, sublessee, tenant, subtenant, licensee, permittee or other
obligee under any of the Additional Leases, whether paid in a lump sum or
installments, all of which are hereinafter collectively called the "Additional
Rents"; (v) all minerals, flowers, crops, trees, timber, shrubbery and other
emblements now or hereafter located on the Additional Encumbered Property or
under the Additional Encumbered Property or on or under any part or parcel of
the Additional Encumbered Property; (vi) all estates, rights, title and interest
in the Additional Encumbered Property, or in any part or parcel of the
Additional Encumbered Property; (vii) all equipment, machinery, apparatus,
fittings, furniture, furnishings and personal property of every kind or
description whatsoever owned by Grantor or in which Grantor has an interest, now
or hereafter located on the Additional Encumbered Property or on any part or
parcel of the Additional Encumbered Property or in or on any of the Additional
Improvements, and used in connection with the operation or maintenance of the
Additional Encumbered Property or any of the Additional Improvements, all
accessions and additions to and replacements of the foregoing and all proceeds
(direct and remote) of the foregoing, including without limitation all plumbing,
heating, lighting, ventilating, refrigerating, water-heating, incinerating,
air-conditioning and heating, and sprinkling equipment and systems, and all
screens, awnings and signs; (viii) all fixtures (including all trade, domestic
and ornamental fixtures) owned by Grantor or in which Grantor has an interest,
now or hereafter on the Additional Encumbered Property or on any part or parcel
of the Additional Encumbered Property or in or on any of the Additional
Improvements, whether actually or constructively attached or affixed, including
without limitation all plumbing, heating, lighting, ventilating, refrigerating,
water-heating, incinerating, air-conditioning and heating, and sprinkling
fixtures, and all screens, awnings and signs which are fixtures; (ix) all
building materials, supplies, goods, machinery and equipment delivered to the
Additional Encumbered Property and placed on the Additional Encumbered Property
for the purpose of being affixed to or installed or incorporated or otherwise
used in or on the Additional Encumbered Property or any part or parcel of the
Additional Encumbered Property or any of the Additional Improvements, and all
accessions and additions to and replacements of the foregoing and all proceeds
(direct or remote) of the foregoing; (x) all payments, awards, judgments and
settlements (including interest thereon) to which Grantor may be or become
entitled as a result of the exercise of the right of eminent domain with respect
to the Additional Encumbered Property or any part or parcel of the Additional
Encumbered Property or any of the Additional Improvements; and (xi) all policies
of insurance which insure against loss or damage to any property described above
and all proceeds from and payments under such

<PAGE>

policies. The Additional Encumbered Property and all of the foregoing are
hereinafter sometimes collectively called the "Additional Premises".

         TO HAVE AND TO HOLD the Additional Premises with all rights, privileges
and appurtenances thereunto belonging, and all income, rents, royalties,
revenues, issues, profits and proceeds therefrom, unto Grantee, its successors
and assigns, forever, for the uses and purposes herein expressed.

         (e)      All references in the Security Deed to "Improvements" shall
from and after the date hereof be deemed references to the Improvements (as
defined in the Security Deed) and the Additional Improvements, as defined
herein.

         (f)      All references in the Security Deed to "Premises" shall from
and after the date hereof be deemed references to the Premises (as defined in
the Security Deed) and the Additional Premises, as defined herein.

         (g)      All references in the Security Deed to "Leases" shall from and
after the date hereof be deemed references to the Leases (as defined in the
Security Deed) and the Additional Leases, as defined herein.

         (h)      All references in the Security Deed to "Rents" shall from and
after the date hereof be deemed references to the Rents (as defined in the
Security Deed) and the Additional Rents, as defined herein.

         (i)      Grantor warrants that Grantor has fee simple title to the
Additional Premises, that Grantor is lawfully seized and possessed of the
Additional Premises, that Grantor has the right to convey the Additional
Premises, that the Additional Premises are unencumbered except by the matters
set forth in Exhibit "C" attached hereto and incorporated herein by reference
and that Grantor shall forever warrant and defend the title to the Additional
Premises unto Grantee against the claims of all persons whomsoever, other than
claims arising under any matter set forth on Exhibit "C" hereof.

3.       INTANGIBLE RECORDING TAX.

         (a)      The Revolver Note constitutes a "short-term note secured by
real estate" as defined by O.C.G.A. Section 48-6-60(4). Accordingly, no State of
Georgia intangible recording tax shall be payable with respect to the Revolver
Note.

         (b)      The Term Note constitutes a "long term note secured by real
estate" as defined by O.C.G.A. Section 48-6-60(3). Accordingly, a State of
Georgia intangible recording tax shall be payable with respect to the Term Note
at the rate of $1.50 per $500 of the principal amount of the Term Note. Upon
the filing for recordation of this Second Amendment in Decatur County, Georgia,
the State of Georgia intangible recording tax shall be payable to the Clerk of
the Superior Court of Decatur County, Georgia in the amount of $1,494.00.

<PAGE>

         4.       RATIFICATION. Except as expressly modified and amended by the
First Amendment and this Second Amendment, the Security Deed is and shall remain
in full force and effect. This Second Amendment is not intended to be nor shall
it constitute a novation of the Security Deed or of the indebtedness secured
thereby. Grantor hereby ratifies, confirms and approves the Security Deed as
previously modified in the First Amendment, and as further modified herein and
agrees that the same constitutes the valid and binding obligation of Grantor and
is enforceable by Grantee in accordance with its terms.

         5.       GOVERNING LAW. This Second Amendment shall be governed by,
construed, interpreted and enforced in accordance with the laws of the State of
Georgia.

         6.       BINDING EFFECT. This Second Amendment shall be binding upon
and shall inure to the benefit of the parties hereto and their respective legal
representatives, successors and assigns.

         7.       DEFINITIONS. Each capitalized term used in this Second
Amendment shall have the meaning ascribed to it in the Security Deed, as
previously modified and amended by the First Amendment, unless such term is
otherwise defined in this Second Amendment or the context requires otherwise.

         8.       COUNTERPARTS. This Second Amendment may be executed and
acknowledged in counterparts, all of which executed and acknowledged
counterparts shall together constitute a single document.

                  [Remainder of page intentionally left blank]

<PAGE>

                  IN WITNESS WHEREOF, Grantor and Grantee have executed and
delivered this Second Amendment, and have affixed their seals hereto, all as of
the day and year first written above.

                                             GRANTOR:

Signed, sealed and delivered in              LYNCH SYSTEMS, INC.,
the presence of:                             a South Dakota corporation

[ILLEGIBLE]                                  By: /s/ [ILLEGIBLE]
---------------------------                  -------------------------------
Unofficial Witness                           President

[ILLEGIBLE]
---------------------------
Notary Public                                 Attest:

My Commission Expires:
          [STAMP]                             [ILLEGIBLE]
---------------------------                   ----------------------------------
                                              Secretary

(NOTARIAL SEAL)                                                 (CORPORATE SEAL)

       [Signature Page to Second Amendment to Security Deed and Agreement]

<PAGE>

IN WITNESS WHEREOF, Grantor and Grantee have executed and delivered this Second
Amendment, and have affixed their seals hereto, all as of the day and year first
written above.

                                        GRANTEE:

Signed, sealed and delivered in         LYNCH SYSTEMS, INC., a South Dakota
presence of:                            corporation

_______________________________         By:_____________________________________
Unofficial Witness                         Chief Financial Officer

_______________________________
Notary Public                             (CORPORATE SEAL)

My Commission Expires:
_______________________________
(NOTARIAL SEAL)

                                        GRANTEE:

Signed, sealed and delivered in         SUNTRUST BANK,
the presence of:

[ILLEGIBLE]                             By: /s/ Valerie Whiteman
-------------------------------             ------------------------------------
Unofficial Witness                          Valerie Whiteman, Its Vice President

[ILLEGIBLE]
-------------------------------
Notary Public

My Commission Expires:
[STAMP]
-------------------------------
(NOTARIAL SEAL)
1<PAGE>
                                                                    Exhibit 10.1

                            Houghton Mifflin Company
                               222 Berkeley Street
                                Boston, MA 02116

June 29, 2003

Mr. Hans Gieskes
c/o Houghton Mifflin Company
222 Berkeley Street
Boston, MA  02116

Dear Hans:

We have discussed a mutually-agreed separation which will be consistent both
with the long-range strategic plans of Houghton Mifflin Company ("Houghton
Mifflin") and with your wish at this time to reduce your work commitments in
order to pursue other interests. The purpose of this letter is to confirm your
resignation as of June 30, 2003, (the "Separation Date") and your agreement with
Houghton Mifflin concerning your severance arrangements, as follows:

1.    RESIGNATION. You hereby resign your employment, and all positions and
      offices held by you, with Houghton Mifflin and any of its Affiliates (as
      hereafter defined), effective as of the Separation Date. Houghton Mifflin
      will take actions in reliance on your resignation and it is agreed that it
      is irrevocable.

2.    FINAL PAY. On Houghton Mifflin's next regular payday following the
      Separation Date, Houghton Mifflin will pay you any base salary earned but
      not paid for the final payroll period of your employment, through the
      Separation Date. You will also receive at that time $36,923, representing
      full pay for the sixteen vacation days you had earned, but not used, as of
      the Separation Date.

3.    SEVERANCE BENEFITS. In consideration of your acceptance of this Agreement
      and subject to your meeting your obligations under it and your surviving
      obligations under the Employment Agreement incorporated by reference
      below, you will be provided the following:

      a.    Houghton Mifflin will pay you $980,000, representing twelve months
            of severance pay, payable in a single lump sum within fifteen
            business days following the effective date of this Agreement.

      b.    Houghton Mifflin will pay you severance pay at the rate of
            $81,666.67 per month for the period of twenty-four months following
            the Separation Date. Payments will be made in accordance with the
            regular pay practices of Houghton Mifflin
<PAGE>
            and will begin on the next regular payday following the Separation
            Date or, if this Agreement has not taken effect at that time, on the
            next regular payday following the effective date hereof, but with
            the first payment retroactive to July 1, 2003.

      c.    Houghton Mifflin will pay you a bonus for 2003 in the amount of
            $210,000, payable within fifteen business days following the
            Separation Date.

      d.    Houghton Mifflin will continue your participation, and that of your
            eligible dependents, in its group health and dental plans for the
            period of thirty-six months following the Separation Date (the
            "Severance Benefit Period") and will pay the full premium cost of
            that participation. Your rights, and those of your eligible
            dependents, to continued participation under the federal law known
            as "COBRA" shall run concurrently with the first eighteen months of
            coverage hereunder.

      e.    Houghton Mifflin will provide you coverage under its executive term
            life insurance plan in the face amount of $4.9 Million Dollars, and
            will pay the full premium cost of that coverage, during the
            Severance Benefit Period.

      f.    Provided that the premium payments paid by Houghton Mifflin in
            accordance with subparagraph 3(e), immediately above, constitute
            income to you, Houghton Mifflin will make payments to you to cover
            your income tax liability for those premium payments (the "tax gross
            up payments"), with the tax gross up payments being determined by
            the same formula which Houghton Mifflin utilizes for all other
            senior executives for whom it is making premium payments under its
            executive term life insurance plan and the timing of the tax gross
            up payments to you being the same as the timing of such payments to
            other former senior executives.

      g.    Houghton Mifflin will reimburse you for the reasonable premium cost
            of long-term disability insurance for you during the Severance
            Benefit Period providing monthly benefits for a covered disability
            not to exceed $25,000 per month and otherwise as comparable to the
            terms of the long-term disability coverage provided during your
            employment as is reasonably obtainable, provided you obtain this
            coverage and provide supporting documentation as reasonably
            requested by Houghton Mifflin from time to time.

      h.    Houghton Mifflin will pay the cost, up to $5000 per year, of
            continued financial planning and tax preparation services to you
            during the Severance Benefit Period.

      i.    Houghton Mifflin will use its best efforts to enable you to continue
            to have playing privileges at the Boston T.P.C. golf course during
            the Severance Benefits Period, to a maximum cost to Houghton Mifflin
            of $7600 per year. It is understood, however, that you will cease to
            be the designated member of Houghton Mifflin at that golf course as
            of the Separation Date.
<PAGE>
      j.    Houghton Mifflin will transfer ownership to you of the notebook
            computer and Blackberry(R) hardware provided for your business use
            immediately prior to the Separation Date, subject to removal, by its
            information technology department, of all information confidential
            or proprietary to Houghton Mifflin and its Affiliates and any
            software that cannot be licensed to you and subject, with respect to
            the Blackberry(R), of your assumption of any user or service fees
            therefor.

      k.    Houghton Mifflin will reimburse your attorneys' fees incurred in the
            negotiation and preparation of this Agreement, to a maximum of
            $20,000, subject to receipt of reasonable documentation and
            substantiation of those fees.

4.    WITHHOLDING. All payments by Houghton Mifflin under this Agreement will be
      reduced by all taxes and other amounts that Houghton Mifflin is required
      to withhold under applicable law and all other deductions authorized by
      you.

5.    ACKNOWLEDGEMENT OF FULL PAYMENT AND STATUS OF BENEFITS. You agree that
      payment by Houghton Mifflin in accordance with the terms of this Agreement
      shall be in full and complete satisfaction of any and all compensation of
      any kind or description which is now or might hereafter have become owing
      to you for services rendered by you during your employment with Houghton
      Mifflin, including without limitation bonus compensation and stock options
      or other equity. You will not continue to earn vacation or other paid time
      off after the Separation Date and, except as expressly provided under
      paragraphs 3(d) and 3(e) above, your participation in all employee benefit
      plans and programs of Houghton Mifflin will end as of the Separation Date
      in accordance with the terms of those plans and programs.

6.    YOUR CONTINUING OBLIGATIONS.

      a.    You agree to provide one week of transition services to Houghton
            Mifflin during the period July 1, 2003 to July 7, 2003, inclusive,
            for which you will be compensated in the amount of $10,770.

      b.    Subparagraph 5(c) ("Promise Not to Engage in Certain Activities") of
            the Employment Agreement is hereby amended such that, following the
            Separation Date, the restrictions on your activities specified
            thereunder shall apply only with respect to the K-12 and college
            publishing businesses of Pearson, plc, Reed Elsevier plc, John Wiley
            & Sons, Inc., Verlagsgruppe Georg von Holtzbrinck, GmbH and the
            McGraw-Hill Companies, as conducted by any of the afore-named
            entities or by one or more of their Affiliates.

      c.    Paragraph 5 ("Covenants") of the Employment Agreement, with the
            amendment to subparagraph 5(c) thereof set forth immediately above,
            and those other provisions of the Employment Agreement necessary or
            desirable for the enforcement of your obligations under Paragraph 5
            of the Employment Agreement, including without limitation Paragraph
            6 thereof, are hereby
<PAGE>
            incorporated by reference and your obligations under Paragraph 5
            shall continue in full force and effect in accordance with its
            terms, as hereby amended.

7.    DEFINITIONS. As used in this Agreement:

      "Affiliates" means, with respect to any Person, all other Persons directly
      or indirectly controlling, controlled by or under common control with that
      Person, where control may be by either management authority or equity
      interest.

      "Employment Agreement" means the letter agreement between you and Houghton
      Mifflin dated May 23, 2002 with respect to the terms of your employment.

      "Person" means an individual, a corporation, a limited liability company,
      an association, a partnership (including a limited partnership), an
      estate, a trust and any other entity or organization.

8.    RELEASE OF CLAIMS.

      a.    This Agreement is in complete and final settlement of any and all
            cause of action, rights or claims, whether known or unknown, that
            you have had in the past, now have, or might now have, in any way
            related to, connected with or arising out of your employment or the
            termination of that employment or pursuant to any federal, state or
            local law, regulation or other requirement and you hereby release
            and forever discharge Houghton Mifflin and its Affiliates and all of
            their respective directors, shareholders, officers, members,
            managers, general and limited partners, employees, agents,
            representative, successors and assigns, and all other connected with
            any of them, both individually and in their official capacities,
            from any and all such causes of action, rights and claims. Excluded
            from the scope of this release of claims, however, are (i) any right
            to defense and/or indemnification that you have under the by-laws of
            Houghton Mifflin or the charter or by-laws of Houghton Mifflin
            Holdings, Inc. or under any existing written agreement with them or
            any of their Affiliates providing indemnification for you against
            third party claims and (ii) any vested rights under any benefit plan
            of Houghton Mifflin in which you were participating on the
            Separation Date.

      b.    This Agreement is in complete and final settlement of any and all
            cause of action, rights or claims, whether known or unknown, that
            Houghton Mifflin, its parent or subsidiaries (together, the
            "Releasors") have had in the past, now have, or might now have
            against you, in any way related to, connected with or arising out of
            your employment or the termination of that employment or pursuant to
            any federal, state or local law, regulation or other requirement and
            Houghton Mifflin, on behalf of the Releasors, hereby releases and
            forever discharge you, your heirs, beneficiaries, executors,
            administrators, personal representatives and assigns, from any and
            all such causes of action, rights and claims. Excluded from the
            scope of this release of claims, however, are any criminal or other
            intentional acts of wrongdoing and any acts of wrongdoing for
            personal gain.
<PAGE>
9.    ENFORCEMENT PROVISIONS

      a.    In the event of a breach by you of Paragraph 5 of the Employment
            Agreement, as incorporated herein by reference and amended hereby,
            Houghton Mifflin shall be entitled to the same remedies under this
            Agreement as are provided to it under Paragraph 6 of the Employment
            Agreement, also incorporated herein by reference.

      b.    In the event that Houghton Mifflin should fail to make any of the
            payments to be provided to you under paragraph 3(b) hereof, other
            than an inadvertent failure corrected within two business days after
            receipt of notice from you, you will be entitled to interest, at the
            prime rate, for the period of delay and your reasonable attorneys'
            fees for enforcement of your rights under paragraph 3(b) hereof;
            provided, however, that in the event Houghton Mifflin ceases payment
            to you under paragraph 3(b) due to an alleged breach of your
            obligations under Paragraph 5 of the Employment Agreement,
            incorporated herein and amended hereby, Houghton Mifflin shall not
            have any obligation to you under the preceding sentence unless and
            until there has been a final judgment by a court of competent
            jurisdiction that you have not breached those obligations.

10.   MISCELLANEOUS.

      a.    This Agreement constitutes the entire agreement between you and
            Houghton Mifflin and supersedes all prior and contemporaneous
            communications, agreements and understandings, whether written or
            oral, with respect to your employment, its termination and all
            related matters, excluding only those provisions of the Employment
            Agreement incorporated herein by reference and Paragraph 10
            (Indemnification) of the Employment Agreement, which shall remain in
            full force and effect in accordance with their terms.

      b.    This Agreement may not be modified or amended, and no breach shall
            be deemed to be waived, unless agreed to in writing by you and an
            authorized representative of the Board of Directors of Houghton
            Mifflin. The captions and headings in this Agreement are for
            convenience only and in no way define or describe the scope or
            content of any provision of this Agreement. This is a Massachusetts
            contract and shall be governed and construed in accordance with the
            laws of the Commonwealth of Massachusetts, without regard to its
            conflict of law principles. This Agreement may be executed in two or
            more counterparts, each of which shall be an original and all of
            which together shall constitute one and the same instrument.

      c.    In signing this Agreement, you give the Houghton Mifflin assurance
            that you have signed it voluntarily and with a full understanding of
            its terms; that you have had sufficient opportunity to consider this
            Agreement and to consult with your attorneys; and that, in signing
            this Agreement, you have not relied on any
<PAGE>
            promises or representations, express or implied, that are not set
            forth expressly in this Agreement.

If the terms of this Agreement are acceptable to you, please sign, date and
return it to one of us no later than the Separation Date. At the time you sign
and return this letter, or, if later, the date it is signed by us on behalf of
Houghton Mifflin, this Agreement will take effect as a legally-binding agreement
between you and Houghton Mifflin on the basis set forth above. If either of us
is the last to sign this Agreement, we will promptly provide you an executed
copy of it.

Sincerely,
HOUGHTON MIFFLIN COMPANY

By:  /s/ Mark Nunnelly              By:  /s/ Scott Sperling
         Mark Nunnelly                   Scott Sperling
         Director                        Director

Date:  June 29, 2003                Date:  June 29, 2003

Accepted and agreed:

Signature: /s/ Hans Gieskes
           ----------------
           Hans Gieskes

Date: June 29, 2003

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