David Howell
Alfred Kniberg
Paul McDonald
Joyce Baran
Graeme Caulfield
Ann-Marie Howell
October 27, 1995
Aristotle Sub, Inc.
78 Olive Street
New Haven, CT 06511
The Artistotle Corporation
78 Olive Street
New Haven, CT 06511
RE: The Strouse, Adler Company
Gentlemen:
Reference is hereby made to the letter dated June 27, 1995 (the "Letter
Agreement") by and among David Howell and Alfred Kniberg, acting in their
capacity as collateral agent for the Original Strouse Shareholders, Aristotle
Sub, Inc. ("Pledgor") and The Aristotle Corporation ("Aristotle") with respect
to the Put Rights of the Original Strouse Shareholders. Initial capitalized
terms not defined herein shall have the meaning assigned to them in the Letter
Agreement.
David Howell and Alfred Kniberg, acting in their capacity as collateral
agent under the Pledge Agreement and signatories to the Letter Agreement do
hereby agree to amend the Letter Agreement by deleting Paragraph 5 and
substituting the following in its place and stead:
5. In the event that (a) the Pledgor exercises the Put
Withdrawal Right and (b) there is a Net Cash Recovery (as defined herein),
then the Net Cash Recovery will be loaned by The Aristotle Corporation
("Aristotle") to Pledgor or otherwise contributed to Pledgor (the
"Aristotle Loan") and Pledgor shall use the Aristotle Loan to restore the
balance of the Account to $700,000. If the amount of (a) the Net Cash
Recovery, minus (b) the aggregate Aristotle Loans exceeds $750,000, then
the provisions of Paragraphs 1, 2, 3 and 4 shall be null and void (but such
provisions shall be effective with respect to any
Aristotle Sub, Inc.
The Aristotle Corporation
Page Two
October 27, 1995
actions taken prior to the date on which the amount of the Net Cash
Recovery less the Aristotle Loans exceeded $750,000) and the Pledgor,
Pledgees and Aristotle shall use their best efforts to cause the 1995
Amendment to be repealed in its entirety and the Pledgor's Certificate of
Incorporation to be reinstated as it was prior to the 1995 Amendment. In
any event, no later than April 12, 1997, the balance of the Account shall
not be less than $700,000 and the failure to achieve such a balance on such
dates shall be an Event of Default under the Pledge Agreement. As used
herein, "Net Cash Recovery" means (a) the aggregate amount of cash
recovered by Aristotle from existing claims against its insurance company
relating to certain shareholder litigation and/or federal income tax refund
claims involving the Federal Deposit Insurance Corporation, and dividends
or tax sharing payments hereafter made by Strouse, Adler and/or Pledgor,
minus (b)(i) Aristotle's expenses, including legal fees, incurred in
connection with recovering the cash or making the tax sharing payments,
(ii) $250,000, and (iii) the Fleet Payment. As used herein, "Fleet
Payment" means the amount that Aristotle will contribute or loan to
Strouse, Adler in order for Strouse, Adler to make the mandatory prepayment
required to be paid to Fleet Bank, N.A. pursuant to Section 2.36 of the
Loan Agreement dated October 27, 1995.
This letter will confirm that all of the undersigned, acting in their
capacity as the Waiver Group (as defined in the Capital Contribution Agreement
dated November 19, 1993 between some of the undersigned, Pledgor, Parent and
certain others, as amended) on behalf of all the Original Strouse Shareholders,
to hereby consent to the amendment to the Letter Agreement described herein.
Neither Pledgor nor Aristotle shall seek any personal recourse or liability
against either Pledgee for the execution and delivery of this Agreement whether
or not the terms and conditions contained herein are fully enforceable in
accordance with their terms against all of the Original Shareholders.
Except as expressly provided herein, none of the other provisions of the
Letter Agreement are amended or waived and the Letter Agreement is and remains
in full force and effect. This letter may be relied upon Parent, Pledgor and
Fleet in connection with entering into certain modifications to Fleet's loans to
The Strouse Adler Company.
Aristotle Sub, Inc.
The Aristotle Corporation
Page Three
October 27, 1995
Please indicate your agreement to the foregoing by executing this letter
agreement in the space provided below. This letter may be executed in
counterparts and the facsimile of the signature of any party shall constitute an
original signature of such party.
Sincerely,
/s/ David Howell
David Howell
/s/ Alfred Kniberg
Alfred Kniberg
/s/ Paul McDonald
Paul McDonald
/s/ Joyce Baran
Joyce Baran
/s/ Graeme Caulfield
Graeme Caulfield
/s/ Ann-Marie Howell
Ann-Marie Howell
Acknowledged and Agreed to:
ARISTOTLE SUB, INC.
/s/ John J. Crawford
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By: John J. Crawford
Its: President
THE ARISTOTLE CORPORATION
/s/ John J. Crawford
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By: John J. Crawford
Its: President