SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(August 3, 1999)
August 6, 1999
Emerson Radio Corp.
- - - - --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 0-25226 22-3285224
_______________ __________________ ____________________
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
9 Entin Road, Parsippany, New Jersey 07054
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(973) 884-5800
Not Applicable
- - - - --------------------------------------------------------------------------------
(Former Address, if changed since Last Report) (Zip Code)
<PAGE>
Item 5. Other Events
On August 3, 1999, Emerson Radio Corp. ("Emerson") and Geoffrey P.
Jurick entered into a letter of intent with Oaktree Capital Management, LLC and
certain of its affiliated entities (collectively, "Oaktree"), a copy of which is
attached hereto as Exhibit 10(a)(c) and incorporated herein by reference (the
"Letter of Intent"). The Letter of Intent sets forth a series of proposed
transactions which, if consummated, would result in the following:
1. The sale by Emerson of its entire ownership interest in Sport Supply
Group, Inc. ("SSG") to Oaktree. Under the terms of the Letter of Intent, Oaktree
would purchase from Emerson 2,269,500 shares of SSG common stock, par value $.01
per share (the "Common Stock") (approximately 31% of SSG's total issued and
outstanding shares of Common Stock) and warrants to purchase an additional
1,000,000 shares of SSG Common Stock. The purchase price would consist of
approximately $15 million in cash, the surrender by Oaktree of $13.9 million
face amount of Emerson's 8 1/2% Senior Subordinated Convertible Debentures
presently owned by Oaktree, and an exit consent amending certain provisions of
the indenture governing Emerson's 8 1/2% Senior Subordinated Convertible
Debentures due 2002, as described below. After giving effect to this
transaction, Oaktree would beneficially own approximately 46% of SSG's issued
and outstanding Common Stock.
2. The purchase by Emerson of up to $23 million of its outstanding
common stock through a self-tender offer at a price of not less than $1.00 per
share. The $15 million cash proceeds from the sale of the SSG securities would
be utilized by Emerson to fund in part a partial tender offer to repurchase up
to $23 million of Emerson's outstanding common shares at a cash purchase price
of not less than $1.00 per share. The remainder of the $23 million would come
from additional borrowings. Mr. Jurick, who beneficially owns 29,752,642 Emerson
common shares, including options to purchase 600,000 Emerson common shares
(approximately 61% of Emerson's issued and outstanding shares), would agree to
tender his shares into the tender offer but would not sell shares having a value
of more than $18.8 million regardless of the proration provisions of the tender.
3. A net reduction of approximately $5.9 million of Emerson's
indebtedness. In addition, pursuant to the Letter of Intent, Oaktree would agree
to amend the terms of the indenture governing Emerson's 8 1/2% Senior
Subordinated Convertible Debentures due 2002 to permit the transactions
described in the Letter of Intent and to eliminate certain restrictive covenants
contained therein.
4. The resolution of litigation between Emerson's Chairman and largest
shareholder, Mr. Jurick, and certain of his creditors. Pursuant to the terms of
the Letter of Intent and an Option Agreement dated as of August 3, 1999 among
Oaktree and the other parties thereto (the "Option Agreement"), a copy of which
is attached hereto as Exhibit 10(a)(d) and incorporated herein by reference,
Oaktree would acquire all claims held by certain creditors of Mr. Jurick for $20
million. The claims to be acquired by Oaktree have been the subject of
litigation in the U.S. District Court for the District of New Jersey. Mr. Jurick
had previously been obligated to sell a majority of his Emerson shares to
<PAGE>
provide a fund for the payment of such claims. However, under the terms of the
transactions, Mr. Jurick would use amounts received by him pursuant to Emerson's
self-tender, together with certain other funds, to acquire those claims from
Oaktree, thereby eliminating the need for him to sell his Emerson shares.
Subject to approval by SSG's Board, Mr. Jurick also intends to assign options to
acquire 300,000 shares of SSG's Common Stock to Oaktree.
Completion of the transactions described above are subject to a number
of conditions, including Oaktree's satisfaction with its pre-acquisition due
diligence review of SSG, the execution of mutually satisfactory definitive
agreements among the parties, regulatory and court approvals, receipt by
Emerson's Board of a fairness opinion, the completion by Emerson of refinancing
of a portion of its outstanding debt to consummate the self tender offer and
certain other corporate approvals.
The description of the transactions set forth above is a summary only
and is qualified in its entirety by reference to the agreements attached as
exhibits hereto.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(c) Exhibits
10(a)(c) Letter of Intent dated as of August 3, 1999 by and among
Oaktree Capital Management, LLC and its affiliates, Emerson
Radio Corp. and Geoffrey P. Jurick.
10(a)(d) Option Agreement dated as of July 30, 1999 by and among
Oaktree Capital Management, LLC, and its affiliates, Thomas
Hackett, Official Liquidator of Fidenas International Bank
Limited, Petra Stelling and Barclays Bank plc.
99(a) Press Release
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMERSON RADIO CORP.
By: /s/ Geoffrey P. Jurick
______________________________________
Name: Geoffrey P. Jurick
Title: Chairman of the Board, Chief
Executive Officer and President
Dated: August 6, 1999
<PAGE>
Exhibit 10(a)(c)
OAKTREE CAPITAL MANAGEMENT, LLC
333 SOUTH GRAND AVENUE
LOS ANGELES, CA.
August 3, 1999
Emerson Radio Corp.
9 Entin Road
Parsippany, NJ 07054
Geoffrey P. Jurick
c/o Emerson Radio Corp.
9 Entin Road
Parsippany, NJ 07054
Dear Sirs,
Oaktree Capital Management, LLC, on behalf of investment funds for
which it is investment manager ("Oaktree"), is pleased to submit its expression
of interest (the "Offer") regarding the potential acquisition of certain
securities of Sport Supply Group, Inc. ("Sport") on the terms and conditions set
forth below.
1. Form of Transaction. The proposed transaction will be effected by
the following steps:
(a) Oaktree will purchase certain claims (the "Claims") against
Geoffrey P. Jurick ("Jurick")for Twenty Million Dollars ($20,000,000) pursuant
to the attached Option Agreement (the "Option Agreement"). In conjunction
therewith, Oaktree will deliver to Jurick items (i) through (iv) and (vi) of
Section 1(d) of the Option Agreement and Jurick and Emerson Radio Corp.
("Emerson") will deliver to Oaktree items (i) and (ii) of Section 1(e) of the
Option Agreement.
(b) Oaktree will purchase from Emerson the 2,269,500 shares of common
stock of Sport owned by Emerson and the 1,000,000 $7.50 warrants to purchase
Sport common stock owned by Emerson in exchange for (i) Oaktree's assistance in
arranging the transactions reflected herein, (ii) an executed consent amending
the indenture for Emerson's outstanding publicly owned debt (the "Bonds") so as
to permit these transactions and otherwise eliminate restrictive covenants,
(iii) surrender of $13,889,000 face amount of Bonds and (iv) Fifteen Million
Dollars ($15,000,000).
(c) Emerson will make a Twenty-Three Million Dollar ($23,000,000)
self-tender for its common stock at a price of not less than One Dollar ($1.00)
per share.
<PAGE>
(d) Jurick will purchase the Claims from Oaktree and Oaktree will
assign the Claims to Jurick for (i) transfer to Oaktree of Jurick's 300,000
$7.50 options for Sport common stock and (ii) Eighteen Million Eight Hundred
Thousand Dollars ($18,800,000)in cash.
(e) Jurick will tender all of the shares of Emerson common stock owned
by him (including those in the custody of the U.S. District Court for the
District of New Jersey) to the Emerson self-tender described in (c) above.
Jurick agrees that in no event will he be permitted to receive more than
Eighteen Million Eight Hundred Thousand Dollars ($18,800,000) for the shares
which he so tenders. Jurick will assign the proceeds from such tender to Oaktree
to satisfy his obligation described above in (d)(ii).
(f) Emerson will amend its bank facility or enter into a new
replacement bank facility releasing the lien on the Sport securities owned by
Emerson and giving Emerson the ability, after completion of the transactions
reflected herein, to continue its business operations with adequate working
capital.
(g) Emerson and Sport will enter into a mutually satisfactory
extension of the Management Services Agreement between them with the terms
thereof acceptable to Oaktree.
(h) Closing of the transactions described in the Option Agreement and
in sections (a) through (g) above to occur simultaneously (the "Closing").
Without limitation thereof, Oaktree will not close the transactions reflected in
the Option Agreement without the closing of the other items listed in this
section (h).
2. Conditions of the Offer. The Offer is conditional upon the
occurrence of all of the following:
(a) Completion of Oaktree's pre-acquisition due diligence review of
Sport, with results satisfactory (in Oaktree's sole discretion) to Oaktree.
(b) Negotiation and execution of definitive legal documentation
reflecting the transactions outlined in section 1 above, on mutually acceptable
terms and containing customary representations, warranties, covenants and
conditions, and the receipt of all necessary governmental approvals.
(c) Receipt by Emerson's board of directors of a fairness opinion from
an investment banking firm reasonably satisfactory to Oaktree relating to the
transactions described herein.
<PAGE>
(d) Receipt by Emerson of all necessary Board of Director and
shareholder approvals; provided, however, that Jurick agrees to vote his shares
of common stock of Emerson in favor of the proposed transactions.
3. Sport Agreements. Emerson agrees to use its best efforts to cause
Sport, subject to execution of a mutually acceptable confidentiality agreement,
to provide Oaktree access to information regarding Sport necessary to complete
Oaktree's due diligence review described in section 2(a) above. Emerson agrees
to use its best efforts to cause Sport to consent, at the Closing, to the
transfer to Oaktree of the Sport securities referred to above.
4. Break-Up Fee. If the Closing does not occur because of the
consummation of the sale of all or substantially all of Emerson's Sport
securities to a third party either as a result of or after an offer by a third
party to purchase the Sport securities owned by Emerson and/or Jurick or to
purchase Sport securities generally, Emerson shall, upon the sale of any of
Emerson's Sport securities, pay to Oaktree a break-up fee of One Million Dollars
($1,000,000) in cash.
5. Termination of the Offer. The Offer will terminate upon termination
of the option pursuant to the Option Agreement.
6. Fees and Expenses. Each party hereto shall bear its respective
expenses incurred in connection with the negotiation and consummation of the
proposed acquisition; provided, however, that if (i) the Closing does not occur
for any reason other than Oaktree deciding not to go forward with the
transaction, (ii) the Offer terminates pursuant to section 5 above and (iii)
Oaktree is not paid the fee described in section 4 above, then Emerson shall pay
to Oaktree, promptly upon submission by Oaktree of evidence of its expenses,
one-half (1/2) of Oaktree's out of pocket expenses incurred in attempting to
complete the transactions reflected herein, up to a total reimbursement to
Oaktree not to exceed Two Hundred Fifty Thousand Dollars ($250,000).
7. Binding Effect. Except with respect to sections 4 through 6 above,
this letter shall not constitute a binding contract among the parties hereto but
instead purports to set forth the present intentions of the parties with respect
to the terms proposed to be incorporated in definitive legal documentation.
8. Governing Law. This letter agreement shall be governed by and
construed in accordance with the substantive laws of the State of New York
without giving effect to the conflict of law rules thereof.
<PAGE>
If you are in agreement with the foregoing, please sign, date and
return the enclosed copy of this letter, which will thereupon constitute our
agreement in principle with respect to the matters set forth herein, but shall
not be a legally binding agreement, except with respect to paragraphs 4 through
6 hereof.
Very truly yours,
OAKTREE CAPITAL MANAGEMENT, LLC
By: /s/ Stephen Kaplan
___________________________________
Name: Stephen Kaplan
Title: Principal
By: /s/ Michael P. Harmon
___________________________________
Name: Michael P. Harmon
Title: Vice President
Accepted to and agreed by
EMERSON RADIO CORP.
By: /s/ Geoffrey P. Jurick
___________________________
Name: Geoffrey P. Jurick
Title: Chairman of the Board, Chief
Executive Officer and President
This 3rd day of August, 1999.
/s/ Geoffrey P. Jurick
_______________________________
Geoffrey P. Jurick
This 3rd day of August, 1999.
<PAGE>
Exhibit 10(a)(d)
OPTION AGREEMENT
THIS AGREEMENT dated as of July 30, 1999 among Oaktree Capital
MANAGEMENT, LLC, a California limited liability company ("Oaktree"), THOMAS
HACKETT, OFFICIAL LIQUIDATOR OF FIDENAS INTERNATIONAL BANK LIMITED (the "Fidenas
Liquidator"), PETRA STELLING ("Stelling") and BARCLAYS BANK PLC ("Barclays").
WHEREAS the Fidenas Liquidator, Stelling and Barclays (collectively,
the "Creditors") are parties to a Stipulation of Settlement and Order (the
"Stipulation") with Geoffrey P. Jurick ("Jurick"), Fidenas International Limited
L.L.C., Ellison International, Inc., GSE Multimedia Technologies, Inc., f/k/a
GSE Electronic Systems, Inc. and Emerson Radio Corp. (collectively, the "Jurick
Group") entered in Case Nos. 93-27874/NW through 93-27879, 95-B-2263 and
95-1179, pending in the United States District Court for the District of New
Jersey (the "Jersey Cases");
WHEREAS pursuant to the Stipulation 29,152,542 shares of common stock
of Emerson Radio Corp. (the "Emerson Shares") are in the custody of the United
States District Court for the District of New Jersey to be held as security for
amounts payable to the Creditors pursuant to the Stipulation;
WHEREAS proceedings (the "Swiss Proceeding") regarding alleged
violations of law by Jurick and others, initiated by the District Attorney for
the Canton of Zurich, Switzerland are currently pending;
WHEREAS Oaktree, on behalf of certain investment limited partnerships
(the "Oaktree Funds") as to which it serves as investment manager, is desirous
of entering into certain agreements with Emerson Radio Corp. ("Emerson") and
Jurick providing for acquisition of the securities of Sport Supply Group, Inc.
owned by Emerson and Jurick (the "Sport Agreements"), the consummation of which
is conditioned on Oaktree obtaining from the Creditors all of their existing
rights against the Jurick Group and releases by the Creditors of the Jurick
Group (collectively, the "Creditor Rights");
WHEREAS, based on discussions with Emerson and Jurick, Oaktree is
hopeful that it can conclude such agreements within a five month time frame and
therefore wishes to secure from the Creditors an option to purchase the Creditor
Rights on the terms and conditions set forth below; and
WHEREAS, the Creditors are desirous of selling the Creditor Rights to
Oaktree on the terms and conditions set forth below and are therefore willing to
grant to Oaktree the option described below.
NOW, THEREFORE, in order to induce Oaktree to attempt to finalize the
Sport Agreements and to make the necessary expenditures to bring such about, and
for consideration of $1.00 paid to each Creditor by Oaktree simultaneously with
the execution of this Agreement and in consideration of the premises and the
agreements contained herein, the parties hereto agree as follows:
<PAGE>
1. The Option. (a) The Creditors hereby grant to Oaktree, acting on
behalf of the Oaktree Funds, an irrevocable option to purchase the Creditors
Rights on the terms and subject to the conditions set forth herein (the
"Option").
(b) The Option may be exercised by Oaktree, only in whole, at any time
during the period commencing on the date of this Agreement and ending on the
date which is five (5) months after the date of this Agreement (the "Expiration
Date").
(c) If Oaktree wishes to exercise the Option, it shall send a written
notice to the Creditors of its intention to exercise the Option, specifying the
place and the time and date of the closing (the "Closing Date") of the purchase
(the "Closing"). Such notice shall be provided to the Creditors not less than
five (5) business days prior to the Closing Date.
(d) At the Closing, each Creditor shall deliver to Oaktree (i) an
assignment of such Creditor's rights against each member of the Jurick Group,
(ii) a general release of each member of the Jurick Group, dated as of the
Closing Date and releasing all claims of such Creditor against each member of
the Jurick Group as of the Closing Date, other than the obligations of Jurick
under the Stipulation (a) to use his best efforts to re-register the "pink
sheet" stock as described in Section 9(d) of the Stipulation and (b) to return
to the Fidenas Liquidator the funds previously deposited by the Fidenas
Liquidator to secure the appearance of Jurick and Jerome Farnum in accordance
with Section 10(i) of the Stipulation, (iii) a consent to the release by the
United States District Court for the District of New Jersey to Jurick of the
Emerson Shares, signed by such Creditor, (iv) a stipulation of dismissal with
prejudice of the Jersey Cases, executed by such Creditor, (v) a general release
of Oaktree by each Creditor and (vi) except as set forth in Section 1(d)(ii)(b)
above, an assignment of all proceeds and rights to proceeds received by such
Creditor as a result of the Swiss Proceedings, all of documents (i) through (vi)
to be in form and substance reasonably satisfactory to Oaktree.
(e) At the Closing, Oaktree shall pay to the Creditors pursuant to the
exercise of the Option, by wire transfer, Twenty Million Dollars ($20,000,000)
in cash in immediately available funds, divided among the Creditors and paid to
such accounts of the Creditors as shall be specified to Oaktree in a writing
signed by all of the Creditors, such writing to be received by Oaktree no more
than two (2) business days prior to the Closing, provided, however, that if no
such specification is received by Oaktree by the required date, Oaktree shall
pay such sum to the custody of the U.S. District Court for the District of New
Jersey, with reference to the Jersey Cases, for the account of the Creditors,
and such payment shall satisfy the payment obligation of Oaktree pursuant to
this subsection (e). At the Closing, Oaktree shall also deliver to each Creditor
(i) a general release of such Creditor by each member of the Jurick Group and by
<PAGE>
Oaktree and (ii) a stipulation of dismissal with prejudice of the Jersey Cases,
executed by each member of the Jurick Group, both documents described in (i) and
(ii) to be in form and substance reasonably satisfactory to the Creditors.
(f) The Closing shall be subject to the satisfaction of the following
conditions: (i) no court, arbitrator, governmental body, agency or official
shall have issued any order, decree or ruling restraining, enjoining or
prohibiting the consummation of the purchase and sale of the Creditor Rights
pursuant to the exercise of the Option and (ii) the closing of the transactions
reflected in the Sport Agreements shall close simultaneously with the closing of
the Option exercise.
2. Oaktree Covenants. Oaktree covenants to the Creditors as follows:
(a) Oaktree will use its commercially reasonable efforts to attempt to
finalize the Sport Agreements and to close the transactions reflected therein as
soon as reasonably possible. The Creditors acknowledge that Oaktree's decision
to complete such transactions is subject to satisfactory completion, in
Oaktree's sole discretion, of its due diligence regarding Sport Supply Group,
Inc.
(b) If Oaktree determines that the Sport Agreements will not be
finalized or that the transactions reflected therein will not close prior to the
Expiration Date, it will promptly so notify the Creditors and, thereupon, the
Option will expire.
(c) While the Option is in existence, Oaktree will, through its
counsel, respond to inquiries from the Creditors as to the status of efforts to
finalize the Sport Agreements and to close the transactions reflected therein.
3. Further Assurances. The Creditors and Oaktree will, from time to
time, execute and deliver, or cause to be delivered, such additional or further
consents, documents and other instruments as may be reasonably requested for the
purpose of effectively carrying out the transactions contemplated by this
Agreement. Without limitation of the foregoing, the Creditors agree that, after
the Closing, if so requested by a party hereto or Jurick, counsel for each of
the Creditors will promptly provide a copy of the releases delivered pursuant to
Section 1(d)(ii) and a copy of the assignment delivered pursuant to Section
1(d)(vi) to any Swiss or other courts.
4. Standstill. While the Option is in existence, the Creditors agree
not to assign, sell, transfer or impair the Creditor Rights, other than pursuant
to exercise of the Option.
5. General Provisions.
(a) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) Notice. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or sent by overnight
<PAGE>
courier or sent by telecopier to the addresses listed below or to such other
addresses as any party shall specify to the other parties by like notice:
To Oaktree:
Conor D. Reilly
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166-0193
Telecopier: 212-351-5247
To the Fidenas Liquidator:
James E. Tolan
Dechert, Price & Rhodes
30 Rockefeller Plaza
New York, NY 10112
Telecopier: 212-698-3599
To Stelling:
David H. Wollmuth
Wollmuth, Maher & Deutsch LLP
500 Fifth Avenue
New York, NY 10110
Telecopier: 212-382-0050
To Barclays:
Wendy S. Walker
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Telecopier: 212-309-6273
(c) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more of the counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
each party need not sign the same counterpart.
(d) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and performed in that state, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law thereof.
<PAGE>
6. Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in the U.S. District Court for the
District of New Jersey, this being in addition to any other remedy to which they
are entitled at law or in equity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their authorized signatories as of the date first written above.
OAKTREE CAPITAL MANAGEMENT, LLC
By: /s/ Stephen Kaplan
________________________________
Name: Stephen Kaplan
Title:
By: ________________________________
Name:
Title:
THOMAS HACKETT, OFFICIAL LIQUIDATOR
OF FIDENAS INTERNATIONAL
BANK LIMITED
/s/ Thomas Hackett
___________________________________
/s/ Petra Stelling
___________________________________
PETRA STELLING
BARCLAYS BANK PLC
By: /s/ Stanley Garulnick
_______________________________
Name:
Title:
<PAGE>
Exhibit 99(a)
FOR: EMERSON RADIO CORP.
9 Entin Road
Parsippany, NJ 07054-0430
CONTACT: Kenneth A. Corby
(973) 884-5800
(972) 884-2301
FOR IMMEDIATE RELEASE
_____________________________
EMERSON RADIO ENTERS INTO LETTER OF INTENT TO RESOLVE CERTAIN
LITIGATION AND OWNERSHIP ISSUES
Proposed Plan Involves Sale of Sport Supply Group Interest
and $23 Million Partial Self-Tender for
Emerson Shares at Not Less Than $1.00 Per Share
Parsippany, N.J., August 3, 1999 -- Emerson Radio Corp. (AMEX:MSN)
("Emerson") announced today that it entered into a letter of intent with Oaktree
Capital Management Corp. and certain of its affiliated entities (collectively,
"Oaktree"). The letter of intent sets forth a proposed series of transactions
which, if consummated, would result in the following:
1. The sale by Emerson of its entire ownership interest in
Sport Supply Group, Inc. (NYSE: GYM) ("SSG") to Oaktree. Under the
terms of the letter of intent, Oaktree would purchase from Emerson
2,269,500 shares of SSG common stock (approximately 31% of SSG's total
issued and outstanding shares of common stock) and warrants to purchase
an additional 1,000,000 shares of SSG common stock. The purchase price
would consist of approximately $15 million in cash, the surrender by
Oaktree of approximately $13.9 million face amount of Emerson's
convertible debentures presently owned by Oaktree, and an exit consent
amending certain provisions of the indenture governing Emerson's 8 1/2%
Senior Subordinated Convertible Debentures due 2002, as described
below. After giving effect to this transaction, Oaktree would
beneficially own approximately 46% of SSG's issued and outstanding
common stock.
2. The purchase by Emerson of up to $23 million of its
outstanding common stock through a self-tender offer at a price of not
less than $1.00 per share. The $15 million cash proceeds from the sale
of the SSG securities would be utilized by Emerson to fund in part a
partial tender offer to repurchase up to $23 million of Emerson's
outstanding common shares at a cash purchase price of not less than
$1.00 per share. The remainder of the $23 million would come from
additional borrowings. Mr. Jurick, who beneficially owns 29,752,642
Emerson common shares (approximately 61% of Emerson's issued and
outstanding shares), would agree to tender his shares into the tender
offer but would not sell shares having a value of more than $18.8
million regardless of the proration provisions of the tender.
<PAGE>
3. A net reduction of approximately $5.9 million of Emerson's
indebtedness. In addition, pursuant to the letter of intent, Oaktree
would agree to amend the terms of the indenture governing Emerson's
8 1/2% Senior Subordinated Convertible Debentures due 2002 to permit
the transactions described in the letter of intent and to eliminate
certain restrictive covenants contained therein.
4. The resolution of litigation between Emerson's Chairman and
largest shareholder, Geoffrey P. Jurick, and certain of his creditors.
Pursuant to the terms of the letter of intent, Oaktree would acquire
all claims held by certain creditors of Mr. Jurick for $20 million. The
claims to be acquired by Oaktree have been the subject of litigation in
the U.S. District Court for the District of New Jersey. Mr. Jurick had
previously been obligated to sell a majority of his Emerson shares to
provide a fund for the payment of such claims. However, under the terms
of the transactions announced today, Mr. Jurick would use amounts
received by him pursuant to Emerson's self-tender, together with
certain other funds, to acquire those claims from Oaktree, thereby
eliminating the need for him to sell his Emerson shares. Subject to
approval by SSG's Board, Mr. Jurick also intends to assign options to
acquire 300,000 shares of SSG's common stock to Oaktree.
Completion of the transactions described above remains subject to a
number of conditions, including Oaktree's satisfaction with its pre-acquisition
due diligence review of SSG, the execution of mutually satisfactory definitive
agreements among the parties, regulatory and court approvals, receipt by
Emerson's Board of a fairness opinion, the completion by Emerson of refinancing
of a portion of its outstanding debt to consummate the self tender offer and
certain other corporate approvals.
EMERSON RADIO CORP., founded in 1956, is headquartered in Parsippany,
N.J. The Company designs, markets and licenses, throughout the world, full lines
of televisions and other video products, microwave ovens, clocks, clock radios,
audio and home theater products.
OAKTREE provides investment advice and management services to
institutional and individual investors. Through its affiliated entities, it
presently has more than $11 billion under management and presently beneficially
owns more than 5% of the outstanding common shares of Sport Supply Group, Inc.
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, that are based on the
beliefs of Emerson's management as well as assumptions made by and information
currently available to Emerson's management. When used in this press release,
the words "estimate," "project," "believe," "anticipate," "intend," "expect",
"plan," "predict," "may," "should," "will," the negative thereof and similar
expressions are intended to identify forward-looking statements. Forward-looking
statements are inherently subject to risks and uncertainties, many of which can
not be predicted with accuracy and some of which might not even be anticipated.
Future events and actual results, financial and otherwise, could differ
materially from those set forth in or contemplated by the forward-looking
statements herein. Important factors that could contribute to such differences
<PAGE>
include, but are not limited to, the following: general economic and political
conditions; conditions in the securities markets generally and in the markets
for securities of Emerson and SSG; the financial results and future prospects of
Emerson and SSG, the failure of the transactions described herein to be
consummated or any delay in the expected date of such consummation, and risks
related to the receipt and timing of court and regulatory approvals. Other
factors may be described from time to time in Emerson's public filings with the
Securities and Exchange Commission, news releases and other communications.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Emerson does not undertake
any obligation to release publicly any revisions to these forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
