EXHIBIT 10
EXECUTION COPY
EXCHANGE AGREEMENT
Exchange Agreement, dated as of November 27, 2001 (the "Agreement"), by and
between The Aristotle Corporation, a corporation organized under the laws of the
State of Delaware (the "Company"), and Geneve Corporation, a corporation
organized under the laws of the State of Delaware ("Geneve").
W I T N E S S E T H:
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WHEREAS, as a condition to the closing of the merger of Nasco International
Inc., an indirect subsidiary of Geneve, with and into the Company (the
"Merger"), pursuant to the Agreement and Plan of Merger, dated as of November
27, 2001, by and among the Company and the parties named therein (the " Merger
Agreement"), the Company and Geneve have agreed to enter into this Agreement;
and
WHEREAS, as a preparatory step, immediately prior to the Merger, the
Company will distribute to its common stockholders, pro rata, a dividend of one
share of newly issued Series I Convertible Voting Cumulative 11% Preferred
Stock, par value $0.01, of the Company ("Series I Preferred Stock") for each
share of Company common stock, par value $0.01 ("Company Common Stock"), then
issued and outstanding; and
WHEREAS, as of the date of this Agreement, Geneve owns 964,596 shares of
Company Common Stock and between the date of this Agreement and the closing date
of the Merger, Geneve may acquire additional shares of Company Common Stock; and
WHEREAS, the Company and Geneve desire to exchange all shares of Series I
Preferred Stock held by Geneve on the closing date of the Merger for an
identical number of shares of Series J Non-Voting Cumulative 12% Preferred
Stock, par value $.01 per share, of the Company (the "Series J Preferred Stock")
to be issued by the Company to Geneve in such exchange;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
Article I.
Exchange and Cancellation
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Section 1.1. Exchange of Series I Preferred Stock. Upon the terms and
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subject to the conditions of this Agreement, Geneve hereby agrees to transfer to
the Company the shares of Series I Preferred Stock owned by Geneve, and the
Company agrees to issue to Geneve, in exchange therefor, an identical number of
newly issued shares of Series J Preferred Stock, which when issued upon
consummation of the transactions contemplated hereby will be duly authorized,
validly issued, fully paid and non-assessable, and free and clear of all liens,
claims, charges, security interests, or other legal or equitable encumbrances or
restrictions ("Liens").
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Section 1.2. Tender of Series I Preferred Stock ; Issuance of Series J
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Preferred Stock. The exchange of the Series I Preferred Stock for the Series J
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Preferred Stock described in Section 1.1 shall take place at the time of the
Merger immediately following the filing of the certificate of merger with the
Secretary of State of the State of Delaware, at such location as the Merger
closing shall take place.
Article II.
Representations and Warranties of the Company
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The Company hereby represents and warrants to Geneve as follows:
Section 2.1. Organization. The Company is a corporation duly organized,
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validly existing and in good standing under the laws of the State of Delaware,
with full power to enter into and perform this Agreement and the transactions
contemplated hereby in accordance with the terms hereof.
Section 2.2. Authorization; Binding Effect. All corporate action necessary
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to authorize the Company to enter into this Agreement and to perform the
covenants and agreements hereof to be performed by it has been duly and validly
taken. The Company has validly executed and delivered this Agreement. This
Agreement constitutes the legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights generally and by general principles of equity. Neither the
execution or delivery of this Agreement nor the performance by the Company of
its covenants and agreements hereunder violates any provisions of the
certificate of incorporation or bylaws of the Company, any applicable law or any
material agreement, document or instrument to which it is a party or by which it
is bound.
Section 2.3. Capitalization. Upon issuance and delivery to Geneve as
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contemplated by this Agreement, the Series J Preferred Stock will be duly
authorized, validly issued, fully paid and non-assessable shares of the Company,
free and clear of all Liens, preemptive or similar rights, and entitled to the
rights described in the certificate of incorporation of the Company.
Article III.
Representations, Warranties, and
Acknowledgments of Geneve
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Geneve hereby represents, warrants and acknowledges to the Company:
Section 3.1. Authorization, Binding Obligation and Title to Series I
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Preferred Stock.
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(a) Geneve has duly taken any and all action necessary to authorize the
execution, delivery and performance of this Agreement in accordance with its
terms. This Agreement constitutes the legal, valid and binding obligation of
Geneve, enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights generally and by general principles of equity. Neither the
execution or delivery of this Agreement nor the performance by Geneve of its
covenants and agreements hereunder violates or
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will violate, conflicts with or will conflict with, the terms of any applicable
law or any agreement, document or instrument to which Geneve is a party or by
which Geneve may be bound.
(b) The Series I Preferred Stock to be transferred by Geneve to the
Company hereunder will be free of all Liens.
Section 3.2. Suitability.
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(a) Geneve (x) has the requisite knowledge and experience in financial and
business matters to be capable of evaluating the merits and risks of an
investment in the Company, (y) is able to bear the economic risks of such
investment in the Company for an indefinite period and (z) at the present time
could afford a complete loss of such investment.
(b) Geneve's attorneys, accountants and other representatives (x) have
been given an opportunity to ask, and have, to the extent that Geneve has
considered necessary, asked questions of, and have received answers from,
representatives of the Company concerning the exchange of the Series I Preferred
Stock for the Series J Preferred Stock and the affairs of the Company, and such
questions, if any, have been answered to the full satisfaction of Geneve and
such persons; and (y) have been given or afforded access to all documents,
records, books and additional information which Geneve or its representatives
have requested regarding such matters.
Section 3.3. Awareness.
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(a) Geneve understands that the exchange of the Series I Preferred Stock
for the Series J Preferred Stock hereunder has not been registered under the
Securities Act of 1933, as amended (the "1933 Act"), or under any state
securities laws, in reliance upon exemptions therefrom for non-public offerings,
and that the Series J Preferred Stock must be held indefinitely unless the sale
thereof is subsequently registered under the 1933 Act and under certain state
securities laws or an exemption from such registration is available. Geneve
understands that the certificate or certificates for the Series J Preferred
Stock will bear a legend to such effect.
(b) Geneve shall not sell or otherwise transfer the Series J Preferred
Stock unless it is registered under the 1933 Act and under any applicable
securities laws, or an exemption from such registration is available. Geneve
understands that neither the Company nor any other person is required to
register the Series J Preferred Stock under the 1933 Act, or take any steps to
perfect any exemption therefrom for any resale of the Series J Preferred Stock
pursuant to Rule 144 under the 1933 Act, or otherwise. Geneve understands that
there may not be any public market for the Series J Preferred Stock.
(c) The Series J Preferred Stock is being acquired by Geneve solely for
its own account for investment, and not with a view to, or for resale in
connection with, a distribution.
(d) Geneve understands that no offering memorandum or sales literature in
connection with the issuance of the Series J Preferred Stock hereunder has been
filed with or reviewed by the Securities and Exchange Commission or any state
securities administrators. No federal or state agency has passed upon the Series
J Preferred Stock or made any finding or determination as to the merits thereof.
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Article IV.
Miscellaneous
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Section 4.1. Binding Agreement. This Agreement shall bind and inure to the
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benefit of the respective parties hereto, their successors and assigns.
Section 4.2. Headings. The headings and descriptive titles contained in
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this Agreement are for convenience of reference only and do not modify, limit or
in any way define the interpretation or construction of the provisions of this
Agreement.
Section 4.3. Survival of Representations and Warranties. The
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representations and warranties made in this Agreement by the parties hereto
shall survive the execution and effectiveness hereof and any investigation or
observation made by any party.
Section 4.4. Entire Agreement. This Agreement embodies the entire
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agreement and understanding between the parties hereto and supersedes all prior
agreements or understandings relating to the subject matter hereof.
Section 4.5. Governing Law. This Agreement shall be governed by, and
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construed in accordance with, the internal laws of the State of Delaware without
reference to any principles of conflicts of laws.
Section 4.6. Amendments. This Agreement may not be altered or amended
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except by a writing duly executed by any party against whom such alteration or
amendment is sought to be enforced.
Section 4.7. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
Section 4.8. Severability. Should any one or more of the provisions of
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this Agreement be determined to be illegal, invalid or unenforceable, all of the
other provisions of this Agreement shall be given effect separately from such
provision or provisions and shall not be affected by any such determination.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE ARISTOTLE CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
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Title: Chairman and President
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GENEVE CORPORATION
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: President
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