IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
- ----------------------------------------X
In re: : Case Nos.: 93-27874/NW
: through 93-27879
EMERSON RADIO CORP. et al., : inclusive
:
Debtors. :
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In re: : In a Case Ancillary
: to a Foreign
Petition of THOMAS HACKETT, : Proceeding under
Official Liquidator of : 11 U.S.C. Section 304
FIDENAS INTERNATIONAL BANK LIMITED, :
: No. 95-B-2263
Debtor in Foreign Proceeding. :
- ----------------------------------------X
THOMAS HACKETT, Official Liquidator of :
FIDENAS INTERNATIONAL BANK LIMITED, :
: CIVIL ACTION
Plaintiff, :
: No. 95-1179 (NHP)
- against - :
:
GEOFFREY P. JURICK, ERIC F. GEBAIDE, :
and FIDENAS INTERNATIONAL LIMITED, :
:
Defendants. :
:
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STIPULATION OF SETTLEMENT AND ORDER
WHEREAS, on September 29, 1993, Emerson Radio Corp.
("Emerson") and five of its subsidiaries filed voluntary
petitions for relief under Chapter 11, Title 11, United States
Code (the "Bankruptcy Code") in the United States Bankruptcy
Court for the District of New Jersey (the "New Jersey Bankruptcy
Court") and, on March 31, 1994, a plan of reorganization (the
"Emerson Plan") was confirmed.
WHEREAS, Geoffrey P. Jurick ("Jurick") is the Chairman
of the Board of Directors of Emerson (the "Emerson Board") and
the direct or indirect owner or controlling person of Fidenas
International Limited, L.L.C. ("FIN"), GSE Multimedia
Technologies, Inc., formerly known as GSE Electronic Systems,
Inc., ("GSE") and Elision International, Inc. ("Elision" and,
together with Jurick, FIN and GSE, the "Jurick Group").
WHEREAS, on October 26, 1993, the Supreme Court of the
Commonwealth of the Bahamas (the "Bahamas Court") appointed,
subject to its ongoing supervision, Provisional Liquidators of
Montcour Bank & Trust Company Limited ("MBT"); and, on July 29,
1994, the Bahamas Court ordered that MBT be wound up.
WHEREAS, on April 14, 1994, the Bahamas Court
appointed, subject to its ongoing supervision, Wayne J. Aranha
(the "FIL Liquidator") the Provisional Liquidator of Fidenas
Investment Limited ("FIL"); and, on January 10, 1995, the Bahamas
Court appointed the FIL Liquidator as the Official Liquidator of
FIL and ordered that FIL be wound up.
WHEREAS, by complaint, dated July 14, 1994 (as amended
August 3, 1994), Emerson commenced an action against Petra Jacobs
Stelling ("Stelling") and Donald K. Stelling in the United States
District Court for the District of New Jersey, Honorable Nicholas
H. Politan (the "Court"), entitled Emerson Radio Corp. v. Donald
K. Stelling and Petra Jacobs Stelling, Civil Action No. 94-3393
(NHP) (the "Stelling Proceedings"), seeking declaratory relief
and damages; and by motion, dated October 31, 1994, the
defendants therein moved to dismiss the action on several
grounds, including lack of personal jurisdiction over Stelling.
WHEREAS, Stelling is the direct or indirect owner of
MBT, the direct or indirect majority owner of FIL, the direct or
indirect owner of the principal creditors of MBT and FIL, and the
direct or indirect owner of Montcour Finance Limited, Jenvan
Limited, Cam-Pack Limited, and Montcour Holding Limited (all such
persons and entities, together with Donald K. Stelling and any
other person or entity directly or indirectly owned or controlled
by Stelling, the "Stelling Group").
WHEREAS, by complaint, dated August 23, 1994, Stelling
commenced an action for damages against Jurick in the district
court of Zurich, Switzerland (the "Zurich Civil Proceedings").
WHEREAS, the District Attorney for the Canton of
Zurich, Switzerland (the "Zurich District Attorney") is
conducting a criminal investigation regarding alleged violations
of law by Jurick, Peter G. Bunger ("Bunger") and Jerome H. Farnum
("Farnum").
WHEREAS, on September 15, 1994, on motion by Jurick and
others, the Court ordered the transfer of a proceeding that had
been commenced by the FIL Liquidator pursuant to Section 304 of the
Bankruptcy Code in the Bankruptcy Court for the Southern District
of New York, seeking the turnover of certain shares of Emerson
common stock held in the names of FIN and GSE, to the New Jersey
Bankruptcy Court on the ground, among others, that disputes
concerning ownership of common stock issued pursuant to the
Emerson Plan fell within the retained jurisdiction of the New
Jersey Bankruptcy Court, as provided in the Emerson Plan (see In
re Emerson Radio Corp., 173 B.R. 490, 495 (D.N.J. 1994), aff'd,
52 F.3d 50 (3d Cir. 1995)).
WHEREAS, on July 14, 1994, the Swiss Federal Banking
Commission issued a decree appointing a provisional liquidator to
liquidate the assets in Switzerland of Fidenas International Bank
Limited ("FIBANK") and Fidenas AG.
WHEREAS, on October 4, 1994, the Bahamas Court ordered
that FIBANK be wound up compulsorily under the supervision of the
Bahamas Court; on January 27, 1995, Thomas Hackett (the "FIBANK
Liquidator" and, together with the FIL Liquidator, the "Bahamian
Liquidators") was appointed, subject to the ongoing supervision
of the Bahamas Court, to liquidate FIBANK's assets; and, on
February 1, 1996, the FIBANK Liquidator was recognized by the
Swiss authorities as FIBANK's foreign liquidator in the territory
of the Swiss Confederation.
WHEREAS, the Bahamian Liquidators have separately
sought and obtained certain orders in the Bahamas Court
restricting the transfer of certain shares of Emerson common
stock and other assets of Jurick and related entities (the
"Mareva Injunctions").
WHEREAS, MBT is a member of the creditors' committee of
FIBANK having filed a proof of claim in FIBANK's compulsory
liquidation proceedings in the Bahamas Court on or about March
21, 1995.
WHEREAS, on March 23, 1995, FIL filed a proof of claim
in FIBANK's compulsory liquidation proceedings in the Bahamas
Court.
WHEREAS, on March 10, 1995, the FIBANK Liquidator
commenced a proceeding in this Court under Section 304 of the Bankruptcy
Code, entitled In re Petition of Thomas Hackett, Official
Liquidator of Fidenas International Bank Limited, No. 95-B-2263,
and a related civil action, entitled Thomas Hackett v. Geoffrey
P. Jurick, Eric F. Gebaide and Fidenas International Limited, No.
95-1179 (NHP) (together, the "New Jersey Proceedings"), seeking
the turnover of all FIBANK property owned or controlled by the
defendants in that action and, specifically, certain shares of
Emerson common stock held in the name of FIN.
WHEREAS, on March 10, 1995, with the consent of Emerson
and the parties to the New Jersey Proceedings, the Court issued
an order withdrawing the reference of such proceedings to the New
Jersey Bankruptcy Court.
WHEREAS, on March 27, 1995, the FIL Liquidator filed in
the New Jersey Proceedings a pleading containing a counterclaim
against FIBANK and cross-claims against Jurick and FIN seeking
the turnover of certain shares of Emerson common stock.
WHEREAS, on April 18, 1996, the FIL Liquidator filed a
complaint in this Court entitled Wayne J. Aranha v. Geoffrey P.
Jurick, GSE Multimedia Technologies Corporation, Fidenas
International Limited, L.L.C., and Elision International, Inc.,
No. 96-1645 (NHP) (the "FIL Action"), seeking damages and
injunctive and declaratory relief with respect to certain shares
of Emerson common stock held in the names of FIN, Elision or GSE.
WHEREAS, Barclays Bank PLC ("Barclays") is a member of
the creditors' committee of FIBANK having filed a proof of claim
on or about May 9, 1995 in FIBANK's compulsory liquidation
proceedings in the Bahamas Court.
WHEREAS, by complaint, dated August 10, 1995, Barclays
commenced an action in the Supreme Court of the State of New
York, New York County, entitled Barclays Bank PLC v. GSE
Multimedia Technologies, Inc., f/k/a GSE Electronic Systems,
Inc., Index No. 120083/95 (the "New York Proceedings"), seeking a
monetary judgment against GSE, and, on November 2, 1995, Barclays
obtained a default judgment against GSE in the amount of
US$1,835,423.26 (the "New York Judgment") (which was also
recorded in Delaware).
WHEREAS, by complaint, dated September 1, 1995 (as
amended on October 17, 1995) Barclays commenced an action against
Elision and MaxCom Corporation ("MaxCom") in the Commonwealth of
Massachusetts, Middlesex Superior Court (the "Massachusetts
Court"), entitled Barclays Bank PLC v. Elision International,
Inc. and MaxCom Corporation, No. 95-5132A (the "Massachusetts
Proceedings"), seeking, inter alia, injunctive relief as well as
monetary judgments against Elision and MaxCom.
WHEREAS, on September 7, 1995, the Massachusetts Court
issued a preliminary injunction, which has continued in effect to
date, enjoining Elision from conveying any assets of the
corporation.
WHEREAS, Emerson is a reporting company under the
Securities Exchange Act of 1934, as amended, whose common stock
is listed on the American Stock Exchange and which has 40,252,772
shares of such stock issued and outstanding as of the date
hereof.
WHEREAS, pursuant to a Stipulation and Order among
Emerson and the parties to the New Jersey Proceedings so ordered
by the Court on March 10, 1995, FIN deposited with the Clerk of
the Court certificates for 15,030,000 shares of Emerson common
stock that had been issued in the name of FIN pursuant to the
Emerson Plan (together with any shares issued in respect of, in
substitution or in exchange for any such shares, the "New Jersey
Shares").
WHEREAS, the New Jersey Shares remain in the custody of
the Court and 14,122,542 shares of Emerson common stock are being
held in Zurich, Switzerland, in connection with pending bank
regulatory and other investigations (together with any shares
issued in respect of, in substitution or in exchange for any such
shares, the "Zurich Shares" and, together with the New Jersey
Shares, the "Emerson Shares").
WHEREAS, the Bahamian Liquidators, Barclays and the
Jurick Group have filed claims with the Zurich Bankruptcy Office
concerning their rights with respect to the Zurich Shares and
have requested that the Zurich Shares be delivered to the Court.
WHEREAS, Barclays, Stelling, the FIL Liquidator, the
FIBANK Liquidator, Jurick, FIN, Elision, GSE and Emerson have
agreed to enter into a global settlement upon the terms and
conditions set forth herein in order to resolve all claims
described above, and, except as specifically provided herein, all
other pending litigation and all potential claims by, between and
among the parties described in the recitals hereof and the
parties listed on Exhibit B hereto.
NOW, THEREFORE, IT IS HEREBY STIPULATED, CONSENTED,
AGREED AND ORDERED, that:
1. Payment.
(a) The Settlement Amount. In full satisfaction of
all claims described above (including, without limitation, those
which are the subject of pending litigation) and all potential
claims by, between and among the parties described in the
recitals hereof and the parties listed on Exhibit B hereto,
except as specifically provided herein, Jurick, FIN,
Centralinvest S.A. ("Centralinvest") and Pentland Finance Limited
("Pentland") shall be jointly and severally liable to the FIBANK
Liquidator, Stelling and Barclays (together, the "Creditors") for
the payment of the aggregate sum of US$49.5 million (the
"Settlement Amount"), in accordance with Exhibit A hereto. In
addition, to the extent set forth in the Consent Judgments
described in paragraph 9(a) hereof, GSE shall be jointly and
severally liable with the foregoing entities to Barclays for the
payment of US$1,835,423.26. Subject to the other provisions of
this Stipulation and Order, Jurick shall be paid the sum of
US$3.5 million, in accordance with Exhibit A hereto, solely from
the proceeds of the sale of the Emerson Shares (the "Jurick
Payment" and, together with the Settlement Amount, the "Aggregate
Amount"). The Emerson Shares are comprised of 29,152,542 shares
of Emerson common stock. On the Effective Date (as defined in
paragraph 5(b) hereof), all Emerson Shares which are not on that
date registered in FIN's name on Emerson's books and records
shall be transferred to and registered on Emerson's books and
records in FIN's name by the registered owners of such shares;
provided, however, that all of the 29,152,542 Emerson Shares
shall remain in the custody of the Court or be transferred to the
Settlement Agent (as defined in paragraph 3(b) hereof) pursuant
to paragraph 1(b) hereof. Following receipt by the Court of the
Zurich Shares, any required transfer and registration of any of
the Emerson Shares into FIN's name on Emerson's books and records
and the delivery of certificates with respect to any of the
Emerson Shares to the Settlement Agent or the Court, as the case
may be, the Emerson Shares shall be divided into two pools.
(b) Pool A Shares. According to calculations performed by
Emerson on the date of execution hereof, the first pool shall
consist of (i) initially, 15,286,172 Emerson Shares, and (ii)
thereafter, shall also include such additional number of Emerson
Shares that the Settlement Agent or the Court shall determine,
from time to time, are not to be held in custody by the Court
pursuant to paragraph 1(c) hereof (the "Pool A Shares"). All New
Jersey Shares shall be Pool A Shares. Following the appointment
of the Settlement Agent, whether by agreement among the
Creditors, Jurick and Emerson (collectively, the "Lead Parties")
or by the Court, the Pool A Shares shall be delivered to the
Settlement Agent, together with stock powers in blank and
certificates in denominations requested by the Settlement Agent.
(c) Pool B Shares. The second pool shall consist solely of
the number of Emerson Shares with respect to which Jurick must
retain beneficial ownership of voting power in order to avoid an
event of default arising out of a Change of Control (as defined
in the Indenture referred to in this paragraph 1(c)) under that
certain Indenture, dated as of August 17, 1995, between Emerson
and Bank One, Columbus, N.A., as Trustee, as in effect on the
Effective Date (the "Indenture") and that certain Loan and
Security Agreement, dated March 31, 1994, as amended, among
Emerson, certain of its affiliates and Congress Financial
Corporation as in effect on the Effective Date (the "Senior
Credit Agreement") unless such event of default has been waived
in accordance with the terms of the applicable instrument as then
in effect (the "Pool B Shares"). The Pool B Shares shall be held
in custody by the Court and shall neither be subject to
foreclosure under the Pledge Agreement (as defined in paragraph
2(a) hereof) nor available for sale or release from the custody
of the Court absent further order of the Court; provided, however
that, if at any time it becomes unnecessary (whether as a result
of waiver, amendment, modification, payment, redemption or
otherwise) for the Court to hold any or all of the Pool B Shares
in custody, then such shares will (i) immediately be delivered to
the Settlement Agent, together with stock powers in blank and
certificates in denominations requested by the Settlement Agent,
and (ii) become part of the Pool A Shares. The Settlement Agent
shall provide the Lead Parties with at least five (5) Business
Days (as defined below) prior written notice of any such transfer
of Pool B Shares to Pool A Shares, which notice shall set forth
the calculations with respect to such transfer, and any of the
Lead Parties may apply to the Court for appropriate relief in
connection therewith. The term "Business Day" shall mean any day
(other than a day which is a Saturday, Sunday or legal holiday in
the State of New York) on which banks are open for business in
New York City.
(2) Security for Payment
(a) The parties hereto agree that all of the Emerson Shares
(including, without limitation, any dividends paid thereon, in
cash or in kind, any additional shares by virtue of stock splits
or stock distributions and any proceeds of any of the foregoing
(collectively, "Proceeds")) shall secure the payment of the
Settlement Amount to the Creditors on a first priority basis and,
on a subordinated basis and subject to the other provisions of
this Stipulation and Order, shall secure the payment of the
Jurick Payment to Jurick. Accordingly, effective on the
Effective Date (as defined in paragraph 5(b) hereof), FIN hereby
(x) pledges to the Settlement Agent, as collateral agent for the
Creditors and Jurick (in such capacity, the "Collateral Agent"),
all of its right, title and interest in and to the Emerson Shares
(including, without limitation, any Proceeds) to secure the
payment of the Settlement Amount and the Jurick Payment; and (y)
agrees to take all steps necessary to effect the pledge of the
Emerson Shares, including, but not limited to, the execution and
delivery to the Collateral Agent (with an original counterpart
for each Creditor and Emerson), in accordance with paragraph 9
hereof, of a pledge agreement in form and substance consistent
with the provisions of this Stipulation and Order and containing
such other customary or appropriate provisions not inconsistent
with the provisions of this Stipulation and Order as the
Creditors may require and as Jurick may require with respect to
his subordinated interest (the "Pledge Agreement"). A copy of
the Pledge Agreement will be attached hereto as Exhibit C. The
Collateral Agent shall have an enforceable perfected, first
priority security interest in and lien upon all of the Emerson
Shares, including, without limitation, the Pool A Shares to be
held by the Collateral Agent, the Pool B Shares to be held in
custody by the Court and any Proceeds securing (i) the payment of
the Settlement Amount for the benefit of the Creditors and (ii)
the Jurick Payment. Each of Jurick, Elision and GSE acknowledges
and consents to the pledge granted by FIN hereunder and to the
terms of the Pledge Agreement.
(b) Each member of the Jurick Group, for itself
and on behalf of each of its affiliates (whether present or future),
other than Emerson, hereby represents, warrants and covenants
that, (i) as of the Effective Date, FIN will hold the Emerson
Shares free and clear of all mortgages, pledges, security
interests, liens, encumbrances or charges of any kind whatsoever
(except for (x) the security interest granted hereunder and the
claims of the Creditors, (y) the restrictions on the exercise of
voting power with respect to such shares set forth in the
Indenture and the Senior Credit Agreement, and (z) all other
similar restrictions, all of which are set forth on Schedule I
hereto); (ii) FIN will not assign, pledge, hypothecate or
transfer, or create any lien upon, the Emerson Shares, other than
pursuant hereto, and agrees to take all steps necessary to
prevent the same from occurring; and (iii) it will, from time to
time, do such further acts and things and promptly execute and
deliver all such additional conveyances, assignments,
instruments, agreements and documents, and take all further
action, that may be necessary or desirable or that the Collateral
Agent or the Creditors may reasonably request, in order to
perfect and protect the security interest and lien granted
pursuant to this Stipulation and Order, the Pledge Agreement and
the Approval Order (as hereinafter defined) or to enable the
Collateral Agent or the Creditors to exercise and enforce any of
their rights under this Stipulation and Order or the documents
contemplated hereunder with respect to any of the Emerson Shares
(including, without limitation, any Proceeds).
(c) For purposes of perfecting the security interest and lien
granted hereunder and pursuant to the Pledge Agreement and the
Uniform Commercial Code, (i) the Collateral Agent shall
acknowledge, upon its retention, that it holds, and will continue
to hold, the Pool A Shares as Collateral Agent, (ii) the Office
of the Clerk of the Court shall acknowledge that it holds, and
will continue to hold, the Pool B Shares as the Collateral
Agent's bailee for such purposes, and (iii) the receipt by the
Collateral Agent and the Office of the Clerk of the Court of this
Stipulation and Order shall constitute written notification of
the security interest in and lien upon the Emerson Shares
(including, without limitation, any Proceeds) granted by FIN
hereunder and pursuant to the Pledge Agreement.
(d) The Emerson Shares shall automatically be released from
the security interest and lien granted hereunder and under the
Pledge Agreement, without the need for further action, upon (i)
the sale of all or any portion thereof to a third party in
accordance with the terms of this Stipulation and Order, the
Pledge Agreement or a subsequent order of the Court, or (ii) the
payment of the Aggregate Amount and the reimbursement of any
amounts paid by Emerson in accordance with paragraph 3(g) hereof.
3. Advisor and Settlement Agent
(a) Appointment/Selection of Advisor. By no later
than the execution of this Stipulation, Emerson shall submit to the
Creditors and Jurick a list of five (5) proposed institutional
financial advisors, which have no written or oral agreements or
understandings with Emerson or any member of the Jurick Group
concerning their proposed retention hereunder or the subject
matter thereof. Each of the Lead Parties shall consider
Emerson's nominees and shall use its best efforts to agree, by no
later than twenty-one (21) days after the execution of this
Stipulation, with respect to the selection of a financial advisor
(the "Advisor") to formulate the Marketing Plan described in
paragraph 3(c) hereof. If the Lead Parties reach agreement
within twenty-one (21) days after the execution of this
Stipulation, such Person (as defined in the Indenture), upon
approval of the Court, shall be the Advisor, shall perform the
functions set forth herein, and shall consult with and report to
the Lead Parties. If the Lead Parties are unable to so agree
within twenty-one (21) days after the execution of this
Stipulation, the Lead Parties shall submit to the Court a joint
list of proposed financial advisors, containing no more than one
nominee by each Creditor, Jurick, and Emerson, which list shall
be accompanied by full written disclosure of all previous
retentions of each such nominee by any of the Lead Parties or any
agreements between or among each nominee and any such party or
the parties identified on Exhibit B hereto relating to the
Emerson reorganization, the Emerson Shares or any of the
proceedings described in the recitals hereto, and the Court will,
after conferring with the Lead Parties, either select the Advisor
from the joint list or select a third party to serve as the
Advisor. Any successor Advisor shall be selected by agreement of
the Lead Parties or appointed by the Court, in accordance with
the procedures described in this paragraph 3(a).
(b) Appointment/Selection of Settlement Agent.
The Lead Parties shall use their best efforts to agree, with the advice
of the Advisor, within fourteen (14) days after the appointment of
the Advisor, with respect to the appointment of an administrator
(the "Settlement Agent"), which may be a division or affiliate of
the Advisor and which will hold the Pool A Shares and administer
the distribution of proceeds of the sale of the Emerson Shares as
provided herein. If the Lead Parties reach agreement within
fourteen (14) days after the appointment of the Advisor, such
Person, upon approval of the Court, shall be the Settlement
Agent, shall perform the functions set forth herein, and shall
consult with and report to the Lead Parties. If the Lead Parties
are unable to so agree within fourteen (14) days after the
appointment of the Advisor, the Lead Parties and the Advisor
shall submit to the Court a joint list of proposed
administrators, containing no more than one nominee by each
Creditor, Jurick, Emerson, and the Advisor, which list shall be
accompanied by full written disclosure of all previous retentions
of each such nominee by any of the Lead Parties or any agreements
between or among each nominee and any such party or the parties
identified on Exhibit B hereto relating to the Emerson
reorganization, the Emerson Shares or any of the proceedings
described in the recitals hereto, and the Court will, after
conferring with the Lead Parties and the Advisor, either select
the Settlement Agent from the joint list or select a third party
to serve as the Settlement Agent. Any successor Settlement Agent
shall be selected by agreement of the Lead Parties or appointed
by the Court in accordance with the procedures described in this
paragraph 3(b).
(c) The Marketing Plan. The Advisor shall formulate and
from time to time amend, as necessary or appropriate, a plan or
plans (the "Marketing Plan") for marketing the Emerson Shares
designed to meet the goal of generating proceeds sufficient to
pay the Aggregate Amount as quickly as possible consistent with
the intent, interests and purposes of this Stipulation and Order.
The Advisor shall provide each of the Lead Parties and the
Settlement Agent with a written report setting forth the initial
Marketing Plan as soon as practicable after its appointment. In
formulating the Marketing Plan, the Advisor shall take into
account the interests of all of the Lead Parties, including the
interests of Emerson's minority shareholders. The Lead Parties
shall use their best efforts to resolve any objections to the
Marketing Plan within twenty-one (21) days of its delivery. If,
within twenty-one (21) days of the delivery of the Marketing
Plan, the Lead Parties agree on the Marketing Plan, upon approval
of the Court, the Advisor and the Settlement Agent shall
implement the Marketing Plan. If, however, within twenty-one
(21) days of the delivery thereof, the Lead Parties are unable to
agree with respect to any aspect of the Marketing Plan, a hearing
shall be held before the Court, on notice to all Lead Parties,
the Settlement Agent and the Advisor, to consider all objections
of any Lead Party thereto. Any amendment to any Marketing Plan
shall be approved by the Lead Parties or the Court in accordance
with the procedures described in this paragraph 3(c).
The Advisor shall, in formulating the Marketing
Plan, consider and, not less than semi-annually, report to the
Court and the Lead Parties with respect to (i) its progress in
making the payments required pursuant to Exhibit A, (ii) all of
its efforts under this Stipulation and Order, (iii) all available
options for disposing of the Emerson Shares, and (iv) its best
recommendations with respect to the disposition of the Emerson
Shares so as to generate proceeds to pay the Aggregate Amount as
quickly as possible and to accomplish the other purposes set
forth in this Stipulation and Order (each report, a "Payment
Progress Report"). The Advisor shall supplement the Payment
Progress Reports from time to time, as necessary or appropriate,
including, subject to approval of the Court after notice to all
Lead Parties, the Advisor and the Settlement Agent, by amending
the Marketing Plan or creating a new Marketing Plan.
(d) Objections After Implementation of Marketing
Plan. Following the approval of the Marketing Plan or any amendment
thereto, any Lead Party that becomes dissatisfied with the
progress of the Advisor in implementing, or the Settlement Agent
in administering, the Marketing Plan or with the provisions of
the Marketing Plan or with other matters related thereto may,
upon notice to each other Lead Party, the Settlement Agent and
the Advisor, apply to the Court for appropriate relief (based on
the totality of circumstances) with respect to such progress,
implementation, administration or other matters related thereto.
(e) Notice of Proposed Sales. Subject to paragraph 3(h)
hereof, the Settlement Agent, in accordance with a Court-approved
Marketing Plan or any Court-approved amendment thereto, may,
without further Court approval, (i) sell Emerson Shares pursuant
to a registered offering; provided, that the purchase price for
each share sold is not less than 90% of the average of the three
most recent Closing Prices (as defined in the Indenture), or (ii)
sell up to one percent (1%) of the issued and outstanding common
stock of Emerson per quarter as otherwise allowed under the
Securities Act of 1933 (including pursuant to SEC Rule 144);
provided that the purchase price for each share sold is not less
than 90% of the average of the three most recent Closing Prices.
With respect to all other proposed sales of
Emerson Shares, the Settlement Agent and the Advisor shall
promptly provide each of the Lead Parties with five (5) Business
Days prior written notice (the "Notice Period") of any such
proposed sale and the proposed terms thereof. If there is no
objection to the proposed sale prior to the expiration of the
Notice Period, the Settlement Agent may proceed with such sale.
If any Lead Party objects to the proposed sale, such Lead Party
shall, upon notice to each other Lead Party, the Advisor and the
Settlement Agent, request that the Court conduct an expedited
hearing prior to the closing of such sale and, in that event, no
sale may close prior to the hearing and the disposition of the
matter by the Court.
(f) Distribution of Sale Proceeds. Upon receipt,
the Settlement Agent shall place the proceeds of all sales of the
Emerson Shares, net of the reasonable and customary expenses
incurred in connection with such sales and the reimbursement of
any amounts payable to Emerson under paragraph 3(g) hereof ("Net
Proceeds"), in an interest bearing account and shall, on at least
a monthly basis (and, in the event that a sale of Emerson Shares
generates Net Proceeds in excess of US$1 million, as soon as
practicable following receipt thereof by the Settlement Agent),
account for all proceeds received from sales of the Emerson
Shares and distribute the Net Proceeds of all such sales, pro
rata to the Creditors and Jurick, in accordance with the
applicable percentages set forth on Exhibit A hereto and subject
to the other provisions of this Stipulation and Order, including
but not limited to paragraph 11 hereof, provided, however, that,
in accordance with Exhibit A hereto, (i) neither any Creditor nor
Jurick shall be paid any portion of any payment subsequent to the
First Payment (as used in Exhibit A hereto), unless and until
each Creditor and Jurick have been paid their respective portions
of the First Payment in full; (ii) neither any Creditor nor
Jurick shall be paid any portion of any payment subsequent to the
Second Payment (as used in Exhibit A hereto), unless and until
each Creditor and Jurick have been paid their respective portions
of the Second Payment in full; (iii) neither any Creditor nor
Jurick shall be paid any portion of any payment subsequent to the
Third Payment (as used in Exhibit A hereto), unless and until
each Creditor and Jurick have been paid their respective portions
of the Third Payment in full; and (iv) Barclays shall not be paid
any portion of the Final Payment (as used in Exhibit A hereto),
unless and until each Creditor and Jurick have been paid their
respective portions of the Balance (as used in Exhibit A hereto)
in full.
(g) Fees and Expenses.
(i) All reasonable fees and expenses of the
Settlement Agent (including reasonable fees and expenses incurred
in its capacity as the Collateral Agent) and the Advisor (including
reasonable attorneys' fees) incurred in connection with the retention
of the Settlement Agent and the Advisor and the formulation of the
Marketing Plan and any amendment(s) thereto shall be funded and
advanced as necessary by Emerson up to a maximum amount of
$250,000. Emerson shall be reimbursed for such amounts from the
proceeds, if any, of the first sale(s) of the Emerson Shares
prior to the payment of any portion of the Aggregate Amount.
(ii) In addition, from time to time, following the full
reimbursement to Emerson of its initial expense payments made
pursuant to paragraph 3(g)(i) hereof, Emerson shall pay, on a
revolving basis, additional expenses incurred by the Settlement
Agent (including reasonable fees and expenses incurred in its
capacity as the Collateral Agent) or the Advisor in connection
with the implementation of the Marketing Plan and any
amendment(s) thereto, which expenses shall in no event exceed, at
any one time outstanding, $75,000. Emerson shall be reimbursed
for such amounts from the proceeds, if any, of the first sale(s)
of Emerson Shares following the advance of any portion of the
$75,000 (after payment of the reasonable and customary expenses
incurred in connection with such sales).
(iii) To the extent not reimbursable pursuant to, and
following payment of all outstanding amounts required to be
reimbursed under, paragraph 3(g)(ii) hereof, customary and
reasonable fees and expenses incurred by Emerson in connection
with any registration of the Emerson Shares shall be reimbursed
from the first proceeds of the sale(s) of such shares (after
payment of the reasonable and customary expenses incurred in
connection with such sales).
(h) Special Committee. In the event of an
offer to purchase Emerson Shares that would result in a Change of
Control of Emerson, the offeror shall be required to meet with
Emerson directors Brown, Steele and Eugene Davis, or their
successors (the "Special Committee") and provide such information
as the Special Committee may reasonably request in order to
evaluate the offer. Within ten days of such meeting and
disclosure, the Special Committee shall determine whether to
approve such offer in the exercise of the directors' fiduciary
duties under applicable Delaware law. In the event that the
Special Committee shall not approve such offer within such
period, then any Lead Party other than Emerson may initiate
litigation pursuant to paragraph 8(a)(ii)(F) hereof.
4. Voting
FIN, or the member of the Jurick
Group that beneficially owns or controls the voting power with
respect to the Emerson Shares, shall retain the right to vote
with respect to all of the Emerson Shares remaining either with
the Settlement Agent or in the custody of the Court but shall
provide each of the Creditors with at least ten (10) Business
Days prior written notice of (i) the date and time of any vote;
(ii) each issue with respect to which a vote is required; and
(iii) the manner in which any of the Emerson Shares will be voted
with respect to each such issue. Each Creditor shall be free to
apply to the Court for an expedited hearing to compel FIN or the
applicable member(s) of the Jurick Group to vote such shares in
accordance with the Court's direction. In the event that Jurick
is directed by the Court to vote against any proposal of the
Emerson Board, the Emerson Board may withdraw and not solicit any
vote of its shareholders with respect to such proposal. Upon the
sale of any Emerson Shares to a third party in accordance with
this Stipulation and Order, the voting rights shall be
transferred to the purchaser of such shares without such
restriction.
In the event that the Emerson Board decides to
recommend to its shareholders that any actions be approved by the
shareholders, Emerson shall promptly provide each of the
Creditors with a courtesy copy of the notice to be provided to
its shareholders with respect to any such proposed action. Upon
receipt of such notice, each Creditor shall be free to apply to
the Court for appropriate relief (based on the totality of the
circumstances) and the Court shall hear and determine any such
application within three (3) Business Days of the filing thereof.
This provision shall not affect, in any way, the Emerson Board's
ability to manage the business and affairs of Emerson pursuant to
the business judgment rule.
5. Conditions to Effectiveness
(a) It is a condition to the effectiveness of this
Stipulation and Order that:
(i) the Zurich Shares shall have been received
by the Court;
(ii) after notice and a hearing, the Court shall have so ordered
this Stipulation and Order and shall have entered an order,
substantially in the form to be attached hereto as Exhibit D (the
"Approval Order");
(iii) the Bahamas Court shall have entered an order or
orders confirming, and authorizing the delivery of, this
Stipulation by the Bahamian Liquidators and all documents
delivered hereunder (the "Bahamas Orders") and dissolving the
Mareva Injunctions;
(iv) all of the documents listed in paragraphs 9 and 10 hereof
shall have been deposited with the Court and the other actions
described in paragraphs 9 and 10 shall have been taken; and
(v) (A) the representations and warranties contained herein or
otherwise made in writing in connection herewith shall be true
and correct as of the date hereof, (B) each party hereto shall
have received from each other party hereto, a certificate dated
as of the Effective Date (as defined in paragraph 5(b) hereof)
certifying that such representations and warranties are true and
correct as of the Effective Date, and (C) each Creditor shall
have received from Jurick a certificate dated as of the Effective
Date certifying that the initial Sworn Statement provided in
accordance with paragraph 12 hereof is true and correct as of the
Effective Date or setting forth any amendments thereto, provided
however, that the Creditors may waive the foregoing requirements
of this subparagraph (a)(v) with respect to Jurick or Emerson.
(b) The Bahamas Orders shall be filed with the
Court (or its designee) by the parties which obtained such orders,
on notice to all other parties hereto, within five (5) Business Days
after they are entered by the Bahamas Court. The Court (or its
designee) will notify each party hereto when the conditions to
effectiveness set forth in paragraphs 5(a)(i), (ii), (iii) and
(iv) hereof have been satisfied and, within three Business Days
of receipt of such notification, each party shall provide each
other party with the certificates described in paragraph 5(a)(v)
hereof. The term "Effective Date" shall mean the date on which
each of the conditions set forth in paragraph 5(a) hereof has
been satisfied and each of the parties hereto has received the
notice from the Court referred to in this paragraph 5(b) and the
certificates referred to in paragraph 5(a)(v) hereof.
(c) Notwithstanding anything to the contrary contained in
this Stipulation and Order, if by December 31, 1996 (x) the
Effective Date shall not have occurred, or (y) all of the Zurich
Shares have not been delivered to the Court, then any Lead Party
may apply to the Court, on notice to each other Lead Party, for
an order declaring that this Stipulation and Order is withdrawn
or granting other appropriate relief, based on the totality of
the circumstances, including permission to pursue some or all
available methods to cause the delivery of the Zurich Shares to
the Court or to otherwise satisfy the conditions to the
effectiveness of this Stipulation and Order.
6. Representations and Warranties
(a) All Parties. Each party hereto represents
and warrants to each other party hereto that:
(i) Due Authority. Such party has all the
requisite authority and capacity to enter into this Stipulation and the
documents delivered hereunder and all corporate authorizations
and approvals necessary or required (other than the Bahamas
Orders and the Approval Order) have been duly and effectively
obtained; and
(ii) Binding Obligation. This Stipulation and Order
constitutes a legal, valid and binding obligation of such party,
enforceable against such party and his, her or its estate, heirs,
successors and assigns in accordance with its terms.
(b) Emerson Representations and Warranties. Emerson
represents and warrants to each other party hereto that:
(i) Indenture and Senior Credit Agreement.
It has provided the Creditors with a single copy of each of the (and
there are no other) amendments or modifications to the Indenture and the
Senior Credit Agreement; and
(ii) Encumbrances on Emerson Shares. To its knowledge, after
reasonable inquiry, except for (v) the security interest granted
hereunder and the claims of the Creditors, (w) the Mareva
Injunctions, (x) the current restrictions on the transfer of the
Emerson Shares resulting from the pending Swiss bank regulatory
proceeding (or other investigation by the Zurich District
Attorney), (y) the restrictions on the exercise of voting power
with respect to such shares set forth in the Indenture and the
Senior Credit Agreement, and (z) all other similar restrictions,
all of which are set forth on Schedule I hereto, there exists no
mortgage, pledge, security interest, lien, encumbrance or charge
of any kind whatsoever on or affecting the Emerson Shares.
(c) Creditors Representations and Warranties.
Each of the Creditors represents and warrants to each other party
hereto that, except as referred to herein, it has not commenced any
action or proceeding and has not filed any complaint against any
member of the Jurick Group or Emerson.
7. Affirmative Covenants
(a) All Parties. Each party hereto covenants and
agrees with each other party hereto that, from and after the date hereof
to and including the date on which the Aggregate Amount has been
paid in full:
(i) Further Assurances. It will take all steps
reasonably necessary to effectuate the purposes of this Stipulation and
Order, including the execution of all documents contemplated
hereunder and any other documents reasonably necessary to
effectuate the purposes of this Stipulation and Order.
(ii) Assets and Releases. It will use its best efforts to
obtain Releases from other interested parties in accordance with
paragraph 9(c) hereof and to locate the assets listed in
paragraph 9(d) hereof, provided, however, that this provision
shall not apply to Emerson.
(b) Emerson Covenants. Emerson covenants and
agrees with each other party hereto that, from and after the date hereof
to and including the date on which the Aggregate Amount has been
paid in full, unless the Creditors unanimously agree and
otherwise consent in writing:
(i) Meetings With Court. The President of Emerson
(or, in the event that no one is acting as President of Emerson, then any
Chief Operating Officer of Emerson) will (A) meet in person with
the Court at least once each month, subject to the Court's
availability, and provide the Court with an update as to
Emerson's business and operations; (B) provide the Court, at
least five (5) Business Days in advance (or such shorter period
as may be practicable and which shall be acceptable to the Court)
with the agenda for each meeting (whether to be held in person or
telephonically) of the Emerson Board or any committee thereof
(each a "Committee"); (C) provide the Court with telephonic
notice of any modifications to any such agenda; (D) provide the
Court with copies of the minutes of all meetings of the Emerson
Board and its Committees and such other information as the Court
may require; and (E) keep the Court fully apprised of the
discussions, deliberations and actions or other proceedings at
any meeting of the Emerson Board or any Committee not previously
reported to the Court. The Court may, in its discretion, direct
an appropriate person promptly to notify the Creditors of any
actions (including the actions described in paragraph 7(b)(viii))
to be taken by the Emerson Board or any Committee or may itself
notify the Creditors of any such proposed actions. Upon receipt
of such notice, each Creditor shall be free to apply to the Court for
an order prohibiting any such action, and the Court shall hear
and determine any such application within three (3) Business Days
of the filing thereof. In determining whether or not to grant
such an application, the Court shall: (I) apply the business
judgment rule; (II) make it clear that Emerson is not operating
under Court supervision; (III) permit Emerson to operate its
business in the ordinary course; and (IV) determine whether
Emerson's proposed action will have any adverse impact upon the
ability to achieve the objectives and purposes of this
Stipulation and Order. The Court will not issue any order
prohibiting any proposed action by the Emerson Board or any
Committee unless it determines that such action would materially
interfere with the objectives and purposes of this Stipulation
and Order.
(ii) Jurick Compensation. Jurick's total
compensation from Emerson and all of its Subsidiaries and affiliates
(including salary, bonuses, employee benefits (other than insurance policies
or benefits generally provided to Emerson's senior management)
and any other compensation in any form whatsoever) shall not
exceed the sum of $750,000 until the Settlement Amount has been
paid in full; and, until the Settlement Amount has been paid in
full, Jurick will not receive any stock options, warrants, stock
appreciation rights or other similar non-cash compensation.
Jurick shall continue to receive reasonable housing while located
in the Far East and reimbursement of reasonable and necessary
expenses in connection with the conduct of Emerson's business or
that of its Subsidiaries or affiliates.
(iii) Registration. The Advisor, in the Marketing Plan or
any Court-approved amendment thereto, shall determine if, when
and how many Pool A Shares shall be registered in accordance with
the Securities Act (as defined in the Indenture) and any
applicable "Blue Sky" laws and shall provide notice thereof to
each Lead Party. Emerson shall use its best efforts to register
the offer and sale of such Pool A Shares as set forth in the
Marketing Plan or any Court-approved amendment thereto. Any such
registration shall be subject to the provisions of a registration
rights agreement to be attached hereto as Exhibit E (the
"Registration Rights Agreement").
(iv) Compliance with Indenture. Emerson shall
comply with Sections 1005, 1006, 1011, 1012 and 1029 of the
Indenture. For purposes of this Stipulation and Order with
respect to Section 1012 of the Indenture, the term "Affiliate," as
defined in the Indenture, shall include, in addition, (x) any
entity directly or indirectly controlled by any member of the
Jurick Group; (y) any entity which is owned directly or
indirectly in whole or in part by any member of the Jurick Group,
other than an entity that is traded on the American Stock
Exchange, the New York Stock Exchange or the NASDAQ National
Market System; or (z) any entity that is traded on the American
Stock Exchange, the New York Stock Exchange or the NASDAQ
National Market System, more than 5% of which is owned, directly
or indirectly, by any member of the Jurick Group.
(v) SEC Rule 144 Information. Emerson shall
use its best efforts to make available adequate "current public
information" to the extent required by SEC Rule 144 (or any successor
rule), in order to enable the Settlement Agent to sell the Emerson
Shares in compliance with such rule and, in any event, to the
extent such information is made available, will deliver a
courtesy copy of all such "current public information" to the
Creditors, the Settlement Agent, the Advisor and the Court.
(vi) Financial Reports, Notices, etc. Emerson shall furnish
each Creditor and the Advisor with courtesy copies of all
documents, information, materials and other notices required to
be distributed pursuant to Sections 1025 and 1027 of the Indenture
(within the relevant time frames) to the extent not duplicative
of other information or materials required to be provided
hereunder.
(vii) Access to Books and Records. Emerson shall, at the
Advisor's request, provide the Advisor and its representatives
and such other Persons as the Advisor reasonably deems
appropriate in connection with the Marketing Plan or any Court-
approved amendment thereto (subject to appropriate
confidentiality agreements) access to all of its books and
records and to any of its properties or assets upon reasonable
notice and during regular business hours, at reasonable
intervals.
(viii) Reporting to the Court. The President of Emerson
(or, in the event that no one is acting as President of Emerson,
then any Chief Operating Officer of Emerson) shall give the Court
prior notice of Emerson's intention (or that of any Subsidiary)
to take any of the following actions:
(1) implementation of any further
restrictions on the transfer of the securities of Emerson beyond
those existing on the date hereof, as set forth on Schedule I hereto,
including, but not limited to, restrictions permitted by Sections 202 or
203 of the Delaware General Corporation Law, or the grant of any
provision in any employment, consulting or other similar contract or the
adoption of any policy pursuant to which an officer, director,
employee, agent or independent contractor will become entitled to
receive compensation as a result of a change in the ownership or
control of Emerson or any Subsidiary, a merger of Emerson or any
Subsidiary, or a sale of Emerson's or any Subsidiary's assets, a
recapitalization of Emerson or any Subsidiary or other similar or
dissimilar corporate combination or transaction of Emerson or any
Subsidiary (regardless of whether the employment or other
relationship between Emerson or its Subsidiary and such officer,
director, employee, agent or independent contractor must be
terminated as a condition to the receipt of such compensation) or
any other arrangement customarily referred to as a "golden
parachute";
(2) the grant of any rights or options to subscribe for or
to purchase any shares of Emerson's capital stock or securities
convertible into or exchangeable for any shares of Emerson's
capital stock or other securities;
(3) any assignment, pledge, hypothecation or creation of any
lien upon, the Emerson Shares;
(4) any recapitalization or reorganization;
(5) any amendment of its Certificate of Incorporation or
its By-Laws or any change to its State of Incorporation;
(6) any merger or consolidation with any other entities
(whether for cash, securities or other property); and
(7) any dissolution, liquidation or winding up, whether
voluntarily or involuntarily.
(ix) Emerson Further Assurances. Emerson shall,
from time to time, do such further acts and things and promptly execute
and deliver all such additional instruments, agreements and documents
and take all further action, that may be necessary or desirable
or that the Collateral Agent or the Creditors may reasonably
request in order to perfect and protect the security interest in
and lien upon the Emerson Shares granted hereunder and pursuant
to the Pledge Agreement.
8. Negative Covenants
(a) All Parties. Each party hereto covenants and
agrees with each other party hereto that, from and after the date hereof
to and including the date on which the Aggregate Amount has been
paid in full:
(i) Non-Interference. It will not take any
action that would prevent, preclude or materially interfere with the
consummation of the transactions contemplated by this Stip-
ulation and Order or the performance by any other party of its
obligations under this Stipulation and Order.
(ii) No Further Litigation. It (and in addition, in the case
of Stelling, each other member of the Stelling Group and, in the
case of Jurick, each other member of the Jurick Group) will not,
directly or indirectly, commence, continue, request or finance or
in any way participate in (except, on notice to the Court, such
participation as may be required pursuant to legal process with
notice, unless legally prohibited, to the Lead Parties) any
civil, criminal or administrative proceedings (x) against any
other party or any member of the Stelling Group or any member of
the Jurick Group, or (y) with respect to any dispute or
transaction arising out of or relating to this Stipulation and
Order, the Approval Order, the Emerson Shares, any Marketing Plan
or any amendment thereto or other action or advice of the
Advisor, other than (A) by application to the Court as provided
for in this Stipulation and Order to enforce or to facilitate the
transactions contemplated hereby or to avail itself of rights
provided for under this Stipulation and Order, the terms hereof
or any documents delivered hereunder or the Approval Order or
with respect to the Emerson Shares or with respect to any
provisions of the Marketing Plan or any amendment thereto or any
other action or advice by the Advisor; (B) in connection with
enforcement in any jurisdiction of any Consent Judgment or the
Swiss Judgment (as each is hereinafter defined); (C) in
connection with pursuit by Barclays, FIL and MBT of their claims
filed in FIBANK's compulsory liquidation proceedings in the
Bahamas Court in accordance with paragraph 13 hereof; (D) the
Malpractice Action (as defined in paragraph 15 hereof); (E)
actions reasonably required for the continuance of the Zurich
Civil Proceedings pending entry of the Swiss Judgment; and (F)
litigation by any Lead Party, other than Emerson, to review,
under applicable Delaware Law, any actions of the Special
Committee in connection with an offer described in paragraph 3(h)
hereof. This covenant and agreement (other than clause (F))
shall survive the termination of this Stipulation and Order.
(b) Jurick Options. Jurick covenants and agrees
with each other party hereto that, from and after the date hereof to and
including the date on which the Aggregate Amount has been paid in
full, unless the Creditors unanimously agree and otherwise
consent in writing, (i) Jurick will not exercise any options,
warrants or conversion rights which he now owns, directly or
indirectly, to purchase any capital stock or any other securities
of Emerson or any of its Subsidiaries or affiliates, provided,
however, that Jurick may retain and, upon prior written notice to
the Advisor, may exercise his existing vested options to purchase
200,000 shares of Emerson common stock unless the Advisor
determines that such exercise will have a material adverse effect
upon the Marketing Plan; (ii) Jurick will cancel or otherwise
terminate all other such options, warrants or conversion rights
as the Advisor may reasonably determine could have a material
adverse effect upon the value of the Emerson Shares or the
implementation of any Marketing Plan (and the Advisor shall
provide written notice of such determination to each of the Lead
Parties and any Lead Party may apply to the Court for appropriate
relief with respect to the Advisor's determinations); and (iii)
if the Advisor does not require the cancellation or termination
of such other options, warrants or conversion rights, Jurick will
hold and not exercise such other options, warrants or conversion
rights until the Settlement Amount has been paid in full.
9. Documents to Be Executed and Deposited With the
Court And Other Actions to Be Taken Following Execution of This
Stipulation and Order
Within ten (10) days of the
execution of this Stipulation, or as soon as
practicable thereafter, each of the Lead Parties,
Donald K. Stelling, Bunger and the Official
Liquidators of FIL and MBT will take the following
actions and execute and/or obtain, as appropriate,
the following documents and deposit them with the
Court (or its designee), on notice to all parties
to this Stipulation and Order, for disposition in
accordance with paragraph 11 hereof:
(a) Consent Judgments. Stipulations, Orders
and Judgments against Jurick, FIN, GSE, Centralinvest
and Pentland, substantially in the form to be annexed hereto as Exhibit
F (hereinafter the "Consent Judgments") shall be deposited with the
Court (or its designee); provided, however, that the Consent
Judgment against GSE in favor of Barclays shall be in the
aggregate amount of US$1,835,423.26.
(b) Swiss Judgment. Swiss counsel for Stelling and Swiss
counsel for Jurick will execute on or before July 10, 1996 a
settlement agreement providing that upon the Effective Date the
parties shall apply for the entry of a judgment for US$21 million
against Jurick in the Zurich Civil Proceedings (the "Swiss
Judgment"), provided that (i) pursuant to agreement between such
counsel the Swiss Judgment shall be duplicative, for all
purposes, of the Consent Judgment in favor of Stelling in this
action and such amount shall be subject to offset in respect of
payments to Stelling under this Stipulation and Order, and (ii)
Stelling shall take no action to enforce such judgment pending
termination of this Stipulation and Order.
(c) Releases. Five duplicate originals of each of the
appropriate releases, in substantially the form annexed hereto as
Exhibits G (the "Limited Releases") and H (the ("General
Releases" and, together with the Limited Releases, the
"Releases") shall be deposited with the Court (or its designee).
Each party hereto shall also use its best efforts to secure the
execution of the Releases required to be executed by Persons not
parties to this Stipulation and to obtain and deposit five
duplicate originals of such Releases with the Court. A list of
the parties hereto primarily responsible for obtaining the
Releases is annexed hereto as Exhibit B. No Person will be given
a Release by any party hereto who does not provide a reciprocal
Release in favor of such party. With respect to Gulf-American
Finance Limited ("Gulf-American"), each of the Stelling Group,
Jurick and the FIBANK Liquidator shall use its or their
reasonable efforts to execute such documents and take such other
actions to achieve the termination of the liquidation of Gulf-
American or to take such action to permit the delivery of
Releases consistent with this subparagraph.
(d) Other Assets. The assets listed below, to the extent that
they may be located through the parties' best efforts,
accompanied by executed stock powers or quitclaim deed each in a
form to be attached hereto (containing no representations or
warranties other than a representation that the depositing party
has not assigned, pledged, hypothecated, transferred, encumbered
or granted any security interest or lien with respect thereto)
shall be deposited with the Court (or its designee); provided,
however, that with respect to any listed asset held by a
liquidator on behalf of a bankrupt estate, the asset need not be
deposited with the Court until such time as the liquidator has
completed any necessary accounting and determined that the
estate, rather than any creditor of (or other party claiming
against) the estate, has title to the asset. Jurick undertakes
to use his best efforts to provide assistance reasonably
necessary to permit a liquidator to obtain from the issuers of
any of the listed assets new stock certificates in names and
denominations necessary and appropriate to accomplish the
purposes hereof. So long as the following assets are deposited
with the Court, the depositing party or Jurick, as the case may
be, will retain any power to vote with respect to such assets
which it has on the date hereof, but the depositing parties will,
at Jurick's request, consult with him before voting the shares.
(i) All common
and preferred shares of GSE (or its
predecessor entity).
(ii) All common
shares and warrants of Elision.
(iii) All common
shares of MaxCom.
(iv) All common
shares and warrants of Draco
Corporation.
(v) All common
shares and warrants of
International Sensor Technologies
Inc.
(vi) All common
shares of Ficap Investments
Limited.
(vii) All common
shares of Rainbow Fund Inc.
(viii) All common
shares of Crandall Finance
Corporation (formerly Calix
Corporation).
(ix) All rights
of FIBANK arising under or in
respect of loans to, and
obligations and indebtedness of,
Thalos Treuhand AG.
(x) All rights
of FIBANK arising under or in
respect of loans to, and
obligations and indebtedness of,
Marnlac Limited.
(xi) All rights
of FIBANK arising under or in
respect of loans to, and
obligations and indebtedness of,
Elision International Limited.
(xii) All rights
of FIBANK arising under or in
respect of loans to, and
obligations and indebtedness of,
MaxCom.
(xiii) All rights
of FIBANK arising under or in
respect of loans to, and
obligations and indebtedness of,
Gulf-American.
(xiv) All rights
of FIBANK arising under or in
respect of loans to, and
obligations and indebtedness of,
Mercedes Limited.
(xv) All rights
of FIBANK arising under or in
respect of loans to, and
obligations and indebtedness of,
Rainbow Fund Inc.
(xvi) All rights
of FIBANK arising under or in
respect of loans to, and
obligations and indebtedness of, ST
Sensor Technik AG.
(xvii) All rights
of FIBANK arising under or in
respect of loans to, and
obligations and indebtedness of,
Cubix AG.
(a) Pledge Agreement. Six duplicate originals of the
Pledge Agreement shall be deposited with the Court (or its
designee).
(b) District Attorney Letter. An original, executed
letter to the Zurich District Attorney, in the form attached hereto as
Exhibit I (the "District Attorney Letter") shall be deposited
with the Court (or its designee). The District Attorney Letter
will be forwarded by the Court (or its designee) only upon the
Effective Date pursuant to paragraph 10(j) hereof).
(c) Acknowledgement. Four duplicate originals of the
acknowledgement executed by the Official Liquidators of MBT in
the form attached as Exhibit J hereto (the "Acknowledgement")
shall be deposited with the Court (or its designee).
(d) GSE Preferred Shares. The GSE preferred shares
issued to FIL in connection with Emerson Plan shall be deposited with
the Court (or its designee).
(e) FIL Shares. All shares of FIL in the custody or
control of Jurick (20%) and the FIBANK Liquidator (20%), together
with executed stock powers and other documents acceptable in form
to counsel for Stelling (the "FIL Shares") shall be deposited
with the Court (or its designee).
(f) Approval Order. The Lead Parties shall use their
best efforts to agree upon the terms of the Approval Order. In the
event that the Lead Parties are unable to so agree, the Court
shall resolve all disputes concerning the Approval Order at the
hearing with respect to the application for an order approving
this Stipulation and Order.
(g) Board Resolutions. Each of GSE, Elision and FIN
shall deposit with the Court (or its designee) corporate resolutions of
each of their respective boards of directors, certified by their
respective corporate secretaries, duly authorizing such entity to
enter into and perform all of its obligations thereunder.
(h) Registration Rights Agreement. The form of the
Registration Rights Agreement shall be deposited with the Court
(or its designee).
In the event that the Effective
Date does not occur and this Stipulation and Order is withdrawn
in accordance with paragraph 5(c) hereof, each of the items
listed in this paragraph 9 shall be returned to the depositing
party.
2. Actions to Be Taken on or After the Effective Date
(a) The FIBANK Liquidator and Jurick shall file an
executed Stipulation and Order, to be so ordered by the Court, dismissing
Eric F. Gebaide from the New Jersey Proceedings.
(b) The FIBANK Liquidator shall deposit with the Court a
Stipulation and Order dismissing the New Jersey Proceedings with
prejudice and without costs (the "Dismissal Order").
(c) FIL shall file an executed Stipulation, to be so
ordered by the Court, dismissing the FIL Action with prejudice
and without costs.
(d) Emerson shall file an executed Stipulation, to be so
ordered by the Court, dismissing the Stelling Proceedings with
prejudice and without costs.
(e) Barclays shall file an executed Stipulation, to be
so ordered by the Massachusetts Court, dismissing the Massachusetts
Proceedings with prejudice and without costs and vacating the
preliminary injunction issued therein.
(f) Barclays shall deliver to Jurick executed
satisfactions of the New York Judgment.
(g) FIL shall file an executed Stipulation and Order
dismissing the civil suit against Jurick commenced by FIL in the
Bahamas with prejudice and without costs.
(h) The FIL Shares shall be delivered to Stelling, and
Bunger shall have performed his obligation to deliver his shares
of FIL to Stelling as provided in the agreement between Swiss
counsel for Stelling and Swiss counsel for Bunger, dated June 10,
1996, to be filed in the Swiss litigation pending between Bunger
and Stelling.
(i) In the event that Jurick or Farnum receive from the
law enforcement authorities in Zurich, Switzerland the return of any
of the funds previously deposited by FIBANK to secure the
appearance of Jurick and Farnum, such funds shall be returned
immediately to FIBANK.
(j) The original District Attorney Letter shall be
forwarded to the Zurich District Attorney.
(k) All Emerson Shares which are not on that date
registered in FIN's name on Emerson's books and records shall be
transferred and registered on Emerson's books and records in
FIN's name by the registered owners of such shares in accordance
with paragraph 1(a) hereof and delivered to the Settlement Agent
or the Court, as the case may be.
(l) The GSE preferred shares issued to FIL in connection
with the Emerson Plan shall be cancelled.
(m) The parties thereto shall execute the Pledge
Agreement and an original shall be forwarded to each of the Creditors and
the parties thereto.
(n) One original Acknowledgment shall be forwarded to
each of the Creditors and Jurick.
(o) One original of each Limited Release deposited with
the Court pursuant to paragraph 9(c) hereof shall be forwarded to
each Lead Party.
(p) The parties thereto shall execute the Registration
Rights Agreement and one original shall be forwarded to each of
the Lead Parties, FIL, FIN, the Advisor and the Settlement Agent.
(q) Emerson shall pay or cause to be paid the sum of
US$100,000 to Donald K. Stelling.
On or after the Effective Date, if
required by Jurick or Emerson, U.S. counsel for Stelling shall
send a letter to the Division of Enforcement of the Securities
and Exchange Commission indicating that Stelling no longer has
any interest in pursuing the allegations set forth in the report
delivered to the Division of Enforcement by Stelling on June 21,
1995. Such letter shall be satisfactory to each of the Lead
Parties.
3. Termination Upon Payment In Full or Upon Order of
the Court After the Effective Date
(a) Termination Upon Payment of Aggregate Amount.
Upon the payment in full of the Aggregate Amount and reimbursement of
amounts paid pursuant to paragraph 3(g) hereof, the Lead Parties
shall jointly request that the Court (or its designee) dispose of
the documents remaining in its custody or in the custody of the
Collateral Agent in the following manner:
(i) Consent Judgments, Swiss Judgment and
Dismissal Order. The Court (or its designee) shall deliver the
original Consent Judgments to Jurick and shall at that time enter
the Dismissal Order. The status of the Swiss Judgment shall be
resolved as provided for in the agreement to be entered into
pursuant to paragraph 9(b).
(ii) Releases. One original of each and
every General Release shall be delivered to each Lead Party.
(iii) Other Assets. All assets referred to
in paragraph 9(d) above shall be delivered to Jurick or his
designee.
(iv) Emerson Shares. Any remaining Emerson
Shares, together with any remaining proceeds of Emerson Shares
shall be delivered to FIN by the Collateral Agent and/or the
Office of the Clerk of the Court, as the case may be, and the
security interest in and lien upon such shares granted pursuant
to paragraph 2 hereof and the Pledge Agreement shall be deemed
released.
(a) Termination Upon Order of the Court. In the
event (i) of a bankruptcy, insolvency or similar proceeding as specified
in Sections 501(8) and 501(9) of the Indenture, (ii) of a default under
the Indenture, the Senior Credit Agreement or other similar material
financing agreement or any refinancing or replacement thereof,
which has not been cured or waived, (iii) that there is a
delisting of the Emerson Shares from the American Stock Exchange,
unless the Emerson Shares are listed on the New York Stock
Exchange or the NASDAQ National Market System within seven (7)
days of such delisting, (iv) of a material breach hereof by
Jurick or Emerson, or (v) that there is no reasonable prospect
that the goals contemplated by this Stipulation and Order can be
achieved, then any Creditor may apply to the Court, on notice to
all other Lead Parties, for an order from the Court declaring
that the Stipulation and Order is terminated. After a hearing,
at which any Lead Party may participate, the Court, in its
discretion, based on the totality of the circumstances,
including, without limitation, evidence with respect to the then-
current Marketing Plan or other advice or opinions of the Advisor
and the value of the remaining Emerson Shares, if any, and the
available ways and means of realizing such value, shall determine
whether to order the termination of this Stipulation and Order on
the grounds that its goals and purposes are not reasonably likely
to be realized.
(b) Effect of Termination Prior to Payment in Full.
When, and if, (x) the Court terminates this Stipulation and Order, as
provided in subparagraph (b) above, or (y) all of the Emerson
Shares have been sold and the Net Proceeds of such sales have
been paid in accordance with the provisions hereof but the
Settlement Amount has not been paid in full, then the parties
shall take the following actions and shall request that the Court
(or its designee) dispose of the documents deposited with it in
the following manner:
(i) Consent Judgments
and Swiss Judgment. Within five (5) Business Days of either (x)
the entry of an order terminating this Stipulation and Order or
(y) the date on which all of the Emerson Shares have been sold
and the Net Proceeds of such sales have been paid in accordance
with the provisions hereof and any portion of the Settlement
Amount remains unpaid, the Creditors shall consult with Jurick
with respect to the amount of the Consent Judgments to be entered
and the amount of the Swiss Judgment, after giving appropriate
credit to the Jurick Group for any payments previously made
pursuant to paragraph 1 hereof, provided, however, the Consent
Judgment against GSE shall be reduced by an amount equal to
twenty-seven percent (27%) of the amounts paid to Barclays
pursuant to Exhibit A hereof. Following a determination by the
Creditors, which determination shall be made in their sole
discretion, of the appropriate reduced amount of the Consent
Judgments and the Swiss Judgment, the Creditors shall request
that, within ten (10) Business Days, Jurick cause each judgment
debtor to deliver to them executed Consent Judgments, in form
acceptable to counsel for the Creditors, in the reduced amounts
(collectively, the "Restated Consent Judgments"). If the
Restated Consent Judgments are delivered, the Creditors will then
request, on notice to each of the other Lead Parties, that the
Court enter the Restated Consent Judgments. Upon the entry by the
Court of the Restated Consent Judgments, the original Consent
Judgments shall be returned to the judgment debtors. If all of
the Restated Consent Judgments are not delivered or any proposed
judgment debtor seeks to be heard in any respect concerning the
amount or form of any Restated Consent Judgment, then the Court
will enter the original Consent Judgments (in the amount of
US$1,835,423.26 against GSE and $49.5 million against Jurick and
each other judgment debtor). Following the entry of the original
Consent Judgments or the Restated Consent Judgments, the
Creditors may take any action permitted by law to execute upon
their Consent Judgments to collect the unpaid balance, and
Stelling may take such actions with respect to the Swiss
Judgment.
(ii) Other Assets. All assets referred
to in paragraph 9(d) above shall be returned to the party which
deposited the asset with the Court (or its designee).
2. Jurick Sworn Statements.
(a) Within twenty-one (21) days of the execution of this
Stipulation, and thereafter, subject to paragraph 5(a)(v)(B)
hereof, annually within forty-five (45) days of the end of each
calendar year until the Jurick Group has discharged all of its
obligations under this Stipulation and Order, Jurick shall file
with the Court under seal, a statement, sworn to under penalty of
perjury, including a balance sheet (the "Sworn Statements"), sub
stantially in the form annexed hereto as Exhibit K, which shall
be acceptable to counsel for each of the Creditors, in their
judgment reasonably exercised. Simultaneously with the filing of
the initial and each subsequent Sworn Statement, Jurick shall
provide each of the Creditors with an unsigned, uncertified
document containing all of the information set forth in such
Sworn Statement but which shall not contain any references to
Jurick's name. The initial Sworn Statement shall contain a full
and complete list of all assets (other than assets having an
aggregate fair market value which is less than US$100,000) held
by Jurick directly or indirectly as of the date thereof and shall
be accompanied by a quitclaim deed, in form acceptable to counsel
for the Creditors, executed by Jurick in favor of the Collateral
Agent conveying all property owned by Jurick which is not listed
but is required to be listed on such Sworn Statement (a "Deed").
Each subsequent annual Sworn Statement shall contain a full and
complete list of all assets (other than assets having an
aggregate fair market value which is less than US$100,000) held
by Jurick directly or indirectly as of the end of the year to
which it relates and shall be accompanied by a Deed dated as of
the date of such sworn statement. By delivery of a Deed, Jurick
shall not be deemed to have conceded the existence of any such
property.
(b) In the event that, following the delivery of any Sworn
Statement but prior to the payment in full of the Settlement
Amount, it is discovered that Jurick held, as of the date
thereof, assets of any kind whatsoever not disclosed in such
Sworn Statement but which were required to be listed in such
Sworn Statement (the "Undisclosed Assets"), the Creditors shall
request, on notice to all Lead Parties, that the Court release
the applicable Deed(s) so that such assets may be quitclaimed to
the Settlement Agent and liquidated by the Settlement Agent for
the benefit of the Creditors. The proceeds of any Undisclosed
Assets shall be distributed to the Creditors in addition to the
Settlement Amount in accordance with the following percentages:
Creditor Percentage
Barclays 13.13%
Stelling 42.43%
FIBANK 44.43%
The Court and the other parties hereto shall rely upon the
initial Sworn Statement in approving and entering into this
Stipulation and Order.
(a) Following the Effective Date but prior to the
payment in full of the Settlement Amount, if Jurick holds liquid assets
of any kind whatsoever having an aggregate value which exceeds
US$2,000,000 from any source whatsoever (other than the Jurick
Payment, the compensation permitted to be paid to Jurick in
accordance with paragraph 7(b)(ii) hereof and the stock options
to be retained by Jurick in accordance with paragraph 8(b)
hereof), such amounts in excess of US$2,000,000 (the "Excess
Assets") shall be offset against any unpaid portion of the Jurick
Payment and, with respect to any portion of the Jurick Payment
that has been paid, the Excess Assets shall be transferred to the
Settlement Agent for distribution in accordance with paragraph
3(f), excluding any payments to Jurick. To the extent that,
following the Effective Date, Jurick's net worth (exclusive of
the value of the Emerson Shares, the Jurick Payment, the
compensation permitted to be paid to Jurick in accordance with
paragraph 7(b)(ii) hereof and the stock options to be retained by
Jurick in accordance with paragraph 8(b) hereof) exceeds
US$5,000,000, any Creditor may apply to the Court, on notice to
each other Lead Party, for appropriate relief.
2. Compromise of Claims Between and Among Certain
Parties Related to the FIBANK Liquidation.
(a) In exchange for the agreements by the FIL Liquidator
and the Official Liquidators of MBT that are set forth in
paragraphs 13(b) and 13(c) below and to be acknowledged in
Exhibit J hereto, and in consideration of this entire Stipulation
and Order, the FIBANK Liquidator shall not assert any claim on
behalf of FIBANK against the estate of either FIL or MBT.
(b) In exchange for the agreement by the FIBANK
Liquidator that is set forth in paragraph 13(a) above, and in consideration
of this entire Stipulation and Order, the FIL Liquidator shall
waive all claims exceeding US$1,240,303.62 previously asserted on
behalf of FIL in the liquidation proceedings of FIBANK and shall
not assert (i) any priority with respect to such amount, or (ii)
any additional claims.
(c) In exchange for the agreement by Hackett that is set
forth in paragraph 13(a) above, and in consideration of this
entire Stipulation and Order, the Official Liquidators of MBT
shall waive all claims exceeding US$3,510,058.24 previously
asserted on behalf of MBT in the liquidation proceedings of
FIBANK and shall not assert (i) any priority with respect to such
amount, or (ii) any additional claims.
(d) In consideration of this entire Stipulation and
Order, Barclays shall waive all claims exceeding US$7,711,331.83
previously asserted in the liquidation proceedings of FIBANK and
shall not assert (i) any priority with respect to such amount, or
(ii) any additional claims.
(e) Each member of the Jurick Group, for itself and on
behalf of each of its affiliates (whether present or future)
agrees to waive all claims in the liquidation proceedings of
FIBANK except for net deposits reflected on the books and records
of FIBANK not to exceed US$200,000 in the aggregate.
3. Stelling Personal Jurisdiction.
By entering into and performing
under this Stipulation and Order, Stelling shall not be deemed to
have in any respect consented to her being or caused her to be
subject to personal jurisdiction in New Jersey or any other part
of the United States, except solely with respect to the
implementation and enforcement of this Stipulation and Order and
the transactions contemplated hereby.
4. The Malpractice Action.
(a) The Court has been duly notified of the action
brought in this Court by FIL against FIL's former U.S. counsel (the
"Malpractice Action"), arising out of alleged legal malpractice
in connection with the Emerson Plan and other matters.
Notwithstanding the provisions of this Stipulation and Order, FIL
may proceed with the Malpractice Action, provided, however, that
the Malpractice Action shall be dismissed in the event of a
determination by the Court upon a motion by defendants therein
that Emerson or Jurick must participate therein as a third party
defendant.
(b) The proceeds of the Malpractice Action, if any,
whether by way of settlement, judgment or otherwise, net of legal fees
(contingent or otherwise) and expenses incurred in the
Malpractice Action to obtain such proceeds plus an additional
$300,000 of other fees incurred in connection therewith, shall be
paid to Stelling and credited against the last payment(s) owing
to Stelling pursuant to Exhibit A hereof.
5. Confidentiality.
The parties hereto agree (which
agreement shall survive the termination of this Stipulation and
Order) that (a) all documents filed with the Court under seal in
connection with this Stipulation and Order, including but not
limited to the Sworn Statements, (b) any documents which at the
time of receipt are clearly labeled as confidential, and (c) all
documents designated by the Court as confidential, shall be treated
as confidential by the receiving party and each party agrees to
use its best efforts to ensure that such information is not
published, disclosed or otherwise divulged to anyone other than
employees or officers of such party, its counsel and agents, the
Settlement Agent and any potential nominees for such position,
the Advisor and any potential nominees for such position and the
Court and the Bahamas Court, provided, however, that it is
understood that the foregoing shall not apply to:
(i) disclosure made with the prior written
authorization of the party from whom the material was received;
(ii) disclosure of (A) information (other than
information received on a confidential basis prior to the Effective Date
of this Stipulation and Order) already known by, or in the
possession of the receiving party without restrictions on the
disclosure thereof at the time such information is supplied or
(B) information also furnished by a third party not having any
similar duty of confidentiality;
(iii) disclosure of information which is required
by or appropriate pursuant to applicable law or to any Federal, state,
local or foreign court or governmental agency, authority,
instrumentality or regulatory body having supervisory authority
over any party hereto;
(iv) disclosure of information in connection with
the execution of this Stipulation or any suit, action or proceeding
in connection with the implementation of this Stipulation and
Order or enforcement of rights hereunder or under any document
delivered hereunder; or
(v) disclosure of information that prior to such
disclosure is or has become publicly available through no violation of this
Stipulation and Order.
6. Notices.
Notices and other communications provided for
herein shall be in writing and shall be delivered, if to the
Court, by hand or overnight courier service and, if to any other
party, by telex, facsimile transmission or other telegraphic
communication equipment of the sending party and by First Class
mail, as follows:
If to the Court:
The Honorable Nicholas H. Politan
United States District Court Judge
United States District Court for
the District of New Jersey
The Martin Luther King, Jr. Federal Building
50 Walnut Street
Newark, New Jersey 07102
If to Barclays:
Mr. Michael B. Nash
Senior Vice President
Mr. Ronald Spitzer
Vice President
Barclays Bank PLC
75 Wall Street
New York, New York 10265
FAX: (212) 412-5661
with a copy to:
Margot B. Schonholtz, Esq.
Zalkin, Rodin & Goodman LLP
750 Third Avenue
New York, New York 10017
FAX: (212) 682-6331
If to the FIBANK Liquidator:
Mr. Thomas Hackett
Price Waterhouse
Providence House
East Hill Street
P.O. Box N-3910
Nassau, Bahamas
FAX: (809) 326-7308
with a copy to:
James Tolan, Esq.
Nancy Prahofer, Esq.
Dechert, Price & Rhoads
477 Madison Avenue
New York, New York 10022
FAX: (212) 308-2041
If to Stelling:
Mrs. Petra Stelling
IM Berghof 5
8700 Kusnacht
Switzerland
FAX: 011-411-910-7861
with copies to:
Dr. Peter Hafter
Lenz & Staehelin
Bleigherweg 58
CH-8027
Zurich, Switzerland
FAX: 011-411-204-1200
and
Thomas P. Ogden, Esq.
Davis, Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
FAX: (212) 450-5986
and
David H. Wollmuth, Esq.
Crummy, DelDeo, Dolan, Griffinger & Vechione
One Riverfront Plaza
Newark, New Jersey 07102-5497
FAX: (201) 639-6236
If to the Jurick Group:
Mr. Geoffrey P. Jurick
c/o Emerson Radio Corp.
9 Entin Road
Parsippany, New Jersey 07054
FAX: 011-85-22-956-1322
with a copy to:
Herbert S. Edelman, Esq.
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022
FAX: (212) 836-8689
If to Emerson:
Emerson Radio Corp.
9 Entin Road
Parsippany, New Jersey 07054
Att: Chief Operating Officer
FAX: (201) 428-2022
with copies to:
Jeffrey M. Davis, Esq.
Wolff & Samson
5 Becker Farm Road
Roseland, New Jersey 07068
FAX: (201) 740-1407
and
William S. Katchen, Esq.
Lowenstein, Sandler, Kohl, Fisher & Boylan
65 Livingston Avenue
Roseland, New Jersey 07068
FAX: (201) 992-5820
If to the FIL Liquidator:
Mr. Wayne J. Aranha
Coopers & Lybrand
P.O. Box N 596
2nd Floor Charlotte
Charlotte Street
Nassau, Bahamas
FAX:
with a copy to:
Thomas P. Ogden, Esq.
Davis, Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
FAX: (212) 450-4800
All notices and other communications given to any party hereto in
accordance with the provisions of this Stipulation and Order
shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by telex,
facsimile transmission or other telegraphic communication
equipment of the sender, in each case delivered or sent and
mailed (properly addressed) to such party as provided in this
paragraph 17 or in accordance with the latest unrevoked direction
from such party given in accordance with this paragraph 17.
2. Withdrawal of the Reference.
The reference of the Emerson
bankruptcy proceedings is hereby withdrawn pursuant to 18 U.S.C.
Section 157(d) solely with respect to and to the extent necessary to
resolve issues relating to (a) the pending or threatened
litigation, proceedings and disputes described above concerning
ownership of Emerson common stock issued pursuant to the Emerson
Plan, which litigation, proceedings and disputes fall within the
retained jurisdiction of the New Jersey Bankruptcy Court, as
provided in the Emerson Plan, and (b) the enforcement of this
Stipulation and Order and the documents delivered hereunder, the
Approval Order and the administration of the transactions
contemplated hereby or made necessary hereunder.
3. Continuing Jurisdiction.
(a) The Court shall retain
continuing jurisdiction over these proceedings for the purposes
of enforcing this Stipulation and Order and the documents
delivered hereunder and administering the transactions
contemplated hereby or made necessary hereunder, including
without limitation any litigation, proceedings or disputes
arising out of or relating to this Stipulation and Order, the
Approval Order, the Emerson Shares, any Marketing Plan or any
amendment thereto or other action or advice of the Advisor.
(b) Except as otherwise specifically provided
herein, the administration and implementation of this Stipulation
and Order shall be within the sound discretion of the Court.
4. Transfer of Obligations; Parties in Interest. Whenever
in this Stipulation and Order any of the parties hereto is
referred to, such reference shall be deemed to include the
successors, assigns, heirs and legatees of such party; provided,
however, that neither Emerson nor Jurick may assign its rights
hereunder without the prior written consent of the other Lead
Parties. No party hereto will transfer any of its rights or
obligations under this Stipulation and Order unless the
transferee agrees in writing to be bound by the terms of this
Stipulation and Order to the same extent as its transferor.
5. Admissability.
If this Stipulation and Order does not by its
terms become, or is not declared, effective, then the provisions
of this Stipulation and Order shall be given no probative value
in any action or proceeding before any court by any party hereto
or any of the parties listed on Exhibit B hereto, and any
evidence of any conduct or statements made in connection with the
negotiations of this Stipulation and Order shall not be
admissible for any purpose in any such action or proceeding.
Dated: June 11, 1996
STIPULATED AND AGREED,
_/s/ Thomas Hackett___________
THOMAS HACKETT, OFFICIAL
LIQUIDATOR OF FIDENAS
INTERNATIONAL BANK LIMITED
_/s/ Petra Stelling_________
PETRA STELLING
BARCLAYS BANK PLC
_/s/ Ronald E. Spitzer________
By: RONALD E. SPITZER
Title: VICE PRESIDENT
__/s/ Wayne J. Aranha_________
WAYNE J. ARANHA, OFFICIAL
LIQUIDATOR OF FIDENAS
INVESTMENT LIMITED
_/s/ Geoffrey P. Jurick_______
GEOFFREY P. JURICK
FIDENAS INTERNATIONAL LIMITED
L.L.C
__/s/ Geoffrey P. Jurick______
By: GEOFFREY P. JURICK
Title: MANAGER
ELISION INTERNATIONAL, INC.
__/s/ Geoffrey P. Jurick______
By: GEOFFREY P. JURICK
Title: CHAIRMAN
GSE MULTIMEDIA TECHNOLOGIES,
INC., F/K/A GSE ELECTRONIC
SYSTEMS, INC.
_/s/ Geoffrey P. Jurick_______
By: GEOFFREY P. JURICK
Title: CHAIRMAN
EMERSON RADIO CORP.
__/s/ Eugene I. Davis_________
By: EUGENE I. DAVIS
Title: PRESIDENT