dvi, inc. securities litigation 03-cv-05336

Case 2:03-cv-05336-L Document 519 Filed 10/16/2007 of 10

IN THE UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF PENNSYLVANIA

In Re DVI, Inc. Securities LitigationCase No. 2:03-CV-5336

Hon. Legrome D. Davis

LEAD PLAINTIFFS' MOTION FOR ORDER APPROVING SECOND PARTIALSETTLEMENT, PLAN OF ALLOCATION, CERTIFICATION OF ASETTLEMENT CLASS, AND ATTORNEYS' FEES AND EXPENSES

Lead Plaintiffs respectfully move this Court pursuant to Fed. R. Civ. Pro. 23(e)

for an order, in the form attached hereto as Exhibit 1, approving the Settlement

Agreement that Lead Plaintiffs have entered into with Defendants Nathan Shapiro,

William Goldberg, and John McHugh (the "Partial Settlement").

For the reasons set forth in Lead Plaintiffs' accompanying Memorandum of Law

in Support of Motion for Entry of Order Approving Partial Settlement, Lead Plaintiffs

respectfully request that this Court (a) approve the Partial Settlement; (b) approve the

parties' plan of allocation; (c) approve and certify a settlement class; and (d) award

Plaintiffs' Counsel's requested attorneys' fees and expense reimbursement.

Dated: October 16, 2007

Respectfully submitted,

KRISLOV & ASSOCIATES, LTD.

By: /s/ Michael R. Karnuth

Clinton A. Krislov, Esq.Michael R. Karnuth, Esq.20 North Wacker DriveChicago, Illinois 60606Phone: 312-606-0500

1


Fax: 312-606-0207Plaintiffs' Lead Counsel

Steven A . Schwartz, Esq.Attorney I.D. No. 50579Kathy Meermans Esq.Attorney I.D. No. 37846Chimicles & Tikellis LLP361 W . Lancaster AvenueOne Haverford CentreHaverford, PA 19041Phone : 610-642-8500Fax: 610 -649-3633Plaintiffs' Liaison Counsel

2


EXHIBIT 1



In Re DVI, Inc. Securities LitigationCase No. 2:03-CV-5336-LDD

Judge Legrome D. Davis

ORDER OF FINAL JUDGMENT AND DISMISSAL

On November 2, 2007, a hearing having been held before this Court to determine:

(1) whether the terms and conditions of the Stipulation of Settlement dated June 25, 2007

(hereinafter referred to individually and interchangeably as the "Stipulation" and the

"Settlement"), including the releases provided for in the Stipulation, are fair, reasonable

and adequate for the settlement of all claims asserted by the Class against Defendants

Nathan Shapiro, William Goldberg and John McHugh (the "Settling Defendants")

respectively, in the Complaint now pending in this Court under the above caption, and

should be approved; (2) whether a Settlement Class should be finally certified for

purposes of the proposed Settlement; (3) whether judgment should be entered dismissing

the Complaint with prejudice as to Settling Defendants; and (4) whether and in what

amount to award Plaintiffs' Lead Counsel fees and reimbursement of expenses.

The Court, having previously granted certification of a Settlement Class as to

Plaintiffs' claims against the Settling Defendants on July 16, 2007, and having considered

all matters submitted to it at the hearing and otherwise, and it appearing that a notice of

the hearing substantially in the form approved by the Court was mailed to all persons or

entities reasonably identifiable who purchased the DVI, Inc. securities at issue in this

Action from August 10, 1999 to August 13, 2003 (dates inclusive) (the "Class Period"),


and who were damaged thereby, except those persons or entities excluded from the

definition of the Class or who previously excluded themselves from the Class, and that a

summary notice of the hearing substantially in the form approved by the Court was

published on one occasion in: the national editions of The Wall Street Journal; USA

Today, and editions of the Chicago Tribune and the Philadelphia Inquirer , as well as

published on one occasion on the PR Newswire, and the Court having considered and

determined the fairness and reasonableness of the award of attorneys' fees and expenses

requested; and all capitalized terms used herein having the meanings as set forth and

defined in the Stipulation;

NOW, THEREFORE, IT IS HEREBY ORDERED THAT:

The Court has jurisdiction over the subject matter of the Action, the

Plaintiffs, the Settlement Class Members, and the Settling Defendants.

2. The Court determines for purposes of finally approving the Stipulation

only that the action as against Settling Defendants may proceed for settlement purposes

as a class action under Federal Rules of Civil Procedure 23(a) and (b)(3) in that: (a) the

number of Class Members is so numerous that joinder of all members thereof is

impracticable; (b) there are questions of law and fact common to the Class; (c) the claims

of the Lead Plaintiffs (who have moved for appointment as Class Representatives) are

typical of the claims of the Class they seek to represent; (d) the Lead Plaintiffs have and

will fairly and adequately represent the interests of the Class; (e) the questions of law and

fact common to the Class Members predominate over any questions affecting only

individual members of the Class; and (f) a class action is superior to other available

methods for the fair and efficient adjudication of the controversy.

2


3. The Court therefore also determines for purposes of finally approving the

Stipulation only that the Lead Plaintiffs may represent a Settlement Class defined as

follows, which the Court hereby certifies for settlement purposes only:

All persons and entities who purchased or otherwise acquired thesecurities of DVI (its common stock and 9 7/8% Senior Notes), betweenAugust 10, 1999 and August 13, 2003, both dates inclusive. Excludedfrom the Settlement Class are Defendants; any entity in which a Defendanthas a controlling interest or is a part or subsidiary of, or is controlled by aDefendant; the officers, directors, legal representatives, heirs,predecessors, successors and assigns of any of the Defendants; plaintiffsnamed in the WM High Yield Fund, et al. v. O'Hanlon, et al. , No. 04-CV-3423 (E.D. Pa.); and those persons or entities who timely and validlyrequest exclusion from the Settlement Class pursuant to the Notice.

4. Notice of the pendency of this Action as a class action and of the proposed

Partial Settlement was given to all Class Members who could be identified with

reasonable effort. The form and method of notifying the Class of the pendency of the

action as a class action and the terms and conditions of the proposed Partial Settlement

met the requirements of Rule 23 of the Federal Rules of Civil Procedure, Section

21D(a)(7) of the Securities Exchange Act of 1934, 15 U.S.C. § 78u-4(a)(7), as amended

by the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), due process, and

any other applicable law; constituted the best notice practicable under the circumstances;

and constituted due and sufficient notice to all persons and entities entitled thereto.

The Partial Settlement is approved as fair, reasonable and adequate, and

the parties are directed to and shall consummate and abide by the Partial Settlement in

accordance with the terms and provisions of the Stipulation.

6. The Complaint, which the Court finds was filed on a good faith basis in


accordance with the PSLRA and Rule 11 of the Federal Rules of Civil Procedure based

upon all publicly available information, is hereby dismissed with prejudice and without

costs, except as provided in the Stipulations, as against Settling Defendants only.

7. Class Members who have not previously excluded themselves from the

Class and the successors and assigns of any of them are hereby permanently barred and

enjoined from instituting, commencing or prosecuting all claims, rights, demands, suits,

matters, issues or causes of action, whether known or unknown, asserted or unasserted,

whether under state or federal law, including the federal securities laws, and whether

directly, indirectly, derivatively, representatively or in any other capacity, arising out of

losses sustained by the Class with respect to any transaction in or related to the DVI, Inc.

securities (the "Settled Claims") (but excluding any claims to enforce the terms of the

Partial Settlement) against Settling Defendants and Settling Defendants' trusts for which

Settling Defendants are the settlor or which is for the benefit of them or their families;

Settling Defendants' personal or legal representatives, heirs, executors, administrators,

and any other Person acting on their behalf, and all of Settling Defendants' past and

present agents, employees, attorneys, insurers, co-insurers, reinsurers, accountants,

advisors, successors, shareholders, directors, affiliates, parents, subsidiaries, and assigns;

provided, however, that nothing herein shall bar or enjoin any Members of the Class from

instituting or pursuing any claims against Defendants Michael A. O'Hanlon, Steven R.

Garfinkel, John P. Boyle, Terry Cady, Gerald Cohn, Harry T.J. Roberts, Deloitte &

Touche, LLP, Merrill Lynch & Co., Inc., Radnet Management, Inc., Richard E. Miller,

Anthony J. Turek, Thomas Pritzker, the Pritzker Organization LLC, and certain unnamed

Pritzker family members , Clifford Chance LLP and Clifford Chance (US) LLP. The

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Case 2:03-cv-05336- L Document 519 Filed 10/16/2007 of 10

Settled Claims are hereby compromised, settled, released, discharged and dismissed as

against Settling Defendants with prejudice by virtue of the proceedings herein and this

Order and Final Judgment.

To the maximum extent permitted by law, the Court hereby bars (1) all

claims against Settling Defendants for indemnity or contribution or any other claim

against Settling Defendants arising out of the Action or otherwise where the injury to the

claimant is the claimant's actual or threatened liability to the Class arising out of or

related to any transactions with respect to the DVI securities , and (2) all claims by

Settling Defendants against any person for indemnity or contribution arising out of the

Action or otherwise where the injury to the claimant is the claimant's actual or threatened

liability to the Class arising out of or related to any transactions with respect to the

securities.

9. Any non-settling party shall be entitled to a reduction in any final verdict

or judgment in an amount calculated as provided for in 15 U.S.C. § 78u-4(f)(7)(B).

10. Neither this order and Final Judgment, the Stipulation, nor any of their

terms and provisions, nor any of the negotiations or proceedings connected therewith, nor

any of the documents or statements referred to therein shall be:

a. offered or received against the Settling Defendants as evidence of

or construed as or deemed to be evidence of any presumption, concession, or admission

by Settling Defendants with respect to the truth of any fact alleged by the Plaintiffs or the

validity of any claim that had been or could have been asserted in the Action or in any

litigation, or the deficiency of any defense that has been or could have been asserted in

Case 2:03-cv-05336- L Document 519 Filed 10/16/2007 of 10

the Action or in any litigation, or of any liability, negligence, fault, or wrongdoing of

Settling Defendants;

b. construed as or received in evidence as an admission, concession

or presumption against Lead Plaintiffs or the Class, or any of them that any of their

claims are without merit or are subject to any infirmities, or that damages recoverable

under the Complaint would not have exceeded the Settlement Amount; or

construed against Settling Defendants, or Lead Plaintiffs or the

Class as an admission or concession that the consideration to be given hereunder

represents the amount which could be or would have been recovered after trial.

11. On the Effective Date of the Partial Settlement, all Class Members and

anyone claiming through or on behalf of any of them, will be forever barred and enjoined

from commencing, instituting, prosecuting or continuing to prosecute any action or other

proceeding in any court of law or equity, arbitration tribunal, or administrative forum,

asserting the Released Claims against any of the Released Parties, except that these

releases shall not bar any suit or action to enforce the terms of the Stipulation or this

Order of Final Judgment and Dismissal.

12. The Court finds that all parties to the Stipulation and their counsel have

complied with each requirement of Rule 11 of the Federal Rules of Civil Procedure as to

all proceedings herein.

13. Plaintiffs' Lead Counsel are hereby awarded $ in attorneys'

fees, which shall be paid from the Partial Settlement Fund and which the Court finds to

be fair and reasonable, and $ in reimbursement of expenses, both of

which shall be paid to Plaintiffs' Lead Counsel from the Partial Settlement Fund with

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Case 2-03-cv-05336-LDD Document 519 Filed 10/16/2007 of 10

interest from the date such Partial Settlement Fund was funded to the date of payment at

the same interest rate that the Partial Settlement Fund earns.

14. Exclusive jurisdiction is hereby retained over the parties and the Class

Members for all matters relating to this Action, including the administration,

interpretation, effectuation or enforcement of the Stipulation and this Order and Final

Judgment, and including any application for fees and expenses incurred in connection

with administering and distributing the settlement proceeds to the members of the Class.

15. Without further order of the Court, the parties may agree to reasonable

extensions of time to carry out any provisions of the Stipulation.

16. There is no just reason for delay in the entry of this Order and Final

Judgment and immediate entry by the Clerk of Court is expressly directed pursuant to

Rule 54(b) of the Federal Rules of Civil Procedure.

ENTER:

Judge, United States District Courtfor the Eastern District of Pennsylvania

Dated: , 2007

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Case 2:03-cv-05336- L Document 519-2 Filed 10/16/2007 Page 1 of 73




PLAINTIFFS' MEMORANDUM OF LAW IN SUPPORT OFMOTION FOR FINAL APPROVAL OF SECOND PARTIAL SETTLEMENT

ANDIN SUPPORT OF CERTIFICATION OF SETTLEMENT CLASS, PLAN OF

ALLOCATION AND AWARD OF ATTORNEYS FEES AND COSTS

Clinton A. KrislovMichael R . KarnuthKRISLOV & ASSOCIATES, LTD.20 N. Wacker Dr., Suite 1350Chicago, Illinois 60606Tel. (312) 606-0500Fax. (312) 606-0207Plaintiffs' Lead Counsel

Steven A. SchwartzKimberly DonaldsonM. Kathy MeermansCHIMICLES & TIKELLIS, LLPOne Haverford CentreHaveford, PA 19041Tel. (610) 645-4720Fax. (610) 649-3633Plaintiffs' Liaison Counsel


TABLE OF CONTENTS

TABLE OF AUTHORITIES ......................................................................................... .....v

1. INTRODUCTION ............................................................................................... .....1

II. HISTORY OF THE LITIGATION .................................................................. .....3

A. Early History ........................................................................................... .....3

B. The DVI Bankruptcy Examiner's Report and Lead Plaintiffs'Fifth Amended Complaint ..................................................................... .....4

C. Settlement Negotiations with the Outside Directory Defendants ....... .....6

ARGUMENT ................................................................................................................... .....7

L THE PROPOSED CLASS SATISFIES THE REQUIREMENTS FORCERTIFICATION OF A SETTLEMENT CLASS ......................................... .....7

A. Class Certification Is Favored In Securities Fraud Cases .................. .....8

B. The Settlement Class Meets The Requirements For Certification ..... .....8

1. Courts Liberally Construe Rule 23 In This Circuit ................. .....9

2. The Rule 23(a) Prerequisites Are Satisfied ............................... .....10

a. Numerosity is Clearly Present .......................................... .....10

b. There Are Questions of Law and Fact Common toAll Class Members ............................................................ .....11

c. Plaintiffs' Claim Are Typical of the Class of AllClass Members .................................................................. .....13

d. Plaintiffs and Class Counsel Have and Will Continueto Adequately Represent the Interests of the Class ........... .....14

i. Class Counsel Has and Will Continue toAbly Represent the Class .................................... .....14

ii. The Class Representative ' s Interests AreNot Antagonistic to those of the Class ............... .....15

i


3. The Requirements Of Rule 23(b)(3) Are Also Met InThe Settlement Context ...................................................................17

a. The Questions of Law and Fact that are Common tothe Class Predominate Over Any Individual Issues ...............18

b. Class Treatment of this Matter is the Best Method toAchieve Judicial Efficiency and Ensure That AllPlaintiffs Have the Opportunity to Assert Their Claim .........19

II. THE PROPOSED PARTIAL SETTLEMENT WITH THE SGMSETTLING DEFENDANTS WARRANTS FINAL APPROVAL ......................21

A. The Due Process Requirements Have Been Satisfied ...............................21

B. The Standards For Judicial Approval Of Class ActionSettlements ....................................................................................................22

1. Complexity, Expense , and Likely Duration of theLitigation Weigh in Favor of Approval .........................................25

2. Reaction of the Class to the Partial Settlement .............................27

3. The State of the Proceedings and the Amount ofDiscovery Completed Weigh in Favor of Approval ...................... 28

4. The Risks of Establishing Liability Weigh in Favorof Approval .......................................................................................29

5. The Risk of Proving Damages and Causation Weighsin Favor of Approval .......................................................................31

6. The Risks of Maintaining the Class Action ThroughTrial Weigh in Favor of Approval ..................................................32

7. The Ability of Defendants to Withstand Greater Judgment .......32

8. The Settlement is Reasonable in Light of the Best PossibleRecovery and All Attendant Risks of Litigation ...........................33

9. The Settlements are the Product of Arm's LengthNegotiations Among Experienced Counsel ....................................35

C. The Plan of Allocation Is Fair And Reasonable ........................................37

III. PLAINTIFFS' COUNSEL'S REQUEST FOR ATTORNEYS' FEES

11


AND EXPENSE REIMBURSEMENT SHOULD BE APPROVED .............. .....38

A. Legal Standard Governing the Award of Attorneys' Fees .................. .....38

B. The Court Should Calculate the Attorneys' Fee AwardUsing the Percentage-of-Recovery Approach ...................................... .....40

C. The Requested 30% Fee Is Fair and Reasonable Under TheThird Circuit ' s Gunter Factors ............................................................. .....40

1. The Size and Nature of the Common Fund Created, andthe Number of Persons Benefited By the Settlement ............... ..... 42

2. The Absence of Any Objections to the Settlement or theRequested Attorneys ' Fee Award .............................................. .....43

3. The Skill and Efficiency of Plaintiffs ' Counsel ........................ .....44

4. The Complexity and Duration of the Litigation ....................... .....45

5. The Risk of Non-Payment .......................................................... .....46

a. The Fully Contingent Nature of Plaintiffs'Representation ................................................................... .....46

b. The Risk of Collecting A Judgment ThatMight Ultimately Be Obtained Was SignificantIn This Case ...................................................................... .....48

i. Litigation Risks ................................................... .....48

ii. Collectability ........................................................ .....48

6. The Time Devoted to this Case by Plaintiffs ' Counsel wasSignificant .................................................................................... .....49

7. Awards in Similar Cases ............................................................ .....50

D. The Requested Fee Is Reasonable Under The LodestarCross-Check ........................................................................................... .....52

1. Hours Reasonably Expended by Counsel ................................. .....53

2. Calculating the "Base" Lodestar ............................................... .....54

3. The Lodestar Multiplier ............................................................. .....55

iii


4. Performing the Lodestar Cross-Check ..........................................55

E. Public Policy Considerations Support the Requested Fee .......................57

F. Plaintiffs ' Counsel Should Be Reimbursed For Their ReasonablyIncurred Litigation Expenses .....................................................................58

IV. CONCLUSION ........................................................................................................60

lv

Case 2:03-cv-05336-L Document 519-2 Filed 10/16/2007 Page 6 of 73

TABLE OF AUTHORITIES

Cases

Aamco Automatic Transmissions, Inc. v. Ta. loe, 82 F.R.D. 405 (E.D. Pa. 1979) .......... 52

Anixter v. Home-Stake Prod. Co. , 77 F.3d 1215 (10th Cir. 1996) ................................... 47

ATI Tech. , 2003 WL 1962400 (E.D. Pa. April 28, 2003) ................................................ 51

Basic Inc. v. Levinson , 485 U.S. 224 (1988) .................................................................... 57

Bateman Eichler, Hill Richars, Inc. v. Berner, 472 U.S. 299 (1985) .................... 39, 57, 58

Behrens v. Wometco Enters., Inc. , 118 F.R.D. 534 (S.D. Fla. 1988),affdwithout op., 899 F.2d 21 (11th Cir. 1990) ...................................................... 42, 44

Blackie v. Barrack, 524 F.2d 81 (9th Cir. 1975) ............................................................... 16

Blackman v. O'Brien Envtl. Energy, Inc. , 1999 WL 397389(E.D. Pa. May 12, 1999) ............................................................................................... 52

Blum v. Stenson , 465 U.S. 886, 104 S. Ct. 1541 (1984) ............................................ 40, 54

Boeing Co. v. Van Gernert , 444 U.S. 472 (1980) ................................................. 38, 39, 40

Bradburn v. 3M, No. Civ. A. 02-7676, 2004 WL 1842987(E.D. Pa. Aug. 18, 2004) ............................................................................... 9, 10, 12, 16

Brown v. Esmor Correctional Services, Inc. , No. 98-1282, 2005 WL 1917869(D. N.J. Aug. 10, 2005) ................................................................................................. 51

Brown v. Pro Football, Inc. , 839 F. Supp. 905 (D.D.C. 1993) ......................................... 59

Bryan v. Pittsburgh Plate Glass Co. , 494 F.2d 799 (3d Cir. 1974) ................................... 24

Bullock v. Adm'r of Estate of Kircher, 84 F.R.D. 1 (D.N.J. 1979) .................................. 25

Cent. R.R. & Banking Co. v. Pettus , 113 U.S. 116 (1885) ............................................... 38

City of Detroit v. Grinnell Corp. , 495 F.2d 448 (2d Cir. 1974) .................................. 23, 34

Cohen v. Tuttle , Civ. Action Nos. 85-2396, 85-2621, 85-3022, 1987 WL 7224(E.D. Pa. 1987) .............................................................................................................. 35

Cullen v. Whitman Med. Corp. , 188 F.R.D. 226 (E.D. Pa. 1999) .................................... 11

v


Cullen v. Whitman Med. Corp. , 197 F.R.D. 136 (E.D. Pa. 2000) ....................... ............. 51

Daniel B . v. O'Bannon, 633 F. Supp. 919 (E.D. Pa. 1986) .................................. ....... 24, 37

Denney v. Jenkens & Gilchrist, 230 F.R.D. 317 (S.D.N.Y. 2005) ...................... ............. 35

DeSantis v. Snap-on Tools, 2006 WL 3068584 (D.N.J., Oct. 27, 2006) ............. ............. 28

Eichenholtz v. Brennan, 52 F.3d 478 (3d Cir. 1995) ........................................... ....... 22, 23

Eisen v. Carlisle & Jacquelin, 417 U. S. 156 (1974) ............................................ ......... 9, 21

Eisenberg v. Gagnon, 766 F.2d 770 (3d Cir. 1985) ............................................. ............... 8

Eisenstadt v. Centel Corp. , 113 F.3d 738 (7th Cir. 1997) .................................... ............. 47

Elec. Carbon , 2006 WL 2505881 (D. N.J. Aug. 30, 2006) .................................. ............. 56

Eltman v. Grandma Lee's Inc. , 1986 WL 53400 (E.D.N.Y. May 28, 1986) ....... ....... 24, 57

Farris v. JC Penney Co., Inc. , 176 F.3d 706 (3d Cir. 1999) ................................ ............. 22

Feder v. Harrington , 58 F.R.D. 171 (S.D.N.Y. 1972) .......................................... ............. 24

Fickinger v. C.I. Planning Corp.., 646 F. Supp. 622 (E.D. Pa. 1986) ................... ............. 34

Fisher Bros . v. Cambridge-Lee Indus., Inc. , 630 F. Supp. 482 (E.D. Pa. 1985) . ....... 24, 37

Fisher Bros ., Inc. v. Mueller Brass Co. , 630 F. Supp. 493 (E.D. Pa. 1985) ........ ............. 28

Girsh v. Jepson, 521 F.2d 153 (3d Cir. 1975) ...................................................... ..22, 23, 28

Gunter v. Ridgewood EnergyCo, 223 F.3d 190 (3d Cir. 2000) ..................... ....... 41, 52

Hanlon v. Chrysler Corp. , 15 F.3d 1011 (9th Cir. 1998) ..................................... ............. 13

Hoxworth v. Blinder Robinson & Co. , 980 F.2d 912 (3d Cir. 1992) .................. ............. 13

Huddleston , 459 U.S. 375 (1983) ........................................................................ ............. 57

In re Aetna Inc. Sec. Litig. , 2001 WL 20928 (E.D. Pa. Jan. 4, 2001) ................. ...... passim

In re AT&T Corp. Sec. Litig., 455 F.3d 160 (3d Cir. 2006) ........................... 40 , 43, 52, 53

In re Automotive Refinishing Paint Antitrust Litig. , MDL No. 1426

(E.D. Pa. Oct. 13, 2004) ........................................................................... ..............51

vi


In re Baldwin-United Corp. , 607 F. Supp. 1312 (S.D.N.Y. 1985) ................................... 24

In re Cell Pathways , 2002 WL 31528573 (E.D. Pa. 2002) ............................. 23, 37, 44, 51

In re Cendant Corp. Sec. Litig., 404 F.3d 173 (3d Cir. 2005) .......................................... 40

In re Cendant Sec. Litig. , 264 F.3d 201 (3d Cir. 2001) ........................................ 28, 29, 36

In re Chambers Dev. Sec. Litig. , 912 F. Supp. 822 (W.D. Pa. 1995) ......................... 26, 30

In re Cigna Corp. Sec. Litig. , 2006 WL 2433779 (E.D. Pa. Aug. 18, 2006) ............. passim

In re Computron Software, Inc. Sec. Litig. , 6 F. Supp. 2d 313 (D. N.J. 1998) ......... passim

In re Corel Corp. Sec. Litig., 206 F.R.D. 533 (E.D. Pa. 2002) ....................... 12, 13, 19, 20

In re Corel Corp. Sec. Litig. , 293 F.Supp.2d 484 (E.D. Pa. 2003) ................................... 51

In re Crazy Eddie Sec. Litig., 824 F. Supp. 320 (E.D.N.Y. 1993) ................................... 35

In re Elec. Carbon Prods. Antitrust Litig. , 447 F. Supp. 2d 389 (D.N.J. 2006) ................ 39

In re Fine Paper Antitrust Litig. , 751 F.2d 562 (3d Cir. 1984) ................................... 54, 55

In re Flat Glass Antitrust Litig. , MDL No. 1200 (W.D. P.A. May 28, 2003) ...................51

In re Greenwich Pharm. Sec. Litig. , No. 92-3071, 1995 WL 251293

(E.D. Pa. April 25, 1995) .............................................................................................. 52

In re Ikon Office Solutions, Inc. Sec. Litig. , 194 F.R.D. 166 (E.D. Pa. 2000) .......... passim

In re LifeUSA Holding, Inc. , 242 F.3d 136 (3d Cir. 2001) .............................................. 18

In re Linerboard Antitrust Litig. , 2004 WL 1221350 (E.D. Pa. June 2, 2004)........... 51, 53

In re Loewen Group, Inc. Sec. Litig. , 233 F.R.D. 154 (E.D. Pa. 2005) ................ 15, 18, 19

In re Michael Miliken & Assoc. Sec. Litig. , 150 F.R.D. 57 (S.D.N.Y. 1993) .................. 35

In re Nat'l Student Mktg. Litig. , 68 F.R.D. 151 (D.D.C. 1974) ........................................ 24

In re Orthopedic Bone Screw Prod. Liability Litigation , 246 F.3d 315 (3d Cir. 2001).... 22

In re Plastic Cutlery Antitrust Litigation, 1998 WL 125703

(E.D. Pa. March 20, 1998) ........................................................................................... 20

vii


In re Prudential Ins. Co. of America Sales Practice Litig. Agent Actions ,148 F.3d 283 (3d Cir. 1998) .............................................................................. ..... passim

In re Prudential Sec. Inc. Ltd. P'ships Litig., MDL No. 1005, 1995 WL 798907(S.D.N.Y. Nov. 20, 1995) ................................................................................. ............ 35

In re Prudential-Bache Energy Income Partnerships Sec. Litig. , No. 888, 1994 WL202394 (E.D. La. May 18, 1994) ...................................................................... ............ 47

In re Ravisent Technologies, Inc. Sec. Litig. , No. 00-1014, 2005 WL 906361(E.D. Pa. April 18, 2005) .................................................................................. ............ 51

In re Remeron Direct Purchaser Antitrust Litig. , No. 03-0085, 2005 WL 3008808

(D.N.J. Nov. 9, 2005) ........................................................................................ ...... 43, 51

In re Remeron End-Payor Antitrust Litig. , No. 02-2007, 2005 WL 2230314(D.N.J. Sept. 13, 2005) ..................................................................................... ............ 59

In re Rent-Way Sec. Litig., 218 F.R.D. 101, 116 (W.D. Pa. 2003) ...................... ...... 18, 19

In re Residential Doors Antitrust Litig. , No. 96-2125, 1998 WL 151804(E.D. Pa. Apr. 2, 1998) ..................................................................................... ............ 36

In re Rite Aid Corp. Sec. Litig. , 146 F. Supp. 2d 706 (E.D. Pa. 2001) ................ 39, 50, 59

In re Rite Aid Corp. Sec. Litig. , 362 F. Supp. 2d 587 (E.D. Pa. 2005) ................ ............ 40

In re Rite Aid Corp. Sec. Litig. , 396 F.3d 294 (3d Cir. 2005) ........................ 40, 44, 53, 54

In re Saxon Sec. Litig. , No. 82 Civ. 3101 (MJL), 1985 WL 48177(S.D.N.Y. Oct. 30, 1985) .................................................................................. ............ 24

In re School Asbestos Litig. , 789 F.2d 996 (3d Cir. 1986) ................................... ............ 18

In re SmithKline Beckman Corp. Sec. Litig. , 751 F. Supp. 525(E.D. Pa. 1990) .................................................................................................. 23, 28, 44

In re ValueVision Int'l Sec. Litig. , 957 F. Supp. 699 (E.D. Pa. 1997) .................. ............ 52

In re Vicuron Pharmaceuticals, Inc. Sec. Litig. , 233 F.R.D. 421(E.D. Pa. 2006) .................................................................................................. 11, 12, 19

In re Warfarin Sodium Antitrust Litig. , 391 F.3d 516 (3d Cir. 2004) .................. ............ 36

In re Warner Communications Sec. Litig. , 618 F. Supp . 735 (S.D.N.Y. 1985)

viii

Case 2-03-cv-05336-LDD Document 519-2 Filed 10/16/2007 Page 10 of 73

affd, 798 F.2d 35 (2d Cir . 1986) ................................................................ 25, 45, 55, 57

In re Warner Communications Sec. Litig . , 798 F . 2d 35 (2d Cir . 1986) ........................... 24

Johnston v. HBO Film Management, Inc. , 265 F . 3d 178 (3d Cir . 2001 ) ........................... 8

Kanter v . Casey , 43 F.3d 48 (3d Cir. 1994) ...................................................................... 12

Karasik v . Pac E. Corp . , 180 A . 604 (Del . Ch. 1935) ....................................................... 34

Kathleen S. v. Dept of Public Welfare of the Commonwealth of Pa. ,No. 97-6610, 1998 WL 83973 (E.D. Pa. Feb. 25, 1998) .............................................. 10

Katz v. E.L.I. Computer Ste, 70 Civ. 2462, 1971 WL 251(S.D.N.Y. Apr. 5, 1971) ................................................................................................ 24

Ketchum v. Sunoco, Inc. , 217 F.R.D. 354 (E.D. Pa. 2003) .............................................. 13

Kirkorian v. Borelli , 695 F. Supp. 446 (N.D. Cal. 1988) ................................................. 24

La Fata v. Raytheon Co. , 207 F.R.D. 35 (E.D. Pa. 2002) ................................................. 12

Lazy Oil, Co. v. Witco Corp. , 95 F. Supp. 2d 290 (W.D. Pa. 1997) .......................... 22, 37

Lenahan v. Sears, Roebuck and Co. , No. 02-0045, 2006 WL 2085282(D.N.J. July 24, 2006) ................................................................................................... 51

Lyon v. Caterpillar, Inc. , 194 F.R.D. 206 (E.D. Pa. 2000) ................................................. 9

M. Berenson Co. v. Faneuil Hall Marketplace, Inc. , 671 F. Supp. 819(D. Mass. 1987) ............................................................................................................. 24

Meijer, Inc. v. 3M, No. 04-5871, 2006 WL 2382718 (E.D. Pa. Aug. 14, 2006)........ 43, 59

Mills v. Elec. Auto-Lite Co. , 396 U.S. 375 (1970) ........................................................... 38

Milstein v. Huck, 600 F. Supp. 254 (E.D.N.Y. 1984) ...................................................... 25

Missouri v. Jenkins , 491 U.S. 274 (1989) ................................................................... 54, 59

Moskowitz v. Lopp , 128 F.R.D. 624 (E.D. Pa. 1989) ...................................................... 12

National Organization on Disability v. Tartadlione No. Civ. A. 01-1923,2001 WL 1258089 (E.D. Pa. Oct. 22, 2001) ................................................................... 9

New York State Ass'n for Retarded Children, Inc. v. Carey , 711 F.2d 1136

ix


(2d Cir. 1983) ................................................................................................................ 54

Newman v. Stein, 464 F.2d 689 (2d Cir. 1972) .......................................................... 24, 34

Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 259 F.3d 154 (3d Cir. 2001) ... 12

Nichols v. SmithKline Beecham Corp . , No. 00-6222, 2005 WL 950616

(E.D. Pa. April 22, 2005) ........................................................................................ ...... 51

Parker v. Anderson , 667 F.2d 1204 (5th Cir. 1982), cert. denied,

459 U.S. 828 (1982) ................................................................................................ ...... 34

Perry v. FleetBoston Financial Corp. , 229 F.R.D. 105 (E.D. Pa. 2005) ..................... 40, 41

Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson ,390 U.S. 414 (1968) ................................................................................................ ...... 25

Ratner v. Bennett, No. 92-4701, 1996 WL 243645 (E.D. Pa. May 8, 1996) .............. ...... 52

Robbins v. Koper Props., Inc. , 116 F.3d 1441 (1 lth Cir. 1997) ................................. ...... 47

Schutte v. Maleski , No. Civ. A. 93-0961, 1993 WL 218898 (E.D. Pa. June 18, 1993) ..... 9

Seidman v. American Mobile Sys. , 965 F. Supp. 612 (E.D. Pa. 1997) ...................... 28, 55

Seidman v. American Mobile Systems, Inc. , 157 F.R.D. 354 (E.D. Pa. 1994) .......... ...... 13

Semerenko v. Cendant Corp. , 223 F.3d 165 (3d Cir. 2000) ....................................... ...... 31

Shlensky v. Dorsey, 574 F.2d 131 (3d Cir. 1978) ...................................................... ...... 23

Smith v. Dominion Bridge Corp. , 2007 WL 1101272 (E.D. Pa. April 11, 2007) ...... ...... 51

Smith v. Suprema Specialties , 2007 WL 1217980 (D.N.J. April 23, 2007) ............... ...... 18

Sommers v. Abraham Lincoln Fed. Sav. & Loan Ass'n. , 79 F.R.D. 571(E.D. Pa. 1978) ........................................................................................................ ...... 24

Sprague v . Ticonic Nat' l Bank, 307 U . S. 161, 59 S.Ct . 777 U. S. 1939 ............................ 40

Stewart v. Abraham , 275 F . 3d 220 (3d Cir. 2001 ), cert. denied, 536 U . S. 958 (2002).... 10

Stoetzner v. United States Steel Corp. , 897 F . 2d 115 (3d Cir. 1990) ............................... 27

Stoner v . CBA Info . Servs . , 352 F . Supp . 2d 549 (E.D. Pa . 2005) ............................. 40,51

x


United States v. 412.93 Acres of Land, 455 F.2d 1242 (3d Cir. 1972) ............................ 31

Voisin v. Bartell Media Corp. , No. 76 Civ. 3954 (MJL), 1982 WL 1359(S.D.N.Y. Dec. 2, 1982) ................................................................................................ 36

Walsh v. Great Atl. & Pac. Tea Co. , 726 F.2d 956 (3d Cir. 1983) ............................. 22, 23

Williams v. First Nat'l Bank, 216 U.S. 582 (1910) ........................................................... 22

Yang v. Odom, 392 F.3d 97 (3d Cir. 2004) ........................................................................ 8

Zeffro v. First Pa. Banking and Trust Co. , 96 F.R.D. 567 (E.D. Pa. 1983) ...................... 13

Zinman v. Avemco Corp. , No. 75-1254, 1978 WL 5686 (E.D. Pa. Jan. 18 , 1978).......... 52

StatutesPSLRA. 15 U.S.C. '78u-4(e)(3) ........................................................................................ 38

RulesFed. R. Civ. P. 23(a)(1) ..................................................... ................................................ 10

Fed. R. Civ. P. 23(a)(2) ..................................................... ................................................ 11

Fed. R. Civ. P. 23(a)(4) ..................................................... ................................................ 14

Fed. R. Civ. Pro. 23(b)(3) ................................................. ................................................ 18

Fed. R. Civ. Pro. 23(e) ...................................................... ................................................ 23

xi

one previously approved by this Court on November 17, 2006.

Lead Plaintiffs respectfully submit this memorandum of law in support of their

application for final approval of (1) the certification of the same settlement class as

previously approved; (2) the Second proposed partial settlement of this securities fraud

class action (the "Action") between Lead Plaintiffs and defendants Nathan Shapiro

("Shapiro"), William Goldberg (`Goldberg") and John McHugh ("McHugh")

(collectively, the "Outside Director Defendants" or "SGM Settling Defendants"), (3) the

Plan of Allocation for distributing the proceeds of the Partial Settlement, and (4)

attorneys fees and costs.

The proposed partial settlement - an additional $3,250,000 in cash to the Class -

is the second settlement achieved for the Class and, like the first', represents an

exceptional recovery for the Class from the SGM Settling Defendants. The settlement

amount has been fully funded into an interest-bearing escrow account. Combined with

the first settlement, Lead Plaintiffs have, thus far, achieved recoveries for the Class

totaling $6.135 million. This recent settlement is described as a "Partial Settlement"

because although it completely resolves Lead Plaintiffs' claims against the Outside

Director Defendants it does not affect their claims against the remaining, non-settling,

parties in this case. Lead Plaintiffs, Kenneth Grossman, the Cedar Street Fund and the

Cedar Street Offshore Fund, and Lead Counsel believe that the Partial Settlement is an

1 The first settlement, entered into with OnCure Medical Corp., Dolphin Medical, Inc. and PresGarImaging, L. C., achieved a $2.885 million recovery for the Class, and was finally approved by this Court onNovember 17, 2006.


excellent result for the Class, and another significant step toward final resolution against

the remaining Defendants.

The Settling Defendants were outside directors and audit committee members of

DVI, who were not DVI employees during the Class Period. Significantly, the Settling

Defendants are arguably "outsiders" with respect to DVI and are individuals whose

settlement comes from the Defendants' own personal assets, not from insurance

proceeds, which is a remarkable accomplishment. Moreover, although two other plaintiff

groups in the related DVI litigations---Fleet National Bank and the WM High Yield

Fund-have also settled their claims against these Settling Defendants, Lead Class

Plaintiffs negotiated two additional important and valuable settlement terms (i) a

guarantee that the Class would receive a significantly greater settlement than the other

plaintiff groups pursuant to a "most favored nations" provision in the Settlement

Agreement, plus (ii) significant cooperation in pursuing claims against the remaining

defendants. For practical purposes, this Settlement represents the maximum settlement

achievable from these defendants, in both present cash and future recovery.

Not surprisingly, the Settlement has been favorably received by the Class.

Indeed, that no objections or opt-outs2 to the partial settlement have been received from

any class members, in a case where over 11,000 notices were mailed to institutional and

individual investors, is strong evidence of the outstanding result obtained. This partial

settlement is the result of substantial briefing and research, oral argument on numerous

motions to dismiss, decisions on those motions, briefing and decisions on Defendants'

2 Since July 19, 2004, when Plaintiffs in the WM High Yield Fund et al. v. O'Hanlon, et al. , filed theirindividual action, it was expected that they would opt-out of participating in this Class Action. Indeed, thePartial Settlement Agreement expressly excludes the WM High Yield plaintiffs from participating in theseSettlements and, as explained herein, they have expressly opted-out of these Partial Settlements.

2


motions for reconsideration and petitions for interlocutory appeal, analysis of millions of

pages of documents (many from productions that were disorganized or otherwise difficult

to review), numerous depositions, several months of rigorous negotiations, the

involvement of an outside mediator, and briefing and oral argument on Plaintiffs'

pending motion for class certification.

On July 16, 2007, this Court granted preliminary approval of the Partial

Settlement, approved the form of and method for giving Notice of the pendency of this

Action and the Partial Settlement to the Settlement Class ("Notice"); preliminarily

approved a class for settlement purposes; directed that the Notice be given to Settlement

Class Members as approved by the Court; and scheduled a hearing (the "Final Fairness

Hearing") for November 2, 2007 at 10:00 a.m., at which the Court will consider : (i) the

settling parties' request for final approval of the Partial Settlement and entry of the

proposed Final Order and Judgment; (ii) certifying the Settlement Class (which is

materially the same as the Settlement Class that this Court certified on November 17,

2006); (iii) the Plan of Allocation of the Settlement Fund; and (iv) plaintiffs' counsel's

application for an award of attorneys' fees and reimbursement of expenses. As requested

herein, Plaintiffs respectfully request that the Court grant final approval, certify the

Settlement Class, approve the Plan of Allocation and plaintiffs' counsels' application for

an award of attorneys' fees and reimbursement of expenses.

II. HISTORY OF THE LITIGATION

A. Early History

Shortly after DVI, Inc.'s ("DVI" or "Company") announcement on August 13,

2003, that it was filing for Chapter 11 bankruptcy protection, numerous putative class


actions were filed in the United States District Court for the Eastern District of

Pennsylvania (the "Court"), asserting federal securities law claims, with numerous

contenders for lead plaintiff status . On November 25, 2003, the Cedar Street Group was

appointed Lead Plaintiffs and the actions were consolidated.

B. The DVI Bankruptcy Examiner's Report And Lead Plaintiffs' FifthAmended Complaint

On October 14, 2003, the bankruptcy court overseeing DVI's bankruptcy

proceedings appointed R. Todd Neilson to investigate allegations of financial

improprieties at DVI (the "Examiner"). After an almost four month investigation,

coordinated with the Company's crisis management team and certain government

agencies, the Examiner, on April 7, 2004, issued a 188-page report, along with numerous

exhibits and appendices, describing numerous instances of financial irregularities at the

Company, including material overstatements of revenues, understatements of loan loss

reserves , and concealment of substantial liquidity problems. The report, however,

indicated that the Examiner's findings just scratched the surface of the potential claims

and possible parties involved in DVI's demise.

On September 20, 2004, in accordance with an Order of this Court, Lead

Plaintiffs filed their Third Amended Consolidated Complaint (the "Third Amended

Complaint"), a putative class action lawsuit filed on behalf of purchasers of DVI's

common stock and 9 7/8% Senior Notes from August 10, 1999 through August 13, 2003,

both dates inclusive (the "Class Period"). The allegations in the Third Amended

Complaint were based in part on the Examiner's findings.

4


Specifically, Lead Plaintiffs alleged that during the Class Period Defendants3

engaged in numerous schemes to artificially inflate DVI's securities prices by materially

misstating DVI's operating results and financial condition. These schemes consisted of

concealing severe cash shortages through double-pledging collateral or pledging

ineligible collateral on DVI' s lines of credit and Securitization transactions , intentionally

refusing to write-down impaired loans, and overstating revenues on delinquent loans.

Based on these and other allegations, the Third Amended Complaint charges

Defendants with securities fraud under Sections 10(b) and 20(a) of the Securities

Exchange Act of 1934 (the "Exchange Act"), and Rule 10b-5 promulgated thereunder by

the Securities and Exchange Commission ("SEC"). Claims against the Settling

Defendants were raised under both of the aforementioned sections.

On or about November 1, 2004, Defendants, including the SGM Settling

Defendants, filed sixteen separate Motions to Dismiss the Third Amended Complaint (the

"Motions"). On or about January 25, 2005, Lead Plaintiffs filed their omnibus opposition

papers . Following the March 4, 2005 oral argument on the Motions, the Court, on May

31, 2005, issued its ruling on Defendants ' Motions, granting in part and denying in part

Defendants' Motions. Specifically, with respect to the Settling Defendants, the Court

denied their motions.

On February 13, 2006, the Court denied Defendants ', including the Settling

Defendants', motions for reconsideration or, alternatively, for interlocutory appeal.

3 Defendants, as set forth in the Third Amended Complaint, include the Settling Defendants, Shapiro,Goldberg and McHugh, as well as the non-Settling Defendants which consist of Michael A. O'Hanlon,Steven R. Garfinkel, Richard E. Miller, John P. Boyle, Anthony J. Turek, Terry Cady, Gerald Cohn, HarryT.J. Roberts, Deloitte & Touche LLP, Merrill Lynch & Co., Inc. and Radnet Management, Inc., and thethree defendants who previously settled with Plaintiffs in this case, and which this Court finally approvedon November 17, 2006, OnCure Medical Corp., Dolphin Medical Inc., and PresGar Imaging LC.


Plaintiffs, on September 30, 2005, amended the Complaint to add Section 20(a)

claims against Thomas Pritzker, the Pritzker Organization LLC and certain unnamed

Pritzker family members (collectively, the "Pritzker Defendants") as liable controlling

parties. Thereafter, on April 7, 2006, Plaintiffs further amended their complaint (the

"Fifth Amended Complaint") to add Section 10(b) and Rule IOb-5 (a) and (c) claims

against DVI's former legal counsel Clifford Chance LLP and Clifford Chance (US) LLP

(collectively, "Clifford Chance"). On August 11, 2006, the Court denied the Pritzker

Defendants' and Clifford Chance's separate motions to dismiss Lead Plaintiffs' Fourth

and Fifth Amended Complaints, respectively.

While Lead Plaintiffs continue to believe that their claims against the Settling

Defendants are meritorious, Lead Plaintiffs also believe that the Partial Settlement offers

substantial benefits for the Class and, thus, should be approved.

C. Settlement Negotiations with the Outside Director Defendants

Settlement negotiations between Lead Plaintiffs' counsel and counsel for

Shapiro/Goldberg/McHugh started subsequent to this Court's decision denying

Defendants' motions to dismiss (on May 31, 2005) and after the parties exchanged

substantial discovery. Initially, the parties' settlement discussions were assisted by Eric

Greene of Resolutions, LLC, who agreed to serve as a mediator between August 2005

and October 2005.

After several months and continued discovery, the parties resumed settlement

discussions in Spring 2006, conferring on numerous occasions via phone and in-person,

but after several months, these discussions also ended without agreement. Settlement

discussions resumed again in early-2007, after substantial amounts of additional

6


discovery, including the taking of several depositions in the case. These rigorous

settlement negotiations consisted of numerous conversations between Lead Plaintiffs'

counsel and counsel for Shapiro/Goldberg/McHugh, which took into account, inter alia,

the analysis of culpability, causation , damages, the ability of Shapiro/Goldberg/McHugh

to pay a larger judgment, and an analysis of various defenses raised by the Settling

Defendants. After several months of intense negotiations, which extended through the

full briefing of Lead Plaintiffs' extensive motion for class certification, and having taken

into account the risks and hazards of further litigation, Lead Counsel for Plaintiffs and the

Settling Defendants entered into a Stipulation on June 25, 2007.

Lead Counsel has obtained confirmatory discovery of each Settling Defendant,

including reviews of thousands of pages of documents, and will have completed

interviews of each of the Settling Defendants before the Final Fairness hearing.

ARGUMENT

For the reasons set forth below, the Court should grant (I) Certification of the

proposed Settlement Class; (II) final approval of the proposed Partial Settlement as fair,

reasonable and adequate; (III) final approval of the plan of allocation; and (IV) approve

Lead Counsel's request for attorneys' fees and reimbursement of expenses.

1. THE PROPOSED CLASS SATISFIES THE REQUIREMENTS FORCERTIFICATION OF A SETTLEMENT CLASS

This Court has already certified the same requested Settlement Class in this case,

doing so in finally approving the $2. 885 million Settlement with OnCure, Dolphin and

PresGar on November 17, 2006. The facts and factors this Court must consider in finally

certifying the Settlement Class for the present settlement are materially the same as those

7


for the Settlement Class this Court previously certified. The following restates the legal

basis supporting that certification of a Settlement Class is appropriate.

A. Class Certification Is Favored In Securities Fraud Cases

"Class actions are a particularly appropriate and desirable means to resolve claims

based on the securities laws, since the effectiveness of the securities laws may depend in

large measure on the application of the class action device ." Yang v. Odom, 392 F.3d 97,

109 (3d Cir. 2004); Eisenberg v. Gagnon, 766 F.2d 770, 785 (3d Cir. 1985). "[T]he

interests of justice require that in a doubtful case ... any error, if there is to be one,

should be committed in favor of allowing a class action." Eisenberg, 766 F.2d at 785

("a class action [in a federal securities action] may well be the appropriate means for

expeditious litigation of the issues, because a large number of individuals may have been

injured , although no one person may have been damaged to a degree which would have

induced him to institute litigation solely on his own behalf ")

B. The Settlement Class Meets The Requirements For Certification

In order for a lawsuit to be maintained as a class action under Rule 23, the named

plaintiff must meet the four prerequisites of Rule 23(a) - numerosity of parties,

commonality of factual and legal issues , typicality of claims and defenses of class

representatives, and adequacy of representation - as well as the requirements of one of

the subsections of Rule 23(b). See, Johnston v. HBO Film Management, Inc. , 265 F.3d

178, 183-84 (3d Cir. 2001). Here, Plaintiffs seek certification under Rule 23(b)(3), which

requires that common issues predominate over individual ones and that a class action be

superior to other available methods of adjudication. Plaintiffs request certification of the

following class for settlement:

8


all Persons and entities who purchased or otherwise acquired the securities

of DVI, Inc. (including its common stock and 9 7/8% Senior Notes)

between August 10, 1999 and August 13, 2003, both dates inclusive.

Excluded from the class are Defendants; any entity in which a Defendant

has a controlling interest or is a part or subsidiary of, or is controlled by a

Defendant; the officers, directors, legal representatives, heirs,

predecessors, successors and assigns of any of the Defendants; plaintiffs

named in WM High Yield Fund, et al. v. O'Hanlon, et al. , No. 04-CV-

3423 (E.D. Pa.); and those Persons who timely and validly request

exclusion from the Class pursuant to the Notice.

This proposed settlement class meets all of the requirements for certification

pursuant to Rules 23(a) and (b)(3).

1. Courts Liberally Construe Rule 23 In This Circuit

In the Third Circuit, Rule 23 is given a liberal, rather than a restrictive,

construction. See, Stewart, 183 F.R.D. at 194. The question for the court "is not whether

the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but

rather whether the requirements of Rule 23 are met." Eisen v. Carlisle & Jacquelin , 417

U. S. 156, 178 (1974); see also, Duffy, 202 F.R.D. at 439 (court must refrain from

conducting preliminary inquiry into merits of suit in determining class motion); Bradburn

v. 3M, No. Civ. A. 02-7676, 2004 WL 1842987, *2 (E.D. Pa. Aug. 18, 2004) (Padova,

J.); Schutte v. Maleski , No. Civ. A. 93-0961, 1993 WL 218898, at *3 (E.D. Pa. June 18,

1993) (court does not consider merits of case on class certification). In ruling on class

certification, the Court must treat the substantive allegations of the complaint as true.

Lyon v. Caterpillar, Inc. , 194 F.R.D. 206, 209 (E.D. Pa. 2000); Schutte , 1993 WL

218898, at *3. When doubt exists concerning certification of the class, the court should

err in favor of allowing the case to proceed as a class action . See, Duffy, 202 F. R. D. at

439; National Organization on Disability v. Tartaglione, No. Civ. A. 01-1923, 2001 WL

1258089, *1 (E.D. Pa. Oct. 22, 2001 ) (Padova, J.).

9

members is "impracticable". Fed. R. Civ. P. 23(a)(1). "No minimum number of

plaintiffs is required to maintain a suit as a class action, but generally if the named

plaintiff demonstrates that the potential number of plaintiffs exceeds 40, the first prong of

Rule 23(a) has been met." Stewart v. Abraham , 275 F.3d 220, 226-27 (3d Cir. 2001),

cert. denied, 536 U.S. 958 (2002) (holding class of 67 people was sufficiently numerous);

Bradburn, 2004 WL 1842987, at *3 ("Generally if the named plaintiff demonstrates that

the potential number of plaintiffs exceeds 40, the [numerosity] prong of Rule 23(a) has

been met.") (citations omitted). In determining whether joinder is impracticable, courts

may employ common sense assumptions, such as geographic dispersions of Class

Members. See, In re Chlorine and Caustic Soda Antitrust Lit. , 116 F.R.D. at 625;

Stewart, 183 F.R.D. at 194. In this context, "impracticable" does not mean "impossible",

but only the difficulty or inconvenience ofjoining all members of the class. Stewart , 183

F.R.D. at 194, fnl; Kathleen S. v. Dep't of Public Welfare of the Commonwealth of Pa.

No. 97-6610, 1998 WL 83973, at *I (E.D. Pa. Feb. 25, 1998).

The members of the Class contemplated here number at least in the thousands,

making joinder impracticable . Over 15 million shares of DVI stock were issued and

outstanding at the end of the Class Period, and were actively traded on the New York

Stock Exchange ("NYSE") during the Class Period . Additionally , $ 155 million of par

value DVI Senior Notes were issued and outstanding, and traded on the NYSE and Over-

The-Counter during the Class Period. The Class Members comprise individuals and

10


entities residing in numerous states across the country who traded in these DVI securities

during the Class Period. Thus, the proposed Class easily satisfies the numerosity

requirement. See, In re Vicuron Pharmaceuticals, Inc. Sec. Litig. , 233 F.R.D. 421, 425

(E.D. Pa. 2006) (certifying class where "exact size of the proposed class [was] not

known" but where 40 million shares were outstanding and the shares traded on the

NASDAQ); In re Ci gna Corp . Sec. Litig. , 2006 WL 2433779, at *2 (E . D. Pa. Aug. 18,

2006) ("courts have recognized a presumption that the numerosity requirement is

satisfied when a class action involves a nationally traded security") (citation omitted).

b. There Are Questions of Law and Fact Common to AllClass Members

Rule 23(a)(2) requires a showing of the existence of "questions of law or fact

common to the class ." Fed. R. Civ. P. 23(a)(2). "Because a single common issue may

satisfy this requirement, `it is easily met."' In re Cigna Corp. Sec. Litig. , 2006 WL

2433779, at *3 (citing, Cullen v . Whitman Med. Corp . , 188 F . R.D. 226, 230 (E.D. Pa.

1999)). Common factual questions here include, among others, whether DVI's financial

statements were materially misstated during the Class Period, whether Defendants made

material misrepresentations or omitted material information regarding DVI's financial

statements during the Class Period, and whether the market price of DVI's common stock

and Senior Notes were artificially inflated because of Defendants' alleged misconduct

during the Class Period. Common legal questions include, among others, whether

Defendants' alleged acts violated the federal securities laws, whether Defendants had a

duty to disclose certain information, whether Defendants acted knowingly and recklessly

in making materially false and misleading statements during the Class Period, and the

appropriate measure of damages.

11


Such issues have been found to satisfy the commonality requirement of Rule

23(a) in other securities fraud class actions . See, In re Cigna Corp. Sec. Litig., 2006 WL

2433779, at *3; In re Vicuron Pharm. Sec. Litig . , 233 F.R.D. at 426 (finding

commonality satisfied where "members of the proposed class must demonstrate that the

press releases and other actions taken by Vicuron artificially inflated the trading price of

the company's stock" and "must prove that Vicuron's course of conduct violated the

federal securities laws"); In re Corel Corp. Sec. Litig. , 206 F.R.D. 533, 540-41 (E.D. Pa.

2002); Moskowitz v. Lopp , 128 F.R.D. 624, 629 (E.D. Pa. 1989) ("Plaintiffs' allegations

that [a company] and its management omitted material information from its public

disclosures thereby inflating the price of ... stock is the paradigmatic common question

of law or fact in a securities fraud action.").

To this end, Plaintiffs need only make a threshold showing that common proof

will be presented at trial with respect to the essential elements of their claims. See,

Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 259 F.3d 154, 183 (3d Cir. 2001)

("We have set a low threshold for satisfying both [the commonality and typicality]

requirements ."); La Fata v. Raytheon Co. , 207 F.R.D. 35, 42 (E.D. Pa. 2002) ("The

threshold for satisfying the commonality as well as the typicality prerequisites of Rule

23(a) is not high."); Bradburn, 2004 WL 1842987 at *3 ("The commonality requirement

will be satisfied if the named plaintiffs share at least one question of fact or law with the

grievances of the prospective class .") (citation omitted). Plaintiffs' numerous class

allegations (see, Fifth Amended Cmplt. ¶65) more than satisfy the common questions

requirement of Rule 23(a)(2). See, Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 56

(3d Cir. 1994) (requiring only a single issue of law or fact common to class members).

12

To satisfy the typicality requirement under Rule 23(a)(3), the "claims or defenses

of the representative parties [must be] typical of the claims or defenses of the class."

Seidman v. American Mobile Systems, Inc. , 157 F.R.D. 354, 360 (E.D. Pa. 1994)

(quoting, Fed. R. Civ. P. 23(a)(3)). Rule 23(a)(3)'s typicality requirement is satisfied

when "there is a common nucleus of facts and potential legal remedies among all class

members..." Manual for Complex Litigation, Fourth §21.132 at 251, citing, Hanlon v.

Chrysler Corp. , 15 F.3d 1011, 1022 (9th Cir. 1998). The class representative and class

members need not have identical factual and legal claims. Rather, the typicality

requirement is satisfied if the class representatives show that their interests are aligned

with class members ' interests and their claims arise from the same events and are

premised on the same legal theories as class members ' claims . See, Ketchum v. Sunoco,

Inc. , 217 F.R.D. 354, 357 (E.D. Pa. 2003); Duffy, 202 F.R.D. at 442; In re Corel Corp..

Inc. Sec. Litig. , 206 F.R.D. at 541-42. "Factual differences will not render a claim

atypical if the claim arises from the same event or practice or course of conduct that gives

rise to the claims of the [absent] class members, and if it is based on the same legal

theory." Hoxworth v. Blinder Robinson & Co. , 980 F.2d 912, 923 (3d Cir. 1992); In re

Corel Corp., Inc. Sec. Litig. , 206 F.R.D. at 541.

Just as the differences in the factual nature of claims do not affect typicality,

neither do differences in the amount of damages . See, Zeffro v. First Pa. Banking and

Trust Co. , 96 F.R.D. 567, 570 (E.D. Pa. 1983) (where the representative plaintiff and

other class members share an interest in prevailing on similar legal claims, differences in

13


the amount of damages claimed or availability of certain defenses against a class

representative may not render claims atypical).

Plaintiffs' claims are typical of the claims of the Class. Plaintiffs allege that

DVI's financial statements were materially false and misleading because DVI, among

other things, materially overstated its recognized revenue, understated its loan loss

reserves and double-pledged collateral on its lines of credit and securitizations (Fifth

Amended Cmplt. IT 161). All class members were injured in the same manner by each of

the material false statements and omissions, and by the schemes to defraud engaged by

Defendants that kept DVI's securities prices artificially inflated. Therefore, typicality is

" easily " satisfied . In re Ikon Office Solutions , Inc. Sec . Litig. , 194 F.R.D. 166, 176 (E.D.

Pa. 2000) (finding typicality "easily met" where there was "no difference between legal

theories advanced by plaintiffs and those of the other class members"); In re Cigna Corp.

Sec. Litig . , 2006 WL 2433779, at *3.

d. Plaintiffs and Class Counsel Have and Will Continue ToAdequately Represent the Interests of the Class

The final requirement of Rule 23(a) requires that "the representative parties will

fairly and adequately protect the interests of the class." Fed. R. Civ. P. 23(a)(4). In the

Third Circuit, this prerequisite involves a two-pronged inquiry: (1) whether "the

representatives and their attorneys will competently, responsibly and vigorously

prosecute the suit," and (2) "whether plaintiffs' interests are antagonistic to those of the

class ." Boogsian, 561 F.2d at 499.

Class Counsel Has and Will Continue to AblyRepresent the Class

14


As to the first prong, the named Plaintiffs are represented by counsel with

extensive experience in prosecuting complex class actions, including those in the area of

securities litigation. On November 25, 2003, this Court appointed the lawfirms of

Krislov & Associates, Ltd. as lead counsel and Chimicles & Tikellis, LLP, as liaison

counsel to Lead Plaintiffs and the proposed Class. The biographies of Lead Counsel and

Liaison Counsel for the proposed Class, attached to Exhibits A and B hereto, show the

experience and success these firms have had in competently representing lead plaintiffs in

similar actions.

Lead Counsel have actively prosecuted this litigation (e.g., filing five amended

complaints, opposing motions to dismiss, reconsideration and interlocutory appeal, filing

their fully briefed and argued pending motion for class certification , requesting and

reviewing millions of pages of documents from parties and non-parties, and preparing for

and taking numerous depositions) and intend to continue to vigorously prosecute the

remaining claims against the non-Settling Defendants. Further, Lead Counsel negotiated

the proposed Partial Settlements from a position of knowledge and strength, and as

advocates for the entirety of the Class. It is respectfully submitted that the adequacy of

counsel requirement is satisfied for certification. See, In re Cigna Corp. Sec. Litig. , 2006

WL 2433779 , at *4 fn2 (adequacy of representation satisfied where counsel was

experienced in securities and complex litigation); In re Loewen Group, Inc. Sec. Litig. ,

233 F.R.D. 154, 166 (E.D. Pa. 2005) (finding counsel adequate where "[t]hey have

vigorously pursued this action, preparing memoranda and conducting appropriate

discovery.")

ii. The Class Representative's Interests Are NotAntagonistic to those of the Class

15

2003 Order also appointed Kenneth Grossman, Cedar Street Fund and Cedar Street

Offshore Fund as Lead Plaintiffs in this action. Lead Plaintiffs now seek appointment to

be the class representatives for a Settlement Class in this case.

Lead Plaintiffs and each member of the proposed Class have similar interests in

establishing liability against the Settling and non-Settling Defendants. By pursuing this

litigation, each representative Plaintiff necessarily advances the common interests of all

other Class members. No conflict of interest exists as all Class Members desire to

recover as damages all losses incurred because of the alleged frauds engaged in by

defendants, which artificially inflated DVI's securities prices during the Class Period.

For a conflict to preclude class certification, the disagreement between Plaintiffs

and other Class members must be "apparent, imminent, and on an issue at the very heart

of the suit;" a speculative or hypothetical conflict will not bar class certification.

Bradburn, 2004 WL 1842987 at *4 (citing, Blackie v . Barrack, 524 F.2d 81, 909 (9th Cir.

1975)). There is nothing to suggest that the representative Plaintiffs have significant

interests antagonistic to those of the absent Class members in the vigorous pursuit of the

Class claims against defendants. Here, Plaintiffs seek to represent DVI investors, each of

who were similarly impacted by defendants' alleged wrongdoing in a like manner and

each of which has the same interest as Plaintiffs in establishing defendants' liability and

obtaining damages. That each class member likely has different damages does not defeat

class certification and any damage issues can be addressed at the time the Settlement

Fund is allocated and the claims are administered . In re Cigna Corp. Sec. Litig. , 2006

WL 2433779, at *5 ("the mere fact that individual members of the class may be entitled

16


to different amounts of money damages does not mean that individual questions

predominate")

Moreover, Lead Plaintiffs, who are sophisticated, institutional investors, have far

exceeded the adequacy requirements for appointing Class Representatives in this case.

Lead Plaintiffs, from the beginning of this case, have vigorously pursued their claims on

behalf of the Class, and have been involved in managing and prosecuting this Action.

Lead Plaintiffs independently evaluated and selected class counsel, thereafter conferring

extensively with counsel on managing the progress of the case. Moreover, Lead

Plaintiffs have cooperated in discovery requests, producing a substantial amount of

documents, answering numerous interrogatories and sitting for a contentious two-day

deposition. Mr. Kenneth Grossman's deposition testimony exemplifies his willingness

and ability to advance the Class' interests. See, e.g., Lead Plaintiffs' Reply in Support of

Class Certification, Ex. 2 (Deposition Transcript of Kenneth Grossman), at p. 410

("there's probably not a month that passes that we don't have communication at least

several times since the beginning of the case. We're very motivated to stay on top of the

case.")

Thus, as shown above, all four elements of Rule 23(a) are satisfied.

3. The Requirements Of Rule 23(b)(3) Are Also Met In TheSettlement Context

Having satisfied the four requirements of Rule 23(a), the proposed class action

must also meet the requirements of at least one of the subsections of Rule 23(b). Under

Rule 23(b)(3), a class may be certified only where "questions of law or fact common to

the members of the class predominate over any questions affecting only individual

17


members, and ... a class action is superior to other available methods for the fair and

efficient adjudication of the controversy." Fed. R. Civ. Pro. 23(b)(3).

a. The Questions of Law and Fact that are Common to theClass Predominate Over Any Individual Issues

The predominance inquiry requires the Court to determine whether common

questions of law or fact predominate over any questions affecting only individual class

members. See, In re LifeUSA Holding, Inc. , 242 F.3d 136, 143 (3d Cir. 2001). The

question is "whether the class is sufficiently cohesive to warrant adjudication by

representation ." Id. at 144.

Courts within this Circuit regularly find that common issues predominate in

securities fraud claims . E.g., In re Loewen Group Inc. Sec. Litig. , 233 F.R.D. at 167

("Predominance is a test readily met in certain cases alleging ... securities fraud .)4, in re

Cana, 2006 WL 2433779, at *5; In re Ikon , 194 F.R.D. at 177-78; Smith v. Suprema

Specialties , 2007 WL 1217980, at *9 (D .N.J. April 23, 2007); and In re Rent-Way

Litig. , 218 F.R.D. 101, 116 (W.D. Pa. 2003).

Here, as stated above, common issues of liability predominate over any individual

issues . If an individual Plaintiff proves that defendants committed violations of the

federal securities laws, that proof would be the same for any other person seeking to

establish that fact. The only issue remaining would be the amount of damages suffered,

and it is well-settled that differences in the amount of damages to be awarded to each

class member do not preclude class certification. See, In re Warfarin Sodium, 212 F.R.D.

at 249 (necessity for individual damage calculations does not defeat predominance or

4 Rule 23(b)(3) requires only that common issues predominate; they need not be dispositive of the entirelitigation. See, In re School Asbestos Litig. , 789 F.2d 996, 1010 (3d Cir. 1986) ("[t]here may be cases inwhich class resolution of one issue or a small group of them will so advance the litigation that they mayfairly be said to predominate"); Stewart, 183 F.R.D. at 197.

18


class certification); In re Vicuron, 233 F.R.D. at 428 ("the determination of damages

owed to each class member will involve a comparatively simple mathematical calculation

once the class-wide questions regarding liability are solved ."); In re Cigna, 2006 WL

2433779, at *5 ("the mere fact that individual members of the class may be entitled to

different amounts of money damages does not mean that individual questions

predominate"). Thus, where all Class members' claims are premised upon their injury

resulting from defendants' conduct in artificially inflating the prices of DVI's securities,

there can be little doubt that predominance is sufficiently demonstrated and that

certification is appropriate.

b. Class Treatment of this Matter is the Best Method toAchieve Judicial Efficiency and Ensure That All PlaintiffsHave the Opportunity to Assert Their Claims

In Amchem, the Supreme Court stated that the requirement of superiority in Rule

23(b)(3), like that of predominance, ensures that resolution by class action will "achieve

economies of time, effort, and expense, and promote ... uniformity of decision as to

persons similarly situated, without sacrificing procedural fairness or bringing about other

undesirable results ." 521 U. S. at 615 . As noted above, courts regularly certify securities

fraud class actions, recognizing that securities fraud cases are particularly amenable to

common treatment and that the private enforcement purpose of the securities laws is well

served by class actions. In re Vicuron, 233 F.R.D. at 429; In re Ikon Office Solutions

Inc. Sec. Litig. , 194 F.R.D. at 177; In re Loewen Group Inc. Sec. Litig., 233 F.R.D. at

168; In re Ci gna Corp . Sec. Litig. , 2006 WL 2433779 , at *6; In re Rent-Way Sec . Litig.

218 F.R.D. at 121; In re Corel Corp. Sec. Litig. , 206 F.R.D. at 544.

19


This case satisfies the "superiority" requirement. Settling this case as a class

action will achieve economies for both the litigants and the Court, avoiding thousands of

individual adjudications that would dismally clog the system. Moreover, if certification

was denied, "[i]ndividual actions would be needlessly duplicative, expensive, and time-

consuming, especially in light of the predominance of common questions." In re Plastic

Cutlery Antitrust Liti gation , 1998 WL 125703, at *9 (E . D. Pa. March 20, 1998); In re

Corel Corp. , 206 F.R.D. at 544 (finding superiority met and indicating that absent a class

potentially thousands of lawsuits could be filed and/or individual actions would be

forgone because of cost); In re Cigna, 2006 WL 2433779, at *5; Cardizem , 200 F.R.D. at

326 (finding that class action will achieve economies for litigants and judiciary);

Lorazepam , 202 F.R.D. at 30-31 (finding that without class action, individual lawsuits

would unnecessarily waste judicial resources and that class certification provides

opportunity for efficient resolution). Requiring individual class members to file their

own lawsuits would cause unnecessary duplicative litigation, with parties, witnesses and

courts required to litigate time and again the same issues, possibly in different forums. In

addition, class treatment limits the possibility of inconsistent rulings regarding liability or

the appropriate measure of damages.

Moreover, absent the class procedure , many class members may be effectively

foreclosed from pursuing their claims. While many of the Class members are large

institutional investors, many of the Class members are individuals that do not have the

financial wherewithal to take on defendants and their attorneys in individual actions.

Finally, settlement on a class basis is also superior to individual litigation and

adjudication because settlement provides class members with prompt compensation for

20


their injuries. By contrast, compensation resulting from litigation is highly uncertain and

may not be received before lengthy trial and appellate proceedings are complete.

Therefore, class treatment of this matter is the best method to achieve judicial efficiency

and ensure that Plaintiffs and the Class have the opportunity to efficiently settle and/or

assert their claims.

II. THE PROPOSED PARTIAL SETTLEMENT WITH THE SGMSETTLING DEFENDANTS WARRANTS FINAL APPROVAL

D. The Due Process Requirements Have Been Satisfied

In accordance with the Preliminary Approval Order, there was an extensive notice

program, including the mailing of 11, 165 notice and claim forms to putative Class

Members, posting of notice and claim forms on the Claims Administrator's website, and

publication of the notice in the national edition of The Wall Street Journal, USA Today,

the Chicago Tribune and Philadelphia Inquirer, and electronically on PR Newswire, all

on or before August 22, 2007. See, Affidavit of Paul Mulholland at 2-3 ("Mulholland

Affidavit"), attached as Ex. C. Moreover, in an effort to convenience class members by

avoiding having them file multiple claim forms, the Notice provides that Class Members

who submitted claims in the first Settlement approved by this Court are automatically

included in this Settlement unless they opt-out. This program clearly meets the due

process requirements of Rule 23 of the Federal Rules of Civil Procedure, which calls for

"the best notice practicable under the circumstances, including individual notice to all

members who can be identified through reasonable effort." Eisen v. Carlisle & Jacquelin,

417 U.S. 156, 173 (1974); see also, In re Orthopedic Bone Screw Prod. Liability

Litigation, 246 F.3d 315, 328 (3d Cir. 2001). In this regard, the Class has been (i)

provided with notice of the proposed Partial Settlement as well as rights, method and

21


dates by which Class Members could object or opt out of the Partial Settlement, and (ii)

advised of the date of the final fairness hearing at which they will be provided an

opportunity to be heard. Due process requirements, therefore, have been satisfied.

B. The Standards For Judicial Approval Of Class Action Settlements

The approval of a proposed class action settlement is a matter within the sound

discretion of the court. In re General Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab.

Litig. , 55 F.3d 768, 782-83 (3d Cir. 1995), cert. denied, GMC v. Freuds, 516 U.S. 824

(1995) (" General Motors"); Eichenholtz v. Brennan , 52 F.3d 478, 482 (3d Cir. 1995);

Walsh v. Great Atl. & Pac. Tea Co. , 726 F.2d 956, 965 (3d Cir. 1983); Girsh v.Jepson,

521 F.2d 153, 156 (3d Cir. 1975).

In determining whether to approve a settlement, the Court should be cognizant of

the strong judicial policy favoring resolution of litigation short of trial. See, Williams v.

First Nat'l Bank, 216 U.S. 582, 595 (1910); Farris v. JC Penney Co., Inc. , 176 F.3d 706,

711 (3d Cir. 1999) ("A strong public policy exists in favor of settlements"); Eichenholtz,

52 F.3d at 478; Lazy Oil, Co. v. Witco Corp. , 95 F. Supp. 2d 290, 329 (W.D. Pa. 1997)

("The settlement of disputed claims, especially of complex class action litigation, is

favored by courts as a matter of public policy."). Indeed, the Third Circuit has stated

that:

The law favors settlement, particularly in class actions and other complexcases where substantial judicial resources can be conserved by avoidingformal litigation ... The parties may also gain significantly from avoidingthe costs and risks of a lengthy and complex trial.... These economicgains multiply when settlement also avoids the costs of litigating classstatus - often a complex litigation within itself. Furthermore, a settlementmay represent the best method of distributing damage awards to injuredplaintiffs, especially where litigation would delay and consume theavailable resources and where piecemeal settlement could result, in the

22

General Motors , 55 F.3d at 784 (citations omitted); accord, Eichenholtz , 52 F.3d

at 486 ("[i]n general, the settlement of complex litigation before trial is favored by

the federal courts"); Bell Atl. Corp. , 2 F.3d at 1314 fnl6 ("our rules of civil

procedure and evidence encourage settlement")

The district court should approve a class action settlement if it is "fair, reasonable,

and adequate" and in the best interest of the class. General Motors, 55 F.3d at 805;

Eichenholtz, 52 F.3d at 482; Walsh, 726 F.2d at 965; In re Cell Pathways, Inc., Sec. Litig.

II, at *3 (E.D. Pa. Sept. 23, 2002) ("In re Cell Pathways"). In deciding whether to

approve a proposed class action settlement under Fed. R. Civ. Pro. 23(e) as "fair,

adequate and reasonable," the Third Circuit has endorsed examination of the following

factors by the district courts:

(1) the complexity, expense and likely duration of the litigation ...; (2) thereaction of the class to the settlement ...; (3) the stage of the proceedingsand the amount of discovery completed...; (4) the risks of establishingliability ...; (5) the risk of establishing damages ...; (6) the risks ofmaintaining the class action through trial ...; (7) the ability of thedefendants to withstand a greater judgment ...; (8) the range ofreasonableness of the settlement fund in light of the best possible recovery...; (9) the range of reasonableness of the settlement fund to a possiblerecovery in light of all the attendant risks of litigation ...

Girsh, 521 F.2d at 157 (citing, City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d

Cir. 1974); accord, In re Aetna Inc. Sec. Litig. , 2001 WL 20928 at *6 (E.D. Pa. Jan. 4,

2001) ("Aetna"); In re Ikon Office Solutions , Inc. Sec . Litig. , 194 F.R.D. 166, 178-79

(E.D. Pa. 2000) (`Ikon III"); General Motors, 55 F.3d at 785; Shlensky v. Dorsey, 574

F.2d 131, 147 (3d Cir. 1978); In re Cell Pathways , 2002 WL 31528573, at *8; In re

SmithKline Beckman Corp . Sec. Litig . , 751 F. Supp . 525, 528 (E.D. Pa. 1990).

23

Supp . 919, 926 (E.D. Pa. 1986); accord, Kirkorian v. Borelli , 695 F. Supp . 446, 451

(N.D. Cal. 1988); In re Nat'l Student Mktg. Litig. , 68 F.R.D. 151, 155 (D.D.C. 1974);

Feder v. Harrington, 58 F.R.D. 171, 176 (S.D.N.Y. 1972). Although the court must

independently evaluate a proposed settlement, the court should avoid substituting its

judgment for that of counsel who negotiated the settlement. See, e.g., Bryan v. Pittsburgh

Plate Glass Co. , 494 F.2d 799, 804 (3d Cir. 1974); Fisher Bros. v. Cambridge-Lee Indus.,

Inc. , 630 F. Supp. 482, 488 (E.D. Pa. 1985); Sommers v. Abraham Lincoln Fed. Sav. &

Loan Ass'n. , 79 F.R.D. 571, 576 (E.D. Pa. 1978). Furthermore, the court need not, and

should not, engage in a trial on the merits. See, In re Warner Communications Sec.

Litig. , 798 F.2d 35, 37 (2d Cir. 1986) ("Warner Communications "). The very purpose of

a settlement is to avoid the trial of disputed issues and to avoid wasteful litigation.

Newman v . Stein, 464 F.2d 689 (2d Cir. 1972).

The proposed Partial Settlements enjoy a presumption that they are fair and

reasonable because they are the product of arms-length negotiations conducted by

capable counsel who are well experienced in class action litigation. M. Berenson Co. v.

Faneuil Hall Marketplace, Inc. , 671 F. Supp. 819, 822 (D. Mass. 1987); Katz v. E.L.I.

Computer Sys. Inc . , 70 Civ. 2462, 1971 WL 251, at *4 (S .D.N.Y. Apr. 5, 1971) (holding

that there is a "strong initial presumption that the compromise is fair and reasonable");

see also, Eltman v. Grandma Lee's Inc. , 1986 WL 53400 (E.D.N.Y. May 28, 1986); In re

Baldwin-United Corp. , 607 F . Supp . 1312, 1320 (S.D.N.Y. 1985 ); In re Saxon Sec. Litig. ,

No. 82 Civ. 3101 (MJL), 1985 WL 48177 (S.D.N.Y. Oct. 31 , 1985 ); In re Warner

24


Communications Sec. Litig. , 618 F. Supp . 735, 741 (S.D.N.Y. 1985 ) aff'd, 798 F.2d 35

(2d Cir . 1986).

Analysis Of This Settlement. As set forth below, analysis of this Partial

Settlement in light of the factors set forth in Girsh demonstrates that they are fair,

reasonable and adequate.

1. Complexity, Expense , and Likely Duration of the LitigationWeigh in Favor of Approval

Courts have consistently held that the expense and uncertainty of the litigation are

factors supporting a settlement. Milstein v . Huck, 600 F . Supp . 254, 267 (E.D.N.Y.

1984); see also, Aetna, 2001 WL 20928, at *6 ("Of equal importance is the likely

complexity of proof in the case."); Ikon III, 194 F.R.D. at 179 (noting the "complicated

nature of large class actions alleging securities fraud" where "there are literally thousands

of shareholders, and any trial on these claims would rely heavily on the development of a

paper trail through numerous public and private documents"); Protective Comm. for

Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson , 390 U.S. 414, 424 (1968)

(court must consider, among other things, "the complexity, expense, and likely duration

of such litigation"); Bullock v. Adm'r of Estate of Kircher, 84 F.R.D. 1, 10 (D. N.J.

1979).

This has been, and will likely continue to be, a complex, expensive and lengthy

litigation. It has already been zealously litigated for over four years. During that time,

Plaintiffs' counsel have expended considerable time preparing five amended complaints,

addressing lead plaintiff and lead counsel appointment, successfully responding to twenty

separate motions to dismiss, numerous motions for reconsideration and motions for

interlocutory appeal filed by defendants, conducting extensive factual investigation,

25


reviewing and analyzing millions of pages of documents, dissecting DVI's financials and

the results of internal and external investigations, and preparing for and taking numerous

depositions. Plaintiffs know that the trial of this action against the Settling Defendants

would have been a lengthy, expensive affair, and because of the amounts and issues

involved, appeals would be virtually assured no matter what the verdict. "It is safe to

say, in a case of this complexity, the end of that road might be miles and years away." In

re Chambers Dev. Sec. Litig. , 912 F. Supp. 822, 837 (W.D. Pa. 1995). Taking into

account the likelihood of appeal, absent the Partial Settlement, this litigation likely would

have continued for years against the Settling Defendants, despite the best efforts of the

parties and the Court to speed the process.

In approving the settlement of a securities fraud case against Ikon, Judge

Katz noted the complexity of securities fraud cases and that in these types of

actions:

[a]n equally significant issue is the likely complexity of proof. Many ofthe allegations relate to defendants' accounting decisions, and extensiveexpert testimony would certainly be required on the nature of theaccounting practices, the significance of various decisions in relation toGAAP, and the effect that those practices ultimately had on stock pricesand the plaintiffs' finances. The difficulty of presenting these issues eitherin the context of a motion for summary judgment or at trial thus weighs infavor of settlement, particularly when considered in conjunction with thecorresponding financial outlays by both sides.

Ikon III, 194 F.R.D. at 179.

Although Plaintiffs ' counsel strongly believe that their case is meritorious against

all Defendants, they are sufficiently experienced and realistic to know that all of these

factors make the outcome of a trial and inevitable appeals uncertain and protracted. Even

if the Class could recover a larger judgment after trial, which is certainly not guaranteed,

26


the additional delay, through the trial, post-trial motions and the appellate process, could

deny the Class recovery for years. Given the time value of money, a future recovery,

against these defendants, even one in excess of the Settlement, may be less valuable to

the Class than receiving the benefits of the Partial Settlement now. These risks and

delays must be taken into account when appraising the fairness of the proposed

settlement. In re Prudential Ins. Co. of America Sales Practice Litig. Agent Actions , 148

F.3d 283 (3d Cir. 1998) (settlement was favored where "the trial of this class action

would be a long, arduous process requiring great expenditures of time and money on

behalf of both the parties and the court").

Additionally, obtaining cooperation from these outside directors now will likely

prove valuable and enhance the claims and/or recoveries against other defendants.

The Partial Settlement, thus, provides a swift and certain benefit to the Class and

avoids years of delay and uncertainty with an all or nothing risk. Therefore, the likely

prospect of continued protracted litigation against the Settling Defendants militates

strongly in favor of approving the proposed Partial Settlement as in the best interest of

the Class.

2. Reaction of the Class to the Partial Settlement

As directed by the Court, Plaintiffs have caused more than 11,000 Notices to be

mailed to members of the Class. Mulholland Affidavit at p.3 (Ex. Q. The fact that there

have been no objections to the Partial Settlement filed by members of the Class, which

included many sophisticated institutional investors, indicates a favorable reaction by the

members of the Class. See, Stoetzner v. United States Steel Corp. , 897 F.2d 115, 119 (3d

Cir. 1990) (observing that objections by "only" 29 members of the class comprised of

27


281 "strongly favors settlement"); Ikon III, 194 F.R.D. at 179 (six objections to the

proposed settlement was found to be "extremely limited"); In re SmithKline Beckman

Corp. Sec. Litig., 751 F. Supp. 525, 530 (E.D. Pa. 1990); Fisher Bros., Inc. v. Mueller

Brass Co. , 630 F. Supp. 493, 498 (E.D. Pa. 1985).

Additionally, other than the opt-outs submitted by plaintiffs in the parallel WM

High Yield case, as explained earlier , no other opt-outs were received. Mulholland

Affidavit at p.3 (Ex. C); see also, In re Cendant Sec. Litig. , 264 F.3d 201, 235 (3d Cir.

2001) (affirming district court's finding that low number of opt-outs supported approving

settlement); DeSantis v. Snap -on Tools , 2006 WL 3068584, at *6 (D .N.J. 2006) ("the

Third Circuit has repeatedly recognized that low numbers of objectors and opt-outs is

probative on the issue of whether a settlement is fair, adequate , and reasonable.")

The absence of any objections or opt-outs in this case strongly favors settlement

approval.

3. The Stage of the Proceedings and the Amount of DiscoveryCompleted Weigh in Favor of Approval

"[T]he stage of the proceedings and the amount of discovery completed" is

another factor considered in determining the fairness, reasonableness and adequacy of a

settlement. Girsh, 521 F.2d at 157. This prong of the analysis "captures the degree of

case development that class counsel have accomplished prior to settlement." Seidman v.

American Mobile Sys. , 965 F. Supp. 612 (E.D. Pa. 1997) (citing, General Motors, 55

F.3d at 813).

In this case, substantial work has been completed prior and subsequent to the

settlements. Plaintiffs' counsel conducted extensive investigation and analysis regarding

the law and facts relevant to the case. Plaintiffs filed five amended complaints and

28


survived numerous motions to dismiss, reconsideration and interlocutory appeal.

Plaintiffs gathered and studied relevant publicly available information and reviewed and

analyzed millions of pages of non-public documents produced by the Settling

Defendants, DVI, DVI's former auditors, Deloitte & Touche LLP, its former

underwriter/lender/financial advisor, Merrill Lynch & Co., Inc., its primary outside

counsel, Clifford Chance LLP, the Pritzker Defendants, and numerous third parties, and

have extensively prepared and conducted over 20 depositions, and continue to prepare for

numerous upcoming depositions. In addition, Plaintiffs' counsel consulted with several

experts on matters of accounting, auditing, damages and market efficiency to assist with

the consideration and analysis of the strengths and weaknesses of their claims.

Furthermore, Plaintiffs' counsel have also conducted extensive interviews of each of the

three SGM Settling Defendants. Although discovery is not yet complete, Plaintiffs have

conducted more than sufficient investigation and discovery to properly evaluate this

Partial Settlement for these three defendants.

4. The Risks of Establishing Liability Weigh in Favor ofApproval

"This inquiry attempts to measure the expected value of litigating the action rather

than settling it at the current time". In re Cendant Corp. Sec. Litig., 264 F.3d 201, 238

(3d Cir. 2001). Plaintiffs' counsel believe that Plaintiffs have a strong case as to liability

against the Settling Defendants. Nevertheless, Plaintiffs recognize that a finding of

liability was never assured against the Settling Defendants, who continue to deny any

liability. The pleadings filed with the Court in this case indicate that the strengths of the

claims and defenses thereto have been the subject of substantial dispute between the

parties.

29


The instant lawsuit involves, among other things, federal securities claims against

defendants under Section 10(b) of the Exchange Act and Rule 10b-5 promulgated

thereunder, and Section 20(a). To prove their Rule 10b-5 claim against the Settling

Defendants, Plaintiffs would have the burden of demonstrating that these Defendants

knowingly or recklessly allowed the issuance of false and misleading financial

statements, and/or were responsible for engaging in a scheme to defraud DVI investors

and that the Class suffered damages as a result of Defendants ' conduct . With respect to

Plaintiffs' Section 20(a) claims, Plaintiffs would have the burden of showing that the

Settling Defendants had the potential to influence the conduct of a primary violator of

Section 10(b) and that the Settling Defendants were aware of or recklessly indifferent to

such violations.

While Plaintiffs' counsel believe that discovery has provided significant support

for Plaintiffs' allegations as to the Settling Defendants' knowledge and/or recklessness in

regard to the schemes to defraud DVI investors, Plaintiffs recognize that proving scienter

for any defendant is always difficult and uncertain and could go either way before the

jury. And, as "outside directors ", albeit audit committee members , these three defendants

have repeatedly asserted their innocence which might be plausible to a jury. Moreover,

had the Partial Settlement not occurred, the Settling Defendants have indicated , by their

previously filed motions for interlocutory appeal , that they would likely pursue appellate

review.

As Judge Lee has noted, "[a] very large bird in the hand in this litigation is surely

worth more than whatever birds are lurking in the bushes." In re Chambers Der. Sec.

Litig. , 912 F. Supp. at 838. Although Plaintiffs believe that their claims have merit,

30


establishing liability at trial and prevailing on an inevitable appeal would by no means be

guaranteed. Accordingly, avoiding the risks of establishing liability is another factor that

supports approval of the proposed Partial Settlement.

5. The Risk of Proving Damages and Causation Weighs in Favorof Approval

As with liability, the Settling Defendants do not concede that Plaintiffs and the

Class were damaged by any conduct they engaged in. Plaintiffs, though they strongly

believe in their case on these points, could still face risks in proving damages against

these particular defendants. In an action brought under Section 10(b), plaintiff must

prove that the fraudulent scheme caused plaintiffs harm. Semerenko v. Cendant

223 F.3d 165, 185 (3d Cir. 2000). These issues can be complicated and require expert

opinions.

Although Plaintiffs strongly believe that they would be able to provide convincing

expert testimony as to damages and causation, and receive a favorable judgment, they

also realize "it is certainly not inconceivable that, in the unavoidable `battle of the

experts,' a jury might disagree with the [Plaintiff Class]". In re Computron Software,

Inc. Sec. Litig. , 6 F. Supp. 2d 313, 320 (D. N.J. 1998); see also, United States v. 412.93

Acres of Land , 455 F.2d 1242, 1247 (3d Cir. 1972) (`The jury ... is under no obligation

to accept as completely true the testimony of any expert witness. It may adopt as much

of the testimony as appears sound, reject all of it, or adopt all of it."). Given that the

parties would present opposing damage theories, it is impossible to predict how the jury

would react. This unpredictability is avoided by the proposed Partial Settlement, which

provides the Class with a meaningful percentage of the recovery that might realistically

be obtained through trial.

31

Plaintiffs counsel believe that this case is appropriate for class certification.

However, the class certification decision is still pending. Even following certification it

can be reviewed and modified at any time before trial and there is always a risk that the

action, or particular claims in the action, might not be maintained as a class through trial.

In re Prudential Ins. Co. of America Sales Practice Litig. Agent Actions , 148 F.3d at 321

("Under Rule 23, a district court may decertify or modify a class at any time during the

litigation if it proves to be unmanageable.")

Although this Court has not yet ruled on Plaintiffs' pending motion for class

certification, Plaintiffs strongly believe that this case is properly brought as a class action

with respect to all asserted claims . Nonetheless , the Partial Settlement avoids any

uncertainty with respect to this issue.

7. The Ability of Defendants to Withstand a Greater Judgment

This factor was of primary importance to Plaintiffs when considering whether to

accept the current Partial Settlement, given that the DVI directors and officers liability

insurance policy was near exhausted and, at least with respect to certain Settling

Defendants, their personal wealth was relatively limited. As indicated herein, Plaintiffs'

counsel believes that had they proceeded to trial against the Settling Defendants,

Plaintiffs had a very good chance of prevailing on liability. However, during

negotiations and at the time Plaintiffs entered into the Stipulations of Settlement, some of

the Settling Defendants appeared potentially unable to pay even this amount, let alone a

significantly greater judgment. Thus, the potential for a substantial recovery was

32


tempered by the risk of being unable to collect a significantly greater judgment, even if

successful, against the Settling Defendants.

The Settling Defendants' access to relatively little remaining insurance coverage

and, with respect to some Settling Defendants, their relatively limited personal wealth,

was made more acute by not only the effect of this litigation, but also the burden imposed

by claims filed against them in the "related" actions, including the WM High Yield case

and in the case of Fleet Bank et al . v. O'Hanlon et al. , (04-CV-1277 (E.D. Pa.)). 5 It was

therefore beneficial for Plaintiffs to settle at the time and for the amounts they did before

some of the Settling Defendants were possibly forced into bankruptcy.

8. The Settlement Is Reasonable in Light of the Best PossibleRecovery and All Attendant Risks of Litigation

"This inquiry measures the value of the settlement itself to determine whether the

decision to settle represents good value for a relatively weak case or a sell-out of an

otherwise strong case." General Motors, 55 F.3d at 806. Plaintiffs contend that neither

stated scenario applies, but rather the settlement reflects a very good outcome considering

all the attendant risks in this case . In General Motors, the Third Circuit explained that:

[I]n cases primarily seeking monetary relief, the present value of thedamages plaintiffs would likely recover if successful, appropriatelydiscounted for the risk of not prevailing, should be compared with theamount of the proposed settlement ... The evaluating court must, ofcourse, guard against demanding too large a settlement based on its viewof the merits of the litigation; after all, settlement is a compromise, ayielding of the highest hopes in exchange for certainty and resolution.

55 F.3d at 806.

s Notably, contained in the Stipulation of Settlement was a "most favored nations" provision whichguaranteed Lead Plaintiffs and the Class a recovery significantly greater than the recoveries obtained in therelated actions.

33


In this case, the value of the cash Settlements of $3.25 million, coming from the

pockets of these Individual Defendants and currently escrowed and earning interest for

the Class, is not subject to dispute. The range of possible recovery must be juxtaposed

against the likelihood of recovery. Moreover, the determination of a "reasonable"

settlement is not susceptible to a mathematical equation yielding a particularized sum.

Rather, " in any case there is a range of reasonableness with respect to a settlement."

Newman, 464 F.2d at 693; Fickinger v. C.I. Planning Corp. , 646 F. Supp. 622, 630 (E.D.

Pa. 1986).

In Parker v. Anderson, 667 F.2d 1204 (5th Cir. 1982), cert. denied, 459 U.S. 828

(1982), the Court stated:

The fact that a proposed settlement may only amount to a fraction of thepotential recovery does not, in and of itself, mean that the proposedsettlement is grossly inadequate and should be disapproved ... In factthere is no reason, at least in theory, why a satisfactory settlement couldnot amount to a hundredth or even a thousandth part ofa single percent ofthe potential recovery.

Id. at 1210 fn6 (quoting Grinnell , 495 F.2d at 455 fn2) (emphasis added). Indeed, courts

have approved settlements that have resulted in little or no recovery to class members at

all. For example, in Karasik v. Pac E. Corp. , 180 A. 604, 609 (Del. Ch. 1935), the court

stated:

[T]he amount claimed is one hundred million dollars and the amountreceived in settlement is a minimum of three hundred and eighty-fivethousand dollars. Now that is a wide disparity. But it is one thing toassert a claim and another thing to prove the claim to judgment ...Figures, however imposing, should not compel practical considerations toyield place to visions.

In this case, Lead Plaintiffs have not concluded their estimate of damages and

therefore cannot now provide an exact measure of the percentage that the Partial

34

benefits included in the Partial Settlement we also obtained valuable ongoing cooperation

from these Settling Defendants. See, e.g., Denney v. Jenkens & Gilchrist , 230 F.R.D.

317, 339 (S.D.N.Y. 2005)("Pursuant to the settlement, Jenkens has agreed to provide

(and has already provided) discovery on plaintiffs' claim. The value of this agreement is

hard to determine, but it is not negligible."). These cooperation provisions appear likely

to enhance Plaintiffs' continued pursuit of their claims against the remaining defendants

in this case. Therefore, while the $3.25 million cash portion alone would be well within

the range of recoveries of settlements approved by courts, see, In re Prudential Sec. Inc.

Ltd. P' ships Litig., MDL No. 1005, 1995 WL 798907 (S.D.N.Y. 1995) (approving

settlement of between 1.6% and 5% of claimed damages); In re Crazy Eddie Sec. Litig. ,

824 F. Supp . 320 (E.D.N.Y. 1993) (settlement of between 6% and 10% of damages); In

re Michael Miliken & Assoc. Sec. Litig. , 150 F.R.D. 57 (S.D.N.Y. 1993) (7.5%), adding

in the ongoing cooperation makes the product even more valuable.

9. The Settlements are the Product of Arm's Length NegotiationsAmong Experienced Counsel

Upon an analysis of the "fairness" factors, it is clear that the proposed Partial

Settlements were entered into in good faith, at arms-length and without any collusion.

Counsel from both sides zealously represented their respective clients' interests prior to

and during settlement negotiations. Absent some indicia of collusion, a settlement is

presumptively fair. See, e.g., Cohen v. Tuttle, Civ. Action Nos. 85-2396, 85-2621, 85-

3022, 1987 WL 7224, at *I (E.D. Pa. 1987) ("A compromise settlement is presumed,

initially, to be fair and reasonable and should be regarded not as an unlimited victory but

35


as a realistic compromise."); see also, Voisin v. Bartell Media Corp. , No. 76 Civ. 3954

(MJL), 1982 WL 1359 (S.D.N.Y. 1982); In re Residential Doors Antitrust Litig. , No. 96-

2125, 1998 WL 151804, at *6 (E.D. Pa. Apr. 2, 1998) ("[a] presumption of correctness is

said to attach to a class action settlement reached in arms-length negotiations between

experienced, capable counsel after meaningful discovery" (quoting, Manual for Complex

Litigation, Second §30.41 (1985)).

During negotiations with Shapiro/Goldberg/McHugh's counsel, Lead Counsel

zealously advanced Lead Plaintiffs' position and was fully prepared to continue to litigate

rather than accept a settlement that was not in the best interests of Lead Plaintiffs and the

Settlement Class. Lead Plaintiffs, through their counsel, carefully considered and

evaluated, inter alia, the relevant legal authorities and evidence to support the claims

asserted against the Settling Defendants, the likelihood of prevailing on these claims, the

risk, expense and duration of continued litigation and the likely appeals and subsequent

proceedings necessary if Lead Plaintiffs did prevail against Settling Defendants at trial,

and the Settling Defendants ability to pay a larger amount after protracted litigation

and/or a trial . Although the parties also engaged a well-respected, independent mediator

who has vast experience in mediating securities fraud lawsuits, Eric D. Greene, who

assisted with the earliest stage of this negotiation, the final SGM Settlement was the

product of two years of on-again off-again negotiations between Lead Plaintiffs' counsel

and SGM Counsel, over more than two years. See, In re Warfarin Sodium Antitrust

Litig. , 391 F.3d 516, 539-40 (3d Cir. 2004) (affirming settlement involving "extensive,

arms-length negotiations"); In re Cendant Corp. Lit. , 264 F.3d 201, 233 fn18 (3d Cir.

2001). After considering the foregoing, Lead Plaintiffs and their counsel concluded that

36


the Partial Settlement is fair, reasonable and adequate and in the best interest of the

Settlement Class.6

C. The Plan Of Allocation Is Fair And Reasonable

Notably, this Plan of Allocation is identical to the Plan approved by this Court on

November 17, 2006 for the first settlement.

Approval of a plan of allocation of a settlement fund in a class action is governed

by the same standards of review applicable to approval of the settlement as a whole: the

distribution plan must be fair, reasonable and adequate. Ikon III, 194 F.R.D. at 184;

Aetna, 2001 WL 20928, at * 12. In general , a plan of allocation that reimburses class

members based on the type and extent of their injuries is reasonable. Id. The present

Allocation Plan is substantially similar to the one approved in the Rite Aid settlement and

is exactly the same as the one this Court approved in the first Partial Settlement in this

case. Claimants are reimbursed for their recognized losses based on when they bought

and sold their shares of DVI securities . See, In re Cell Pathways , 2002 WL 31528573, at

*7 ("To distinguish between the award given to class members based on these factors

[type of security bought/sold and the timing of transactions] is reasonable."). Recognized

losses for those who purchased and sold during the class period is simply the difference

in price of the purchase and sale. Whereas, recognized losses for those who purchased

and held is the difference between the purchase price and the average price for the 90-day

6 Lead Counsel has over twenty years of experience in securities and other complex class action litigation,and have negotiated numerous other substantial class action settlements throughout the country, and basedupon this extensive experience, believe that the Partial Settlement is fair. "In considering a proposedsettlement, the courts are entitled to rely upon the judgment of experienced counsel." Lazy Oil Co. , 95 F.Supp. 2d at 331(`The opinion and recommendation of experienced counsel are entitled to considerableweight"); Daniel B. v. O'Bannon, 633 F. Supp. 919, 926 (E.D. Pa. 1986); Fisher Bros. v. Cambridge-LeeIndus., Inc. , 630 F. Supp. 482, 488-89 (E.D. Pa. 1985).

37


period subsequent to the end of the Class Period, pursuant to the PSLRA. 15 U.S.C.

§78u-4(e)(3). This Allocation Plan is reasonable and should be approved.

III. PLAINTIFFS' COUNSEL'S REQUEST FOR ATTORNEYS' FEES ANDEXPENSE REIMBURSEMENT SHOULD BE APPROVED

Plaintiffs' Counsel's requested fee of 30% of the $3,250,000 settlement fund

(exclusive of interest), plus reimbursement of reasonable out-of-pocket litigation

expenses of $325,000, is well within the range of approved fees and costs in similar

cases , and fully comports with the Third Circuit' s criteria for approval. Notably, this

Court approved the same fee percentage in the first Settlement in this case. As a

percentage of the Settlement Fund, the requested fee is substantially less than Plaintiffs'

Counsels' lodestar, even without a multiplier. Moreover, despite a comprehensive notice

program in which over 11,000 notices were issued, many to sophisticated institutional

investors, notifying them of counsel's fee request and requested expense reimbursement,

no objections were submitted. For all of these reasons, as more fully discussed below,

the Court should approve Plaintiffs' Counsel's modest fee and expense reimbursement

request.

A. Legal Standard Governing the Award of Attorneys' Fees

Ever since the United States Supreme Court's seminal decision in Cent. R.R. &

Banking Co . v. Pettus , 113 U. S. 116, 123-28 ( 1885), the common fund doctrine has been

firmly established and consistently applied in class actions. The Supreme Court "has

recognized consistently that a litigant or a lawyer who recovers a common fund for the

benefit of persons other than himself or his client is entitled to a reasonable attorney's fee

from the fund as a whole." Boeing Co. v. Van Gernert , 444 U.S. 472, 478 (1980). See

also Mills v. Elec. Auto-Lite Co. , 396 U.S. 375, 393-95 (1970) (discussing application of

38


the common fund doctrine even in cases involving non-monetary recoveries). Courts

have further recognized that not only do attorneys' fee awards from a common fund

provide just compensation, they also encourage skilled counsel to represent those seeking

redress for damages inflicted on entire classes of persons, and to discourage future

misconduct of a similar nature . See, e.g., In re Elec . Carbon Prods . Antitrust Litig. , 447

F. Supp. 2d 389, 405 (D.N.J. 2006) (noting that the common fund doctrine "fosters class

actions and encourages skilled counsel to represent class action plaintiffs") (citing

Deposit Guaranty Nat'l Bank v . Roper, 445 U. S. 326, 338 (1980)). Indeed, the Supreme

Court has emphasized that private securities fraud actions "provide a `most effective

weapon in the enforcement' of the securities laws and are `a necessary supplement to

[SEC] action ."' Bateman Eichler, Hill Richars , Inc. v . Berner, 472 U.S. 299, 310 (1985)

(quoting J . 1. Case Co . v. Borak, 377 U. S. 426, 432 (1964)).

The Court of Appeals for the Third Circuit and the District Courts within the

Third Circuit consistently apply these principles. See, e.g., In re Rite Aid Corp. Sec.

Litig. , 146 F. Supp. 2d 706, 734 (E.D. Pa. 2001) ("It is, of course, firmly established that

`a lawyer who recovers a common fund for the benefit of persons other than himself or

his client is entitled to a reasonable attorney's fee from the fund as a whole.') (citing

Boeing, 444 U. S. at 478); In re Ikon Office Solutions, Inc. Sec. Litig. , 194 F.R.D. 166,

192 (E.D. Pa. 2000) ("there is no doubt that attorneys may properly be given a portion of

the settlement fund in recognition of the benefit they have bestowed on class members");

In re Computron Software, Inc. Sec. Litig. , 6 F. Supp. 2d 313, 321 (D.N.J. 1998)

("Attorneys who represent a class and aid in the creation of a settlement fund are entitled

to compensation for legal services offered to the settlement fund under the common fund

39


doctrine") (citing In re Gen. Motors Corp. Pick-up Truck Fuel Tank Prods. Liab. Litig. ,

55 F.3d 768, 820 n. 39 (3d Cir. 1995)).

B. The Court Should Calculate the Attorneys' Fee Award Using thePercentage-of-Recovery Approach

The Supreme Court and the Third Circuit have repeatedly held that the award of

attorneys' fees in common fund cases should be determined as a percentage of the fund.

See Blum v . Stenson , 465 U. S. 886, 900 n . 16 ("under the ` common fund doctrine,' ... a

reasonable fee is based on a percentage of the fund bestowed on the class"); Boeing, 444

U.S. at 478-79; Sprague v. Ticonic Nat'l Bank, 307 U.S. 161, 164-66; In re AT&T Corp.

Sec. Litig. , 455 F.3d 160, 164 (3d Cir. 2006) ("In common fund cases such as this one,

the percentage-of-recovery method is generally favored [over a lodestar approach]

because `it allows courts to award fees from the fund in a manner that rewards counsel

for success and penalizes it for failure") (citing In re Rite Aid Corp. Sec. Litig. , 396 F.3d

294, 300 (3d Cir. 2005) (internal quotation marks omitted)); In re Cendant Corp. Sec.

Litig. , 404 F.3d 173, 188 (3d Cir. 2005) (noting that the "percentage-of-recovery

approach" dominates common fund cases and finds support in the PSLRA). Similarly,

judges within the Eastern District of Pennsylvania have approved the percentage-of-

recovery method of awarding fees in other common fund cases like the instant one. See,

e.g., Perry v . FleetBoston Financial Corp. , 229 F.R.D. 105, 109 (E.D. Pa. 2005) (Schiller,

J.); In re Rite Aid Corp. Sec. Litig. , 362 F. Supp. 2d 587 (E.D. Pa. 2005) (Dalzell, J.);

Stoner v. CBA Info. Servs. , 352 F. Supp. 2d 549, 551 (E.D. Pa. 2005) (Katz, J.).

C. The Requested 30% Fee Is Fair and Reasonable Under The ThirdCircuit ' s Gunter Factors

40

Energy Corp. , 223 F.3d 190, 195 (3d Cir. 2000) ("We give [a] great deal of deference to a

district court's decision to set fees"); Perry, 229 F.R.D. at 119 (noting that a district court

has "a wide range of discretion when selecting which method [for calculating attorneys'

fees] to employ"). In the first settlement, this Court approved Lead Counsel's fee request

seeking, as here, a 30% recovery. Nonetheless, the Third Circuit has also cautioned that,

in exercising its broad discretion in awarding fees, a district court should consider the

following non-exhaustive factors:

(1) the size of the fund created and the number of persons benefited;

(2) the presence or absence of substantial objections by members of the classto the settlement terms and/or the fees requested by counsel;

(3) the skill and efficiency of the attorneys involved;

(4) the complexity and duration of the litigation;

(5) the risk of nonpayment;

(6) the amount of time devoted to the case by plaintiffs' counsel; and

(7) the awards in similar cases.

Gunter, 223 F.3d at 195 n.1 (citing Prudential , 148 F.3d at 336-40; Gen. Motors, 55 F.3d

at 819-22).

The Court of Appeals has also suggested that the percentage-of-recovery method

should be cross-checked against the lodestar method. Gunter, 223 F.3d at 195.

Application of these factors to the present case shows that a 30% fee award to Plaintiffs'

counsel is fully justified and appropriate.

41

The result achieved is clearly a primary factor for consideration in determining

the amount of reasonable attorneys' fees. See Behrens v. Wometco Enters., Inc. , 118

F.R.D. 534, 547-48 (S.D. Fla. 1988), aff'd without op., 899 F.2d 21 (11th Cir. 1990)

("The quality of work performed in a case that settles before trial is best measured by the

benefit obtained"); Ikon , 194 F.R.D. at 194 ("The most significant factor in this case is

the quality of representation, as measured by `the quality of the result achieved, the

difficulties faced, the speed and efficiency of the recovery, the standing, experience, and

expertise of the counsel, the skill and professionalism with which counsel prosecuted the

case and the performance and quality of opposing counsel"') (quoting Computron, 6 F.

Supp . 2d at 323).

Plaintiffs' counsel in this case have created a very substantial benefit for the

Proposed Settlement Class from just three of the nineteen named defendants, each of

whom have very limited insurance coverage remaining. Far from being comprised of

coupons or illiquid securities of questionable marketability, here the entire $3,250,000

settlement consideration, including interest, is in cash, and solely from the pockets of

these individual defendants.

Moreover, the number of persons benefited is undeniably large, including all

persons who purchased DVI securities (including DVI's Senior Notes as well as its

common stock) in the open market during the Class Period . At this early stage in the

claims filing process of this second Partial Settlement, which does not expire until

December 14, 2007, several hundred claim forms have already been submitted and those

class members who had previously filed a claim form in the first Settlement in this case,

42


totaling more than 1,600 claimants, are automatically included in this Settlement. See

Mulholland Affidavit at p.4 (Ex. Q. The substantial benefit to the Class therefore

supports the requested fee award.

2. The Absence of Any Objections to the Settlement or theRequested Attorneys' Fee Award

The over 11,000 Notices mailed to DVI investors of record - as well as nearly

2,000 banks, brokers, mutual funds, pension funds, money managers, and insurance

companies - advised the Class that Plaintiffs' counsel would apply for a fee award of

$975,000, plus up to $325,000 in expenses. The Notice also expressly advised Class

Members of their right to object to the fee application. No objections to the 30% fee or

$325,000 expense reimbursement have been submitted, an especially noteworthy fact

here because the Class includes large sophisticated institutional investors who

collectively purchased a substantial percentage of DVI securities during the Class Period.

See Meijer, Inc. v. 3M, No. 04-5871, 2006 WL 2382718, *20 (E.D. Pa. Aug. 14, 2006)

(Padova, J.) ("The absence of objections to the requested attorneys' fees in this case is

particularly notable given the sophisticated nature of the absent Class Members"); In re

Remeron Direct Purchaser Antitrust Litig. , No. 03-0085, 2005 WL 3008808 (D.N.J. Nov.

9, 2005) ("When a class is comprised of sophisticated business entities that can be

expected to oppose any request for attorney fees they find unreasonable, the lack of

objections indicates the appropriateness of the fee request") (quotation marks and

citations omitted). Indeed, cases involving low numbers of objections (but nonetheless

some objections, in contrast to the complete absence of objections here), have been

characterized by the Third Circuit as "rare phenomen[a]." AT&T, 455 F.3d at 170 (eight

objections out of one million potential class members was "rare"); Rite Aid, 396 F.3d at

43


305 (two objections out of 300,000 potential class members characterized as a "rare

phenomena")

The over 1,800 claim forms filed to-date and on file from the prior Settlement

show that Class Members are aware of the settlement terms, including the attorneys' fees

and reimbursement requests . See, Ex. C, Mulholland Affidavit, p.4. The absence of any

objections therefore is significant evidence that the requested 30% fee is fair. See, e.g., In

re Cell Pathways, Inc., Sec. Litig., 01-1189, 2002 WL 31528573, *9 (E.D. Pa. Sept. 23,

2002) (McLaughlin, J.) ("Despite the large number of class members notified, only one

objection was received and it related only to the fee petition. This reaction shows that the

class views the settlement as a success, and ... indicates that the class does not object to

the thirty percent requested by the attorneys. This positive reaction supports approval of

the fee petition ."); In re Aetna Inc. Sec . Litig. , MDL 1219, 2001 WL 20928, * 15 (E.D.

Pa. Jan. 4, 2001) (Padova, J.) ("the Class members' view of the attorneys' performance,

inferred from the lack of objections to the fee petition, supports the fee award"); In re

SmithKline Beckman Corp. Sec. Litig. , 751 F. Supp. 525, 533 (E.D. Pa. 1990)

(Broderick, J.).

3. The Skill and Efficiency of Plaintiffs' Counsel

Plaintiffs' counsel's efforts to efficiently resolve this litigation with respect to the

Settling Defendants are the best indicator of the experience and ability of the attorneys

involved. See, e.g., Behrens, 118 F.R.D. at 547-48 ("The quality of work performed in a

case that settles before trial is best measured by the benefit obtained"). By any measure,

counsel's efforts have resulted in a significant settlement from three of the nineteen

named defendants for the benefit of the Class. See Ikon, 194 F.R.D. at 194 (awarding

44


30% fee upon partial settlement and stating "the most significant factor in this case is the

quality of representation, as measured by `the quality of the result achieved, the

difficulties faced, the speed and efficiency of the recovery, the standing, experience and

expertise of the counsel, the skill and professionalism with which counsel prosecuted the

case and the performance and quality of opposing counsel"') (quoting Computron, 6 F.

Supp . 2d at 323).

The experience of Plaintiffs' counsel in this action is set forth in the

accompanying biographies of Plaintiffs' counsel submitted herewith and attached to

Exhibits A and B. As those submissions show, Plaintiffs' counsel practice extensively in

the highly complex field of class actions, including securities litigation.

The quality and vigor of opposing counsel is also relevant in evaluating the

quality of the services rendered by plaintiffs' counsel. See, e.g., Ikon, 194 F.R.D. at 194;

In re Warner Communications Sec. Litig. , 618 F. Supp. 735, 749 (S.D.N.Y. 1985) ("The

quality of opposing counsel is also important in evaluating the quality of plaintiffs'

counsel's work"). The Settling Defendants were represented by Morgan, Lewis &

Bockius LLP, a nationally prominent and highly regarded law firm of undeniable

experience and skill. The ability of Plaintiffs' counsel to obtain such a favorable

settlement for the Class in the face of such formidable legal opposition further confirms

the superior quality of Plaintiffs' counsel ' s representation.

4. The Complexity and Duration of the Litigation

Another factor used to evaluate fee awards is the complexity and duration of the

litigation. The Third Circuit has stated that this factor is intended to capture "the

probable costs, in both time and money, of continued litigation." Gen. Motors, 55 F.3d at

45


812. This action involves a massive accounting fraud, perpetrated by numerous actors,

and consisting of a host of different accounting manipulations infecting many aspects of

DVI's publicly reported financial statements . It is thus necessarily complex. See

Computron, 6 F. Supp. 2d at 317-18 ("Here, the trial, as ... all securities fraud trials, will

be long and complex ... Thus, the complexity, expense and duration of the litigation

weigh in favor of settlement.") (citing Hoffman Elec., Inc. v. Emerson Elec., Co. , 800 F.

Supp. 1279, 1285 (W.D.Pa.1992)).

As for the duration of this litigation, Plaintiffs' counsel has been actively

litigating this case for over four years (since September 2003), and have defeated motions

to dismiss , motions for reconsideration, and motions for interlocutory appeal filed by the

Settling Defendants. In the absence of the Partial Settlement, the litigation with respect

to these defendants would inevitably involve substantially more time and delay - for

continued discovery, pre-trial motions, trial, post-trial motions, and the appellate process

- likely necessitating thousands of additional attorney hours. Consequently, by reaching

the Partial Settlement, Plaintiffs' counsel have obtained "a substantial benefit

undiminished by further litigation expenses, without the delay, risk and uncertainty of

continued litigation." Computron, 6 F. Supp. 2d. at 318 (citation omitted).

In short, this highly complex case has been actively litigated over an extended

period, and there will in all likelihood be significant additional work and many additional

hours spent administering the settlement. The "Complexity and Duration" factor,

therefore, also weighs in favor of the requested fee.

5. The Risk of Non-Payment

a. The Fully Contingent Nature of Plaintiffs' Representation

46


Plaintiffs' counsel undertook this action over four years ago on an entirely

contingent fee basis, assuming a substantial risk that the litigation would yield no

recovery and leave them uncompensated for their efforts. Courts across the country have

consistently recognized that the risk of receiving little or no recovery is a maj or factor in

considering an award of attorneys' fees. For example, as one court has noted:

Although today it might appear that risk was not great based on PrudentialSecurities' global settlement with the Securities and ExchangeCommission, such was not the case when the action was commenced andthroughout most of the litigation. Counsel's contingent fee risk is animportant factor in determining the fee award. Success is never guaranteedand counsel faced serious risks since both trial and judicial review areunpredictable. Counsel advanced all of the costs of litigation, a notinsubstantial amount, and bore the additional risk of unsuccessfulprosecution.

In re Prudential-Bache Energy Income Partnerships Sec. Litig., No. 888, 1994 WL

202394, at *6 (E.D. La. May 18, 1994).

The real risk of no recovery in complex cases of this type is heightened when

Plaintiffs' counsel press to achieve the very best result for their clients. Examples

abound of class actions in which plaintiffs' counsel expended thousands of hours and yet

received no remuneration despite their diligence and expertise. See, e.g., Robbins v.

Ko er Props., Inc. , 116 F.3d 1441 (11th Cir. 1997) (reversing jury verdict of $81 million

for plaintiffs against an accounting firm and entering judgment for defendant); Eisenstadt

v. Centel Corp. , 113 F.3d 738 (7th Cir. 1997) (affirming lower court's granting of

summary judgment for defendants); Anixter v. Home-Stake Prod . Co. , 77 F.3d 1215

(10th Cir. 1996) (overturning securities fraud class action jury verdict for plaintiffs based

on 1994 Supreme Court opinion in case filed in 1973 and tried in 1988).

47


Plaintiffs' counsel should be rewarded for assuming the real risk of no recovery in

this case, and this factor thus weighs in favor of approval of the requested fee.

b. The Risk Of Collecting A Judgment That Might UltimatelyBe Obtained Was Significant In This Case

The Third Circuit has cautioned that percentage fee awards should be

substantially lower in those rare situations where, from the outset, neither the defendants'

liability nor the collectability of damages are at issue . See Cendant, 243 F.3d at 741

("Cendant's liability and consequent collectability had been conceded at the outset of the

PRIDES controversy, and that fact should have been given major consideration by the

District Court when setting Kirby's attorneys' fees"). Here, however, both the litigation

and collectability risks were significant.

Litigation Risks

It has never been certain that plaintiffs could establish liability against the Settling

Defendants in this case. Unlike Cendant, liability in this case has never been "conceded,"

but has instead been vigorously disputed. Although Plaintiffs' counsel are confident that

they would have established the Settling Defendants' liability if the case proceeded to

trial, there would nonetheless be substantial opposition, creating the substantial costs,

uncertainty and risk that arises in virtually all contested litigation, especially in complex

securities fraud cases like this.

ii. Collectability

The collectability risks in this case were also significant, and a consideration of

these risks makes the results achieved here all the more extraordinary. Given that

damages attributable to the Settling Defendants could have been assessed at a range close

to or lower than the settlement amount, it is far from certain that the additional costs

48


incurred to proceed to trial and judgment would have garnered a higher award. In

addition, the insurance policies covering the Settling Defendants are almost exhausted at

this time, and some of these Settling Defendants were represented to have relatively

modest net worth, resulting in the distinct possibility that continued, protracted litigation

against these parties could have resulted in them filing for bankruptcy. Moreover, the

Settling Defendants also settled other related cases prior to or concurrently with the

instant Partial Settlement (Fleet National Bank v . O'Hanlon, et al. , No. 04-1277 (E.D.

Pa.); and WM High Yield Fund, et al. v. O'Hanlon, et al. , No. 04-3423 (E.D. Pa.)), which

further demonstrates that the Partial Settlement represented all that the Settling

Defendants could afford.' The $3.25 million provided to the Class from these defendants

was a substantial benefit provided by Plaintiffs' counsel, and this factor thus militates in

favor of approval of the fee request.

6. The Time Devoted to this Case by Plaintiffs' Counsel wasSignificant

To date, Plaintiffs' counsel have expended over 32,000 hours and advanced over

$800,000 in expenses on this case since its inception . See Karnuth Affidavit (Ex. A); and

Schwartz Affidavit (Ex. B). Plaintiffs' counsels ' efforts reflect an unselfish commitment

to vigorously pursuing this case for the benefit of Plaintiffs and the Class. Moreover, as

noted above, Plaintiffs' counsel will likely incur many more hours in connection with

administration of this proposed Partial Settlement and continued pursuit of claims against

non-Settling Defendants. The foregoing unquestionably represents a very significant

7 Notably, as raised earlier, Plaintiffs' counsel obtained a "most favored nation" clause in thePartial Settlement, representing a significant benefit to the Class by guaranteeing that its recoveryagainst the Settling Defendants would be significantly higher than what plaintiffs achieved in theother related actions.

49


commitment of time, personnel, and out-of-pocket expenses to this case and to this

Settlement, and supports approval of the requested fees and expenses.

7. Awards in Similar Cases

The requested fee of 30% of the settlement fund is well within the range of fees

typically awarded in actions of this nature. There is no rule governing the appropriate

percentage of the common fund to be awarded as attorney fees. According to the leading

treatise on class actions:

No general rule can be articulated on what is a reasonable percentage of acommon fund. Usually 50 percent of the fund is the upper limit of areasonable fee award from a common fund, in order to assure that fees donot consume a disproportionate part of the recovery obtained for the class,though somewhat larger percentages are not unprecedented.

Newberg on Class Actions, Section 14.03 at 186, 188, 190 (2d ed. 1985).

The Third Circuit has observed that fee awards range from 19% to 45% of the

settlement fund. Gen. Motors , 55 F.3d at 822. See also Ikon, 194 F.R.D. at 194

("Percentages awarded have varied considerably, but most fees appear to fall in the range

of nineteen to forty-five percent"); Computron, 6 F. Supp. 2d at 322-23 ("There is no set

standard, however, on how to determine a reasonable percentage. Awards utilizing the

percentage-of-recovery method can reasonably range from nineteen percent to forty-five

percent of a settlement fund ... the percentage awarded, should, and generally does,

increase commensurate with increased quality of representation")

Numerous courts within the Third Circuit, including the Eastern District of

Pennsylvania, have regularly awarded fees of 30% to 33-1/3% of the recovery or more,

even in cases involving much larger settlement funds than the instant case. Rite Aid, 146

F. Supp. 2d at 735 (review of 289 settlements demonstrates "average attorney's fee

50

(awarding fee of 30% of $15 million fund and noting that "[a]ttorneys' fees of 30 percent

are common in this Circuit"); In re Linerboard Antitrust Litig. , 2004 WL 1221350, * 14

(E.D. Pa. June 2, 2004) (Dubois, J.) (awarding fee of 30% of $202 million settlement

fund and citing with approval "a recent Federal Judicial Center study that found that in

federal class actions generally median attorney fee awards were in the range of 27 to 30

percent). See, e.g., Smith v. Dominion Bridge Corp, 2007 WL 1101272, at * 10 (E.D.

Pa. April 11, 2007) (Reed, J.) (granting fee of "33.33%" of $750,000 settlement fund);

Remeron , 2005 WL 3008808 (33-1/3% of $75 million settlement fund); Brown v. Esmor

Correctional Services , Inc. , No. 98-1282, 2005 WL 1917869 (D.N.J. Aug. 10, 2005) (33-

1/3% of $2. 5 million settlement fund); Nichols v. SmithKline Beecham Corp . , No. 00-

6222, 2005 WL 950616 (E.D. Pa. April 22, 2005) (Padova, J.) (30% of $65 million

settlement fund); In re Ravisent Technologies , Inc. Sec . Litig. , No. 00-1014, 2005 WL

906361 (E.D. Pa. April 18, 2005) (Surrick, J.) (33-1/3% of $7 million settlement fund);

Stoner, 352 F. Supp. 2d 549 (33%); In re Automotive Refinishing Paint Antitrust Liti

MDL No. 1426 (E.D. Pa . Oct 13, 2004) (32% of $66. 75 million settlement fund); In re

Corel Corp. Sec. Litig. , 293 F.Supp.2d 484 (E.D. Pa. 2003) (Brody, J.) (33-1/3% of $7

million settlement fund); In re Flat Glass Antitrust Litig. , MDL No. 1200 (W.D. Pa. May

28, 2003) (33%); ATI Tech. , 2003 WL 1962400 (Dalzell , J.) (30%); Cell Pathways , 2002

WL 31528573 (McLaughlin, J.) (30%); Ikon, 194 F.R.D. 166 (Katz, J.) (awarding fee of

30% of $111 million after only one and a half years of litigation); Aetna, 2001 WL 20928

(Padova, J.) (30%); Cullen v. Whitman Med. Corp. , 197 F.R.D. 136 (E.D. Pa. 2000)

51


(Brody, J.) (33-1/3%); In re Mobilemedia , No. 96-5723 (D.N.J. Feb. 24, 2000) (Lechner,

J.) (33-1/3%); Blackman v. O'Brien Envtl. Energy, Inc. , 1999 WL 397389 (E.D. Pa. May

12, 1999) (O'Neill, J.) (35%); In re ValueVision Int'l Sec. Litig. , 957 F. Supp. 699, 700

(E.D. Pa . 1997) (Pollack, J.) (34%); Ratner v. Bennett, No. 92-4701, 1996 WL 243645

(E.D. Pa. May 8, 1996) (Broderick, J.) (35%); In re Greenwich Pharm. Sec. Litig. , No.

92-3071, 1995 WL 251293 (E.D. Pa. Apr. 25, 1995) (Newcomer, J.) (33-1/3%). See also

Aamco Automatic Transmissions , Inc. v. Ta. loe, 82 F.R.D. 405 (E.D. Pa. 1979) (Van

Artsdalen, J.) (43.87%); Zinman v. Avemco Corp. , No. 75-1254, 1978 WL 5686 (E.D.

Pa. Jan . 18, 1978) (Higginbotham , J.) (50%).

The fact that the requested fee clearly falls within the range of fees awarded in

other class cases in this Circuit further attests to its reasonableness.

D. The Requested Fee Is Reasonable Under The Lodestar Cross-Check

In addition to applying the percentage approach to determine attorneys' fees in

common fund cases like this one, courts in this Circuit also apply the lodestar method to

"cross-check" whether the fee determined under the percentage approach is reasonable.

See AT&T, 455 F.3d at 164 ("we have recommended that district courts use the lodestar

method to cross-check the reasonableness of a percentage-of-recovery fee award") (citing

Rite Aid, 396 F.3d at 305; Prudential , 148 F.3d at 333); Gunter, 223 F.3d at 195 n. 1 ("we

have also suggested that district courts cross-check the percentage award at which they

arrive against the `lodestar' award method"); Computron, 6 F. Supp. 2d at 322 ("In

assessing the requested fee in the instant matter, the percentage-of-recovery method was

primarily relied upon, but the lodestar method served as a useful cross-check"). It is

important to note that "[t]he lodestar cross-check, while useful, should not displace a

52

Case 2-03-cv-05336-LD D Document 519-2 Filed 10/16/2007 Page 65 of 73

district court' s primary reliance on the percentage-of-recovery method ." AT&T, 455

F.3d at 164 (citing Rite Aid, 396 F.3d at 307).

The lodestar method is a two-step process: the court first ascertains the "lodestar"

figure by multiplying the number of hours worked by the normal hourly rates of counsel,

then adjusts the lodestar, in its discretion, by applying a multiplier to take into account

the contingent nature and risks of the litigation, the results obtained and the quality of the

services rendered by counsel. See, e.g., Rite Aid, 396 F.3d at 305-06; Linerboard, 2004

WL 1221350 at * 16 (citing Prudential , 148 F.3d at 340-41). The lodestar cross-check

analysis "need not entail `mathematical precision' or `bean-counting,' and is `not a full-

blown lodestar inquiry ."' AT&T, 455 F. 3d at 169 n. 6 (quoting Rite Aid, 396 F.3d at

306, 307 n. 16) (internal citations omitted).

1. Hours Reasonably Expended by Counsel

The lodestar cross-check begins with the number of hours expended in the

prosecution of the action. To date, Plaintiffs' counsel have spent, in the aggregate, more

than 32,000 hours in the prosecution of this case. The aggregate hours include time

spent: responding to Defendants' twenty separate motions to dismiss, and numerous

motions for reconsideration and for interlocutory appeal; conducting pertinent factual and

legal research and amending the complaint when appropriate; researching and reviewing

pertinent accounting and auditing standards; requesting, reviewing and analyzing millions

of pages of documents produced by parties and non-parties; engaging in numerous

discovery and case management disputes; preparing for and taking over twenty

depositions in various locations, and preparing for numerous additional depositions;

preparing and filing extensive briefs in support of Plaintiffs' pending motion for class

53


certification; consulting with plaintiffs' retained consultants and experts in the areas of

market efficiency, damages and accounting; negotiating the terms of the prior Settlement

and the current Proposed Settlement; and drafting the Stipulation of Settlement and

related papers.

Counsel has conducted this litigation in a coordinated and well-organized fashion

to ensure efficiency and minimize unnecessary duplication of work. In addition, where

professionally and economically feasible, work was assigned to personnel with lower

billing rates in order to provide the best quality work at lower cost. The time records of

petitioners are available for review by the Court, although for the convenience of the

Court and in conformity with practice, Plaintiffs' counsel submit them to the Court in

summarized form, along with accompanying affidavits (see, Exhibits A and B). See Rite

Aid, 396 F.3d at 307 ("The district court may rely on summaries submitted by the

attorneys and need not review actual billing records")

2. Calculating the "Base" Lodestar

To arrive at the lodestar, the hours expended are multiplied by each attorney's

respective hourly rate. The hourly rate to be applied in calculating the lodestar is that

which is normally charged in the community where the attorney practices. See, e.g.,

Blum, 465 U.S. at 895; In re Fine Paper Antitrust Litig., 751 F.2d 562, 590-91 (3d Cir.

1984). Moreover, the United States Supreme Court and other courts have held that the

use of current rates is proper since such rates compensate for inflation and the loss of use

of funds . See Missouri v. Jenkins, 491 U.S. 274, 283-84 ( 1989); New York State Ass'n

for Retarded Children, Inc. v. Carey , 711 F.2d 1136, 1153 (2d Cir. 1983) (deeming the

54


use of current rates appropriate where services were provided within two to three years of

fee application).

In determining the reasonableness of an attorney's rates, courts take into account

the attorney's legal reputation, experience, and status (e.g., partner or associate). The

accompanying affidavits of plaintiffs' counsel include a description of the background

and experience of the attorneys who worked on this case, providing support for the

hourly rates charged in this case.

3. The Lodestar Multiplier

"Calculation of the lodestar, however, is simply the beginning of the analysis."

Warner, 618 F . Supp . at 747. In the second step of the typical lodestar analysis (as

opposed to the cross-check), the court adjusts the lodestar to take into account, among

other things, the result achieved, the quality of representation, the complexity and

magnitude of the litigation, and public policy considerations . Fine Paper, 751 F.2d at

583; Prudential , 148 F.3d at 341 (citing 3 Newberg § 14.03 at 14-5); Seidman v. Am.

Mobile Sys. , 965 F. Supp. 612, 623 (E.D. Pa. 1997). The court then applies the

appropriate multiplier to the lodestar number to account for these additional factors.

4. Performing the Lodestar Cross-Check

In performing the lodestar cross-check, instead of applying a multiplier to the

lodestar, the court determines what multiplier would bring the lodestar to the amount

requested as a percentage of the common fund, and then determines whether the resulting

fee would be so unreasonable as to warrant a downward adjustment.

The mechanics of this calculation depend on the actual value of the Settlement

Fund, which in this case is $3,250,000 excluding interest. Counsel's requested

55


percentage of 30% of the fund results in a fee award of $975,000. The cumulative hours

expended by all Plaintiffs' counsel since inception of this case are over 32,000 hours,

resulting in a lodestar total of over $10.4 million. Combined with the $865,500 in

attorney's fees approved on the prior settlement, Lead Counsel's cumulative attorneys

fees recovered would amount to $1,840,500 if the present fee request is approved; which

is less than one-fifth of the cumulative lodestar for the services performed by the

plaintiffs' firms in this action since inception (see, Exs. A and B).8/9

Typically the lodestar cross -check is performed to insure that the percentage-

based fee does not translate to an unreasonably high multiplier. Here, "multiplier" is a

misnomer, as the lodestar method actually yields a substantially higher total than the

requested percentage fee. Given that the requested fee is substantially below the

Plaintiffs' counsels' lodestar, the requested fee is shown to be eminently reasonable.

Indeed, the recent words of this Court's sister court are equally - if not more - applicable

here:

The lodestar multiplier is approximately 0.97. There is no disparity here

between the fees requested and the lodestar cross-check figure. By this

important measure, the requested fees are extremely reasonable and

congruent with the work performed. A multiplier of 0.97 is modest in

comparison with the multiples from 1 to 4 frequently awarded in common

fund cases, see Prudential, 148 F.3d at 341, depending on circumstances

presented.

Accordingly, the lodestar cross-check provides significant confirmation inthis case of the reasonableness of the fees sought under the percentage-of-recovery method.

8 In further comparison, the cumulative class recovery in the two Settlements thus far is $6,135,000.

9 The cumulative totals include time and expenses submitted by the lawfirm of Morgenstern Jacobs & BlueLLP, which completed specialized work related to DVI's bankruptcy and submitted time and expenses inthe first settlement only.

56


Elec. Carbon , 2006 WL 2505881 at *19.

Consequently, by any objective or comparative standard, the requested fee

is reasonable and warranted by the result obtained in this case.'°

E. Public Policy Considerations Support the Requested Fee

The federal securities laws are remedial in nature and designed to encourage

private lawsuits to effectuate their purpose of protecting investors. See Basic Inc. v.

Levinson , 485 U.S. 224 ( 1988); Bateman Eichler, 472 U.S. 299; Huddleston, 459 U.S.

375. Indeed, the ultimate effectiveness of these remedies may largely depend on the

efficacy of the class action device. As one court has noted:

Private lawsuits serve to further the objective of the federal securities lawswhich is to protect investors and consumers against fraudulent and otherdeceptive practices. As a practical matter, those lawsuits can bemaintained only if competent counsel can be obtained to prosecute them.Competent counsel can be obtained if reasonable and adequatecompensation for the services were awarded if a successful result isachieved. "To make certain that the public is represented by talented andexperienced trial counsel, the remuneration should be both fair andrewarding. The concept of a private attorney acting as a `private attorneygeneral' is vital to the continued enforcement and effectiveness of theSecurities Acts."

Eltman v. Grandma Lee's, Inc. , No. 82-1912, 1986 WL 53400, *9 (E.D.N.Y. May 28,

1986) (citations omitted). See also Warner, 618 F. Supp. at 750-51 ("Fair awards in

cases such as this encourage and support other prosecutions, and thereby forward the

cause of securities law enforcement and compliance."). Retired District Judge Abraham

10 Plaintiffs' Counsels' lodestar represents all time spent prosecuting class members' claims against alldefendants, not just time spent prosecuting claims against the Settling Defendants. Should Plaintiffs'Counsel submit future fee petitions in connection with other settlements or judgments, Plaintiffs' Counselwill provide the Court, as is custom, with their full lodestar from inception of this litigation, along withitemization of any fees awarded by the Court from these Partial Settlements, so that the Court canmeaningfully evaluate such future fee requests and perform any necessary lodestar cross-checks.

57


Sofaer, of the Southern District of New York, has also succinctly stated the reasons for

providing a substantial financial incentive for capable counsel in securities class actions:

It unquestionably is true that without able lawyers handling these mattersnot only do some of them go unprosecuted, but the big difference in myexperience is in the amount obtained, and you don't get the highestrecovery when you are paying at the low end of the scale of fee recoveryin contingent actions. It seems to me that I as the protector of the classcan fairly say, and honestly say, that I believe it is in the class's bestinterests - of this class and of future classes yet unknown - to pay this kindof money for these kinds of benefits.

Conte, supra, §1.04, at 6-7 (citation omitted). This view has also been endorsed by

Former Chief Justice William H. Rehnquist:

Full civil justice reform will not likely be accomplished until we rethinkthe manner in which litigation is paid for in this country, and until betterincentives exist to reward lawyers for early resolution of controversies andefficient handling of cases, instead of providing a disincentive, as thepresent hourly rate often does.

Remarks of the Chief Justice for the Distinguished Citizen Award, February 5, 1994, at

10.

The Supreme Court has also emphasized that private actions provide "`a most

effective weapon in the enforcement' of the securities laws and are `a necessary

supplement to [SEC] action ."' Bateman Eichler , 472 U. S. at 310 (quoting J.I. Case Co.

v. Borak, 377 U. S. 426, 432 (1964)). These authorities have expressed the clear public

policy of encouraging private attorneys to take the risks required to represent those who

would not otherwise be protected from securities fraud. Accordingly, an award of the

fees requested herein is fully consistent with important public policy considerations.

F. Plaintiffs' Counsel Should Be Reimbursed For Their ReasonablyIncurred Litigation Expenses

58

reimbursement at this time to $325, 000. Similar to the fees , these expenses combined

with the $90,000 interim expenses approved by this Court in the first Settlement, the

cumulative amount is still substantially less than the actual expenses incurred to-date, as

summarized in the accompanying affidavits, attached as Exhibits A and B. "Attorneys

who create a common fund for the benefit of a class are entitled to reimbursement of

reasonable litigation expenses from the fund." Meijer, 2006 WL 23 82718 at * 18

(quoting Aetna, 2001 WL 20928 at * 13). Each of the expense categories for which

reimbursement is sought is appropriate for payment from a class settlement fund. Brown

v. Pro Football, Inc. , 839 F. Supp. 905, 916 (D.D.C. 1993) (citing Missouri , 491 U. S. at

284, for the proposition that "Plaintiffs' out-of-pocket costs for telephone, telecopier, air

and local couriers, postage, photocopying, Westlaw research, secretarial overtime, and

counsels' travel expenses are routinely billed to fee-paying clients, and thus are all

compensable as part of a reasonable attorney's fee"); In re Remeron End-Payor Antitrust

Litig. , No. 02-2007, 2005 WL 2230314, *32 (D.N.J. Sept . 13, 2005) (approving

reimbursement of expenses including "costs expended for purposes of prosecuting this

litigation, including substantial fees for experts ; substantial costs associated with creating

and maintaining an electronic document database; travel and lodging expenses; copying

costs; and the costs of deposition transcripts"). Moreover, the Notice informed class

members that plaintiffs' counsel would seek reimbursement of expenses up to $325,000,

and no objection to the expense application have been filed. For all the foregoing

reasons , the requested expenses should be awarded . Cf. Rite Aid, 146 F. Supp . 2d at 736

59


("plaintiffs seek reimbursement of expenses ... which they have detailed in their

submissions to us. These out-of-pocket expenses ... are compensable ... They are also

unobjected to and, in our judgment, reasonable") (citation omitted).

III. CONCLUSION

For all the reasons set forth herein, including (a) the substantial immediate

recovery of $3,250,000 in cash for the Class; (b) the risks attendant with any litigation,

that Plaintiffs would recover little or nothing or be unable to collect any judgment if they

continued to trial; (c) the skill and efficiency of Plaintiffs' counsel; (d) the absence of any

objection from Class members; and (e) the significant amount of time already spent on

the case (and the additional time that counsel will spend administering this Settlement);

and (f) in comparison to awards in comparable cases ; Plaintiffs counsel respectfully

requests that the Court grant (i) final approval of certification of a settlement class, (ii)

final approval of the Partial Settlements as fair, reasonable and adequate, (iii) final

approval of the Plain of Allocation and (iv) final approval of Lead Counsel's request for

an award of attorneys fees of 30% of the Settlement Fund, together with interim

reimbursement of their reasonable expenses in the amount of $325,000, with accrued

interest as earned in the Settlement Fund.

Dated: October 16, 2007 Respectfully submitted,

/s/ Michael R. KarnuthCounsel for Lead Plaintiffs

Clinton A. Krislov, Esq.Michael R. Karnuth, Esq.KRISLOV & ASSOCIATES, LTD.20 North Wacker DriveChicago, Illinois 60606Phone: 312-606-0500

60


Fax: 312-606-0207

Plaintiffs' Lead Counsel

CHIMICLES & TIKELLIS LLPSteven A. Schwartz, Esq.Attorney I.D. No. 50579Kathy Meermans Esq.Attorney I.D. No. 37846361 W. Lancaster Avenue1 Haverford CenterHaverford, PA 19041Phone: 610-642-8500

Plaintiffs ' Liaison Counsel

61


EXHIBIT A





AFFIDAVIT OF MICHAEL R. KARNUTH IN SUPPORT OFPETITION FOR ATTORNEY'S FEES AND

REIMBURSEMENT OF EXPENSES

I am an associate of the law firm of Krislov & Associates Ltd. I submit

this affidavit in support of this firm's application for an award of attorneys' fees in

connection with services rendered in the above-titled case and with respect to the Second

Settlement achieved in this matter, as well as the reimbursement of expenses incurred by

the firm in connection with this litigation.

2. Lead Plaintiffs, Kenneth Grossman, Cedar Street Fund, and Cedar Street

Offshore Fund, selected Krislov & Associates, Ltd. as their Lead Counsel, and this Court

appointed this firm as Lead Counsel for Lead Plaintiffs and the proposed class . Krislov

& Associates Ltd. as well as Chimicles & Tikellis LLP, whom this Court appointed

Liaison Counsel, have vigorously prosecuted this action, including, but not limited to: the

investigation, research, and preparation of complaints; the motions related to those

complaints; research and preparation of briefs in support of class certification; the

motions related to class certification and preparing for and orally arguing for class

certification; fact discovery including document review and analysis and motion practice

in connection with discovery; expert discovery; work and negotiations related to the

previous settlements and settlements currently pending before this Court; and the overall

litigation strategy on behalf of the proposed class.


3. Attached hereto as Exhibit 1 is a detailed summary articulating the amount

of time spent by each attorney, paralegal, and/or other staff member who was involved in

the above-titled litigation, and the lodestar calculation based upon the billing rates for

such attorneys, paralegals, and staff members. For attorneys, paralegals, and staff

members who are no longer employed by Krislov & Associates, the lodestar calculation

is based upon the billing rates for such attorneys and paralegals in his or her final year of

employment by the firm. The schedule was prepared from contemporaneous, daily

records regularly prepared and maintained by the firm. Time expended in preparing this

application for fees and reimbursement of expenses has not been included in this request.

4. The hourly rates for the attorneys, paralegals, and staff members in this

firm that are included in Exhibit 1 are the same as the regular current rates charged for

their services in non-contingent matters and/or which have been accepted and approved

in other class action cases.

The total number of hours expended on the above-titled litigation through

September 30, 2007 is 24,770.84 hours. The total lodestar calculation for Krislov &

Associates is $7,207,722.50.

6. Krislov & Associates lodestar figures are based upon the firm's billing

rates, which do not include charges for expense items. Expense items are billed

separately and such charges are not duplicated in the hourly billing rates.

7. Exhibit 2 details Krislov & Associates unreimbursed expenses, which total

$700,815.99.

The expenses incurred in this action are reflected on the books and records

of Krislov & Associates. These books and records are prepared from expense vouchers,


check records, and other source materials and are an accurate recordation of the expenses

incurred.

9. With respect to the standing of counsel in this case, attached hereto as

Exhibit 3 is a brief biography of Krislov & Associates and its attorneys, including those

who were involved with this litigation.

I declare under penalty of perjury that the foregoing is true and correct.

Executed this 16th day of October, 2007.

/s/ Michael R. KarnuthMichael R. Karnuth


EXHIBIT 1


DVI SECURITIES LITIGATIONLodestar Report

Firm: Krislov & Associates, Ltd.Period: Inception through September 30, 2007

Name & Status Total Hours Current Hourly Rate Total Lodestar

Clinton A. Krislov p 1,591.70 $600.00 $955,020.00

Michael R. Karnuth A 6,400.68 $450.00 $2,880,306.00

M. Reas Bowman A 1,320.30 $325.00 $429,097.50

W. Joel Vander Vliet FA 1,390.50 $250.00 $347,625.00

Elizabeth Dixon A 113.80 $350.00 $39,830.00

Jeffrey M. Salas A 608.00 $250.00 $152,000.00

Kenneth T. Goldstein A .70 $400.00 $280.00

Jason Stiehl FA 5.20 $275.00 $1,430.00

Brian Stalets CA 2,115.90 $250.00 $528,975.00

Bonnie Tunic FCA 185.60 $275.00 $51,040.00

Timothy J. Weber FLA 3,507.50 $150.00 $526,125.00

Michalene McElligott LA 710.30 $175.00 $124,302.50

Charles Wysong LA 1,086.50 $175.00 $190,137.50

Mathew D. Dudek FLC 715.50 $150.00 $107,325.00

Robert P. DeWitte LC 760.40 $175.00 $133,070.00

Amy Keller LC 783.40 $175.00 $137,095.00

Dean F. Pettinga FLC 336.36 $150.00 $50,454.00

Jeffrey M. Salas FLC 471.20 $175.00 $82,460.00

Carey J. Crimmons FCA 62.50 $250.00 $15,625.00

Michele A. Dukes FCA 257.00 $250.00 $64,250.00

Jessica McGill FLC 1.30 $150.00 $195.00

Katherine Eisenmann FLC 237.60 $150.00 $35,640.00

M. Reas Bowman FLC 459.00 $175.00 $80,325.00

Krista Young FLC 51.20 $150.00 $7,680.00

W. Joel Vander Vliet FLC 346.30 $150.00 $51,945.00

Catherine Cifonelli FPL 130.90 $150.00 $19,635.00

Rebecca Rose FLC 713.00 $175.00 $124,775.00


Steven Proksa PL 392.20 $175.00 $68,635.00

Clint Costa FLC 16.30 $150.00 $2,445.00

TOTALS: 24,770. 84 n/a $7,207,722.50

P = Partner; A = Associate; FA = Former Associate CA = Contract Attorney; LA = LegalAssistant; LC = Law Clerk; PL = Paralegal; FPL = Former Paralegal; FLC = Former LawClerk; FCA = Former Contract Attorney


EXHIBIT 2


DVI SECURITIES LITIGATIONEXPENSE REPORT

Firm: Krislov & AssociatesPeriod: Inception through September 30, 2007

Description Amount

Photocopies :In-house: $38 ,434.80Outside: $67,924.27

$106,359.07

Scanned Documents $1,803.45

Postage $2,012.86

Telephone-long distance $506.70

Fax $41,628.00

Messenger $10,479.19

Office Supplies $7,204.51

Online Research $56,833.01

Consultants and Experts $330,727.87

Press Release $910.00

TRAVEL:Airfare : $29,056.61Meals: 6,000.60Hotels: 16,865.91Parking ; 368.50Taxi : 11,186.45Train : 156.00Rental Car: 1,893.02Other : 214.40

$65,741.49

Litigation Support $16,336.25

Filing Fees $230.00

Summons Service $3,628.80

Depositions $41,035.63

CD-Disks $2,245.00

Mediation Fee $10,177.13

Witness Fees $2,957.03


TOTALS: $700 ,815.99F:\CASES\DVI\Reports\ Expenses Inception to 9-30-07.wpd


EXHIBIT 3


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EXHIBIT B


IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

IN RE: DVI, INC. SECURITIES LITIGATION CIVIL ACTIONNO. 2:03-cv-05336-LDD

DECLARATION OF STEVEN A. SCHWARTZ IN

SUPPORT OF PETITION FOR ATTORNEYS' FEES AND

REIMBURSEMENT OF EXPENSES

I am a member of the law firm of Chimicles & Tiltiellis LLP. I submit this affidavit

in support of my firm's application for an award of attorneys' fees in connection with services

rendered in this case, as well as the reimbursement of expenses incurred by my firm in connection

with this litigation.

2. Lead Plaintiffs selected and, pursuant to the PSLRA, this Court appointed my firm

as Liason Counsel for Lead Plaintiffs and the proposed class in this class action. My firm has

worked closely with Lead Counsel in all aspects of the prosecution of this litigation, including, but

not limited, to the investigation, research and preparation of the various complaints; motion practice

related to those complaints; all aspects of fact discovery including document review and analysis and

related motion practice; expert discovery; depositions; work and negotiations related to the

settlement currently pending before the Court; and the overall litigation strategy on behalf of the

proposed class.

The schedule attached hereto as Exhibit 1 is a detailed summary indicating the

amount of time, by category, spent by each attorney and paralegal of my firm who was involved in

this litigation , and the lodestar calculation based on my firm's current billing rates. For attorneys

and paralegals who are no longer employed by myfirm, . the..lodestar calculation.is.based ..upon the..

billing rates for such attorneys and paralegals in his or her final year of employment by my firm.

The schedule was prepared from contemporaneous, daily time records regularly prepared and


maintained by my firm. Time expended in preparing this application for fees and reimbursement of

expenses has not been included in this request.

4. The hourly rates for the attorneys and paralegals in my firm included in Exhibit I are

the same as the regular current rates charged for their services in non-contingent matters and/or

which have been accepted and approved in other securities or shareholder litigation.

5. The total number of hours expended on this litigation by my firm through

September 30, 2007 is 8,157 hours. The total lodestar for my firm is $3,219,331.25.

6. My firm' s lodestar figures are based upon the firm's billing rates, which rates do not

include charges for expense items . Expense items are billed separately and such charges are not

duplicated in my firm' s billing rates.

7. As detailed in Exhibit 2, my firm has incurred a total of $ 99,994.74 in unreimbursed

expenses in connection with the prosecution of this litigation.

S. The expenses incurred in this action are reflected on the books and records of my

firm. These books and records are prepared from expense vouchers, check records and other

source materials and are an accurate recordation of the expenses incurred.

9. With respect to the standing of counsel in this case, attached hereto as Exhibit 3 is a

brief biography ofmy firm and attorneys in my firm who were principally involved in this litigation.

I declare under penalty of perjury that the foregoing is true and correct.

Executed this 10th day of October, 2007.

STEVEN A. SCHWARTZ


EXHIBIT 1

CHI MICIN RE Dl^ V

9WWA 519-5

TIME REPORTINCEPTION THROUGH SEPTEMBER 30, 2007

Filed 10/16/2007 Page 5 of 52

NAME*TOTALHOURS

HOURLYRATE LODESTAR

Chimicles, Nicholas E. P 51.75 $675.00 $34,931.25Tikellis, Pamela S. P 0.25 $600.00 $150.00Malone, James R. Jr. P 12.00 $550.00 $6,600.00Gottsch, Michael D. P 0.25 $500.00 $125.00Schwartz, Steven A. P 1,931.25 $500.00 $965,625.00Schwartzman, Denise D. OC 70.00 $470.00 $32,900.00Donaldson, Kimberly M. P 331.50 $425.00 $140,887.50Geyelin, Anthony A. OC 0.75 $410.00 ..$307.50Hegedus, Candice L.H. OC 555.50 $395.00 $219,422.50Meermans, M. Katherine A 3,399.50 $395.00 $1,342,802.50Sauder, Joseph G. A 223.00 $350.00 $78,050.00Scott, Daniel B. A 575.50 $325.00 $187,037.50Mariani, Ramona M. FA 73.50 $300.00 $22,050.00Landau-Smith, Philip IT 17.25 $300.00 $5,175.00Burkey, Fatema A 281.50 $280.00 $78,820.00Davis, Robert A 0.50 $280.00 $140.00Kimmel, Kimberly Litman A 5.50 $280.00 $1,540.00Mathews, Timothy N. A 1.00 $280.00 $280.00Naylor, Zachary A 4.75 $280.00 $1,330.00Long, Brian FA 26.25 $285.00 $7,481.25Sanders, Kimberly A. A 13.50 $220.00 $2,970.00Bottenfield, Anthony M. FLC 12.25 $190.00 $2,327.50Sanders, Kimberly A. FLC 7.00 $190.00 $1,330.00Wozny, Michael J. FLC 22.00 $190.00 $4,180.00Aldinger, Catherine A. LA 136.50 $175.00 $23,887.50Paquette, Roland LA 13.50 $165.00 $2,227.50Torpey, Mary Fran FA 0.50 $165.00 $82.50Kasman, Donna A. FLA 5.75 $165.00 $948.75Emmett, Catherine LA 0.25 $155.00 $38.75Dickinson, Joshua FLC 1.00 $150.00 $150.00Rosso, Matthew D. FLC 39.25 $150.00 $5,887.50Williams, Emily K. LA 319.75 $150.00 $47,962.50Kramer, Brent FLC 0.75 $140.00 $105.00Mastraghin, Corneliu P. LA 2.25 $135.00 $303.75Apfel, Sandra L. LA 4.75 $60.00 $285.00Harrington, Amanda E. FLA 16.50 $60.00 $990.00

TOTALS: 5,157,00 $3,219,331.25

*P=Partner, OC=Of Counsel, A=Associate, FA=Former Associate,FLC=Law Clerk, LA=Legal Assistant, FLA=Former Legal Assistant1T=IT Manager 10/11/2007


EXHIBIT 2


IN RE : DVI SECURITIES LITIGATIONCHIMICLES & TIKELLIS LLPUNREIMBURSED LITIGATION EXPENSES

EXPENSECATEGORY AMOUNT

Filing Fee $81.18Consulting Fee $68,281.72Postage $29.10Telephone/Telecopy $100.07Travel, Food and Lodging $7,148.03Photocopy - Firm $19,085.00Photocopy - Outside $147.40Other $4.00Computer Research $4,209.41Express.Mail $480.58Deposition Transcript $428.25

TOTALS: $99,994.74

2:03-cv-05336- L Document 519-5 Filed 10/16/2007 Page 9 of 52

HAVERFORD.PA361 West Lancaster Avenue

Haverfbrd, PA 19041Voice: 610-642-8500

Toll Free: 866-399-2487Fax: 610-649-3633

W[LMTNGTQN. DEP.Q. Box 1035

One Rodney SquareWilmington , DE 19899Voice: 302-656-2500Fax: 302-656-9053

2-03-cv-05336-LDD Document 519-5 Filed 10/16/2007 Page 10 of 52

OUR ATTORNEYS

Partners

Nicholas E. Chimicles 3Pamela S. Tikellis 8James R. Malone, Jr. 11Michael D. Gottsch 13Robert J. Kriner, Jr. 14Steven A. Schwartz 16Kimberly M. Donaldson 19

Of Counsel

Morris M. Shuster 21Denise Davis Schwartzman 22Anthony Allen Geyelin 23Candice L.H. Hegedus 24

Associates

Fatema Burkey 25Benjamin F. Johns 25Kimberly Litman Kimmel 26Timothy N. Mathews 26Mary Katherine Meermans 28A. Zachary Naylor 28Joseph G. Sauder 30Daniel B. Scott, 32Scott M. Tucker 33

PRACTICE AREAS

REPRESENTATIVE CASES

Chimicles & Tikellis LLP / Firm Resume / October 2007 / Page 2


02 1

o' C

is senior partner and Chairman of the Firm's ExecutiveCommittee Mr. Chunicles is a 1970 graduate of the Univer-sity of Pennsylvania, where he received a Bachelor of ArtsDegree with Honors. Mr. Chimicles graduated in 1973 fromthe University of Virginia School of Law, where he was amember of the Editorial Board of the University of VirginiaLaw Review and was the author of several published com-

ments. While attending law school, he co-authored a course and study guide enti-tled "Student's Course Outline on Securities Regulation," published by the Uni-

versity of Virginia School of Law. Upon graduation from law school, Mx. Chimicles

joined a major Philadelphia law firm where he practiced for eight years and spe-cialized in litigation including complex commercial, antitrust and securities fraud

cases and served as principal or assistant trial counsel in several matters.

Mr. Chimicles has actively prosecuted major complex litigation, antitrust, securi-

ties fraud and breach of fiduciary duty suits. Most recently, Mr. Chimicles was

lead trial counsel for a Class of investors in a six-week jury trial of a securitiesfraudlbreach of fiduciary duty case that resulted in a $185 million verdict. In reReal Estate Associates Limited Partnerships Litigation, No. CV 98-7035 DDP, was

tried in the federal district court in Los Angeles before the Honorable Dean D.

Pregerson. On November 15, 2002, the 10 member jury returned a unanimous

verdict in favor of the Class (comprising investors in the eight REAL Partner-ships) and against the REALs' managing general partner, National Partnership

Investments Company ("NAPICO") and the four individual officers and directors

of NAPICO. The jury awarded more than $25 million in damages against all fivedefendants on Count I, the Section 14(a), 1934 Act, proxy fraud claim and more

than $67 million in damages against NAPICO on Count II for breach of fiduciary

duty, On November 19, 2002, the jury returned a verdict of $92.5 million in puni-

tive damages against NAPICO. This total verdict of $185 million was among the

"Top 10 Verdicts of 2002," as reported by the National Law Journal

(verdictsearch.com). The Court upheld in all respects the jury's verdict on liability

as to both Count I and Count II, upheld in full the jury's award of $92.5 million in

compensatory damages, upheld the Class's entitlement to punitive damages (but

reduced those damages to $2.6 million based on the application of California law

to NAPICO's financial condition), and awarded an additional $25 million in pre-

judgment interest. Based on the Court's decisions on the post-trial motions, the

judgment entered in favor of the Class on April 28, 2003 totaled over $120 million,

$91 million on Count IT and $30 million on Count I.

In other federal securities fraud action, he served as a lead counsel in the Hercu-



Nichalaa E. Chimicles cont.les Securities Litigation, Civil Action No. 90-442 (RR.M) (D. Del.) ($18 million recov-

ery); Scott Paper Securities Litigation, Civil Action No. 90-6192 (E.D. Pa.) ($8 mil-lion recovery); Sunrise Savings & Loan Securities Litigation, MDL No. 655 (E.D.Pa.) ($15 million recovery); Storage Technology Corp. Securities Litigation, Master

File No. 84-F-1981 (D. Colo.) ($18 million recovery); In re Fiddler's Woods Bond-

holders Litigation, Civil Action No. 83-2340 (E.D. Pa.), a bondholders' class actionarising out of a default on a $33 million industrial development bond issue (recoveryof more than $7 million for the Class); and Charter Securities Litigation, Civil Ac-tion No. 84-448 Civ-J-12 (M.D. Fla.) (recovery of $7.75 million); Continental Illinois

Securities Litigation, Civil Action No. 82 C 4712 (N.D. Ill.) involving a twenty-weekjury trial conducted by Mr. Chimicles that concluded in July, 1987 (the Class ulti-

mately recovered nearly $40 million).

Mr. Chimicles has been a principal counsel in several major litigations that haveresulted in precedent-breaking recoveries for classes of limited partners, in additionto the Real Estate Associates Limited Partnership Litigation, discussed above, Mr.Chimicles was a member of the Executive Committee in the Prudential LimitedPartnerships Litigation, MDL 1005 (S.D.N.Y.), where the Class recovered $130 mil-lion in settlement from Prudential, and other defendants. Mr. Chimicles was leadcounsel in the PaineWebber Limited Partnerships Litigation, 94 Civ. 8547 (S.D.N.Y.)in which a $200 million settlement was approved in mid-1997. As co-lead counsel inseveral litigations involving ML-Lee Acquisition Fund, L.P., ML-Lee AcquisitionFund 11, L.P. and ML-Lee Acquisition Fund (Retirement Accounts) IT, L.P. (C.A. No.92-60, 93-494, 94-422 and 95-724) that were prosecuted in the Delaware FederalDistrict Court. Mr. Chimicles (together with partner Pamela Tikellis and financialspecialist Kathleen Chimicles) negotiated settlements that resulted in more than$30 million in cash and other benefits to be paid or made available to investors inthe various funds. In litigation involving PLM Equipment Growth and IncomeFunds .N-VII, Mr. Chimicles (together with financial specialist Kathleen Chimicles)was instrumental in negotiating a settlement reached in 2001 that provides bothmonetary and equitable relief for the limited partners. In February 2002, the Supe-rior Court of Maxin County, California, approved the settlement of a case in whichMr. Chimicles was co-lead counsel, involving five public partnerships sponsored byPhoenix Leasing Incorporated and its aMates and resulting in entry of a judgmentin the amount of $21 million. (In Re Phoenix Leasing Incorporated Limited Partner-ship Litigation, Superior Court of the State of California, County of Marin, Case No.173739).

Mr. Chimicles has represented limited partners who successfully have sought theliquidation of assets or the reorganization of the partnership. For example, in In rethe Mendik Real Estate Limited Partnership, N.Y. Supreme Ct. No. 97-600185, Mr.Chimicles, as co-lead counsel, negotiated a settlement which provided for theprompt sale of more than $100 million of the partnership's real estate assets. Addi-tionally, as co-lead counsel, Mr. Chiinicles, together with partner Pamela Tikellis,negotiated the settlement of a suit filed against the general partners of Aetna Real



IaG

Nicholas E. Chiiniclea tout,

Estate Associates , L.F., providing for the orderly liquidation of the more than $200

million in that partnership's real estate holdings, the reduction of general partner

fees and the payment of a special cash distribution to the limited partners. (Aetna

Real Estate Associates, L,P., Area GP Corporation and Aetna/Area Corporation,

Delaware Chancery Court, New Castle County, Civil Action Nos. 16386-NC and

16393-NC).

Mr. Chimicles has also represented stockholders in suits arising from proposed

mergers, acquisitions and hostile takeovers. For example, in Garlands, Inc, Profit

Sharing Plan et al. u, The Pillsbury Company, a Delaware corporation, et al, State of

Minnesota, County of Hennepin, Fourth Judicial District, Court File No. 88-17834,

Mr. Chimicles was a lead counsel in a suit brought to compel Pillsbury's board of

directors to negotiate in good faith with Grand Metropolitan and persuaded the

court to enjoin a proposed spin-off of Burger King. Additionally, Mr. Chimicles has

represented shareholders in obtaining enhanced consideration for their stock in

takeovers or going private transactions. Randee L. Shantzer, et al. u. Charter Medi-

cal Corp., ef. at., Court of Chancery, State of Delaware, New Castle County, Consoli-

dated Civil Action No. 9530; In re Interstate Bakeries Corporation Shareholders Liti-

gation, Court of Chancery, State of Delaware, New Castle County, Consolidate Civil

Action No. 9263.

In the antitrust field, Mr. Chimicles has acted as a lead and co-lead counsel in nu-

merous class suits. He was co-lead counsel in the Travel Agency Commission Anti-

trust Litigation, (ID. Minn.) in which the Firm represented the American Society of

Travel Agents, an Alexandria, Virginia-based association that represents more than

9,000 travel agencies nationwide and worldwide in a suit against seven airlines for

Section 1 (Sherman Act) violations involving commission cuts. The case was settled

in late 1996 for more than $80 million. Mr. Chimicles was also co-lead counsel in the

Insurance Antitrust Litigation, Case No. C-88-1688 (N.D. Calif.) which charged com-

mercial general liability insurers, domestic and London-based reinsurers and an

insurance service organization with violations of the Sherman and Clayton Acts.

The case was settled after an earlier dismissal was reversed by the Ninth Circuit, a

decision affirmed by the U.S. Supreme Court. In re Insurance Antitrust Litigation,

938 F.2d 919 (9th Cir. 1991); aff'd sub nom. Hartford Fire Insurance Co. v. Califor-

nia, 113 S.Ct. 2891 (1993).

As an appellate advocate, Mr. Chimicles has handled cases which have protected

the rights of victims of securities fraud in bankruptcy proceedings. In cases that he

successfully argued before the Courts of Appeals for the Tenth and Eleventh Cir-

cuits, due process and notice principles were extended to protect securities purchas-

ers filing claims in bankruptcy cases, In re Standard Metals Corp„ 817 F.2d 625

(10th Cir.), rev'd in part an rehearing, 839 F.2d 1383 (1987), and it was established

that class proofs of claim are allowable in bankruptcy proceedings, In re the Charter

Company, 876 F.2d 866 (11th Cir. 1989).

Chimicles & Tikellis LLP / Firm Resume I October 2007 1 Page 5


Nuholae E. cont.Mr. Chimicles has also actively prosecuted suits involving public utilities construct-ing nuclear plants . He was lead counsel in the Philadelphia Electric Company Secu-rities Litigation , Master File No. 85-1878 (E.D. Pa.) and a lead counsel in the Con-sunaers Power Company Derivative Litigation , Master File No. 84-CV- 3788 AA (E.D.Mich). Mr. Chimicles was co -lead counsel in the stockholder derivative suit arisingfrom mismanagement claims against former officers of Philadelphia Electric Com-pany involved in the closing of the Peach Bottom Nuclear Plant , a suit which Mr.Chimicles was authorized to bring by a PECO board of directors resolution. In rePhiladelphia Electric Company Derivative Litigation , Case No . 7090 , Court of Com-mon Pleas, Philadelphia County, PA. That case resulted in a recovery of $35 millionfor the utility. company in November 1990.

Mr. Chimicles was also a co-lead counsel in a major environmental litigation, Ash-land Oil Spill Litigation, Master File M-14670 (W.D. Pa.), involving the claims ofresidents and businesses for damage arising from the largest inland waterway oilspill in history that occurred on January 2, 1988 in Pittsburgh. In 1990, the casewas settled upon creation of a claims fund of over $30 million for the class. This andsimilar environmental suits in which the Firm was involved were the subject of aprogram, "Toxic Torts May Not Be Hazardous To Your Health: A Lawyer's Guide toHealth Survival in Mass Tort Litigation," in which Mr. Chimicles was a principalspeaker at this program which was held at the American Bar Association's 1989Convention in Honolulu.

Mr. Chimicles has acted as special counsel for the City of Philadelphia and thePhiladelphia Housing Authority in an action seeking to hold lead pigment manufac-turers liable for federally mandated abatement of lead paint in properties owned,managed or operated by the plaintiffs. City of Philadelphia, et al. v. Lead IndustriesAssn, et al., Civil Action No. 90-7064 (E.D. Pa.) and No. 92-1420 (3rd Cir.).

Mr. Chimicles is admitted to practice in the Supreme Court of the United States,numerous federal district and appellate courts, as well as the Supreme Court ofPennsylvania . He is a member of the American Bar Association (Sections of Litiga-tion ; Antitrust; and Corporation , Banking and Business Law), the Pennsylvania BarAssociation , and the Philadelphia Bar Association (Federal Courts Committee andvarious subcommittees). Mr. Chimicles has lectured frequently on securities law atthe Rutgers University Law School Camden , the Wharton School Graduate Divisionof the University of Pennsylvania , New York University, the University of Virginia,and for Prentice Hall Law and Business Publications. Mr. Chimicles has addressednumerous law and accounting conferences , including ALI-ABA, Practising Law In-stitute , the Pennsylvania Bond Counsel Association and the Pennsylvania Instituteof Public Accountants , and has also frequently appeared as a speaker in numerousstate and national bar association sponsored seminars on topics involving federalsecurities laws, RICO , class actions , hostile corporate takeovers , and professionalethics. Mr. Chimicles also is a contributor to and member of the advisory boards ofvarious professional publications involving the securities law field. Mr. Chimicles is

Chimicles & Tikellis LLP / Finn Resume / October 2007 / Page 6


i

Nicholas E. Chimicles cont.

a member of the Board of Overseers of the School of Arts and Sciences of the Uni-

versity of Pennsylvania. He is the past President of the National Association of Se-

curities and Commercial Law Attorneys. Mr. Chimicles is the author of numerous

articles including an article co-authored with the Firm's Financial Specialist, Kath-

leen P. Chimicles nee Baton, published in the New York Law Journal, August 26,

1993, entitled "A Realistic Assessment Of The Need For Securities Class Action

Litigation Reform;" and The Securities Case: 77ie Plaintiffs Perspective, co-authored

with Ira N. Richards, published in the Practical Litigator, Vol 6, No. 6 (Nov. 1995).


se 2:03-cv-05336-LDD Document 519-5 Filed 10/16/2007 Page 16 of 52

Pai^ SI

Ual.

is a name partner and a member of the Firm's Executive60

Committee. Ms. Tikellis was born in Lawrence, Kansas and isa 1974 graduate of Manhattanville College, where she re-ceived a Bachelor of Arts, and a 1976 graduate of the Gradu-ate Faculty of the New School for Social Research, where shereceived a Master's in Psychology. Ms. Tikellis graduated in1982 from Widener University School of Law, where she was

the Managing Editor of the Delaware Journal of Corporate Law. Upon graduatingfrom law school, Ms. Tikellis served as a law clerk in the nationally recognizedCourt of Chancery in Wilmington, Delaware. Before joining the Firm, Ms. Tikellisengaged in significant shareholder litigation practice. In 1987, she opened theDelaware office of the Firm, where she is a resident and has continued to specializein litigation, including complex transactional cases, both derivative and class, lim-ited partnership litigation, antitrust and securities fraud litigation. She is AVrated by Martindale Hubbell.

Ms. Tikellis has prosecuted class and derivative suits of national importance forover 20 years. Notably, Ms. Tikellis has represented stockholders in numeroussuits, primarily in the Court of Chancery in Wilmington, Delaware arising out ofmergers and acquisitions and hostile takeovers. Ms. Tikellis served as liaison. coun-sel in the litigation arising out of the Paramount/Viacom merger. She and her co-counsel represented Paramount stockholders in the successful challenge to themerger and were instrumental in eliciting the highest possible value to the stock-holders. (Court of Chancery Civil Action No. 13117; Delaware Supreme Court No.4.27, 1993). Similarly, Ms. Tikellis served as lead counsel in Home Shopping Net-work Shareholders and Securities Litigation, (C.A. No. 93-406; Court of Chancery,Cons. C.A. No. 12868; Delaware District Court C.A. No. 93-336 (MMS)) obtainingover $15 million in settlement funds for the class of Home Shopping stockholders.More recently, as lead counsel, she actively prosecuted litigation on behalf of Cy-prus Amax stockholders arising out of 0 proposed merger with Asarco and helpedachieve a merger for Cyprus Amax with Phelps Dodge for greater considerationthan was offered by Asarco. (In re Cyprus Amax Shareholders Litigation, Court ofChancery, C.A. No. 17383-NC). Ms. Tikellis also acted as one of lead counsel repre-senting a Class of stockholders of First Interstate Bancorp prior to the acquisitionof First Interstate by Wells Fargo & Co. The litigation resulted in Wells Fargo'sacquisition of First interstate for a substantially greater consideration than of-fared by the First Bank Systems in a battle for the company. (First Interstate Ban-corp Shareholders Litigation, Cons. C.A. No. 14623).

Ms. Tikollis has actively prosecuted derivative litigation on behalf of companies

Chimicles & Tikellis LLP / Firm Resume / October 2007 1 Page 8


Pamela S. 7'ikellis cont,and their stockholders. Sanders v. Wang, DE Court of Chancery C.A. No. 16640,was a derivative suit brought on behalf of Computer Associates International, Inc.The suit alleged that the board exceeded its authority under the KESOP by award-ing 9.5 million excess shares to the participants. Ms. Tikellis was instrumental inachieving the return from the defendants of over $50 million in stock issued in vio-lation of the Company's plan. This represented a recovery of substantially all of therelief sought by Plaintiffs. Reported decisions include 1998 Del. Ch. LEIXIS 207 (Del.Ch. Nov 19, 1998); 1999 Del. Ch. LEXIS 203 (Del. Ch. Nov. 8, 1999); 2001 Del. Ch.LEXIS 82 (Del, Ch. May 24, 2001); 2001 Del. LEXIS 387 (Del. Aug. 22, 2001); 2001Del. Ch. LEXIS 121 (Del. Ch. Sept. 18, 2001).

In the limited partnership arena, Ms. Tikellis along with partner Nicholas Chimi-cles has actively and successfully prosecuted several cases including ML Lee Acqui-sWti,on .Fund L.P. and ML-Lee Acquisition Fund II L.P. and ML-Lee Acquisition Fund(Retirement Accounts), (C.A. Nos. 92-60, 93-494, 94-422, and 95-724). The litigationresulted in a negotiated settlement exceeding $30 million in cash and other benefitsmade available to investors in these funds. In another limited partnership matter,Ms. Tikellis along with partner Nicholas Chimicles was successful in representinglimited partners of Aetna Real Estate Associates L.P. This settlement provided forthe orderly liquidation of more than $200 million in the partnership's real estateholdings and reduction of general partners' fees and the payment of a special cashdistribution to the limited partners (Aetna Real Estate Associates, L.P., DelawareCourt of Chancery, C. A. Nos. 15386-NC and 15393-NC).

On the Appellate level, Ms. Tikellis has successfully handled cases before the Dela-ware Supreme Court resulting in victories for the shareholders and investors.Within the years of 2002 and 2003, Ms. Tikellis argued successfully three appeals inthe Delaware Supreme Court. She argued en bane to the Delaware Supreme Courtin Saito v. McKesson Corporation, Civil Action No. 18553. This books and recordscase was tried by Ms. Pikellis. While the Court of Chancery permitted production ofcertain documents, the Court imposed severe restrictions. The limitations imposedby the Court of Chancery were appealed successfully by the Plaintiff Importantly,the documents ultimately received in the books and records Saito case resulted inthe filing of an amended derivative complaint in the underlying case againstMcKesson and its directors. The derivative suit was recently settled and the settle-ment won approval by the Court of Chancery. The settlement provides for a $30 mil-lion payment to the Company by the insurance carriers for the directors and theimplementation of important corporate governance reforms.

Most recently, in a case argued by Ms. Tikellis, the Delaware Supreme Court over-ruled the Court of Chancery's determination that accorded the presumption of thebusiness judgment rule to a board's merger recommendation even though 5 of the 7directors were interested in the transaction. The Supreme Court held that the moreexistence of a purportedly disinterested special committee (consisting of the othertwo board members) did not shield the remaining 5 members from liability. Krasner


e 2-03-cv-05336-LDD Document 519-5 Filed 10/16/2007 Page 18 of 52

r G

v, Moffett, 826 A.2d 277 (Del. June 18, 2003). Importantly, the Court held that a fullrecord needed to be developed to determine whether the entire fairness standard ofreview or the business judgment standard of review would apply in the case. The de-cision has broken new ground in the field of corporate litigation in Delaware. A set-tlement providing for a $17.5 million fund for the Class was approved by the Court ofChancery on April 20, 2006.

In a case argued by Ms. Tikellis, the Delaware Supreme Court overruled the Court ofChancery's determination that accorded the presumption of the business judgmentrule to a board's merger recommendation even though 5 of the 7 directors were inter-ested in the transaction. The Supreme Court held that the mere existence of a pur-portedly disinterested special committee (consisting of the other two board members)did not shield the remaining 5 members from liability. Krasner v. Moffett, 826 A.2d277 (Del. June 18, 2003). Importantly, the Court held that a full record needed to bedeveloped to determine whether the entire fairness standard of review or the busi-ness judgment standard of review would apply in the case. The decision has brokennew ground in the field of corporate litigation in Delaware. A settlement providingfor a $17.5 million fund for the Class was approved by the Court of Chancery onApril 20, 2006. Most recently, Ms. Tikellis has been appointed Interim Co-LeadCounsel in an action challenging the $21 billion dollar management-led leveragedbuyout of Kinder Morgan, Inc. In re Kinder Morgan, Inc. Shareholders Litigation,Consol. Case No. 06 C 801 (Ian. Dist. Ct.)

Ms. Tikellis is admitted to practice before all Courts in the State of Delaware and theUnited States Court of Appeals for the Third Circuit. She is a member of the Dela-ware Bar Association and the American Bar Association (Litigation and BusinessSections). Ms. Tikellis has served as a member of the Board of Bar Examiners of theSupreme Court of the State of Delaware since 1994. She also served as the Chair ofthe Delaware Bar Association Ethics Committee from 1989 to 1992, and is a directorof the Historical Society of the Court of Chancery for the State of Delaware. In addi-tion, Ms. Tikellis is President of the Delaware chapter of the International Networkof Boutique Law Firms.

Ms. Tikellis has addressed numerous conferences including ALI-ABA, The Practising

Law Institute , the American Bar Association , the Delaware Bar Association , and the

Pennsylvania Bar Institution lecturing on corporate governance, merger and acquisi-

tions, hostile takeovers , defense mechanisms and professional ethics. She has partici-

pated as a commentator on corporate governance as part of the Institute for Law and

Economic Policy's program on Corporate Accountability and recently addressed insti-tutional investors at the OPAL Conference regarding the various tools available in

Delaware to protect shareholder rights. Ms. Tikellis was a member of the faculty of

the 7'b Annual Colorado Business Law Institute that was held in Vail, Colorado on

August 10- 12, 2006. She participated on a panel featuring the Honorable Phillip S.

Figa of the United States District Court for the District of Colorado and the Honor-

able Leland P. Anderson of the Colorado State District Court addressing the topic offiduciary duties.

Cliimicles & Tikellis LLP / Firm Resume / October 2007 / Page 10


... ' I ^1' Mai-U It J'!

m=`- ``:- `r``ry= is a partner in the law firm of Chimicles & Tikellis. Mr. Maloneis admitted to practice before the Supreme Court of Pennsyl-

` vania, the Supreme Court of the United States, the UnitedStates Courts of Appeal for the First, Third, Fifth, Sixth, Sev-enth, Ninth and D.C. Circuits and the United States DistrictCourts for the Eastern District of Pennsylvania, the NorthernDistrict of California, and the Eastern District of Michigan. Mr.

Malone is a 1984 cunt laude graduate of the Villanova University School of Lawwhere he was a staff member on the Villanova Law Review and was elected to theOrder of the Coif. Upon graduation from law school, Mx. Malone was associated witha major Philadelphia law firm where he concentrated in bankruptcy and commerciallitigation.

Mr. Malone has substantial experience in the securities field. With his former part-ner, Oliver Burt, he served as co-lead counsel in Hoexter u, Simmons, Civ. No. 89-1069-PHX-RCB (D. Ariz.) in which a $10.8 million settlement was achieved. In Sera-bian u. Amoskeag Bank, 24 F. 3d 357 (1st Cir. 1994), Mr. Malone successfully arguedfor the reversal of a district court order dismissing a securities complaint in a caseinvolving deceptive financial reporting by a New Hampshire bank holding company.Mr. Malone served as colead counsel in Winsor u. Holgerson, No. 89-2507 (PBS) (D.Mass.), a case involving the accounting practices of a failed savings bank, in which a$12.5 million settlement was reached. Mr. Malone has been active in cases involvingpublic offerings of limited partnerships; he served as lead counsel in In re Jiffy LubeInsured Income Partners Securities Litigation, Civil Action No. 10828 (Del. Ch.). Thesettlement resulted in limited partnership investors receiving the full amount of theirinitial investment. He has also been active in transactional cases, such as limitedpartnership roll-ups, and in shareholder derivative actions.

In the area of consumer litigation, Mr. Malone was a member of the Executive Com-mittee in In re Advanta Credit Card Terms Litigation, MDL Docket No, 1233, a con-sumer case brought on behalf of credit card holders. The case resulted in a settlementof $ 7.25 million dollars that also provided for substantial reductions in rates forcredit card holders. Along with his partner, Michael Gottsch, Mr. Malone was activein FJ,annick v. First Union Home Equity Bank, NA,, No. 98-6080, an action broughtunder the National Bank Act against a home equity lender, which resulted in a sub-stantial recovery.

In the field of ERISA litigation, Mr. Malone served as co-lead counsel in In re UnisysSavings Plan Litigation, 74 F. 3d 420 (3d Cir. 1996), in which he successfully arguedfor the reversal of a district court order granting summary judgment in an ERISAclass action arising out of the failure of the Executive Life Insurance Company. The

Chi-micles & Tikellis LLP / Firm Resume / October 2007 / Page 11

2-03-cv-05336- LD D Document 519-5 Filed 10/16/2007 Page 20 of 52

' rs

James 1 . Malone, Jr. cont.

case was the first appellate decision addressing Section 404(c) of ERISA and the liabil-

ity of fiduciaries in certain individual account plans. Mr. Malone served as counsel in

Corcoran v. Bell Atlantic Corporation, 97-cv-610 (E.D. Pa.) an ERISA class action chal-

lenging the conversion of a defined benefit pension plan into a cash balance plan. The

case involved issues relating to the calculation of accrued benefits under ERISA's vest-

ing standards and the elimination of early retirement benefits. He is currently active

in In re Lucent Death Benefits ERISA Litigation, No. 2:03-5017(WGB)(D.N.J.), which

challenges Lucent's elimination of spousal death benefits for retirees that were funded

as part of a defined benefit pension plan, and in Charles v. Pepco Holdings, Inc., No.

05-702-SLR (D. Del.), a class action challenging the conversion of a traditional pension

• .plan to a cash balance plan.

..Mr. Malone has been involved in a variety of different antitrust actions in both state

and federal court. He was active in indirect purchaser actions arising out of price-

fixing in the market for sorbates pending in Tennessee and Wisconsin; the resolution

of these cases resulted in substantial recoveries by indirect purchasers. Mr. Malone

was also active in In re Microsoft Antitrust Litig., MDL No. 1332, and in In re Buspi-

rone Antitrust Litigation, MDL No. 1413, where he served in a variety of roles. Mr.

Malone is currently active in In re Plavix Indirect Purchaser Antitrust Litigation, No.

..06-226 (S.D. Ohio), and in In re Intel Corp, Microprocessor Litigation, MDL No. 1717

(D. Del.), among others.

Mr. Malone served as co-lead counsel in Gersenson v. Pennsylvania Life & Health In-

surance Guaranty Association, April Term 1994, No. 3468, an insurance insolvency

class action brought under the Pennsylvania Life & Health Insurance Guaranty Asso-

ciation Act. In June 1998, the Philadelphia Court of Common Pleas granted summary

judgment in favor of the plaintiff class in the amount of $16.5 million dollars. Mr.

Malone successfully argued the resulting appeal and successfully opposed the defen-

danfs petition for allocatur before the Supreme Court of Pennsylvania.

Mr. Malone is a member of The Philadelphia Bar Association, and is a trustee of the

Philadelphia Bar Foundation, which raises funds for grants to legal services organiza-

tions in the metropolitan Philadelphia area.

Climicles & Tikellis LLP / Firm. Resume / October 2007 / Page 12

ot RGliet,zrm^ ,W^

is a partner in the Firm's Haverford office. Mr. Gottsch is ad-nutted to practice before the Supreme Courts of Pennsylvaniaand New Jersey, the United States District Court for theEastern District of Pennsylvania, the United States DistrictCourt for the District of New Jersey and the United StatesCourts of Appeals for the Third and Ninth Circuits. He is agraduate of Temple University School of Law (J.D. 1983) and

Marquette University (B.S. 1977). From 1986 to 1987 he served as a Law Clerk to

the Honorable Joseph H..Rodriguez, Judge of the United States District Court for

the District of New Jersey.

Mr. Gottsch has concentrated his practice in the fields of Antitrust and Consumer

Protection law. As a partner in the firm, recent cases in which he has served in the

role of lead or co-lead counsel are: McParland v. Keystone Health Plan Central, Civil

Action No. 98-SU-00770-01 (Common Pleas Court York County) (case successfully

resolved on behalf of a class of approximately 15,000 senior citizens who enrolled in

Keystone's "Senior Blue" program); Flannick u, First Union Home Equity Bank,

N.A„ Civil Action No. 98-CV-6080 (E.D. Pa.) (case successfully resolved on behalf of

a class of approximately 32,000 home equity borrowers from First Union Home Eq-

aity Bank); and GFS ofMadison, Inc. v. RhonePoulenc, S.A., Case No. 00-CV-1143

(Cir. Ct. Dane County, Wis.) ("Methionine antitrust litigation") (action pend-

ing). Mr. Gottsch has assisted in the firm's pro bono efforts in the area of immigra-

tion asylum appeals. He is the treasurer of the Committee to Support the Antitrust

Laws ("COSAL"), a Washington, D.C. based organization committed to supporting

diligent enforcement of the federal and state antitrust laws. In June 2006, Law &

Politics and the publishers of Philadelphia Magazine named Mr. Gottsch a Pennsyl-

vania Super Lawyer. Super Lawyers are the top 5 percent of attorneys in Permsyl-

vania, as chosen by their peers and through the independent research of Law &

Politics.

Chimicles & Tikellis LLP / Firm Resume I October 2007 / Page 13


p^(a

d a,e of ruauerj'Jill

is a Partner in the Firm's Wilmington, Delaware office. He is

admitted to practice before the Supreme Court of Delaware

and the United States District Court for the District of Dela-

ware. Mx. Kriner is a 1983 graduate of the University of Dela-

ware with a degree in chemistry, and a 1988 graduate of the

Delaware Law School of Widener University, where he was

managing editor of The Delaware Journal of Corporate Law.

From 1988 to 1989, Mr. Kriner served as law clerk to the Honorable James L.

Latch-am, Senior Judge of the United States District Court for the District of Dela-

ware. Following his clerkship and until joining the Firm, Mr. Kriner was an associ-

ate with a major Wilmington, Delaware law firm, practicing in the areas of corpo-

rate and general litigation.

Mr. Kriner's practice focuses primarily on business litigation on behalf of investors.

Mr. Kriner has prosecuted actions, including class and derivative actions, on behalf

of stockholders, limited partners and other investors with claims relating to merg-

ers and acquisitions, hostile acquisition proposals, the enforcement of fiduciary du-

ties, the election of directors, and the enforcement of statutory rights of investors

such as the right to inspect books and records. Mr. Kriner prosecuted the Home

Shopping Network, McKesson and Moffett matters along with Partner Pamela Tikel-

lis. In addition, Mr. Kriner represented holders of Series B stock of Litton Indus-

tries in Myers and Koehler u. Litton Industries, Inc., et al., C.A. No. 18947-NC in

connection with the short form merger cash out of the Series B stock in 2001. The

short form merger price was $35 per share. Mr. Kriner negotiated a settlement of

the claims which provided an additional $1.84 per share to the Series B holders.

Mr. Kriner also was on the trial team in Gelfman, et.. al. v. Weeden Investors, L.P., et

al., C.A. No. 18519-NC, which was tried in the Delaware Court of Chancery and re-

sulted in a judgment in favor of the limited partners represented by Mr. Kriner. In

Weeden, the limited partners represented by Mr. ICriner asserted that dilution and a

cash out of their interests at a book value of $4.20 per Unit was unfair and in viola-

tion of the Partnership Agreement and the General Partner's fiduciary duties. After

trial, the Court agreed, concluding the value of the interests was $20.92 per Unit,

4.98 times that paid on the cash out plan, and awarded damages to the limited part-

ners.

Mr. Kriner represented the public limited partners in I.G. Holdings, Inc ., et al. V.

Hallwood Realty LLC, et al., C.A. No. 20283 -NC, in an action challenging the defen-

sive response of the General Partner of Hallwood Partners LP to a premium tender

offer by an affiliate of Carl Icahn in 2003 . Mr. Kriner led the litigation on behalf of

Chimicles & Tikellis LLP / Firm Resume / October 2007 1 Page 14


Robert J. Kre.ner, Jr. cont.

the public limited partners through expedited injunction proceedings and an expe-

dited trial which led to the General Partner's agreement to auction and sell the

Partnership. The sale of the Partnership resulted in a per unit price of $136.70 to

the limited partners, as compared to the trading range for the Units of $60 - $80

prior to the litigation.

Recently, Mr. Kriner was one of the co-lead counsel in actions brought on behalf of

the public stockholders of Chiron Corporation challenging the buyout of Chiron by

its 42% parent, Novartis AG. Novartis initially proposed a buyout at $40 per share

and thereafter entered into a merger agreement to acquire Chiron for $45 per share.

Mr. Kriner and his co-counsel moved preliminarily to enjoin the merger pending a

proper process to maximize value and full disclosure to the stockholders. After com-

pletion of briefing on the injunction motion, an agreement in principle was reached

for a settlement of this litigation which includes, among other things, an increase in

the merger price to $48 per share, or an aggregate increase of over $330 million for

the public stockholders.

Mr. Kriner is an associate member of the Board of Bar Examiners of the Supreme

Court of the State of Delaware.



i

S)seu- Aiz,^ ..a Partner in the Firm's Haverford office, is admitted to practice

before the United States Supreme Court, the Supreme Court ofPennsylvania, the United States District Courts for the Eastern

and Western Districts of Pennsylvania and the Eastern District

4 of Michigan, and the United States Court of Appeals for theThird Circuit. He is a graduate of the Duke University School of

Law (J.D. 1987) where he served as a senior editor of Law &

Contemporary Problems. He is a 1984 cum laude graduate of the University of Penn-

sylvania, where he received a B.A. in political science. Mr. Schwartz previously prac-

ticed at Schnader, Harrison, Segal & Lewis, LLP, a major Philadelphia firm, concen-

trating in complex civil litigation.

Mr. Schwartz has actively prosecuted complex class actions in a wide variety of

contexts . Most recently , he served as co -lead counsel for a certified national class of

employees of Siemens Medical Solutions whose 1998 Incentive Compensation was

retroactively reduced by 30% by Siemens. The Philadelphia Court of Common

Pleas granted Plaintiffs' motion for summary judgment as to liability , and a few

days before trial was scheduled to begin , Siemens agreed to pay Class members a

net recovery of the full amount that their incentive compensation was reduced

(approximately $10.1 million), and pay all counsel fees and expenses in addition to

the Class members' recovery.

Similarly, in connection with the withdrawal by Bayer of its anti-cholesterol drug

Baycol, Mr. Schwartz represents various Health and Welfare Funds (including the

Pennsylvania Employees Benefit Trust Fund, the Philadelphia Firefighters Union,

and the American Federation of State, County and Municipal Workers District

Council 47) and a certified national class of "third party payors" seeking damages

for the sums paid to purchase Baycol for their members/insureds and to pay for the

costs of switching their members/insureds from Baycol to an another cholesterol-

lowering drug. The Philadelphia Court of Common Pleas granted plaintiffs' motion

for summary judgment as to liability; this is the first and only judgment that has

been entered against Bayer anywhere in the United States in connection with the

withdrawal of Baycol. The Court subsequently certified a national class, and the

parties recently reached a settlement in which Bayer agreed to pay class members

a net recovery that approximated the maximum damages (including pre-judgment

interest) suffered by class members.

In the securities litigation field, as lead or co-lead counsel, Mr. Schwartz has ob-

tained significant recoveries for defrauded investors. In In re Coin Fund Litigation,

(Superior Court of the State of California for the County of Los Angeles), Mr.



Steven A. Schwartz cond.Schwartz served as plaintiffs' co-lead counsel and successfully obtained a settlementin excess of $35 million on behalf of limited partners, which represented a 100% netrecovery of their initial investments. Mr. Schwartz also served as Plaintiffs co-leadcounsel in In re Veritas Software Corp. Derivative Litigation (Superior Court of theState of California for the County of Santa Clara). In early 2005, the Court ap-proved a settlement in which Veritas agreed to extensive corporate governancechanges, including requiring that 75% ofthe members of Veritas' Board of Directorswould be independent directors, and that all reporting 16b officers and directors ofthe Company would be prohibited from engaging in any sales of Veritas' stock ex-cept pursuant to a newly-enacted 10b5- 1 Trading Plan. Mr. Schwartz currentlyserves as Plaintiffs' co-lead counsel in the Pennexx Securities Litigation, (E.D. Pa.)and liaison counsel in In re DVI Securities Litigation, (E.D. Pa.).

In the consumer protection field, Mr. Schwartz served as plaintiffs' co-lead counselin Wolens, et al. v. American Airlines, Inc. In that class action, plaintiffs alleged thatAmerican Airlines breached its contracts with members of its AAdvantage frequentflyer program when it retroactively increased the number of frequent flyer milesneeded to claim certain frequent flyer miles travel awards. In a landmark decision,the United States Supreme Court held that plaintiffs' claims were not preempted bythe Federal Aviation Act. 513 U.S. 219 (1995). The parties ultimately reached a set-tlement in which American agreed to provide Class members with mileage certifi-cates that represent, for practical purposes, the full extent of class members' allegeddamages, which the Court valued at between $ 95.6 million to $141.6 million. Mr.Schwartz also represented a national Class of owners of wood clad doors and win-dows manufactured by Marvin Windows that prematurely ratted due to a defectivewood preservative. (Minn. 4th Judicial Dist.). Even though the windows were be-tween 12 and 16 years old, the parties reached a national settlement providingClass members with the opportunity to obtain replacement windows with minimumnet discounts of between 45 % and 58 %.

In the environmental field, Mr. Schwartz played a significant role as part of a largeteam of plaintiffs' counsel who prosecuted the claims of fisherman, property owners,and Native Americans who were injured as a result of the Exxon Valdez oil spill.The trial of that case resulted in a jury verdict in excess of $5.3 billion. Appellateproceedings in the 9th Circuit Court of Appeals are still ongoing.

Mr. Schwartz has also developed an expertise in representing the interests of pro-

viders of medical services whose bills have been denied for payment by insurers. Mr.Schwartz represented a certified class of Pennsylvania physicians and chiropractorswho were not paid by Nationwide Mutual Insurance Company for physical therapy/physical medicine services provided to its insureds. Nationwide agreed to pay Classmembers approximately 130% of their bills. Mr. Schwartz is currently representingcertified classes of medical providers seeking interest for overdue bills for treatmentprovided to insureds of SEPTA and Progressive Insurance Company.

C imicles & Tikellis LLP / Firm Resume / October 2007 / Page 17


StcienA. Schwartz cont.In the product liability field, Mr. Schwartz served as a member of the Plaintiffs'Steering Committee for medical monitoring claims in In re Pennsylvania Diet DrugsLitigation, (Phila. C.C.P.). To settle that case, American Home Products agreed topay for an extensive medical monitoring program for all Pennsylvania residentswho ingested £enf7.uramine and dexfenfloramine, the "fen" of the "fen phen" dietdrug combination.


Y71is a Partner in the Firm's Haverford office. Ms. Donaldson con-centrates her practice on the prosecution of securities fraudclass action litigation, shareholder derivative actions andbreach of fiduciary duty class action lawsuits. She is also amember of the Firm's Client Development Group and worksclosely with the Firm's institutional clients.

Ms. Donaldson is a 1999 cum laude graduate of Villanova Uni-versity School of Law and is a 1996 graduate of Boston Univer-

sity, where she received a B.A, in Political Science, and interned with the Massa-chusetts Office of the Attorney General , Public Protection Bureau , Ms. Donaldsonis admitted to. practice before the Supreme Courts of Pennsylvania and New Jer-sey, and various Federal Appellate and District Courts. Ms. Donaldson's pro bonaactivities include serving as a volunteer attorney with the Support Center for ChildAdvocates , a Philadelphia-based, nonprofit organization that provides legal andsocial services to abused and neglected children.

In 2006 , Law & Politics and the publishers of Philadelphia Magazine included Ms.Donaldson as a Pennsylvania Rising Star , as listed in the "Pennsylvania RisingStars Super Lawyers " publication. Only 2.5 percent of the total lawyers in Penn-sylvania are listed in Rising Stars.Also, together with the Firm' s Partners , Ms. Donaldson has assisted, or is cur-rently assisting , in the prosecution of several federal securities fraud cases, breachof fiduciary duty suits and corporate derivative actions, including the following:

Wells Real Estate Investment Trust Inc. (Wells REIT), Case No. 07-cv-637 (USDCD.MD.), The Firm filed this class action in 2007 asserting federal securities lawclaims under the 1933 Securities Act involving a $4.0 Billion real estate invest-ment trust whose stock is not listed on a national stock exchange. This pendingaction alleges that the Company and its officers and directors violated the federalsecurities laws and breached their fiduciary duties by entering into and presentingfor a vote by Wells REIT shareholders a Merger between Wells REIT and its affili-ate whereby the affiliates would improperly receive $175 million worth of consid-eration.

CNL Hotels & Resorts Inc, Federal Securities Litigation, Case No. 04-cv-1231 (M.D.Fla.). The Firm is lead trial counsel in this settled action filed in 2004 assertingfederal securities law claims under the 1933 Securities Act involving a $3.0 Billionreal estate investment trust whose stock is not listed on a national stock exchange.The Litigation was settled by: (1) the establishment of a $35,000,000 Cash Settle-ment Fund for the benefit of the Purchaser Class; and, (2) by CNL entering intorevised agreements in connection with a proposed Merger between CNL and itsaffiliate which Plaintiffs estimate reduced the amount to have been paid by CNL

Chimicles & Tikellis LLP / Finn Resume / October 2007 1 Page 19


041twilui!$piola$lMraberly M. Donaldson cont,

and its stockholders in connection with the merger by over $225 Million. On August1, 2006, the Federal District Court in Orlando, Florida granted final approval of theSettlement of the CNL Litigation, noting that "Plaintiffs' counsel pursued this com-

plex case diligently, competently and professionally" and "achieved a successful re-sult." The Court also concluded that, "a substantial benefit [was] achieved

(estimated at approximately $225,000,000)" and "this lawsuit was clearly instru-

mental in achieving that result."

In re Real Estate Associates Limited Partnerships Litigation, No. CV 98-7035 DDP(CD. Cal.). The Firm was Lead Trial Counsel in this class action asserting federalsecurities law claims and claims for state law breaches of fiduciary duty. As theprincipal trial assistant to Mr. Chimicles, Ms. Donaldson was an integral member ofthe trial team that obtained the first plaintiffs' jury verdict in a federal securitiesfraud/breach of fiduciary duty lawsuit tried to a jury in the past ten years. The totalverdict of $185 million (including $92.5 million in punitive damages) was among the"Top 10" Verdicts of 2002 and stands as the first and largest jury verdict in favor ofplaintiffs in a case brought under the federal securities laws since their amendmentin 1995. The Real Estate Associates judgment was settled by an agreement approvedby the Court in November 2003 for $83 million, which represented full recovery forthe Class (and an amount in excess of the damages calculated by Plaintiffs' expert).Please refer to Mr. Chimicles' bio for additional information.

In re Discovery Laboratories Securities Litigation, No. 06-1820 (E.D. Pa). The Firmis Lead Counsel in this pending securities class action brought on behalf of share-holders who purchased common stock of Discovery Labs during the class period.Discovery Labs is a development stage biotechnology company, which is focusedupon proprietary surfactant technology.

Lewis, et al, v. CAL Income Funds, et al, District Court of Dallas County, Texas.The Firm is co-lead counsel in this pending action filed in 2005 on behalf of limitedpartners in 18 Florida limited partnerships who were requested to approve a $1.6Billion three-way merger involving their limited partnerships. Among other things,the Complaint alleges that the General Partners breached their fiduciary duties byapproving a Merger that provided the Limited Partners with inadequate considera-tion, and by disseminating a misleading Proxy on which the Limited Partners wereasked to cast their vote on the Merger.

Pennexx Securities Litigation, No. 2:03-CV-4318 (F.D. Pa.) The Firm is co-lead coun-sel in this pending securities fraud class action lawsuit filed in 2003 on behalf ofpublic investors in Pennexx Foods, Inc. ("Pennexx"). Certain of the District Court'srulings on Defendants' Motions to Dismiss are currently being appealed to the ThirdCircuit Court of Appeals.

Together with the Firm's Partners, Ms. Donaldson has also assisted in the prosecu-tion of actions involving health and welfare issues, including actions to recover ex-cessive charges due to fraud and other misconduct by health service providers, andantitrust claims to recover excessive prescription drug charges and other costs dueto corporate collusion and misconduct.

Chimicles & Tikellis LLP I Firm Resume / October 2007 / Page 20


i

MT

eL

Of Counsel, is admitted to practice before the United States Su-

preme. Court, United-States Court of Appeals for the Third Cir-

cuit, the United States District Court for the Eastern District of

Pennsylvania, the Supreme Court of Pennsylvania, and all other

Pennsylvania Appellate and trial courts.

Mr. Shuster is a graduate of the Wharton School, University of

Pennsylvania (B.S. in Economics, 1951), and of the University of Pennsylvania Law

School (J.D., 1954). Prior to joining the Firm, Mr. Shuster was an active civil litigator

as an associate and partner in a major Philadelphia litigation firm, as a named-

partner in his own firm, and as special litigation counsel to a large Philadelphia, full-

service firm. Over the last 20 years, he has concentrated his practice in consumer

class actions against banks and insurance companies. He has been successful in ob-

taining multi-million dollar recoveries in these cases.

Mr. Shuster is currently a faculty member at the University of Pennsylvania Law

School where he teaches Trial Advocacy. In 1981, he was a full-time faculty member

at the University of Pennsylvania Law School and taught a course in The Lawyering

Process. He also has been a guest lecturer on various legal subjects at the University

of Pennsylvania Law School, Medical School, and Dental School, and at Drexel Univer-

sity. He is a member of the Advisory Committee for the Public Service Program at the

University of Pennsylvania Law School where he developed the mentor/student pro

bong project.

Mr. Shuster is a past president of The Philadelphia Trial Lawyers' Association. He

was appointed by the Third Circuit Court of Appeals as Chairperson of the Bankruptcy

Judge Search Committee. He was appointed by the District Court for the Eastern Dis-

trict of Pennsylvania as Chairperson of a Panel to consider the reappointment of a U.S.

Magistrate.

In the Philadelphia Bar Association, Mr. Shuster has served as a member of the Board

of Governors, Committee on Judicial Selection and Reform, Committee on Civil Legis-

lation/Logislative Liaison, Committee on Civil Judicial Procedure (state courts) and

Chairperson of the Judicial Commission. He is listed in Who `s Who in American Law,

Pennsylvania Super Lawyers, and received an "av" rating from Martindale0-

Hubbell.

Clumicles & Tikellis LLP / Finn Resume / October 2007 / Page 21


k^ ^ k

rJ j%k a3 . a ..,.

Of Counsel, is admitted to practice in Pennsylvania, Florida,Texas and the District of Columbia. She is admitted to practicebefore all the State Courts in these jurisdictions and is admittedto the United States Courts of Appeals for the Third, Fifth, Elev-enth and District of Columbia Circuits as well as United StatesDistrict Courts within each Circuit. Ms. Schwartzman is agraduate of The Law School of the University of Pennsylvania

(L.L.B. 1969) and Temple. University (AB, 1966). She holds a Master of Laws inTaxation from the Villanova University Law School. Ms. Schwartzman has practicedextensively at the trial and appellate levels before Federal and State Courts and be-fore various administrative agencies.

Ms. Schwartzman was appellate counsel on the brief in In re Charter Company, 876F.2d 866 (11th Cir. 1989), a case which established that class proofs of claim are al-lowable in bankruptcy proceedings, served on the trial team in Ashland Oil Spill Liti-gation, Master file M-14670 (W.D. Pa), In re Sunrise Securities Litigation, MDL No.685 (E.D.Pa.) and represented our firm on the Litigation Committee in PrudentialSecurities Incorporated Limited Partnership Litigation, MDL 1005 (S.D.N.Y.). Ms.Schwartzman represented the Firm on the plaintiffs' co-lead counsel committee inSpitzer v. Abdelhak, No. 98-CV-6475 (E.D.Pa.), a civil RICO action which recovereddamages on behalf of the physicians and research scientists of the now defunct Alle-gheny Health Education and Research Foundation (ABERF), a major health care pro-vider in the Delaware Valley and is a senior member of the trial team for the Firm inIn re Mutual Funds Investment Litigation, MDL 1586, a complex coordinated deriva-tive action alleging violations of the Investment Company Act and the InvestmentAdvisers Act by the investment advisers to eighteen mutual fund families. Prior torelocating to Philadelphia, she was associated with a major law firm in San Antonio,Texas.



E E

'i ^ 1 r3S ^

i

Of Counsel, is admitted to practice before the United StatesDistrict Court for the Eastern District of Pennsylvania and theSupreme Court of Pennsylvania.

Mr. Geyelin is a graduate of the University of Virginia (B.A. inEnglish, 1968) and the Villanova University School of Law(J.D. 1974 cum laude), where he was a member of the Moot

Court Board, an Associate Editor of the Vi,llanoua Law Review, and a recipient ofthe Obert Corporate Law Award. After graduation from law school Mr. Geyelin

was an associate in the business department of a major Philadelphia law firm be-

fore accepting an appointment as Chief Counsel to the Pennsylvania InsuranceDepartment in Harrisburg, an office he held from 1981 through 1983. Mr. Geyelin

served as Pennsylvania's Acting Insurance Commissioner in 1983 and 1984. In

1985 Mr. Geyelin accepted the position as chief inside counsel for Academy Insur-

ance Group, Inc. in Valley Forge, Pennsylvania and Atlanta, Georgia, serving as

General Counsel and Secretary of the publicly traded holding company and its op-

erating subsidiaries. In 1994 Mr. Geyelin was appointed Secretary and General

Counsel of Penn-America Insurance Company in Hatboro, Pennsylvania, and in

1995 assumed the same offices with Penn-America Group, Inc., the publicly traded

parent company. From 1997 until joining the Firm Mr. Geyelin was in privatepractice, concentrating on general business, insurance regulatory and litigationsupport matters.


jse 2-03-cv-05336-LDD Document 519-5 Filed 10/16/2007 Page 32 of 52

Of Counsel, is admitted to practice before the Supreme Court ofPennsylvania, the United States District Court for .the EasternDistrict of Pennsylvania, and the United States Court of Appealsfor the Third Circuit. She is a graduate of Villanova UniversitySchool of Law (J.D. 1979) and Muhlenberg College (B.A. 1974cum laude). Prior to joining the Firm, she practiced with majorPhiladelphia litigation firms. The focus of her practice is complex

litigation, including securities fraud and limited partnership cases behalf of sharehold-

crs and antitrust matters. Ms. Hegedus was a member of the team who litigated In reReal Estate Associates Limited Partnership Litigation, No. CV-98-7035 (Federal Dis-

trict Court, Los Angeles), a case brought for violation of federal securities laws. Follow-ing a six-week trial in November 2002, the jury returned a $185 million plaintiffs' ver-

dict, the first verdict awarding substantial monetary damages since the passage of the

Private Securities Litigation Act of 1995.



y

an associate in the Haverford office, is admitted to practice be-

fore the Supreme Courts of Pennsylvania and New Jersey. She

graduated from Washington University School of Law (J.D.

2003) and received her undergraduate degree in French and

English from Georgetown University (B.S. 1998 cunt laude).

While in law school, Ms. Burkey served as Associate Editor of

the Washington University Law Quarterly and authored, Prose-

rutor u. AleksousI.i-< A Critical Analysis of the ICTY Appeals Chamber's Abandon-

inent of Witness Protection Measures, 82 Wash. U. L.Q. 297-318 (2004).

an associate in the Haverford office, is admitted to practice be-

fore the Supreme Courts of Pennsylvania and New Jersey. His

entire practice is devoted to litigation, with an emphasis on an-

titrust, securities, and consumer fraud class actions. Mr. Johns

has presented oral argument before the Judicial Panel on Mul-

tidistrict Litigation. In re Long-Distance Telephone Service

Federal Excise Tax Refund Litig., 2006 WL 3848729 (J.P.M.L.

2006). He is also actively involved in the In re Insurance Brokerage Antitrust Liti-

gation (MDL 1663), which involves allegations of bid rigging and steering against

numerous insurance brokers and insurers. The District Court for the District of

New Jersey recently granted final approval to a settlement with an insurer defen-

dant which provides a benefit to the plaintiffs and class members valued at over

$121 million.

Mr. Johns is a graduate of the Penn State Dickinson School of Law (J.D. 2005), and

the Penn State Harrisburg School of Business Administration (M.B.A. 2004, Beta

Gamma Sigma). While attending law school, he was a member of the Woolsack

Honor Society and Irving R. Kaufinan Securities Moot Court Team. Prior to law

school, Mr. Johns attended Washington and Lee University (B.S. 2002, cum laude),

where he played college basketball and spent a semester studying abroad in Osaka,

Japan. Outside of the office, Mr. Johns volunteers as an advisor to a high school

mock trial team, and coaches in the Narberth Basketball League. He is a member of

the Philadelphia Bar Association and the American Association for Justice.


4 t o .'i+. t

s F eF

an associate in the Haverford office, is admitted to practice be-fore the Supreme Courts of Pennsylvania and New Jersey. Sheis a graduate of the Temple University Beasley School of Law(J.D. 2003) and received her undergraduate degree in Psychol-ogy from the University of Maryland at College Park (B.A2000). While in law school, she served as Executive Editor ofthe Temple Political & Civil Rights Law Review and as a law

clerk to Senior District Judge Kenneth L. Ryskamp of the United States DistrictCourt for the Southern District of Florida. Ms. Kimmel's pro bono activities includeserving as a volunteer attorney with the Philadelphia Volunteers for the IndigentProgram,.a non-profit organization that provides legal services to low-income cli-ents who reside in Philadelphia or have legal problems in Philadelphia.

3 ^k9yey 4 " gf f^ 5

an associate in the Haverford office, is a graduate of RutgersSchool of Law-Camden J.D.( magna cum laude 2003) and RutgersUniversity- Camden (B.A. summa cum laude 2000 While attend-ing law school, Mr. Mathews was a Teaching Assistant for theLegal Research and Writing Program and received the 1L LegalWriting Award. He was also Lead Marketing Editor of the Rut-gers Journal of Law & Religion and one of the top 10 oralists in

the 2003 Judge John R. Brown Admiralty Moot Court competition.

Mr. Mathews' practice includes the representation of investors in complex antitrust,securities, and shareholder derivative litigation. He is an active member of the Firm'slitigation team in In re Mutual Funds Investment Litigation (MDL 0d-1586), a multi-

district litigation alleging claims related to late trading and market timing of mutualfunds in eighteen mutual fund families and involving hundreds of parties. Mr.Mathews also directs the Summer Associate program for the Haverford office and co-ordinates the fall hiring process for the firm.

Mr. Mathews is admitted to practice before the Supreme Courts of Pennsylvania andNew Jersey, the United States District Courts for the Eastern District of Pennsyl-vania and the District of New Jersey, and the United States Court of Appeals for theNinth Circuit.



Timothy N. Matthews cont.

Mr. Mathews has an active role in the following actions:

McWilliams v. Long Beach, Granados u. County ofLos Angeles, Granados v, City ofLos Angeles, Superior Court of California for the County of Los Angeles. In theseconsolidated cases, Plaintiffs challenge the imposition of a utility users tax im-

posed by local government entities an certain telephone services which are ex-cluded from taxation under the federal telephone excise tax. Plaintiffs seek a re-fund of the taxes on behalf of a class of taxpayers, as well as injunctive and de-claratory relief.

Volitis v. Blue Cross, Eastern District of Pennsylvania. This pending ERISA actionchallenges the methodology applied by Blue Cross to calculate plan participants'coinsurance payments. Plaintiff alleges that Blue Cross requires participants to

pay more than the designated coinsurance percentage by ignoring discounts Blue

Cross receives from hospitals and other facility providers when calculating partici-pants' coinsurance responsibilities.

In re Live Concert Antirust, MDL 1745. Plaintiffs in this multidistrict litigation

allege that Clear Channel and its affiliates monopolized and attempted to monopo-

lize the markets for live concerts and concert tickets by, inter alia, leveraging their

position in radio markets to coerce performers to use their concert promotion ser-

vices.

Title Insurance Cases, Eastern District of Pennsylvania. In these cases plaintiffs

allege that Title Insurers and their agents overcharged homeowners for title insur-

ance policies by failing to give refinance and reiusse rate discounts as required.

International .Fibercom Insurance Actions, District of Arizona. These related cases

involve an insurance coverage dispute and bad faith claims arising out of a securi-

ties lawsuit which the firm previously litigated to a final judgment.


d 1 £

an associate in the Haverford office, graduated cum laude from

the Law School of University of Pennsylvania in 1982. Sheserved as a law clerk to the Honorable Paul M. Chaffin, Phila-delphia Court of Common Pleas, from September 1982 to Janu-I-Nary 1984, and to the Honorable Phyllis W. Beck from January1984 to October 1984, She is a member of the PennsylvaniaBar,

AFA N1

an associate in the Wilmington office , is a graduate of the

Widener University School of Law (J.D., 2003 magna cum

laude), the University of Delaware (B.A. in Economics and Po-litical Science , 2000) and Salesianum School. While at Widener,

he served as Wolcott Law Clerk to the Honorable Joseph T.

Walsh of the Supreme Court of Delaware. He was also a Man-aging Editor of the Delaware Journal of Corporate Law, merit-

ing the Russell R. Levin Memorial Award for outstanding service and dedication to

that publication. Mr. Naylor is admitted to practice before the Supreme Court of

Delaware, the United States District Court for the District of Delaware and the

United States Court of Appeals for the Third Circuit.

Together with the Firm' s Partners , Mr. Naylor has assisted in the prosecution of

numerous shareholder and unitholder class and derivative actions arising pursuant

to Delaware law, including;

In re Freeport McMoRaa Sulphur Inc. Shareholder Litigation, C.A. No. 16729-NC

(Del. Ch.) This Action challenged the fairness of the terms and process of a 1998

merger between Freeport-McMoRan Sulphur Inc. and McMoRan Oil & Gas, Co. See

e.g. 2005 WL 1653923 (Del. Ch. June 30, 2005) and 2005 WL 225040 (Del. Ch. Jan.

26, 2005). A settlement providing for a $17.5 million fund for the Class was ap-

proved by the Court of Chancery on April 20, 2006.

IG Holdings, Inc. et , ai. v. Hallwood Realty, LLC, C.A No. 20283-NC (Del. Ch.)This

Action challenged the response of a Partnership' s general partner to a tender offer

Chiniicles & Tikellis LLP / Firm Resume / October 2007 / Page 28


A. .Zachary Naylor cant.and the eventual allocation of merger consideration between the general partnerand limited partners . Ultimately, as a result of the litigation , the limited partnersreceived a premium price for their units, protected by a floor.

Saito, et.al., v. McCall, et.al., C.A. No. 17132-NC (Del. Ch.) This Action involvedderivative litigation on behalf of McKesson FIBOC arising from alleged oversightviolations by certain board members. The Court approved a settlement including a$30 million fund for the Company's behalf, mechanisms to protect the independentprosecution of certain realigned claims, and other corporate governance benefits.The settlement represents a historically large achievement for cases of this typeand was characterized by the Court of Chancery as "strikingly good" particularly inlight of the "onerous path" presented by Delaware law for derivative Plaintiffs.

In re Chiron Shareholder Deal Litigation, Consol. Case No. RGO5-230567 (Cal). &In. re Chiron Corporation Shareholder Litigation, C.A. No. 1602-N (Del. Ch.)TheseActions sought to enjoin the proposed acquisition of shares of Chiron Corporationnot already held by its 42% stockholder, Novartis AG. The Actions also sought toinvalidate certain contractual provisions that effectively prevent Chiron boardmembers from effectively discharging their unremitting fiduciary duties in accor-dance with Delaware law. Following briefing on a motion for preliminary injunc-tion, a settlement was reached pursuant to which Novartis increased the offeredmerger consideration by $330 million.

Gelfman et. al. u. Weeden Investors, L,P., et. al„ C.A. No. 18519 (Del. Ch,.) This Ac-tion alleged that the corporate general partner (and its board of directors) of a lim-ited partnership violated contractual and fiduciary duties owed to limited partners.Following a trial on the merits , Plaintiffs prevailed on a substantial -portion of theirclaims resulting in a judgment in favor of Plaintiffs . See e.g. 859 A.2d 89 (Del.2004).


.F g T° 3 y d^

Gu;

F 7° Ff ^^ gs -

JA.

an associate in the Haverford office, has concentrated hispractice on prosecuting class action litigation, including se-

curities fraud, shareholder derivative actions, consumer pro-

tection, ERISA and antitrust cases on behalf of shareholders,

consumers and institutional clients. Prior to joining the firm,

4 Mr. Sauder was an associate with a major Philadelphia firmwhere he concentrated on complex civil litigation. From 1998

to. 2003, Mr. Sauder was a prosecutor in the Philadelphia District Attorney's Of-fice where he served as lead counsel in hundreds of criminal trials including overtwenty jury trials involving major felonies.

Mr. Sauder received his Bachelor of Science, magna cum laude in Finance fromTemple University in 1995. He graduated from Temple University School of Lawin 1998, where he was a member of Temple Law Review.

Mr. Sauder's public service activities include teaching trial advocacy to a localPhiladelphia high school team which competed in the State Mock Trial Competi-tion. He is vice president of the Philadelphia District Attorneys' Alumni Associa-tion. His pro Bono activities include serving as a volunteer attorney with the Sup-port Center for Child Advocates, a nonprofit organization that provides legal andsocial services to abused and neglected children,

Mr. Sauder is a member of the Firm's Client Development Group and worksclosely with the Firm's institutional clients. He is admitted to practice before theSupreme Courts of Pennsylvania and New Jersey, the United States Court ofAppeals for the Third Circuit, the United States District Courts for the EasternDistrict of Pennsylvania, the Middle District of Pennsylvania and the District ofNew Jersey.

In 2006, Law & Politics and the publishers of Philadelphia Magazine includedMr. Sauder as a Pennsylvania Rising Star, as listed in the "Pennsylvania RisingStars Super Lawyers" publication. Only 2.5 percent of the total lawyers in Penn-sylvania are listed in Rising Stars.

In August 2007, American Lawyer Media, publisher of The Legal Infellrgencerand the Pennsylvania Law Weekly, named Mr. Sauder as one of the "Lawyers onthe Fast Track" a distinction that recognized thirty-five Pennsylvania attorneysunder the age of 40 who show outstanding promise in the legal profession andmake a significant commitment to their community.


:Taaeph G. sander cont.I Together with the Firm` s Partners , Mr. Sander has assisted or is assisting in the

prosecution of the following actions:

Charles v. Pepco Holdings Inc., No. 05-702 (D.Del) This pending ERISA class action

lawsuit filed in September 2005 on behalf of a class consisting of employees who

may suffer significantly reduced future benefit accruals as a result of the company

converting their pension rights to the Cash Balance Sub-Plan of the Conectiv Re-

tirement Plan.

In re Volkswagen and Audi Warranty Extension Litigation, This pending consumer

class action on behalf of consumers against Volkswagen involves oil sludge related

problems with the Volkswagen and Audi 1.8 litre turbo-charged engines. The action

is pending in the United States District Court for the District of Massachusetts.

In re Textainer Financial Services Corporation, et al., Superior Court of California,

County of San Francisco. This pending securities class action filed in 2005 arises

out of proxy solicitations that were made to holders of limited partnership units is-

sued by the Textainer Partnerships, a California Limited Partnership. The Com-

plaint alleges that the defendants breached their fiduciary duties by approving a

sale of the assets that provided the Limited Partners with inadequate consideration

and by disseminating a misleading Proxy on which the Limited Partners were asked

to cast their vote on the sale. In early 2006 the court denied the defendants' demur-

rer and certified the class.

Cook v. Rockwell International and the Dow Chemical Company, No. 90-cv-00181

(D. Co.) Mr. Sauder assisted with the trial of this environmental case involving the

Rocky Flats Nuclear Weapons Plant. The case sought property damages

(compensatory and punitive) for a class of approximately 15,000 persons owning

parcels downwind of Rocky Flats, which is located about 16 miles northwest of

downtown Denver, Colorado. In February 2006 a jury returned a verdict of $554

million on behalf the class. It includes an award of $200 million in punitive dam-

ages.


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

iaan 1 Seotian associate in the Haverford office, is admitted to practiceb efore the Supreme Courts of Pennsylvania and New. Jersey,he United States Court of Appeals for the Third and SixthCircuits and the United States District Courts for the Districtof New Jersey, Eastern District of Pennsylvania and EasternDistrict of Michigan. He is a graduate of Emory UniversitySchool of Law (J.D. 2001, Atlanta Law Fellow) and Pennsyl-

vania State University (B.S. Economics 1991, with Distinction, University Scholar).Upon graduation from law school, Mr. Scott was inducted into the Order of Barris-ters and Order of Emory Advocates, in recognition of his work as a participant andcoach on the Emory Law School Philip C. Jessup International. Law Moot Court team(1999-2001).

His practice includes the representation of companies, investors and consumers incomplex antitrust, securities and consumer protection litigation. In In re PennsylvaniaBaycol Third Party Payor Litigation (Phila. Ct. Common Pleas), a class action forwhich Chimicles & Tikellis served as co-lead counsel, Mr. Scott was instrumental inhelping obtain partial summary judgment on liability; this was the first judgment tobe entered against Bayer in the United States in connection with the withdrawal ofBaycol. Mr. Scott also materially assisted in briefing a motion for class certificationin that case, resulting in the certification of one of the few national class actions in-volving third party payors to be certified in a state court. Shortly before trial, thefirm reached a settlement with Bayer in which Bayer agreed to pay class members anet recovery that approximates their maximum damages. In Wong v. T-Mobile PISA,Inc, (E.D. Mich. 2006), a class action for which Chimicles & Tikellis serves as co-leadcounsel, Mr. Scott was instrumental in briefing opposition to T-Mobile's motion tocompel arbitration. In July 2006, the Court issued an opinion denying T-Mobile'smotion, having concluding that the class action waiver contained therein was unen-forceable. Mr. Scott's pro bona commitments include an effort to obtain asylum for aColombian bacteriologist who was kidnapped, assaulted and threatened with deathby the FARC rebels of Colombia. In this case, Mr. Scott argued and won remandfrom the Court of Appeals for the Third Circuit on a denial of asylum by the Depart-ment of Homeland Security. Rojas-Contreras v. Atty Gen'l-, No. 04-4762, 2006 WL2052233 (3d Cir. July 24, 2006).

In September 2006, American Lawyer Media, publisher of The Legal Intelligencerand the Pennsylvania Law Weekly, named Mr. Scott as one of forty-five "Lawyers onthe Fast Track" -Pennsylvania attorneys under the age of 40 who show outstandingpromise in the legal profession and make a significant commitment to their commu-nity. Selection for this award is done by an independent ALM committee comprised

Chirnicles & Tikellis LLP / Firm Resume / October 2007 1 Page 32


of members of the bar, In 2006, Law & Politics and the publishers of PhiladelphiaMagazine named Mr. Scott as a Pennsylvania Rising Star, as listed in the"Pennsylvania Rising Stars Super Lawyers" publication.

^•js ,11 T exIkk"elxx

an associate in the Wilmington Office, is admitted to practicebefore the Supreme Court of Delaware and the U.S. DistrictCourt for the District of Delaware. He is a graduate of theSyracuse University College of Law (J.D. 2006, cure laude),

the Whitman School of Management at Syracuse University (M.B.A. 2006), andSUNY Cortland (B.S. 2002 , cum laude). While attending law school, Mr. Tuckerwas a member of the Securities Arbitration Clinic.


2-03-cv-05336-LD D Document 519-5 Filed 10/16/2007 Page 42 of 52

Health & Welfare Fund AssetsC&T Protects Clients' Health & WelfareServices & Vigorously Pursuing Health &

Fund Assets Through MonitoringWelfare Litigation.

At no cost to the client, C&T seeks to protect its clients' health & welfare fund as-sets. against. fraud and other.wrongdoing by monitoring the. health. &.welfare fund'sdrug purchases, Pharmacy benefit Managers and other health service providers. Inaddition, C&T investigates potential claims and, an a fully-contingent basis, pur-sues legal action for the client on meritorious claims involving the clients' heath &welfare funds. These claims could include: the recovery of excessive charges due tomisconduct by health service providers; antitrust claims to recover excessive pre-scription drug charges and other costs due to corporate collusion and misconduct;and, cost-recovery claims where welfare funds have paid for health care treatmentresulting from defective or dangerous drugs or medical devices.

Monitoring Financial InvestmentsC&T Protects Clients' Financial Investments Through Securities FraudMonitoring Services.

Backed by extensive experience, knowledge of the law and successes in this field,C&T utilizes various information systems and resources (including forensic account-ants, financial analysts, seasoned investigators, as well as technology and data col-lection specialists, who can cut to the core of complex financial and commercial.documents and transactions) to provide our institutional clients with a means toactively protect the assets in their equity portfolios. As part of this no-cost service,for each equity portfolio, C&T monitors relevant financial and market data, pricing,trading, news and the portfolio's losses. C&T investigates and evaluates potentialsecurities fraud claims and, after full consultation with the client and at the client'sdirection, C&T will, on a fully-contingent basis, pursue legal action for the client onmeritorious securities fraud claims.

Corporate TransactionalC&T Protects Shareholders' Interest by Holding Directors Accountable forBreaches of Fiduciary Duties

Directors and officers of corporations are obligated by law to exercise good faith, loy-alty, due care and complete candor in managing the business of the corporation.Their duty of loyalty to the corporation and its shareholders requires that they actin the best interests of the corporation at all times. Directors who breach any ofthese "fiduciary" duties are accountable to the stockholders and to the corporationitself for the harm caused by the breach. A substantial part of the practice ofChimicles & Tikellis LLP involves representing shareholders in bringing suits forbreach of fiduciary duty by corporate directors.



Securities FraudC&T Protects and Recovers Clients'Assets Through the Vigorous Pursuit ofSecurities Fraud Litigation.

C&T has been responsible for recovering over $1 billion for institutional and indi-vidual investors who have been victims of securities fraud. The prosecution of secu-rities

.. .fraud often involves allegations that a publicly traded corporation and its af-

filiates and/or agents disseminated materially false and misleading statements toinvestors about the company's financial condition, thereby artificially inflating theprice of that stock. Often, once the truth is revealed, those who invested at a timewhen the company's stock was artificially inflated incur a significant drop in thevalue of their stock. C&Ts securities practice group comprises seasoned attorneyswith extensive trial experience who have successfully litigated cases against some ofthe nation's largest corporations. This group is strengthened by its use of forensicaccountants, financial analysts, and seasoned investigators.

AntitrustC&T Enforces Clients' Rights Against Those Who Violated Antitrust Laws.

C&T successfully prosecutes an may of anticompetitive conduct, including pricefixing, tying agreements, illegal boycotts and monopolization. As counsel in majorlitigation over anticompetitive conduct by the makers of brand-name prescriptiondrugs, C&T has helped clients recover significant amounts of price overcharges forblockbuster drugs such as BuSpar, Coumadin, Cardizem, Relafen, and Paxil.

Real Estate Investment TrustsC&T is a Trail Blazer in Protecting Clients' Investments in Non-Listed Equi-ties.

C&T represents limited partners and purchaser of stock in limited partnerships andreal estate investment trusts (non-listed REITs) which are publicly-registered butnot traded on a national stock exchange. These entities operate outside the realm ofa public market that responds to market conditions and analysts' scrutiny, so theinvestors must rely entirely on the accuracy and completeness of the financial andother disclosures provided by the company about its business, its finances, and thevalue of its securities. C&T prosecutes: (a) securities law violations in the sale ofthe units or stock; (b) abusive management practices including self-dealing transac-tions and the payment of excessive fees; (c) unfair transactions involving sales of theentities' assets; and (d) buy-outs of the investors' interests.

Chimicies & Tikellis LLP / Firm Resume / October 2007 / Page 35

Shareholder Derivative LawsuitsC&T is a Leading Advocate for Prosecuting and Protecting ShareholderRights through Derivative Lawsuits and Class Actions.

C&T is at the forefront of persuading courts to recognize that actions taken by di-

rectors (or other fiduciaries) of corporations or associations must be in the best in-

terests of the shareholders. Such persons have duties to the investors (and the cor-poration) to act in good faith and with loyalty, due care and complete candor.Where there is an indication that a director's actions are influenced by self-interest

or considerations other than what is best for the shareholders, the director lacks the

independence required of a fiduciary and, as a consequence, that director's decisions

cannot be honored. A landmark decision by the Supreme Court of Delaware under-

scored the sanctity of this principal and represented a majorvictory for. C&Ts cli-

ents.

Corporate Governance and AccountabilityC&T is a Principal Advocate for Sound Corporate Governance and Account-ability.

C&T supports the critical role its investor clients serve as shareholders of publiclyheld companies. Settlements do not provide exclusively monetary benefits to ourclients. In certain instances, they may include long term reforms by a corporateentity for the purpose of advancing the interests of the shareholders and protectingthem from future wrongdoing by corporate officers and directors. On behalf of ourclients, we take corporate directors' obligations seriously. It's a matter of justice.That's why C&T strives not to only obtain maximum financial recoveries, but also toeffect fundamental changes in the way companies operate so that wrongdoing willnot reoccur.

Chimicles & Tikellis LLP I Firm Resume / October 2007 / Page 36


CNL Hotels & Resorts Inc. Securities Litigation, Case No. 6:04-CV-1231(M.D. FL).

C&T is Lead Litigation Counsel in CNL Hotels & Resorts Inc. Securities Litiga-tion, representing a Michigan Retirement System, other named plaintiffs and over'100,000 investors in this federal securities law class action that was filed in August2004 against the nation's.second largest .hotel real estate .investment trust, CNLHotels, and certain of its affiliates, officers and directors. CNL raised over $3 bil-lion from investors pursuant to what Plaintiffs alleged to be false and misleadingoffering materials. In addition, in June 2004 CNL proposed an affiliated-transaction that was set to cost the investors and the Company over $300 million(Merger").

On August 1, 2006, the Federal District Court located in Orlando, Florida grantedfinal approval of the Settlement as fair, reasonable, and adequate, and in render-ing its approval of an award of attorneys' fees and costs to Plaintiffs' Counsel, theCourt noted that "Plaintiffs' counsel pursued this complex case diligently, compe-tently and professionally" and "achieved a successful result." More than 100,000class members received notice of the proposed settlement and no substantive objec-tion to the settlement, plan of allocation or fee petition was voiced by any classmember.

The Settlement resolves federal securities law and state law claims that were filedagainst CNL Hotels & Resorts, Inc. (f/k/a CNL Hospitality Properties, Inc.)(`CNLHotels") and other individual and entity defendants ("Settling Defendants") in Au-gust, 2004. The Action was filed on behalf of, (a) CNL Hotels shareholders entitledto vote on the proposals presented in CNL Hotels' proxy statement dated June 21,2004 ("Proxy Class"); and (b) CNL Hotels' shareholders who acquired CNL Hotelsshares pursuant to or by means of CNL Hotels' public offerings, registration state-ments and/or prospectuses between August 16, 2001 and August 16, 2004("Purchaser Class").

The Proxy Class claims were settled by (a) CNL Hotels having entered into an.Amended Merger Agreement which significantly reduced the amount that CNLHotels paid to acquire its Advisor, CNL Hospitality Corp., compared to the Origi-nal Merger Agreement approved by CNL Hotels' stockholders pursuant to the June2004 Proxy; (b) CNL Hotels having entered into certain Advisor Fee ReductionAgreements, which significantly reduced certain historic, current, and future advi-sory fees that CNL Hotels paid its Advisor before the Merger; and (c) the adoptionof certain corporate governance provisions by CNL Hotels' Board of Directors. Inapproving the Settlement , the Court concluded that in settling the Proxyclaims, "a substantial benefit [was] achieved (estimated at approximately$225,000 ,000)" and "this lawsuit was clearly instrumental in achievingthat result." The Purchaser Class claims were settled by Settling Defendants'

Chimicles & Tikellis LLP / Finn Resume / October 20071 Page 37

payment of $35,000,000, payable in three annual installments (January 2007 to

January 2009).

This is an excellent result in a litigation that presented extremely difficult and com-

..plex issues. The Settlement achieves outstanding benefits for CNL Hotels' investors

and, importantly, the Company is now well-positioned to pursue its business plan

In re Chiron Shareholder Deal Litigation, Case No. RG05-230567(Cal. Super.) & In re Chiron Corporation Shareholder Litigation,C.A. No. 1602-N (Del. Ch.).C&T represents stockholders of Chiron Corporation in an action which. challengedthe proposed acquisition of Chiron Corporation by its 42% stockholder, Novartis AG.Novartis announced a $40 per share merger proposal on September 1, 2005, whichwas rejected by Chiron on September 5, 2005. On October 31, Chiron announced anagreement to merge with Novartis at a price of $45 per share. C&T was co-leadcounsel in the consolidated action brought in the Delaware Court of Chancery.Other similar actions were brought by other Chiron.shareholders in the SuperiorCourt of California, Alameda City. The claims in the Delaware and California ac-tions were prosecuted jointly in the Superior Court of California. C&T, togetherwith the other counsel for the stockholders, obtained an order from the CaliforniaCourt granting expedited proceedings in connection with a motion preliminary toenjoin the proposed merger. Following extensive expedited discovery in March andApril, 2006, and briefing on the stockholders' motion for injunctive relief, and justdays prior to the scheduled hearing on the motion for injunctive relief, C&T, to-gether with Co-lead counsel in the California actions, negotiated an agreement tosettle the claims which included, among other things, a further increase in themerger price to $48 per share, or an additional $330 million for the public stockhold-ers of Chiron. On July 25, 2006, the Superior Court of California, Alameda County,granted final approval to the settlement of the litigation.

Rojas-Contreras v. Att'y Gen'l, No. 04-4762, 2006 WL 2052233 (3d Cir.July 24, 2006).In this pro beano matter, one of C&T's Associates represented a Colombian bacteri-ologist who was kidnapped, assaulted and threatened with death by the FARC re-bels of Colombia, who thereafter sought asylum in the United States. The Depart-ment of Homeland Security denied asylum to the bacteriologist, and C&T repre-sented her in the appeal of that denial. Subsequent to an oral argument before theCourt of Appeals for the Third Circuit, C&T won remand on the denial of asylum,

Chimicles & Tikellis LLP / Finn Resume / October 2007 1 Page 38

e 2-03-cv-05336-LDD Document 519-5 Filed 10/16/2007 Page 47 of 52

URI

In re Pennsylvania Baycol: ThirdParty Payor Litigation, Case No.own=NNE=001874, Court of Common Pleas, Philadelphia County.

MOMM In connection with the withdrawal by Bayer of its anti-cholesterol drug Baycol,C&T represents various Health and Welfare Funds, including the PennsylvaniaEmployees Benefit Trust Fund, and a certified national class of "third party pay-ors" seeking damages for the sums paid to purchase Baycol for their members/.. .. ....... .insureds and to pay for the costs of switching their members/insureds from Baycolto an another cholesterol-lowering drug. The Philadelphia Court of Common Pleasgranted plaintiffs' motion for summary judgment as to liability; this is the firstand only judgment that has been entered against Bayer anywhere in the UnitedStates in connection with the withdrawal of Baycol. The Court subsequently certi-fied a national class, and the parties reached a settlement (recently approved bythe court) in which Bayer agreed to pay class members a net recovery that ap-proximates the maximum damages (including pre-judgment interest) suffered byclass members. The class settlement negotiated by C&T represents a net recoveryfor third party payors that is between double and triple the net recovery pursuantto a non-litigated settlement negotiated by lawyers representing third party pay-ors such as AETNA and CIGNA that was made available to and accepted by nu-merous other third party payors (including the TRS). C&T had advised its clientsto reject that offer and remain in the now settled class action. On June 15, 2006the court granted final approval of the settlement.

In re Freeport-McMoran Sulphur, Inc. Shareholder Litigation, C.A.No. 16729 (Del. Ch.).In this shareholder class action, C&T serves as Lead Plaintiffs' Counsel represent-ing investors in a stock-for-stock merger of two widely held public companies,seeking to remedy the inadequate consideration the stockholders of Sulphur re-ceived as part of the merger. In June 2005, the Court of Chancery denied defen-dants' motions for summary judgment, allowing Plaintiffs to try each and everybreach of fiduciary duty claim asserted in the Action. In denying defendants' mo-tions for summary judgment the Court held there were material issues of fact re-garding certain board member's control over the Board including the Special Com-mittee members and the fairness of the process employed by the Special Commit-tee implicating the duty of entire fairness and raising issues regarding the valid-ity of the Board action authorizing the merger. The decision has broken newground in the field of corporate litigation in Delaware. Before the trial com-menced, Plaintiffs and Defendants agreed in principle to settle the case. The set-tlement, which was approved in April 2006, provides for a cash fund of$17,500,000.



In re McKesson Derivative Litigation, Saito, et. al. v. McCall, et. A,C.A. No. 17132 (Del. Ch.).As Lead Counsel in this stockholder derivative action, C&T challenged the actions

of the officers, directors and advisors of McKesson and HBOC in proceeding with

the merger of the two companies when their managements were .allegedly aware

of material accounting improprieties at HBOC. In addition, C&T also brought

(under Section 220 of the Delaware Code) a books and records case to discover in-

formation about the underlying events. C&T successfully argued in the DelawareCourts for the production of the company's books and records which were used inthe preparation of an amended derivative complaint in the derivative case againstMcKesson and its directors. Seminal opinions have issued from both the DelawareSupreme Court and Chancery Court about Section 220 actions and derivativesuits as a result of this lawsuit. Plaintiffs agreed to a settlement of the derivativelitigation subject to approval by the Delaware Court of Chancery, pursuant towhich the Individual Defendants' insurers will pay $30,000,000 to the Company.In addition, a claims committee comprised of independent directors has been es-tablished to prosecute certain of Plaintiffs' claims that will not be released in con-

nection with the proposed settlement. Further, the Company will maintain impor-

tant governance provisions among other things ensuring the independence of theBoard of Directors from management. On February 21, 2006, the Court of Chan-

cery approved the Settlement and signed the Final Judgment and Order and Re-alignment Order.

Shared Medical Systems 1998 Incentive Compensation Plan Litiga-tion, Philadelphia County Court of Common Pleas, Commerce Pro-gram, No. 0885.Chimicles & Tikellis LLP is lead counsel in this action brought in 2003 in the

Philadelphia County Court of Common Pleas. The case was brought on behalf of

approximately 1,300 persons who were employees of Defendant Siemens MedicalSolutions Health Services Corporation (formerly Shared Medical Systems, Inc.)

who had their 1998 incentive compensation plan ('ICP") compensation reduced

30% even though the employees had completed their performance under the 1998

ICP contracts and had earned their incentive compensation based on the targets,

goals and quotas in the ICPs. The Court had scheduled trial to begin on Febru-

ary 4, 2005. On the eve of trial, the Court granted Plaintiffs' motion for summary

judgment as to liability on their breach of contract claim. With the rendering of

that summary judgment opinion on liability in favor of Plaintiffs, the parties

reached a settlement in which class members will receive a net recovery of the

full amount of the amount that their 1998 ICP compensation was re-duced. On May 5, 2005, the Court approved the settlement, stating that the case"should restore anyone's faith in class actions as a reasonable way of proceeding

on reasonable cases."



}9 d

Gelfman r'. Weeden Investors, L.P., Civ. Action No. 18519-NC (Del.

Ch.).Chimicles & Tikellis LLP served as class counsel, along with other plaintiffs'

firms, in this action against the Weeden Partnership, its General Partner and

various individual defendants filed in the Court of Chancery in the State of Dela-

ware. In this Class Action, Plaintiffs alleged that Defendants breached their fidu-

ciary duties to the investors and breached the Partnership Agreement. The Dela-

ware Chancery Court conducted a trial in this action which was concluded in De-

cember 2003. Following the trial, the Chancery Court received extensive briefing

from the parties and heard oral argument. On June 14, 2004, the Chancery Court

issued a memorandum opinion, which was subsequently modified, finding that the

Defendants breached their fiduciary duties and the terms of the Partnership

Agreement, with respect to the investors, and that Defendants acted in bad faith

("Opinion"). This Opinion from the Chancery Court directed an award of damages

to the classes of investors, in addition to other relief. In July 2004, Class Counsel

determined that it was in the best interests of the investors to settle the Action for

over 90% of the value of the monetary award under the Opinion (over $8 million).

McParland v. Keystone Health Plan Central, Case No. 98-SU-

00770-01 (Pennsylvania Court of Common Pleas, York County).

Chimicles & Tikellis LLP served as lead counsel in this class action, filed in 1998

in the Court of Common Pleas of York County on behalf of persons who enrolled in

Keystone's medicare HMO "SeniorBlue" program based on Keystone's aggressive

marketing of prescription coverage, low premiums, and its affiliation with Blue

Cross and Blue Shield. The suit asserted claims under the Pennsylvania Unfair

Trade Practices and Consumer Protection Law and for breach of contract. In July

2004, the Court approved the settlement of this Action providing some class mem-

bers with case and others with discounts on prescription drugs.

LG. Holdings Inc., et. al. v. Hallwood Realty, LLC, et. al., C.A. No.

20283 (Del. Ch.).In the Delaware Court of Chancery, C& T represented the public unitholders of

Hallwood Realty L.P. The action challenged the general partner's refusal to re-

deem the Partnership's rights plan or to sell the Partnership to maximize value

for the public unitholders. Prior to the filing of the action, the Partnership paid no

distributions and Units of the Partnership normally traded in the range of $65 to

$85 per unit. The prosecution of the action by C&T caused the sale of the Partner-

ship, ultimately yielding approximately $137 per Unit for the unitholders plus

payment of the attorneys' fees of the Class,

Chimicles & Tikeliis LLP / Firm Resume / October 2007 / Page 41


ML-Lee Litigation, ML Lee Acquisition Fund L.P. and ML-Lee Acqui-sition Fund H L.P. and ML-Lee Acquisition Fund (Retirement Ac-Counts), (C.A. Nos. 92-60, 93-494, 94-422, and 95-724), Delaware Fed-eral District Court.C&T represented three classes of investors who purchased units in two investmentcompanies, ML-Lee Funds (that were jointly created by Merrill Lynch and ThomasH. Lee). The suits alleged breaches of the federal securities laws, based on the omis=lion of material information and the inclusion of material misrepresentations in thewritten materials provided to the investors, as well as breaches of fiduciary dutyand common law by the general partners in regard to conduct that benefited themat the expense of the limited partners. The complaint included claims under the of-ten-ignored Investment Company Act of 1940, and the case witnessed numerousopinions that are considered seminal under the ICA. The six-year litigation re-sulted in $32 million in cash and other benefits to the investors.

.In re Real Estate Associates Limited Partnership Litigation, CaseNo. CV 98-7035, United. States District Court, Central District ofCalifornia.Chimicles & Tikellis LLP achieved national recognition for obtaining, in a federalsecurities fraud action, the first successful plaintiffs' verdict under the PSLRA. Sen-ior partner Nicholas E. Chimicles was Lead Trial Counsel in the six-week jury trialin federal court in Los Angeles, in October 2002. The jury verdict, in the amount of.$185 million (half in compensatory damages; half in punitive damages), was rankedamong the top 10 verdicts in the nation for 2002. After the court reduced the puni-tive damage award because it exceeded California statutory limits, the case settledfor $83 million, representing full recovery for the losses of the class. At the finalhearing, held in November 2003, the Court praised Counsel for achieving both averdict and a settlement that "qualif[ied] as an exceptional result" in what theJudge regarded as "a very difficult case..." In addition, the Judge noted the case's"novelty and complexity... and the positive reaction of the class. Certainly, therehave been no objections, and I think Plaintiffs' counsel has served the class verywell."

Case Summary: In August of 1998, over 17,000 investors {"Investor Class") in 8.public Real Estate Associates Limited Partnerships ("REAL Partnerships") weresolicited by their corporate managing general partner, defendant National Partner-ship Investments Corp. ("NAPICO"), and other Defendants via Consent Solicitationsfiled with the Securities and Exchange Commission ("SEC"), to vote in favor of thesale of the REAL Partnerships' interests in 98 limited partnerships ("Local Partner-ships"). In a self-dealing and interested transaction, the Investor Class was askedto consent to the sale of these interests to NAPICO's affiliates ("REIT Transaction").In short, Plaintiffs alleged that defendants structured and carried out this wrongfuland self-dealing transaction based on false and misleading statements, and omis-sions in the Consent Solicitations, resulting in the Investor Class receiving grossly

Chinucles & Tikellis LLP / Finn Resume / October 2007 / Page 42

inadequate consideration for the sale of these interests. Plaintiffs' expert valued

these interests to be worth a minimum of $86,523,500 (which does not include addi-

tional consideration owed to the Investor Class), for which the Investor Class was

paid only $20,023,859.

Plaintiffs and the Certified Class asserted claims under Section 14 of the Securities

Exchange Act of 1934.("the.Exchange Act"), alleging that the defendants.caused the...

Consent Solicitations to contain false or misleading statements of material fact and

omissions of material fact that made the statements false or misleading. In addi-

tion, Plaintiffs asserted that Defendants breached their fiduciary duties by using

their positions of trust and authority for personal gain at the expense of the Limited

Partners. Moreover, Plaintiffs sought equitable relief for the Limited Partners in-

cluding, among other things, an injunction under Section 14 of the Exchange Act for

violation of the "anti-bundling rules" of the SEC, a declaratory judgment decreeing

that defendants were not entitled to indemnification from the REAL Partnerships.

Trial: This landmark case is the first Section 14 - proxy law- securities class action

seeking damages, a significant monetary recovery, for investors that has been tried,

and ultimately won, before a jury anywhere in the United States since the enactment

of the Private Securities Litigation Reform Act of 1995 fi'PSLRND. Trial began on Oc-

tober 8, 2002 before a federal court jury in Los Angeles. The jury heard testimony

from over 25 witnesses, and trial counsel moved into evidence approximately 4,810

exhibits; out of those 4,810 exhibits, witnesses were questioned about, or referred to,

approximately 180 exhibits.

On November 15, 2002, the jury, after more than four weeks of trial and

L six days of deliberation, unanimously found that Defendants knowingly violated the

federal proxy laws and that NAPICO breached its fiduciary duties, and that such

breach was committed with oppression, fraud and malice. The jury's unanimous ver-

diet held defendants liable for compensatory damages of $92.5 million in favor of the

Investor Class. On November 19, 2002, a second phase of the trial was held to deter-

mine the amount of punitive damages to be assessed against NAPICO. The jury re-

turned a verdict of $92.5 million in punitive damages. In total, trial counsel secured a

unanimous jury verdict of $185 million on behalf of the Investor Class.

With this victory , Mr. Chimicles and the trial team secured the 10th largest verdict of

2002 . (See, National Law Journal, "The Largest Verdicts of 2002", February 2, 3003;

National Law Journal , "Jury Room Rage", Feb. 3 . 2002). Subsequent to post-trial

briefing and rulings , in which the court reduced the punitive damage award because it

exceeded California statutorylimits, the case settled for $83 million . The settlement represented full recovery for

the losses of the class.

Prosecuting and trying this Case required dedication, tenacity, and skill:

This case involved an extremely complex transaction . As Lead Trial Counsel, C&T


2:03-cv-05336-LDD Document 519-5 Filed 10/16/2007 Page 52 of 52

was faced with having to comprehensively and in an understandable way present

complex law, facts, evidence and testimony to the jury, without having them be-

come lost (and thus, indifferent and inattentive) in a myriad of complex terms, con-

cepts, facts and law. The.trial evidence in this case originated almost exclusively

from the documents and testimony of Defendants and their agents. As Lead Trial

Counsel, C&T was able, through strategic cross-examination of expert witnesses,

to effectively. stonewall. defendants'. damage analysis.. In.addition.,..Q&T conducted

thoughtful and strategic examination of defendants' witnesses, using defendants'

own documents to belie their testimony.

The significance of the case: The significance of this trial and the result are

magnified by the public justice served via this trial and the novelty of issues tried.

This case involved a paradigm of corporate greed, and C&T sent a message to not

only. the Defendants in this Action, but to all corporate fiduciaries, officers, direc-

tors and partners, that it does not pay to steal, he and cheat. There needs to be

effective deterrents, so that "corporate greed" does not pay. The diligent and unre-

lenting prosecution and trial of this case by C&T sent that message.

Moreover, the issues involved were novel and invoked the application of developing

case law that is not always uniformly applied by the federal. circuit courts. In

Count I, Plaintiffs alleged that defendants violated § 14 of the Exchange Act. Sub-

sequent to the enactment; of the PLSRA, the primary relief sought and accorded for

violations of the proxy laws is a preliminary injunction. Here, the consummation

of the REIT Transaction foreclosed that form of. relief. Instead, Plaintiffs' Counsel

sought significant monetary damages for the Investor Class on account of defen-

dants' violations of the federal proxy laws. C&T prevailed in overcoming defen-

dants' characterization of the measure of damages that the Investor Class was re-

quired to prove (defendants argued for a measure of damages equivalent to the dif-

ference in the value of the security prior to and subsequent to the dissemination of

the Consent Solicitations), and instead, successfully recouped damages for the

value of the interests and assets given up by the Investor Class. The case is im-

portant in the area of enforcement of fiduciary duties in public partnerships which

are a fertile ground for unscrupulous general partners to cheat the public inves-

tors.

Because of C&Ts leadership and extensive advocacy skills, a complex case, requir-

ing thousands of hours of attorney, expert, paralegal and support staff labor, which

faced fierce opposition at each turn, was fully litigated and tried to a jury. Because

of C&T, 17,000 investors had their day in court and were heard. C&T brought this

Action before the revelations about the extensiveness of "corporate wrongdoing,"

and at the time this Action was filed, C&T already recognized the need for a clear

message to be sent to corporations, and to the decision makers running those cor-

porations, that wrongdoing will not be tolerated and will not pay.



EXHIBIT C


IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

In Re DVI, Inc. Securities LitigationCase No . 2:03-CV-5336


AFFIDAVIT OF PAUL MULHOLLAND, CPA CVA

CONCERNING MAILING OF NOTICE OF PENDENCY OF CLASS ACTION,

HEARING ON PROPOSED PARTIAL SETTLEMENT, PLAN OF ALLOCATION AND

ATTORNEYS' FEES AND EXPENSES

I, Paul Mulholland, being duly sworn, depose and say:

1. I submit this affidavit in order to provide the Court and the parties to the above-

captioned litigation with information regarding the mailing of the Notice of Pendency of Class

Action, Hearing on Proposed Partial Settlements, Plan of Allocation and Attorneys' Fees and

Expenses ("Notice") and the Proof of Claim and Release form ("Claim Form") (collectively,

"Notice Claim Form") and the publication of the Summary Notice ("Publication Notice"). I am

over 21 years of age and am not a party to this action. I have personal knowledge of the facts set

forth herein and, if called as a witness, could and would testify competently thereto.

2. I am the President of Strategic Claims Services ("SCS"), a nationally recognized

claims administration firm. I am a Certified Public Accountant and a Certified Valuation

Analyst. I have over fifteen (15) years of experience specializing in claims administration for

class action settlements and I have administered over one-hundred (100) cases. SCS was

established in April 1999 and has administered over sixty (60) class actions settlements since its

inception. SCS was retained by Counsel for the Class to provide administrative services as part

of the settlement administration process in the above-captioned litigation. Our services include

supervising the printing of the Notice Claim Form; providing Notice Claim Forms to the Class;

notifying brokerage firms or other nominee accounts of the appropriate manner to provide


individual notice to class members , both individually and on a published basis; distributing,

accepting and processing Claim Forms filed by class members; reviewing submitted Claim

Forms for accuracy and completeness and to ensure that they are supported by sufficient

documentary evidence; providing notice of deficient or rejected claims, when appropriate;

calculating recognized losses of the class, on both an individual and classwide basis; and all

other services necessary to administer this securities litigation class action settlement

("Settlement")

To provide actual notice to those persons and entities who purchased or otherwise

acquired the securities of DVI, Inc. ("DVI") between August 10, 1999 and August 13, 2003, both

dates inclusive ("Class Period"), we mailed, by first class mail, postage prepaid, the Notice

Claim Form approved by the Court to all individuals and organizations identified on the records

of DVI's transfer agent. These records reflect persons and entities that purchased or otherwise

acquired securities of DVI for their own account or for the account(s) of others during the Class

Period. A copy of the Notice Claim Form is attached as Exhibit A. The Notice Claim Forms

along with a letter1 was also mailed to all brokerage companies, banks and trust companies

contained on our master mailing list notifying them of the most recent settlement and asking

them to either send the Notice Claim Form to beneficial owners within 10 days from receipt or

provide SCS with a list of names and addresses of such beneficial owners so that SCS could

promptly mail the Notice Claim Forms directly to them. Copies of the letters sent to these

organizations are attached as Exhibit B. SCS maintains a master list consisting of the 837

largest banks and brokerage companies ("Nominee Account Holders"), as well as 1,037 mutual

funds, insurance companies, pension funds, and money managers ("Institutional Groups") which

1 There were 100 Nominee Account Holders and Institutional Groups who responded to the previous Partial

Settlement approved by the Court on November 17, 2006. SCS sent a letter along with the Notice Claim Form to

each of these 100 Nominee Account Holders and Institutional Groups requesting that they review the information

they previously sent us and provide us with any updated information (address changes, etc), if applicable. A

separate letter was sent to the remaining 1,774 Nominee Account Holders and Institutional Groups who did not

respond to the previous Partial Settlement Notice. See letters attached as Exhibit B.

2


may have traded or owned DVI's securities in their clients' or their own accounts. The mailing

of Notice Claim Forms were mailed on or before August 15, 2007 as required by the Preliminary

Approval Order Pursuant to Rule 23 of the Federal Rules of Civil Procedure, dated July 16, 2007

(the "Court's July 16, 2007 Order"). Moreover, the Notice Claim Form was made available to

the public at SCS's website.

4. To date, 11,165 Notice Claim Forms have been mailed. SCS mailed 227 Notice

Claim Forms to individuals and organizations from the shareholders' list provided by the

Company. As noted above, 1,874 Notice Claim Forms were sent to Nominee Account Holders

and Institutional Groups. Also, to date, an additional 9,064 Notice Claim Forms were requested

by, and provided to, the Nominee Account Holders and Institutional Groups and other

individuals.

5. As required by the Court's July 16, 2007 Order, the Summary Notice was

published on one occasion in the national edition of The Wall Street Journal, USA Today, and

editions of the Chicago Tribune and the Philadelphia Inquirer, and electronically on the PR

newswire on or before August 22, 2007, as shown in the affidavit of publication attached hereto

as Exhibit C.

6. The notice procedures described in paragraphs two (2) through five (5 ) above are

consistent with the procedures I have used in each of the class action securities litigation cases in

which I have been involved with over the past fifteen years.

7. Included in my affidavit for the first settlement dated October 31, 2006, five (5)

WM Funds (plaintiffs named in a related action titled WM High Yield Fund et al. v. O'Hanl.on et

al., No. 04-CV-3423 --- Eastern District of PA.) requested to be excluded from the Class to pursue

their own action. Attached as Exhibit D are the WM Funds requests for exclusion. SCS has

received no additional requests for exclusion from members of the Class in this settlement. In

addition, SCS has received no objections to the Settlement or the request for application for

3


attorneys' fees and reimbursement of litigation expenses by plaintiffs' counsel. The deadline for

exclusions and objections was September 26, 2007.

8. Pursuant to the Court's July 16, 2007 Order, the 1,640 Class Members who

previously filed claims2 related to the November 17, 2006 Partial Settlement will also be

included as claims filed in this settlement. To date, there are an additional 166 Class Members3

who filed claims for this settlement only. The claims filing deadline is December 14, 2007.

Paul Mulholland , CPA, CVA

Sworn to and Subscribed before me

This _^day of October 2007

In the County of Delaware,Commonwealth of Pennsylvania

2 These include both valid and invalid claims.

3 These claimants did not file a claim form for first settlement.

4

NOTARIAL SEALCATHY L. JAMES, Notary public

Media Borough , Delaware County, PAMy Commission Expires Jan. 25, 20t0

Case 2:03-cv-05336-L Document 519-6 Filed 10/16/2007


In Re DVI, Inc. Securities Litigation

X

X

Case No. 2:03-CV-5336-LDD

Page 6 of 35

EXHIBIT A

NOTICE OF PENDENCY OF CLASS ACTION, HEARING ON PROPOSED PARTIALSETTLEMENT, PLAN OF ALLOCATION AND ATTORNEYS' FEES AND EXPENSES ("NOTICE")

TO: All persons and entities who purchased or otherwise acquired the securities of DVI, Inc. (`DVI") between August

10, 1999 and August 13, 2003, both dates inclusive (the "Class Period"), excluding those plaintiffs named in a

related action titled WM High Yield Fund, et al. v. O'Hanlon, et al., No. 04-CV-3423 (E.D. Pa.) (hereinafter referred

to separately and interchangeably as the "Settlement Class," "Settlement Class Members," "Class Members," and

"Members of the Class").

If you purchased or otherwise acquired any DVI securities (common stock and 9Yn% Senior Notes) during the Class

Period and you lost money on the securities, you may be entitled to share in a partial settlement of $3,250,000

cash received from certain Defendants in this Action.

To claim benefits that may be due to vou, you must submit a Proof of Claim on the form attached to this Notice

postmarked on or before December 14, 2007.

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS WILL BE AFFECTED BY PROCEEDINGS

IN THIS ACTION. IF YOU ARE A CLASS MEMBER, YOU ULTIMATELY MAY BE ENTITLED TO RECEIVE BENEFITS PURSU-

ANT TO THE PROPOSED PARTIAL SETTLEMENT DESCRIBED HEREIN.

CLAIMS DEADLINE : FOR THOSE MEMBERS OF THE CLASS WHO DID NOT SUBMIT A PROOF OF CLAIM FORM IN

THE PARTIAL SETTLEMENT WITH DEFENDANTS ONCURE MEDICAL CORP., DOLPHIN MEDICAL, INC. AND PRESGAR

IMAGING LC, APPROVED BY THE COURT ON NOVEMBER 17, 2006 (HEREINAFTER REFERRED TO AS THE "NOVEMBER

17, 2006 PARTIAL SETTLEMENT"), YOU MUST SUBMIT A PROOF OF CLAIM, ON THE FORM ACCOMPANYING THIS

NOTICE, POSTMARKED ON OR BEFORE DECEMBER 14, 2007 , TO BE ENTITLED TO RECOVERY IN THIS PARTIAL

SETTLEMENT.

FOR THOSE MEMBERS OF THE CLASS WHO SUBMITTED A VALID PROOF OF CLAIM FORM IN THE NOVEMBER 17,2006 PARTIAL SETTLEMENT, THAT PROOF OF CLAIM FORM WILL SERVE AS YOUR PROOF OF CLAIM FORM IN THIS

PARTIAL SETTLEMENT AND YOU ARE AUTOMATICALLY ELIGIBLE FOR A RECOVERY IN THIS PARTIAL SETTLEMENT

WITHOUT NEEDING TO SUBMIT ANOTHER PROOF OF CLAIM FORM.

FOR THOSE MEMBERS OF THE CLASS WHO DID NOT SUBMIT A VALID PROOF OF CLAIM FORM IN THE NOVEMBER

17, 2006 PARTIAL SETTLEMENT, SUBMITTING A PROOF OF CLAIM FORM IN THIS PARTIAL SETTLEMENT DOES NOT

ENTITLE YOU TO RECOVERY IN THE NOVEMBER 17, 2006 PARTIAL SETTLEMENT.

Eg,RE M=11 -_ I

The purpose of this Notice is to inform you of this Action, as defined below, and the proposed Partial Settlementthat will affect all Class Members ' rights . This Notice describes rights you may have under the proposed PartialSettlement and what steps you may take in relation to this Action . This Notice is not an expression of any opinionby the Court as to the merits of any claims or any defenses asserted by any party in this Action , or the fairnessor adequacy of the proposed Partial Settlement.

You are receiving this Notice because you may have purchased a security issued by DVI, Inc. during the ClassPeriod.

The above captioned lawsuit is a class action lawsuit (the "Action") in which the Court has certified a SettlementClass, described more fully below.

The proposed Partial Settlement creates a fund (the "Partial Settlement Fund") in the amount of $3,250,000 incash (the "Partial Settlement Amount") and will include interest that accrues on the fund prior to distribution.

By Order of the Court , this Notice is being sent to you in the belief that you may be a Member of the Class, toinform you as follows:

+ THE COURT HAS CERTIFIED THE SETTLEMENT CLASS ON BEHALF OF THE CLASS DEFINED IN SECTION III

BELOW.

• A PARTIAL SETTLEMENT OF THE ACTION HAS BEEN REACHED, SUBJECT TO COURT APPROVAL. THIS PAR-

TIAL SETTLEMENT IS WITH ONLY CERTAIN DEFENDANTS, AND THE ACTION IS CONTINUING AGAINST OTHERDEFENDANTS. THE TERMS OF THE PARTIAL SETTLEMENT ARE DESCRIBED IN SECTION IV BELOW.


• IF YOU MEET THE CLASS DEFINITION, YOU ARE A MEMBER OF THE CLASS AND YOU WILL BE BOUND BY THE

PARTIAL SETTLEMENT AND THE RELEASES THAT ARE GIVEN PURSUANT THERETO, UNLESS YOU ACT TO

EXCLUDE YOURSELF PURSUANT TO THE INSTRUCTIONS IN SECTION VII BELOW. IF YOU WISH TO REMAIN

A MEMBER OF THE CLASS AND TO BE BOUND BY THE PARTIAL SETTLEMENT AND RELEASES, YOU DO NOT

NEED TO TAKE ANY ACTION IN RESPONSE TO THIS NOTICE OTHER THAN WHAT IS OUTLINED IN SECTION

VIII BELOW TO ESTABLISH THE DOLLAR AMOUNT OF YOUR CLAIM.

• NO DETERMINATION HAS BEEN MADE ON THE MERITS OF THE CASE. ANY FINAL JUDGMENT WILL BIND ALL

MEMBERS OF THE CLASS EXCEPT THOSE MEMBERS WHO ACT TO EXCLUDE THEMSELVES PURSUANT TO

THE DEADLINES SET HEREIN.

• YOU MAY OBTAIN MORE DETAILED INFORMATION ABOUT THE ACTION BY ACCESSING THE COURT FILE.

Plaintiffs' Lead Counsel have not received any payment for their services in prosecuting the Action on behalf of

Plaintiffs and the Members of the Class, nor have they been reimbursed for their out-of-pocket expenditures. If

the Partial Settlement is approved by the Court, Plaintiffs' Lead Counsel will apply to the Court for attorneys'

fees not to exceed 30% of the Partial Settlement Amount, or up to $975,000, and reimbursement of out-of-pocket

expenses not to exceed $325,000, both of which shall be paid to Plaintiffs' Lead Counsel from the Partial Settle-

ment Fund with interest from the date such Partial Settlement Fund was funded to the date of payment at the

same interest rate that the Partial Settlement Fund earns. The average cost per share and per note will vary

depending on the number of shares and notes for which claims are filed.

The Third Amended Consolidated Class Action Complaint (the "Complaint"), filed on September 20, 2004, alleges

that during the Class Period the Defendants prepared and disseminated to the investing public materially false

and misleading information about DVI's financial condition and results of operations, and/or engaged in decep-

tive schemes to conceal DVI's dire financial position, in order to artificially inflate the prices of DVI's publicly-

traded securities.

The culmination of this alleged misconduct resulted in DVI publicly disclosing its intention, on August 13, 2003,

to petition for Chapter 11 Bankruptcy protection based on the "discovery of apparent improprieties in its prior

dealings with lenders involving misrepresentations as to the amount and nature of collateral pledged to lenders."

On August 25, 2003, DVI filed for bankruptcy protection and, thereafter, liquidated. In the bankruptcy proceed-

ings, a Bankruptcy Court-appointed Examiner conducted an investigation of DVI's demise and on or about April

8, 2004, issued a 188-page report, which described numerous misstatements related to DVI's revenue recognition

and loan loss reserves, among other items.

In this case, the Complaint, which derives in part from the Examiner's findings and conclusions, alleges that

Defendants' misconduct violated federal securities laws and damaged investors who purchased or otherwise

acquired the artificially inflated securities during the Class Period.

This Action is pending against:

(1) individuals and entities who allegedly intentionally or recklessly made materially false and misleading state-

ments to the investing public regarding DVI, including DVI's Officers and Directors (Michael A. O'Hanlon

("O'Hanlon" ), Steven R. Garfinkel ("Garfinkel "), John P, Boyle (" Boyle"), Gerald Cohn ("Cohn"), Nathan Shapiro

("Shapiro"), William S. Goldberg (" Goldberg"), Harry T . I. Roberts ("Roberts"), John E. McHugh ("McHugh")),

its Auditor, Deloitte & Touche , LLP, and one of its Underwriter 's/Lender 's, Merrill Lynch & Co., Inc.; these

claims were brought under Section 10 (b) of the Securities & Exchange Act of 1934 , 15 U.S.C. '78j(b), and Rule

lOb-5(b), 17 C.F.R. '240.10b -5(b), promulgated by the Securities and Exchange Commission;

(2) one "special relationship" entity - Radnet Management, Inc. ("Radnet"), who Plaintiffs allege was closely

associated with DVI and participated in DVI's scheme of avoiding substantial loss recognition on delinquent

loan and lease receivables; these claims were brought under Section 10(b) and Rule lOb-5(a) and (c); as

indicated herein, Plaintiffs have settled their claims against three other special relationship entities, OnCure,

Dolphin, and Presgar, pursuant to an order entered by the court dated November 17, 2006, approving the

terms of the settlement;

(3) individuals and entities who engaged in a scheme or device to conceal DVI's financial irregularities from the

investing public, specifically Richard E. Miller, Anthony J. Turek, Terry Cady, and all individuals and entities

in paragraph (1); these claims were brought under Section 10(b) and Rule lOb-5(a) and (c); and

(4) individuals and entities who allegedly knew or were recklessly indifferent to the fact that DVJ's financial

statements were materially false and had control over DVI, specifically including O'Hanlon, Garfinkel, Boyle,

Cohn, Shapiro, Goldberg, Roberts, McHugh, Miller, Turek, Cady (collectively, "the Individual Officer and


Director Defendants"); these claims were brought under Section 20(a) of the Securities & Exchange Act of

1934, 15 U.S.C. '78t(a).

On or about November 1, 2004, each of the aforementioned named Defendants, as well as Canadian Imperial Bank

of Commerce Trust Company (Bahamas) Limited ("CIBC"), the trustee of certain trusts for the benefit of certain

Pritzker family members and against whom Plaintiffs filed a Section 20(a) claim, filed motions to dismiss the

Complaint (the "Motions"). On May 31, 2005, the Court granted in part and denied in part Defendants' Motions

to Dismiss. Specifically, the Court denied all motions to dismiss except as to CIBC, claims under Rule 10b-5(b)

asserted against Defendants Turek, Cady and Miller, and the claims under Rule lOb-5(a) and (c) against OnCure

for purchasers who bought prior to July 30, 1999. The Court, on February 16, 2006, denied Defendants' motions

for reconsideration and for certification for interlocutory appeal of the Court's May 31, 2005 decision.

Plaintiffs, on September 30, 2005, amended the Complaint to add Section 20(a) claims against Thomas Pritzker,

the Pritzker Organization LLC and certain unnamed Pritzker family members (collectively, the "Pritzker Defen-

dants") as controlling parties. In addition, Plaintiffs, on April 7, 2006, added Section 10(b) and Rule 10b-5(a) and

(c) claims against DVI's former lead legal counsel, Clifford Chance LLP and Clifford Chance (US) LLP.

The Court's denial, in part, of Defendants' motions to dismiss Plaintiffs' Complaint only addressed the sufficiency

of Plaintiffs' pleadings and did not determine the merits of Plaintiffs' claims.

Defendants Shapiro, Goldberg, and McHugh, former outside directors of DVI, (hereinafter referred to as "Shapiro/

Goldberg/McHugh" or "Settling Defendants"), deny that they engaged in any wrongdoing, deny that they violated

Sections 10(b) and 20(a), and Rule 10b-5 promulgated thereunder by the SEC, and deny that the Complaint sets

forth a valid claim against them.

The Settling Defendants, in order to resolve this litigation, have agreed to settlement terms with Plaintiffs. Any

final judgment made by the Court will be binding on all Settlement Class Members as to the Settling Defendants

excepting only those Class Members who exclude themselves as provided herein.

The Court has certified the Settlement Class as consisting of all persons or entities, other than defendants in the

Litigation, who purchased or otherwise acquired the DVI securities (its common stock and 9%% Senior Notes)

between August 10, 1999 and August 13, 2003, both dates inclusive. Excluded from this Settlement Class are

plaintiffs named in a related action titled WM High Yield Fund, et al. v. O'Hanlon et j, No. 04-CV-3423 (E.D. Pa.),

and those who timely and validly request exclusion from the Class pursuant to this Notice.

Lead Plaintiff/Class Representative . The Court appointed Kenneth Grossman, the Cedar Street Fund and the

Cedar Street Offshore Fund (collectively, "Cedar Street Group") as Lead Plaintiffs in the Action pursuant to the

Private Securities Litigation Reform Act of 1995, 15 U.S.C. '78u-4 & 772-1 ("PSLRA"). The Court has also certified,

for settlement purposes, the Cedar Street Group as Class representatives.

Lead Counsel Class Counsel. The Court has appointed the law firm of Krislov & Associates, Ltd., 20 N. Wacker

Drive, Chicago, IL 60606, (312) 606-0500 to serve as Lead Counsel for the Class. The Court has also certified, for

purposes of the settlement class, Krislov & Associates, Ltd, as Class Counsel.

A. Reasons The Parties Settled

On June 25, 2007, Lead Plaintiffs, by their counsel, signed a Stipulation of Settlement (the "Stipulation") with

Settling Defendants. The Stipulation provides for settlement of this Action as only against Defendants Shapiro/

Goldberg/McHugh (the "Partial Settlement"), and does not constitute settlements of any claims by Lead Plaintiffs

or the Class against any other Defendants named or who may be named in the Action in the future.

Settling Defendants were outside directors of DVI and members of DVI's audit committee during the Class Period.

Settling Defendants were alleged to have issued materially false and misleading financial statements of DVI, to

have participated in concealing the substantial impairments to loan and lease assets on DVI's books through a

variety of deceptive mechanisms, to have engaged in a scheme or device to conceal DVI's financial irregularities

from the investing public, to have participated in devices in furtherance of an overall scheme to defraud DVI

investors, knew or were recklessly indifferent to the fact that DVI's financial statements were materially false, and

to have controlled those who also engaged in securities law violations.

Settling Defendants vigorously deny all allegations of wrongdoing, fault, liability or damage to Lead Plaintiffs

or the Class, deny that they engaged in any wrongdoing, deny that they participated in, or were aware of, any

unlawful or improper conduct on the part of DVI or its management, deny that they made, or participated in the


making of, any false or misleading statements, deny that they committed any violation of law, deny that they

acted improperly in any way and believe that they acted properly at all times. Settling Defendants recognize,

however, the uncertainty and risk inherent in any litigation, especially complex securities litigation, and the dif-

ficulties and substantial expense and length of time necessary to defend this action through trial and any appeal.

Solely to eliminate the burden and expense of further litigation and the risk of a judgment at trial, the Settling

Defendants wish to settle the litigation against them on the terms and conditions stated in the Stipulation, and to

put the claims alleged in this Action to rest finally and forever.

Based on the investigations of Lead Counsel and the comprehensive investigation by the Bankruptcy Court

appointed Examiner, Lead Plaintiffs have concluded that the terms and conditions of the Partial Settlement are

fair, reasonable and adequate to the Class' interests, and have agreed to settle the claims raised in the Action

as against the Settling Defendants pursuant to the terms and provisions of the Stipulation. The Lead Plaintiffs

made this decision after considering (a) the substantial benefits that the Class will receive from the Partial

Settlement, (b) the attendant risks of litigation, (c) the ability of Settling Defendants to pay a materially greater

amount (especially considering that the entire Settlement will be funded from the Settling Defendants' personal

assets), and (d) the desirability of permitting the Partial Settlement to be consummated as provided by the terms

of the Stipulation. From the perspective of the Lead Plaintiffs, the principal reason for the Partial Settlement is

the substantial monetary benefits to be provided to the Class now. These benefits must be compared to the risk

that recovery might not be achieved after a contested trial and likely appeal - possibly years into the future.

Assuming the Lead Plaintiffs won at trial, they anticipated that the Settling Defendants would have appealed the

verdict which would have created further uncertainty and delay. From the perspective of the Settling Defendants,

the principal reasons for the Partial Settlement are to settle and terminate all existing or potential claims against

them, and to eliminate the risk of a judgment against them, without in any way acknowledging any fault or Iiabil-

ity, in order to eliminate the burden and expense of further litigation and possible appeals.

B. Releases Exchanged By The Parties

Pursuant to the Stipulation, if the Partial Settlement is approved by the Court, all Class Members will be deemed

to have released the following claims against the Settling Defendants and certain related parties (as more fully

defined in the Stipulation):

all claims, rights, demands, suits, matters, issues or causes of action, whether known or unknown, asserted

or unasserted, whether under state or federal law, including the federal securities laws, and whether directly,

indirectly, derivatively, representatively or in any other capacity, arising out of any losses sustained by Class

Members with respect to any transaction in or related to the DVI securities at issue here (but excluding any

claims to enforce the terms of the Partial Settlement).

Furthermore, upon the Effective Date of the Partial Settlement, Lead Plaintiffs, all Settlement Class Members,

and all other persons and entities whose claims are being released, shall be deemed to have, and shall have,

expressly waived and relinquished, any and all provisions, rights and benefits conferred by any law of any state

or territory of the United States, or principals of common law, which is similar, comparable or equivalent to

§ 1542 of the California Civil Code, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS, WHICH THE CREDITOR DOES NOT KNOW OR SUS-

PECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM

OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

This means that, upon Court approval, all Settlement Class Members will be permanently barred from asserting

any known or unknown claims related to this Action against the Settling Defendants. In addition, if the Court

approves the Partial Settlement, the Settling Defendants will be precluded from suing the Lead Plaintiffs, Class

Members, or Lead Counsel in connection with the Action.

C. The Settlement Benefits

Under the terms of the Stipulation, the Settling Defendants have deposited from their personal assets an aggre-

gate $3,250,000 (the "Partial Settlement Amount") into a settlement accounnt on behalf of the Class (the "Partial

Settlement Fund"). The Partial Settlement Fund will be distributed to eligible Settlement Class Members who

send in valid Proof of Claim forms with the requested documentation, after payment of Court-approved legal fees,

attorney and Lead Plaintiff expenses and the costs of claims administration, including the costs of printing and

mailing this Notice and the cost of publishing newspaper notice (the "Net Settlement Fund").

D. Plan of Allocation

Your share of the Net Settlement Fund will depend upon: (a) the number of valid Proof of Claim forms that

Settlement Class Members have submitted (the fewer the number of Settlement Class Members who choose


to participate in the Partial Settlement, the larger the recovery for each participant); (b) the number of sharesof DVI common stock and/or DVI 9%% Senior Notes you purchased during the Class Period; and (c) when youbought and sold them.

In order to recover damages, you must have suffered an actual monetary loss on the shares of DVI common stockand/or the units of DVI 97/s% Senior Notes that you purchased during the Class Period. For shares or units that youpurchased and sold during the Class Period, the purchase price must have been greater than the sales price.

Recognized Loss Formula. The Net Settlement Fund shall be distributed to Authorized Claimants, which arethose Settlement Class Members who file timely and valid claims. The Claims Administrator shall determine eachAuthorized Claimant's pro rata share of the Net Settlement Fund based upon a formula which takes into accountwhich type of security was purchased (DVI common stock or DVI 9Y/% Senior Notes) and the amount of eachsecurity purchased, among other things (the "Recognized Loss Formula"). The Recognized Loss Formula, whichprovides each Authorized Claimant with his, her, or its "Recognized Loss," as defined below, is not intended to

be an estimate of the amount which a Settlement Class Member would recover after trial; nor is it an estimate ofthe amount that will be paid to Authorized Claimants pursuant to the Partial Settlement. The Recognized LossFormula is the basis upon which the Net Settlement Fund will be allocated to the Authorized Claimants.

The Recognized Loss Formula per DVI common share will be calculated as follows:

(a) if Authorized Claimant purchased and sold DVl common stock at a loss during the period August 10, 1999through the close of trading on August 13, 2003, an Authorized Claimant's "Recognized Loss" shall be the dif-ference between the amount paid by the Authorized Claimant for his, her or its DVI common stock, excludingcommissions, less the amount received before commissions from the sale of such stock;

(b) if Authorized Claimant purchased DVI common stock during the period August 10, 1999 through the closeof trading on August 13, 2003, and held those shares through the close of trading on August 13, 2003, anAuthorized Claimant's "Recognized Loss" shall be the difference between the amount paid by the AuthorizedClaimant for his, her or its DVI common stock, excluding commissions, and $0.12 per share, the 90-day aver-age closing price of DVI's common stock after the Class Period.

The Recognized Loss Formula per DVI 9%% Senior Notes will be calculated as follows:

(a) if Authorized Claimant purchased and sold DVI 9V% Senior Notes at a loss during the period August 10, 1999through the close of trading on August 13, 2003, an Authorized Claimant's "Recognized Loss" shall be thedifference between the amount paid by the Authorized Claimant for his, her or its DVI 9%% Senior Notes,excluding commissions, less the amount received before commission from the sale of such notes;

(b) if Authorized Claimant purchased DVI 9%% Senior Notes during the period August 10, 1999 through theclose of trading on August 13, 2003, and held those notes through the close of trading on August 13, 2003, anAuthorized Claimant's "Recognized Loss" shall be the difference between the amount paid by the AuthorizedClaimant for his, her or its DVI 9%% Senior Notes, excluding commissions, and $20.82 per note, the 90-dayaverage closing price of DVI's 9%s% Senior Notes after the Class Period.

Settlement Class Members who did not suffer a Recognized Loss, as calculated above, will not be entitled to par-ticipate in the Net Settlement Fund. In the event a Settlement Class Member has more than one purchase or saleof DVI common stock or DVI 9/8 Senior Notes, all purchases and sales of DVI securities shall be matched on aFirst In First Out ("FIFO") basis, including securities held as of the beginning of the Class Period. Any transactionsresulting in a gain shall be excluded, The covering purchase of a short sale is not an eligible purchase.

The Court has reserved jurisdiction to allow, disallow, or adjust the claim of any class member on equitablegrounds.

Xz-

For those Members of the Class who did not submit a valid Proof of Claim form in the November 17, 2006 PartialSettlement, as described herein, and who wish to remain in the Class, you must file your Proof of Claim attachedhereto by December 14, 2007.

For those Members of the Class who submitted a valid Proof of Claim form in the November 17, 2006 PartialSettlement, and who wish to remain in the class, your Proof of Claim form in the November 17, 2006 Partial Settle-ment will serve as your Proof of Claim form in this Partial Settlement and you are eligible to remain in the Classwithout needing to submit another Proof of Claim form.

if you remain in the Class, then: (a) your interests in the Action will be represented by Lead Counsel for the Class,as identified in Section III above; (b) you will not have to pay any of Lead Counsel's attorneys' fees or expenses,except to the extent the Court may direct that such fees and expenses be paid out of any settlements or recoveries

5


obtained for the Class (including the Partial Settlement); (c) you may be entitled to share in the benefits of any

settlements or recoveries obtained in the Action, and you will be bound by any such settlements (including the

Partial Settlement) and by any favorable or unfavorable judgments entered in the Action; (d) you will have theright to appear and be heard regarding Court approval of the Partial Settlement and any future settlements, and

any applications for payment of attorneys' fees and expenses; and (e) you will have the right to receive notice of

and object to any settlements (including the Partial Settlement).

If you elect to remain in the Class, you have the right to object to the Partial Settlement in the manner set forth

below. If your objection is rejected, you will be bound by the Partial Settlement and the releases describedherein, just as if you had not objected.

If you do not wish to have your interests represented by Lead Counsel for the purpose of appearing, objecting to,and/or otherwise being heard regarding the Partial Settlement and/or any future settlements or applications for

payment of attorneys' fees and expenses, you may enter a separate appearance through counsel of your choice,

or personally, at your own expense.

In order for you to benefit from any future recoveries against other Defendants in the Action, should there be any,

you should retain copies of all records pertaining to your ownership of, as well as all purchases and sales of, DVIcommon stock and DVI 9%H% Senior Notes during August 10, 1999 through August 13, 2003 inclusive.

Under the law, you have the right to exclude yourself from the Class certified by the Court. You may exclude

yourself from the Class if you wish to pursue a separate lawsuit against the Defendants, or for any reason at all.If you exclude yourself from the Class, you will not be entitled to participate in any recovery by such Class in the

Action, and you will not be bound by the Partial Settlement or any settlement in the Action, or by any favorable

or unfavorable judgment in the Action.

If you do not wish to remain a Member of the Class, then you must timely request in writing to be excluded from

the Class. Your request for exclusion must legibly set forth your name and address, and must include a statement

that you wish to be excluded from the Class in the DVI, Inc. Securities Litigation. Your request for exclusion mustbe sent by United States mail, postmarked no later than September 26, 2007, to the Claims Administrator:

DVI, Inc. Securities Litigationc/o Strategic Claims Services

ExclusionsClaims Administrator

600 N. Jackson Street, Suite 3Media, PA 19063

If you request exclusion from the Class on behalf of any person, entity, or individual other than yourself (such as,for example, a trust, a minor, or a pension fund), you also must state the basis of your legal authority to make arequest for exclusion on behalf of that person, entity, or other individual,

In order to ensure proper processing of your request for exclusion, please include with the request the SocialSecurity Number or Taxpayer Identification Number of the person, entity, or individual requesting exclusion from

the Class, as well as a list stating the DVI, Inc. securities purchased and/or sold during the Class Period, and the

date or dates of each such purchase and sale.

For those Members of the Class who did not submit a valid and timely Proof of Claim form in the November 17,2006 Partial Settlement, as described herein, in order to be eligible to receive any distribution from this PartialSettlement, you must complete and sign the accompanying Proof of Claim and Release form and send it by first

class mail postmarked on or before December 14, 2007, addressed as follows:


Claims Administrator600 N . Jackson Street , Suite 3

Media , PA 19014

If you do not timely submit a proper Proof of Claim form, you will not be entitled to any share of the Net Settle-

ment Fund.


For those Members of the Class who submitted a valid and timely Proof of Claim form in the November 17, 2006

Partial Settlement, that Proof of Claim form will serve as your Proof of Claim form in this Partial Settlement andyou are automatically eligible for recovery in this Partial Settlement without needing to submit another Proof ofClaim form.

Each Claimant shall be deemed to have submitted to the jurisdiction of the United States District Court for theEastern District of Pennsylvania with respect to his, her or its Proof of Claim. The Court has reserved jurisdictionto allow, disallow, or adjust any claim on equitable grounds.

Nominees who purchased or acquired DVI common stock or DVI 9h% Senior Notes for the benefit of another per-

son or entity during the Class Period are requested to send the Notice and the Proof of Claim to all such beneficial

owners of those securities within ten (10) days after receipt thereof, or send a list of the names and addresses

of such beneficial owners to the Claims Administrator within ten (10) days of receipt thereof in which event theClaims Administrator shall promptly mail the Notice and Proof of Claim to such beneficial owners.

117

Lead Counsel has expended considerable time and effort in the prosecution of this litigation on a contingent feebasis, and has advanced substantial expenses for the litigation, in the expectation that if they were successful

in obtaining a recovery for the Class they would be paid from such recovery. Plaintiffs' Lead Counsel intends to

apply to the Court for an award of attorneys' fees in the amount of $975,000, which represents 30% of the PartialSettlement Amount, and for reimbursement of expenses incurred in connection with the prosecution of thisAction against the Settling Defendants of not more than $325,000, both of which shall be paid to Plaintiffs' LeadCounsel from the Partial Settlement Fund with interest from the date such Partial Settlement Fund was funded tothe date of payment at the same interest rate that the Partial Settlement Fund earns. The Settling Defendants andtheir counsel do not oppose these requests. Lead Counsel, without further notice to the Class, may subsequentlyapply to the Court for expenses incurred in connection with administering and distributing the proceeds of thePartial Settlement to the Class Members.

A hearing on the proposed Partial Settlement (the "Partial Settlement Hearing") will be held on November 2, 2007at 9:00 a.m. before the Honorable Legrome D. Davis in the U.S. District Court for the Eastern District of Pennsyl-vania, 601 Market Street, Room #6614, Philadelphia, Pennsylvania 19102. The purpose of the Partial SettlementHearing will be to determine: (1) whether the Partial Settlement should be finally approved as fair, just and

reasonable; (2) whether the Action should be dismissed with prejudice as against the Settling Defendants; and

(3) to consider the proposed Plan of Allocation for the proceeds of the Partial Settlement and the application of

Lead Counsel for attorneys' fees and reimbursement of expenses.

Any member of the Class who has not requested exclusion may appear at the Partial Settlement Hearing to showcause why the proposed Partial Settlement should not be approved, why the Action should not be dismissed

with prejudice as against the Settling Defendants, or why Lead Counsel should not be awarded attorneys' feesand reimbursement of expenses; provided, however, that no such person shall be heard, unless his, her or itsobjection or opposition is made in writing and filed, together with copies of any and all supporting papers and

briefs, with the Court no later than September 26, 2007, with copies sent to:

Attorneys for Lead Plaintiffs:

Clinton A. KrislovMichael R. KarnuthKRISLOV & ASSOCIATES, Ltd.Civic Opera Building20 N. Wacker Dr., Suite 1350Chicago, IL 60606

Attorneys for the Settling Defendants:

William P. Quinn, Jr.MORGAN, LEWIS & BOCKIUS LLP1701 Market StreetPhiladelphia , PA 19103

The Claims Administrator:

STRATEGIC CLAIMS SERVICES600 N. Jackson Street, Suite 3Media, PA 19063

Once an objection to the proposed Partial Settlement is made, it cannot be withdrawn without the Court's

approval. Unless otherwise ordered by the Court, any Member of the Class who does not make his, her, or itsobjection or opposition in the manner provided above shall be deemed to have waived all objections and opposi-tion to the fairness, reasonableness and adequacy of the proposed Partial Settlement.


If you receive multiple copies of this Notice, it may be because you had multiple brokerage accounts, holdings ortransactions in DVI, Inc. securities.

If this Notice was sent to a wrong address, or if your address changes in the future, please send prompt writtennotification of your correct address to the Claims Administrator at the address stated at the end of this Notice.

FOR MORE INFORMATION

This Notice contains only a summary of the Action and the terms of the proposed Partial Settlement. Anyoneinterested in more detail regarding the Action is invited to: (1) visit the Office of the Clerk of the United StatesDistrict Court for the Eastern District of Pennsylvania at 601 Market Street, Philadelphia, PA, during regularbusiness hours, to inspect the Stipulations, the pleadings, and the other papers maintained there in Case No.2:03-CV-05336-LDD; and/or (2) contact the Claims Administrator at the following address:


Claims Administrator600 N. Jackson St., Suite 3

Media, PA 19063www.strategicclainis.net

(610) 565-9202

ALL INQUIRIES CONCERNING THIS PARTIAL SETTLEMENT NOTICE OR THE PROOF OF CLAIM FORM BY CLASSMEMBERS SHOULD BE MADE TO THE CLAIMS ADMINISTRATOR IN WRITING AT THE ADDRESS INDICATED IMME-DIATELY ABOVE.

DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE

Dated: July 16, 2007BY ORDER OF THE COURTUNITED STATES DISTRICT COURT FORTHE EASTERN DISTRICT OF PENNSYLVANIA

8



x

In Re DVI, Inc. Securities Litigation Case No. 2:03-CV-5336-LDD

X

Must be Postmarked No Later Than December 14, 2007

In re DVI, Inc. Securities Litigation

c/o Strategic Claims ServicesClaims Administrator

600 N. Jackson Street, Suite 3Media, PA 19063(610) 565-9202

www.strategicclaims.net

PROOF OF CLAIM AND RELEASE

1. GENERAL INSTRUCTIONS

If you did not submit a valid and timely Proof of Claim and Release form in the November 17, 2006 Partial Settle-

ment, as described below, to recover as a Member of the Settlement Class based on your claims in the action titled

In re DVI, Inc. Securities Litigation, 2:03-CV-05336-LDD (the "Action"), you must complete and, on page 8 hereof, sign

this Proof of Claim and Release, and submit the requested documentation. If you fail to file or properly complete the

Proof of Claim and Release, or fail to provide the required documentation, your claim maybe rejected and you may be

precluded from obtaining any recovery from the Net Settlement Fund created in connection with the proposed Partial

Settlement of the Action.

If you submitted a valid and timely Proof of Claim and Release form in the November 17, 2006 Partial Settlement,

that Proof of Claim and Release form will serve as a proper Proof of Claim and Release form in this Partial Settlement

and you are eligible to recover in this Partial Settlement without needing to submit another Proof of Claim form.

Submission of a timely and valid Proof of Claim and Release form in this Partial Settlement or a timely and valid

Claim and Release form in the November 17, 2006 Partial Settlement, however, does not assure that you will share

in the proceeds of this Partial Settlement. The Claims Administrator will review your Proof of Claim and supporting

documentation to determine if you are entitled to a distribution.

If You Did Not Submit a Timely and Valid Proof of Claim and Release Form in the November 17, 2006 Partial

Settlement, You Must Mail A Completed And Signed Proof Of Claim And Release, With Appropriate Documenta-

tion , Postmarked On Or Before December 14, 2007, Addressed As Follows:

In Re DVI, Inc. Securities LitigationClaims Administrator

c/o Strategic Claims Services600 N. Jackson Street, Suite 3

Media, PA 19063www.strategieclalms.net

(610) 565-9202

If you are NOT a Member of the Settlement Class, as defined in the Notice of Pendency (`Notice"), DO NOT submit

a Proof of Claim and Release form.

If you are a Member of the Settlement Class and you do not timely request exclusion, you will be bound by the terms

of any judgment entered in the Action, WHETHER OR NOT YOU SUBMIT A PROOF OF CLAIM AND RELEASE FORM.

[I. DEFINITIONS

1. "Defendants" means Michael A. O'Hanlon ("O'Hanlon"), Steven R. Garfinkel ("Garfinkel"), John P. Boyle ("Boyle"),

Gerald Cohn ("Cohn"), Nathan Shapiro ("Shapiro"), William S. Goldberg ("Goldberg"), Harry T.J. Roberts ("Roberts"),

John E. McHugh ("McHugh"), Richard E. Miller ("Miller"), Anthony J. Turek ("Turek"), Terry Cady ("Cady"), Deloitte

& Touche, LLP ("Deloitte"), Merrill Lynch & Co., Inc. ("Merrill Lynch"), Radnet Management, Inc. ("Radnet"), Thomas

Pritzker, the Pritzker Organization LLC and certain unnamed Pritzker family members (collectively, the "Pritzker

Defendants"), and Clifford Chance LLP and Clifford Chance US LLP (collectively, "Clifford Chance"),

1


2. The "November 17, 2006 Partial Settlement" means the settlement agreement in which Plaintiffs settled theirclaims against three former Defendants referred to as "special relationship" entities, OnCure Medical Corp., DolphinMedical, Inc. and Presgar Imaging LC, pursuant to an order entered by the court dated November 17, 2006, approvingthe terms of the settlement.

3. "Released Persons" means the three settling defendants, Nathan Shapiro, William Goldberg and John McHugh,and Related Parties as defined in the Settlement Stipulation.

4. All other capitalized terms used in this Proof of Claim and Release are as defined in the Stipulation andNotice.

III. CLAIMANT IDENTIFICATION(How To Identify Yourself)

1. If you purchased DVI common stock and DVI 9%% Senior Notes during the period of August 10, 1999 through

August 13, 2003, inclusive, and the stock certificate(s) and/or note(s) are in your name, you are the beneficial owner

as well as the record owner of the stock and note. If, however, the stock certificate(s) and note(s) are registered in

the name of a third party, such as a nominee or brokerage firm, you are only the beneficial owner of the shares and/or

notes, and the nominee or brokerage firm is the record holder.

2. This Claim Must Be Filed By The Actual Beneficial Purchaser , Or Legal Representative Of Such BeneficialPurchaser of the DVI common stock and/or DVI 97/8 Senior Notes, Upon Which These Claims Are Based.

3. All joint purchasers of DVI common stock and 9Y9% Senior Notes must sign this Proof of Claim and Release.Executors, administrators, guardians, conservators and trustees must complete and sign this Proof of Claim andRelease on behalf of Persons represented by them. A copy of proof of their authority must accompany this Proof ofClaim and Release. Their titles or capacities must be stated. Failure to provide the foregoing information could delayverification of your Claim or result in rejection of the Claim.

IV. CLAIM FORM

1. Use Part VIII entitled "Schedule of Transactions" in DVI common stock and 9%s% Senior Notes, to supply all

required information regarding your ownership of and transaction(s) in these DVI Securities. If you need more spaceor additional schedules, attach separate sheets. In the attachment, you should give all of the required information insubstantially the same form. Sign and print or type your name on each additional sheet.

2. On the schedules, provide all the requested information with respect to all of your purchases and all of yoursales of DVI common stock and DVI 9%% Senior Notes which took place beginning August 10, 1999 through August 13,2003, inclusive. Failure to report all such transactions may result in the rejection of your claim.

3. List each transaction separately and in chronological order, by trade date, beginning with the earliest date.You must accurately provide the type of security purchased or sold, the month, day and year of each transaction you

list, along with the quantity and selling price.

4. Any loans of DVI Securities to Persons engaged in a "short sale " are not considered a sale.

5. You must attach photocopies of documentation of all your transactions in DVI Securities. This includes brokerconfirmation slips, broker statements, relevant portions of federal or state tax returns, or other documentation.Failure to provide this documentation will delay verification of your claim and could result in rejection of your claim.

Do not send original documents.

6. The Claims Administrator may request additional information as required to calculate your claim. In somecases, where the Claims Administrator cannot perform the calculation accurately or at a reasonable cost to the Class,the Claims Administrator may require the production of additional information. In certain exceptional cases, calculat-ing a claim may require the hiring of an accounting expert at the claimant's expense.

Notice Regarding Electronic Files: Certain claimants with a large number of transactions, such as institutionalholders, may ask (or be asked) to submit claim information in an electronic format. The Claims Administrator willdecide when electronic filing of information will be authorized. In these cases, all claimants must still submit a manu-

ally signed paper Proof of Claim and Release form. The Proof of Claim and Release form must list all the data andtransactions, whether or not they are also submitted electronically. Only electronic files authorized by the ClaimsAdministrator will be considered properly submitted. The Claims Administrator will issue a written acknowledgment

of receipt and acceptance of electronically submitted data to the claimant.

2


V. CLASS MEMBER SUBMISSION TO THE JURISDICTION OF THE COURT

Each Class Member who signs and submits a Proof of Claim and Release agrees to the following:

I/(we) submit this Proof of Claim and Release under the terms of the Stipulation of Settlement described in the

Notice. I/(we) also submit to the jurisdiction of the United States District Court for the Eastern District of Pennsylva-nia. The Court has jurisdiction over my/(our) claim and the enforcement of the release granted. l/(we) acknowledgethat I am/(we are) bound by the terms of any judgment in the Action. l/(we) agree to furnish additional information to

the Claims Administrator to support this claim if necessary. 1/(we) have not submitted any other claim covering thesame acquisitions or sales of DVI common stock and/or DVI 9'/% Senior Notes. I/(we) know of no other Person having

done so on my/(our) behalf.

VI. RELEASE

1, If you remain a Class Member, you release all claims against the Released Parties for the Settled Claims. Thismeans you give up all rights to sue concerning the Settled Claims. Specifically, all Class Members and their represen-tatives will be forever barred from any legal prosecution of the Settled Claims against any of the Released Parties.

2. "Released Parties" means Defendants Shapiro, Goldberg and McHugh, and their past or present directors,

officers, employees, partners, principals, agents, underwriters, issuers, insurers, co- insurers, reinsurers, controlling

shareholders, attorneys, accountants, auditors, banks or investment bankers, advisors, personal or legal representa-

tives, predecessors, successors, parents, subsidiaries, divisions, joint venturers, assigns, spouses, heirs, associates,

related or affiliated entities, any entity in which any of them has or had a controlling interest, any members of their

immediate families, any trust of which any of them is the settlor or which is for the benefit of any of them and/or

member(s) of their families, and any past or present officer or director of each of the foregoing entities.

3. "Settled Claims" means any and all claims rights or causes of action or liabilities whatsoever, whether based

on federal, state, local, statutory or common law or any other law, rule or regulation, including both known claimsand Unknown Claims, that have been or could reasonably have been asserted in any forum by the Class Members, orany of them, whether directly, indirectly, representatively or in any other capacity against any of the Released Par-

ties and which arise out of, or relate in any manner to, the DVI Inc. securities, including the facts, occurrences, acts,disclosures, statements, omissions or failures to act which were alleged or could have been alleged in the Litigation,

4. Furthermore, upon the Effective Date of the Settlements, all persons and entities whose claims are beingreleased shall be deemed to have, and shall have, expressly waived and relinquished, any and all provisions, rights

and benefits conferred by any law of any state or territory of the United States, or principals of common law, which issimilar, comparable or equivalent to § 1542 of the California Civil Code, which provides: A GENERAL RELEASE DOESNOT EXTEND TO CLAIMS, WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR

AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED

HIS OR HER SETTLEMENT WITH THE DEBTOR. This means that, upon Court approval, all Settlement Class Memberswill be permanently barred from asserting any known or unknown claims related to this Action against the SettlingDefendants. In addition, if the Court approves the Partial Settlement, the Settling Defendants will be precluded fromsuing Plaintiffs, Class Members, or Lead Counsel in connection with the Action.

5. This release shall only be in force when the Court approves the Partial Settlement and it becomes effective on

the Effective Date (as defined in the Stipulation of Settlement).

6. I /(we) guarantee that I (we) have not assigned or transferred (or purported to assign or transfer), voluntarily

or involuntarily, any Released Claim or any other part or portion thereof.

7. I /(we) guarantee that I/(we) have included complete information about all of my/(our) purchases and sales of

DVl Securities, which occurred between August 10, 1999 and August 13, 2003, inclusive.


VII. CLAIMANT IDENTIFICATION

Name(s) of Beneficial Owner(s):

Name:

Name: : € t I € E € r € € I [ I € f t-I€ I I I { I € I I € J € I

Street

Address:

StreetAddress:

qCity: Zip Code:State :

Foreign ForeignCountry : Province:

Area Code Telephone No. (Day) Area Code Telephone No. (Evening) Facsimile Number

E-Mail Address

Social Security Number : t L J-€-- -„I- L J OR Employer Identification Number: q

(for individuals ) (for estates, trusts, corporations, etc.)

The Internal Revenue Service requires a taxpayer identification number to be provided for this claim . Please provide that

information as directed:

Check One: q Individual q Joint Owners (if any, identify here): q IRA q Estate q Corporation

q Other (please specify):

VIII. SCHEDULE OF TRANSACTIONS IN DVI COMMON STOCK AND 97/8% SENIOR NOTES

A. BEGINNING HOLDINGS:

1. At the close of trading on August 9, 1999 (1/we) owned shares of DVI common stock (write none orzero ("0"), if no shares were owned on that date) (Must be documented);

2. At the close of trading on August 9, 1999 (]/we) owned units of DVI 9V5% Senior Notes (write none

or zero ("0"), if no units were owned on that date) (one unit equals a $1,000 par value Note) (Must be documented).

B. PURCHASES: Below please list all purchases of DVI common stock and DVI 91/s% Senior Notes Purchased

on or after August 10 , 1999 to August 13, 2003 inclusive . (Must be documented).

I (we) made the following purchases of DVI common stock and DVI 9Y8% Senior Notes between (and including)

August 10, 1999 and August 13, 2003:

DVI Security Purchased(Identify Common Stockor 9%% Senior Notes)

FLI

Purchase (Trade) Date(List Chronologically)(Month / Day / Year)

q

q

q -q

Number of Shares ofDVI Stock or 9tt% Senior

Notes PurchasedPurchase Price

Per Share or Per Note

Total Purchase Price(Excluding Commissions,

Taxes, and Fees)

Total Proceeds(Excluding Commissions,

Taxes, and Fees)

s q

LIII Fl= sLI_Lq

$ .q $ .qC. SALES: Below, please list all sales of DVI common stock and DVI 97/s% Senior Notes Sold on or after August

10, 1999 to August 13, 2003 inclusive . (Must be documented).

I (we) made the following sales of DVI common stock and DVI 9'/% Senior Notes between (and including) August

10, 1999 and August 13, 2003:

DVI Security Sold(Identify Common Stockor 9h% Senior Notes)

LE7=

Sale (Trade) Date (ListChronologically)

(Month / Day / Year)

q q

Number of Shares ofDVI Stock or 9'n% Senior

Notes Sold

E=1q

Sales PricePer Share or Per Note

.q

.q

Please attach pages for additional transactions as necessary. Please sign and print or type your name on each additional

sheet.


D. ENDING HOLDINGS:

1. At the close of trading on August 13, 2003, I/(we) owned shares of DVI common stock (write none

or zero ("0"), if no shares were owned on that date) (Must be documented).

2. At the close of trading on August 13, 2003, I/(we) owned notes ($1,000 face value) of DVI 9%s%

Senior Notes (write none or zero ("0"), if no notes were owned on that date) (Must be documented).

For each transaction and holding listed above, you must attach a legible copy of a broker's confirmation, monthly

statement, correspondence, relevant portions of a tax return or other documentation confirming the above listed

transaction(s) in DVI Securities. Do not submit originals of such documents.

CERTIFICATION

I (we) certify that I am (we are) not subject to backup withholding under the provisions of Section 3406 (a)(I)(c)

of the Internal Revenue Code because: (a) I am (we are) exempt from backup withholding; or (b) I (we) have not

been notified by the Internal Revenue Service ("IRS") that I am (we are) subject to backup withholding as a result of

a failure to report all interest or dividends; or (c) the IRS has notified me (us) that I am (we are) no longer subject to

backup withholding.

NOTE: If you have been notified by the IRS that you are subject to backup withholding, please strike out the

language that you are not subject to backup withholding in the immediately preceding paragraph.

I (we) certify under penalty of perjury under the laws of the United States of America that the information

included in this claim form (and any additional sheets) is true and correct, that this claim is being submitted by or

on behalf of a Class Member, and that this is the only claim being made with respect to these DVI Securities, executed

this day of , 2007 in I(City) (State/Country)

...........Signature of Claimant

(Type or Print Your Name Here)

Capacity of person(s) signing if other than in an individual

capacity, e.g., Beneficial Owner, Executor, or Administrator

Signature of Joint Claimant, if any

(Type or Print Your Name Here)

Capacity of person(s) signing if other than in an individual

capacity, e.g., Beneficial Owner, Executor, or Administrator

This Proof Of Claim Must Be Postmarked No Later Than December 14, 2007 And Be Mailed To:

In re: DVI, Inc. Securities Litigation

c/o Strategic Claims Services

600 N. Jackson Street, Suite 3

Media, PA 19063

Reminder Checklist:

1. Please complete and sign the release and certification.

2. Remember to attach supporting documentation.

3. Do not send originals of stock certificates or other documents,

4. Keep a copy of your claim form for your records, including any attachments or supporting documents.

5. If you desire an acknowledgement of receipt of your claim form, please send it Certified Mail, Return

Receipt Requested.

6. If you move, please send us your new address.

5


[THIS PAGE INTENTIONALLY LEFT BLANK]

6


[THIS PAGE INTENTIONALLY LEFT BLANK]

7


In re: DVI, Inc. Securities Litigation

c/o Strategic Claims Services

Claim Administrator

600 N. Jackson Street, Suite 3

Media, PA 19063

FIRST CLASS MAIL

PLEASE FORWARD - IMPORTANT LEGAL NOTICE

Case 2-03-cv-05336-LDD Document 519-6 Filed 10/16/2007 Page 22 of 35EXHIBIT B

STRATEGIC CLAIMS SERVICES

600 N. JACKSON STREET, SUITE 3

MEDIA, PA 19063

PHONE: (610) 565-9202 FAX: (610) 565-7985

EMAIL: info@ strategicctai €ns.net

August 10, 2007

NOTICE TO BROKERS, CUSTODIAL BANKS, FUND MANAGERS, INSURANCE

COMPANIES, PENSION FUNDS , MUTUAL FUNDS AND OTHER NOMINEES

Re: DVI, I nc. Securities Litigation


Cusip No.: Common Stock - 233343102

9 7/8% Senior Notes ($100M tranche ) - 233343AB8

9 7/8% Senior Notes ($ 55M tranche ) - 233343AD4

PER COURT ORDER, PLEASE PROVIDE THE INFORMATION REQUESTED BELOW.

Enclosed is a copy of the "Notice of Pendency of Class Action, Hearing on Proposed Partial Settlement, Plan of

Allocation and Attorney's Fees and Expenses" in the above-referenced matter. This was sent to all entities whose names

have been made available to us, or which we believe may know of potential claimants.

Your clients may be due to receive a portion of the net settlement fund set aside in this matter.

We request that you assist us in identifying any individuals or accounts who purchased or otherwise acquired DV1

common stock and DVI 9 7/8% Senior Notes during the period of August 10, 1999 through and including August 13,

2003 (both dates inclusive), excluding (a) Defendants; (b) plaintiffs named in a related action titled WM High Yield Fund,

et al, v. O'Hanlon et al.; and (c) those who timely and validly request exclusion from the Class pursuant to this Notice.

Please comply in one of the following ways:

1. If you have no beneficial owners, please so advise us in writing; or

2. Supply us with the narnes and addresses of your beneficial owners and we will do the mailing (Please

provide us this information electronically . If you are not able to do this, labels will be accepted but it is

important that a hardcopy also be submitted of the names of your clients); or

3. Advise us of how many beneficial owners you have and we will supply you with ample forms to do the

mailing.

Below are important dates regarding the proposed settlement:

Exclusion Deadline - September 26, 2007

Objection Deadline - September 26, 2007

Settlement Fairness Hearing Date - November 2, 2007

Claims Filing Deadline - December 14, 2007

You are on record as having been notified of this legal matter. Any reasonable research and mailing expenses may be

billed directly to our office, payable subject to the approval of the Class Representative. You should note on your invoice

that expenses incurred were for compliance with the Order of the Court. Please call us directly at the above number

should you have any questions.

Thank you for your prompt response.

Sincerely,

Claims Administrator

DVI, Inc. Securities Litigation

FOR: PLAINTIFFS' COUNSEL

Case 2-03-cv-05336-LDD Document 519-6 Filed 10/16/2007

STRATEGIC CLAIMS SERVICES

600 N. JACKSON STREET, SUITE 3

MEDIA, PA 19063

PHONE: (610) 565-9202 FAX: (610) 565-7985

EMAIL: [email protected]

August 10, 2007

Re: DVI, Inc. Securities Litigation


Cusip No.: Common Stock. - 233343102

9 7/8% Senior Notes ($100M tranche) - 233343AB8

9 7/8% Senior Notes ($55M tranche) - 233343AD4

To Whom It May Concern:

Page 23 of 35

Thank you for previously supplying us in 2006 with names and addresses of your clients who purchased/owned

securities in the above matter. This is to inform you that we will be using the same list to mail your clients the

attached "Notice of Pendency of Class Action, Hearing on Proposed Partial Settlement, Plan of Allocation and

Attorneys' Fees and Expenses" ("Notice") and "Proof of Claim and Release" ("Proof of Claim"). Enclosed

please find a Notice and Proof of Claim, to inform you and your clients that there is a proposed settlement in this

matter.

If you have already responded with names and addresses of your clients who purchased DVI, Inc.

common stock and DVI 9 7/8% Senior Notes during the period of August 10, 1999 through and including

August 13, 2003 (both dates inclusive), we will send a copy of the Notice and Proof of Claiin directly to

them. Please do not reprocess another list unless there are any changes to the initial list you sent us

in 2006. However, if you have recently discovered additional names and/or updated addresses, then we

can either mail a Notice and Proof of Claim directly to your clients or you can request additional copies of

the Notice and Proof of Claim to be sent to you.

If you have previously requested forms, enclosed please find the number of forms you requested so that

you can mail the Notice and Proof of Claim to your clients.

For those of you who previously responded to us indicating you had no beneficial purchasers/holders in

this matter, we are sending you a Notice and Proof of Claire Form for your files. Unless we hear from you

otherwise, we will continue to show that you had no beneficial purchasers/holders during the Class Period

in the above matter.

Below are important dates regarding the proposed settlement:

Exclusion Deadline - September 26, 2007

Objection Deadline -- September 26, 2007

Settlement Fairness Hearing Date - November 2, 2007

Claims Filing Deadline - December 14, 2007

If you have any questions, please feel free to contact our office.

Thank you.

Sincerely,

Claims Administrator

DVI, Inc. Securities Litigation

FOR: PLAINTIFFS' COUNSEL

Case 2:03-cv-05336-LDD Document 519-6 Filed 10/16/2007 Paae 24 of 35

EXHIBIT C

OF TEXAS )ss:

ND COUNTY OF DALLAS)

v Cox, being duly sworn, depose and say that I am the Advertising Clerk of the

r of THE WALL STREET JOURNAL , a daily national newspaper published

and of general circulation in the City and County ofNew York, New York, City of

Naperville, DuPage County, Illinois, and in the city and County of Dallas, Texas and that

the attached Notice has been regularly published in THE WALL STREET JOURNAL for

national distribution for one insertion(s) on the following date(s): 8/20/07 at the request

of advertiser : DV[, Inc and that the foregoing statements are true and correct to the best

of my knowledge, information, and belief.

MITCHELL 'c, CHEATHAMNotary public, State of Texas

s^. '. My Commission 1=xpiresMaroh 01, 2011

preur«^

Swo to befo e thi

day of 20J

Notary Public

aoad,zMuas JO xaTi zq xaMuaa a xalonk 3n')t' 1Bes ,sue si

r ° saa masax anuli l,uplp aM„'oofSao`. ^ tea;` as^rir iu a o a2aI9ua uz AIiEn1au aae 011M One.

11u-^'::.» ^r^ra,s Ml^>1.AII LO SM"

66 Monday, August 20 2007

U'r,

•

^""^ ® Unveils6

ailsDetStart-Up Says Its Design

tersection. "That bus is just 9he said.

Could Be^pUsedfor Products

Just as cities changed th

grew, Mr. Agarwal in 1996 prE

With 1,000 Microprocessors Withannth

aatt a3esideli

gnn,

signalssi

naal

silsc

-ând simultaneously, betweer

By Doty CLARK Mesh connections were alconnect chips within a large:

Some companies are racing to put a handful of fecting the same trick within

electronic brains on a computer chip. Others, Mr. Agarwal says. Tilera cn

such as Tilera Corp, are laying the groundwork "tiles," microprocessors tbuilt-in router to direct data t

for much more complex creations.The Silicon-Valley start-up, drawing on re- varieties of cache memory, a

search that emerged in 1996 from the Massachu-

setts institute of Technology, today is providingdata repository.

Each tile can run a stand

the first details of its 64-processor chip-and an tem., such as Linux. That at

underlying design that it says could be used.for wal says, helps with anothi

products with more than 1,000 calculating en- tively programming multic

gores.

Tilera's technology isn't targeted at comput-cases, companies can quit

software to run on a single i

a market where chip makers such as Intelers cate the saute program to.i,

Corp. and Advanced Micro Devices Inc. are

now selling products with two microproces-them, he says.

Some specialized calculat

'a piece of silicon, Instead, the start-upsors on.is targeting special video-processing hard-

ware and networking devices. Tilera says it isdo

^'k^seTzenshipping its chips now and has about a

customers.The race to develop such `multicore" chips,

Associated PressSire said its intern;

as they are called, accelerated because tech- turned to normal after

niques for speeding up individual microproces- many users unable to to .

sors are running into limits. But there are-obsta- The company, a divisicompany,ties to effectively use vast numbers of micro- Inc.; sacompanyprocessors. what caused the probieiOne

ofOne of the biggest challenges is commurlica- day.tions between processors. For that chore,

most chip makers now use a data pipe called a estimated 220 Inwide use the Skype servl

bus.'fine for up to eight or so Y1tiC1 OpraCE5That's

ers make long-distanceInternet

sors, says Anent Agarwal, a former MIT re-

searcher who is now Tilera's chief technology of-..

The world-wide ou

ficer. Beyond that, he says, chips face data traffic day. Users from Vietna

jams--like too manyroads converging on the in-

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CkAMEU

VERIFICATION OF PUBLICATION

COMMONWEALTH OF VIRGINIACOUNTY OF FAIRFAX

Being duly sworn, Marcus Edmonds says that he is the principal clerk of USA TODAY,

and is duly authorized by USA TODAY to make this affidavit , and is fully acquainted

with the facts stated herein: August 20, 2007 on the following advertisement To All

Persons Or Entities , Other Than Defendants In WM II !h Yield nd. ET AL V. O'jlfuHanlon ET AL. published in USA TODAY

PrincipalClerk of USA TODAAugust 20, 2007

Subscribed and sworn to before me 0';1 ``1 U J'',r,

This,RA- day a month R pt C-year 'Na"A.RY Q:

_- FEG f 13X532 ':NAY COMMIS.ON T

O. EXPIRES z

Notary P l9^;Glz^7t 'cam

J/1111 fIF1141\\\

My Commission Expires September 30, 2044^:


4B • MONDAY, AUGUST 20, 2007 • USA TODAY

-= z

A

in the U.S. only

TRIS NOTICE ADVISES YOU OF A PROPOSED CLASSWITIT LAMPS PLUS , INC.

THIS NOTICE MAY AFFECT YOUR LLGAPLEASE REAL) IT CAREFULLY

5WMARY NOTICE

The Parties have agreed on a proposed class action settleasoLamps Plus, Inc. ("LPI "). The settlement will resolve a suitSuperior. Court, in which plaintiff claims that the Plaintiff andconsumers were requested anli/or required by LPI toproinformationin connection with a credit cad transaction in violetSection 1747 , 08(a) between November 9, 2002 and July 17, 2(you Were requested and/or required to provide personal Icconnection with a credit card transaction with LPI during themember of the class and entitled to a $15.00 voucher if you tPersonal identification information is information concerninginformation set forth on the card, such as address and telephvoucher is not transferable , not stacl able and can be used to putvoucher will expire one (l) year from the date of issuance,

The full text of. the Notice of Proposed Class Settlement (the "detail the settlement terms, appears at amw.sshbclaw.coo, RIMwu'w bglStlatvta , com or call the toll free number at 1.877-46Notice in both English and Spanish: A copy of the Notice can alsClaims Administrator at Finch V. Lamps Plus, clo Gilardi & Co.CA 949124060.

The Settlement enjoins LPI from further requests of any Pairs":during a credit card transaction, other than a zip code, and fidmcontaining spaces for the entry of any Personal Identificationtransaction , ltowwever , this injunction shall not apply to LIdentification Information in connection with a return of atecchreasonable and proper under Civil Code section 1747.08{c)(4)Card Act of 1971 , as reasonably required for a special ptnpomerchandise , that purpose being loss prevention, baud, and Illsuch information obtained by LPI in connection with a return ofuse such infiatmation for loss prevention, fraud, and theft penjoined from maintaining any such infortsmtion in a manner thataccess to or use of such information except for the purposes stareor distributing the information except for the purposes stated itthe information for a period of time in excess of 12 months afterinformation was initially obtained at the time ofthe return trmnaePending fi nal deterruinatiisn of whether the Court should appSettlement set forth therein , all proceedings in the Action are stayCourt, except as may he necessary to effectuate the settlement dthe. Agreement Pending final determination of whether thesettlement and the Agreement, no person in the Settlement Classact on behalf of sischper'sons may, directly ;on a representative bcommence or prosecute against any of the Released Partiesproceeding in any court, arbitration firne t, or tribunal asserting anIf you want to excite a claim, you can download the claim formwvv^v pilatii.co^laa pgplvs or at t awca.c or can writo request a claim form at Finch Y. Lamps Pluth n1u Gilerdi & Co.CA 94912.8060.

YOU MUST RETURN A SIGNED AND COMPLEOCTOBER 17 , 2007 TO BE ELIGIBLETO RECEIVE ANYSETTLEMENT. IF YOU FAIL TO TIMELY SUBMIT AYOU WILLSTILL BE BOUND BY THE JUDGMENT, BUTIF YOU DO NOT WISH TO DEPART OF THIS CASE, you mso, you must snail a request to "OPT OUT," postmarked no laterrequest must state ; " I wane to opt out of the LPl Class Action,"Plus, dc Gitandi & Co. P.O. Box 11060, San Rafael, CA 9491conducted on whether to finally approve . the Settlement andPlaintiffs award, attorney ' s fees and costs on October 26, 200761 of the San Diego County Superior Court, 330 Weal Broad92101.- You roar object to the Settlement and/or PlaintiWa arequest in advance of that hearing by following the poceedatc sda^NOT TELEPHONE THE COURT OR THE CLERK OF THE CO

SE HABLA ESPANOL POR ,-877-464-7Finch v. Lamps Plus, Ise., San Diego County Superior C

For more in `ormali{

IN THE UNITED STATES DISTRICT OOUR7FOR THE EASTERN DISTRICT OF PENNSYLVANIA

f>a Re EYt, lno. BecwNleat.#BgattnnCasa No.2;03CV•5336[ton. Legrame D. Davis

SUMMARY OFINFORNIAFION IN NOTICE OF PENDENCY 'AND tHrnPEi6E0 PARIIAiS^jTEBNEENTOE,C^.:gss aCT10 fF

TO: ALL PERSONS OR ENTITIES, OTHER THAN DEFENDANTS IN THE

- LITIGATION AND PLAINTIFFS NAMED IN WM Hi VIEW FUND, ETALy,yMANLON E7 AL , Nib 04.CV3423 (E.D. PA .), WHO PURCHASED OR

. OTHERWISE AOtIUIRED THE SECURITIES OF DVI, Inc. (DVI'e OOMMONSTOCK AND 9 7/8%SENIOR NOTES) BEM'EEN AUGUST 10, 1999 ANDAUBU,T13,2D03, BOTH DATES INCLUSIVE (THE "CLASS") -

IF YOU ARE A MEMBER OF THE CLASS YOU MAY BE ENTITLED TOSHARE IN A PARTIALSErrIEMENT.

YOU ARE HEREBY NOTIFIED that the Lead Plaintiffs In the abovecaptioned actiior, have entered into a Partial Settlement with three of thenamed Defendants fnthesiltigstlon, Nathan Shapiro, William GoldhetgandSohn McHugh the 'Settling Defendants"). The Partial Settlement termsinc€ude releases or the Ctans' claims asserted against the Settling Doran-dents, but not other sietendents, brought pursuant to Snclions 10th) and20(a) otthe 3ecurftiesExchange Act of 1934 and Rule 10b-5 promulgatedthereunder hythe Securitiesi nd EnohangeCommission.

Lead Plalatiffs have settled their ciafmsagainstttfeSettling Delendants,- who areformer outside directors of DVI, for east payment of Three MillionIwo Hundred fifty Thousand dollars ($3,250,0001, which is being fundedfrom the Settling Defendants' personal assets, The final amount disluib-

uted to Class Members will dependupon the amount of Interest earned onthose funds and the Amount of Court-approved attorneys' fees , costs end

Notice Find Administration Ccsts.The testes to this ftigatlon do not agree on the amount of damages

nor Common Share and per Senior Nets ttat would be raoeverale if theClass were to prevail on each claim atieged. The parties alahde not agree

as to wbetherthe Class sutleted dameges.tle amount thereof and how tomeasure damages'

Tfie Lead Plaintiffs are proposing the partial Saulereent because, uponecssideration of, among otherthings, the record, the potential damages,the strength of the Class' claims amithe mike and cost of continued litiga-Uan, the Partial Settlement provides substantial recovery to the Class, is

fair, reasonable. and adequate, and is prefierable to continued litigation.The Selling Defendants terry any liability or wrongdoing, but desire toresolve the claims asserted under the terms setforth herein and, in more

. detail, In the Partial SettletnentAgreemeniA hearing will Jae held before the honorable Legeume D. Davis In the

United States District Court for the Eastern bisbict of PemtsyNasts onNoeember2, 2007 at 9:00 a.irt, to determine whether the proposed Par.tial Settlement is fair, reasonable and adequate to the Class and ehauktbe apprwrsd; whether the proposed Plan of Atoeation in W. reasonableand adequate to the Class end should he eppinved: whether a proposedFinal Judgment should be entered: to detemune the amount of fees andexpenses that should be awarded to Plaintiffs' Lead Counsel; and to ruleIlion such other nutters as the Court maydeem appropriate.

IFYOIJARE A MEMBEROFTHE CLASS DESCRtBEDAeovg, YOUR RIGHTSWILL BE AFFECIEDANG YOU MAY BE ENTtTLEO TO SI4ARE IN THE PARTIALS6i7Tl.EMENT FUNDS . If you have not yet received a Proof of Claim formandthefullpriatedldotlceof(IIProposed PurtlalSettlementofClass lotion.(i:i 3learingon Proposed Partial Settlement and Petition forAttorneyu' Feesand Costa, and tlli)night to share In SettiementFunds, you mayobtain cop-ies ottheseencuments bycontectingthg Claims Administhalorat

DVI. Inc. Securities Litigation • c/o Strategic Claims ServicesClainrsAdmtrlstrator • WON. Jackson Street; Safte 3, Media, FA i9063

. r, yrtratnljrfan • (610) 565.9202Inquiries, other then requests for the Notice and Proof o€Clsim fors, -

magbemadataPleintitis'Lead Counsel:ClintonAKrialov • Michaelfi. Kamuth • Kristen &Associates. Ltd.20 N. Wacker Orion, Suite 1356, Chicago, It80606, (312) 606{1500

tfyou are a Cress member and do rrot suhmlta proper Proof of Ctalm,youwill not share in the Partial Settlement Once you submit a proper Proof ofClaim, unless too exclude youreee from the Class on or before September26, 2007,you will be bound y! the Order and Final Judgment ofthc Court.

If you alreadysubmitffid a valid and timely Proof of Claim form in.the par-tial Settlement between Lead Plaintiffs and Defendants OrCure MedicalCoop., Dolphin Medical Inc. and Presgar Imaging LC, approved bgttre Courton November ti, 7006 (herelnater referred to45the'#ovember17,2006Partial Settlement'), that Proof of Claim form wit serve as your Proof ofClaim inthispartialSettlement andysuareeli (JbletorecoverInthisPartialSettlement without needirlgtc submitanother Prop: of Claim intro.

If yso did Wt Submit a proof d Claim is the November 17, 2006 PartialSettlement, sahmttdng a Proof of Claim in this Partial Settlement does not

entitle ypu to recovery In the November 17, 2006 Partial Settlement. Topartiolpate in this Partial Settlement, you must submit a valid and timelyProof o€ Clam form to theClaims ndministratorbyno later than December14, 2007.

Anyohlectlonto any of the matters to be censldered atthe Partial Settlerent Hearing most be filed with the court no later than September 26,2007, with copies sent to ti) Anorneysfor Lead Pfairtfs: Clinton A, lfdaiov,Michael R . Karmrth, KRiSWV& ASSOCIATES, Ltd., CivicOpera Building, 20N. Wacker Dr., Su#te 1350, Chicago, IL 60606;1ill Attorneys for the SettlingDefendants MSRGAN, LENS & BCCIUUS LLP, IM111 in P. Quinn, Jr., 1701Market Sttee€, Philadelphia, PA 19103; and (il€) The Claims Administrator:STRATCOICCLAIMS SERVICES, 600 N. Jechsan Street, Suite J. Media, PA19063- - -

Further information may be obtained by directktgyour Inquiry in writingtame Claims Aaministrator atthe addressabovs.

PLEASE 00 NOT CALL THE COURT OR THE OFFICE OF THE CLERK OFTHE COURT FOR INFORMATION OR ADVICE. If you hove questions aboutthis nollm. you may consult an attorney of pour own ehoaslng or any ofPtalntiffs' Lead Counsel, vrhose names and other contact Intormatlon arelisted above. - -

DATED: JULY 16,20007 ' SYORDER OFTHECOURT


CERTIFICATE OF PUBLICATION

Chicago Tribune Company hereby certifies that it is the

publisher of the Chicago Tribune; that the Chicago Tribune

is an English language newspaper of general circulation,

published daily in the City of Chicago, County of Cook

and State of Illinois; that the Chicago Tribune has been

so published continuously for more than one year prior to

the date of first publication mentioned below and is furth

a newspaper as defined in Ill . Rev. Stat. ch . 100, 55 5 &

that the undersigned is the duly authorized agent of the

Chicago Tribune Company to execute this certificate on its

behalf ; and that a notice of which the annexed is a true

copy was printed and published in said newspaper

time ( s) and on the following dates:

71 Q ^ 0) -7the first publication being on the earliest of said dates

the last publication being on the latest of said dates.

Executed at Chicago , Illinois this

^_.Day of , 20

CHICAGO TRIBUNE COMPANY

B

Q"LQ-&

Chicago Tribune •435 North Michigan Avenue • Chicago, Illinois 60611

(312) 222-3232

Case 2-03-cv-05336-LDD Document 519-6 Filed 10/16/2007 Page 29 of 35prumarmaumr canceming manecurament CHon COSltatt

Ms Makissa Lidtiat '(S12} 55v -

..ose at '. b"' sustnesd on : ep[emher 2s 2op7, otherwlso tne=

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please Contact Chris Cobden

NoneF O REVIEW ANDOPPORTUNITY FOR

five September 26, 2007 anddisposed of aecarding to law.

to furnish certlf €ed copies ofany and all Insurance policies

uaetl in relation to this con-

Senior Procurement Adminisleator , at 3121681-2456.Any contract resulting irom

PUBLIC HEARI NG ANDWRITTEN COMMENT : ANIn Patten

,atract prior to CTA5 exacutian , this advert i sement will be ., ,..

In accoidsnc0 with the rettidre -Specia l Agent In ChargeIRS Cominai frost!^non

Contractor will be required tocomply With. oil applicable

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awarded to the lowest tesponrive and responsible bidder .

^f,Worth a

`:. ^!mants of the tl(innis Health Fa- Chicago Field pffice etrt OpportunityCoped Engl#oyrtlaws and regulations and af-

Tie contractorwili be rogldredto furnish certified copies of

[t1 00wordscilieas f rece n g Act, Nance rs

gSven of receipt of an pile sa€nt Xavier University is firmative act€ on requirementsl l

any and all insurance Policies"

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fdr permit far a pro o ments from thepea king comof Federa Trans3tAdmin s-tration and Ik'I€nais Human

re ulred €n rotation to this con-qtract prior to CTA'e execution Include a hotoP, N rthprojpmjectfProjoct4fD7 2, North -

IllmolS Medical Center,tthepuh H about unlvershy inC

pre poration for its p eriodic Ri COMM SSon ..,û'ddars will be required to

.Chicaga Transit Authority note -by notifies alt bidders that It

il ^()^ralj,l424201 Medtcal Center Orive ,

Illinois 60050 ) fromMcHherY,Northern Illinois Medical Cen•

evaluation #ts ragr°nal ac-c

byredidng agency. The

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certify that they are no# on theComptroller General's list of in,

wi ll affirmatively ensure that inregard to any contrast entered call 312222.2222

ter, 45201 Megicai CenterDrIVw, MLHart ry^ Illinois 6111150

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tenslve evaiuailon molt No-vemher 5.7, 2007, try a teamrepresentin The Higher

eligible contractors . Any con-

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crystalMllen nluasg

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ness Enterprise will be affordedL600012, The applf-ofsLake,

orthNNorth Caentrratal Association of on5161e hiddar. ChIcagU Trap -

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submitinvitationpro

ce ntsbe propose to discont inue aca se vice,

Colleges a Scho ols .ity hSaintdiXavie rdi it

bitlders tfiat it w II efllr not veryensure that it regard to an Y

and wilt not be discriminatedo on the grounds o

[tTc cata 6bada 6 bad pediatric coteScry of0

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550,113 Commission 's nterfa for Ac- I N THE UNITED STATES DISTRICT COURT

The a plication was declare dSTRICT OF PENNSYLVANIA ?. .FOR THE EASTERN DI

pcomplete on August 177,, 2007and a copy of the appl i cation

The pub l ic may send coin-meats regarding Saint Xavier

Case No, 2:03 CV5335In Re DVI Inc- Securities litigation Han. Legrome, D. Davismay be viewed at the libootsNealtfi faCl (t1f85 P18nnlflg Rnard

university to the HigherLeanling Commission at the

SUMMARY OF INFORMATION IN NOTICE OF PENDENCYANR O 3ED pkgTtqt_ $ EME 17 CIA94 NMON- eD€ilce, atltlress below . To ob

tafn a copy of an applicationaddress below. - -

TO: ALL PERSONS OR ENTITIES, OTHER THAN DEFENDANTS INTHE LMGJ(TION AND .:• '

shone the office far detal5 and Public Comment on Saint T A V O HAML AL MO . 04 CVVPLAtNTEFFB NAMED IN t FLEND E

ropyklgfees a [ theeamhe€; list- Xavier University 342:3 M.D. PA.), WHO PURCHASED OR OTHERWISE- ACQUIRED THE 5ECURmES OF.Id below . Consideration by the The Higher Laammg t^fl, Inc. (DV€'s COMMON STOCK AND 9 718% SENIOR NOTES) BETWEEN AUGUST 10,

"irate Board has been tentative - Commission 1999 AND AUGUST I3 , 2003, BOTH DATES INCLUSIVE (THE "CLASS ) - - ( .yscheduled for theianua ry 1S- 30N. La5a0eStreet Suite IFYOUAREAMEM13EROFTHECLASSYOU MAYBEENTITiLEDTOSHAREINAPART1Af_,16, 2M State 111 MeeNn 2400 Chicago- it 6x602 SETTLEMEf,(^my persoa wanting a putncctearing on the apnsed pro-

- - -Comments may also be re- YOU ARE HEREBY NOTIFIED t rat the Lead Plaintiffs in the above ca^honed action ha 'a'it

eft must submit a written re)nest for Such hearing to :

carved through The NigherLearning Commiss i on web .

entered into a Partial Settlement with three of the neared Defendants In this Litigation, Neither)Shapiro , W€14am GoldbergandJohn McHugh (the 'Settling Defendanta°t, The Partial Settlement

site at www. ncah €c.org. terms Include releases the Class clams assened against the Settl ing Defw € dants, hvt noDonald lanes , supervisor, other defendants , brought pursuant to Sacdons't0 (b) and 20{a) of the Securities Exffitange AcPrefect Review Section Comments most address of 1934 and Rule I Ob- 5promulgatedihereunder by the Securities and Exchange Commission,, _Illinois Health Facilities substantive matters related Lead Plaintiffs have eettfetl their claims against the Settling Defendants, who are tormef - -

P#anni nR [toard to the quality of the institu - outside directors of DVi, for cash payment of Three Mih€on Two Hundred Fifty Thousand dollars575 West Jefferson Strot: t tion or Its academic pro- ($3 , 250,000), which is being lunded from the Settling Defendants ' personal assets - The final

(2nd Fit" grams . Comments must be it amount distributed to Class Membe€a will depend upon the amount of inherent eamedon theseSpdngffeld, lifinois 62761 writing sad signed. Coin= funds and the amount of Court-approved attorneys fees; costs andexpsnses , and Notice and

(217) 782.3516 - merits cagnot be treated as Administration Costs . ,-- - - - - - -(nY x 800-547.0466 for confident al. The par€ies to thin litigation do not aggrree on the amount of damages perCommiopShare andh pa only) - -- - per SoisorNotethatwouldberecovera eiftheClasswere topromotion each dalmagoged.Th4All comments must be re - parties also do not agree as to whether the Class suffered damages ; Iho amount thereof andwquestsforhearingmustbe ceived October 1S207, howtomeasuredamages.lion S d 6ytheAgettcy no later The Lead Plaintiffs are proposing the Partial Settlemen t because, upon consideration oflion September 1 2007 . Arty

among other things , the record , the potential damages , the streng th of the Class' clelms andursorl wanting to submit wilt- TOANSWER A CHICAGO' the risks and cost of cominted lit# anon, the Parhel Settlement rvides substantia l recovery toprovidesEn comments this proêetTRleutle CONFIDEN TIAL 60x gtEUSt submit those comments the Cress , is fair, reasonable and adequa te, and is preforatke to continued aertedu Settl ing

`NUMEERAC) Dofendaetsden an liatlili orwrongdorarstloln butdawnsdesms

toto

rrsolsolveihedatmsassssertednder

thqthy December 26, 2 m7. Y y h g n 6

Address ourr enve - Atorcnseatforthiend,more,rePartial DaAts

(n1heAgreemeUnitent.'-

NOT€CE 4r- roarEITURE Y ^Y hearing w3t bee €n

b held CeforetheeHonHnnarabfe Legra

meD.D. David States Dlstricj

lope to PA BOX aa f1e3, Court for the Easter District of Pennsylvania on November 2, 2007 at-9 : Ob a.m . to determineOn July 20,' 29M , the United M, followed by Chi, whether the proposed Partial Settlementis fah, reasonable and adequate to the class andores District Court for the cBornlut 8O. NO Other ahoutd be approved ; who her the proposed Plain of Anocallon is fair. reasonable and adequatei -Soc em District of lkl ols, in a intarrgation is needed ., . , to the Class and should b approved, whether a proposed Final Judgment should be entered; toass entitled United States v. sample:.

determine the amounto3 fees and expenses that should be awarded to Plaintiffs ' Lead Counsel;

13,orord ered

foan- Na. to

the P . O- Box go 6S and torule o unsuch othermattersastheCourt ma deemappropriate 't0IF YOU ARE A MEMBER OF THE CLASS DESCRIBEBVE, YbUR RIGHTS WILLcitedd states fffollowing

CtiMc

npursuan tthe agn,

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BE AFFECTED AND YOU MAY BE ENTITLED TO SHARE IN THE PARTIIAL SETTLEMENTactionpt92dXia

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UU.S.5.S.C.C. SPECIAL SERVICE : FUNDS . 9 you hates not ye t received a Proof of Claim form and the full printed Notice of ; 1 pro,.

action61(c):)

2g6q(c}; ., ,• - if you wish your reply not eased Partia l Settlement of Class Action, (a) Hearing on Proposed Partial Settlemen t en Patinforwarded tea particular Non torAttorneys Fees and Costs , and (iii) Rig ht to Share In Settlement Funds, you may obtain

Aone€ntratec9- millimeter em addressynur Copies nfthese documents bycontacting theClaimsAdministratorat .. > -Ser, Model A6 .10 handgun , • repyaetelopeasabove - .' DVI, Inc.Secrid tlesUJlinal km-.doStretegioClahmsServices ' .

i[h an obliterated sedan num- but attach a note that ClaimsAtlmialstratbr• 60010 . Jackson Street, Suhe 3 Media; PA 19683 , F - -sr: says roc Not Forward to - - Y S j rioclaims.rre) (fit6) 585-9202 r . -nY Company placeThe At

'the note in

thea Inquir€es, other then requests forttre Notice and Proof of Cfalmforms, may bemede to

arees

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- cond topasseof tle proparty In accord - addressed to' - Clinton A Knsrov • Michael R. Karnuth KrisloVS,Annoeiales , Lidice with 21 U . 5^C. 853 (15)113 . Chl cagoTdbune -' 20 N. Wacker Drive, Suite 150, Chicago, IL0050E , (512) me-MOry persons or enlitlno alleging P.O. Box 803083 It you are a Class member and do notsubmh a proper Proof of Clahn , you will notshare lnî interest In such property - - Chicago, it. 60680 ' Partial-Settlement . Once you sutunit a proper Proof of Claim, unless yarr exclude yourself troopust fife a petition with the - - - the Class on or before September 26, 2007,- you will be bosdd by the Orderand Final Judgmeniwrt and the United StatasAt- Infurination nfi ull ccntdelitlal of the Court. ... - - . .: - -'..- - - ,Irony's Office , 219 South aureherais kept ins [ rh.teonfl - It.you already submitted a valid and timely Proof of Claim form in the Partial Settlom er£^=arbor Slraet, Chicago, Rif- Mean Lead Plaintiffs and Defendanls OnCure Medical Corp Dolphin -Medical Inc. anq -

Pies ax Imaging LO, approved by the Court on November 17, 21)06 (herairiatfer . retatted to as .-tha"November 17, 21306 Partial settlement"); Ihaf Proofaf Glalm form wlu.serv8 Trsyourt'mnf o4Claim In this Partial Settlement and yau are eligible is recover In thin Pathal 5eillementhethatrkneeding tosubmi[ analher Proof sl !aim form . - . - `- - -: - '- r

RotIf you did notsuhmit .e Proof ofClalm (tithe November 17 , 2006Par1tal5ettlement ashmi

,hlng

a Proof of Clalmin this Partial Settlement does not entitle you. to recoveryin the November 77,2066 Partial 5etUemen€, To part] rile in this Partial Settlement , you must sut3mit a valid and .timely Proof ofClalmform totheC' faimsAdministrator bynolater then December 14,2007Any objection to any of the matters to be considered of the Fartls! Settlement, Hearing musk; : .

be filed with the Court no later than September 26, 2007, wish copies sent to ( i),Atiorneys forLead Plaintiffs : ClintonfA. Kd51n4, Michael R. KarriUth , KRISLOV & ASSOCIATES, Ltd,, CltRfi.

' - - - Opera -Building SON. Wacker Dr., Suite 1350 , Chicago, IL 60605; (it) Attorneys forthe Settling.'Defendants : MORGAN, LEWIS & BO,CKIUS LLR William P. Quinn, Jr., 1701.Market Street

LEGAL' -- Phi[ade €phla; PA 19103 ; and (ht) The Ckaims Admrnis €ratoi STAATE5IC CLAIMS SERVICES,

SOON. Jackson Street , Suite 3, Media , PA 19063. - -SERVICES . ' - Furtherintormat # on may be obtained by directing your ingwry In wridngto the Ofaims Adrrt ;

.. _ - .^ ispansia ?RawACahons?OUl? - is€ratoratrhoaddress above .

ecnsta rY of 5tato allot s gs 7PLEASE DO NOT CALL THE COURT OR THE OFFICEOF THE CLERK OF THE COURT

3x YOUR DRIVER'S UCENS _ - £ FOR INFORMAT€ON OR ADVI1 . It you have questions shout this cMrc^ you may coif

Drivers ticanse Doctor - ; i an atterney ot,your own ehoosi arany

of Plaintiffs Lead .Counsel whose names and ottij,,r

2-663.5555 877-069-2065 conWetlntaniatronora listed ail e. :- - - - -DATF{7 ; JULY 06, 2007 BV OROEH OFTHE COURT .

LOO 'oz isnOWAVO1OVU • 9 N01-03S • 3 V1d .L351l1VW H.ZION 09V)IH3 3Nngwl09W) HD

Case 2-03-cv-05336-LD D Document 519-6 Filed 10/16/2007

Proof of Publication in The Philadelphia Inquirer

Under Act. No 160, P.L. 877, July 9,1976

STATE OFPENNSYLVANL4COUNTY OFPHILALELPH7A

Anna Dickerson being duly sworn, deposes and says

that The Philadelphia Inquirer is a daily newspaper published

at Broad and Callowhill Streets, Philadelphia County,

Pennsylvania, which was established in the year 1829, since

which date said daily newspaper has been regularly published

and distributed in said County, and that a copy of the printed

notice of publication is attached hereto exactly as the same

was printed and published in the regular editions and issues of

said daily newspaper on the following dates:

August 20, 2007

Affiant further deposes and says that he is an employee

ofthe publisher of said newspaper and has been authorized

to verify the foregoing statement and that he is not interestedin the subject matter ofthe aforesaid notice of publication, and

that all allegations in the foregoing statement as to time, place

and character of publication are true.

Sworn to and subscribed before me this 20`h day of

August, 2007

Nota ublic

My Commission Expires: NOTA LAL SEALMiry An;n Logan, Notary PubfhcCity of Philadelphia, Phila. CountyMy Commission Expires March 30, 2009

Page 30 of 35

Copy of Notice of Publication


ELP INQUIRER Mo aB August 20, 2007.

Sheriff Sates : Sheriff Sates Legal AoBces Segal ôfiês legal)lo ices889.,.: 71B -': [NTHEUNtTE(} MTESD€ORIOTC'OURT54th s449tlrin9rlen 8k 10134 2762 Graham $L.. 18131 52nd wpR'I'!i. F.q.TERN DISTfi1CT OF PE riS YLVANIAPT# 65th Wd T674 eq, M BRT# Wd 1,$ 11.52 eq. l1. OR., 52-

rntat 4stat03danta t

2-282288 : tmpeavamehtx in Re pYi Mc. SecurEtlB@1,It1y8tion Hd 2:03-CV•s338Rattdenttm pe»r

Wcta• MICHAEL W, PARKINSON , R. IHERMA L DOR ETT AND SUMMARYOFINFOFINFORMATION €NNDflCEOFPENPENCI!3 A/tUA MMCHAE L WtUJAM MICHAEL L. BROWN CA No-

AH

S

UMMA T}AL SEITLEMEN ,'[; 0* Ci.ASS AC7tnN .I A . PARKINSON GP PeLtuarp vember Yeah, 2008 He.Ter 2007 No.. 0831 do2s72 . Ss4 iad B9 auk FD ALL PERSONS ORENT[T9E9 OTHER THAN DEFENDANTS INTHE G7[GATION ANDSi22,e76.2& Pltoisn R^Nnaa + J. tldrcnr Seq. _ L ...: PLAINTIFFS NAMED IN ' A^ Ht6H YIELD FUNp-ETAt V. QUALyO -A[ N0.04•CV.

RALPH

tiwat9 , Hon li."In 6 Davis

8861 A 9drm€rgkLLP. , in ygT.B {E,p. PA-1, WHO t RCHA5EB OA?OTHEMWISE ACQUEREt3 ME SECURITIES CFBT# 82d 8809 Boyalrit 81. Islas . Both OVi, tna (Mrs COMMON STOCK AND 9 718% SENIOR NOTES). BETWEEN AUGUST 10,..::.

13i22S- ante N. 84ttt 9t. : 74th Will Wd. 1,4 8 . 14. sq . 1t. BAT# 1999 AN AUGUST 13 , 2003, BOTH DATES INCLUSIVE (fl "CLASS-1A18 sq. ft. IBM 3442$7100 901219700 . hnprevemeat4 : rFYU IAREA MEMBER OFTHE CLASSVOU MAYBE ENTITLt_DTQSHARE IN A PART€AL ;C.P. Subject to Mortgage an Residential LEA ng

Id9:: preverri ResidenUat DMIS B. ELEAZ1R, LAST OF, SETTLEMENT—'I A ptrbit4[g t^7RD OSNHFN- ap. Jecoary YOU ARE HERESYNOTIFJEU that th6 [,yid Plant) s in the a^ve captipned.aCtion have

.. &Na[,A f6i .' ADMM- Term 2007 N. OOO07erentered Intoa Partial SetdBmerd with threebf the named Oefertdants in this Lftlgahcn Nathan- '^- TRA1RI1t OF THE ESTATE OF $584330Y --' Mark J. Udrrn. Shapira; WilliamGddberg andJohn Md-iugh(tBe ."dmgI]eflw€danwt.TheParaalseitiemantLEON Itl 16AACS GP Jana- E64 terms include reteases Yli the Casa'Cfaims asserted ainStIh6 Settl9ig ^2[erant8; but netOrdSi; Teem , 2005 Na. 3221 711 -- .. oth0rde[endartfa, bro T .. $ 1,ttxea , OMgery 4$i hidIowSL teiB4 27rn f lduanlloSecionsit){b}and20(a)otthnSecutNesi zchangeAct

kitif 10b-5 promulgated thereunder by the S It Iles and Exchange Cc4n nlssion .Aes• aBUdnSsn, . 4319 Lu 4 aq. tt B7t - 27-a of 1 and Rule

Bill : ooeae p [ rOveme,ua: Real L inltlfs have settled their i ms.dgafnat lie Setting Defendants, who 010eformer2408 1Rr Ntchatas 6L 1 1 2 dentleilAr ing outside lorsofDVl, fmcash aym

en[afe SeaMlllonTnddntsrrol tar dollars

^, 29th Wd 1e9.Te.aq. ft: 13RTN 6 uarv A %iRDo C.P.e1$3,254,OVO)130Q), Which is hemg funded from pie Belding Defendants' personal

asseis.lhe. final

za1263e00 enpravementa ; Jarirar77 form, 2807 NO. amountsits]rftwtedtoC[assMemkiarswdldepend. upon theamount ofInterest earood"o&i thow^.:.. ReaWenaidWoyerty , Wau74 41 Marx funds and are amount.of Court approved at(oinays' fees, oasts and expenses, and 0350e mat

t E.60ATWiaGNT P. E"„ - -: AdmirdStialunCosts. .-: ..:' -. -. ..- .1133 Domebar Terry Zees No. 722 'niepartiestothlsfikgahodunotngreeontheameuntofdeiiiagesperCon-mo^ tar,nnd 'fiTii agn-.:528,86818 - kaUfen T894 Wygdate AveL 1916f p0r Sf4€ior NtrM tha;wnuld tyO ieGOVarabl9Hlha Claffi WeretO prdvaB l7rlaaCh rJalnlaI ed.ThO.1. R T.tiey Eag 34th Wd - on SE etch of parties also do not agree as to wh[uhar the Class suffered damages, fir, Moto t thereof and

092 -: -.. WYad.ie Ave;. Std tt . $W Of howtomeasuiedama es .A27 N. =6 aL 18141 42nd 78th Sk Prh .: 24 ft tfeptk Tho. Lead Plain fte are ro oes,.. tl,e P271ial Settlement bet use,' on Consiaer hell of,

t i3RNi^8^105 ^knprovimonh AkPN tul€itttAY C.P._duits O miilga.

Me

turd t potential dam^@3, the strength of this C#a55 claims and

Dete,Bt3d'COSEptmnt#IUBd_ktt8a1301i , 1ha.Parliai Sefila ant provides substantial recoigsry to

ong

et'

..;, 'ReatdMoat arty :: Term 2€#.... Ne. 777 ih1tsk6PATRICA E:: tr6H ;AlSB7,338 of !#et[:eraAssn- the CfS58.is fair, rea70nableandAdequa [B,. attd f6[l12Feratllat ()CpldfilU0d 119^81I0n TPi@ Settllitg

IrA PA11tia&E . tiwpxt1 GP.:. ePF P.rori,Maltese . rtttatrto

it

erryenyllalNlityoTVirangdotng :#utdesireto resolvethedaimsasserted urerthe - j.9Tq April Term, 2007 No . 265 - . . - ietmB aBff[s rth tiarein And, In rripra detail, 9[ th@ Periiel Sal tnment A^reem ®IU. - _Met: $4Ta to Seem Ida ..' zda A hearing Will

be

"'

t dlore the Honorable'Leg[oma i).'Oaavrs !n the United e JtMdFJaentaxgLLP 5820 Rlbeil St 18138 4th Court far the Eastern Distde[

of

Penhsytvania.-on NBVerteber 2; 2007 at 9:bba.m k; d.term€ncK/A .. - sBg , Wd 1,725 .. sq. ft, ANT wi3ether the prapu58ii Partial 5et€lament is f81t 'reasorht@ shd adequote to the Class endC.P i4s"pterlua at 21st We 40 unp^rovenveIa : shotdd b@ aPPrbvad; Whetirer.lhe proposed Pl@n ol.Allncelion i:ea5pl^4fe and ad aleNw 2,281 .42 sq. ft. BRT# Beddvndal -. .1a Ross ahd Shauldlie appfOved^whethera piopo98d Frsa$Judgmantshould bs entered-tolarlt Resid 7700 .. Impreyamenft JAPAN TAYEAA^ CA. Febru -. determine the ampuntat

fe

es and elfpenseBihet 3houId .be awarded to Pieinhff9'Lead Counsel,JON: Gnaat Dwelt^[p Ally Term 20D7 No Od0288 :, ^.torule nON ONZALAZ Alit%A JON C. Lam" R. Poll eunh otitirma a34l10 Court mavdoam89reit4 .04 @ppro VE,GONZALEZ C.P, iNarnh Tabse , Eag, " IF YOU ARE

AA MEMBER OFTHE CLASS

bESCRIESCR18Et7R$OVE 7'pUA Ptpt-ITS YVfLLi3i

Term, 2007 Nn. 3®40.. 724 BE AFFECTED AND YOUl MAY BE ENTITLEO TO 9# RE IN THE PARTIAL SETTLEMENT4 SBA a0a.87 <trspary 7e02N Tread St tet28 10th FUNDS . If you h2v6 no[yef received a Proof of-Clot form arid the full {irimed.NobD3 of ( Pro-Jerardf: i+Esq Wd 2, 055 eq . I Ii to-f Po5ad partial Settlement of Class Action , (fl) Headrr^ on Proposed Partial SettiamenlnimP2h-rsn 699 0071 -atr IaFQnamem^ Reid- lion 1orAtion,eya'Fees and Costs, and (!17 Aightto Share in SetNement Fun ts.`6 1J m ay otietnSee SBdat3eneaeeP€.' 10154 66th nnelProperty cupigsattheaPdoc[at rdsbyc^[taagnyjihoGlatmBAc4nkiisirarorat;tea, era 1;ao0 bit, ft. Bars QI YE JA=M ; AND W&. D%A:Ih SectirEtieaU ngationidostrlte gicClaims 8ennces663447808 improvemww U JAS CP tuns (dal- Adn; nistrafor^BOU N-Jacitgon Sttnat,5uite$, Media, °A 19069w-- tea€deNW Prapar tt:.. -.: Tara, 2004 - € te. RdFT

JESSICA KNAtriJB GP-Alr9 ti23,i$ 9.8T Leann a; "- W 1[Sf@gi alms. net • [Bff3^5ti5 $202 - -:!121 Tenr[; ...:= 2007 Ne. 0723 T e, !sq ... IItquinyg.a1t10rthan requests ftNtT1@NOSiCB 7iId Pr00101 Claim iorr",, mati'liF ntaJe to Flevi-It. $140408 38 Phalan deigns" •._ 72s ttlf LeadCmrneel ..- .: :, _.

5^ ^ L-P - 112$Etl .g St'--10111 Bard CirrtonAtCrPslov MichaelR€csmWli [isfov&ASSOCIatc Lid. -wa , Rrk 2B M S ten beptN : ,_. 20I Wadaarprive, sulie13fi0,Chicago, 1L89Bg6(31°tê [„f`pN outs BItdm Pt. 1$142 40th .?39 fl. tlA I- tS61Yr 88- li area Class IneritfiBr anddo 00tnubmftah Wd 1,0246 11 it. 052348- .129"00 Yrrprevpmeata: Raai. pPtedF0l y ;mu wi!I nrl.,tle[e ktflie

tied29eo Improycm t, dent€at Proerm Thu ISsttterentOnceyou submit a proper Proof otCtCfm: Unlesesvy rd raid qyoureM+rum

RealdenteelDwe €Bng. 4AtY €E6 - G1 YAND the on all tYet6r@Sirpleber

mher2625.2ptrY, yOL will bebound 174 the Qidea-A Fin.^3udp'rwiR

CtW16TOPINAIi2TlkLOOKSANNA GtkRGY C.5 Si Ofthe Court1911i C.P.: Ayr[t Teeny 2007 xe. teary T.^r 9007,11003767It you - already subntptetl a valid grid t[h3ely Proof of CIdim iprm in the Partial Sethemerl1-1- 00275i: St2aat3,$4 Mart $i47,ete . eb Rret [erd N. betoken [.mod p€aln18f6 and E1eiâmlaiNa OrrCure Medleai Ci#p_, bdphin Modicr . Inc andSquire & ABweletes L .i,CT.^.- Tresg tnleghl^ €.tr. app-treed by the Coltrt on bar 17,2W6 ( hereinafter referred .a as

897 -- .738 :- - fFfe'id0yemb*r 17 2006' Partlal Saloeitlant °},1trat Proof of Claim form YAII s ve us yaurPrcat of2§}i$. Parct^St 18148 39th X41 B Maistiw St 19199 Claim inihls' PertIaI S8lKeiftBnfavd ycv .af0 eligihle tofect,er,ct Ihfs Parlle15e1HemeM rvtttu,Will 1,eaa,rd

'it SIM 3a 1901 Wd 2,117 aq a BFrr#S7 3.487100 InjIM 1-

naedlagtbsubrn€taiiotltBrProof . ofClaimfntln ; o-.-: ,.: J.....191066798 :^w

wamentxlfing:::.. e.. PeetdUlai P^ - ltyotiikdri0tsu tat'rbo46[Cia€mEni oafinoren7.209t3Par uleinertt. BUtiniht#rrg'•.. ..' ANN1HO11YY Di ACA Alto ' N E. FrA86E^'.-"N

O,CIP, march,- aProofol Gatm arti Par#a(Setllemant does fire yaf toteIvoryso In the Ntrvermt rl7,

LAURIE. MEBppACA Teen, 2Fd17 1145 ' Paoodof MBmerN:9b parGrtp3[0 tit thhYPa3U81^5rtKemm'it^ you must submit avafsf »nd

god Ma rch .Term 2007. N0. S4alL6B Krlei M:- ?im_ ety PrndfblCl&Iril klfril le tFr@ -Cla{m5Ad7rFlsllBtrB [W'by nnlatinhan December 14 2607 :87 002400 574d2d4.Ta 0 '. Airy t Nqn to any of the mailers is be corrsidetdd at

it* Partial StatementHsaung10001

ei MorkJ'U ell L. !iF777777 be Filed 1h tills Go@ l no later than September2g, 2067, 11 copse s@nt to (r) ATtarneys toyfL 490 1902 6 24th St. 10148 3881 Lead PlaintBfe Clinton A', Kridov; Michael A. Kdmuth KRSLOV & ASSOCiAT S, Ltdd„ Civic

2080 5. 6th St. . 10145 88th Wd 000 aq It... BETA $e-4-- Gpera HUading, 2U N: Wadctsr Or.-, Suttee 1350, tTnicaga 1L 60806- (fi}Attorneys for the Sootingô Wd1082, 78.a^^-ft. 5RT#$8. 8A0 SvbledtoMud880e ..:pyieitdant&: MORCANI.EWIS H-8[ US LLP 1Ah7Aam-P. Quinn. Jr,,.1'7t11:'Marlmi':Streei^0$- 2 260600 ' : lr [revemersm event Rerdde eBel PFtrladefphi ,PA 19103; @nd {f8j The.Clavns Adrnhrldretor STRATEGIC CLAfMS SERVICES,kA Reaidee8at 0wetfleg . Pr00e tY 600 N.,ladvnon [YfeCl $pYe 9 MEd€a, PA 19063 ..t.P RNAO T. NOUYBI AND 1'RIR1G811JAN 7). t3ttEF Jai. CR.E- - ttOUYEN [taoR7GAGOR) Cx Tnf»r Temr: . soee Ne; ft'rshe^tntarrrlatloi€ map.b®obtaldcW AytliraOtdlg your inquiry ri w,wng rotheClaims Adman-.

Plhrnery -' Teter, '2007.- Ntr, 402000 9N,050:P7 61cm . StraL atltrg adNOT CtroVB.,. 0@2622 „- 814 ,Td8. 30 end Beerthgrg tIF PLEAS€-DO NOT CAt;(,THE COlJHT pR'I'HI: QFFICL OF THE CLERK 0M.E.COURT

.- ida:fcJ . t7dren -. ,: -.. i=OR INFt7AMAT1ON OR A7]YICE IFiot tl@ve questrans about this nbtks you may coneuL' ... if04 age , 9tit-..: 43rd Wd an otlorney;of your own choosing or'any of Pialr 9s'-Lead Counsel whose rrirnca and otherT# lt2x iror [ taht BL 19f21 92nd MOO eq• ft: SR'fir c t500t lniprfnati0lt are IiSt dshave - :. .. [

ULYIre wd sat) eq fL BRT# 32.7. 4331376" , Anlneremente :. t)A'T Crî 78 2007'";. ^.. BY.ORI7EROPTHE COURTfBB6011 ê1[EYnwtta Rest. N d prpp ylent[

PLEAdalphdentiatbwafh[p RAlDOLPH HAYWARD C.P. aBf TAKE t+i07YCE that Rqn alone t,. .. '• 013 LAKEJSIIA GAYMON . . GP... N enbrr TOM IBM % Ho;

the.on1mo. Aete

fing aurangei Co ta,:

Inh sir

otft 8 nof E .:

News09520,747.96 Sh" '. ' Corrimnwaao

a}tU166LiqyLIq ylvan [a Irt hisA. Awil Tenn, 2007 No. 00=09 [at acity'f.! p oD- ^P o .eIIh as Stuidator of We AndS 19640 Mark J. Ile,* Llquld insurance .., Cathpan d 4t Aatalrfes ( in Nodes to her €vrn

T# 4338 N. 75th t

IN wm-mi^^

tlqutdafion) { ^LtitCA filed'In the Common- °o.wi141 : - 701 ,.... -' - 7357 ' Bookwel€ Ave, iBt1'I wealth -Court o} Penn

eytVatlte life Liquidator'e in compr€erice wrttt.tha

: " êquIr manta: o} the. f&, 10141 17th Bard . Wd 2.30505 aq It. Finer Adaounting and PotINori toy Distribution7 °r°'1 ebta . PrOVfalons _t782 aq fL BRTA ' 17•S 7A 8$7172368 imprpveOld , ' {,ft. ; al AcCOUnt€ng and Petition '} onJune ' 4.

064000 R4ti Mont e ReahlKAMI tOKY AA 4007Fin

of 129W) S§4128( b}Rest- jA dentist .- RIATitEW . KAMINSKY ND -. _ '- or 8128{b) that 1140rtt-:`Dwelling

tfg KERRY A, d iA/It/A JENNIFER K :..KAMIN6KY The Poi epseiri I) n+q^r+ats that ago Mo age Corpc-:PDRMa. oritla cur-KERRY. A; PORTM JR. AND ANNA JENNlFffiS SKY _ - i^Y4rlnnr f

' S:. KIM N:'ta0A11gt g^tTGA- 6. T-%- 2002 Tho Final A0counting ,and Ponttott be approved :]oration, Intends to;Ry GOB} G.P 09utsk 7'etm, 2006 0332C 3188,87768 Mark _ and confirmed abeottetety; wlthdrnw Iiom doing:.tlo d0$f83 567268 .td aU^"t+6.y. punineae In th Cam-._

Mulct Vdrwr,gag. ^,'- The Ltgirfanlor be euthnrized to make dlsirEbu -- ^^bnwealth Pwnn-t"lvanla by riling ari ap

06.tine' and transfers of the ava€lebte asacts of

7o3 PrQpQah O : 11 hs acnordan e with paragraph IT of the A;^ptoalion #a Termi4754 Large SL 19724 . 23rd .. .. ..

nation

of Ruthorrtyf# .: Painter ae,f 11cwa .--:- ,Wd MD1,416 sq ft. : : ;'... Porolan C^rporatkoa.24 200 . tnprovon[q>etx SEPTA. a Priority class (a) ctatma of the Lt uldutor

dF' gee '- IpNV1TATIOti . TO 0i Merrtwd ,-. In thiserrtowns. of , $1.9 mill - errsB,11YN . l US08U LAST RE SEPTA w€If accept bid . '. the" ^ al:..tha gaerank . aemeotetlonp .- IncurredCDR -. OWNhR Ate USA :.' dbiiymer [te:. Cl . 1234 before, JUBa 80; -4006 by Sara SmounF:: o1-yL.7NlAt , EtIEgtTRflt OF-7th Mark a St-,` ltih Fi million which WdH :hepals apt appiroxtrriately PUELIC NOTICELASTA. 10 00 ELVYN BD$$[*J,5 :' Pttei PA .19107 for[AST RECORg

0WN1Jt the :

forli Praeuine-

hE.oth.e Is hereb y ...J11IY'Tarm, 2 008 Na, 008738 men:to unttl:::the time b, The poNoy [retdae 0iaee (ii ' uneevand g[ven86 N UBa- B9 Mat J. Ddrvn. and data . noted bet : elarate which were In claim

.n khe August 1 . ' mot the Cfiy o! Ptsna»

rtr Se9 - low: No. .. t1891o7A ' 2004 s4pryf. rfx[ng data tnbI Udlag . V..i1,670 - delphlu thrn(egh its ... ." - ` 704 Various of

but.tm : niecovated ielelnt psyrrieeHt .. tttreagh

!)[IV Ion of-'.: AWattcr, -". 0188 N.: FslrffE Sf.- '. 19020 . Cables oprns 1100 : $Fa7 /O7' end . the - iwtequ9 : of apprexitzaaroly Pr" Posse a' goal , 01, -. - -

100i

10 Star Wd i,6d0 aq iLON PM,. Fri . - Aug, $1 ': $a a:"^ lo Philadelphia Amsrtoan Ltfr tn. , -. 2Stton icr the partict-'Pat€orr of _: L7€aedvan-o- 671747889 .. 6nprevrmeeia - " 7..: Baryon Fre k .. swarms : CompanyeubJvct tc:-edhretment

ge~lm Caraolno Jr through tftr Aes Han RQ1n uretco Aproo : raged Bus€does Enter-)a'R- GONG ttAFt LEE. O,p Mut'de (21S) BSO- 0015 menu attached t w. paRBon-..all.: xtdBrFA B.

prtAea (DHE) In Feder-Tam4'. 2807 01 003718 : - PVaspoetlya ... B7d- _:- Which win be Paid at approxhnetal,100%;: al AViailoTi Adm€nls=... : -- .

- --... •.^«^.. ..._^_.. _..$118 Bta.61 Mat,.1 roe..: dam mar" erfetet.

Case 2-03-cv-05336-LDD Document 519-6 Filed 10/16/2007 Page 32 of 35PrimeNewswire Cross Time Report: Krislov & Associates, Ltd.

Subject: PrimeNewswire Cross Time Report: Krislov & Associates, Ltd.

From : [email protected] : Mon, 20 Aug 2007 12:00:20 UT

To: [email protected]

Prim

Cross Time : August 20, 2007 at 08:00 AM (Eastern)

Headline : Notice of Pendency and Proposed Partial Settlement of Class Action On Behalf of Those

Who Purchased or Otherwise Acquired the Securities of DVI, Inc. Announced by Krislov

& Associates, Ltd.

This email message serves as a formal confirmation that your release was transmitted on

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If you have any questions, comments or concerns, please reply to this message, contact your account

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Copyright O 2007 PrimeNewswire, Inc.

I of 1 8/20/2007 8:20 AM

Case 2-03-cv-05336- LD D Document 519-6 Filed 10/16/2007

Jay W. Esenhofer

Stuart N. Grant

Mogan D. Mclnlyre

Geoffrey C Jarvis

Sidnoy S. liobesman

John C Kairis

Michael) Barry

James J. Sabella*

David E. Sellinger

Charles T. Caliendo

Stephen G. Grygiel

Diane T Zilka

October 11, 2006

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTEDAND FIRST CLASS MAIL

DVI, Inc, Securities [_,Litigation

c/o Strategic Claims Seivices

Exclusions

Claims Administrator2710 Concord Road, Suite 5Aston , PA 19014

Page 33 of 35

Al AgraJeff A Almeida°

Nauman A Amjcd

Peter S. Andrews

James R Banker

Jacqueline Bryks'

Cynthia A Calder

Ananda Chaudhuri

P Bradford deLeeuw

Lydia Ferrarese*

Gregg 5 Levin'

Christine Mackintosh°

Jonathan D Margolis"

James P McEvilly, 11]

Re: DVI Inc. Securities LitigationCiv. Act. No. 2:03-CV-5336-LDD

Dean Claims Administrator:

Sharon Nirmul

Catherine Pratsinakis

Brian M Roslocki

Ralph N Sianni

Lauren E Wagner

Marc D Wefnberg°

Kimberly L Wierzel

Admiled in 3 d PA OnlyAdmlfkd in MA & DC OntyAdmlued In NY Only

° Admined in PA Only+ Admirj d in SC Only

Sta hen K. B enjamin+^F C.-I

This firm is litigation counsel to and represents WM High Yield Fund, WM IncomeFund, AT High Yield Fund, WM VT Income Fund and AT Income Fund (collectively the "WMFunds"). The WM Funds have a business address of 1201 Third Avenue, Suite 2220, Seattle,Washington 98101. The undersigned has been authorized by the WM Funds to request that theybe excluded from the class in the DVI Inc Securities Litigation, Civ. Act. No 2,03-CV-5.366-LDD, and this letter shall constitute a request for exclusion tiom the class by the WM Funds

The following is a list of transactions in DVI, Inc. securities by the WM Funds during theclass period:

TransactionType Portfolio

B Anchor Trust High Yield Fund

B Anchor Trust High Yield Fund

S Anchor Trust High Yield FundS Anchor Trust High Yield Fund

5 Anchor Trust High Yield Fund

(i^^Grant & Elsenhofer, PA.

Chase ,Manhattan Centre120 L North Market StreetWilmington, DE 19801

To): 302 622 7000 - Fax: 302 622 7100

45 Rockefeller Center 15th Floor630 Fifth AvenueNew Yoak, NY 10111

lei: 646-722-8500 • Fax: 646-7228501

www.gelaw.com

Direct Dial: 302-622-7115Email: jmcevilly c@?i gelaw corn

Cusip Issue

233343ABS 9.875 FEB 01 34

233343AD4 9.875 FEB 01 34233343AB8 9.875 FEB 01 34233343AB8 9.875 FEB 01 34233343AD4 9.875 FEB 01 34

TradeDate ParAmount

2-Jul-01 500,00023-Aug-01 750,000

17-Jul-03 175,00017-Jul-03 175,0006-Aug -03 150,000

Case 2-03-cv -05336-LD D Document 519-6 Filed 10/16/2007 Page 34 of 35

5^, 4.4, r

Claims Admini stratorDVI Inc. Securities LitigationOctober 11, 2006Page 2

B Anchor Trust Income Fund 233343ABB 9.875 FEB 01 34 17-Jul-01 750,000

S Anchor Trust Income Fund 233343AB8 9 875 FEB 01 34 17-Jul-03 25,000

S An char Trust Income Fund 233343AB8 9 875 FEB 01 34 17-Jul-03 25,0003D-May-

B VT Income Fund 233343AB8 9 875 FEB 01 34 01 1,000,000

B VT Income Fund 233343AD4 9.875 FEB 01 34 20-Jun-03 500,000S VT Income Fund 233343ABS 9.875 FEB 01 34 17-Jul-03 50,000

S VT Income Fund 233343AB8 9.875 FEB 01 34 17-Jul-03 50,000

S VT Income Fund 233343AD4 9.875 FEB 01 34 6-Aug-03 100000B WM High Yield Fund 233343A98 9-875 FEB 01 34 29-Nov-99 100,000B WM High Yield Fund 233343AB8 9.875 FEB 01 34 12-Jan-00 500,000B WM High Yield Fund 233343AB8 9 875 FEB 01 34 19-Jan-00 750,000

B WM High Yield Fund 233343AB8 9 875 FEB 01 34 1-Feb-00 750,000B WM High Yield Fund 233343AB8 9.875 FEB 01 34 22-Feb-00 500,000B WM High Yield Fund 233343AB8 9.875 FEB 01 34 7-Apr-00 500,000

B WM High Yield Fund 233343AD4 9.875 FEB 01 34 6-Sep-00 2,000,000

B WM High Yield Fund 233343AD4 9 875 FEB 01 34 8-May-01 175,00023-May-

B WM High Yield Fund 233343A88 9.875 FEB 01 34 01 1,000 00030-May-

B WM High Yield Fund 233343A88 9 875 FEB 01 34 01 1 500,000

B WM High Yield Fund 233343ABB 9.875 FEB 01 34 17-Jul-01 250,000

B WM High Yield Fund 233343ABS 9 875 FEB 01 34 1-Aug-01 500,000

B WM High Yield Fund 233343AD4 9875 FEB 01 34 14-Feb-02 1,000,000

B WM High Yield Fund 233343A04 9 875 FEB 01 34 15-Feb-02 500,000

B WM High Yield Fund 233343ABS 9.875 FEB 01 34 20-Jun-03 3,000,000B WM High Yield Fund 233343ABB 9 875 FEB 01 34 2-Jul-03 50,000

B WM High Yield Fund 233343ABO 9 875 FEB 01 34 2-Jul-03 250,000S WM High Yield Fund 233343AB8 9.875 FEB 01 34 17-Jul-03 500,000

S WM High Yield Fund 233343AB8 9.875 FEB 01 34 17-Jul-03 625,000

S WM High Yield Fund 233343AD4 9.875 FEB 01 34 6-Aug-03 825,000

B WM High Yield Fund 233343A98 9.875 FEB 01 34 4-Sep-03 550,000

B WM High Yield Fund 233343A174 9 875 FEB 01 34 5-Apr-05 1,000,000B WM High Yield Fund 233343AD4 9.875 FEB 01 34 12-Apr-05 3,000,000B WM Income Fund 233343AB8 9 875 FEB 01 34 16-Nov-$9 500,000B WM Income Fund 233343A88 9 875 FEB 01 34 19-Jan-00 250,000B WM Income Fund 233343AB8 9.875 FEB 01 34 6-Sep-00 750,000

30-May-8 WM Income Fund 233343AB8 9 875 FEB 01 34 01 1,500,000

B WM Income Fund 233343ABB 9.875 FEB 01 34 17-Aug-01 1,500,000

B WM Income Fund 233343AB8 9.875 FEB 01 34 21-Sep-01 1,500,000

B WM Income Fund 233343AB8 9 875 FEB 01 34 10-Apr-02 1,000,000

B WM income Fund 233343ABB 9 875 FEB 01 34 20-Jun-03 2,000,000

B WM Income Fund 233343AD4 9 875 FEB 01 34 20-Jun-03 500,000

S WM Income Fund 233343AB8 9 875 FEB 01 34 17-Jul-03 250,000

S WM Income Fund 233343AB8 9.875 FEB 01 34 17-Jul-03 625,000

S WM Income Fund 233343AD4 9.875 FEB 01 34 6-Aug-03 100,000

0


Claims Administratoi

DVI Inc. Securities LitigationOctober 11, 2006Page 3

You should direct any inquiries regar ding the exclusion of the WM funds from the classin the DVI Inc. Secwities Litigation to the undersigned.

Very truly yours,

I n s P McEvilly, III


CERTIFICATE OF SERVICE

I, Michael R. Karnuth, an attorney, on oath state that Plaintiffs ' Motion andMemorandum of Law in Support of Motion for Final Approval of Second PartialSettlement and In Support of Certification of Settlement Class , Plan of Allocationand Award of Attorneys Fees and Costs was electronically filed on October 16, 2007and the documents are available for downloading and viewing from the U. S. DistrictCourt for the Eastern District of Pennsylvania's Electronic Court Filing service. Thedocuments have been served electronically upon the parties on the attached Service Listwho have consented to electronic service and for those on the attached Service List whohave not consented to electronic service were served via U. S. Mail, postage prepaid andproperly addressed, on October 16, 2007.

By: /s/ Michael R. Karnuth


SERVICE LIST

Richard L . Scheff, Esq.Jeffrey S. Feldman, Esq.MONTGOMERY MCCRACKEN WALKER &RHOADS LLP123 S. Broad StreetPhiladelphia, PA 19109Tel: 215-772-1500Fax: 215-772-7620rscheff(o_ ^_^. f nnv r.coznjfeldmauu .r . tunwr.comCounselfor Michael A. O'Hanlon

Maura E. Fay, Esq.DILWORTH PAXSON LLP3200 Mellon Bank Center1735 Market StreetPhiladelphia , PA 19103Tel: 215-575-7000Fax: 215-575-7200mfav(a)dilworthlaw.comCounselfor Steven R. Garfinkel

Robert E. Kelly, Esq.Kelly D. Eckel, Esq.Patrick Loftus, Esq.Matthew M. Ryan, Esq.Matthew A. Taylor, Esq.DUANE MORRIS LLP30 South 17th StreetPhiladelphia, PA 19103Tel: 215-979-1000Fax: 215-979-1020rkell\..._± ,` duanemorris. cornkdeckelnduanemorris.cornloftusla9duanemorris.commmryan(a)duanemorris.commata for d.duanemorris.comCounselfor John P. Boyle

Patricia M. Hamill, Esq.Vincent T. Cieslik, Esq.CONRAD, O'BRIEN, GELLMAN & ROHN, P.C.1515 Market Street, 16th FloorPhiladelphia, PA 19102-1916Tel: 215-864-9600Fax: 215-864-9620phamill(c^r,cogr.comvcieslikA,co rg cornCounselfor Richard E. Miller

Gregory P. Miller, Esq.Michael A. Morse, Esq.Stephen G . Stroup, Esq.William L . Can, Esq.Amy C. Lachowicz, Esq.MILLER, ALFANO & RASPANTI, P.C.1818 Market Street, Suite 3402Philadelphia, PA 19103Tel: 215-972-6400Fax: 215-981-0082

t u11el 1._Ea1;E E'-law. corn

nmmorsel c Har-1aw.comsstrou ' Ezi;Er-law.comwcarr&mar-law.comalachowicznamar-law.comCounselfor Harry T.J. Roberts

William P. Quinn, Jr., Esq.Thomas V. Ayala, Esq.Karen Pieslak Pohlmann, Esq.David W. Marston, Jr., Esq.Marc J. Sonnenfeld, Esq.MORGAN, LEWIS & BOCKIUS LLP1701 Market StreetPhiladelphia, PA 19103-2921Tel: 215-963-5000Fax: 215-963-5001wguinn()morganlewis. corntayalana morganlewis.comkpohlmamz(a morganlewis.corndlnarstonL4,morganlewis.commsonnenfeld(Omorganlewis.comCounselfor William S. Goldberg, John E.McHugh, and Nathan Shapiro

William J. Taylor, Esq.Kevin F. Berry, Esq.COZEN O'CONNOR, P.C.The Atrium1900 Market StreetPhiladelphia, PA 19103Tel: 215-665-2000Fax: 215-665-2013wta for ecozen.comkberry;c'^r,cozen. cornCounselfor Anthony J. Turek

Paul W. Kaufman, Esq.Matthew Hamermesh, Esq.Daniel Segal, Esq.Shara L. Alpern, Esq.HANGLEY ARONCHICK SEGAL & PUDLIN,P.C.One Logan Square, 27th FloorPhiladelphia, PA 19103Tel: 215-568-6200Fax: 215-568-0300mhamermesh(ahanglev.compkauflnar c)hangley.coindse a1r.E.. hanglev.consalpem(' . I:ianglev.camCounselfor Terry Cady

2


William J. Leonard, Esq.Thomas A. Leonard, Esq.OBERMAYER REBMANN MAXWELL &HIPPEL LLPOne Penn Center, 19th Fl.1617 JFK BoulevardPhiladelphia, PA 19103-1895Fax: 215-665-3165William.LeonardA,obennayer.comThomas.Leonard(obermayer. cornCounselfor Gerald Cohn

Julian W. Friedman, Esq.Mary Margulis-OhnumaSTILLMAN, FRIEDMAN & SHECHTMAN, P.C.425 Park AvenueNew York, NY 10022Tel: 212-223-0200Fax: 212-223-1942jfriedman(stilhnanfriedman.commohnuma(stillmanfriedman.cornLead Counselfor Gerald Cohn

David L. Comerford, Esq.Edward F. Mannino, Esq.Jeffery A. Dailey, Esq.AKIN GUMP STRAUSS HAUER & FELD LLPOne Commerce Square2005 Market Street, Suite 2200Philadelphia, PA 19103Tel: 215-965-1200Fax: 215-965-1210dcomerfordAakingunp.comemannino(cakinuomp.conijdaile a,akin iunp.comCounselfor Deloitte & Touche, LLP

William J. O'Brien, Esq.Stephanie Pompey, Esq.DELANEY & O'BRIEN325 Chestnut Street, Ste, 1212Philadelphia, PA 19106Tel: 215-829-4210Fax: 215-829-4219w odolaw.comsmpi&,dolaw.comCounselfor Radnet Management, Inc

Laurence S. Shtasel, Esq.BLANK ROME LLPOne Logan SquarePhiladelphia, PA 19103Tel: 215-569-5691Fax: 215-832-5691shtasel(c blankrome.cornCounselfor Canadian Imperial Bank ofCommerce Trust Company ofthe Bahamas

Bruce Cohen, Esq.Scott R. Lord, Esq.Chun Hsu, Esq.Rob Martin, Esq.COHEN & LORD, P.C.1801 Century Park East, Ste. 2600Los Angeles, CA 90067-2328Tel: 310-691-2200Fax: 310-691-2201rmartin&cohenjord. coinbcohenAcohen-lord.comchsuAcohen-lard. cornCounselfor Radnet Management, Inc

Jeffrey W. Sarles, Esq.Robert J. Kriss, Esq.Nicole Byrd, Esq.MAYER BROWN ROWE & MAW LLP71 South Wacker DriveChicago, IL 60606Tel: 312-782-0600Fax: 312-701-7711isarles lmayerbrownrowe.comCounselfor Canadian Imperial Bank ofCommerce Trust Company ofthe Bahamas

John G. HarkinsMarianne ConsentinoHARKINS CUNNINGHAM LLP2800 One Commerce Square2005 Market StreetPhiladelphia, PA 19103-7042Tel.: 215-851-6700Fax: 215-851-6710jharkins (a)harkinscunningham.commconsentino(a harkinscunningham. cornCounselfor Clifford Chance LLP, CliffordChance US LLP


Rachel B. KaneWilliam J. SchwartzEmma TerrellCelia Goldwag BarenholtzMaxine SleeperJennifer LernerCOOLEY GODWARD KRONISH LLP1114 Avenue of the Americas

New York, NY 10036rkane(c^r,coolewschwartzna coolev.cometerrell(coolev.comcbarenholtznacoolev.comrnsleeper^ coolev.comjle rnerLctcoole yTel: 212-479-6000Fax: 212-479-6275Counselfor Clifford Chance LLP, CliffordChance US LLP

Mark C. HansenDavid E. RossAndrew ShenSilvija A. StrikisKELLOGG, HUBER, HANSEN, TODD, EVANS& FIGEL PLLC1615 M Street, NW, Suite 400Washington, DC 20036-3209Tel: 202-326-7900Fax: 202-326-7999mhansen(c khhte.corndross(c khhte.comashenA,,khhte.comsstrikis(c^rkhhte.comCounselfor Thomas J. Pritzker and The PritzkerOrganization LLC

Steven D. JohnsonGIBBONS, DEL DEO, DOLAN, GRIFFINGER &VECCHIONE PC1700 Two Logan Square18th & Arch StreetsPhiladelphia, PA 19103Tel: 215-665-0400Fax: 215-636-0366siohnson(c gkibbonslaw.comCounselfor Thomas J. Pritzker and The PritzkerOrganization LLC

Gregory Ballard, Esq.Liz Butler, Esq.Benjamin Gardner, Esq.Gregory A. Markel, Esq.Amy Miller, Esq.Gazeena Soni, Esq.CADWALADER, WICKERSHAM & TAFT LLPOne World Financial CenterNew York, New York 10281Tel: 212-504-6000Fax: 212-504-6666

gregorv.ballard(icwt.com

liz.butlerncwt.com

greg.markel(d)cwt.com

benjamin. argdner!ct?cwt.com

gabriel.weaverncwt.com

amy.miller(l cwt. coin

gazeena. som(Q cwt.com

Lead Counselfor Merrill Lynch & Co., Inc

10/16/07

C. Clark Hodgson, Jr., Esq.Michael D. O'Mara, Esq.STRADLEY, RONON, STEVENS & YOUNG,LLP2600 One Commerce SquarePhiladelphia, PA 19103Tel: 215-564-8000Fax: 215-564-8120chodgson(a^.stradtev. commo'[email protected] Counsel_for Merrill Lynch & Co., Inc.

4