Unassociated Document


    Exhibit 10.1

    


    UNITED
STATES DISTRICT COURT

    SOUTHERN
DISTRICT OF NEW YORK

    


    
      	 	 	 
	
               

              IN
      RE ESCALA GROUP, INC. SECURITIES

              LITIGATION

               

            	 
      	
               

              Master
      File No. 06 Civ. 3518 (AKH)

            
	
               

              This
      Document Relates To:  ALL ACTIONS

               

            	 
      	 
      


    

    


     

    AGREEMENT

     

     

    
      	
              1.  

            	
              This
      Agreement is dated as of May 30, 2008, and is entered into by and between
      the Virginia Retirement System (“VRS” or “Lead Plaintiff”) and Defendants
      Escala Group, Inc. (“Escala” or the “Company”), Greg Manning, Larry
      Crawford, Jose Miguel Herrero, Esteban Perez, Greg Roberts, Juan Antonio
      Cano and Amper, Politziner & Mattia P.C. (“Amper”) (collectively, the
      “Defendants”) and Scott S. Rosenblum, Mark Segall, James Davin and Anthony
      Biongiovanni, each by and through his, their, or its undersigned
      attorneys.

            


    

     

     

    
      	
              2.  

            	
              The
      parties hereto are prepared to execute, by and through their counsel, and
      thereby become bound by the terms of the Stipulation of Settlement in this
      Action, attached as Exhibit A hereto, once the exhibits to which are
      finalized.  Afinsa and Auctentia, through their duly authorized
      foreign representatives, however, have not yet approved the execution of
      the Stipulation of Settlement on their behalf.  The parties
      hereto agree that once the exhibits to the Stipulation of Settlement are
      finalized and agreed-to, and once Afinsa and Auctentia, by and through
      counsel for Afinsa’s and Auctentia’s duly authorized foreign
      representatives, execute the Stipulation of Settlement, that each of them,
      by and through their counsel, also will promptly execute the Stipulation
      of Settlement.

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              3.  

            	
              If
      the Stipulation of Settlement is not executed on or before April 15, 2008
      by counsel for all of the parties appearing in the signature pages of the
      Stipulation of Settlement, then on April 16, 2008, simple interest in the
      amount of 5 percent per annum will begin to accrue on the $10 million cash
      component of the Settlement Amount described in the Stipulation of
      Settlement.  No interest will accrue if either (i) the
      Stipulation of Settlement is fully executed on or before April 15, 2008,
      or (ii) counsel for VRS is the sole counsel not to have executed the
      Stipulation of Settlement on or before April 15, 2008.  Interest
      will cease to accrue on the first day after April 15, 2008 either (i) the
      Stipulation of Settlement is fully executed or (ii) counsel for VRS is the
      sole counsel not to have executed the Stipulation of Settlement, provided
      counsel for VRS is given reasonable notice that the Stipulation of
      Settlement is ready for signing.

            


    

     

     

    
      	
              4.  

            	
              No
      interest shall accrue for the date on which the Stipulation of Settlement
      is signed and signed pages are transmitted to counsel for
    VRS.

            


    

     

     

    
      	
              5.  

            	
              Accrued
      interest on the $10 million cash component of the Settlement Amount, if
      any, shall be paid or caused to be paid solely by Escala at the same time
      that the cash component of the Settlement Amount is paid into the Escrow
      Account pursuant to the terms of the Stipulation of
      Settlement.  Neither Amper nor its insurer(s) shall be
      responsible to pay any interest that accrues under this
      Agreement.

            


    

     

     

    
      	
              6.  

            	
              If
      either (a) the Effective Date does not occur, (b) the Stipulation of
      Settlement is canceled or terminated pursuant to its terms, or (c) the
      Stipulation of Settlement does not become final for any reason, then any
      accrued interest paid by or caused to be paid by Escala shall be refunded
      to it by the Escrow Agent consistent with Section X of the Stipulation of
      Settlement.

            


    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    
      	
              7.  

            	
              Any
      of Lead Plaintiff’s counsel, Escala’s counsel or Amper’s counsel shall
      have the right, any time after July 15, 2008, to terminate this Agreement
      upon written notice to counsel for all parties hereto if the Stipulation
      of Settlement has not been executed consistent with this Agreement on or
      before July 15, 2008.  If this Agreement is terminated pursuant
      to this paragraph 7, then no accrued interest shall be
      payable.

            


    

     

     

    
      	
              8.  

            	
              Because
      the Settlement of the Action is expressly conditioned upon settlement in
      the Derivative Action becoming Final, all parties hereto, except for VRS
      and Cano (neither of whom is a party in the Derivative Action) agree that
      they, by and through their counsel, will promptly after the execution of
      this Agreement execute the Stipulation of Settlement in the Derivative
      Action, provided that it is agreed to in substantially the form set forth
      in the Stipulation of Settlement attached as Exhibit B hereto and that the
      parties also reach an agreement on the exhibits to the Stipulation of
      Settlement in the Derivative Action, which still must be
      finalized.

            


    

     

     

    
      	
              9.  

            	
              All
      capitalized terms in this Agreement shall have the same meanings as set
      forth in the Stipulation of Settlement in this
  action.

            


    

     

     

    
      	
              10.  

            	
              This
      Agreement may be amended or modified only by a written instrument signed
      by counsel for all parties to this Agreement or their successors in
      interest.

            


    

     

     

    
      	
              11.  

            	
              This
      Agreement may be executed in one or more original, photocopied or
      facsimile counterparts.  All executed counterparts and each of
      them shall be deemed to be one and the same
  instrument.

            


    

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    
      	
              12.  

            	
              This
      Agreement shall be binding upon, and inure to the benefit of the
      successors, assigns, executors, administrators, affiliates (including
      parent companies), heirs and legal representatives of the parties
      hereto.  No assignment shall relieve any party hereto of
      obligations hereunder.

            


    

     

     

    
      	
              13.  

            	
              All
      terms of this Agreement shall be governed and interpreted according to the
      laws of the State of New York without regard to its rules of conflicts of
      law and in accordance with the laws of the United
  States.

            


    

     

    
      	 
      	
               

              IN WITNESS WHEREOF, the
      parties hereto, intending to be legally bound May 30, 2008.

               

            
	 
      	
              KAPLAN
      FOX & KILSHEIMER LLP

               

              By:  /s/Robert
      N.
      Kaplan

               

              Robert
      N. Kaplan

              Donald
      R. Hall

              Jeffrey
      P. Campisi

              850
      Third Avenue, 14th Floor

              New
      York, NY 10022

              Tel:           (212)
      687-1980

              Fax:           (212)
      687-7714

               

              Lead
      Counsel for Lead Plaintiff the Virginia Retirement System

               

            


    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
 

    
      	 
      	
              KRAMER
      LEVIN NAFTALIS & FRANKEL LLP

               

              By:
      /s/ Arthur H.
      Aufses III

              Arthur
      H. Aufses III

              1177
      Avenue of the Americas

              New
      York, NY 10036

              Tel:
      (212) 715-9100

               

              Attorneys
      for Defendant Escala Group, Inc.

            
	 
      	
               

              LOVELLS
      LLP

               

              By:
      /s/ Scott W.
      Reynolds

               

              Scott
      W. Reynolds

              590
      Madison Avenue

              New
      York, New York 10022

              Tel:
      (212) 909-0600

               

              Attorneys
      for Defendants Larry Crawford, Esteban Perez, Jose Miguel Herrero, Greg
      Roberts, Scott S. Rosenblum, Mark Segall, James Davin and Anthony
      Bongiovanni

               

            
	 
      	
               

              GOODWIN
      PROCTER LLP

               

              By:
      /s/ Stephen D.
      Poss

              Stephen
      D. Poss

              Exchange
      Place

              Boston,
      Massachusetts 02109

              Tel:
      (617) 570-1000

               

              Attorneys
      for Defendant Amper, Politziner & Mattia,
  P.C.

            


    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    
      	
               

               

               
      

            	
               

              BRESSLER,
      AMERY & ROSS, PC

               

              By:
      /s/ Lawrence Fenster

              Lawrence
      Fenster

              17
      State Street

              New
      York, New York 10004

              Tel: 
      212-425-9300

               

              Attorneys
      for Defendant Juan Antonio Cano

            
	 
      	
               

              HOFFMAN
      AND POLLOK LLP

               

              By:
      /s/ William A.
      Rome

               

              William
      A. Rome

              260
      Madison Avenue, 22nd Floor

              New
      York, NY 10016

              Tel:  (212)
      679-2900

               

              Attorneys
      for Defendant Greg Manning

               

            


    

    


     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Exhibit A

    


    UNITED
STATES DISTRICT COURT

    SOUTHERN
DISTRICT OF NEW YORK

    


    
      	 	 	 
	
               

              IN
      RE ESCALA GROUP, INC. SECURITIES

              LITIGATION

               

            	 
      	
               

              Master
      File No. 06 Civ. 3518 (AKH)

            
	
               

              This
      Document Relates To:  ALL ACTIONS

               

            	 
      	 
      


    

    


    


    STIPULATION OF
SETTLEMENT

    


    


    This
Stipulation of Settlement is dated as of ___ __, 2008.  Subject to the
approval of the Court, it is entered into by and between the Virginia Retirement
System (“VRS” or
“Lead Plaintiff”), and the other members of the Settlement Class (as
defined herein), and Defendants Escala Group, Inc. (“Escala” or the “Company”),
Greg Manning (“Manning”), Larry Crawford (“Crawford”), Jose Miguel Herrero
(“Herrero”), Esteban Perez (“Perez”), Greg Roberts (“Roberts”), Juan Antonio
Cano (“Cano”) and Amper, Politziner & Mattia P.C. (“Amper”) (collectively,
the “Defendants”) as well as additional former defendants Afinsa Bienes
Tangibles S.A. ("Afinsa"), Auctentia S.L. ("Auctentia"), Anthony Bongiovanni,
Scott S. Rosenblum, James Davin, and Mark Segall (together, the "Additional
Named Parties") each by and through his, their, or its undersigned
attorneys.  This Stipulation is intended by the parties hereto to
fully, finally and forever resolve, discharge, release and settle the Released
Claims, the Released Parties Claims and the Released Co-Defendant Claims, upon
and subject to the terms and conditions hereof.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    RECITALS

     

    WHEREAS,
the following cases were commenced in the United States District Court for the
Southern District of New York, on or after May 9, 2006:

     

    
      	 
      	
              Case

            	
              Civil
      No.

            	
              Date
      Filed

            
	
              1.

            	
              Barend
      Cohen, v. Escala Group, Inc., et al.

            	
              06-3518
      (AKH)

            	
              5/9/2006

            
	
              2.

            	
              Wendy
      M. Schulman Kalman, v. Escala Group, Inc., et al.

            	
              06-3644
      (AKH)

            	
              5/12/2006

            
	
              3.

            	
              Henri
      Roman, v. Escala Group, Inc., et al.

            	
              06-3699
      (AKH)

            	
              5/15/2006

            
	
              4.

            	
              Frank
      Do, v. Escala Group, Inc., et al.

            	
              06-3740
      (AKH)

            	
              5/16/2006

            
	
              5.

            	
              Elvira
      Everette, v. Escala Group, Inc., et al.

            	
              06-3929
      (AKH)

            	
              5/23/2006

            
	
              6.

            	
              Trustee
      Abe E. Miller, for the Abe E. Miller and Inez V. Miller Living Trust, v.
      Escala Group, Inc., et al.

            	
              06-4324
      (AKH)

            	
              6/8/2006

            
	
              7.

            	
              Spring
      Partners v. Manning et al.

            	
              06-3980
      (AKH)

            	
              5/24/2006

            
	
              8.

            	
              Hammer
      et al v. Escala Group, Inc. et al.

            	
              06-4049
      (AKH)

            	
              5/26/2006

            
	
              9.

            	
              Trustee
      Abe E. Miller, for the Abe E. Miller and Inez V. Miller Living Trust, v.
      Escala Group, Inc., et al.

            	
              06-4324
      (AKH)

            	
              6/8/2006

            
	
              10.

            	
              Eddy
      Lovaglio, v. Escala Group, Inc., et al.

            	
              06-4681
      (AKH)

            	
              6/19/2006

            
	
              11.

            	
              Shapiro
      et al v. Escala Group, Inc., et al.

            	
              06-4919
      (RCC)

            	
              6/23/2006

            


    

    


     

    WHEREAS, on July
10, 2006, VRS and certain other parties moved pursuant to the Private Securities
Litigation Reform Act of 1995 (“PSLRA”) to: 1) consolidate the cases; 2) appoint
Lead Plaintiff; and 3) appoint lead counsel.

     

    WHEREAS,
by an Order dated August 31, 2006, the above-captioned cases were consolidated
for all purposes under the caption In re Escala Group, Inc. Securities
Litigation, Case No. 06 Civ. 3518 (AKH), and the Court appointed VRS as
Lead Plaintiff, and appointed the law firm of Kaplan Fox & Kilsheimer LLP
(“Kaplan Fox”) as Lead Counsel.

     

    WHEREAS, on October
13, 2006, Plaintiffs filed a Consolidated Amended Class Action Complaint (the
“CAC”) alleging violations of the federal securities laws, specifically,
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
(“Exchange Act”), and Rule 10b-5 promulgated thereunder.  The CAC was
brought on behalf of a purported class of all persons (with certain exceptions)
who purchased the publicly traded common stock of Escala during the period from
September 5, 2003 through May 8, 2006.  The CAC purported to assert
claims against Defendants, as well as the Additional Named Parties.

     

    WHEREAS,
on December 18, 2006, certain of the Defendants and certain of the Additional
Named Parties moved, pursuant to Rules 9(b) and 12(b)(6) of the Federal Rules of
Civil Procedure and the PSRLA, to dismiss the CAC.

     

    WHEREAS,
the Court held oral argument on the motions to dismiss on April 17, 2007 and, on
April 20, 2007, issued an Opinion and Order granting in part and denying in part
the motions to dismiss and granting Lead Plaintiff leave to file an amended
complaint.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
on June 1, 2007, Lead Plaintiff filed a Second Consolidated Amended Class Action
Complaint (the “Complaint”) that amended the allegations concerning Crawford,
Roberts, Herrero, Perez and Cano and, on or about July 5, 2007, each of these
Defendants moved to dismiss the Complaint.

     

    WHEREAS,
the Court held oral argument on September 25, 2007 concerning the motions to
dismiss of Crawford, Roberts, Herrero, Perez and Cano and, on October 2, 2007,
denied such motions.

     

    WHEREAS,
on October 30, 2007, Plaintiffs moved the Court to certify a class and appoint
VRS as Class Representative and Kaplan Fox as Counsel to the class.

     

    WHEREAS,
Afinsa and Auctentia had been, but are not currently defendants in this Action
because the United States Bankruptcy Court for Southern District of New York
entered separate orders granting recognition of Afinsa’s and Auctentia’s
respective insolvency proceedings in Spain, and, among other things, enjoined
continuation of this litigation against Afinsa and Auctentia.

     

    WHEREAS,
Lead Plaintiff, through its counsel, transmitted a Summons and the Complaint to
the central authority in Spain for service of process on Defendants Albertino de
Figueiredo (“A. Figueiredo”), Carlos de Figueiredo (“C. Figueiredo”), and Emilio
Ballester (“Ballester”), through the Convention on the Service Abroad of
Judicial and Extrajudicial Documents in Civil or Commercial Matters, and was
informed that the central authority in Spain served Ballester.

     

    WHEREAS,
A. Figueiredo, C. Figueiredo, and Ballester, have not appeared in this
litigation.

     

    WHEREAS,
following arms-length negotiations for many months with the assistance of an
experienced mediator, Lead Plaintiff and the Defendants have agreed to a
settlement (the “Settlement”) of the Action;

     

    WHEREAS,
Lead Counsel, on behalf of Lead Plaintiff, has conducted an investigation
relating to the claims and the underlying events and transactions alleged in the
Complaint, has engaged in discovery, including the review of hundreds of
thousands of pages of documents, and filed a motion to certify a class of Escala
investors.  Lead Counsel and Lead Plaintiff recognize the expense,
risks and uncertain outcome of any litigation and subsequent appeals, especially
for a complex action such as this with its inherent difficulties and
delays.  Lead Plaintiff, on behalf of itself and all other members of
the Settlement Class (collectively, “Plaintiffs”), desires to settle their
claims against the Defendants in this Action on the terms and conditions set
forth in this Stipulation.  Furthermore, Lead Plaintiff and Lead
Counsel deem said Settlement to be fair, reasonable, adequate and in the best
interests of the members of the Settlement Class; have agreed that the Released
Parties should be released from the Released Claims pursuant to the terms and
provisions of this Stipulation; and have agreed to the dismissal of the Action
with prejudice, after considering the substantial benefits that the Lead
Plaintiff and all members of the Settlement Class will receive from the
settlement of the Action; and

     

    WHEREAS,
the Defendants, while continuing to deny all allegations of wrongdoing or
liability whatsoever arising out of any of the conduct, statements, acts or
omissions alleged, or that could have been alleged, in the Action, also
recognize the expense, risks and uncertain outcome of any litigation, especially
a complex action such as this, and the Defendants desire to settle the claims
against them so as to avoid lengthy, distracting and time-consuming litigation
and the burden, inconvenience and expense connected therewith, without in any
way acknowledging any fault or liability, such that this Stipulation and all
related documents are not, and shall not in any event be construed or deemed to
be evidence of or an admission or concession on the part of the Defendants with
respect to any claim or of any fault or liability or wrongdoing or damage
whatsoever, or any infirmity in the defenses that the Defendants have asserted,
of or by any of them or of any other person.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    NOW,
THEREFORE, IT IS HEREBY STIPULATED, CONSENTED TO AND AGREED, between Lead
Plaintiff, the Defendants and the Additional Named Parties, by and through their
respective attorneys or counsel of record, that this Action and the Released
Claims as against the Released Parties shall be settled, compromised, and
dismissed with prejudice, subject to the approval of the Court, in the manner
and upon the terms and conditions hereafter set forth:

     

    I. CERTAIN
DEFINITIONS

     

    A. To the
extent not otherwise defined herein, as used in this Stipulation, the following
terms have the meanings specified below:

     

    1. “Action”
means the consolidated securities class action pending in this Court under the
caption In re Escala Group,
Inc. Securities Litigation, Master File No. 06 Civ. 3518 (AKH),
including, without limitation, all cases consolidated under that
caption.

     

    2. “Amper-Related
Parties” means Amper, along with its present, former and future employees,
insurers, officers, directors, partners, attorneys, legal representatives and
agents; any person or entity which is or was related to or affiliated with
Amper; and the immediate family members, heirs, executors, administrators,
present, former and future parents, subsidiaries, divisions, affiliates,
predecessors, successors, employees, officers, directors, partners, attorneys,
assigns, and agents of all of the foregoing.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    3. “Authorized
Claimant” means a member of the Settlement Class who submits a timely and valid
Proof of Claim and Release form to the Settlement Administrator and whose proof
of claim is not rejected.  Only those members of the Settlement Class
filing valid and timely Proofs of Claim and Releases shall be entitled to
receive any distributions from the Net Settlement Fund.

     

    4. “Court”
means the United States District Court for the Southern District of New
York.

     

    5. “Derivative
Action” means the case pending in this Court under the caption In re Escala Group, Inc. Derivative
Litigation, Master File No. 06 Civ. 03902 (AKH), and any other derivative
action filed in any other state or federal court against any of the Released
Parties relating, in whole or in part, to the allegations set forth in the
Action.

     

    6. “Effective
Date” means the date that is five business days after the date on which all of
the conditions to the Settlement, set forth in Section X(A), are
satisfied.

     

    7. “Escala-Related
Parties” means Escala, Greg Manning, Larry Crawford, Jose Miguel Herrero,
Esteban Perez, Greg Roberts, Juan Antonio Cano, and each of the Additional Named
Parties, along with each of their present, former and future employees,
insurers, officers, directors, partners, attorneys, legal representatives,
trustees and agents; any person or entity which is or was related to or
affiliated with Escala, Afinsa or Auctentia; and the immediate family members,
heirs, executors, administrators, present, former and future parents,
subsidiaries, divisions, affiliates, predecessors, successors, employees,
officers, directors, partners, attorneys, assigns, and agents of all of the
foregoing.

     

    8. “Escrow
Account” means the interest-bearing account created pursuant to Section
II.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    9. “Execution
Date” means the date that this Stipulation has been signed by all the
signatories hereto through their counsel.

     

    10. “Escrow
Agent” means Lead Counsel or its designees.  The Escrow Agent shall
perform the duties as set forth in this Stipulation.

     

    11. “Final”
means, with respect to any judgment or order, including but not limited to the
Final Judgment, that such judgment or order represents a final and binding
determination of all issues within its scope and is not subject to further
review on appeal or otherwise.  Without limitation, a judgment or
order becomes “Final” when:  (a) the time within which to seek review,
alteration, amendment or appeal of such judgment or order, including (if
applicable) any three (3) day period for service by mail under Federal Rule of
Civil Procedure 6(a) and (e) or any such service period applicable to an action
in state court, has expired without any review, alteration, amendment or appeal
having been sought or taken; or (b) if an appeal, petition for writ of
certiorari,  motion or other application for review, alteration or
amendment is filed, sought or taken, the date as of which such appeal, petition,
motion or other application shall have been finally determined in such a manner
as to affirm the Court’s original order in its entirety and the time, if any,
for seeking further review has expired.

     

    12. “Final
Settlement Approval Hearing” means the final hearing to be held by the Court to
determine whether the proposed Settlement should be approved as fair, reasonable
and adequate; whether all Released Claims should be dismissed with prejudice;
whether an order approving the Settlement should be entered thereon; whether the
allocation of the Settlement Fund should be approved; and whether and in what
amounts to award attorneys' fees and expenses to Lead Counsel and reimbursement
to Lead Plaintiff.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    13. “Gross
Settlement Fund” means the Settlement Amount plus all interest earned
thereon.

     

    14. “Judgment”
or “Final Judgment” means the judgment to be entered by the Court, substantially
in the form of Exhibit B hereto.

     

    15. “Lead
Counsel” means the law firm of Kaplan Fox & Kilsheimer LLP.

     

    16. “Lead
Plaintiff” means the Virginia Retirement System.

     

    17. “Escala”
means Escala Group, Inc.

     

    18. “Escala
Common Stock” means any common stock of Escala outstanding during the Settlement
Class Period, irrespective of the date of issue.

     

    19. “Net
Settlement Fund” means the Gross Settlement Fund, less: (i) attorneys' fees and
expenses; (ii) taxes and tax expenses; (iii) Notice and Administration Expenses
and (iv) reimbursement awards to Lead Plaintiff, if any.

     

    20. “Notice
and Administration Account” means the interest-bearing account to be established
and maintained by the Settlement Administrator from the Gross Settlement
Fund.  The Notice and Administration Account may be drawn upon by the
Settlement Administrator for Notice and Administration Expenses without prior
approval of the Court.

     

    21. “Notice
and Administration Expenses” means all expenses incurred (whether or not paid)
in connection with the settlement administration, and shall include, among other
things, the cost of publishing summary notice in the national edition of The Wall Street Journal or
other national news service, printing and mailing the notice and Proof of Claim
and Release, as directed by the Court, and the cost of processing proofs of
claim and distributing the Net Settlement Fund to Settlement Class Members who
timely submit a valid Proof of Claim and Release.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    22. “Parties”
means the Lead Plaintiff, the Settlement Class Members, and the
Defendants.  The “parties hereto” means all those Persons whose
counsel have signed this stipulation on their behalf.

     

    23.  “Person”
means any individual, corporation, partnership, association, affiliate, joint
stock company, trust, estate, unincorporated association, government and any
political subdivision thereof, and any other type of legal or political
entity.

     

    24. “Plan of
Allocation” means the plan or formula of allocation of the Net Settlement Fund,
to be approved by the Court, which plan or formula shall govern the distribution
of the Net Settlement Fund to Authorized Claimants.  The Plan of
Allocation is not a part of this Stipulation, the Defendants shall have no
responsibility or liability with respect thereto, and any order or proceedings
relating to the Plan of Allocation shall not operate to terminate or cancel this
Stipulation or affect the finality of the Final Judgment or any other orders
entered by the Court pursuant to this Stipulation.

     

    25. “Released
Claims” shall mean any and all actions, suits, claims, debts, demands, rights,
causes of action or liabilities of every nature and description whatsoever
(including, but not limited to, claims for damages, interest, attorneys’ fees,
expert or consulting fees, and any other costs, expenses, or liability
whatsoever), whether based in law or equity, whether fixed or contingent,
accrued or unaccrued, liquidated or unliquidated, matured or not matured,
pursuant to federal, state, local, statutory or common law, or any other law,
rule or regulation, whether foreign or domestic, including both known claims and
Unknown Claims (as defined herein), whether or not concealed or hidden,
(including but not limited to claims for securities fraud, negligence,
gross negligence, professional negligence, breach of duty of care and/or 
breach of duty of loyalty, fraud, breach of fiduciary duty, aiding or abetting a
breach of fiduciary duty, breach of contract, unjust enrichment, or violations
of any statutes, rules, duties or regulations), that have been or could have
been or could in the future be asserted in any forum by Lead Plaintiff, any
member of the Settlement Class, or their successors, assigns, executors,
administrators, representatives, attorneys, agents, affiliates, and partners,
and any Persons they represent or any of them, whether brought directly or
indirectly against any of the Released Parties, which arise out of, are based
on, or relate in any way, directly or indirectly, to any of the allegations,
acts, transactions, facts, events, matters, occurrences, representations or
omissions involved, set forth, alleged or referred to, in the Action, or which
could have been alleged in the Action based upon the facts alleged in the CAC or
the Complaint, and which arise out of, are based upon, or relate in any way,
directly or indirectly, to the purchase, sale, or voting of any Escala common
stock by any Settlement Class member during the Settlement Class
Period.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    26. “Released
Co-Defendant Claims” means any and all actions, suits, claims, debts, demands,
rights, causes of action or liabilities of every nature and description
whatsoever (including, but not limited to, claims for damages, interest,
attorneys’ fees, expert or consulting fees, and any other costs, expenses, or
liability whatsoever), whether based in law or equity, whether fixed or
contingent, accrued or unaccrued, liquidated or unliquidated, matured or not
matured, pursuant to federal, state, local, statutory or common law, or any
other law, rule or regulation, whether foreign or domestic, including both known
claims and Unknown Claims, whether or not concealed or hidden, that have been or
could have been or could in the future be asserted in any forum against any of
the Amper-Related Parties by any of the Escala-Related Parties, or by any of the
Amper-Related Parties against any Escala-Related Party, whether brought
directly, indirectly or derivatively, which arise out of, are based on, or
relate in any way, directly or indirectly, in whole or in part, to any of the
allegations, acts, transactions, facts, events, matters, occurrences,
disclosures, statements, failure to disclose or failure to act involved, set
forth, alleged or referred to, in the Action or the Derivative Action, or which
could have been alleged based upon the facts alleged in the Action, or the
Derivative Action or in any other securities class action or derivative action
filed in any other state or federal court, or in any way relate to, arise out of
or are based on any audit or other work performed by Amper for, on behalf of or
concerning Escala or any of the Escala-Related Parties.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    27. “Released
Parties” means Defendants, the Additional Named Parties and each of their
immediate family members, heirs, executors, administrators, successors, and
assigns; Defendants’ and the Additional Named Parties’ present, former and
future employees, insurers, officers, directors, partners, attorneys, legal
representatives and agents; any person or entity which is or was related to or
affiliated with any Defendant or Additional Named Party, or in which any
Defendant or Additional Named Party has or had a controlling interest; and the
present, former and future parents, subsidiaries, divisions, affiliates,
predecessors, successors, employees, officers, directors, partners, attorneys,
assigns, and agents of all of the foregoing.

     

    28. “Released
Parties Claims” means any and all claims, rights, or causes of action or
liabilities whatsoever, whether based in federal, state, local, statutory or
common law or any other law, rule or regulation, including both known claims and
Unknown Claims, that have been or could have been asserted in the Action or any
forum by the Defendants or any of them or the successors and assigns of any of
them, or any Released Parties against the Lead Plaintiff, Settlement Class
Members or their attorneys, which arise out of or relate in any way to the
institution, prosecution, or settlement of the Action (except for claims to
enforce the Settlement).

     

    29. “Settlement
Administrator” means Complete Claims Solutions, LLC.

     

    
      
        
        

      

      
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    30. “Settlement
Amount” means (a) $10,000,000 (Ten Million Dollars) in cash and (b) 4 million
shares of common stock with a value of at least $8,000,000 (Eight Million
Dollars) that Escala shall issue in accordance with the provisions set forth in
Section II.

     

    31. “Settlement
Class” or “Settlement Class Members” means, for purposes of this Settlement
only, all persons or entities who, during the Settlement Class Period, purchased
or otherwise acquired publicly-traded common stock issued by
Escala.  Excluded from the definition of “Settlement Class” and
“Settlement Class Members” are (a) Defendants; any Additional Named Parties; any
parent or subsidiary, present or former director, officer, subsidiary, or
affiliate of Escala, including without limitation, Afinsa and Auctentia; any
entity in which any excluded person has a controlling interest; and their legal
representatives, heirs, successors and assigns, and (b) any putative members of
the Settlement Class who timely and validly exclude themselves from the
Settlement Class in accordance with the requirements set forth in the Mailed
Notice and Rule 23 of the Federal Rules of Civil Procedure.

     

    32. “Settlement
Class Period” means the period of time from September 5, 2003 through May 8,
2006, inclusive of those dates.

     

    33.  “Settlement
Fund” means the payments to be made in accordance with Section II of this
Stipulation.

     

    34. “Unknown
Claims” means any and all claims, demands, rights, liabilities, and causes of
action of every nature and description which Lead Plaintiff, any member of the
Settlement Class or any Defendant or any of the Additional Named Parties does
not know or suspect to exist in his, her or its favor at or after the Execution
Date and including, without limitation, those which, if known by him, her or it,
might have affected his, her or its decision(s) with respect to the
Settlement. 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

      With
respect to any and all Released Claims and Released Co-Defendant Claims, the
parties hereto stipulate and agree that, upon the Effective Date, Lead
Plaintiff, Defendants and the Additional Named Parties shall expressly waive,
and each of the Settlement Class Members shall be deemed to have waived, and by
operation of the Final Judgment shall have waived, any and all provisions,
rights, and benefits conferred by any law of any state or territory of the
United States, or principle of common law, which is similar, comparable, or
equivalent to Cal. Civ. Code § 1542, which provides:

       

      
        
          	 	
                  A
      GENERAL RELEASE DOES NOT EXTEND TO CLAIMS 

                  WHICH
      THE CREDITOR DOES NOT KNOW OR SUSPECT

                  TO
      EXIST IN HIS FAVOR AT THE TIME OF EXECUTING

                  THE
      RELEASE, WHICH IF KNOWN BY HIM MUST HAVE

                  MATERIALLY
      AFFECTED HIS SETTLEMENT WITH THE

                  DEBTOR.

                	 


        

      

    

     

    Lead
Plaintiff, Defendants and the Additional Named Parties and the members of the
Settlement Class may hereafter discover facts in addition to or different from
those that any of them now know or believe to be true with respect to the
subject matter of the Released Claims, the Released Parties Claims or the
Released Co-Defendant Claims but Lead Plaintiff, Defendants and the Additional
Named Parties shall expressly have, and each member of the Settlement Class
shall be deemed to have and by operation of the Judgment shall have, fully,
finally, and forever settled and released any and all Released Claims, the
Released Parties Claims and the Released Co-Defendant Claims known or unknown,
suspected or unsuspected, contingent or non-contingent, whether or not concealed
or hidden, that now exist, or heretofore have existed upon any theory of law or
equity now existing or coming into existence in the future, including, but not
limited to, conduct that is negligent, reckless, intentional, with or without
malice, or a breach of any duty, law or rule, without regard to the subsequent
discovery or existence of such different or additional facts.

     

    
      
        
        

      

      
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    Lead
Plaintiff and Defendants and the Additional Named Parties acknowledge, and the
members of the Settlement Class by operation of the Judgment shall be deemed to
have acknowledged, that the waivers contained in this paragraph, and the
inclusion of “Unknown Claims” in the definition of Released Claims, Released
Parties Claims and Released Co-Defendant Claims, were separately bargained for
and are key elements of the Settlement.

     

    II. THE SETTLEMENT
CONSIDERATION

     

    A. In full
settlement of the Released Claims, Escala shall pay or cause to be paid $6
million in cash, and Amper shall pay or cause to be paid $4 million in cash into
a separate, interest-bearing escrow account maintained by the Escrow Agent on
behalf of Lead Plaintiff and the Settlement Class.  Within five (5)
business days of the Execution Date, Escala and Amper shall each pay or cause to
be paid the first $100,000 of their respective payments referenced in the
preceding sentence.  Escala and Amper shall make or cause to be made
the balance of their respective payments, referenced in the first sentence of
this paragraph, within five (5) business days after the Court’s entry of an
order granting preliminary approval of the Settlement.

     

    B. Escala
will issue 4 million shares (“Shares”) of its authorized but unissued common
stock, with a guaranteed value of at least $2 per share.  The Shares
will be issued free of any restrictions on transfer in accordance with the
exemption from registration contained in Section 3(a)(10) under the Securities
Act of 1933, as amended, and will be identical in all respects to Escala’s
currently outstanding common stock.

     

    C. Until the
Shares are issued in accordance with the Stipulation, the 4 million shares shall
be treated identically to the existing Escala common stock and shall receive all
benefits, except for voting rights, that accrue to the existing common stock
(including but not limited to stock or cash dividends).  Therefore,
the number of shares of common stock issuable hereunder will be adjusted if the
Company: i) Declares a dividend in common stock on any class of its capital
stock; ii) Issues generally to its stockholders rights, options, or warrants to
purchase common stock at less than the then current market price of the common
stock;

     

    
      
        
        

      

      
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      iii)
Subdivides, combines or reclassifies its outstanding common stock; or iv)
Distributes generally to its stockholders evidences of debt, shares of capital
stock, cash or other assets.

       

    

    D. It is
contemplated that there will be at least two dates of distribution for both cash
and securities: (i) the date of the distribution of attorneys’ fees and costs
awarded by the Court to Lead Plaintiff’s counsel; and (ii) the date of the
distribution to Settlement Class Members.

     

    E. Five
business days before each of the two distribution dates (“Notification Dates”),
Plaintiffs’ Lead counsel shall notify Escala’s transfer agent of the number of
shares of common stock to be distributed for the particular distribution to
Plaintiffs’ counsel or members of the Settlement Class, and the number of shares
to be distributed to each person or entity based on a total distribution for the
two distributions of 4 million shares. (“Notification Shares”).

     

    F. If the
Average Closing Price per share for a particular Notification Date is less than
$2 per share, Escala shall issue an additional number of Shares for that
distribution so that the value of the distribution is equivalent to the number
of Notification Shares times $2 per share.  As used herein, “Average
Closing Price” for a valuation period shall mean, with respect to a Notification
Date or Notice Date (as defined below), as the case may be, the average of the
last daily sales prices of Escala common stock as reported in the Pink Sheets
electronic quotation system (or , if the shares of Escala common stock are then
quoted on a stock exchange, then the average closing price on such exchange) for
the 10 trading days ending at the close of trading on the day immediately prior
to the Notification Date or Notice Date, as the case may be.

     

    
      
        
        

      

      
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    G. If on a
Notification Date, the Average Closing Price for the valuation period of Escala
common stock is less than $2 per share, Escala shall have the right to “buy
back” some or all of those shares in that distribution at a price equal to $2
per share.

     

    H. If on a
Notification Date, the Average Closing Price for the valuation period of Escala
common stock exceeds $2 per share, Escala shall have the option, exercisable in
its discretion, to “buy back” some or all of the shares in that distribution at
a price equal to $4 per share, plus 50 percent of the amount by which the
Average Closing Price for the Notification Date for the valuation period exceeds
$4 per share. (“Buyback Price”).  For example, if the average closing
price for a Notification Date is $6 per share, then Escala will have the right
to “buy back” all or any portion of the shares to be issued in that distribution
at a price of $5 per share.

     

    I. In the
event that the first Notification Date does not occur prior to the date (the
“Six Month Date”) that is 180 days following the Execution Date, then, at any
time thereafter, Escala shall have the right to “buy back” some or all of the
Shares that would otherwise be issued on the Distribution
Dates.  Escala may exercise this right by giving notice thereof to the
plaintiffs’ Lead Counsel (the date on which the notice is given is referred to
as the “Notice Date”).  The price at which Escala may buy back shares
shall be as follows: (a) if the Average Closing Price for the valuation period
for the Notice Date is less than $2 per share, then $2 per share, and (b) if the
Average Closing Price for the valuation period for the Notice Date exceeds $2
per share, then $4 per share, plus 50 percent of the amount by which the,
Average Closing Price for the Notice Date exceeds $4 per share.

     

    J. If Escala
exercises the option to buyback Shares, it shall pay via wire transfer within 5
business days of the Notification Date  or the Notice Date, as the
case may be, to the Escrow Agent for Plaintiff’s Lead Counsel the cash which
Escala is paying instead of issuing shares.

     

    
      
        
        

      

      
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    III. THE ESCROW
ACCOUNT

     

    A. The Escrow
Account, including any interest earned thereon net of any taxes on the income
thereof, shall be used to pay: (i) attorneys' fees and expenses, (ii) taxes and
tax expenses, (iii) Notice and Administration Expenses and (iv) reimbursement
awards to Lead Plaintiff.  The balance of the Escrow Account shall be
the Net Settlement Fund and shall be distributed to the Authorized Claimants as
set forth in the Plan of Allocation.  Lead Plaintiff and Settlement
Class Members shall look solely to the Net Settlement Fund for payment and
satisfaction of any and all Released Claims.

     

    B. All funds
held by the Escrow Agent shall be deemed in custodia legis of the Court
and shall remain subject to the jurisdiction of the Court until such time as
such funds shall be distributed pursuant to the Stipulation and/or further
orders of the Court.  The Escrow Agent shall invest any funds
exclusive of the Notice and Administration Account, in United States Government
obligations with a maturity of 180 days or less, and shall collect and reinvest
all interest accrued thereon.  Any funds held in the Notice and
Administration Account may be held in an interest bearing bank account insured
by the FDIC.

     

    C. The Escrow
Agent shall not disburse the Gross Settlement Fund except as provided in this
Stipulation, by order of the Court, or with the prior written agreement of
counsel for the Defendants and Lead Plaintiff’s Counsel.

     

    D. The Escrow
Agent shall be authorized to execute only such transactions as are consistent
with the terms of this Stipulation and the order(s) of the Court.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    E. After the
Effective Date, the Defendants shall have no interest in the Gross Settlement
Fund or in the Net Settlement Fund.

     

    F. The Escrow
Agent shall indemnify Escala, Amper and their insurers, and hold them harmless
against, any losses arising from (a) the investment of any portion of the
Settlement Fund other than in accordance with this Stipulation, or (b) the
disbursement of any portion of the Gross Settlement Fund other than in
accordance with this Stipulation.

    


    IV. THE NOTICE AND
ADMINISTRATION ACCOUNT

     

    A. The
Settlement Administrator shall establish and administer the Notice and
Administration Account.  The Notice and Administration Account shall
be established using funds in the Gross Settlement Fund (including the $200,000
referenced above) and will be used for the payment of Notice and Administration
Expenses.  The Escrow Agent is authorized to transfer funds from the
Gross Settlement Fund to the Notice and Administration Account for Notice and
Administration Expenses.

     

    V. PRELIMINARY APPROVAL ORDER; NOTICE ORDER; AND
SETTLEMENT HEARING

     

    A. The
Parties shall submit the Stipulation together with its Exhibits to the Court,
and the Lead Plaintiff shall apply for entry of an order (the “Preliminary
Approval Order”) substantially in the form and content of Exhibit A attached
hereto, requesting, inter alia, the preliminary approval of the settlement set
forth in the Stipulation, and final approval of forms of notice to be mailed to
all potential Settlement Class Members who can be identified with reasonable
effort (the “Mailed Notice”) and to be published (the “Summary Notice”),
substantially in the forms and contents of Exhibits A-1 and A-2 hereto,
respectively.  The Mailed Notice shall include the general terms of
the settlement set forth in the Stipulation and shall set forth the procedure by
which Persons who otherwise would be Members of the Settlement Class may request
to be excluded from the Settlement Class.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    B. The
Parties shall request that, after the Mailed Notice and Summary Notice have been
mailed and published, respectively, in accordance with this Stipulation, above,
the Court hold the Final Approval Settlement Hearing and finally approve the
settlement of the Actions with respect to the Parties.

     

    C. The
Parties hereby stipulate to certification of the Settlement Class, pursuant to
Rule 23(b)(3) of the Federal Rules of Civil Procedure, solely for purposes of
this Stipulation and the Settlement set forth herein.  If this
Stipulation is not approved by the Court, however, then (a) Defendants shall
retain all rights to (i) object to and oppose class certification, or (ii)
challenge the standing of Lead Plaintiff or any other intervening plaintiff; and
(b) this Stipulation and any motion or other papers filed in support of its
approval shall not be offered as evidence of any agreement, admission or
concession that any class should be or remain certified in the Action or that
Lead Plaintiff or any other intervening plaintiff has standing or any legal
right to represent any class.

     

    VI. FINAL JUDGMENT APPROVING THE
SETTLEMENT

     

    A. At the
Final Settlement Approval Hearing, the Parties shall jointly request entry of
the Final Judgment, substantially in the form attached hereto as Exhibit
B.

    


    VII. ATTORNEYS’ FEES AND
EXPENSES

     

    A.           Plaintiff’s
Lead Counsel's attorneys’ fees and expenses as are awarded by the Court shall be
payable from the Gross Settlement Fund three (3) business days after the later
of (a) the date on which the Judgment becomes Final, and (b) the date on which
an order from the Court on Lead Plaintiff’s fee and expense application becomes
Final.  All such attorneys’ fees and expenses shall be paid solely
from the Gross Settlement Fund, and none of the Released Parties shall be
required to pay any portion of such attorneys’ fees and/or reimbursement of
expenses.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    B.           The
failure of the Court to award the full amount of any fees and expenses requested
by plaintiff’s Lead Counsel shall not affect the finality of the Judgment or the
Settlement contemplated by this Stipulation.

     

    VIII. ADMINISTRATION AND CALCULATION OF CLAIMS,
FINAL AWARDS AND DISTRIBUTION OF NET
SETTLEMENT FUND

     

    A. Each
Settlement Class Member wishing to participate in the Settlement shall be
required to submit a Proof of Claim and Release in the form annexed hereto as
Exhibit A-3, signed under penalty of perjury by the beneficial owner(s) of the
stock or by someone with documented authority to sign for the beneficial
owner(s), and supported by such documentation as specified in the instructions
accompanying the Proof of Claim and Release.

     

    B. All Proofs
of Claim and Releases must be received within the time prescribed in the
Preliminary Approval Order unless otherwise ordered by the Court.  Any
Settlement Class Member who fails to submit a properly completed Proof of Claim
and Release within such period as shall be authorized by the Court shall be
forever barred from receiving any payments pursuant to this Stipulation or from
the Net Settlement Fund, but will in all other respects be subject to the
provisions of this Stipulation and the Final Judgment, including, without
limitation, the release of the Released Claims and dismissal of the
Action.

     

    C. The
Settlement Administrator shall administer the Settlement subject to such
approvals of the Court as circumstances may require.

     

    D. Each Proof
of Claim and Release shall be submitted to the Settlement Administrator who
shall determine, in accordance with this Stipulation and the Plan of Allocation
to be formulated by Lead Counsel, for approval by the Court, the extent, if any,
to which each claim shall be allowed, subject to appeal to the
Court.

     

    E. The
Settlement Administrator shall administer and calculate the claims submitted by
the members of the Settlement Class, determine the extent to which claims shall
be allowed, and oversee distribution of the Net Settlement Fund subject to
appeal to, and jurisdiction of, the Court.  Neither Lead Counsel, its
designees or agents, Lead Plaintiff, the Defendants’ counsel, the Defendants,
the Additional Named Parties or their counsel shall have any liability arising
out of such determination.

     

    
      
        
        

      

      
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    F. The
administrative determination of the Settlement Administrator accepting and
rejecting claims shall be presented to the Court, on notice to the Defendants'
counsel, for approval by the Court.

     

    G. Following
the Effective Date, the Net Settlement Fund shall be distributed to Authorized
Claimants by the Settlement Administrator upon application to the Court by Lead
Counsel.

     

    H. The Net
Settlement Fund shall be distributed to the Authorized Claimants substantially
in accordance with the terms of the Stipulation and a Plan of Allocation to be
approved by the Court, subject to and in accordance with the
following:

     

    1. Any such
Plan of Allocation is not a part of this Stipulation and it is not a condition
of this Settlement that any particular Plan of Allocation be
approved.  No funds from the Net Settlement Fund shall be distributed
to Authorized Claimants until after the Effective Date.

     

    2. Each
Settlement Class Member who claims to be an Authorized Claimant shall be
required to submit to the Settlement Administrator a completed Proof of Claim
and Release signed under penalty of perjury and supported by such documents as
specified in the Proof of Claim and Release and as are reasonably available to
such Settlement Class Member.

     

    3. Except as
otherwise ordered by the Court, all Settlement Class Members who fail timely to
submit a Proof of Claim and Release within such period as may be ordered by the
Court, or otherwise allowed, shall be forever barred from receiving any payments
pursuant to the Stipulation and the Settlement set forth herein, but shall in
all other respects be subject to and bound by the provisions of the Stipulation,
the releases contained herein, and the Final Judgment.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

       

    

    4. All
Persons who fall within the definition of the Settlement Class and who do not
timely and validly request to be excluded from the Settlement Class in
accordance with the instructions set forth in the Mailed Notice (as defined in
Section V.A., above) shall be subject to and bound by the provisions of the
Stipulation, the releases contained herein, and the Final Judgment with respect
to all Released Claims, regardless of whether such Persons seek or obtain by any
means, including, without limitation, by submitting a Proof of Claim and Release
or any similar document, any distribution from the Gross Settlement Fund or the
Net Settlement Fund.

     

    I. Neither
the Defendants, nor the Additional Named Parties, nor their counsel shall have
any responsibility for, interest in, or liability whatsoever with respect to the
investment or distribution of the Gross Settlement Fund, the Plan of Allocation,
the determination, administration, or calculation of claims, the distribution of
the Net Settlement Fund, or any losses incurred in connection with any such
matters.

     

    J. The
Defendants and the Additional Named Parties shall have no involvement in the
solicitation of, or review of Proofs of Claim and Releases, or involvement in
the administration process, which will be conducted by the Settlement
Administrator in accordance with this Stipulation.

     

    K. Any change
in the allocation of the Net Settlement Fund ordered by the Court shall not
affect the validity or finality of this Settlement.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    L. No Person
shall have any claim against Lead Plaintiff or Lead Counsel, the Settlement
Administrator, the Defendants, the Additional Named Parties or their respective
counsel based on investments or distributions made substantially in accordance
with this Stipulation and the Settlement contained herein, the Plan of
Allocation or further orders of the Court.

     

    IX. TAX
TREATMENT

     

    A. The
Parties, their counsel, the Court, and the Escrow Agent shall treat the Escrow
Account as being at all times a “qualified settlement fund” within the meaning
of Treas. Reg. § 1.468B-1 for all periods on and after the date of the Court
order preliminarily approving this Agreement.  The Parties, their
counsel, the Court and the Escrow Agent agree to take no action inconsistent
with the treatment of the Escrow Account in such manner.   In
addition, the Escrow Agent, and as necessary, the Defendants, shall make the
“relation back election” (as defined in Treas. Reg. § 1.468B-1(j)) back to the
earliest permitted date.  Such elections shall be made in compliance
with the procedures and requirements contained in such
regulations.  It shall be the responsibility of the Escrow Agent to
timely and properly prepare and deliver the necessary documentation for
signature by all necessary parties and thereafter to cause the appropriate
filing to occur.  All provisions of this Agreement shall be
interpreted in a manner that is consistent with the Escrow Account being a
“qualified settlement fund” within the meaning of Treas. Reg. §
1.468B-1.

     

    B. For the
purpose of § 468B of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, the “administrator” shall be the Escrow
Agent.  The Escrow Agent shall satisfy the administrative requirements
imposed by Treas. Reg. § 1.468B-2 by e.g., (i) obtaining a taxpayer
identification number, (ii) timely and properly satisfying any information
reporting or withholding requirements imposed on distributions from the Escrow
Account, and 

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

       

      (iii)
timely and properly filing or causing to be filed on a timely basis, all
federal, state, local and foreign tax returns and other tax related statements
necessary or advisable with respect to the Escrow Account (including, without
limitation, all income tax returns, all informational returns, and all returns
described in Treas. Reg. § 1.468B-2(1)), and timely and properly paying any
taxes imposed on the Escrow Account.  Such returns and Statements (as
well as the election described in this VIII.B. shall be consistent with this
VIII.B. and in all events shall reflect that all taxes (including any estimated
taxes, interest or penalties) on the income earned by the Escrow Account shall
be paid out of the Escrow Account as provided in VIII.C. hereof.

       

    

    C. All (i)
taxes arising with respect to the income earned by the Escrow Account and (ii)
tax expenses shall be paid out of the Escrow Account.  Further, taxes
and the tax expenses shall be treated as, and considered to be, a cost of
administration of the settlement and shall be timely paid by the Escrow Agent
out of the Escrow Account without prior order from the Court, and the Escrow
Agent shall be obligated (notwithstanding anything herein to contrary) to
withhold from distribution to claimants any funds necessary to pay such amounts
(as well as any amounts that may be required to be deducted or withheld under
Treas. Reg. § 1.468B-2(1)(2)).  All parties and their
tax attorneys and accountants shall to the extent reasonably necessary carry out
the provisions of paragraphs A-C of this Section.

     

    D. The
Defendants and the Additional Named Parties shall have no responsibility to make
any filings relating to the Escrow Account and will have no responsibility to
pay tax on any income earned by the Escrow Account.  In the event the
Stipulation is canceled or terminated, Escala and Amper shall be responsible for
the payment of all taxes (including any interest or penalties), if any, on their
respective portions of said income.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    X. CONDITIONS OF SETTLEMENT;
EFFECT OF DISAPPROVAL,CANCELLATION OR
TERMINATION

     

    A. This
Stipulation shall be subject to the following conditions and, except as provided
herein, shall be canceled and terminated unless:

     

    1. The Court
enters the Preliminary Approval Order, as provided in Section V;

     

    2. Escala and
Amper shall have caused to be timely transferred, or caused to be transferred,
their respective shares of the cash portion of the Settlement Amount
($10,000,000), and Escala shall have transferred 4 million Escala common shares
with a value of at least $2 per share, as provided in Section II or otherwise
satisfied its obligations under Section II hereof;

     

    3. The Court
has approved the settlement as described herein, following notice to the
Settlement Class and a Hearing, as prescribed by Rule 23 of the Federal Rules of
Civil Procedure, and has entered the Final Judgment, as provided in Section
VI;

     

    4. The time
within which Escala or Amper may exercise its option to terminate this
Stipulation in accordance with the terms of the Supplemental Agreement described
in Section X(G) shall have expired without the exercise of that
option;

     

    5. The Court
shall have entered the Judgment, in all material respects in the form set forth
in Exhibit B attached hereto, or an order and final judgment in a form that is
not in all material respects identical to Exhibit B attached hereto (an
“Alternative Judgment”) and Defendants do not elect to terminate the settlement
following the entry of such Alternative Judgment;

     

    6. Counsel
for all Persons listed on the signature pages of this Stipulation have executed
this Stipulation;

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    7.         
The
Judgment, or any Alternative Judgment, has become Final; and

     

    8.           Settlement
in the Derivative Action has becomes Final.  The parties hereto
expressly recognize that Settlement pursuant to this Stipulation is expressly
conditioned upon settlement in the Derivative Action becoming
Final.

     

    B. Upon the
Effective Date:

     

    1. Lead
Plaintiff and each of the members of the Settlement Class, on behalf of
themselves, their heirs, executors, administrators, personal representatives,
attorneys, agents, partners, successors and assigns, and any other Person
claiming (now or in the future) to have acted through or on behalf of them,
shall hereby be deemed to have, and by operation of the Final Judgment shall
have, fully, finally, and forever, released, relinquished, settled and
discharged the Released Parties from the Released Claims and shall be
permanently barred and enjoined from instituting, commencing, or prosecuting any
Released Claim against any of the Released Parties directly, indirectly or in
any other capacity, whether or not such members of the Settlement Class execute
and deliver a Proof of Claim and Release.

     

    2. Each of
the Escala-Related Parties on the one hand, and the Amper-Related Parties on the
other hand, shall be deemed to have, and by operation of the Final Judgment
shall have, fully, finally, and forever, released, relinquished, settled and
discharged each other from the Released Co-Defendant Claims, and shall have
covenanted not to sue each other with respect to all such Released Co-Defendant
Claims, and shall be permanently barred and enjoined from instituting,
commencing, or prosecuting any such claims against each other either directly,
indirectly, representatively, derivatively, or in any other
capacity.  Escala, Greg Manning, Larry Crawford, José Miguel Herrero,
Esteban Pérez, Greg Roberts, Juan Antonio Cano, and each of the Additional Named
Parties and Amper each represent and warrant that they have not assigned,
transferred or otherwise granted any interest in any Released Co-Defendant Claim
to any other Person.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    3. The
Released Parties, on behalf of themselves, their heirs, executors,
administrators, personal representatives, attorneys, agents, partners,
successors and assigns, and any other Person claiming (now or in the future) to
have acted through or on behalf of them, shall hereby be deemed to have, and by
operation of the Final Judgment shall have, fully, finally, and forever,
released, relinquished, settled and discharged the Lead Plaintiff, the members
of the Settlement Class and their attorneys from the Released Parties Claims and
shall be permanently barred and enjoined from instituting, commencing, or
prosecuting any Released Parties Claim against any of them directly, indirectly
or in any other capacity.

     

    C. If all of
the conditions specified in paragraph A of this Section are not met, then the
Stipulation shall be canceled and terminated, unless Lead Counsel and the
Defendants' Counsel mutually agree in writing to proceed with the
Settlement.

     

    D. If either
(a) the Effective Date does not occur, (b) this Stipulation is canceled or
terminated pursuant to its terms, or (c) the Stipulation does not become final
for any reason, then the Gross Settlement Fund and all interest earned on the
Gross Settlement Fund while held in escrow (less Notice and Administration
Expenses paid or incurred), plus any amount then remaining in the Notice and
Administration Account, including both interest paid and accrued (less expenses
and costs which have not yet been paid but which are properly chargeable to the
Notice and Administration Account), shall be refunded by the Escrow Agent to
Escala, Amper and their respective insurers in accordance with the amounts
contributed by each such Person pursuant to Section II(A) of this
Stipulation.  The Escrow Agent shall make the refund described in the
preceding sentence within ten (10) business days of such cancellation or
termination.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    E. Upon the
occurrence of all of the events specified in paragraph A of this Section, the
obligation of the Escrow Agent to return funds from the Gross Settlement Fund to
the Escala and Amper and/or their respective insurers pursuant to paragraph D of
this Section, shall be absolutely and forever extinguished.

     

    F.  If
either (a) the Effective Date does not occur, (b) this Stipulation is canceled
or terminated pursuant to its terms, or (c) the Stipulation does not become
final for any reason, all of the parties to this Stipulation shall be deemed to
have reverted to their respective status prior to the execution of this
Stipulation, and they shall proceed in all respects as if this Stipulation had
not been executed and the related orders had not been entered, preserving in
that event all of their respective claims and defenses in the
Action.  Notwithstanding the foregoing language, the following
provisions of this Stipulation shall survive any termination or cancellation of
the Settlement:  Section X(D) (“Conditions of Settlement, Effect of
Disapproval Cancellation or Termination”); Section XI (“No Admissions”).


     

    G. Escala and
Amper shall have the option to terminate the settlement in its entirety in the
event that purchasers who collectively purchased more than a certain amount of
Escala common stock choose to exclude themselves from the Settlement Class, as
set forth in a separate agreement (the “Supplemental Agreement”) executed among
the Parties which, if ordered by the Court, shall be filed under
seal.

     

    XI. NO
ADMISSIONS

     

    A. The
parties hereto intend the Settlement as described herein to be a final and
complete resolution of all disputes between them with respect to the Action and
to compromise claims that are contested and entry in this Settlement shall not
be deemed an admission by any Defendant or Additional Named Party as to the
merits of any claim or defense or any allegation made in the
Action.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    B. Neither
the Stipulation nor the Settlement, nor any act performed or document executed
pursuant to or in furtherance of the Stipulation or the Settlement: (a) is or
may be deemed to be or may be used as an admission of, or evidence of, the
validity of any Released Claim, of any allegation made in the Action, or of any
wrongdoing or liability of any of the Released Parties; or (b) is or may be
deemed to be or may be used as an admission of, or evidence of, any liability,
fault or omission of any of the Released Parties in any civil, criminal or
administrative proceeding in any court, administrative agency or
other  tribunal.  Neither the Stipulation nor the
Settlement, nor any act performed or document executed pursuant to or in
furtherance of the Stipulation or the settlement shall be admissible in any
proceeding for any purpose, except to enforce the terms of the settlement, and
except that any of the Released Parties may file the Stipulation and/or the
Judgment in any action that may be brought against any of them in order to
support a defense or counterclaim based on principles of res judicata,
collateral estoppel, release, good faith settlement, judgment bar or reduction
or any other theory of claim preclusion or issue preclusion or similar defense
or counterclaim.

     

    XII. MISCELLANEOUS
PROVISIONS

     

    A. The
parties hereto: (a) acknowledge that it is their intent to consummate the
Settlement contemplated by this Stipulation; (b) agree to cooperate to the
extent necessary to effectuate and implement all terms and conditions of this
Stipulation; and (c) agree to exercise their best efforts and to act in good
faith to accomplish the foregoing terms and conditions of the
Stipulation.

     

    B. All
counsel who execute this Stipulation represent and warrant that they have
authority to do so on behalf of their respective clients.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    C. The duly
authorized foreign representatives of Afinsa and Auctentia, by virtue of the
signature of their counsel below, represent that they have the authority to
grant the releases set forth herein.

     

    D. All of the
exhibits attached hereto are hereby incorporated by reference as though fully
set forth herein.

     

    E. This
Stipulation may be amended or modified only by a written instrument signed by
counsel for all parties to this Stipulation or their successors in
interest.

     

    F. This
Stipulation, exhibits attached hereto, and the Supplemental Agreement constitute
the entire agreement between Plaintiffs on the one hand, and the Defendants and
Amper on the other hand, and supercede any and all prior agreements, written or
oral, between such parties.   No representations, warranties or
inducements have been made concerning this Stipulation or its exhibits other
than the representations, warranties and covenants contained and memorialized in
such documents, and in a separate interest agreement between Escala and the
Plaintiffs, an indemnity agreement entered into between Escala and Amper and an
agreement between Escala and Amper with respect to interest
accrued.

     

    G. This
Stipulation may be executed in one or more original, photocopied or facsimile
counterparts.  All executed counterparts and each of them shall be
deemed to be one and the same instrument.  Counsel for the parties to
this Stipulation shall exchange among themselves original signed counterparts
and a complete set of original executed counterparts shall be filed with the
Court.

     

    H. This
Stipulation shall be binding upon, and inure to the benefit of the successors,
assigns, executors, administrators, affiliates (including parent companies),
heirs and legal representatives of the parties hereto.  No assignment
shall relieve any party hereto of obligations hereunder.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    I. All terms
of this Stipulation and all exhibits hereto shall be governed and interpreted
according to the laws of the State of New York without regard to its rules of
conflicts of law and in accordance with the laws of the United
States.

     

    J. The
Defendants, Lead Plaintiff, and each member of the Settlement Class hereby
irrevocably submit to the jurisdiction of the Court with respect to enforcement
of the terms of this Stipulation and for any suit, action, proceeding or dispute
arising out of or relating to this Stipulation or the applicability of this
Stipulation.

     

    K. The
parties to this Stipulation intend the Settlement to be a final and complete
resolution of all disputes asserted or which could be asserted by the Settlement
Class Members against the Released Parties with respect to the Released
Claims.  Accordingly, Lead Plaintiff, Defendants and the Additional
Named Parties agree not to assert in any forum that the litigation was brought
by Lead Plaintiff or its counsel, or defended by the Defendants, or their
counsel, in bad faith or without a reasonable basis.  The parties
hereto shall assert no claims of any violation of Rule 11 of the Federal Rules
of Civil Procedure relating to the prosecution, defense, or settlement of the
Action.  The Parties agree that the amount paid and the other terms of
the Settlement were negotiated at arm's-length in good faith by the Parties, and
reflect a settlement that was reached voluntarily after consultation with
experienced legal counsel.

     

    L. This
Stipulation, offer of this Stipulation and compliance with this Stipulation
shall not constitute or be construed as an admission by any of the Released
Parties of any wrongdoing or liability.  This Stipulation is to be
construed solely as a reflection of the desire of the parties hereto to
facilitate a resolution of the claims in the Action and of the Released
Claims.  The parties hereto agree that no party was or is a
“prevailing party” in this case.  In no event shall this Stipulation,
any of its provisions, or any negotiations, statements or court proceedings
relating to its provisions in any way be construed as, offered as, received as,
used as or deemed to be evidence of any kind in the Action, any other action, or
any judicial, administrative, regulatory or other proceeding, except a
proceeding to enforce this Stipulation.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    M. This
Stipulation shall not be construed more strictly against one party than another
merely by virtue of the fact that it, or any part of it, may have been prepared
by counsel for one of the Parties, it being recognized that this Stipulation is
the result of arm’s-length negotiations between the Parties and all Parties have
contributed substantially and materially to its preparation.

     

    N. Escala
shall use its best efforts to provide Lead Plaintiff with transfer records, or
help Lead Plaintiff procure transfer records or other appropriate information
that will assist in the identification of Settlement Class Members for the
purpose of providing Settlement Class Members with notice of the proposed
Settlement.

     

    O. Except as
otherwise provided herein, each party shall bear its own fees and
costs.

     

    P. The
headings herein are used for the purpose of convenience and are not intended to
have legal effect.

     

    Q. Notices
required or permitted by this Stipulation shall be submitted either by overnight
mail or in person as follows:

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    
      	

              Notice
      to
      Plaintiffs:                                                                           

            	Notice
      to the Defendants:
	 	 
	
              Robert
      N. Kaplan, Esq.

              Donald
      R. Hall, Esq.

              Jeffrey
      P. Campisi, Esq.

              Kaplan
      Fox & Kilsheimer LLP

              850
      Third Avenue

              New
      York, NY 10022

            	
              Arthur
      H. Aufses III, Esq.

              Kramer
      Levin Naftalis & Frankel LLP

              1177
      Avenue of the Americas

              New
      York, NY 10036

              Tel:
      (212) 715-9100

               

            
	 
      	
              Scott
      W. Reynolds, Esq.

              Lovells
      LLP

              590
      Madison Avenue

              New
      York, New York 10022

              Tel:
      (212) 909-0600

               

              William
      A. Rome, Esq.

              Hoffman
      & Pollok LLP

              260
      Madison Avenue, 22nd Floor

              New
      York, New York 10016

              Tel: 
      (212) 679-2900

               

              Stephen
      D. Poss, Esq.

              Goodwin
      Procter LLP

              Exchange
      Place

              Boston,
      Massachusetts 02109

              Tel:
      (617) 570-1000

               

              Notice to
      Additional Named Parties Scott S.

              Rosenblum,
      Mark Segall, James Davin and

              Anthony
      Bongiovanni:

               

              Scott
      W. Reynolds, Esq.

              Lovells
      LLP

              590
      Madison Avenue

              New
      York, New York 10022

              Tel:
      (212) 909-0600

               

              Notice
      to Additional Named Parties Afinsa

              and
      Auctentia:

              Thomas
      L. Kent, Esq.

              Paul,
      Hastings, Janofsky & Walker LLP

              75
      East 55th Street

              New
      York, New York  1002

              Tel:  (212)
      318-6060

            


    

    


     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    
 

    
      	 
      	
               

              IN WITNESS WHEREOF, the
      parties hereto, intending to be legally bound  ___,
      2008.

               

            
	 
      	
              KAPLAN
      FOX & KILSHEIMER LLP

               

              By: ___________________________                                                               

               

              Robert
      N. Kaplan

              Donald
      R. Hall

              Jeffrey
      P. Campisi

              850
      Third Avenue, 14th Floor

              New
      York, NY 10022

              Tel:           (212)
      687-1980

              Fax:           (212)
      687-7714

               

              Lead
      Counsel for Lead Plaintiff the Virginia Retirement System

               

            
	 
      	
              KRAMER
      LEVIN NAFTALIS & FRANKEL LLP

               

              By:
      ___________________________

              Arthur
      H. Aufses III

              1177
      Avenue of the Americas

              New
      York, NY 10036

              Tel:
      (212) 715-9100

               

              Attorneys
      for Defendant Escala Group, Inc.

            
	 
      	
               

              LOVELLS
      LLP

               

              By:
      ___________________________

               

              Scott
      W. Reynolds

              590
      Madison Avenue

              New
      York, New York 10022

              Tel:
      (212) 909-0600

               

              Attorneys
      for Defendants Larry Crawford, Esteban Perez, Jose Miguel Herrero, Greg
      Roberts and Additional Named Parties Scott S. Rosenblum, Mark Segall,
      James Davin and Anthony Bongiovanni

               

            


    

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    
      	 
      	
               

              GOODWIN
      PROCTER LLP

               

              By:
      ___________________________

              Stephen
      D. Poss

              Exchange
      Place

              Boston,
      Massachusetts 02109

              Tel:
      (617) 570-1000

               

              Attorneys
      for Defendant Amper, Politziner & Mattia, P.C.

            
	 
      	
               

              BRESSLER,
      AMERY & ROSS, PC

               

              By:
      ___________________________

              Lawrence
      Fenster

              17
      State Street

              New
      York, New York 10004

              Tel: 
      212-425-9300

               

              Attorneys
      for Defendant Juan Antonio Cano

            
	 
      	
               

              HOFFMAN
      AND POLLOK LLP

               

              By:
      ___________________________

               

              William
      A. Rome

              260
      Madison Avenue, 22nd Floor

              New
      York, NY 10016

              Tel:  (212)
      679-2900

               

              Attorneys
      for Defendant Greg Manning

               

               

            


    

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    


    
      	 
      	
              PAUL,
      HASTINGS, JANOFSKY & WALKER LLP

               

              By:  __________________________

               

              Thomas
      L. Kent

              75
      East 55th
      Street

              New
      York, NY 10022

              Tel:  (212)
      318-6060

               

              Attorneys
      for Javier Diaz Galvez, Benito Aguera Mann and Ana Fernandez Daza, as the
      duly authorized foreign representatives of Afinsa Bienes Tangibles,
      S.A.

               

            
	 
      	
              PAUL,
      HASTINGS, JANOFSKY & WALKER LLP

               

              By:  __________________________

               

              Thomas
      L. Kent

              75
      East 55th
      Street

              New
      York, NY 10022

              Tel:  (212)
      318-6060

               

              Attorneys
      for Javier Diaz Galvez and Benito Aguera Mann, as the duly authorized
      foreign representatives of Auctentia, S.A.

               

            


    

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    


    Exhibit B

    


    Jack G.
Fruchter (JF-8435)

    Lawrence
D. Levit (LL-9507)

    ABRAHAM
FRUCHTER & TWERSKY LLP

    One Penn
Plaza, Suite 2805

    New York,
New York  10119

    Telephone:  (212)
279-5050

    Facsimile:   (212)
279-3655

    Lead
Counsel for Plaintiffs

    


    UNITED
STATES DISTRICT COURT

    SOUTHERN
DISTRICT OF NEW YORK

     

    
      
        	 	 
	 
      	
                : Lead Civil Action No.
      1:06-cv-03902-AKH

              
	
                 

                 

                IN
      RE ESCALA GROUP, INC. DERIVATIVE

                LITIGATION

                 

              	
                :

                :  ECF
      CASE

                :  (Derivative
      Action)

                :

                :

                :

              
	 
      	
                :

                :

              
	
                 

                This
      Document Relates To:

              	
                :

                :

              
	
                 

                ALL
      ACTIONS

              	
                :

                :

              
	 
      	
                :

              


      

    

    
 

    STIPULATION OF
SETTLEMENT

    This
Stipulation of Settlement ("Stipulation") is entered into as of ___ __, 2008,
subject to the approval of the Court, by and between the following, by their
undersigned counsel: (i) Jane Bain and Spring Partners (collectively,
"Plaintiffs"); (ii) nominal Defendant Escala Group, Inc. (“Escala” or the
“Company”); (iii) defendants Greg Manning, Gregory N. Roberts, Mark B. Segall,
José Miguel Herrero, Esteban Pérez, Scott S. Rosenblum, James M. Davin, Antonio
Martins da Cruz ("da Cruz") and Larry Crawford (together, the "Individual
Defendants"); and (iv) Amper, Politziner & Mattia P.C. (“Amper”), for the
purpose of fully, finally and forever resolving, discharging and settling the
Released Claims, upon and subject to the following terms and
conditions.

     

    WHEREAS:

     

    R. On May 22,
2006 and May 24, 2006, Plaintiffs commenced two separate actions, styled Bain v. Herrero, et al., No.
06-cv-3902 (DC), and Spring
Partners v. Manning, et al., No. 06-cv-3980, respectively, in the United
States District Court for the Southern District of New York (the “Court”),
purporting to assert claims derivatively on behalf of Escala, a Delaware
corporation.

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    S. The
actions were consolidated before the Honorable Alvin K. Hellerstein, by Order
dated September 5, 2006, under the caption In re Escala Group, Inc. Derivative
Litigation, Master File No. 06-cv-3902 (AKH).  The Court
appointed the firm of Abraham Fruchter & Twersky LLP as Lead Counsel and
ordered Plaintiffs to file a Consolidated Amended Complaint by September 29,
2006.

     

    T. Plaintiffs
filed their Consolidated Amended Complaint (the "CAC") on September 29, 2006,
and later filed a substituted corrected version of that pleading.  The
Individual Defendants (except for da Cruz) jointly filed a motion to dismiss the
CAC on December 18, 2006.  The CAC named Escala as a "nominal
defendant."

     

    U. After
Plaintiffs filed the CAC, and before their response to the motion to dismiss the
CAC was due, the Company announced that it anticipated restating its financial
statements for fiscal years 2003, 2004 and 2005, as well as for the first three
quarters of fiscal year 2006.  According to the Company, the
anticipated restatements related primarily to transactions involving the Company
and its indirect majority shareholder Afinsa Bienes Tangibles, S.A. (“Afinsa”),
a Spanish company that, according to authorities in Spain, allegedly operated as
a pyramid-type scheme.

     

    V. On January
18, 2007, the Court entered an Order, upon stipulation, providing that the
motion to dismiss the CAC was withdrawn without prejudice, and directing
Plaintiffs to file another amended complaint.

     

    W. On or
about February 8, 2007, Plaintiffs filed their Second Amended Complaint (the
“SAC”), purporting to assert claims derivatively on Escala’s behalf against
certain past and present members of Escala’s board of directors and/or senior
executive officers, including the Individual Defendants, as well as Carlos de
Figueiredo (“de Figueiredo”) and Rafael del Valle-Iturriaga Miranda
(“Miranda”).

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    X. In the
SAC, Plaintiffs generally alleged that the Individual Defendants and Messrs. de
Figueiredo and Miranda had breached their fiduciary duties by allowing Escala to
become intertwined with and dependent on Afinsa, which, Plaintiffs alleged,
significantly artificially inflated Escala’s revenues and exposed Escala to
substantial liability and damages.  The SAC also alleged causes of
action against all of the Individual Defendants and Messrs. de Figueiredo and
Miranda for allegedly failing to manage the affairs of Escala in a lawful manner
and for the best interests of its stockholders, for contribution and
indemnification, for waste of corporate assets, and a cause of action for unjust
enrichment against defendants Manning, Herrero, Crawford and Pérez arising out
of Afinsa’s alleged violations of law.  The SAC further alleged that
certain of the defendants caused Escala to make materially false and misleading
statements and omissions in various filings Escala made with the Securities and
Exchange Commission (the “SEC”), including an August 13, 2003 Form 14A
distributed to its shareholders (the “2003 Proxy Statement”), and sought
disgorgement of compensation and trading profits from Messrs. Manning, Herrero
and Crawford pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (“SOX
304”).

     

    Y. On or
about March 12, 2007, the Individual Defendants (except for da Cruz) filed their
motion to dismiss the SAC based upon, among other things, Plaintiffs’ purported
lack of standing, lack of subject matter jurisdiction, failure to state a claim
and failure to plead causation under applicable law.  Plaintiffs filed
their opposition on April 12, 2007, and the Individual Defendants (except for da
Cruz) submitted a Reply on May 14, 2007.     Oral
argument on the motion to dismiss the SAC was held on May 17, 2007.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    Z. On May 17,
2007, the Court ruled from the bench on the motion to dismiss, denying that part
of the motion that sought dismissal of Plaintiffs’ SOX 304 claim but stating the
Court’s intention to certify that portion of its ruling for interlocutory
appeal, finding Plaintiffs’ remaining claims insufficient, and granting
Plaintiffs leave to replead.  By Order filed the next day, the Court
memorialized its May 17, 2007 ruling from the bench.  By subsequent
Order (the “Summary Order”) signed on May 18, 2007, the Court established a
schedule for the filing of Plaintiffs’ third amended complaint.

     

    AA. On June
29, 2007, Plaintiffs filed a third amended complaint (the “TAC”), which, among
other things, for the first time named Amper as a
defendant.  Plaintiffs concurrently filed a Motion to Add a Party,
seeking to add Amper as a party to the TAC.  The motion was granted by
Order dated July 2, 2007.  Also on June 29, 2007, each of the
Plaintiffs filed an Affidavit with the Court asserting that, if the Court
dismissed their federal claims, they would proceed on substantively similar
state law claims in the appropriate state court.

     

    BB. By Order
dated August 16, 2007, the Court extended the Individual Defendants' (except for
da Cruz's) time within which to answer the TAC until 20 days after either the
Individual Defendants' petition for permission to appeal was denied or the
appeal was decided.  The Court ordered an identical extension for Mr.
da Cruz by Order dated October 23, 2007.

     

    CC. Messrs. de
Figueiredo and Miranda have never appeared in this litigation.

     

    DD. By Order
dated September 4, 2007, the Court certified an interlocutory appeal pursuant to
28 U.S.C. § 1292(b) of its prior order denying the Individual Defendants’ motion
to dismiss Plaintiffs' SOX 304 claim.  On December 20, 2007, the
United States Court of Appeals for the Second Circuit granted Messrs. Herrero
and Crawford’s petition for leave to appeal the Court's denial of their motion
to dismiss Plaintiffs' SOX 304 claim.

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    EE. On
September 13, 2007, Amper moved to dismiss the TAC on the grounds that
Plaintiffs failed to state a claim against it.  Plaintiffs opposed
Amper's motion in a filing dated October 15, 2007, to which Amper submitted a
Reply dated October 31, 2007.  The Court heard oral argument on
Amper’s motion to dismiss on December 12, 2007, and entered an Order that day
granting Amper’s motion to dismiss for lack of subject matter
jurisdiction.

     

    FF. On or
about December 21, 2007, the Court entered a Stipulated Protective Order and a
Scheduling Order setting a fact discovery cut-off of December 1,
2008.

     

    GG. Thereafter,
Escala began producing documents to Plaintiffs.  More than 77,000
pages of documents were produced, and then reviewed and analyzed by Plaintiffs’
counsel.

     

    HH. During
January 2008, Plaintiffs began to draft a complaint against Amper for
professional negligence that was to be filed in New York state court (the "Draft
State Court Complaint").

     

    II. Plaintiffs,
through their counsel, represent that they have, over the past almost two years,
conducted a thorough investigation relating to the claims and the underlying
events alleged in the TAC, including review and analysis of tens of thousands of
pages of documents produced by Escala and obtained through public sources, and
the analysis of the legal principles applicable to Plaintiffs’ claims and the
potential defenses thereto.

     

    JJ. Beginning
in or about February 2008, Plaintiffs, the Individual Defendants and Amper,
through their counsel, entered into settlement discussions with a view to
achieving the benefits set forth in this Stipulation and the corporate
governance reforms incorporated by reference herein (the
“Settlement”).  These discussions, when first commenced, included
reliance on retired California state court judge Daniel Weinstein, a mediator
with JAMS, who, although not formally retained in connection with this Action,
was acting as a mediator in connection with the Securities Class Action that
arose from many of the same facts that gave rise to this
Action.  After multiple negotiating sessions over a period of weeks,
the parties hereto reached the agreement referenced herein.

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    KK. Although
Plaintiffs believe their claims have merit, they recognize the expense and
length of continued proceedings necessary to prosecute such claims through trial
and subsequent appeals.  Plaintiffs’ counsel also have taken into
account the costs and risks inherent in proceeding further in this
Action.  Moreover, Defendants, without an agreement to resolve the
Action, will continue to vigorously challenge the claims.  The basis
for federal jurisdiction over the Action was being appealed and the outcome of
that appeal could be uncertain.  Although Plaintiffs were preparing a
state court complaint against Amper, their likelihood of prevailing in that
action, had it been filed, is unknown.  In addition, certain of the
claims against the Individual Defendants have not yet been thoroughly tested on
a motion to dismiss.  Therefore, Plaintiffs and Plaintiffs’ counsel
believe that the Settlement, on the terms and conditions set forth herein, is
reasonable, adequate and in the best interests of the Company and its
shareholders.

     

    LL. The
Defendants and Amper have denied, and continue to deny, each and every
allegation of liability and wrongdoing on their part and assert that the claims
asserted against them in the Action are without merit and fail to state a cause
of action; deny that they breached any duty, violated any law or engaged in
wrongdoing of any form; and believe that they have strong factual and legal
defenses to the claims alleged.  Defendants and Amper have agreed to
this Stipulation and the Settlement provided herein solely in order to fully and
finally settle and dispose of all claims that have been or could have been or
could in the future be raised in the Action or in the Draft State Court
Complaint and to avoid the continuing burden, expense, inconvenience and
distraction of protracted litigation.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    MM. Defendants
acknowledge that the Settlement confers substantial benefits on Escala, that the
Settlement is in the best interests of Escala and its shareholders, and that the
Settlement is fair, reasonable and adequate to Escala and its
shareholders.

     

    NOW, THEREFORE, IT IS STIPULATED AND
AGREED, by and among the parties hereto, through their undersigned counsel, as
follows:

     

    
      CERTAIN
DEFINITIONS

       

    

    To the extent not otherwise defined
herein, as used in this Stipulation, the following terms have the meanings
specified below:

     

    1. “Action”
means the consolidated derivative action pending before the Court under the
caption In re Escala Group,
Inc. Derivative Litigation, Master File No. 06-cv-03902 (AKH), including,
without limitation, all cases consolidated under that caption.

     

    2. “Court”
means the United States District Court for the Southern District of New
York.

     

    3. “Defendants”
means Escala, the Individual Defendants, de Figueiredo and Miranda.

     

    4. “Effective
Date” means the date that is five business days after the date on which all of
the conditions to the Settlement, set forth in Section VI, are
satisfied.

     

    5. “Escala
Shareholder” means any Person with a beneficial interest in Escala common
stock.

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    6. “Execution
Date” means the date that this Stipulation has been signed by all the
signatories hereto through their counsel.

     

    7. “Final”
means, with respect to any judgment or order, including but not limited to the
Final Judgment, that such judgment or order represents a final and binding
determination of all issues within its scope and is not subject to further
review on appeal or otherwise.  Without limitation, a judgment or
order becomes “Final” when:  (a) the time within which to seek review,
alteration, amendment or appeal of such judgment or order, including (if
applicable) any three (3) day period for service by mail under Federal Rule of
Civil Procedure 6(a) and (e) or any such service period applicable to an action
in state court, has expired without any review, alteration, amendment or appeal
having been sought or taken; or (b) if an appeal, petition for writ of
certiorari, motion or other application for review, alteration or amendment is
filed, sought or taken, the date as of which such appeal, petition, motion or
other application shall have been finally determined in such a manner as to
affirm the Court’s original order in its entirety and the time, if any, for
seeking further review has expired.

     

    8. “Final
Settlement Approval Hearing” means the final hearing to be held by the Court to
determine whether the proposed Settlement should be approved; whether all
Released Claims should be dismissed with prejudice; and whether an order
approving the Settlement should be entered thereon.

     

    9. “Individual
Defendants” means Manning, Roberts, Segall, Herrero, Pérez, Rosenblum, da Cruz,
Davin and Crawford.

     

    10. “Judgment”
or “Final Judgment” means the judgment to be entered by the Court, substantially
in the form of Exhibit C hereto.

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    11. “Lead
Counsel” means the law firm of Abraham Fruchter & Twersky LLP.

     

    12. “Parties”
means Plaintiffs and Defendants.  The "parties hereto" or the "parties
to this Stipulation" refers to all those Persons whose counsel have signed this
Stipulation on their behalves.

     

    13. “Person”
means any individual, corporation, partnership, association, affiliate, joint
stock company, trust, estate, unincorporated association, government and any
political subdivision thereof, and any other type of legal or political
entity.

     

    14. “Released
Claims” means any and all actions, suits, claims, debts, demands, rights, or
causes of action or liabilities of every nature and description whatsoever,
whether based on federal, state, local, statutory or common law or any other
law, rule, or regulation, whether foreign or domestic, including, without
limitation, Unknown Claims and claims under Delaware statutory and/or common
law, federal and/or state securities laws and claims under any law governing
fiduciaries or the duties of fiduciaries, or for any remedy whether at equity or
law, that were or could have been or could in the future be asserted against the
Released Parties in the Action or the Draft State Court Complaint by Plaintiffs,
by Escala, or by any Escala Shareholder (claiming in the right of, or on behalf
of, the Company), or that arise out of or are related, directly or indirectly,
in any way to any of the facts, allegations, transactions, events, occurrences,
acts, disclosures, representations, statements, omissions, failures to act, or
matters set forth, alleged, referred to, or that could have been asserted in the
Action, in the Draft State Court Complaint, and/or in any other state or federal
derivative actions against any of the Released Parties relating, in whole or in
part, to the allegations in this Action, whether known or unknown, suspected or
unsuspected, matured or not matured, contingent or non-contingent, accrued or
unaccrued, whether or not concealed or hidden by the Released Parties. Notwithstanding the
foregoing, the Released Claims do not include any claims, counterclaims or
defenses asserted by or that could be asserted directly by Escala against
Manning, or by Manning against Escala, in the arbitration proceeding styled
Manning v. Escala Group,
Inc., Case No. 50 166 T 00336 07, now pending before the American
Arbitration Association.  All such claims, counterclaims and defenses are
expressly preserved by Escala and Manning. 

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    15. “Released
Parties” means Defendants and Amper and each of their immediate family members,
heirs, executors, administrators, successors, and assigns; Defendants’ and
Amper’s present, former and future employees, insurers, officers, directors,
partners, attorneys, legal representatives and agents; any person or entity in
which any Defendant or Amper has or had a controlling interest; and the present,
former and future parents, subsidiaries, divisions, affiliates, predecessors,
successors, employees, officers, directors, partners, attorneys, assigns, and
agents of all of the foregoing.

     

    16. “Securities
Class Action” means the consolidated securities class action pending in this
Court under the caption In re
Escala Group, Inc. Securities Litigation, Master File No. 06 Civ. 3518
(AKH), including, without limitation, all cases consolidated under that
caption.

     

    17. “Unknown
Claims” means any and all claims, demands, rights, liabilities, and causes of
action of every nature and description, which Plaintiffs, Escala, and any or
every Escala Shareholder (claiming in the right of, or on behalf of, the
Company) does not know or suspect to exist in his, her or its favor at or after
the Execution Date and including, without limitation, those which, if known by
him, her or it, might have affected his, her or its decision(s) with respect to
the Settlement.  With respect to any and all Released Claims,
Plaintiffs and Escala stipulate and agree that, upon the Effective Date, they
shall expressly waive, and every Escala Shareholder shall be deemed to have
waived, and by operation of the Final Judgment shall have waived, any and all
provisions, rights, and benefits conferred by any law of any state or territory
of the United States, or principle of common law, which is similar, comparable,
or equivalent to Cal. Civ. Code § 1542, which provides:

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS

    WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT

    TO EXIST
IN HIS FAVOR AT THE TIME OF EXECUTING

    THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE

    MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE

    DEBTOR.

     

    Plaintiffs,
Escala and/or any Escala Shareholder may hereafter discover facts in addition to
or different from those that any of them now know or believe to be true with
respect to the subject matter of the Released Claims, but Plaintiffs and Escala
shall expressly have, and every Escala Shareholder shall be deemed to have and
by operation of the Judgment shall have, fully, finally, and forever settled and
released any and all Released Claims, known or unknown, suspected or
unsuspected, contingent or non-contingent, whether or not concealed or hidden,
that now exist, or heretofore have existed upon any theory of law or equity now
existing or coming into existence in the future, including, but not limited to,
conduct that is negligent, reckless, intentional, with or without malice, or a
breach of any duty, law or rule, without regard to the subsequent discovery or
existence of such different or additional facts.  Plaintiffs and
Escala acknowledge, and every Escala Shareholder by operation of the Judgment
shall be deemed to have acknowledged, that the waivers contained in this
paragraph, and the inclusion of “Unknown Claims” in the definition of Released
Claims were separately bargained for and are key elements of the
Settlement.

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    
      	
              XIII.  

            	
              THE SETTLEMENT
      CONSIDERATION

            


    

     

    1. No later
than five (5) business days after entry by the Court of the Preliminary Approval
Order (as defined below) with respect to the Settlement, the Individual
Defendants shall cause their insurance carrier(s) to pay $3.5 million to Escala,
and Amper shall cause its insurance carrier(s) to pay $2.0 million to
Escala.  These sums would not be paid but for the filing, prosecution
and settlement of the Action.

     

    2. Not later
than thirty (30) days after the Settlement becomes Final, Escala’s board of
directors will adopt by resolution, or other means as appropriate, or will have
already adopted or implemented, the corporate governance reforms set forth in
Exhibit A hereto, and incorporated by reference herein.

     

    
      	
              XIV.  

            	
              PRELIMINARY APPROVAL
      ORDER; NOTICE ORDER; AND SETTLEMENT
  HEARING

            


    

     

    A. The
Parties shall submit this Stipulation together with its Exhibits to the Court,
and the Parties shall apply for entry of an order (the “Preliminary Approval
Order”) substantially in the form and content of Exhibit B attached hereto,
requesting, inter alia,
the preliminary approval of the Settlement set forth in the Stipulation, and
final approval of forms of notice to be mailed to all Escala Shareholders who
can be identified with reasonable effort (the “Mailed Notice”) and to be
published (the “Summary Notice”), substantially in the forms and contents of
Exhibits B-1 and B-2 hereto, respectively.  The Mailed Notice shall
include the general terms of the Settlement set forth in the
Stipulation.

     

    B. The
Parties shall request that, after the Mailed Notice and Summary Notice have been
mailed and published, respectively, in accordance with this Stipulation, above,
the Court hold the Final Settlement Approval Hearing and finally approve the
Settlement of the Action.

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    C. Escala
will be responsible for, and will cause to be paid, the costs of printing,
publishing and mailing the Mailed Notice and the Summary
Notice.  Under no circumstances shall Plaintiffs or Amper be
responsible for the costs of printing, mailing or publishing notice or any
related expense.

     

    
      	
              XV.  

            	
              FINAL JUDGMENT
      APPROVING THE SETTLEMENT

            


    

     

    A. At the
Final Settlement Approval Hearing, the Parties shall jointly request entry of
the Final Judgment, substantially in the form attached hereto as Exhibit
C.

     

    
      	
              XVI.  

            	
              ATTORNEYS’ FEES AND
      EXPENSES

            


    

     

    A. Escala or
the insurance carriers will pay Lead Counsel, or cause them to be paid, as
follows:  No later than five (5) business days after the entry of the
Final Judgment, (i) $925,000 in cash in exchange for the substantial benefits
received as a result of the filing, prosecution and settlement of this Action;
and (ii) reimbursement of expenses in an amount not to exceed
$70,000.  These fees and expenses will be promptly deposited upon
receipt by Lead Counsel into an interest-bearing escrow account.  Such
fees and expenses, plus interest earned on the escrow account, shall be paid to
Lead Counsel from the escrow account within five (5) business days after the
Effective Date.  Neither the Individual Defendants nor Amper shall be
responsible for the payment of any attorneys' fees or
expenses.  Escala agrees that the attorneys' fees and expenses are
fair and reasonable.

     

    
      	
              XVII.  

            	
              CONDITIONS OF
      SETTLEMENT; EFFECT OF DISAPPROVAL, CANCELLATION OR
      TERMINATION

            


    

     

    A. This
Stipulation shall be subject to the following conditions and, except as provided
herein, shall be canceled and terminated unless:

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    1. The Court
enters the Preliminary Approval Order, as provided in Section III;

     

    2. The Court
has approved the Settlement as described herein, following distribution of the
Mailed Notice and Summary Notice and a Final Settlement Approval Hearing, as
prescribed by Rule 23.1 of the Federal Rules of Civil Procedure, and has entered
the Judgment, as provided in Section IV;

     

    3. The Court
shall have entered the Judgment, in all material respects in the form set forth
in Exhibit C attached hereto, or an order and final judgment in a form that is
not in all material respects identical to Exhibit C attached hereto (an
“Alternative Judgment”) if all the parties hereto agree to such Alternative
Judgment;

     

    4. No order
of the Court, or modification or reversal on appeal of any order of the Court,
concerning the amount of attorneys’ fees or expenses constitutes grounds for
cancellation or termination of this Stipulation or the Settlement;

     

    5. The
Judgment, or any Alternative Judgment, becomes Final; and

     

    6. Settlement
in the Securities Class Action has become Final.  The parties hereto
expressly recognize that Settlement pursuant to this Stipulation is expressly
conditioned upon settlement in the Securities Class Action becoming
Final.

     

    B. Upon the
Effective Date, Plaintiffs, Escala and all current and former Escala
Shareholders, on behalf of themselves, and their respective current, future and
former heirs, executors, administrators, personal representatives, attorneys,
agents, partners, successors and assigns, and any other Person claiming (now or
in the future) to have acted through or on behalf of them, shall hereby be
deemed to have, and by operation of the Final Judgment shall have, fully,
finally, and forever, released, relinquished, settled and discharged the
Released Parties from the Released Claims and shall be permanently barred and
enjoined from instituting, commencing, or prosecuting or asserting any Released
Claim against any of the Released Parties.

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    C. Upon the
Effective Date, each of the Defendants and the Released Parties shall be deemed
to have, and by operation of the Judgment shall have, fully, finally and forever
released, relinquished and discharged Plaintiffs and Plaintiffs' counsel from
all claims that arise out of or in connection with, or relate to their
institution, prosecution, assertion, settlement or resolution of the Action or
the Released Claims.

     

    D. If all of
the conditions specified in paragraph A of this Section are not met, then the
Stipulation shall be canceled and terminated, unless Plaintiffs, Defendants and
Amper each authorize their counsel to agree in writing to proceed with the
Settlement.

     

    E. If either
(a) the Effective Date does not occur, (b) this Stipulation is canceled or
terminated pursuant to its terms, or (c) the Settlement does not become Final
for any reason, then any and all sums paid by the Individual Defendants'
insurer(s) and Amper's insurer(s) to Escala pursuant to Section II hereof, and
any amounts paid by Escala or the insurance carriers to Lead Counsel pursuant to
Section V hereof, and all interest earned on such sums, shall be refunded by
Escala to the Individual Defendants' insurer(s) and Amper’s insurer(s) in the
same proportion to the amounts contributed by each such Person pursuant to
Section II hereof, and by Lead Counsel to Escala or the insurance carriers,
respectively. All refunds described in the preceding sentence shall be made
within ten (10) business days of such cancellation or termination.

     

    F. If either
(a) the Effective Date does not occur, (b) this Stipulation is canceled or
terminated pursuant to its terms, or (c) the Settlement does not become Final
for any reason, all of the parties to this Stipulation shall be deemed to have
reverted to their respective status as of March 7, 2008, and they shall proceed
in all respects as if this Stipulation had not been executed and the related
orders had not been entered, preserving in that event all of their respective
claims and defenses in the Action.  Notwithstanding the foregoing
language, the following provisions of this Stipulation shall survive any
termination or cancellation of the Settlement:  Section VI(D)
(“Conditions of Settlement, Effect of Disapproval Cancellation or Termination”);
Section VII (“No Admissions”).

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

    
      	
              XVIII.  

            	
              NO
      ADMISSIONS

            


    

     

    A. The
parties hereto intend the Settlement as described herein to be a final and
complete resolution of all disputes between them with respect to the Action and
the Draft State Court Complaint and to compromise claims that are
contested.  Entry into this Settlement shall not be deemed an
admission by any party hereto as to the merits of any claim or defense or any
allegation made in the Action.

     

    B. This
Stipulation, offer of this Stipulation and compliance with this Stipulation
shall not constitute or be construed as an admission by any Released Party of
any wrongdoing or liability.  This Stipulation is to be construed
solely as a reflection of the desire of the parties hereto to facilitate a
resolution of the claims in the Action and of the Released
Claims.  The parties hereto agree that no party was or is a
“prevailing party” in this case.  In no event shall this Stipulation,
any of its provisions, or any negotiations, statements or court proceedings
relating to its provisions in any way be construed as, offered as, received as,
used as or deemed to be evidence of any kind in the Action, any other action, or
any judicial, administrative, regulatory or other proceeding, except a
proceeding to enforce this Stipulation, and except that the Defendants or Amper
or any of the Released Parties may file the Stipulation and/or the Judgment in
any action that may be brought against any of them in order to support a defense
or counterclaim based on principles of res judicata, collateral estoppel,
release, good faith settlement, judgment bar or reduction or any other theory of
claim preclusion or issue preclusion or similar defense or
counterclaim.

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

    
      	
              XIX.  

            	
              MISCELLANEOUS
      PROVISIONS

            


    

     

    A. The
parties hereto: (a) acknowledge that it is their intent to consummate the
Settlement contemplated by this Stipulation; (b) agree to cooperate to the
extent necessary to effectuate and implement all terms and conditions of this
Stipulation; and (c) agree to exercise their best efforts and to act in good
faith to accomplish the foregoing terms and conditions of the
Stipulation.

     

    B. All
counsel who execute this Stipulation represent and warrant that they have
authority to do so on behalf of their respective clients.

     

    C. All of the
exhibits attached hereto are hereby incorporated by reference as though fully
set forth herein.

     

    D. This
Stipulation may be amended or modified only by a written instrument signed by
counsel for all parties to this Stipulation or their successors in
interest.

     

    E. This
Stipulation and the exhibits attached hereto constitute the entire agreement
between Plaintiffs on the one hand, and the Defendants and Amper on the other
hand, and supercede any and all prior agreements, written or oral, between such
parties.  No representations, warranties or inducements have been made
concerning this Stipulation or its exhibits other than the representations,
warranties and covenants contained and memorialized in such
documents.

     

    F. This
Stipulation may be executed in one or more original, photocopied or facsimile
counterparts.  All executed counterparts and each of them shall be
deemed to be one and the same instrument.  Counsel for the parties to
this Stipulation shall exchange among themselves original signed counterparts
and a complete set of original executed counterparts shall be filed with the
Court.

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

     

    G. This
Stipulation shall be binding upon, and inure to the benefit of the successors,
assigns, executors, administrators, affiliates (including parent companies),
heirs and legal representatives of the parties hereto.  No assignment
shall relieve any party hereto of obligations hereunder.

     

    H. All terms
of this Stipulation and all exhibits hereto shall be governed and interpreted
according to the laws of the State of New York without regard to its rules of
conflicts of law and in accordance with the laws of the United
States.

     

    I. Plaintiffs,
Defendants and Amper hereby irrevocably submit to the jurisdiction of the Court
with respect to enforcement of the terms of this Stipulation and for any suit,
action, proceeding or dispute arising out of or relating to this Stipulation or
the applicability of this Stipulation.  Amper explicitly states that
it does not consent to the jurisdiction of this Court for any other purpose
related to the Action.

     

    J. This
Stipulation shall not be construed more strictly against one party than another
merely by virtue of the fact that it, or any part of it, may have been prepared
by counsel for one of them, it being recognized that this Stipulation is the
result of arm’s-length negotiations between the parties hereto and that all of
them have contributed substantially and materially to its
preparation.

     

    K. Except as
otherwise provided herein, each party shall bear its own fees and
costs.

     

    L. The
headings herein are used for the purpose of convenience and are not intended to
have legal effect.

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

    M. The
parties to this Stipulation and related agreements intend the Settlement to be a
final and complete resolution of all disputes asserted or which could be
asserted by the Plaintiffs against the Released Parties with respect to the
Released Claims.  Accordingly, Plaintiffs, Defendants and Amper agree
not to assert in any forum that the Action was brought by Plaintiffs or defended
by Defendants or Amper in bad faith or without a reasonable
basis.  The parties to this Stipulation agree that the Settlement was
negotiated at arms-length in good faith by the parties, and reflects a
settlement that was reached voluntarily after consultation with experienced
legal counsel.

     

     

    
      	 
      	
              ABRAHAM
      FRUCHTER & TWERSKY LLP

               

              By:
      ___________________________                                                               

               

              Jack
      G. Fruchter (JF-8435)

              Lawrence
      D. Levit (LL-9507)

              One
      Penn Plaza, Suite 2805

              New
      York, NY 10119

              Tel:           (212)
      279-5050

               

              Lead
      Counsel for Plaintiffs

               

            
	 
      	
               

              ROBBINS
      UMEDA & FINK, LLP

               

              By:
      ___________________________                                                           

               

              Marc
      M. Umeda

              610
      West Ash Street, Suite 1800

              San
      Diego, CA 92101

              Tel:           (619)
      525-3990

               

              Counsel
      for Plaintiffs

               

            


    

     

    
      
        
        

      

      
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              KRAMER
      LEVIN NAFTALIS & FRANKEL LLP

               

              By:
      ___________________________

              Arthur
      H. Aufses III

              1177
      Avenue of the Americas

              New
      York, NY 10036

              Tel:
      (212) 715-9100

               

              Attorneys
      for Nominal Defendant Escala Group, Inc.

            
	 
      	
               

              LOVELLS
      LLP

               

              By:
      ___________________________

               

              Scott
      W. Reynolds (SR-8457)

              590
      Madison Avenue

              New
      York, New York 10022

              Tel:
      (212) 909-0600

               

              Attorneys
      for Defendants Larry Crawford, Antonio Martins da Cruz, Esteban Perez,
      Jose Miguel Herrero, Greg Roberts, Scott S. Rosenblum, Mark Segall, James
      Davin and Rafael del Valle Iturriaga Miranda

               

            
	 
      	
               

              GOODWIN
      PROCTER LLP

               

              By:
      ___________________________

              Stephen
      D. Poss

              Exchange
      Place

              Boston,
      Massachusetts 02109

              Tel:
      (617) 570-1000

               

              Attorneys
      for Amper, Politziner & Mattia,
P.C.

            


    

     

    
      
        
        

      

      
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              HOFFMAN
      AND POLLOK LLP

               

              By:
      ___________________________

               

              William
      A. Rome

              260
      Madison
      Avenue, 22nd Floor

              New
      York, NY 10016

              Tel:  (212)
      679-2900

               

              Attorneys
      for Defendant Greg Manning

               

               

            


    

    


    


    


    62