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EXHIBIT 3.09
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RECEIVED
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JUL 23 1996
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JUDGE SWEET CHAMBERS
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JARED STAMELL, ESQ.
STAMELL & SCHAGER, LIP
One Liberty Plaza, 35th Floor
New York, New York 10006
(212) 566-4047
Attorneys for Plaintiff
IRVING L. GOLOMB, ESQ.
GOLOMB, SINDEL & DIBLE, P.C.
185 Madison Avenue, Suite 1600
New York, New York 10016
(212) 686-4004
Attorneys for Defendants
- -----------------------------------X UNITED STATES DISTRICT COURT
SHARON SANDLER, SOUTHERN DISTRICT COURT
OF NEW YORK
Plaintiff,
- against - Case No. 92 Civ. 5292
PROGRAMMING AND SYSTEMS,
INCORPORATED, IRWIN MAUTNER, ALVIN STIPULATION AND ORDER
LIPOFF, LESTER J. TANNER, KENNETH AUTHORIZING RELEASE OF
FULD and MARTIN GREENSTEIN, C.P.A., SHARES FROM ESCROW
Defendants.
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The parties stipulate, that to consummate the Stipulation of Settlement
approved by the Court on January 21, 1994, as amended by an Order entered on
June 12, 1995, plaintiff, acting individually and on behalf of the Class, and
the defendant Programming and Systems, Incorporated ("PSI"), agree as follows:
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THE ACTION
A. The Stipulation of Settlement was entered to settle claims of alleged
violations of the federal securities laws and the common law asserted on behalf
of a class of all persons who owned common stock of PSI on June 17, 1992 and
their successors in interest ("Class").
B. Plaintiff alleged, among other things, that: (i) as a result of false
and misleading statements and/or omissions by defendants, the market prices of
PSI's common stock were artificially inflated from at least May 31, 1989 through
and including June 17, 1992, and (ii) as a result of the alleged misstatements,
non-disclosures and the resulting suspension in trading of PSI's common stock on
June 17, 1992, plaintiff and the Class were damaged. Defendants denied all
liability on the claims made against them.
C. Defendants represented that, as a group, they owned or controlled
approximately 1,200,000 shares of PSI common stock, and that as of June 17, 1992
there were issued and outstanding about 2,432,290 additional shares of PSI
common stock. PSI represented that this same number of shares continued to be
issued and outstanding as of the date of the Amendment and PSI represents that
this continues to be true as of the date this stipulation is signed and
submitted to the Court. PSI further represented that its common stock had been
eligible for quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") until June 17, 1992, and since that date
the stock has not been eligible to trade and has not traded on any public
exchange or market.
D. Plaintiff was afforded the opportunity to investigate the facts and
circumstances of PSI relevant to the settlement and made investigations of the
facts before the hearings at which the settlement was approved and amended and
the settlement was approved by the
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Court as fair, reasonable, adequate and in the best interests of the Class under
Rule 23 of the Federal Rules of Civil Procedure after hearings upon the fairness
of the terms and conditions at which all members of the Class had the right to
appear.
E. The settlement, as amended, provided, among other things, for PSI
shareholders to receive audited financial statements for the fiscal years ended
February 28, 1994, 1995 and 1996 and for the Company to seek a listing on the
NASDAQ of shares of a wholly-owned subsidiary, PSI Settlement Corp. ("PSC"),
established pursuant to the settlement. PSC, which changed its corporate name to
FRM Nexus, Inc. ("Nexus") on February 23, 1996, was capitalized in accordance
with the settlement and presently holds all of the assets of PSI except for a
claim in the lawsuit brought by PSI against fire insurance companies to recover
additional amounts claimed by PSI to be due to it by reason of a fire which
damaged PSI's New York City offices on April 29, 1993. PSI has not prepared or
filed audited financial statements. Nexus has prepared and filed audited
financial statements.
F. This Stipulation is made to authorize the release of the Nexus shares
from escrow for delivery to the Class as contemplated by the previous Orders of
the Court.
THE TERMS OF THE SETTLEMENT
G. In accordance with the original Stipulation of Settlement, PSI created
a Settlement Fund in the sum of $1.4 million which was distributed in 1995 to
shareholders pursuant to this Court's Order, in the amount of fifty cents ($.50)
per share. PSI also paid fees and expenses of the settlement as required by the
Stipulation of Settlement.
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H. PSI incorporated Nexus as a Delaware corporation and a wholly-owned
subsidiary of PSI pursuant to the Court's Order. Pursuant to the Settlement, as
amended, PSI previously transferred to Nexus all of the stock of PSI Capital
Corp., PSI Food Services, Inc., Wendcello Corp. and Wendclark Corp., additional
assets from which Nexus organized a new start-up subsidiary called Medical
Financial Corp., and cash.
I. To secure the obligations of PSI under the terms of the Settlement, PSI
granted a security interest in the stock of Nexus for the benefit of the PSI
shareholders, and to perfect such security interest, the shares of Nexus were
delivered in 1994, and are presently held by, Irving L. Golomb, attorney for
defendants, and Jared B. Stamell, attorney for plaintiff, as Escrow Agents.
J. The original purpose of Nexus was to sell all its assets and distribute
the proceeds to all PSI shareholders, with a view to realizing an amount no less
than $l.50 per issued and outstanding share of PSI. The purpose of the Amended
Settlement, as approved by the Court was to have the shares of PSI or Nexus
trade on NASDAQ and for the Escrow Agents to release the Nexus shares from
escrow so the shares can be delivered to PSI shareholders as a necessary step
before the Nexus shares can be listed on NASDAQ.
K. As required by the Amended Settlement, PSI has provided to the PSI
shareholders audited financial statements of Nexus for the three fiscal years
ended February 29, 1996. PSI has not provided audited financial statements as
required by the Amended Settlement which the parties agree is not material to
consummation of the settlement so long as Nexus can be listed on NASDAQ.
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L. The Court's Order of June 12, 1995 requires PSI to take such steps as
are necessary to have Nexus shares traded on NASDAQ and this Stipulation is a
necessary step in authorizing release to PSI, for delivery to shareholders, of
the Nexus shares for over-the-counter trading and subsequent listing on NASDAQ.
Over-the-counter trading of Nexus shares will be required by NASDAQ before a
listing application is accepted.
M. PSI has prepared for mailing to shareholders a letter dated July 26,
1996 (Exhibit A) and audited financial statement for the fiscal year ended
February 29, 1996, (Exhibit B), copies of which are annexed hereto.
TERMS OF THE STIPULATION
1. Nexus shall mail to shareholders the Letter (Exhibit A) together with
the audited Financial Statement of Nexus for the fiscal year ended February 29,
1996 (Exhibit B).
2. The Escrow Agents shall release the shares held by them in escrow
forthwith so that PSI may cause the transfer agent for the Nexus common stock to
transfer the Nexus common stock to all holders of record of PSI common stock in
the ratio and manner described in Exhibit A.
3. Nexus shall make application for the listing of its shares of common
stock on the NASDAQ Stock Exchange. The Court shall retain jurisdiction of this
action until said listing has been completed in accordance with its prior
Orders.
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4. This Stipulation and Order does not affect the finality of the
Judgments and Orders previously entered herein and is intended to implement the
same.
Dated: July 22, 1996
New York, New York
STAMELL & SCHAGER, LLP
Counsel for Plaintiff
By: /s/ Jared B. Stamell
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Jared B. Stamell (JS-5225)
One Liberty Plaza, 35th Floor
New York, NY 10006
Telephone: (212) 566-4047
GOLOMB, SINDEL & DIBLE, P.C.
Counsel for Defendants
By: /s/ Irving L. Golomb
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Irving L. Golomb (IG-2755)
185 Madison Avenue, Suite 1600
New York, NY 10016
Telephone: (212) 686-4004
SO ORDERED:
/s/ JOHN G. KOELTL
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U.S.D.J.
Dated: July 23, 1996
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