<PAGE>

                                                                       Exhibit A
                                                                       ---------


              IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                         IN AND FOR NEW CASTLE COUNTY

IN RE ENCORE COMPUTER CORPORATION         )
SHAREHOLDERS LITIGATION                   )         Civil Action No. 16044

                               SCHEDULING ORDER
                               ----------------

     The parties to the above-captioned action (the "Action") having made
application pursuant to Court of Chancery Rule 23(e) for an order approving the
proposed settlement of the Action in accordance with a Stipulation and Agreement
of Compromise, Settlement and Release (the "Settlement" or "Stipulation")
entered into by the parties, dated July 2, 2001, filed with the Court which,
together with its accompanying documents, sets forth the terms and conditions of
the proposed Settlement of the Action and for the dismissal of the Action with
prejudice upon the terms and conditions set forth in the Stipulation; and the
Court having read and considered the Stipulation and the accompanying documents;
and all parties having consented to the entry of this Order;

     NOW, THEREFORE, IT IS HEREBY ORDERED this __ day of ________ 2001, that:

     1.   For purposes of Settlement only and pending the Settlement Hearing
described in paragraph 3 hereof, the Action shall be temporarily maintained and
proceed as a class action, pursuant to Court of Chancery Rule 23(a), (b)(1) and
(b)(2), on behalf of all persons and entities (other than Defendants) who or
which were record holders or beneficial owners of shares of the common stock of
Encore Computer Corporation ("Encore" or the "Company") (the "Encore Common
Stock") at any time during the period beginning on and including October 31,
<PAGE>

                                                                       Exhibit A
                                                                       ---------


1997, the record date for the Sun Transaction, through and including the
Effective Date (as defined below) of the Stipulation, and shall include any and
all of their respective predecessors, trustees, executors, administrators,
representatives, heirs, transferees, successors in interest, and assigns,
immediate and remote, and any person claiming from, through or under any of them
(the "Class").

     2.   Pursuant to Court of Chancery Rule 23, the named Plaintiffs, Louis J.
Williams and Paul S. Rosenblum, are temporarily certified as Class
representatives and their counsel, Matthew E. Miller, Esq. and David Staats,
Esq. are temporarily certified as Class counsel.

     3.   A hearing (the "Settlement Hearing") shall be held before the Court on
_______ 2001, at _______ _.m., in the Court of Chancery, Daniel L. Herrmann
Courthouse, 1020 North King Street, Wilmington, Delaware, 19801, to:

          (a)  consider and determine whether the settlement should be approved
               by the Court as fair, reasonable, adequate and in the best
               interests of the Class;

          (b)  consider and determine whether an Order and Final Judgment
               should be entered pursuant to the Stipulation, inter alia,
               dismissing the Action with prejudice and extinguishing and
               releasing and enjoining any further prosecution of all Settled
               Claims (as defined therein);

          (c)  consider and determine whether the Class should be certified and
               whether Plaintiffs and their counsel have adequately represented

                                       2

<PAGE>

                                                                       Exhibit A
                                                                       ---------

               the Class;

          (d)  consider and determine whether to adopt a proposed plan of
               distribution submitted by the named plaintiffs to distribute
               shares of Encore Common Stock in accordance with the
               settlement;

          (e)  consider and rule on any application made by Class counsel for
               payment of fees and disbursements incurred in connection with
               this action; and

          (f)  rule on such other matters as the Court may deem appropriate.

     4.   The Court reserves the right to adjourn the Settlement Hearing or any
adjournment thereof without further notice other than an oral announcement at
the Settlement Hearing or any adjournment thereof. The Court also reserves the
right to approve the Settlement at or after the Settlement Hearing with such
modification as may be consented to by the parties to the Stipulation and
without further notice to the Class.

     5.   As soon as practicable, after the date of this Order, Plaintiffs
shall cause a notice of the Settlement Hearing, in substantially the form
annexed as Exhibit B to the Stipulation (the "Notice") to be mailed by United
States mail, postage pre-paid, to all stockholders of record of Encore on or
after October 31, 1997. All record holders in the Class who are not also the
beneficial owners of the shares of Encore Common Stock held by them are
requested to forward the Notice to such beneficial owners of those shares.
Plaintiffs shall use reasonable efforts to provide the Notice to beneficial
owners by (a) making additional copies of the Notice available to any present
or former record holder who, prior to the Settlement Hearing, requests copies
for distribution to beneficial owners, or (b) mailing additional copies of the

                                       3
<PAGE>

                                                                       Exhibit A
                                                                       ---------


Notice to beneficial owners whose names and addresses Plaintiffs receive from
the record owners.

     6.   The form and method of the Notice specified herein is the best notice
practicable and shall constitute due and sufficient notice of the Settlement
Hearing to all persons entitled to receive such notice.

     7.   At or before the Settlement Hearing, Plaintiffs shall file proof, by
affidavit, with respect to preparing and mailing the Notice.

     8.   Class counsel shall file with the Court, and serve on counsel for the
Defendants, any application for an award of attorneys fees and reimbursements
of expenses together with supporting materials not later than twenty days
before this Settlement Hearing.

     9.   Any member of the Class who objects to the Settlement, the Class
Action determination, the Order and Final Judgment to be entered in the Action,
the representation of the Class by the Plaintiffs and their counsel, the plan
of distribution proposed by the plaintiffs, or any award of fees or expenses
to Class counsel, or who otherwise wishes to be heard, may appear in person or
by counsel at the Settlement Hearing, and present any evidence or argument that
may be proper or relevant; provided, however, that no person other than
                           --------  -------
Plaintiffs' Class counsel and counsel for the Defendants in the Action shall be
heard and no papers, briefs, pleadings or other documents submitted by any
person shall be received and considered by the Court, unless, not later than
ten (10) calendar days prior to the Settlement Hearing (unless the Court, in
its discretion, shall otherwise direct, for good cause shown), such person
files with the Court and serves upon counsel listed below(i) a written notice
of intention to appear; (ii) proof of membership in the Class; (iii) a detailed
statement of such person's specific objections to any

                                       4
<PAGE>

                                                                       Exhibit A
                                                                       ---------

matters before the Court; and (iv) the grounds therefor or the reasons that
such person desires to appear and be heard, as well as all documents and
writings such person desires this Court to consider. Such filings shall be
served by hand delivery, first class mail postage prepaid, or express service,
upon the following counsel:

Peter B. Ladig, Esq.                  David Staats, Esq.
Richards, Layton & Finger             Law Offices Of David Staats, P.A.
One Rodney Square                     1701 Augustine Cut-Off, Suite 36
P.O. Box 551                          Wilmington, Delaware 19803
Wilmington, Delaware 19899

Steven S. Balick, Esq.
Ashby & Geddes
One Rodney Square #302
Wilmington, Delaware 19899

Unless the Court otherwise directs, no person shall be entitled to object at or
in connection with the Hearing, or otherwise be heard, except by serving and
filing a written objection and supporting papers and documents as described
above. Any person who fails to object to the matters set forth herein in the
manner provided by this Order shall be deemed to have waived the right to
object (including any right to appeal) and shall be forever barred from
raising such objection in this or any other action or proceeding.

     10.  Pending final determination of whether the Settlement should be
approved, Plaintiff Releasors (as defined in the Stipulation) are barred and
enjoined from commencing or prosecuting any action or proceeding in any court,
tribunal or administrative proceeding asserting any claims that relate in any
way to the Plaintiff Settled Claims (as defined in the Stipulation) against any
of the Defendant Releasees. Pending final determination of whether the
Settlement should be approved, Defendant Releasors (as defined in the
Stipulation)

                                       5
<PAGE>

                                                                       Exhibit A
                                                                       ---------

are barred and enjoined from commencing prosecuting any action or proceeding in
any court, tribunal or administrative proceeding asserting any claims that
relate in any way to the Defendant Settlement Claims (as defined in the
Stipulation) against any of the Plaintiff Releasees. All obligations to file
responsive pleadings or motions and all discovery and other pretrial
proceedings in the Action are stayed and suspended until further order of this
Court.

     11.  In the event that the Stipulation is not approved by the Court or
shall not become effective for any reason whatsoever, the Settlement (including
any modification thereof), any Class certification herein and any actions
taken or to be taken in connection therewith (including this order and any
Order and Final Judgment entered herein) shall be terminated and shall become
void and of no further force and effect except for Encore's obligations as set
forth in the Stipulation to pay for expenses incurred in connection with the
Notice and administration provided for by this Order. Neither the Stipulation
nor any provision contained therein, nor any action undertaken or document
executed pursuant thereto or in furtherance of, nor the negotiation thereof by
any party (i) is or shall be deemed to be or shall be offered or used as an
admission of the Defendants or any other person of the validity of the Settled
Claims or of any wrongdoing by or liability of the Defendants or Defendants'
Affiliates whatsoever, (ii) is or shall be deemed to be or shall be used as an
admission of any fault or omission of any Defendant in any statement, release
or written document or financial report issued, filed, any action taken or made
or omitted to be taken or made; or (iii) shall be offered or received in
evidence against any Defendant in this or any action or proceeding other than
such proceeding as may be necessary to consummate or enforce the Settlement,
the releases executed pursuant thereto, and/or the Order and Final Judgment,
except that the Stipulation and the Exhibits thereto may be filed in the Action
or in

                                        6
<PAGE>

                                                                       Exhibit A
                                                                       ---------

any subsequent action brought against any Defendant defense or counterclaim of
the Defendants of res judicata, collateral estoppel, release, good faith
                  --- --------
settlement, judgment bar or reduction or any other theory of claim or issue
preclusion or similar defense or counterclaim.


Dated: _____________________, 2001

                                                  __________________________
                                                  Vice Chancellor
<PAGE>

                                                                       Exhibit B
                                                                       ---------

               IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                         IN AND FOR NEW CASTLE COUNTY

IN RE ENCORE COMPUTER CORPORATION       )
SHAREHOLDERS LITIGATION                 )         Civil Action No. 16044


                 NOTICE OF PENDENCY OF CLASS ACTION, PROPOSED
              SETTLEMENT OF CLASS ACTION AND SETTLEMENT HEARING
              --------------------------------------------------

TO:  ALL RECORD HOLDERS AND BENEFICIAL OWNERS OF SHARES OF THE COMMON STOCK
     OF ENCORE COMPUTER CORPORATION DURING THE PERIOD BEGINNING ON AND
     INCLUDING OCTOBER 31, 1997 THROUGH AND ENDING ON THE EFFECTIVE DATE (AS
     DEFINED HEREIN).

     PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS WILL BE
     AFFECTED BY THE LEGAL PROCEEDINGS IN THIS LITIGATION. IF THE COURT APPROVES
     THE PROPOSED SETTLEMENT, YOU WILL BE FOREVER BARRED FROM CONTESTING THE
     FAIRNESS OF THE PROPOSED SETTLEMENT, OR FROM PURSUING THE SETTLED CLAIMS
     (DEFINED BELOW). IF YOU WERE NOT THE BENEFICIAL OWNER OF SHARES OF THE
     COMMON STOCK OF ENCORE BUT HELD SHARES FOR A BENEFICIAL OWNER, PLEASE
     PROMPTLY TRANSMIT THIS DOCUMENT TO SUCH BENEFICIAL OWNER.


                            I.   PURPOSE OF NOTICE
                                 -----------------

     The purpose of this Notice is to inform you of the lawsuit, the caption of
which appears above (the "Action"), a proposed settlement of the Action (the
"Stipulation" or "Settlement"), and the Court's Certification of a Class
(defined below) for purposes of the Settlement, and to notify you of your right
to participate in a hearing before the Court of Chancery of the State of
Delaware in and for New Castle County (the "Court") in the Daniel] L. Herrmann
Courthouse, 1020 North King Streets, Wilmington, Delaware 19801 on ____________,
2001, at __________ a.m.
<PAGE>

                                                                       Exhibit B
                                                                       ---------

(the "Settlement Hearing"), to determine whether the Settlement should be
approved by the Court as fair, reasonable and adequate and in the best interests
of the Class such that the Action should be settled and ended, to consider and
determine whether the Court should certify a Class in the Action, and whether
the Plaintiffs and their counsel have adequately represented the Class, to
consider approval of a plan of distribution proposed by the Plaintiffs to
consider an award of fees and reimbursements of expenses of Class counsel, and
to consider other matters as the Court may deem appropriate.

          The Court has determined that, for the purposes of the Settlement
only, the Action shall be maintained as a Class Action under the Court of
Chancery Rule 23 on behalf of the Class as defined herein.

          This Notice describes the rights you may have under the Settlement
and what steps you may, but are not required to, take in relation to the
Settlement. If the Court approves the Settlement, the Court will enter an Order
and Final Judgment dismissing the Action with prejudice on the merits and
releasing Class members claims against the Defendants and others.

                          II.  THE FACTUAL BACKGROUND
                               ----------------------

     THE FOLLOWING RECITATION DOES NOT CONSTITUTE FINDINGS OF THE COURT OF
     CHANCERY. IT IS BASED ON STATEMENTS OF THE PARTIES AND SHOULD NOT BE
     UNDERSTOOD AS AN EXPRESSION OF ANY OPINION OF THE COURT AS TO THE MERITS OF
     ANY OF THE CLAIMS OR DEFENSES RAISED BY ANY OF THE PARTIES.

     In 1989, Gould Electronics, Inc. ("Gould"), sold its computer systems
business to Encore Computer Corporation ("Encore"). From 1989 through November
1997, Gould loaned Encore approximately $496 million, which was secured by,
inter alia, a first priority security interest in

                                      -2-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

Encore's assets, including its Storage Products business, and a license to Gould
of substantially all of Encore's intellectual property.

     On July 17, 1997, Encore entered into an Asset Purchase Agreement with Sun
Microsystems, Inc. ("Sun"), in which Sun agreed to purchase Encore's Storage
Products business for $185 million (the "Sun Transaction"). As part of the Sun
Transaction, Encore entered into an agreement with Gould on July 16, 1997 (the
"Gould Agreement") in which Gould agreed to release its security interest in the
Storage Products business and to transfer its intellectual property license in
that business to Sun. Gould also agreed to a redemption of its preferred stock
with a liquidation value of $496 million for $60 million.

     In November 1997, Encore distributed a proxy statement (the "Sun Proxy
Statement") for the upcoming shareholders meeting at which, among other things,
the Sun Transaction would be voted upon.

     On November 18, 1997, Plaintiffs filed purported derivative and class
action complaints, subsequently consolidated by order dated December 17, 1997
(the "Action"), on behalf of all shareholders of Encore against Gould, Kenneth
G. Fisher, Rowland H. Thomas, Robert J. Fedor and C. David Ferguson
(collectively, the "Original Defendants"), and named the Company as a nominal
defendant. In November 1997, the court denied plaintiffs' motion for injunctive
relief. On November 24, 1997 the Encore shareholders voted to approve the Sun
Transaction, which closed shortly thereafter.

     On June 1, 1998, Encore entered into an Asset Purchase Agreement with Gores
Technology Group ("Gores"), in which Gores agreed to purchase Encore's Real-Time
business for $3 million (the "Gores Transaction"). In August 1998, Encore
distributed a proxy statement

                                      -3-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

(the "Gores Proxy Statement") for the upcoming shareholders' meeting at which,
among other things, the Gores Transaction and a proposal to liquidate Encore
would be voted upon. On December 31, 1998 the Encore shareholders voted to
approve the Gores Transaction, which closed shortly thereafter.

     Following document discovery, on February 5, 1999 the Original Defendants
moved for summary judgement in their favor on all claims in the Action. No
response to that motion was filed by any of the named plaintiffs.

     On July 15, 1999, the plaintiffs filed an Amended Complaint adding two
additional defendants, Michael C. Veysey and Thomas N. Rich (collectively with
the Original Defendants, the "Defendants") and no longer naming the Company as a
nominal defendant. The Amended Complaint alleged that the Defendants breached
duties and obligations owed to the shareholders of the Company in connection
with the operation and management of the Company, including the Sun and Gores
Transactions and made or caused misstatements and omitted to disclose
information in the Sun and Gores Proxy Statements.

     On August 30, 1999, all Defendants moved to dismiss the Action. After full
briefing and oral argument, on June 16, 2000, the Court of Chancery granted
Defendants' motion and dismissed the Action in its entirety.

     By notice dated July 10, 2000, Plaintiffs Louis J. Williams and Paul S.
Rosenblum appealed the Court of Chancery's dismissal of the Action to the
Supreme Court of the State of Delaware.

                                      -4-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

                              III. THE SETTLEMENT
                                   --------------

     During the pendency of the appeal, the Plaintiffs and Defendants conducted
arms' length settlement negotiations through counsel and agreed to settle the
Action on the terms summarized as follows. In consideration for the Settlement
and dismissal with prejudice of the Action and the releases provided herein, the
parties to the Action have agreed, among other thing, that:

  1. Encore shall repurchase all shares of the common stock of Encore (the
     "Encore Common Stock") beneficially owned by each Defendant upon payment by
     Encore to the Defendant of the proportional share (estimated to be
     approximately 64%) of Encore's tangible net worth represented by such
     shares, and the repurchased shares shall be distributed to members of the
     Class (as defined below and except if the Court of Chancery finds a
     distribution to a member of the Class would be impracticable) in accordance
     with a Plan of Distribution, to be approved by the Court of Chancery (see
     below). Encore's net worth is approximately $2,500,000.

  2. The Defendants shall take the steps necessary to appoint or elect William
     O'Callaghan, Norman Olshansky, and J. Andreas Brenner (the "Interim Board")
     as directors of the Company, who have represented that they are qualified
     to serve as directors of the Company and are under no disability,
     impediment, or restriction from so serving; and upon the appointment or
     election of said individuals, any and all Defendants then serving as an
     officer, director, or employee of Encore shall resign from such
     officership, directorship, and employment, effective immediately, with no
     further duty, obligation, or liability to Encore thereafter. PLaintiffs
     have represented to Defendants that Messrs.

                                      -5-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

     O'Callaghan, Olshansky and Brenner are specialists in facilitating mergers
     between active business with publicly traded "shell" corporations. It is
     the intention of plaintiffs, and the Interim Board, subject to compliance
     with the Delaware Corporation Code and all other applicable laws, to
     facilitate a merger between Encore and an active business seeking to become
     a publicly traded corporation. It is plaintiffs' belief that this will
     create additional value for the shareholders of Encore.

  3. Neither Encore, nor any of the Defendants will take any affirmative action
     to affect Encore's current listing for trading on the NASDAQ Over-the-
     Counter-Bulletin Board.

  4. The parties will release claims as outlined below.


                         IV. THE PLAN OF DISTRIBUTION

     Plaintiffs have proposed for approval by the Court of Chancery the
following plan of distribution of the shares that will be repurchased by the
Company for distribution to members of the Class pursuant to the Settlement:

     1.   The repurchased shares shall be allocated as follows:

          (a) Tranche A: 40% of the Repurchased Shares, or 20,449,897 shares,
          shall be distributed to Class member who were holders of record as of
          October 31, 1997 (the record date of the Sun Transaction); claimants
          will receive approximately 0.69 shares for each share held as of
          October 31, 1997;

          (b) Tranche B: 10% of the Repurchased Shares, or 5,112,474 shares,
          shall be distributed to Class members who were holders of record as of
          August 6, 1998 (the record date of the Gores Transaction); claimants
          will receive approximately 0.17 shares for each share held as of
          August 6, 1998;

          (c) Tranche C: 50% of the Repurchased Shares, or 25,562,371 shares,
          shall be distributed to the entire Class, on a pro rata basis, based
                                                         --------
          on their Total Loss (as

                                      -6-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

          that term is defined below) incurred in purchases and sales of Encore
          common stock during the Class Period. Each class member's "Total Loss"
          consists of (i) the cost basis of all shares of Encore common stock
          held as of the Effective Date, plus (ii) losses incurred in sales of
          Encore common stock occurring during the class period. For each $1.30
          of Total Loss, the Class member will receive one (1) share of common
          stock. In the event that the total shares claimed exceeds the number
          of shares available, the shares will be distributed on a pro rata
                                                                   --------
          basis to those Class members timely filing claims.

     2.   Members of the Class may claim, and receive, distributions of stock
from more than one of the three Tranches.

     3.   Shares of Tranches A and B will be distributed to the Company's
shareholders in accordance with the Company's stock transfer records and stock
registry. Shares of Tranche C will be distributed only to Class members who
timely file claims in accordance with the procedures described in the "Proof of
Claim and Release" accompanying this Notice.

     4.   Shares of Tranches A and B that are unclaimed will be retired by the
Company. To the extent that the number of shares available for distribution in
Tranche C exceeds the number of shares claimed, the unclaimed shares will be
retired by the Company.

     5.   The approval of this Settlement shall not be deferred or delayed
pending, nor is it contingent upon, approval or disapproval of the Plan of
Distribution. Shareholders may object to the Plan of Distribution separately
from any objection to the Settlement.


                            V.   FEES AND EXPENSES

     Defendant Gould will pay up to $15,000 for costs of giving notice of the
peridency and settlement of this Action to the members of the Class. Encore and
the Plaintiffs will be responsible in all other respects for the costs of the
administration of the Settlement including the

                                      -7-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

proof of claim process. Counsel for the Plaintiffs and the Class intend to apply
to the Court for an award of legal fees and expenses to be paid by Encore after
the repurchase of the Defendants' shares as outlined above and not to exceed
$20,000 for Class counsel and $60,000 to reimburse Plaintiffs for a retainer
paid to predecessor counsel. No other fees or expenses will be awarded to
attorneys for named plaintiffs or Class members except upon application to and
order of the Court entered after notice to and an opportunity to be heard by the
Defendants and all Class members.

                        VI. REASONS FOR THE SETTLEMENT

     Plaintiffs believe the claims in the Action were asserted in good faith and
are supported by evidence and that the Court of Chancery erred in dismissing the
Amended Complaint. Nonetheless, upon review and analysis of the facts and
circumstances relating to the claims asserted in the Action and the applicable
law, Plaintiffs and their counsel have concluded the Settlement to be in the
best interests of the Plaintiffs and the Class (as defined below) in light of
(i) the benefits that the purchasers and holders of Encore Common Stock will
receive from the Settlement, (ii) the risks and delay of litigation, including
the fact that the Court of Chancery has dismissed the Action in its entirety,
and (iii) the Plaintiffs' and their counsel's conclusion that the Settlement
upon the terms and provisions set forth herein is fair, reasonable, adequate,
and in the best interest of the members of the Class.

     The Defendants have vigorously denied and continue to deny each and every
allegation of wrongful conduct and any liability whatsoever to the plaintiffs or
the Class, and they have interposed and will pursue numerous defenses to the
claims asserted against them. Nevertheless, the Defendants decided to enter into
the Settlement to avoid the further expense, inconvenience,

                                      -8-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

and burden of this litigation, and to finally and forever put to rest all
disputes and controversies with respect to the operation and management of the
Company, the conduct of the Defendants, the Sun and Gores Transactions, and the
Sun and Gores Proxy Statements.

                           VII.  CLASS CERTIFICATION

     The Court has ordered that, for purposes of the Settlement and pending the
Settlement Hearing, the Action will be maintained and will proceed as a class
action pursuant to Court of Chancery Rule 23(a), (b)(1), and (b)(2), with the
appellants serving as the representatives of the Class and with their counsel
serving as counsel to the Class, on behalf of all persons who and entities which
were record holders or beneficial owners of Encore Common Stock (other than the
Defendants) at any time during the period beginning on and including October 31,
1997, the record date for the Sun Transaction, through and including the
Effective Date of the Settlement and shall include all of their respective
predecessors, trustees, executors, administrators, representatives, heirs,
transferees, successors in interest, and assigns, immediate and remote, and any
person claiming from, through, or under any of them (the "Class"). At the
Settlement Hearing (as defined below), the Court will be asked, among other
things, to confirm the certification of the Settlement Class.

     If the Settlement is not approved, the temporary certification of the Class
shall be void.

                           VIII. SETTLEMENT HEARING
                                 ------------------

     The Court has scheduled a Settlement Hearing, which will be held before the
Court of Chancery of the State of Delaware in and for New Castle County in the
Daniel L. Herrmann Courthouse, 1020 North King Street, Wilmington, Delaware
19801 on _______, 2001, at _____ .m., to determine whether (i) to approve the
Settlement as fair, reasonable, adequate and in the

                                      -9-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

best interests of the Class; (ii) to direct entry of an Order and Final Judgment
that will, among other things, dismiss the Action with prejudice and extinguish
and release and enjoin any further prosecution of the Settled Claims; to
consider the adoption of a proposed Plan of Distribution; and (iv) to consider
any application made by Class counsel for payment of fees and disbursements.

     The Court may adjourn the Settlement Hearing from time to time by oral
announcement at such hearing or at any subsequent adjournment without further
notice of any kind.

                             IX.  RIGHT TO APPEAR

     Any Class member who does not object to the Settlement need not do
anything.

     Any member of the Class who objects to the Settlement, the Class Action
determination, the Order and Final Judgment to be entered in the Action, the
representation of the Class by the Plaintiffs and their counsel, the plan of
distribution proffered by the Plaintiffs, or the award of fees to be sought by
the counsel for the Class, or who otherwise wishes to be heard, may appear in
person or by counsel at the Settlement Hearing and may present any evidence or
argument that may be proper or relevant; provided, however, that no person other
than the Plaintiffs' counsel and counsel for the Defendants in the Action shall
be heard and no papers, briefs, pleadings or other documents submitted by any
person shall be received and considered by the Court, unless not later than ten
                                                             --------------
(10) calendar days prior to the Settlement Hearing (unless the Court in its
discretion shall otherwise direct, for good cause shown), such person files with
the Court and serves upon counsel listed below (i) a written notice of intention
to appear; (ii) proof of membership in the Class, (iii) a detailed statement of
such person's specific objections to any matters before the Court and the
grounds therefor or the reasons that such person desires to

                                     -10-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

appear and to be heard; and (iv) copies of all documents and other evidence such
person desires the Court to consider. Such filings shall be served, by hand
delivery, first class mail postage prepaid, or express service, upon the
following counsel:

Peter B. Ladig, Esq.               Steven J. Balick, Esq.
Richards, Layton & Finger          Ashby & Geddes
One Rodney Square                  One Rodney Square #302
P.O. Box 551                       Wilmington, DE 19899
Wilmington, DE 19899

Co-counsel for Defendants Gould, Ferguson, Co-counsel for Defendants Fisher and
Thomas Fedor, Rich and Fedor

David Staats, Esq.
Law Offices Of David Staats, P.A.
1701 Augustine Cut-Off, Suite 36
Wilmington, DE 19803

Co-counsel for Plaintiffs and the Class

     Unless the Court otherwise directs, no person shall be entitled to object
to the approval of the Settlement, the Order and Final Judgment to be entered
thereon, the adequacy of the representation of the Class by the Plaintiffs and
their counsel, the plan of distribution or the award of fees and expenses by
Class counsel or otherwise be heard, except by serving and filing a written
objection and supporting papers and documents as set forth above. Any person who
fails to object in the manner prescribed above shall be deemed to have waived
any and all objections and the right to object (including any right to appeal)
shall be forever barred from raising such objection in this or any other action
or proceeding.

                                     -11-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

                   X. ORDER AND FINAL JUDGMENT OF THE COURT

     If the Court approves the Settlement as provided for in the Stipulation the
parties will ask the Court to direct entry of an Order and Final Judgment which
will, among other things:

     1.   Approve the Settlement and adjudge the terms thereof to be fair,
reasonable, and adequate and in the best interests of the Class, pursuant to
Court of Chancery Rule 23(e);

     2.   Authorize and direct the performance of the Settlement in accordance
with its terms and conditions;

     3.   Dismiss the Action with prejudice on the merits and release and enjoin
the prosecution of Settled Claims as outlined below.

                                 XI. RELEASES

     If the Court approves the Settlement, the Action will be dismissed on the
merits with prejudice as to each Defendant and Encore and as against the named
Plaintiffs and all other members of the Class and each Plaintiff, each member of
the Class, and Encore, on behalf of themselves and their respective current and
former officers, directors, employees, agents, partners, members, co-venturers,
parents, subsidiaries, affiliates, heirs, personnel, representatives,
successors, and assigns (whether express, implied or by operation of law)(the
"Plaintiff Releasors") shall forever release, discharge and dismiss with
prejudice each Defendant, each Defendant's parent entities, associates, co-
venturers, affiliates, and subsidiaries, and their respective past, present, and
future officers, directors, stockholders, representatives, employees, investment
bankers, commercial bankers, attorneys, advisors, agents, heirs, executors,
trustees, general and limited partners and partnerships, personal
representatives, estates, administrators, predecessors, successors and assigns
(whether express, implied, or by operation of law)(the

                                     -12-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

"Defendant Releasees") from any and all actual and alleged claims, demands,
rights, actions, causes of action, liabilities, damages, losses, obligations,
judgments, suits, matters, and issues of any kind or nature whatsoever,
contingent or absolute, suspected or unsuspected, matured or unmatured,
disclosed or undisclosed, that have been or could have been asserted in the
Action or in any court, tribunal or proceeding (including, but not limited to,
any claims arising under federal or state law relating to alleged fraud, breach
of any duty, negligence, violations of the federal securities laws, or
otherwise) by or on behalf of the Plaintiffs, the Class, or any member of the
Class, or Encore, whether individual, class, derivative, representative, legal,
equitable, or otherwise, which have arisen, could have arisen, arise now, or
relate in any manner to (i) the allegations, facts, events, transactions, acts,
occurrences, statements, representations, misrepresentations, omissions, or any
other matter, thing, or cause whatsoever, or any series thereof, embraced,
involved, set forth or otherwise related, directly or indirectly, to any of the
complaints filed at any time in the Action, any proxy material, public filings,
or statements (including, but not limited to, public statements) by Encore,
Gould, or the Defendants or in connection with any of their affiliated persons
or companies, the Sun Transaction, or the Gores Transaction; or (ii) the
Plaintiffs' or the Class members' purchase, sale, or holding of securities of
the Company or their investment in the Company; or (iii) the operations or
management of the Company (the "Plaintiff Settled Claims"); provided, however,
that the term Plaintiff Settled Claims shall not include the right of the
Plaintiffs, any member of the Class, or Encore to enforce the terms of the
Settlement after the Effective Date. The Defendants, Encore and each member of
the Class will provide reciprocal releases to the Plaintiffs and their privies.

                                     -13-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

     The releases provided for in the Stipulation and in the Order and Final
Judgment extend to claims that Releasors, may not know or suspect to exist at
the time of the release, which if known, might have affected the decision to
enter into the release. Each of the Releasors shall be deemed to have waived any
and all provisions, rights and benefits conferred by any law of the United
States or any state or territory of the United States, or principle of common
law, which governs or limits a person's release of unknown claims. The Releasors
shall be deemed to relinquish, to the full extent permitted by law, the
provision, rights and benefits of (S) 1542 of the California Civil Code 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.

     In addition, each of the Releasors, also shall be deemed to waive 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 California Civil Code (S) 1542, and they shall
acknowledge that it or they may discover facts in addition to or different from
those that it or they now know or believe to be true with respect to the subject
matter of this release, but that it is the intention, on behalf of itself or
themselves, to fully, finally and forever settle and release any and all Settled
Claims as defined above known or unknown, suspected or unsuspected, which now
exist, or heretofore existed and without regard to the subject discovery or
existence of such additional or different facts.

                                     -14-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

             XII. NOTICE TO PERSONS OR ENTITIES HOLDING OWNERSHIP
                              ON BEHALF OF OTHERS

     Brokerage firms, banks and/or other persons or entities who are members of
the Class in their capacities as record holders, but not as beneficial owners,
are requested to send this Notice promptly to all of their beneficial owners.
Additional copies of this Notice for transmittal to beneficial owners are
available on request directed to Matthew E. Miller, Esq., The Law Office of
Matthew E. Miller, P.O. Box 1255, Arlington, Virginia, 22210.

              XIII. SCOPE OF THIS NOTICE AND FURTHER INFORMATION

     This Notice is not all-inclusive. The references in this Notice to the
pleadings in the Action, the Stipulation, and other papers and proceedings are
only summaries and do not purport to be comprehensive. For the full details of
the Action, the claims asserted by the parties, and the terms and conditions of
the Settlement, including a complete copy of the Stipulation, members of the
Class are referred to the Court flies in the Action. You may inspect the Court
files, the Orders entered by the Court of Chancery and other papers filed in the
litigation, unless sealed, at the Office of the Register in Chancery of the
Court of Chancery of the State of Delaware, Daniel L. Herrmann Courthouse, 1020
North King Streets, New Castle County, Wilmington, Delaware, during regular
hours of each business day. Inquiries about the Settlement may be directed to
the attention of the Class Counsel:

                                   Matthew E. Miller, Esq.
                                   Law Offices of Matthew E. Miller
                                   P.O. Box 1255
                                   Arlington, VA 22210
                                   (703) 248-9393

Do not write or telephone the Court.

                                     -15-
<PAGE>

                                                                       Exhibit B
                                                                       ---------

                                           ENTERED BY ORDER OF THE COURT:


                                           ______________________________
                                           Dianne M. Kempski
                                           Register in Chancery


Dated:______________, 2001

                                     -16-
<PAGE>

Must be                   ENCORE SETTLEMENT
Postmarked                C/O Analytics, Incorporated
No Later Than             464 Second Street
[Date], 2001              Excelsior, MN 55331

                          PROOF OF CLAIM AND RELEASE

[Claim Number, Mailing Information, etc.-to be filled in by Administrator]

IF YOU PURCHASED OR HELD SHARES OF THE COMMON STOCK OF ENCORE COMPUTER
CORPORATION ("ENCORE") AT ANY TIME FROM OCTOBER 31, 1997 THROUGH JUNE 2001 (THE
"CLASS PERIOD") AND ARE NOT A DEFENDANT IN THE LAWSUIT CAPTIONED IN RE ENCORE
COMPUTER CORPORATION SHAREHOLDERS LITIGATION CIV. ACT. NO. 16044 (DEL. CH. CT.)
YOU ARE A MEMBER OF THE "CLASS" AND MAY BE ENTITLED TO SETTLEMENT PROCEEDS.
A "PURCHASE" INCLUDES ANY ACCUISITION OF SHARES, FOR CASH OR OTHER
CONSIDERATION, INCLUDING FOR EXAMPLE BY TRANSFER, TRADE, OR EXCHANGE.

IF YOU ARE A MEMBER OF THE CLASS, YOU MUST COMPLETE AND SUBMIT THIS FORM IN
ORDER TO BE ELIGIBLE FOR CERTAIN SETTLEMENT BENEFITS. YOU MUST COMPLETE AND SIGN
THIS PROOF OF CLAIM AND MAIL IT BY PREPAID, FIRST CLASS MAIL, POSTMARKED NO
LATER THAN __________, 2001 TO THE FOLLOWING ADDRESS:

                               Encore Settlement
                          C/O Analytics, Incorporated
                               464 Second Street
                              Excelsior, MN 55331

A Proof of Claim received by the Claims Administrator shall be deemed to have
been submitted when postmarked if (a) it is mailed by [date], 2001; (b) a
postmark is indicated on the envelope, (c) it is mailed first class postage
prepaid; (d) it is addressed in accordance with the above instructions; and (e)
it is actually received by the Claims Administrator before the distribution of
the proceeds of the Settlement. In all other cases, a Proof of Claim shall be
deemed to have been submitted. when actually received by the Claims
Administrator.

YOUR FAILURE TO SUBMIT YOUR CLAIM BY [DATE], 2001 WILL SUBJECT YOUR CLAIM TO
REJECTION AND PRECLUDE YOU FROM RECEIVING ANY DISTRIBUTION FROM TRANCHE C OF THE
SETTLEMENT OF THE ENCORE SHAREHOLDERS' LITIGATION. HOWEVER, IT WILL NOT AFFECT
YOUR RIGHT, IF ANY, TO RECEIVE A DISTRIBUTION FROM TRANCHE A OR TRANCHE B. DO
NOT MAIL OR DELIVER YOUR CLAIM TO THE COURT OR ANY OF THE PARTIES OR THEIR
COUNSEL, AS ANY SUCH CLAIMS MAY BE DEEMED NOT TO HAVE BEEN SUBMITTED. SUBMIT
YOUR CLAIM ONLY TO THE SETTLEMENT ADMINISTRATOR.

                              Statement of Claim
                              ------------------

In order to share in the proceeds of Tranche C of the Settlement, you must
provide the information requested above and on the following pages concerning
record owners of the shares of Encore Computer Corporation, that you purchased
or held during the Class Period. If you held or purchased shares under the name
of different beneficial owners, you are required to file a separate Proof of
Claim for each beneficial owner. You should provide the beneficial owner's
Social Security Number if the beneficial owner is an individual. For estates,
trusts, corporations, partnerships and other entities, please provide that
beneficial owner's Taxpayer identification Number,

<PAGE>

ENCORE COMPUTER CORPORATION SCHEDULE OF TRANSACTIONS

Please complete this page if you held shares of Encore Computer Corporation
during any of the period from October 31, 1997 through June __, 2001. Please
note that "purchased" means any acquisition of Encore shares, for cash or other
consideration, including, for example, by transfer, exchange, or trade. The date
of purchase and sale are the "trade" or "contract" date, and not the
"settlement" or "payment" date. The purchase price is the price paid excluding
commissions or other expenses. You must enclose photocopies of confirmation
slips, account statements, relevant portions of your tax returns or other
documents evidencing each purchase, sale or holdings of Encore shares. Attach a
separate sheet if more space is needed. (Be sure to sign and print your name
with your Social Security or Taxpayer Identification Number on any additional
sheets.)

SECTION A:
PURCHASES OR ACQUISITIONS of shares of the common stock of Encore Computer
Corporation PURCHASED OR HELD BY YOU AT ANY TIME between on or after October 27,
1997 (attach separate sheets if more space is needed). Please include all
purchases or acquisitions occurring prior to October 27, 1997 if any portion
those shares were held by you on or after October 27, 1997.

   Trade Date of
      Purchase          Number of Shares     Purchase Price
   Month/Day/Year           Purchased          Per Share        Net Amount
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

SECTION B:
----------
SALES of shares of the common stock of Encore Computer Corporation on or after
October 27, 1997 (attach separate sheets if more space is needed)


   Trade Date of
       Sale            Number of Shares        Sale Price
   Month/Day/Year           Sold                Per Share        Net Amount
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

SECTION C:
----------
UNSOLD:  Number of shares of the common stock of Encore Computer Corporation now
held:  _____________
<PAGE>

                           CERTIFICATION AND RELEASE
                           -------------------------
SECTION I. By submitting this Proof of Claim, I state: I believe in good faith
---------
that I am a member of Class, as defined in the "Notice of Pendency of Class
Action, Proposed Settlement of Class Action and Settlement Hearing" (the
"Notice"), or that I am acting for such person; that I have read and understand
the Notice; that I believe that I am entitled to receive a share of the proceeds
of the Settlement.

SECTION II. I have set forth where requested herein all relevant information
----------
with respect to (I) my purchases of any shares of Encore Computer corporation
that I held at any time on or after October 27, 1997, (ii) each sale of the
shares of Encore Computer Corporation that I made during the Class Period, and
(iii) all shares of Encore Computer Corporation that I now hold.

SECTION III. I have enclosed photocopies of the confirmation slips, account
-----------
statements, relevant portions of my tax returns or other documents evidencing
each purchase, sale or holding of the shares of Encore Computer Corporation
listed below in support of my claim. (IF ANY SUCH DOCUMENTS ARE NOT IN YOUR
POSSESSION, PLEASE OBTAIN A COPY OR EQUIVALENT DOCUMENTS FROM YOUR BROKER OR
YOUR TAX ADVISOR BECAUSE THOSE DOCUMENTS ARE NECESSARY TO PROVE AND PROCESS
YOUR CLAIM.)

SECTION IV. I understand that the information contained in this Proof of Claim
----------
is Subject to such verification as the Court of Chancery of the State of
Delaware may direct, and I agree to cooperate in any such verification. I agree
to furnish reasonable additional information to the counsel for the Class to
support this claim it requested to do so.

SECTION V. If I am a member of the Class, my signature hereto constitutes a full
---------
and complete release, remise and discharge by me or, if I am submitting this
Proof of Claim on behalf of a corporation, a partnership, estate or one or more
other persons, by it, him, her or them, and by my, its, his, her or their heirs,
executors, administrators, successors, and assigns, of each of the " Released
Parties" with respect to the " Released Claims" as defined in the Notice. I have
been advised of and have read the provisions of California Civil Code Section
1542 (which provisions are set forth in the Notice). I have also been advised of
the potential existence of comparable or equivalent state statutes or principles
of common law. I hereby waive any rights or benefits conferred by those statutes
or principles of common law. My release of the Released Parties shall be of no
force or effect unless the Court approves the Settlement and the Effective
Date (as defined in the Settlement Agreement) occurs.

SECTION VI. I submit this Proof of Claim and Release under the terms of the
----------
Settlement Agreement described in the Notice. If I am a member of the Class, I
submit to the jurisdiction of the Court with respect to my claim and for the
purpose of enforcing the release set forth herein and acknowledge that I am
bound by an subject to the terms of any order or judgment entered by that Court.
I have not sold, hypothecated, or otherwise alienated the claim submitted
herein, nor submitted any other claim covering the same purchases, sales or
holdings of shares of Encore, and I am not aware that any other person has done
so on my behalf.

                                 CERTIFICATION

UNDER THE PENALTY OF PERJURY OF THE LAWS OF THE UNITED STATES OF AMERICA (WE)
CERTIFY THAT: the number shown on this form is my (our) correct Social Security
or Taxpayer Identification Number (TIN), and (b) that the information supplied
on this Proof of Claim is true, correct and complete; and (c) (If you are
submitting this Proof of Claim on behalf of a Class Member) I have attached
hereto documents setting forth my current authority to act on behalf of such
Class Member, and hereby certify that I am entitled to do so.

--------------------------------------------------------------------------------
 Executed this __ day of _______, 2001
                                                 -------------------------------
In _________________, ________________________   (Sign your name here; if this
(city)                    (state/country         claim is being made on behalf
                                                 of joint claimants, then each
                                                 must sign)

                                                 -------------------------------
                                                 (Type or print your name here)

                                                 -------------------------------
                                                 (Capacity of person(s)
                                                 signing, e.g.. Beneficial
                                                 purchaser, Executor or
                                                 Administrator)
--------------------------------------------------------------------------------
If you wish to be assured that your Proof of Claim is actually received by the
Claims Administrator, then you should send it by Certified Mail, Return Receipt
Requested. No acknowledgment will be made as to the receipt of the claim forms.
You should be aware that it will take a significant amount of time to process
fully all of the proofs of Claim and to administer the Settlement. This work
will be completed as promptly as time permits given the need to investigate and
tabulate each proof of Claim.

<PAGE>

                                                                       Exhibit C
                                                                       ---------

               IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
                         IN AND FOR NEW CASTLE COUNTY


IN RE ENCORE COMPUTER CORPORATION       )
SHAREHOLDERS LITIGATION                 )          Civil Action No. 16044


                           ORDER AND FINAL JUDGMENT
                           ------------------------

     A hearing having been held before this Court on ______, 2001 pursuant to
this Court's Order of ______, 2001 (the "Scheduling Order") upon a Stipulation
and Agreement of Compromise and Settlement and Release, dated July 2, 2001 (the
"Stipulation" or "Settlement") of the above-captioned action (the "Action"),
which is attached hereto and incorporated herein by reference; it appearing that
due notice of said hearing has been given in accordance with the aforesaid
Scheduling Order; the respective parties having appeared by their attorneys of
record; the Court having heard and considered evidence and argument in support
of the proposed Settlement; the attorneys for the respective parties having been
heard; an opportunity having been given to all other persons requesting to be
heard in accordance with the Scheduling Order; the Court having determined that
Notice to the Class (as defined below) certified in the Action pursuant to the
aforesaid Scheduling Order was adequate and sufficient; and the entire matter of
the proposed Settlement having been heard and considered by the Court;

     IT IS HEREBY ORDERED, ADJUDGED AND DECREED this ___ day of _____, 2001,
that:

     1.   This Action has been properly maintained as a Class Action pursuant to
Court of Chancery Rule 23.

     2.   Each of the provisions of Court of Chancery Rule 23(a) has been
satisfied and the
<PAGE>

Action has been properly maintained according to the provisions of Court of
Chancery Rule 23(b). The Action is hereby certified as a class action, pursuant
to Court of Chancery Rule 23(b)(1) and (b)(2), on behalf of a class consisting
of all persons who and entities which (other than Defendants) were record
holders or beneficial owners of shares of the common stock of Encore Computer
Corporation ("Encore" or the "Company") (the "Encore Common Stock") at any time
during the period beginning on and including October 31, 1997, the record date
for the Sun Transaction, through and including the Effective Date of the
Stipulation, and shall include any and all of their respective predecessors,
trustees, executors, administrators, representatives, heirs, transferees,
successors in interest, and assigns, immediate and remote, and any person
claiming from, through or under any of them (the "Class"). Paul S. Rosenblum and
Louis J. Williams are certified as the Class representatives and Matthew E.
Miller, Esq. and David Staats, Esq. are certified as Class counsel.
Specifically, based on the record in the Action, this Court expressly and
conclusively finds and orders that (a) the Class is so numerous that joinder of
all members is impracticable, (b) there are questions of law and fact common to
the Class, (c) the claims of the representative Plaintiffs are typical of the
claims of the Class, and (d) the representative Plaintiffs and Class counsel
fairly and adequately protect and represent the interests of the Class.

     3.   The form and manner of Notice given to the members of the Class is
hereby determined to be due and sufficient and to provide the best practicable
notice under the circumstances and to have been given in full compliance with
Court of Chancery Rule 23 and the requirements of due process.

     4.   The Settlement as reflected in the Stipulation is approved as fair,
reasonable,

                                      -2-
<PAGE>

adequate and in the best interests of the Class and the parties are directed to
consummate it in accordance with its terms and conditions.

     5.   Each Plaintiff, each member of the Class, and Encore, on behalf of
themselves and their respective current and former officers, directors,
employees, agents, partners, members, co-venturers, parents, subsidiaries,
affiliates, heirs, personnel, representatives, successors, and assigns (whether
express, implied or by operation of law)(the "Plaintiff Releasors") forever
release, discharge and dismiss with prejudice each Defendant, each Defendant's
parent entities, associates, co-venturers, affiliates, and subsidiaries, and
their respective past, present, and future officers, directors, stockholders,
representatives, employees, investment bankers, commercial bankers, attorneys,
advisors, agents, heirs, executors, trustees, general and limited partners and
partnerships, personal representatives, estates, administrators, predecessors,
successors and assigns (whether express, implied, or by operation of law)(the
"Defendant Releasees") from any and all actual and alleged claims, demands,
rights, actions, causes of action, liabilities, damages, losses, obligations,
judgments, suits, matters, and issues of any kind or nature whatsoever,
contingent or absolute, suspected or unsuspected, matured or unmatured,
disclosed or undisclosed, that have been or could have been asserted in the
Action or in any court, tribunal or proceeding (including, but not limited to,
any claims arising under federal or state law relating to alleged fraud, breach
of any duty, negligence, violations of the federal securities laws, or
otherwise) by or on behalf of the Plaintiffs, the Class, or any member of the
Class, or Encore, whether individual, class, derivative, representative, legal,
equitable, or otherwise, which have arisen, could have arisen, arise now, or
relate in any manner to (i) the allegations, facts, events, transactions, acts,
occurrences, statements, representations, misrepresentations, omissions, or any

                                      -3-
<PAGE>

other matter, thing, or cause whatsoever, or any series thereof, embraced,
involved, set forth or otherwise related, directly or indirectly, to any of the
complaints filed at any time in the Action, any proxy material, public filings,
or statements (including, but not limited to, public statements) by Encore,
Gould, or the Defendants or in connection with any of their affiliated persons
or companies, the Sun Transaction, or the Gores Transaction; or (ii) the
Plaintiffs' or the Class members' purchase, sale, or holding of securities of
the Company or their investment in the Company; or (iii) the operations or
management of the Company (the "Plaintiff Settled Claims"); provided, however,
                                                            --------  -------
that the term Plaintiff Settled Claims shall not include the right of the
Plaintiffs, any member of the Class, or Encore to enforce the terms of the
Settlement after the Effective Date.

     6.   Each Defendant, Encore and each member of the Class, on behalf of
themselves and their respective current and former officers, directors,
employees, agents, partners, members, co-venturers, parents, subsidiaries,
affiliates, heirs, personnel, representatives, successors, and assigns (whether
express, implied, or by operation of law)(the "Defendant Releasors") forever
release, discharge and dismiss with prejudice each Plaintiff; each Plaintiff's
parent entities, associates, co-venturers, affiliates or subsidiaries, and their
respective past, present, and future officers, directors, stockholders,
representatives, employees, investment bankers, commercial bankers, attorneys,
advisors, agents, heirs, executors, trustees, general and limited partners and
partnerships, personal representatives, estates, administrators, predecessors,
successors and assigns (whether express, implied, or by operation of law)(the
"Plaintiff Releasees") from any and all actual and alleged claims, demands,
rights, actions, causes of action, liabilities, damages, losses, obligations,
judgments, suits, matters, and issues of any kind or nature whatsoever,

                                      -4-
<PAGE>

contingent or absolute, suspected or unsuspected, matured or unmatured,
disclosed or undisclosed, that have been or could have been asserted in the
Action or in any court, tribunal or proceeding (including, but not limited to,
any claims arising under federal or state law relating to alleged fraud, breach
of any duty, negligence, violations of the federal securities laws, or
otherwise) by or on behalf of the Defendants, the Class, any member of the
Class, or Encore, whether individual, class, derivative, representative, legal,
equitable, or otherwise, which have arisen, could have arisen, arise now, or
relate in any manner to (i) the allegations, facts, events, transactions, acts,
occurrences, statements, representations, misrepresentations, omissions or any
other matter, thing or cause whatsoever, or any series thereof, embraced,
involved, set forth or otherwise related, directly or indirectly, to any of the
complaints filed at any time in the Action, any proxy material, public filings,
or statements (including, but not limited to, public statements) by Encore,
Gould, the Defendants, or the Plaintiffs or in connection with any of their
affiliated persons or companies, the Sun Transaction, or the Gores Transaction;
or (ii) the Plaintiffs' or the Class members' purchase, sale, or holding of
securities of the Company or their investment in the Company; or (iii) the
operations or management of the Company (the "Defendant Settled Claims");
provided, however, that the term Defendant Settled Claims shall not include the
--------  -------
right of the Defendants or Encore to enforce the terms of the Settlement after
the Effective Date.

     7.   The releases provided for in this Order extend to claims that
Plaintiff Releasors or Defendant Releasors may not know or suspect to exist at
the time of the release, which if known, might have affected the decision to
enter into the Stipulation. Each of the Plaintiff Releasors and Defendant
Releasors shall be deemed to have waived any and all provisions, rights and
benefits conferred by any law of the United States or any state or territory of
the United States, or

                                      -5-
<PAGE>

principle of common law, which governs or limits a person's release of unknown
claims. The Plaintiff Releasors and Defendant Releasors are deemed to have
relinquished, to the full extent permitted by law, the provision, rights and
benefits of (S) 1542 of the California Civil Code 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.

In addition, each of the Plaintiff Releasors and Defendant Releasors also shall
be deemed to 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 California Civil Code
(S) 1542. Plaintiff Releasors and Defendant Releasors have acknowledged that it
or they may discover facts in addition to or different from those that it or
they now know or believe to be true with respect to the subject matter of the
release, but that it is their intention to fully, finally and forever settle and
release any and all Settled Claims released hereby known or unknown, suspected
or unsuspected, which now exist, or heretofore existed and without regard to the
subsequent discovery or existence of such additional or different facts.

     8.   The Plaintiff Releasors and Defendant Releasors either directly,
individually, derivatively, representatively or in any other capacity, are
barred and enjoined from instituting, commencing, prosecuting, asserting or
continuing any action in any court or tribunal asserting any claims that relate
in any way to any of the Settled Claims against the Plaintiff Releasees or
Defendant Releasees in this or any other jurisdiction.

     9.   The plan of distribution, including the Form of Proof of Claims and
Release, is hereby approved as fair, reasonable, and adequate and the Plaintiffs
are directed to implement the

                                      -6-
<PAGE>

plan of distribution in accordance with its terms.

     10.  The Class counsel are awarded _____________ as fees and __________ in
reimbursement of expenses to be paid to them by Encore as specified in the
Settlement Stipulation.

     11.  This Court retains continuing jurisdiction over the action, the
parties, the members of the Class, and Encore for the purposes of enforcing and
implementing, and determining any disputes arising with respect to, the
Settlement and the Plan of Distribution.





                                                  ______________________________
                                                  Vice Chancellor Jacobs

                                      -7-