UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION

Transcription

1 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION JOHN PETERKA; MARK JAY KURZIUS; ARNOLD Case No. CV JSL(Kx MEYERSTEIN; ALVIN OSTROW; STEVE SCHENKER; A. EUGENE SWANSON; and OWEN C. RUSSELL, On Behalf of Themselves and All Others Similarly Situated, Plaintiffs, vs. DOVER ASSET GROUP, INC.; DOVER EQUIPMENT CORPORATION; DOVER EQUIPMENT COMPANY; ANTHONY W. ESERNIA; FINALCO GROUP, INC.; FINALCO, INCORPORATED; CURTLAN MCNEILY; MALLEY, YELSKY, ROSENFELD & SCOTT; MALLEY, ROSENFELD & SCOTT; MCNEILY & ROSENFELD; DELOITTE & TOUCHE; and MARSHALL and STEVENS, INCORPORATED, Defendants. NOTICE OF PENDENCY AND SETTLEMENT OF CLASS ACTION TO: ALL PERSONS WHO PURCHASED OWNERSHIP INTERESTS, DESIGNATED AS UNITS, IN ANY OF THE FOLLOWING EQUIPMENT LEASING PROGRAMS SPONSORED BY DOVER ASSET GROUP, INC. OR FINALCO INCORPORATED: (i DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-1; (ii DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-2; (iii DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-3; (iv DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-4; (v DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-5; (vi DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-6; (vii DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-7; (viii DOWNING STREET EQUIPMENT LEASING 85-1 (ALSO KNOWN AS DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-8; (ix DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-9; (x DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-10; (xi MARQUIS EQUIPMENT LEASING PROGRAM (ALSO KNOWN AS DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-11; (xii DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-12; (xiii DOVER EQUIPMENT LEASING CO-OWNERSHIP PROGRAM-14; AND (xiv FINALCO EQUIPMENT TRUST III, DURING THE PERIOD APRIL 1, 1985 TO DECEMBER 31, 1987, INCLUSIVE, AND WHO SUFFERED DAMAGES AS A RESULT PLEASE READ THIS NOTICE CAREFULLY PLEASE READ THIS ENTIRE NOTICE CAREFULLY. THIS NOTICE CONTAINS IMPORTANT INFORMATION REGARDING YOUR POSSIBLE RIGHT TO SHARE IN THE PROCEEDS OF THE SETTLEMENTS REACHED IN THIS LITIGATION. IN ORDER TO BE ELIGIBLE TO RECEIVE A PAYMENT FROM THE PROCEEDS OF THE SETTLEMENTS, YOU MUST SUBMIT A VALID PROOF OF CLAIM FORM ON OR BEFORE JUNE 20, YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil Procedure, and an Order of the United States District Court for the Central District of California (the Court, that settlements (the Settlements of the above-captioned class action (the Class Action have been reached by the Class Plaintiffs with defendant Marshall and Stevens Incorporated ( Marshall and Stevens and its Related Parties, and with defendant Deloitte & Touche, LLP (as successor to Touche Ross & Co. and its Related Parties, as defined below, including Deloitte & Touche USA LLP, D&T Partners LLP, Deloitte & Touche Consulting Group Holding LLC and Deloitte & Touche Consulting Group LLC ( Deloitte & Touche (Marshall and Stevens and Deloitte & Touche are also referred to as the Settling Defendants. The total amount of the Settlements are $367,000 and $300,000, respectively. The terms of the Settlements are set forth in full in certain Stipulations of Settlement Between Class Plaintiffs and Deloitte & Touche, LLP, dated October 14, 1997, and Marshall and Stevens Incorporated, dated February 1, 2000 (the Stipulations, which are on file with the Court. The Settlements are subject to approval by the Court, and, if approved, will result (a in the creation of a Class Action Settlement Fund which shall be disbursed as set forth below; and, (b in the dismissal of the Class Action with prejudice against the Settling Defendants and the release of the Released Claims (as defined below against the Settling Defendants. With the approval of the Court, plaintiffs dismissed their claims against defendants Dover Asset Group, Inc.; Dover Equipment Corporation; Dover Equipment Company; Anthony W. Esernia; Finalco Group, Inc.; Finalco Incorporated; Curtlan McNeily; Malley, Yelsky, Rosenfeld & Scott; Malley, Rosenfeld & Scott and McNeily

2 & Rosenfeld (the Dismissed Defendants due to the fact that the corporate and partnership entities are now defunct, and counsel for plaintiffs determined that no significant amounts could be collected from the individual defendants; This Notice is not intended to be, and should not be construed as, an expression of any opinion by the Court with respect to the truth of the allegations in the Class Action or the merits of the claims or defenses asserted. This Notice is merely to advise you of the pendency of this Class Action, the proposed settlement of the Class Action and of your rights thereunder. I. THE CLASS ACTION On March 10, 1991, the Class Plaintiffs filed their complaint (the Complaint alleging claims for violations of 10(b of the Securities Exchange Act of 1934 (the 1934 Act, 15 U.S.C. 78(b, and Securities and Exchange Commission rule 10b-5, 17 C.F.R b-5, promulgated thereunder, common law fraud and other claims on behalf of a class of persons who purchased ownership interests ( Units in fourteen related office equipment leasing programs. Certain of the defendants answered the Complaint, while others, including Marshall and Stevens Incorporated and Deloitte & Touche, filed motions to dismiss. However, prior to the hearing on the original motions to dismiss, the Supreme Court handed down its decision in Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 111 S.Ct. 2773, 115 L.Ed.2d 321 (1991, which adopted a shorter statute of limitations for claims brought under 10(b and rule 10b-5 than had been historically applied by many courts, including the court where the Class Action is pending. Thereafter, Congress enacted Section 27A of the 1934 Act, 15 U.S.C. 78aa-1, which, among other things, made the Lampf rule inapplicable to 10(b cases filed on or before June 19, 1991, the day Lampf was decided. However, because of certain constitutional challenges to 27A, on September 27, 1991, the Court stayed this action awaiting authoritative consideration of the constitutional issues by the federal appellate courts. Accordingly, the Court did not rule on the defendants then-pending motions to dismiss. After authoritative rulings on the constitutional issues were handed down, on November 10, 1993, the Court lifted the stay and allowed this case to proceed. Thereafter, the defendants re-filed their motions to dismiss which again challenged the adequacy of plaintiffs 10(b and other claims on various grounds. On June 8, 1995, the Court denied defendants motions to dismiss. Following the Court s ruling, the defendants filed Answers to the Complaint denying the Complaint s material allegations and asserting various affirmative defenses. II. PRETRIAL PROCEEDINGS AND SETTLEMENT A. Discovery, Investigation and Research Conducted By Plaintiffs. Counsel for the Class Plaintiffs have conducted discovery and an investigation of the claims and defenses asserted in the Class Action, including, among other things, (i inspection and analysis of voluminous documents produced by the defendants and others, (ii the review of documents and testimony of witnesses from related litigation and litigation involving similar equipment leasing programs wherein certain of the defendants participated; (iii consultation with experts; (iv review of the publicly-available documents; and (v research of the applicable law with respect to the claims asserted in the Complaint and the potential defenses thereto. B. Arm s-length Settlement Negotiations and Judicial Involvement in the Negotiation Process. The Settlements set forth in these Stipulations were negotiated in good faith over a period of many months by counsel for the Settling Parties. In addition, the Settling Parties took part in settlement negotiations before the Court and before a court-appointed settlement judge, the Honorable J. Lawrence Irving, United States District Judge (Retired. III. DEFENDANTS STATEMENT AND DENIALS OF WRONGDOING AND LIABILITY The Settling Defendants have denied and continue to deny each and all of the claims and contentions of wrongdoing alleged by the Class Plaintiffs in the Class Action. The Settling Defendants also have denied and continue to deny the allegations that the Class Plaintiffs or the Settlement Class suffered damage, or that the Class Plaintiffs or the Settlement Class were harmed by the conduct alleged in the Complaint. Additionally, the Settling Defendants assert that they have strong factual and legal defenses to all claims against them. Neither the Stipulations, nor any document referred to herein, nor any action taken to carry out the Stipulations are, may be construed as, or may be used, directly or indirectly as an admission by or against any defendant in the Class Action of any fault, wrongdoing or liability whatsoever. Nor has there been a determination by any Court, administrative agency or tribunal as to the factual allegations made against the defendants. Entering into or carrying out the Stipulations, the exhibit thereto, and any negotiations or proceedings related thereto, shall not, directly or indirectly, be construed as, or deemed to be evidence of, an admission or concession by any of the Settling Defendants. Nonetheless, and without admitting any wrongdoing or liability, the Settling Defendants have concluded that the further defense of the Class Action would be protracted and expensive, and that it is desirable that the Class Action be fully and finally settled to limit further expense, inconvenience and distraction and to dispose of burdensome and protracted litigation. The Settling Defendants have also taken into account the uncertainty and risks inherent in any litigation, especially in complex cases like this Class Action. IV. CLAIMS OF THE CLASS PLAINTIFFS AND THE BENEFITS OF SETTLEMENT The Class Plaintiffs and their counsel believe that the evidence developed to date supports the claims asserted in the Class Action. However, counsel for the Class Plaintiffs recognize and acknowledge the expense and length of continued proceedings necessary to prosecute the Class Action against the Settling Defendants through trial and through appeals. Counsel for the Class Plaintiffs also have taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as this Class Action, as well as the difficulties and delays inherent in such litigation and the likelihood of protracted appellate review. Counsel for the Class Plaintiffs are mindful of the inherent problems of proof under and the defenses the Settling Defendants have asserted and can assert to the federal 2

3 securities law violations and other claims asserted in the Complaint, including the defenses alleged by the Settling Defendants in the pleadings filed in the Class Action. As a consequence of the foregoing investigation and analyses, counsel for the Class Plaintiffs have engaged in intensive arm s-length negotiations with counsel for the Settling Defendants with a view to achieving the substantial benefits provided by the Settlements on the terms as set forth in the Stipulations. The Class Plaintiffs and their counsel believe that the Settlements set forth in the Stipulations confer substantial benefits upon the Settlement Class. Based on their evaluation, the Class Plaintiffs and their counsel have determined that the Settlements set forth in the Stipulations are fair, reasonable and adequate and in the best interests of the Class Plaintiffs and each of the Settlement Class Members. V. THE RIGHTS OF SETTLEMENT CLASS MEMBERS For purposes of the Settlements, Settlement Class Members are all persons and entities who purchased Units in any of the following equipment leasing programs: Dover Equipment Leasing Co-Ownership Program-1, Dover Equipment Leasing Co-Ownership Program-2, Dover Equipment Leasing Co-Ownership Program-3, Dover Equipment Leasing Co-Ownership Program-4, Dover Equipment Leasing Co- Ownership Program-5, Dover Equipment Leasing Co-Ownership Program-6, Dover Equipment Leasing Co-Ownership Program-7, Downing Street Equipment Leasing 85-1 (also known as Dover Equipment Leasing Co-Ownership Program-8; Dover Equipment Leasing Co-Ownership Program-9, Dover Equipment Leasing Co-Ownership Program-10, Marquis Equipment Leasing Program (also known as Dover Equipment Leasing Co-Ownership Program-11, Dover Equipment Leasing Co-Ownership Program-12, Dover Equipment Leasing Co-Ownership Program-14, and Finalco Equipment Trust III, during the period April 1, 1985 and December 31, 1987, inclusive, and who suffered damages as a result thereof. Excluded from the Class are the named defendants in the Class Action, members of the immediate families of each defendant, all officers, directors, subsidiaries and affiliates of the corporate defendants, all partners of the partnership defendants, any entity in which any defendant has a controlling interest, and the legal representatives, heirs, successors, predecessors in interest, or assigns of any excluded party. Also excluded from the Settlement Class are those persons who timely and validly request exclusion from the Settlement Class pursuant to the Notice of Pendency and Settlement of Class Action to be sent to the Settlement Class. If you are a member of the Settlement Class, you will be bound by the terms of the proposed Settlements described in Part VI of this Notice, upon approval of the Court. If you are a member of the Settlement Class, you have the following options: 1. If you do not wish to be included in the Settlement Class, you may request to be excluded. To do so, you must expressly request exclusion in writing postmarked no later than April 20, You must set forth the name of the Class Action, namely, Peterka v. Dover Asset Group, Inc., CV JSL(Kx, your name, address and telephone number, and the name and address of the record owner if different from your own. You must also set forth all purchases and all sales of Units during the Settlement Class Period, the dates and prices of such purchase(s and sale(s, the number of Units you purchased and sold, the amount of cash you paid for the Units, and state whether you contend these transactions resulted in a loss, and, if so, the reasons for your contention. You must sign the exclusion request and mail it via first class mail to the following: Dover Securities Litigation Marc M. Seltzer, Esq. c/o Gilardi & Co. Susman Godfrey L.L.P. P. O. Box Century Park East, Suite 950 Corte Madera, California Los Angeles, California NO REQUEST FOR EXCLUSION WILL BE CONSIDERED VALID UNLESS ALL OF THE INFORMATION DESCRIBED ABOVE IS INCLUDED IN ANY SUCH REQUEST. If you validly request exclusion from the Settlement Class, (a you will be excluded from the Settlement Class, (b you will not be bound by any judgment entered in the Class Action, and (c you will not be precluded, by reason of your decision to request exclusion from the Settlement Class, from otherwise prosecuting an individual claim, if timely, against the Settling Defendants based on the matters complained of in the Class Action. 2. If you do not request to be excluded from the Settlement Class, you will be bound by any and all determinations or judgments in the Class Action in connection with the Settlements entered into or approved by the Court, whether favorable or unfavorable to the Settlement Class, including, without limitation, the Final Judgment described in VI.3, below. 3. If you do not request to be excluded from the Settlement Class, you may object to the proposed Settlements or the Plan of Distribution, in the manner set forth below. 4. If you are a member of the Settlement Class, you may, but are not required to, enter an appearance through counsel of your own choosing at your own expense. If you do not do so, you will be represented by Class Counsel: Susman Godfrey L.L.P., 1880 Century Park East, Suite 950, Los Angeles, California , Marcus & Thompson, P.C., 504 N. Fourth Street, Suite 105, Fairfield, Iowa 52556, and John Courtade, P.C., 816 Congress Avenue, Suite 1100, Austin, Texas VI. THE PROPOSED SETTLEMENTS AND PLAN OF DISTRIBUTION Proposed Settlements have been reached in the Class Action, between the Class Plaintiffs and the Settling Defendants which are embodied in Stipulations between the Class Plaintiffs and the Settling Defendants. The following description of the proposed Settlements of 3

4 the Class Action is only a summary and reference is made to the text of the Stipulations, on file with the Court and available upon request from Class Counsel, for a full statement of its provisions: 1. A settlement fund (the Settlement Fund has been established by the Settling Defendants to resolve the claims asserted against them in the Class Action. The Settlement Fund will consist of $667,000 in cash, plus accrued interest. 2. Upon approval of the Settlements by the Court and entry of a judgment that becomes a final judgment and upon satisfaction of the other conditions to the settlement, described herein, the Settlement Fund will be distributed under the Court s direction, supervision and order(s, as follows: (a The Settlement Fund will be used to pay all costs and expenses reasonably incurred in connection with the preparation and filing of tax returns and the payment of taxes on the interest earned on the Settlement Fund, including all Taxes and Tax Expenses, as defined in the Stipulation. (b The Settlement Fund will be used to pay all costs and expenses reasonably incurred in connection with providing notice to members of the Settlement Class, locating Settlement Class Members, administering and distributing the Settlement Fund and paying escrow fees and costs, if any. (c The Settlement Fund will be used to award attorneys fees to Class Counsel and reimburse Class Counsel for costs and expenses in the prosecution of this action, in such amounts as the Court may approve. Class Counsel will in addition apply to the Court for an award of fees for services rendered to the Class in an amount of 33-1/3% of the Settlement Fund. (d The Settlement Fund will be used for incentive compensation awards to the Class Plaintiffs. Class Counsel will apply for an award of $2,500 to each of the seven Class Plaintiffs or his/her Estate; (e The Settlement Fund will be used to distribute funds to each Class Member pursuant to a formula approved by the Court. Class Counsel have proposed that the settlement funds contributed by all of the Settling Defendants, less Court-approved attorneys fees, costs and expenses, and such other distributions as are described below, shall be pooled and distributed to all Class members who submit timely and valid Proofs of Claim ( Authorized Claimants on a pro rata basis based on their Net Losses. Although certain Class members may not have had claims against certain of the defendants, no final adjudication was ever made on the merits of any of Class plaintiffs claims. The pro rata distribution of all settlement funds to Authorized Claimants is considered by Class Counsel to be appropriate because, among other things, (i each of the partnerships at issue except one was organized and sponsored by Dover Equipment Corporation or affiliates, each of the partnerships involved appraisals by Settling Defendant Marshall and Stevens, and the claims of all Class members arise out of a similar common course of conduct and related alleged misstatements and omissions; (ii each of the Settling Defendants is alleged to have legal responsibility for the issuance of one or more allegedly misleading sets of the written offering materials; (iii any alternative plan would likely require complex legal and factual issues to be addressed; and (iv such distribution will serve the interests of administrative convenience. Please note that submission of a Proof of Claim form does not necessarily assure the right to payment thereunder. The Court may deny, in whole or in part, any claim submitted should it be determined by the Court that the claimant is excluded from the definition of the Class or if there are legal or equitable grounds for rejecting said claim. (f The following methodology shall be used to calculate the claims of Authorized Claimants. The Net Loss of an Authorized Claimant is the loss, if any, resulting from the purchase of units in any and all of the enumerated equipment leasing programs between April 1, 1985 and December 31, 1987, inclusive, which shall be determined as follows: (i The total amount paid for any and all such units purchased by the Authorized Claimant during the respective time period or periods applicable to the issuing equipment leasing programs shall be aggregated. The amounts paid include cash and the optional investor notes which the Authorized Claimant undertook to pay as part of the purchase price. These amounts do not include the full recourse equipment notes which the Authorized Claimant also signed but which were anticipated to be paid with offsetting lease payments on the main lease. The resulting total is the Authorized Claimant s Net Purchase Price. (ii From the Net Purchase Price, the Authorized Claimant must subtract (A the proceeds received from any sale or other disposition of the units, (B any income received from the units, including dividends, interest, profit distributions, or rent-sharing of payments from the end users of equipment (lease payments used for offsetting the equipment notes are not considered income for this purpose, or any return of capital in connection with the units, and (C any cash or other valuable consideration received in connection with settlement of any prior action in connection with units (forgiveness of any payments owing on the equipment notes is not considered valuable consideration for this purpose. The resulting loss, if any, shall be the Authorized Claimant s Net Loss. (g The Settlement Fund will be used in such other manner as the Court may direct. However, under no circumstances will any residual funds in the Class Action Settlement Fund or the Net Settlement Fund revert to the Settling Defendants after the Effective Date. 3. If the proposed Settlements are approved by the Court, the Court will enter a final judgment (the Final Judgment which will: (a Dismiss the Class Action against the Settling Defendants with prejudice and without costs, except as provided in the respective Stipulations; 4

5 (b Adjudge that the Plaintiffs and each Settlement Class Member, except those who both timely and validly request exclusion in accordance with the procedures detailed herein, shall be deemed conclusively to have released the Released Claims (described below against the Settling Defendants and each and all of their Related Parties (described below. Notwithstanding that the Plaintiffs or any Settlement Class Member may hereafter discover facts in addition to or different from those which the Plaintiffs and Settlement Class Members now know or believe to be true with respect to the Class Action and Released Claims or to the subject matter of the release, the Plaintiffs and each Settlement Class Member shall be deemed, upon the Effective Date, to fully, finally and forever settle and release any and all Released Claims as against the Settling Defendants, and each and all of their Related Parties (i.e., each of a Person s past or present directors, members, officers, managers, employees, partners, participating principals, agents, independent contractors, accountants, parents, subsidiaries, affiliates, divisions, executors, insurers, co-insurers, reinsurers, attorneys, personal or legal representatives joint ventures, assigns, spouses, heirs, associates, estates, any entity in which a Person has a controlling interest, any entity which was derived in any manner from a Person, including reorganization, merger, any other form of combination or division, or name change, any entity from which a person was derived in any manner, including reorganization, merger, any other form of combination or division, or name change, and any members of their immediate families; (c Bar and permanently enjoin the Plaintiffs and each Settlement Class Member from prosecuting any Released Claims against the Settling Defendants and each and all of their Related Parties; and (d Reserve jurisdiction, without affecting the finality of the Judgment entered, over: (i Implementation of the Settlements and any award or distribution of the Settlement Fund; (ii Disposition of the Settlement Fund; (iii Enforcing and administering the Stipulations, including any releases executed in connection therewith; and (iv Other matters related or ancillary to the foregoing. As used above, Released Claims means any and all claims, actions, causes of action, allegations, rights or liabilities, including, but not limited to, claims for negligence, gross negligence, professional negligence, breach of duty of care, breach of duty of loyalty, fraud, misrepresentation, breach of fiduciary duty, mismanagement, malpractice, breach of contract, negligent misrepresentation, violations of any state or federal statutes, rules or regulations, including Unknown Claims as defined below, that have been or could have been asserted by the Class Plaintiffs and the Settlement Class Members, or any of them, regardless of the claims nature (whether the claims are individual, class, representative or direct, or otherwise against the Released Persons, as defined below, or any of them, in the Class Action by reason of or related to (1 the purchase or other acquisition of ownership interests in any of the following equipment leasing programs: Dover Equipment Leasing Co-Ownership Program-1, Dover Equipment Leasing Co-Ownership Program-2, Dover Equipment Leasing Co- Ownership Program-3, Dover Equipment Leasing Co-Ownership Program-4, Dover Equipment Leasing Co-Ownership Program-5, Dover Equipment Leasing Co-Ownership Program-6, Dover Equipment Leasing Co-Ownership Program-7, Downing Street Equipment Leasing 85-1 (also known as Dover Equipment Leasing Co-Ownership Program-8; Dover Equipment Leasing Co-Ownership Program-9, Dover Equipment Leasing Co-Ownership Program-10, Marquis Equipment Leasing Program (also known as Dover Equipment Leasing Co- Ownership Program-11, Dover Equipment Leasing Co-Ownership Program-12, Dover Equipment Leasing Co-Ownership Program-14, and Finalco Equipment Trust III, during the period April 1, 1985 and December 31, 1987, inclusive, by a Class Plaintiff or a Settlement Class Member during the Settlement Class Period, or any loss by reason thereof, or (2 with any of the facts, transactions, events, occurrences, acts, disclosures, statements, omissions or failures to act, of whatever kind or character whatsoever, irrespective of the state of mind of the actor performing or omitting to perform the same, which were or could have been alleged in the Class Action, the Complaint, any other pleading, argument, motion, brief, report or filing in the Class Action. Released Persons, as used in the definition of Released Claims above, means Defendants Deloitte & Touche and Marshall and Stevens Incorporated and their Related Parties. Unknown Claims, as used in the definition of Released Claims above, means any Released Claims which any Class Plaintiff or Settlement Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the Released Persons which, if known by him, her or it, might have affected his, her or its settlement with and release of the Released Persons, or might have affected his, her or its decision not to object to the Settlement. With respect to any and all Released Claims, the Settling Parties agree that, upon the Effective Date, each of the Class Plaintiffs, and Settlement Class Members, and each of them, shall be deemed to have, and by operation of the Final Judgment shall have, expressly waived and relinquished, to the fullest extent permitted by law, the provisions, rights, and benefits of Section 1542 of the California Civil Code, which provides: A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. Each of the Class Plaintiffs and the Settlement Class Members, upon the Effective Date, shall be deemed to have, and by operation of the Final Judgment shall have, waived any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to Section 1542 of the California Civil Code. Each of the Class Plaintiffs and Settlement Class Members may hereafter discover facts in addition to or different from those which he, she or it now knows or believes to be true with respect to the subject matter of the Released Claims, but each Class Plaintiff and Settlement Class Member, upon the Effective Date, shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever settled and released any and all Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed upon any theory of law or equity now existing or coming into existence in 5

6 the future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. VII. NOTICE TO BANKS, BROKERS, AND OTHER NOMINEES Banks, brokerage firms, institutions, and other persons who are nominees who purchased or hold Units in the equipment leasing programs included in the Settlement Class are requested within ten (10 days of receipt of the Notice (1 to provide Plaintiffs Settlement Counsel with the names and addresses of such beneficial owners, or (2 to forward copies of this Notice to each such beneficial owner and provide Plaintiffs Settlement Counsel with written confirmation that the notice has been so forwarded. Plaintiffs Settlement Counsel offer to prepay your reasonable expenses of complying with this request upon submission of appropriate documentation. Additional copies of the Notice may be obtained from Plaintiffs Settlement Counsel for forwarding to such beneficial owners. All such correspondence to Plaintiffs Settlement Counsel should be addressed as follows: Dover Securities Litigation c/o Gilardi & Co. LLC P. O. Box 990 Corte Madera, California VIII. THE FINAL APPROVAL HEARING. A Settlement Hearing will be held before the Honorable J. Spencer Letts, United States District Judge, United States District Court, Central District of California, 312 North Spring Street, Los Angeles, California, on May 14, 2001, at 1:00 p.m., for the purpose of determining whether the proposed Settlements are fair, reasonable and adequate and whether they should be approved by the Court and the Class Action dismissed on the merits and with prejudice as against the Settling Defendants, and the Final Judgment entered, as provided above, and to consider whether a Good Faith Order should be entered regarding the fairness and reasonableness of the Settlements as to the non-settling defendants, and whether the proposed Plan of Distribution should be approved. The hearing on approval of the Settlements, the Good Faith Order and the Plan of Distribution may be adjourned from time to time by the Court at the hearing or any adjourned session thereof without further notice. Any member of the Settlement Class who has not requested exclusion may appear at the hearing to show cause why the proposed Settlements should not be approved and the Class Action should not be dismissed on the merits with prejudice as against the Settling Defendants, and/or to present any opposition to the proposed Plan of Distribution; provided, however, that no such person shall be heard, unless his, her or its objection or opposition is made in writing and is filed, together with copies of all other papers and briefs to be submitted by him, her or it, with the Court no later than April 20, 2001, and showing due proof of service on: MARC M. SELTZER GARETH T. EVANS MICHAEL R. MARRON SUSMAN GODFREY L.L.P. GIBSON, DUNN & CRUTCHER McQUAID, METZLER, BEDFORD 1880 Century Park East, Suite South Grand Avenue & VAN ZANDT LLP Los Angeles, California Los Angeles, California Main Street, 16 th Floor San Francisco, California Plaintiffs Settlement Counsel Attorneys for Defendant Deloitte & Touche, LLP Attorneys for Defendant Marshall and Stevens Incorporated Any member of the Settlement Class who does not make his, her or its objection or opposition in the manner provided herein shall be deemed to have waived all objections and opposition to the fairness, reasonableness and adequacy of the proposed Settlements and the proposed Plan of Distribution. IX. EXAMINATION OF PAPERS AND INQUIRIES. For a more detailed statement of the matters involved in this Class Action, reference is made to the pleadings, the Stipulations and to other papers filed in this action, which may be inspected at the Office of the Clerk of the United States District Court, Central District of California, United States Courthouse, 312 North Spring Street, Los Angeles, California, during business hours of each business day. Inquiries regarding the Class Action should be addressed as follows: Dover Securities Litigation c/o Gilardi & Co. LLC P. O. Box 990 Corte Madera, California PLEASE DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE. Dated: March 20, BY ORDER OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA 6