-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GNMSe/7qmqew1Ot9xx/njoCdK+cp/9GzxqN1vP/YYrQVbIR+e1UrqQ4amLYRHT1D JMKINsKdatWUDk99SBTHMQ== 0000905718-99-000415.txt : 19990813 0000905718-99-000415.hdr.sgml : 19990813 ACCESSION NUMBER: 0000905718-99-000415 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990803 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990806 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMERSON RADIO CORP CENTRAL INDEX KEY: 0000032621 STANDARD INDUSTRIAL CLASSIFICATION: 3651 IRS NUMBER: 223285224 STATE OF INCORPORATION: DE FISCAL YEAR END: 0402 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-07731 FILM NUMBER: 99679751 BUSINESS ADDRESS: STREET 1: NINE ENTIN RD STREET 2: PO BOX 430 CITY: PARSIPPANY STATE: NJ ZIP: 07054-0430 BUSINESS PHONE: 2018845800 FORMER COMPANY: FORMER CONFORMED NAME: MAJOR ELECTRONICS CORP DATE OF NAME CHANGE: 19770921 8-K 1 8-K 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 - - - - -------------------------------------------------------------------------------- (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) 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 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. 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 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 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. (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. (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. 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. 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: 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 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 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. 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: 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. 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 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. -----END PRIVACY-ENHANCED MESSAGE-----