for the district of south carolina greenville division...

6:08-cv-02995-JMC Date Filed 03/07/11 Entry Number 245 of 24

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF SOUTH CAROLINA

GREENVILLE DIVISION

ROBERT A. LATHAM and THE :TAYLOR GROUP, Individually and on :Behalf of All Others Similarly Situated, :

:Plaintiffs, :

:Case No. 6:08-cv-02995-JMCv. :

:MITCHELL J. STEIN, BILL :MATTHEWS, PAMELA M. BUNES, :BUDIMIR S. DRAKULIC, ROBERT C. :SCHERNE, KEVIN F. PICKARD, :LOWELL T. HARMISON, MARVIN H. :FINK and SIGNALIFE, INC., :

:Defendants.

DARRYL K. ROTH and THE TAYLOR :GROUP, Individually and on Behalf of :All Others Similarly Situated, :

:Plaintiffs, :

:v. : Case No. 08-cv-3183-JMC

:MITCHELL J. STEIN, WILLIAM R. :MATTHEWS, PAMELA M. BUNES, :BUDIMIR S. DRAKULIC, ROBERT C. :SCHERNE, KEVIN F. PICKARD, :LOWELL T. HARMISON, MARVIN H. :FINK and SIGNALIFE, INC. :

:Defendants.

LEAD PLAINTIFFS’ MOTION AND MEMORANDUM IN SUPPORT OF ANORDER FOR NOTICE OF HEARING IN CONNECTION WITH SETTLEMENT

PROCEEDINGS


TABLE OF CONTENTS

I. BACKGROUND OF THE LITIGATION AND THE SETTLEMENT 1

II. THE PROPOSED CLASS MEETS ALL ELEMENTS FOR CLASSCERTIFICATION 2

A. The Proposed Class Meets All Prerequisites for Class Certification. 3

B. The Class Is So Numerous the Joinder of All Members Is Impracticable 4

C. There Are Questions of Law and Fact Common to the Class 5

D. The Representative Plaintiffs’ Claims are Typical of the Class 6

E. The Representative Plaintiffs Will Fairly and Adequately Protectthe Interests of the Class 7

III. THE PROPOSED CLASS ALSO SATISFIES RULE 23(b)’s CLASSCERTIFICATION REQUIREMENTS. 9

A. Questions of Law and Fact Common to the Proposed Class MembersPredominate Over Individual Issues 9

B. The Class Action Device Is the Superior Method for the Fair and EfficientAdjudication of this Matter 10

IV. THIS COURT SHOULD GRANT PRELIMINARY APPROVALFOR A REASONABLE SETTLEMENT THAT FACES SUBSTANTIALRISKS IF LITIGATION CONTINUES 11

A. Legal Standard 11

B. There Is Probable Cause to Notify the Class Because theProposed Settlement Is the Result of Arms’ Length Negotiations 12

C. The Proposed Settlement Falls Within the Range of Possible Approval 14

V. THE COURT SHOULD APPROVE THE PROPOSED NOTICE TO THEPUTATIVE CLASS 16

A. Notice Contents 16

VI. CONCLUSION 17

i


TABLE OF AUTHORITIES

Page(s)CASES

Amchem Prods., Inc. v. Windsor,521 U.S. 591 (1997) 9

Armstrong v. Bd. of School Dirs. of City of Milwaukee,616 F.2d 305 (7th Cir. 1980), overruled on other grounds by Felzen v.Andreas, 134 F.3d 873 (7th Cir. 1998) 11, 12

Brady v. Thurston Motor Lines,726 F.2d 136 (4th Cir. 1984), cert. denied, 469 U.S. 827 (1984) 4

Clark v. Experian Info. Solutions, Inc.,219 F.R.D. 375 (D.S.C. 2003) 11

Conner v. Automated Accounts, Inc.,202 F.R.D. 265 (E.D.Wa. 2001) 10

Cuming v. S. C. Lottery Comm’n,Civil Action No. 3:05-cv-03608-MBS, 2008 WL 906705(D.S.C. March 31, 2008) 2

Cypress v. Newport News Gen. & Nonsectarian Hosp. Ass’n,375 F.2d 648 (4th Cir. 1967) 4

Deiter v. Microsoft Corp.,436 F.3d 461 (4th Cir. 2006) 7

Flinn v. FMC Corp.,528 F.2d 1169 (4th Cir. 1975) 11, 12, 15

Grice v. PNC Mortgage Corp. of America,No. CIV. A. PJM-97-3084, 1998 WL 350581 (D. Md. May 21, 1998) 16, 17

Gunnels v. HealthPlan Servs., Inc.,348 F.3d 417 (4th Cir. 2003) 9

Holsey v. Armour & Co.,743 F.2d 199 (4th Cir. 1984), cert. denied, 470 U.S. 1028 (1985) 4, 5

Horton v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,855 F. Supp. 825 (E.D.N.C. 1994) 11, 12

ii


Hunter v. Am. Gen. Life & Accident Ins. Co.,No. CA 301-5000-22, 2004 WL 5231631 (D. S.C. Dec. 2, 2004) 9

In re A.H. Robins Co., Inc.,880 F.2d 709 (4th Cir. 1989) 2

In re Jiffy Lube Securities Litigation,927 F.2d 155 (4th Cir. 1991) 11, 12, 13, 15

In re Mid-Atlantic Toyota Antitrust Litig.,564 F. Supp. 1379 (D. Md. 1983) 11, 12, 13, 14

In re Prudential Ins. Co. of America Sales Practices Litig.,962 F. Supp. 450 (D.N.J. 1997), aff’d., 148 F.3d 283 (3d Cir. 1998) 17

In re Serzone Prods. Liab. Litig.,MDL No. 1477, 2004 WL 2849197 (S.D. W. Va. Nov. 18, 2004) 12, 14

Int’l Woodworkers of Am., AFL-CIO, CLC v. Chesapeake Bay Plywood Corp.,659 F.2d 1259 (4th Cir. 1981) 5

Isby v. Bayh,75 F.3d 1191 (7th Cir. 1996) 14

Jenkins v. Raymark Indus., Inc.,782 F.2d 468 (5th Cir. 1986) 2

Kelley v. Norfolk & W. Ry. Co.,584 F.2d 34 (4th Cir. 1978) 5

Kirkman v. N.C. R. R. Co.,220 F.R.D. 49 (M.D.N.C. 2004) 3

Lilly v. Harris-Teeter Supermarket,720 F.2d 326 (4th Cir. 1983), cert. denied, 466 U.S. 951 (1984) 4

Senter v. Gen. Motors Corp.,532 F.2d 511 (6th Cir. 1976), cert. denied 429 U.S. 870 (1976) 7

Simon v. Westinghouse Elec. Corp.,73 F.R.D. 480 (E.D. Pa. 1977) 5

Sosna v. Iowa,419 U.S. 393 (1975) 8

South Carolina Nat’l Bank v. Stone,139 F.R.D. 335 (D.S.C. 1991) 13, 16

iii


Thomas v. Louisiana-Pacific Corp.,246 F.R.D. 505 (D.S.C. 2007) 8

Thorn v. Jefferson-Pilot Life Ins. Co.,445 F.3d 311 (4th Cir. 2006) 5

Weinberger v. Kendrick,698 F.2d 61 (2d Cir. 1982) 14

STATUTES

15 U.S.C.§78u(a)(4) 2

Federal Rules of Civil ProcedureRule 23 3, 4, 11Rule 23(a) 3, 4, 7, 9Rule 23(a)(1) 4, 5Rule 23(a)(2) 5Rule 23(a)(3) 6Rule 23(a)(4) 7Rule 23(b) 9Rule 23(b)(3) 1, 9, 10Rule 23(b)(3)(A) 9Rule 23(e) 1, 11, 16Rule 23(e)(1) 11, 16

OTHER AUTHORITIES

1 H. Newberg, Newberg On Class Actions§3:13 7§3:21 7

7AA Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure§1778 (3d ed. 2010) 10

BARBARA J. ROTHSTEIN & THOMAS E. WILLGING, MANAGING CLASS ACTIONLITIGATION: A POCKET GUIDE FOR JUDGES 9 (Federal Judicial Center 2009) 3

iv


Lead Plaintiffs Bryan D. Harris, Mark Taylor and Greg Taylor (“Lead Plaintiffs”),

by and through counsel, hereby move this Court, pursuant to Federal Rule of Civil

Procedure 23(b)(3) and (e), for entry of an Order, in the form attached as Exhibit A, for

certification of the proposed settlement Class, approval of the Plan of Distribution, and

preliminary approval of the class action settlement.

I. BACKGROUND OF THE LITIGATION AND THE SETTLEMENT

For more than two years, Class Counsel have prosecuted federal securities claims

both here and in the United States Bankruptcy Court for the Southern District of Florida.

These claims, held by thousands of putative Class members, allege that the Defendants

Signalife, Inc. (“Signalife” or the “Company”), formerly known as Recom Managed

Systems, Inc, and now known as Heart Tronics, Inc., Pamela M. Bunes (“Bunes”),

Lowell T. Harmison (“Harmison”), Robert C. Scherne (“Scherne”), Kevin F. Pickard

(“Pickard”), William R. Matthews (“Matthews”), Mitchell J. Stein (“Stein”) and Budimir

Drakulic (“Drakulic”) (collectively “Defendants”) unlawfully used and manipulated

Signalife as a vehicle to engage in a stock manipulation scheme.

Lead Plaintiffs and Defendants (collectively, the “Parties”) have undertaken

months-long, protracted and contested settlement negotiations while at the same time

continuing to engage in extensive motion practice, party and non-party discovery. These

efforts have produced a comprehensive resolution in the form outlined in the March 1,

2011 Settlement Agreement (hereinafter “Agreement”). See Agreement, attached as

Exhibit 1 to Guglielmo Declaration. 1

The format of the Agreement is straightforward. Under its terms, the Parties have

agreed to a four million dollar ($4,000,000) settlement as full consideration for this action

1 Defined terms identified in this Memorandum have the same meanings as listed in the Agreement.

1


against Defendants Signalife, Bunes, Harmison, Pickard, Scherne, Drakulic, Matthews

and Stein (the “Defendants”). The Parties have agreed to provide each other with full,

mutual claim releases. The Defendants will provide Claim Releases to AXIS after AXIS’

payment of the settlement and covered defense costs. The Class Administrator (mutually

agreed upon by the Parties) shall administer the funds to Class Members and is to be paid

out of the Gross Settlement Amount.

Class Counsel, subject to this Court’s approval, will seek reasonable attorneys’

fees, including expenses, up to 33 1/3% of the total fund created by Defendants.

Defendants do not object to this percentage. Class Counsel will separately move for

approval of reasonable attorneys’ fees and expenses for both funds at or prior to a motion

for final approval.

The Defendants do not object to the Lead Plaintiffs receiving an award by the

Court, pursuant to 15 U.S.C. §78u(a)(4) (“PSLRA”) for their efforts on this litigation.

Class Counsel submit that the settlement and requested award are reasonable in light of

the Lead Plaintiffs’ cooperation with Class Counsel in bringing this lawsuit and their

substantial involvement in the claims both in the Securities action as well as the related

Bankruptcy action.

II. THE PROPOSED CLASS MEETS ALL ELEMENTS FOR CLASSCERTIFICATION

District courts have “wide discretion in deciding whether or not to certify a

proposed class.” In re A.H. Robins Co., Inc., 880 F.2d 709, 728 (4th Cir. 1989) (quoting

Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 471-72 (5th Cir. 1986)). “The court must

accept the allegations made in support of certification as true, and not undertake an

examination of the merits of the case.” Cuming v. S.C. Lottery Comm’n, Civil Action

2


No. 3:05-cv-03608-MBS, 2008 WL 906705, at *2 (D.S.C. March 31, 2008). Lead

Plaintiffs do, however, bear the burden of satisfying Rule 23’s certification requirements,

and have done so here. Id.

A. The Proposed Class Meets All Prerequisites for Class Certification

In order to comply with Rule 23(a), Lead Plaintiffs must show:

(1) The class is so numerous that joinder of all members isimpracticable;

(2) there are questions of law or fact common to the class;(3) the claims or defenses of the representative parties are typical of

the claims or defenses of the class; and(4) the representative parties will fairly and adequately protect the

interests of the class.

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

As an initial matter, the Court should “consider the definition of the class itself

when determining the appropriateness of class certification,” Kirkman v. N.C. R.R. Co.,

220 F.R.D. 49, 53 (M.D.N.C. 2004), in order to determine whether it is “precise,

objective, and ascertainable . . . [and whether it] captures all individuals or entities

necessary for the efficient and fair resolution of common questions of fact and law in a

single proceeding,” B ARBARA J. ROTHSTEIN & THOMAS E. WILLGING, MANAGING CLASS

ACTION LITIGATION: A POCKET GUIDE FOR JUDGES 9 (Federal Judicial Center 2009).

Lead Plaintiffs here propose the following class definition for the four million

dollar ($4,000,000) cash fund (hereafter “Settlement Fund”): “Class” and “Class

Members” shall mean all persons who purchased the publicly traded securities of

Signalife during the period between February 10, 2004 and April 14, 2008, inclusive, as

defined in the Complaint. Excluded from the Class for Settlement purposes only are

Defendants, any entity in which a Defendant has or had a controlling interest, members of

3


the Individual Defendants’ families and legal representatives, agents, affiliates, heirs and

successors-in-interest or assigns of any such excluded party, and all current and former

officers and directors of Signalife who are not also Defendants. Again, for Settlement

purposes only, the term “controlling interest” shall include any interest of 5% or more of

the common stock of any entity. Also excluded from the Class are any putative Class

Members who exclude themselves by filing a timely request for exclusion in accordance

with the requirements set forth in the Notice.

As set forth below, this proposed Class meets all prerequisites for class

certification under Fed. R. Civ. P. 23(a).

B. The Class Is So Numerous the Joinder of All Members Is Impracticable

Rule 23(a)(1) states that the numerosity requirement is met if “joinder of all

members is impracticable.” Fed. R. Civ. P. 23(a)(1). The Fourth Circuit has consistently

held the application of Rule 23 “is to be considered in light of the particular

circumstances of the case,” Cypress v. Newport News Gen. & Nonsectarian Hosp. Ass’n,

375 F.2d 648, 653 (4th Cir. 1967), and, accordingly, it has not set a bright-line rule on

numerosity. See Holsey v. Armour & Co., 743 F.2d 199, 217 (4th Cir. 1984) (holding

that between forty-six and sixty members of a class was a sufficient number to satisfy the

Rule 23(a)(1) numerosity requirement for class certification), cert. denied, 470 U.S. 1028

(1985); Brady v. Thurston Motor Lines, 726 F.2d 136, 145 (4th Cir. 1984) (holding that

seventy-four members of a class was a sufficient number to satisfy the Rule 23(a)(1)

numerosity requirement for class certification), cert. denied, 469 U.S. 827 (1984); Lilly v.

Harris-Teeter Supermarket, 720 F.2d 326, 333 (4th Cir. 1983) (holding that 229 members

4


of a class was a sufficient number to satisfy the Rule 23(a)(1) numerosity requirement),

cert. denied, 466 U.S. 951 (1984).

The proposed Class here involves approximately thousands of Class Members.

Although there is no precise measurement for numerosity, Kelley v. Norfolk & W. Ry.

Co., 584 F.2d 34, 35 (4th Cir. 1978), this number easily satisfies the Rule 23(a)(1)

standard.

C. There Are Questions of Law and Fact Common to the Class

Fed. R. Civ. P. 23(a)(2) requires a showing that questions of law or fact are

common to the class. It does not require that all such issues in the litigation be common,

nor that common questions predominate, but only that common questions exist. See

Holsey, 743 F.2d at 216-17; see also Int’l Woodworkers of Am., AFL-CIO, CLC v.

Chesapeake Bay Plywood Corp., 659 F.2d 1259, 1269-70 (4th Cir. 1981) (stating that

differences in the manner or degree of commonly caused injuries do not preclude

certification). Indeed, a single common question has been found to satisfy Rule 23(a)(2).

See, e.g., Simon v. Westinghouse Elec. Corp., 73 F.R.D. 480, 484 (E.D. Pa. 1977). “A

common question is one that can be resolved for each class member in a single hearing.”

Thorn v. Jefferson-Pilot Life Ins. Co., 445 F.3d 311, 319 (4th Cir. 2006).

While courts have held that “commonality” exists under many different

circumstances, there are common questions if the claims of the class arise from the same

underlying set of facts or circumstances. Holsey, 743 F.2d at 216-17. In the present

action, the claims of Lead Plaintiffs and their proposed Class present a number of

common questions of law and fact, including, but not limited to:

a. Whether Defendants knowingly and systematicallymade false and misleading statements to the public

5


concerning the Company, its sales and revenues andthe development of the Company’s products;

b. Whether Defendants issued false and misleadingstatements to the public concerning the commercialviability of the Fidelity 100;

c. Whether Defendants issued false and misleadingstatements stating the Company had obtainedmillions of dollars in orders and was recognizingrevenues from such sales of the Fidelity 100 and itsother products;

d. Whether the Defendants violated the SecuritiesLaws in disseminating and issuing false andmisleading information in Signalife’s filings withthe Securities and Exchange Commission (“SEC”)and its press releases;

e. The effect of Defendants’ actions on the price ofSignalife stock;

f. Whether the conduct of Defendants, as alleged inthe Complaint, caused damages to the LeadPlaintiffs and the other members of the Class; and

g. The appropriate measure of damages sustained byLead Plaintiffs and other members of the Class.

In sum, Lead Plaintiffs’ allegations, together with the information Lead Plaintiffs

have obtained through pre- and post-filing as well as through formal discovery and its

private investigation, describe a common nucleus of operative facts showing that

Defendants engaged in a uniform practice related to the manipulation of Signalife stock

that was in violation of federal securities laws. Class Members seek redress for this same

common injury; accordingly, the threshold for commonality has been met here.

D. The Representative Plaintiffs’ Claims are Typical of the Class

Rule 23(a)(3) requires that “the claims or defenses of the representative parties”

be “typical of the claims or defenses of the class.” Decisions construing Rule 23(a)(3)

6


have given it a liberal construction, holding that a claim is typical if it arises from the

same events, practices, or course of conduct that gives rise to the claims of other class

members, and if the claims are based on the same legal theories. See, e.g., Senter v. Gen.

Motors Corp., 532 F.2d 511 (6th Cir. 1976), cert. denied 429 U.S. 870 (1976); 1 H.

Newberg, Newberg on Class Actions §3:13 (2002). “The representative party’s interest

in prosecuting his own case must simultaneously tend to advance the interests of the

absent class members . . . [but] [t]hat is not to say that typicality requires that the

plaintiff’s claim and the claims of class members be perfectly identical . . . .” Deiter v.

Microsoft Corp., 436 F.3d 461, 466-67 (4th Cir. 2006).

Here, the Lead Plaintiffs’ claims are typical of the Class as a whole. Each of the

named Lead Plaintiffs is a member of the proposed Class in that the Lead Plaintiffs

purchased Signalife stock during the applicable time period and suffered a loss from the

decline of that stock’s value. Lead Plaintiffs and remaining members of the Class also

share the same common legal theories grounded in federal securities law.

E.

The Representative Plaintiffs Will Fairly and Adequately Protect theInterests of the Class

The final requirement of Rule 23(a) is that “the representative parties will fairly

and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). This

requirement is satisfied in large part by the absence of any disabling antagonism or intra-

class conflict, as demonstrated from the preceding discussion of the “commonality” and

“typicality” requirements. Additional considerations more particularly associated with

Rule 23(a)(4) include the vigor with which the representative party can be expected to

assert and defend the interests of the class and the qualifications of class counsel. 1 H.

7


Newberg, Newberg On Class Actions §3:21. See also Sosna v. Iowa, 419 U.S. 393, 403

(1975); Thomas v. Louisiana-Pacific Corp., 246 F.R.D. 505, 509 (D. S.C. 2007).

Lead Plaintiffs’ interests here are clearly not antagonistic to those claims asserted

on behalf of the Class. Lead Plaintiffs filed this action to seek compensation resulting

from Defendants’ false and misleading statements, and these claims are consistent with

those of the remaining Class Members.

Moreover, Lead Plaintiffs’ Counsel has significant and extensive experience in

the prosecution of securities claims such as the claims brought here as well as significant

and extensive experience in other complex class action litigation. Lead Plaintiffs’

Counsel are well suited to prosecute the claims and they are clearly adequate counsel.

See Scott+Scott Firm Resume, Exhibit 2 to Guglielmo Declaration. Among their efforts

in this case, Class Counsel conducted an investigation, drafted and filed the Consolidated

Amended Complaint, opposed Defendants’ three Motions to Dismiss and successfully

argued for denial of a substantial majority of Lead Plaintiffs’ claims. Class Counsel

issued discovery to the Defendants, litigated and argued successfully against a stay of

discovery. When one of the individual defendants filed for bankruptcy, Class Counsel

retained bankruptcy counsel on behalf of Lead Plaintiffs and the Class to adequately

protect the Class’ interests. Most recently, Class Counsel opposed a fourth motion to

dismiss, as well as a motion for bifurcation and for a protective order concerning the

scope of discovery. Class Counsel and Lead Plaintiffs share the same interest as Class

Members in maximizing recovery, and this Court should therefore find that the proposed

representations are in the best interests of the Class.

8


III. THE PROPOSED CLASS ALSO SATISFIES RULE 23(b)’s CLASSCERTIFICATION REQUIREMENTS

In addition to meeting the requirements of Fed. R. Civ. P. 23(a), Lead Plaintiffs’

proposed Class also satisfies the requirements of Fed. R. Civ. P. 23(b). Rule 23(b)(3)

provides that a class action may go forward if the requirements of Rule 23(a) are met and

if:

(3) the court finds that the questions of law or fact common to class memberspredominate over any questions affecting only individual members, and that aclass action is superior to other available methods for fair and efficientadjudication of the controversy.

Fed. R. Civ. P. 23(b)(3). The rule gives further guidance on factors to be consulted by

the Court when making its superiority determination. Those factors are: (A) the

individual class members’ interests in individually controlling the prosecution or defense

of separate actions; (B) the extent and nature of any litigation concerning the controversy

already begun by or against class members; (C) the desirability or undesirability of

concentrating the litigation of the claims in the particular forum; and (D) the likely

difficulties in managing a class action. Fed. R. Civ. P. 23(b)(3)(A) – (D).

A.

Questions of Law and Fact Common to the Proposed Class MembersPredominate Over Individual Issues

The “predominance inquiry tests whether proposed classes are sufficiently

cohesive to warrant adjudication by representation.” Amchem Prods., Inc. v. Windsor,

521 U.S. 591, 623 (1997). To satisfy the predominance standard “Plaintiffs need only

show that ‘common questions predominate over individual questions as to liability,’”

Hunter v. Am. Gen. Life & Accident Ins. Co., No. CA 301-5000-22, 2004 WL 5231631,

at *10 (D.S.C. Dec. 2, 2004) (quoting Gunnels v. HealthPlan Servs., Inc., 348 F.3d 417,

428 (4th Cir. 2003)), even when individualized damages inquiries may be necessary. At

9


its core, the predominance inquiry focuses upon the relationship between common and

individual issues. “When common issues represent a significant aspect of the case and

they can be resolved for all members of the class in a single adjudication, there is clear

justification for handling the dispute on a representative rather than on an individual

basis.” 7AA Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure

§1778 (3d ed. 2010).

In this action, common questions predominate over questions affecting individual

Class Members. The factual and legal issues are subject to common proof since the proof

necessary to establish the Class claims will be the same for each and every Class Member

via federal securities laws. These questions of law and fact can be handled in a single

adjudication and are clearly worthy of class treatment.

B.

The Class Action Device Is the Superior Method for the Fair and EfficientAdjudication of this Matter

Before a class may be certified, the Court must also find that a class action is the

superior method for the fair and efficient adjudication of the action before it. Fed. R. Civ.

P. 23(b)(3). “A class action may be superior if class litigation of common issues will

reduce litigation costs and promote greater efficiency, or if no realistic alternative exists.”

Conner v. Automated Accounts, Inc., 202 F.R.D. 265, 271 (E.D.Wa. 2001). Because the

certification of the proposed settlement Class will obviate manageability concerns, Lead

Plaintiffs simply note that the use of the class device here will allow the Court to

conserve valuable judicial resources that would otherwise be allocated to individual

litigation.

10


IV. THIS COURT SHOULD GRANT PRELIMINARY APPROVAL FOR AREASONABLE SETTLEMENT THAT FACES SUBSTANTIAL RISKS IFLITIGATION CONTINUES

In determining whether preliminary approval is warranted, two issues must be

decided. The first issue is whether the proposed settlement is within the range of what

might ultimately be found fair, reasonable and adequate, under the standards set forth by

the Fourth Circuit Court of Appeals in Flinn v. FMC Corp., 528 F.2d 1169 (4th Cir.

1975), and its progeny, In re Jiffy Lube Securities Litigation, 927 F.2d 155 (4th Cir.

1991), and thus warrants publication of notice and scheduling of a hearing to consider

final settlement approval. The second issue is whether the proposed notice and notice

plan will provide the best notice practicable, as required under Rule 23 and the due

process clause of the Constitution. As explained below, the terms of the proposed

settlement are fair, reasonable and adequate (for preliminary approval purposes), and the

notice plan exceeds the requirements of Rule 23 and due process.

A. Legal Standard

Rule 23(e) requires the Court to approve any class action settlement and to direct

reasonable notice to the class. Fed. R. Civ. P. 23(e)(1). Judicial approval is necessary to

insure that the rights of absent class members are adequately protected. See Jiffy Lube,

927 F.2d at 158; Clark v. Experian Info. Solutions, Inc., 219 F.R.D. 375, 378 (D.S.C.

2003).

Courts apply a two-step approach to the settlement approval process. See Horton

v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 855 F. Supp. 825, 827 (E.D.N.C. 1994);

Armstrong v. Bd. of School Dirs. of City of Milwaukee, 616 F.2d 305, 314 (7th Cir. 1980),

overruled on other grounds by Felzen v. Andreas, 134 F.3d 873 (7th Cir. 1998); In re

11


Mid-Atlantic Toyota Antitrust Litig., 564 F. Supp. 1379, 1384 (D. Md. 1983). In the first

step, preliminary approval, the court reviews the proposed settlement for obvious

deficiencies, schedules a fairness hearing and provides the class with notice of the

proposed settlement and hearing; in the second step, the court considers final approval of

the proposed settlement at a formal fairness hearing. See Horton, 855 F. Supp. at 827;

Armstrong, 616 F.2d at 314; Mid-Atlantic Toyota, 564 F. Supp. at 1384; Manual for

Complex Litigation (Fourth) §§21.632, 21.634 (2004) (hereinafter, “ Manual”). At the

later fairness hearing, the Court will be asked to consider whether the proposed

settlement is fair, reasonable, and adequate under the factors well established in this

Circuit. See Jiffy Lube, 927 F.2d at 158-59 (setting forth fairness and adequacy factors to

be considered for approval of class settlement); Flinn, 528 F.2d at 1173-74 (same).

On a motion for preliminary approval, however, the Court’s function is merely to

ascertain whether there is “probable cause” to notify class members of the proposed

settlement and to proceed with a fairness hearing. Mid-Atlantic Toyota, 564 F. Supp. at

1384; see Armstrong, 616 F.2d at 314. When a proposed settlement appears to fall within

the range of “possible approval,” it is appropriate to issue preliminary approval and direct

notice to members of the settlement class. See Horton, 855 F. Supp. at 827-28; see also

Manual, supra, §§21.632, 21.633.

B.

There Is Probable Cause to Notify the Class Because the ProposedSettlement Is the Result of Arms’ Length Negotiations

Courts in the Fourth Circuit look to the fairness factors set forth in Flinn and Jiffy

Lube in determining whether there is probable cause to notify the class. See In re

Serzone Prods. Liab. Litig., MDL No. 1477, 2004 WL 2849197, at *2-*3 (S.D. W. Va.

Nov. 18, 2004); see also Mid-Atlantic Toyota, 564 F. Supp. at 1383-85. The fairness

12


factors concern whether there has been arms’ length bargaining. See Mid-Atlantic

Toyota, 564 F. Supp. at 1383, 1385; South Carolina Nat’l Bank v. Stone, 139 F.R.D. 335,

339 (D.S.C. 1991). Courts consider (i) the posture of the case at the time of settlement,

(ii) the extent of discovery that has been conducted, (iii) the circumstances surrounding

the negotiations, and (iv) the experience of counsel. See Jiffy Lube, 927 F.2d at 158-59;

South Carolina Nat’l Bank, 139 F.R.D. at 339.

The fairness factors, as applied to the present case, favor preliminary approval of

the proposed settlement. First, collusion is absent. A proposed class action settlement is

considered presumptively fair where, as here, there is no evidence of collusion and the

parties, through capable counsel, have engaged in arms’ length negotiations. See South

Carolina Nat’l Bank, 139 F.R.D. at 339 (“In assessing the fairness and adequacy of a

proposed settlement ‘there is a strong initial presumption that the compromise is fair and

reasonable.’”) (citation omitted); see also Manual, supra. §§21.61, 21.62. Class Counsel

engaged in protracted negotiations over approximately one year where the outcome was

uncertain. It was only after formalized mediation failed and after a series of in-person

and telephonic settlement discussions were had over the past few weeks that the Parties

were able to reach a settlement in principal.

Next, Class Counsel were fully and sufficiently informed to vigorously advocate

on behalf of the Class. In addition to the formal discovery that the parties have

undertaken, which included the issuance of a number of subpoenas and production of

thousands of documents and related data, Class Counsel conducted extensive factual

investigation and legal analysis to obtain sufficient information to weigh the benefits of

the proposed Agreement against the risks of continued litigation. The risks of continued

13


litigation included unfavorable rulings on pending motions, including but not limited to

Lead Plaintiffs’ Motion for Reconsideration, Defendant Drakulic’s Motion to Dismiss but

also potential unfavorable rulings at class certification or summary judgment.

Furthermore, protracted litigation, which would include extensive discovery from the

Parties, and with recoveries limited given the Company’s present economic situation,

would most likely result in the complete exhaustion of Defendants’ remaining insurance

proceeds which could be otherwise utilized to compensate Class Members. Lead

Plaintiffs also run the risk of losing a jury verdict if the Action went to trial.

It is on the basis of their extensive investigation and analysis that Class Counsel,

who have substantial experience in the commencement, prosecution and negotiation of

securities class actions, recommend approval of the proposed settlement as in the best

interests of the putative Class. See Isby v. Bayh, 75 F.3d 1191, 1200 (7th Cir. 1996)

(noting that the court is “entitled to give consideration to the opinion of competent

counsel that the settlement [is] fair, reasonable, and adequate”); see also Weinberger v.

Kendrick, 698 F.2d 61, 74 (2d Cir. 1982) (noting that absent fraud, collusion or the like,

courts should be hesitant about substituting their own judgment for that of counsel).

C. The Proposed Settlement Falls Within the Range of Possible Approval

Courts should consider the adequacy of the settlement relief to determine whether

the compromise falls within the range of possible approval. See Serzone Prods. Liab.

Litig., 2004 WL 2849197, at *2-*3 (preliminarily approving class settlement); see also

Mid-Atlantic Toyota, 564 F. Supp. at 1385. Like the fairness factors, courts in this

Circuit weigh the following adequacy factors: (i) the relative strength of the plaintiffs’

case on the merits; (ii) the existence of any difficulties of proof or strong defenses the

14


plaintiffs are likely to encounter if the case goes to trial; (iii) the anticipated duration and

expense of additional litigation; (iv) the solvency of the defendants and the likelihood of

recovery of a litigated judgment; and (v) the degree of opposition to the settlement. See

Jiffy Lube, 927 F.2d at 159; Flinn, 528 F.2d at 1173-74. While the Court will also

consider these factors at the final fairness hearing, the weighing of these factors at this

time demonstrates that the proposed settlement is adequate for preliminary approval

purposes (that the proposed settlement falls within the range of possible approval).

First, the strength of Lead Plaintiffs’ case, balanced against the assured

compensation under the proposed Agreement, weighs in favor of the adequacy of the

compromise. Lead Plaintiffs’ ability to prevail on the merits of this litigation, like all

contested matters, is uncertain. This proposed Agreement, however, confers relief that

would not be achievable in the event that this Court rules in favor of Defendants on

summary judgment or opts not to certify a Class.

Second, there can be no serious debate that this already 29-month-old litigation

could continue unabated at great expense and delay for the Class. For example, any

issues decided on summary judgment or at the class certification stage would be subject

to potential lengthy appeals. Therefore, the litigation could very well proceed to the

Fourth Circuit following contested proceedings. Put quite simply, it is very difficult to

conclude that this litigation could be resolved efficiently and at a reasonable expense if

the settlement does not now meet with the Court’s approval.

Third, the Court is already aware that the present economic situation of the

Defendants is a legitimate concern. Indeed, Defendants are covered by a modest

insurance policy that would be exhausted if the litigation is continued. Given that

15


Signalife has not recorded material revenues since this Action was filed, a settlement or

judgment in an amount greater than that agreed upon here, may not be satisfied.

Furthermore, Defendant Stein filed for bankruptcy protection in the Southern District of

Florida, making any potential recovery from him less likely.

Given these facts, Lead Plaintiffs do not foresee any significant opposition to the

proposed Agreement and believe it clearly falls within the range of reasonableness.

V. THE COURT SHOULD APPROVE THE PROPOSED NOTICE TO THEPUTATIVE CLASS

The proposed notice and accompanying plan (hereinafter “Notice”) satisfy Rule

23(e) and due process. Under Rule 23(e), the “court must direct notice in a reasonable

manner to all class members who would be bound by a proposed settlement.” Fed. R.

Civ. P. 23(e)(1). The Notice must be “the best practicable notice under the

circumstances” and must satisfy due process. South Carolina Nat’l Bank, 139 F.R.D. at

338.

A. Notice Contents

Both the mailed version and the publication version of the Notice accurately

summarize the settlement terms and advise the putative Class of the benefits, rights and

limitations of the proposed settlement. See Grice v. PNC Mortgage Corp. of America,

No. CIV. A. PJM-97-3084, 1998 WL 350581, at *7 (D. Md. May 21, 1998). While the

Notice condenses the terms of the proposed settlement, it covers all relevant topics: the

history of the litigation, the substantive terms of the proposed settlement, the class

definition, the effect of the proposed settlement and release of claims, the conditions of

the proposed settlement, what Class Members must do to exclude themselves from the

Class, what they must do if they wish to object to the Settlement, and the procedure for

16


filing a claim. The Notice, importantly, is written and formatted to communicate this

information in a manner that will be understood by members of the Class, who,

presumably, are not lawyers. See id. (the notice should “employ[] plain language”); see

also In re Prudential Ins. Co. of America Sales Practices Litig., 962 F. Supp. 450, 495-96

(D.N.J. 1997), aff’d., 148 F.3d 283 (3d Cir. 1998); Manual, supra, §21.312.

Class Counsel and the Defendants have retained Garden City Group as the

Administrator for the settlement. The Settlement Administrator will provide direct notice

to Class Members. The class will also receive notice by publication in the national

edition of The Wall Street Journal and the Investors Business Daily approximately 20

days following entry of the Order for notice and hearing. The Settlement Administrator

will enhance the Notice by publishing details of the Settlement on its website to be

established by the Settlement Administrator. See Notice of Settlement, Exhibit A-1.

VI. CONCLUSION

For the reasons set forth herein, Lead Plaintiffs respectfully request that the Court

enter an Order, substantially in the form of Exhibit A, certifying the Settlement Class,

approving the Plan of Distribution, and preliminarily approving the settlement so that

Notice may be issued.

Dated: March 7, 2011 Respectfully submitted,

/s/ Terry E. Richardson, Jr. Terry E. Richardson, Jr. (#3457)RICHARDSON PATRICKWESTBROOK & BRICKMAN LLC1730 Jackson StreetBarnwell, SC 29812Tel: (803) 541-7850Fax: (803) [email protected]

Liaison Counsel for Lead Plaintiffs

17


Beth Kaswan (admitted pro hac vice)Joseph P. Guglielmo (admitted pro hacvice)SCOTT+SCOTT LLP500 Fifth Avenue, 40th FloorNew York, NY 10110Tel: (212) 223-6444Fax: (212) [email protected]@scott-scott.com

David R. Scott (admitted pro hac vice)SCOTT+SCOTT LLP156 South Main StreetP.O. Box 192Colchester, CT 06415Tel: (860) 537-5537Fax: (860) [email protected]

Lead Counsel for Lead Plaintiffs

18


CERTIFICATE OF SERVICE

I hereby certify that on March 7, 2011 I caused the foregoing to be electronically

filed with the Clerk of the Court using the CM/ECF system which will send notification

of such filing to the e-mail addresses denoted on the Electronic Mail Notice List, and I

hereby certify that I caused the foregoing document or paper to be mailed via the United

States Postal Service to the non-CM/ECF participants indicated on the Manual Notice

List.

I certify under penalty of perjury under the laws of the United States of America

that the foregoing is true and correct. Executed on March 7, 2011.

/s/ Terry E. Richardson, Jr. Terry E. Richardson, Jr. (#3457)RICHARDSON PATRICKWESTBROOK & BRICKMAN LLC1730 Jackson StreetBarnwell, SC 29812Tel: (803) 541-7850Fax: (803) [email protected]

19

6:08-cv-02995-JMC Date Filed 03/07/11 Entry Number 245-1 Page 1 of 2


GREENVILLE DIVISION

ROBERT A. LATHAM and THE TAYLORGROUP, Individually and on Behalf of AllOthers Similarly Situated,

Plaintiffs,Case No. 6:08-cv-02995-JMC

V.

MITCHELL J. STEIN, BILL MATTHEWS,PAMELA M. BUNES, BUDIMIR S.DRAKULIC, ROBERT C. SCHERNE,KEVIN F, PICKARD, LOWELL T.HARNIISON, MARVIN H. FIM^, andSIGNALIFE, INC.,

Defendants.DARRYL K. ROTH and THE TAYLORGROUP, Individually and on Behalf of AllOthers Similarly Situated,

Plaintiffs,

V. Case No. 08-cv-3183-JMC

MITCHELL J. STEIN, WILLIAM R.MATTHEWS, PAMELA M. BUNES,BUDB41R S. DRAKULIC, ROBERT C.SCHERNE, KEVIN F. PICKARD,LOWELL T. HARMISON, MARVIN H.FINK and SIGNALIFE, INC.

Defendants.

DECLARATION OF JOSEPH P. GUGLIELMO IN SUPPORT OF LEAD PLAINTIFFS'MEMORANDUM IN SUPPORT OF AN ORDER FOR NOTICE OF HEARING IN

CONNECTION WITH SETTLEMENT PROCEEDINGS

1


I, Joseph P. Guglielmo, pursuant to 28 U.S.C. § 1746, declare under penalty of perjury

that the following is true and correct to the best of my knowledge and belief.

1. I am admitted pro hac vice in this case and am a partner with the law firm of

Scott+Scott LLP, counsel for Lead Plaintiffs Bryan D. Harris, Mark Taylor and Greg Taylor,

collectively the Taylor Signalife Investor Group. I have personal knowledge of the matters

stated herein and, if called upon, I could and would competently testify thereto.

2. Attached as Exhibit 1 to this Declaration is a copy of the, Stipulation of

Settlement.

3. Attached as Exhibit 2 to this Declaration is a copy of the firm resume of

Scott+Scott,LLP.

I declare under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct.

Dated: March 1, 2011

New York, New York

JO SE! GUGL 1. `MO

2


EXHIBIT 1

6:08-cy-02995-JMC Date Filed 03/07/11 Entry Number 245-2 Page 2 of 37


GREENVILLE DIVISION

ROBERT A. LATHAM and THE TAYLORGROUP, Individually and on Behalf of AllOthers Similarly Situated,

•Plaintiffs,

Case No. 6:08-cv-02995-JMC•v.•

MITCHELL J. STEIN, BILL MATTHEWS,PAMELA M. BUNES, BUDIMIR S.DRAKULIC, ROBERT C. SCHERNE,KEVIN F. PICKARD, LOWELL T.HARMISON, MARVIN H. FINK andSIGNALIFE, INC.,

•Defendants.

DARRYL K. ROTH and THE TAYLORGROUP, Individually and on Behalf of AllOthers Similarly Situated,

•Plaintiffs,

v. • Case No. 08-cv-3183-JMC•

MITCHELL J. STEIN, WILLIAM R.MATTHEWS, PAMELA M. BUNES,BUDIMIR S. DRAKULIC, ROBERT C.SCHERNE, KEVIN F. PICKARD,LOWELL T. HARMISON, MARVIN H.FINK and SIGNALIFE, INC.

•Defendants.


STIPULATION AND AGREEMENT OF SETTLEMENT

This Stipulation and Agreement of Settlement (the "Stipulation") is submitted pursuant to

Rule 23 of the Federal Rules of Civil Procedure. Subject to the approval of the Court, this

Stipulation is entered into among Bryan D. Harris, Mark Taylor and Greg Taylor ("Lead

Plaintiffs") on behalf of themselves and the Class, and Defendants Signalife, Inc., formerly

known as Recom Managed Systems, Inc, and now known as HeartTronics, Inc. (collectively,

"Signalife" or the "Company"), Pamela M. Bunes ("Bunes"), Lowell T. Harmison ("Harmison"),

Robert C. Scheme ("Scheme"), Kevin F. Pickard ("Pickard"), William R. Matthews

("Matthews"), Mitchell J. Stein ("Stein") and Budimir Drakulic ("Drakulic") (the "Individual

Defendants") (the Company and the Individual Defendants shall be referred to together as the

"Defendants"), by and through their respective counsel. The parties to this Stipulation are

referred to collectively herein as the "Parties".

WHEREAS:

A. On August 28, 2008 and September 17, 2008, Robert Latham and Darryl Roth

filed two separate investor lawsuits against Signalife. ECF No. 1, 1 Roth ECF No. 1. On

November 20, 2008, pursuant to the Private Securities Litigation Reform Act of 1995

("PSLRA"), the actions were consolidated, Bryan D. Harris, Mark Taylor and Greg Taylor were

appointed to serve as Lead Plaintiffs, the law firm of Scott+Scott LLP was appointed to serve as

Plaintiffs' Lead Counsel, and the law firm of Richardson Patrick Westbrook & Brickman LLC

was appointed to serve as Plaintiffs' Liaison Counsel. ECF No. 28. Lead Plaintiffs filed a

Consolidated Amended Complaint (the "Complaint") on December 10, 2008, alleging that

1 Unless otherwise stated herein, all citations to "ECF No. " are citations to the LathamAction.

2


Defendants violated §10(b) of the Securities Exchange Act of 1934, codified at 15 U.S.C. § 78j;

SEC, Rule 10b-5, codified at 17 C.F.R. § 240.10b-5 and § 20(a) of the Securities Exchange Act

of 1934, codified at 15 U.S.C. § 78t. ECF No. 36.

B. On February 11, 2009, the Company and Individual Defendants Bunes, Harmison,

Scheme, Pickard and Matthews filed three separate motions to dismiss the Complaint. 2 ECF

Nos. 44, 52-53. On May 1, 2009, Lead Plaintiffs filed their oppositions to Defendants' Motions

to Dismiss. ECF Nos. 65-66. On May 18, 2009, Defendants filed their reply memoranda in

support of their motions to dismiss. ECF Nos. 72-74. On August 25, 2009, the Court held oral

argument on Defendants' Motions to Dismiss, and on September 4, 2009, United States District

Judge Bryan Harwell issued an Order denying in part and punting in part Defendants' Motions

to Dismiss. ECF No. 91.

C. On June 8, 2010, Lead Plaintiffs filed a Motion for Reconsideration of the Court's

September 4, 2009 Order granting, in part, Defendants' Motion to Dismiss premised on the

United States Supreme Court's decision in Merck & Co., Inc. v. Reynolds, 130 S.Ct. 1784

(2010). ECF No. 105. On June 25, 2010, Defendants' opposed Lead Plaintiffs' Motion for

Reconsideration, ECF Nos. 123, 125, 163, and on July 6, 2010, Lead Plaintiffs filed their reply

memorandum. ECF No. 154. The Court has yet to rule on Lead Plaintiffs' Motion for

Reconsideration.

2 Specifically, Defendants Signalife, Pickard, Scheme and Matthews filed a Motion to Dismiss andDefendants Harmison and Bunes filed separate, individual Motions to Dismiss. On March 13, 2009,Defendant Stein filed for personal bankruptcy in the Southern District of Florida, which automaticallystayed the case against Stein. See ECF No. 70. Defendant Drakulic filed his Motion to Dismiss theComplaint on October 8, 2009. ECF No. 80. On October 29, 2009, Lead Plaintiffs filed their response inopposition to Drakulic's Motion to Dismiss, ECF No. 83, and on November 9, 2009, Drakulic filed hisreply. ECF No. 84. On December 14, 2010, this Court held a hearing on Drakulic's Motion to Dismissand its Order is pending.

3


D. On June 18, 2010, Lead Plaintiffs served discovery upon Defendants, which

included document requests and F.R.C.P. Rule 30(b)(6) Notice of Deposition upon the

Company. On June 25, 2010, Defendants filed a Motion to Stay discovery pursuant to the

PSLRA stay provisions. ECF Nos. 132, 139, 142, 170. On July 12, 2010, Lead Plaintiffs' filed

their opposition to the Motion to Stay Discovery, ECF No. 159, and on July 21, 2010,

Defendants filed their reply. ECF no. 163. Magistrate Judge Kevin McDonald heard oral

argument on the Motion to Stay on August 17, 2010. By order dated August 20, 2010,

Magistrate Judge McDonald denied Defendants' Motion to Stay discovery pursuant to the

PSLRA. ECF No. 179.

E. On August 23, 2010, this action was reassigned to United States District Judge J.

Michelle Childs. ECF No. 180.

F. On October 13, 2010, Signalife filed a Motion to Bifurcate Discovery and a

Motion for Protective Order. ECF No. 193. On October 20, 2010, certain Individual Defendants

responded to Signalife's Motion. ECF No. 199. On November 1, 2010, Lead Plaintiffs' filed an

opposition to Signalife's Motion. ECF No. 204. Thereafter, on November 12, 2010, Signalife

filed a reply. ECF No. 207. On December 14, 2010, the Court heard oral argument on the

Motion to Bifurcate and Motion for Protective Order. The Court has yet to rule on Signalife's

Motion to Bifurcate and Motion for Protective Order.

G. Between September 10, 2010 and January 4, 2011, Lead Plaintiffs have also

subpoenaed the following third party individuals and organizations: Rubbermaid Inc., Standard

Registrar Transfer Co., Lee Erhlichman, Tracy Jones, The Silye Group, Elliot Davis LLC, Ralph

4


Olson, Martin Sumiclu-ast and Ventrex, Inc. 3 Lead Plaintiffs also received documents from

numerous third parties, including Rubbermaid Inc., Standard Registrar Transfer Co., Lee

Erhlichman, Tracy Jones, The Silye Group and Elliot Davis LLC.

H. Plaintiffs' Lead Counsel represents that it has conducted an extensive pre and post

filing investigation relating to the claims and the underlying events and transactions alleged in

the Complaint, and that Plaintiffs' Lead Counsel has analyzed evidence produced by certain

individual Defendants and third parties, and has researched the applicable law with respect to the

claims of Lead Plaintiffs and the Class against Defendants and the potential defenses thereto.

I. Based on this investigation and review as set forth above, Lead Plaintiffs and

Plaintiffs' Lead Counsel have concluded that the terms and conditions of this Stipulation are fair,

reasonable and adequate to the Class Members and in their best interests, and have agreed to

settle the claims raised in the Action pursuant to the terms and provisions of this Stipulation,

after considering (a) the substantial benefits that Lead Plaintiffs and the members of the Class

will receive from settlement of the Action, (b) the attendant risks of litigation, and (c) the

desirability of permitting the Settlement to be consummated as provided by the terms of this

Stipulation.

J. Defendants deny any wrongdoing whatsoever and this Stipulation shall in no

event be construed or deemed to be evidence of or an admission or concession on the part of

Defendants with respect to any claim or of any fault or liability or wrongdoing or damage

whatsoever, or any infirmity in the defenses that Defendants have asserted.4

3 On January 10, 2011, Lead Plaintiffs notified these third parties that the subpoenas have beenwithdrawn without prejudice, pending the approval of this proposed Agreement of Settlement.

4 Defendants have not filed their Answers to Complaint pursuant to the Consent Motion submittedto the Court extending their deadline. ECF No. 103.

5


K. Lead Plaintiffs and Defendants agree not to assert in any forum that the litigation

was brought by Lead Plaintiffs or defended by Defendants in bad faith or without a reasonable

basis. The Parties hereto shall assert no claims of any violation of Rule 11 of the Federal Rules

of Civil Procedure or of 28 U.S.C. § 1927 relating to the prosecution, defense, or Settlement of

the Action, and shall withdraw with prejudice all such pending claims.

L. The Parties agree that the amount paid and the other terms of the Settlement were

negotiated at arm's-length in good faith by the Parties, and reflect a settlement that was reached

voluntarily after consultation with experienced legal counsel and that the terms of the Settlement

are fair, adequate and reasonable.

NOW THEREFORE, without any admission or concession on the part of Lead Plaintiffs

of any lack of merit of the Action whatsoever, and without any admission or concession of any

liability or wrongdoing or lack of merit in the defenses whatsoever by Defendants, it is hereby

STIPULATED AND AGREED, by and among the Parties to this Stipulation, through their

respective attorneys, subject to approval of the Court pursuant to Rule 23(e) of the Federal Rules

of Civil Procedure, in consideration of the benefits flowing to the Parties hereto from the

Settlement, that all Settled Claims (as defined below) as against the Released Parties (as defined

below) and all of Settled Defendants' Claims (as defined below) shall be compromised, settled,

released and dismissed with prejudice, upon and subject to the following terms and conditions:

CERTAIN DEFINITIONS

1. As used in this Stipulation, the following terms shall have the following meanings:

(a) "Action" means the consolidated cases of Latham v. Matthews, et al., Case No.

08-cv-2995-JMC and Roth v. Matthews, et al., Case No. 08-cv-3183-JMC, and all cases

consolidated therewith.

6


(b) "Defendants" means Signalife, Inc., Pamela M. Bunes, Lowell T. Harmison,

Robert C. Scheme, Kevin F. Pickard, William R. Matthews, Mitchell J. Stein and Budimir

Drakulic.

(c) "Authorized Claimant" means a Class Member who submits a timely and valid

Proof of Claim form to the Claims Administrator.

(d) "Claims Administrator" means (Garden City Group, Inc.), which shall administer

the Settlement.

(e) "Class" and "Class Members" shall mean all persons who purchased the publicly

traded securities of Signalife during the period between February 10, 2004 and April 14, 2008,

inclusive, as defined in the Complaint. Excluded from the Class for Settlement purposes only

are Defendants, any entity in which a Defendant has or had a controlling interest, members of the

Individual Defendants' families and legal representatives, agents, affiliates, heirs and successors-

in-interest or assigns of any such excluded party, and all current and former officers and directors

of Signalife who are not also Defendants. Again, for Settlement purposes only, the term

"controlling interest" shall include any interest of 5% or more of the common stock of any entity.

Also excluded from the Class are any putative Class members who exclude themselves by filing

a timely request for exclusion in accordance with the requirements set forth in the Notice.

"Class Period" means, for the purposes of this Settlement only, the period of time

between February 10, 2004 and April 14, 2008, inclusive.

(g) "Court" means the United States District Court for the District of South Carolina,

Greenville Division, the Honorable J. Michelle Childs presiding.

(h) "Effective Date of Settlement" or "Effective Date" means the date upon which the

Settlement contemplated by this Stipulation shall become effective, as set forth in ¶24 below.

7


(i) "Fee Award" means the amount of attorneys' fees awarded by the Court to

Plaintiffs' Lead Counsel as described in ¶9 below.

"Final Order" means an order as to which there is no pending appeal, stay, motion

for reconsideration or motion to vacate or similar request for relief, and as to which the period of

time for a party to appeal or petition for a writ of certiorari has expired. For purposes hereof if

no appeal or motion for reconsideration, to vacate, or for similar relief is filed within thirty-three

(33) days after entry of the order in the District Court, the order shall be deemed to be a Final

Order.

(k) "Defendants' Counsel" means the law firms of Padula & Grant, PLLC, Jeter and

Williams, Jared J. Scharf Law Office, Greenberg Traurig LLP, Haynsworth Sinkler Boyd, PA,

Nexsen Pruet Jacobs and Pollard, Richardson Plowden and Robinson, and Schertler and Onorato.

(1) "Insurer" means AXIS Insurance Company.

(m) "Signalife" means Signalife, Inc., formerly known as Recom Management

Systems, Inc., and now known as HeartTronics, Inc.

(n) "Lead Plaintiffs" means Bryan D. Harris, Mark Taylor, and Greg Taylor.

(o) "Net Settlement Fund" shall mean the Gross Settlement Fund, as defined in lf 4,

less notice and administration costs, Plaintiffs' Lead Counsel's and Plaintiffs' Liaison Counsel's

fees and expenses, amounts payable to any Lead Plaintiff pursuant to 15 U.S.C. § 78u(a)(4)

("PSLRA") as awarded by the Court, and taxes on interest earned by the Cash Settlement

Amount, and tax expenses.

( 3 ) "Notice" means the Notice of Pendency of Class Action and Proposed Settlement

with Defendants, Motion for Attorneys' Fees and Settlement Fairness Hearing (the "Notice"),

8

6:08-cy-02995-JMC Date Filed 03/07111 Entry Number 245-2 Page 10 of 37

which is to be sent to members of the Class and all other appropriate recipients substantially in

the form attached hereto as Exhibit A-1 to Exhibit A.

(q) "Order and Final Judgment" means the proposed order to be entered approving

the Settlement substantially in the form attached hereto as Exhibit B.

(r) "Order for Notice and Hearing" means the proposed order preliminarily

approving the Settlement and directing notice thereof to the Class substantially in the form

attached hereto as Exhibit A.

(s) "Partners Investment Network" means the entity that has been named as a

defendant in the action captioned action Signalife Inc. v. McMahan, et al., No. BC 397448 (Cal.

Super. Ct.).

(t) "Plaintiffs' Lead Counsel" means the law firm of Scott+Scott LLP.

(u) "Plaintiffs' Liaison Counsel" means the law firm of Richardson Patrick

Westbrook and Brickman LLC.

(v) "Plan of Allocation" means the plan described in the Notice or any alternate plan

approved by the Court for allocation of each Authorized Claimant's pro rata share of the Net

Settlement Fund.

(w) "Proof of Claim" means the Proof of Claim and Release, substantially in the form

attached hereto as Exhibit A-2 to Exhibit A.

(x) "Publication Notice" means the summary notice of proposed Settlements and

hearing for publication substantially in the form attached as Exhibit A-3 to Exhibit A.

(y) "Released Parties" means Defendants and any and all of their present or former

parent companies, divisions, subsidiaries, affiliates, associates, representatives, predecessors,

successors, heirs, assigns, executors, administrators and any of their present or former directors,

9


agents, partners, principals, officers, employees, trustees, representatives, insurers, including

AXIS Insurance Company, or any of them, and their lawyers and all persons acting by, through,

under or in concert with them or any of them.

(z) "Settled Claims" means any and all claims, debts, demands, rights or causes of

action or liabilities whatsoever (including, but not limited to, any claims for damages, interest,

attorneys' fees, expert or consulting fees, and any other costs, expenses or liability whatsoever),

whether based on United States federal, state, local, statutory or common law or any other law,

rule or regulation, whether foreign or domestic, fixed or contingent, accrued or unaccrued,

liquidated or unliquidated, at law or in equity, matured or unmatured, foreseen or unforeseen,

whether class or individual in nature, including, without limitation, both known claims and

Unknown Claims (as defined below) (i) that have been asserted in the Action by the Class

Members or any of them against any of the Released Parties (whether pleaded in the Complaint

or not), or (ii) that could have been asserted in the Action or in any forum by the Class Members

or any of them against any of the Released Parties, which also arise out of, relate to, or are based

on any of the claims, allegations, activities, press releases or public statements set forth in the

Complaint and relate to the purchase, sale, transfer or acquisition of the publicly traded securities

of Signalife during the Class Period, or any actions, representations or omissions that were

alleged or might have been alleged to affect the price of any publicly traded common stock of

Signalife during the Class Period. Settled Claims shall include claims asserted by Lead Plaintiffs

against Mitchell Stein in the action In re Mitchell J. Stein, 09-cv-14345-BKC-PHG, pending in

the United States Bankruptcy Court for the Southern District of Florida.

(aa) "Settled Defendant's Claims" means any and all claims, rights or causes of action

or liabilities whatsoever, whether based on United States federal, state, local, statutory or

10


common law, or any other law, rule or regulation, whether foreign or domestic, fixed or

contingent, accrued or unaccrued, liquidated or unliquidated, at law or in equity, matured or

unmatured, foreseen or unforeseen, whether class or individual in nature, including both known

claims and Unknown Claims (as defined below), that have been or could have been asserted in

the Action or any other forum by any of the Defendants or the successors and assigns of any of

them against each other, any of the Lead Plaintiffs, Plaintiffs' Lead Counsel, Plaintiffs' Liaison

Counsel, Class Members, their attorneys, or the attorneys for the Defendants, which arise out of

or relate to the institution, prosecution, or Settlement of the Action (except for claims to enforce

the Settlement). Settled Defendant's Claims shall include claims that could be asserted by

Mitchell Stein against Lead Plaintiffs or Plaintiffs' Lead Counsel or Plaintiffs' Liaison Counsel

in the action In re Mitchell J. Stein, 09-cv-14345-BKC-PHG, pending in the United States

Bankruptcy Court for the Southern District of Florida. Settled Defendant's Claims shall also

include all claims that have been or could be asserted in the action that is captioned Szgnalzfe Inc.

v. McMahan, et al., No. BC 397448 (Cal. Super. Ct.).

(bb) "Settlement" means the settlement contemplated by this Stipulation.

(cc) "Settlement Fairness Hearing" means the hearing scheduled by the Court to

review the Settlement and determine whether it is fair and should be approved.

(dd) "Unknown Claims" means any and all Settled Claims which any Lead Plaintiff or

Class Member does not know or suspect to exist in his, her or its favor at the time of the release

of the Released Parties, and any Settled Defendants' Claims which Defendants do not know or

suspect to exist in their favor, which if known by him, her or it might have affected his, her or its

decision(s) with respect to the Settlement. With respect to any and all Settled Claims and Settled

Defendants' Claims, the Parties stipulate and agree that by operation of the Order and Final

11


Judgment, upon the Effective Date, the Lead Plaintiffs and Defendants shall have expressly

waived, and each Class Member shall be deemed to have waived, and by operation of the Final

Judgment shall have expressly waived, any and all provisions, rights and benefits conferred by

any law of any state or territory of the United States, or principle of common law, which is

similar, comparable, or equivalent to Cal. Civ. Code § 1542, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMSWHICH THE CREDITOR DOES NOT KNOW ORSUSPECT TO EXIST IN HIS OR HER FAVOR AT THETIME OF EXECUTING THE RELEASE, WHICH IFKNOWN BY HIM OR HER MUST HAVE MATERIALLYAFFECTED HIS OR HER SETTLEMENT WITH THEDEBTOR.

Lead Plaintiffs and Defendants acknowledge, and Class Members by operation of law shall be

deemed to have acknowledged, that the inclusion of "Unknown Claims" in the definition of

Settled Claims and Settled Defendants' Claims was separately bargained for.

SCOPE AND EFFECT OF SETTLEMENT

2. The obligations incurred pursuant to this Stipulation shall be in full and final disposition

of the Action against Defendants and any and all Settled Claims as against all Released Parties

and any and all Settled Defendants' Claims.

3. (a) By operation of the Order and Final Judgment, upon the Effective Date of this

Settlement, Lead Plaintiffs and members of the Class on behalf of themselves, their heirs,

executors, administrators, predecessors, successors and assigns and all persons (now or in the

future) acting in concert with, or who purport to act through, such persons, shall have fully,

finally and forever waived, released, discharged, dismissed and agreed not to institute, maintain

or prosecute, and shall forever be enjoined from commencing or prosecuting, each and every

Settled Claim either directly, indirectly or in a representative, derivative or any other capacity

12


against any of the Released Parties in any action or proceeding of any nature. The foregoing

applies regardless of whether Lead Plaintiffs and/or members of the Class ever seek or obtain

any distribution from the Net Settlement Fund; whether Lead Plaintiff and/or members of the

Class executed and delivered a Proof of Claim; whether Lead Plaintiff and/or members of the

Class filed an objection to the Settlement, to their claim being rejected as provided in this

Stipulation, to the proposed Plan of Allocation, to any application by Lead Counsel for any

award of attorneys' fees and expenses; and whether the claims of such Lead Plaintiffs and/or

members of the Class have been approved or allowed or such objection has been overruled by

the Court.

(b) By operation of the Order and Final Judgment, upon the Effective Date of

this Settlement, Defendants and the Released Parties shall have fully, finally and forever waived,

released and discharged, dismissed and agreed not to institute, maintain or prosecute, and shall

forever be enjoined from commencing or prosecuting, each and every of the Settled Defendants'

Claims, and shall forever be enjoined from prosecuting Settled Defendants' Claims.

(c) By operation of the Order and Final Judgment, upon the Effective Date of

this Settlement, Defendants and each of them, on behalf of themselves, their heirs, executors,

administrators, predecessors, successors and assigns and all persons or entities (now or in the

future) acting in concert with, or who purport to act through them, shall have fully, finally and

forever waived, released, discharged, dismissed and agreed not to institute, maintain or prosecute

and shall forever be enjoined and barred from commencing or prosecuting each and every of the

Settled Defendants' Claims against the Released Parties in any action or proceeding of any

nature.

13


(d) Notwithstanding the provisions of tf 3(a) and (b) hereof, in the event that

any of the Released Parties asserts against the Lead Plaintiffs, any Class Member or their

respective counsel, any claim that is a Settled Defendants' Claim, then Lead Plaintiffs, such

Class Member or counsel shall be entitled to use and assert such factual matters included within

the Settled Claims only against such Released Party in defense of such claim but not for the

purposes of affirmatively asserting any claim against any Released Party.

(e) Notwithstanding the provisions of tf 3(a) and (b) hereof, in the event that

the Lead Plaintiffs or any Class Member asserts against any of the Released Parties or their

respective counsel any claim that is a Settled Claim, then such Released Party or counsel shall be

entitled to use and assert such factual matters included within the Settled Defendants' Claims

only against such Lead Plaintiffs or Class Member in defense of such claim but not for the

purposes of affirmatively asserting any claim against Lead Plaintiffs or any Class Member.

Upon the Effective Date of this Settlement, the Released Parties shall

obtain bar order protection substantially in the form appearing in the Order and Final Judgment

annexed hereto as Exhibit B.

(g) The releases provided in this Stipulation shall become effective

immediately upon occurrence of the Effective Date without the need for any further action,

notice, condition or event.

(h) Upon entry of the Final Order, the Action will be dismissed with prejudice

against Defendants.

Upon entry of the Order for Notice and Hearing (or substantially similar

order) referenced in 1f22, Signalife will move to dismiss with prejudice the claims made in the

14


action Signal ife Inc. v. McMahan, et al., No. BC 397448 (Cal. Super. Ct.) against any of the

Lead Plaintiffs and Partners Investment Network; and

(j ) Upon entry of the Order for Notice and Hearing (or substantially similar

order) referenced in 1f22, Lead Plaintiffs will move to dismiss with prejudice their claim against

Mitchell Stein in the action In re Mitchell J. Stein, 09-cv-14345-BKC-PHG, pending in the

United States Bankruptcy Court for the Southern District of Florida.

THE SETTLEMENT CONSIDERATION

4. Defendants shall pay or cause the Insurer to pay $4.0 million (the "Cash Settlement

Amount") into escrow in an interest-bearing account established by and for the benefit of Lead

Plaintiffs and the Class. The Cash Settlement Amount shall be paid within thirty calendar days

after the later of (i) entry of the Order for Notice and Hearing (or a substantially similar order)

granting preliminary approval of the Settlement, or (ii) Plaintiffs' Lead Counsel notification to

Defendant's Counsel of the wire transfer instructions, tax identification number associated with

the escrow fund and physical address of the bank which will hold the interest-bearing escrow

account. The Cash Settlement Amount and any interest earned thereon shall be the "Gross

Settlement Fund."

5. Lead Plaintiffs and Class Members shall look solely to the Cash Settlement as

satisfaction of all claims that are released hereunder. Under no circumstances will Defendants be

required to pay more than the Cash Settlement Amount pursuant to this Stipulation and

Settlement set forth herein. Lead Plaintiffs and Class Members acknowledge that as of the

Effective Date, the releases given herein shall become effective immediately by operation of the

Order and Final Judgment and shall be permanent, absolute and unconditional.

15


6. All (i) taxes on the income of the Gross Settlement Fund and (ii) expenses and costs

incurred in connection with the taxation of the Gross Settlement Fund (including, without

limitation, expenses of tax attorneys and accountants) (collectively "Taxes") shall be paid out of

the Gross Settlement Fund, shall be considered to be a cost of administration of the Settlement

and shall be timely paid by the Escrow Agent without prior Order of the Court. Defendants and

the Released Parties shall have no liability or responsibility for the payment of any Taxes.

ADMINISTRATION

7. The Claims Administrator shall administer the Settlement subject to the jurisdiction of

the Court. The Claims Administrator agrees to be subject to the jurisdiction of the Court with

respect to the administration of the Settlement and the distribution of the Gross Settlement Fund

pursuant to the terms of this Stipulation. Defendants shall have no responsibility or liability for

the administration of the Settlement and shall have no liability to the class in connection with, as

a result of, or arising out of such administration.

8. Plaintiffs' Lead Counsel may pay from the Cash Settlement Amount, without further

approval from Defendants or the Court, the reasonable costs and expenses up to the sum of

$250,000 associated with identifying appropriate recipients of the notice and effecting mail

notice and publication notice to the appropriate recipients, and the administration of the

Settlements, including without limitation, the actual costs of publication, printing and mailing the

notice, reimbursements to nominee owners for forwarding notice to their beneficial owners, and

the administrative expenses incurred and fees charged by the Claims Administrator in connection

with providing notice and processing the submitted claims.

16


ATTORNEYS' FEES AND EXPENSES

9. Plaintiffs' Lead Counsel will apply to the Court for an award from the Gross Settlement

Fund of attorneys' fees not to exceed thirty-three and one-third percent (33 1/3 %) of the Cash

Settlement Amount, respectfully, and reimbursement of expenses, plus interest. Defendants take

no position regarding the amount of attorneys' fees, expenses and interest payable to Plaintiffs'

Lead Counsel. Such attorneys' fees, expenses, and interest as are awarded by the Court shall be

paid from the Cash Settlement Amount to Plaintiffs' Lead Counsel immediately upon award by

the Court, notwithstanding the existence of any timely filed objections thereto, or potential for

appeal therefrom, or collateral attack on the Settlement or any part thereof, subject to Plaintiffs'

Lead Counsel s obligation to make appropriate repayments to the Settlement Fund plus accrued

interest at the same net rate as is earned by the Gross Settlement Fund, if and when, as a result of

any appeal and/or further proceedings on remand, or successful collateral attack, the fee or cost

award is reduced or reversed or return of the Gross Settlement Fund is required consistent with

the provisions of 1f27 hereof Notwithstanding any other provision of this Stipulation to the

contrary, the procedure for the allowance (in whole or in part) by the Court of any application by

Plaintiffs' Lead Counsel for attorney's fees, costs, and expenses, to be paid out of the Gross

Settlement Fund are to be considered by the Court separately and apart from its consideration of

the fairness, reasonableness, and adequacy of the Settlement, and any order or proceeding

relating to the award of fees and expenses, or any appeal of any order relating thereto, shall not

operate to terminate or cancel this Stipulation and Settlement of the Action.

CAFA NOTICE

17


10. Defendants shall, no later than ten (10) calendar days following the filing of this

Stipulation with the Court, serve a notice of the proposed Settlement in compliance with the

requirements of the Class Action Fairness Act, 28 U.S.C. § 1711 et. seq.

ADMINISTRATION EXPENSES

11. Plaintiffs' Lead Counsel will apply to the Court for an Order (the "Class Distribution

Order") approving the Claims Administrator's administrative determinations concerning the

acceptance and rejection of the claims submitted herein and approving any fees and expenses not

previously applied for, including the fees and expenses of the Claims Administrator, and, if the

Effective Date has occurred, directing payment of the Net Settlement Fund to Authorized

Claimants.

DISTRIBUTION TO AUTHORIZED CLAIMANTS

12. The Claims Administrator shall determine each Authorized Claimant's pro rata share of

the "Net Settlement Fund" based upon each Authorized Claimant's recognized claim as defined

in the Plan of Allocation described in the notice annexed hereto as Exhibit A-1 to Exhibit A, or in

such other plan of allocation as the Court approves.

13. The Plan of Allocation proposed in the notice is not a necessary term of this Stipulation

and it is not a condition of this Stipulation that any particular plan of allocation be approved.

14. Each Authorized Claimant shall be allocated a pro rata share of the Net Settlement Fund

based on his or her recognized claim compared to the total recognized claims of all accepted

claimants. Defendants shall not be entitled to get back any of the settlement monies, or interest

earned thereon, once the Settlement becomes final. The Defendants shall have no involvement

in reviewing or challenging claims and shall have no responsibility or liability for the

18


determination or allocation of any payments to any Class Members or for any other matters

pertaining to the Plan of Allocation.

ADMINISTRATION OF THE SETTLEMENT

15. Any member of the Class who does not submit a valid Proof of Claim will not be entitled

to receive any of the proceeds from the Net Settlement Fund but will otherwise be bound by all

of the terms of this Stipulation and the Settlement, including the terms of the judgment to be

entered in the Action and the releases provided for herein, and will be barred from bringing any

action against the Released Parties concerning the Settled Claims.

16. The Claims Administrator shall process the settlement based upon Proofs of Claim which

may be submitted in connection with this Settlement, and, after entry of the Class Distribution

Order, distribute the Net Settlement Fund to the Authorized Claimants. Except for their

obligation to pay the Cash Settlement Amount or cause it to be paid, Defendants shall have no

liability, obligation or responsibility for the administration of the Settlement or disbursement of

the Net Settlement Fund. Plaintiffs' Lead Counsel shall have the right, but not the obligation, to

advise the Claims Administrator to waive what Plaintiffs' Lead Counsel reasonably deem to be

formal or technical defects in any Proofs of Claim submitted in the interests of achieving

substantial justice.

17. For purposes of determining the extent, if any, to which a Class Member shall be entitled

to be treated as an Authorized Claimant, the following conditions shall apply:

(a) Each Class Member shall be required to submit a Proof of Claim (see attached

Exhibit A-2 to Exhibit A), supported by such documents as are designated therein, including

proof of the transactions claimed and the losses incurred thereon, or such other documents or

proof as the Claims Administrator, in its discretion may deem acceptable;

19


(b) All Proofs of Claim must be submitted by the date specified in the Notice, unless

such period is extended by Order of the Court. Any Class Member who fails to submit a Proof

of Claim by such date shall be forever barred from receiving any payment pursuant to this

Stipulation (unless, by Order of the Court, a later submitted Proof of Claim by such Class

Member is approved), but shall in all other respects be bound by all of the terms of this

Stipulation and the Settlement including the terms of the Judgment to be entered in the Action

and the releases provided for herein, and will be barred from bringing any action against the

Released Parties concerning the Settled Claims. Provided that it is received before the motion

for the Class Distribution Order is filed, a Proof of Claim shall be deemed to have been

submitted when posted, if received with a postmark indicated on the envelope and if mailed by

first-class mail and addressed in accordance with the instructions thereon. In all other cases, the

Proof of Claim shall be deemed to have been submitted when actually received by the Claims

Administrator;

(c) Each Proof of Claim shall be submitted to and reviewed by the Claims

Administrator, who shall determine in accordance with this Stipulation and the approved Plan of

Allocation the extent, if any, to which each claim shall be allowed, subject to review by the

Court pursuant to subparagraph (e) below;

(d) Proofs of Claim that do not meet the submission requirements may be rejected.

Prior to rejection of a Proof of Claim, the Claims Administrator shall communicate with the

claimant in order to remedy the curable deficiencies in the Proofs of Claim submitted. The

Claims Administrator shall notify, in a timely fashion and in writing, all claimants whose Proofs

of Claim they propose to reject in whole or in part, setting forth the reasons therefor, and shall

indicate in such notice that the claimant whose claim is to be rejected has the right to a review by

20


the Court if the claimant so desires and complies with the requirements of subparagraph (e)

below;

(e) If any claimant whose claim has been rejected in whole or in part desires to

contest such rejection, the claimant must, within twenty (20) days after the date of mailing of the

notice required in subparagraph (d) above, serve upon the Claims Administrator a notice and

statement of reasons indicating the claimant's grounds for contesting the rejection along with any

supporting documentation, and requesting a review thereof by the Court. If a dispute concerning

a claim cannot be otherwise resolved, Plaintiffs' Lead Counsel shall thereafter present the

request for review to the Court. Class Members involved in such a dispute whose rejection is

ultimately upheld by the Court shall be forever barred from receiving any payment pursuant to

this Stipulation (unless, by Order of the Court, a later submitted Proof of Claim by such Class

Member is approved), and shall in all other respects be bound by all of the terms of this

Stipulation and the Settlement including the terms of the Judgment to be entered in the Action

and the releases provided for herein, and will be barred from bringing any action against the

Released Parties concerning the Settled Claims; and

The administrative determinations of the Claims Administrator accepting and

rejecting claims shall be presented to the Court for approval by the Court in the Class

Distribution Order.

18. Each claimant shall be deemed to have submitted to the jurisdiction of the Court with

respect to the claimant's claim, and the claim will be subject to investigation and discovery under

the federal rules of civil procedure, provided that such investigation and discovery shall be

limited to that claimant's status as a Class Member and the validity and amount of the claimant's

claim. No discovery shall be allowed to be directed to Defendants or any of the Released

21


Parties, and no discovery shall be allowed on the merits of the Action or Settlement in

connection with processing of the Proofs of Claim.

19. Payment pursuant to this Stipulation shall be deemed final and conclusive against all

Class Members. All Class Members whose claims are not approved by the Court shall be barred

from participating in distributions from the Net Settlement Fund, but otherwise shall be bound by

all of the terms of this Stipulation and the Settlement, including the terms of the Order and Final

Judgment to be entered in the action and the releases provided for herein, and will be barred from

bringing any action against the Released Parties concerning the Settled Claims.

20. All proceedings with respect to the administration, processing and determination of

claims described by fi14-18 of this Stipulation and the determination of all controversies

relating thereto, including disputed questions of law and fact with respect to the validity of

claims, shall be subject to the jurisdiction of the Court.

21. The Net Settlement Fund shall be distributed to Authorized Claimants by the Claims

Administrator only after the Effective Date and after: (i) all claims have been processed, and all

claimants whose claims have been rejected or disallowed, in whole or in part, have been notified

and provided the opportunity to be heard concerning such rejection or disallowance; (ii) all

objections with respect to all rejected or disallowed claims have been resolved by the Court, and

all appeals therefrom have been resolved or the time therefore has expired; (iii) all matters with

respect to attorneys' fees, costs, and disbursements have been resolved by the Court, all appeals

therefrom have been resolved or the time therefore has expired; and (iv) all fees and costs of

administration have been paid.

22


TERMS OF ORDER FOR NOTICE AND HEARING

22. Promptly after this Stipulation has been fully executed, Plaintiffs' Lead Counsel and

Defendants jointly shall apply to the Court by motion on notice for entry of an Order for Notice

and Hearing, substantially in the form annexed hereto as Exhibit A. Plaintiffs' Lead Counsel and

Defendants shall jointly request that the postmark deadline for submitting exclusions from this

Settlement be set at least 15 calendar days prior to the Settlement Fairness Hearing. Upon

receiving any request(s) for exclusion pursuant to the notice, the Claims Administrator shall

promptly notify Plaintiffs' Lead Counsel and Defendants' counsel of such request(s) for

exclusion.

TERMS OF ORDER AND FINAL JUDGMENT

23. If the Settlement contemplated by this Stipulation is approved by the Court, Plaintiffs'

Lead Counsel and Defendants shall request that the Court enter an Order and Final Judgment

substantially in the form annexed hereto as Exhibit B.

EFFECTIVE DATE OF SETTLEMENT, WAIVER OR TERMINATION

24. The Effective Date of Settlement shall be the date when all the following shall have

occurred:

(a) approval by the Court of the Settlement, following notice to the Class and a

hearing, as prescribed by Rule 23 of the Federal Rules of Civil Procedure; and

(b) entry by the Court of an Order and Final Judgment, substantially in the form set

forth in Exhibit B annexed hereto, and the expiration of any time for appeal or review of such

Order and Final Judgment, or, if any appeal is filed and not dismissed, after such Order and Final

Judgment is upheld on appeal in all material respects and is no longer subject to review upon

appeal or review by writ of certiorari, or, in the event that the Court enters an Order and Final

23


Judgment in form other than that provided above ("Alternative Judgment") and none of the

Parties hereto elect to terminate this Settlement, the date that such Alternative Judgment becomes

final and no longer subject to appeal or review.

25. Defendants or Lead Plaintiffs, through their respective counsel, shall have the right to

terminate the Settlement and this Stipulation by providing written notice of their election to do so

("Termination Notice") to all other parties hereto within thirty (30) days of (a) the filing of an

order pursuant to which the Court declines to enter the Order for Notice and Hearing in any

material respect; (b) the Court files an order refusing to approve this Stipulation or any material

part of it; (c) the Court files an Order declining to enter the Order and Final Judgment in any

material respect; (d) the date upon which the Order and Final Judgment is modified or reversed

in any material respect by the Court of Appeals or the Supreme Court; or (e) the date upon which

an Alternative Judgment is modified or reversed in any material respect by the Court of Appeals

or the Supreme Court. Notwithstanding this paragraph, the Court's determination as to the

attorneys' fees and expenses to be awarded to Plaintiff's Lead Counsel shall not provide grounds

for termination of the Stipulation or Settlement.

26. If prior to the Settlement Fairness Hearing, any Persons who otherwise would be Class

Members have timely requested exclusion ("Requests for Exclusion") from the Class in

accordance with the provisions of the Order for Notice and Hearing and the Notice given

pursuant thereto, and such persons in the aggregate purchased or otherwise acquired a number of

shares of Signalife common stock during the Class Period in an amount greater than the sum

specified in a separate Supplemental Stipulation between the Parties, Defendants shall have, in

their sole and absolute discretion, the option to terminate this Stipulation by agreement of all

Defendants in accordance with the procedures set forth in the Supplemental Stipulation. Lead

24


Plaintiffs shall have the right to seek a retraction of any excluded shares pursuant to 1f6 of the

Supplemental Stipulation. The Supplemental Stipulation will not be filed with the Court unless

and until a dispute among the Settling Parties concerning its interpretation or application arises.

Copies of all Requests for Exclusion received, together with copies of all written revocations of

Requests for Exclusion, shall be delivered to Defendants' counsel within five (5) business days

of receipt by the Plaintiffs' Lead Counsel but in any event no later than five (5) business days

before the Settlement Fairness Hearing.

27. Except as otherwise provided herein, in the event the Settlement is terminated in

accordance herewith, vacated, or fails to become effective for any reason, then the Parties to this

Stipulation shall be deemed to have reverted to their respective status in the Action as of the date

of this Stipulation and, except as otherwise expressly provided, the Parties shall proceed in all

respects as if this Stipulation and any related orders had not been entered, and any portion of the

Cash Settlement Amount previously paid by or on behalf of Defendants, together with any

interest earned thereon (and, if applicable, re-payment of any attorneys' fee and expense award

referred to in 1f9 hereof), less any Taxes due with respect to such income, and less costs of

administration and notice actually incurred and paid or payable from the Cash Settlement

Amount (not to exceed $250,000 without the prior approval of the Court) shall be returned to

AXIS Insurance Company.

NO ADMISSION OF WRONGDOING

28. Defendants deny that they have committed any act or omission giving rise to any liability

and/or violation of law, and state that they are entering into this Settlement to eliminate the

burden and expense of further litigation. This Stipulation, whether or not consummated,

25


including any and all of its terms, provisions, exhibits and prior drafts, and any negotiations or

proceedings related or taken pursuant to it:

(a) shall not be offered or received against Defendants as evidence of or construed as

or deemed to be evidence of any presumption, concession, or admission by Defendants with

respect to the truth of any fact alleged by any of the Lead Plaintiffs or the validity of any claim

that has 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 the Action or in any litigation, or of any

liability, negligence, fault, or wrongdoing of the Defendants;

(b) shall not be offered or received against Defendants as evidence of a presumption,

concession or admission of any fault, misrepresentation or omission with respect to any

statement or written document approved or made by Defendants;

(c) shall not be offered or received against Defendants as evidence of a presumption,

concession or admission with respect to any liability, negligence, fault or wrongdoing, or in any

way referred to for any other reason as against Defendants, in any other civil, criminal or

administrative action or proceeding, other than such proceedings as may be necessary to

effectuate the provisions of this Stipulation; provided, however, that if this Stipulation is

approved by the Court, Defendants may refer to it to effectuate the liability protection granted

them hereunder;

(d) shall not be construed against Defendants 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;

(e) shall not be construed as or received in evidence as an admission, concession or

presumption against Lead Plaintiffs or any of the Class Members that any of their claims are

26


without merit, or that any defenses asserted by Defendants have any merit, or that damages

recoverable under the Complaint would not have exceeded the Gross Settlement Fund.

shall not be used, described, portrayed or referred to by Lead Plaintiffs, Class

Members, Plaintiffs' Lead Counsel or Plaintiffs' Liaison Counsel for any purpose other than to

effectuate the provisions of the Stipulation, and in no event in a manner inconsistent with the

terms and provisions of the Stipulation and its exhibits.

This paragraph 28 shall survive the termination of this Stipulation.

MISCELLANEOUS PROVISIONS

29. All of the exhibits attached hereto are hereby incorporated by reference as though fully

set forth herein.

30. Upon final approval of the Settlement, all Parties to the Stipulation of Settlement agree to

abide by the provisions in lf 12 of the Consent Confidentiality Order issued on December 2,

2010, regarding the return or destruction of Confidential or For Attorneys Eyes Only documents.

31. All Defendants other than Defendant Mitchell J. Stein and Signalife warrant as to

themselves that, as to the payments made by or on behalf of them, at the time of such payment

that Defendants made or caused to be made pursuant to 1f4 above, they were not insolvent nor

will the payment required to be made by or on behalf of them render Defendants insolvent within

the meaning of and/or for the purposes of the United States Bankruptcy Code, including §§ 101

and 547 thereof This warranty is made by Defendants and not by Defendants' Counsel.

32. Lead Plaintiffs, pursuant to the PSLRA, intend to move the Court to award them their

reasonable costs and expenses (including lost wages) directly relating to their representation of

the Class. Defendants take no position regarding an award to the Lead Plaintiffs compensating

them for their reasonable costs and expenses.

27


33. The Parties to this Stipulation intend the Settlement to be a final and complete resolution

of all disputes asserted or which could be asserted by the class members against the Released

Parties with respect to the Settled Claims. Accordingly, Lead Plaintiffs and Defendants agree

not to assert in any forum that the litigation was brought by Lead Plaintiffs or defended by

Defendants in bad faith or without a reasonable basis. The Parties hereto shall assert no claims

of any violation of Rule 11 of the Federal Rules of Civil Procedure or of 28 U.S.C. § 1927

relating to the prosecution, defense, or settlement of the Action, and shall withdraw with

prejudice all such pending claims. The Parties agree that the amount paid and the other terms of

the Settlement were negotiated at arm's-length in good faith by the Parties, and reflect a

Settlement that was reached voluntarily after consultation with experienced legal counsel.

34. This Stipulation may not be modified or amended, nor may any of its provisions be

waived except by a writing signed by all Parties hereto.

35. The headings herein are used for the purpose of convenience only and are not meant to

have legal effect.

36. The administration and consummation of the Settlement as embodied in this Stipulation

shall be under the authority of the Court, and the Court shall retain jurisdiction for the purpose of

entering orders providing for awards of attorneys' fees and expenses to Plaintiffs' Lead Counsel

and Plaintiffs' Liaison Counsel and enforcing the terms of this Stipulation.

37. The waiver by one party of any breach of this Stipulation by any other party shall not be

deemed a waiver of any other prior or subsequent breach of this Stipulation.

38. This Stipulation and its exhibits constitute the entire agreement among the parties hereto

concerning the Settlement of the Action, and no representations, warranties, or inducements have

28


been made by any party hereto concerning this Stipulation and its exhibits other than those

contained and memorialized in such documents.

39. This Stipulation may be executed in one or more counterparts. All executed counterparts

and each of them shall be deemed to be one and the same instrument provided that counsel for

the Parties to this Stipulation shall exchange among themselves original signed counterparts.

40. This Stipulation shall be binding upon, and inure to the benefit of, the successors and

assigns of the Parties hereto.

41. The construction, interpretation, operation, effect and validity of this Stipulation, and all

documents necessary to effectuate it, shall be governed by the internal laws of the State of South

Carolina, without regard to conflicts of laws, except to the extent that federal law requires that

federal law governs.

42. This Stipulation shall not be construed more strictly against one party than another

merely by virtue of the fact that it, or any part of it, may have been prepared by counsel for one

of the Parties, it being recognized that it is the result of arm's-length negotiations between the

Parties and all Parties have contributed substantially and materially to the preparation of this

Stipulation.

43. All counsel and any other person executing this Stipulation and any of the exhibits

hereto, or any related Settlement documents, warrant and represent that they have the full

authority to do so and that they have the authority to take appropriate action required or

permitted to be taken pursuant to the stipulation to effectuate its terms.

44. Plaintiffs' Lead Counsel and Defendants' Counsel agree to cooperate fully with one

another in seeking Court approval of the Order for Notice and Hearing, the Stipulation and the

29


Settlement, and to promptly agree upon and execute all such other documentation as may be

reasonably required to obtain final approval by the Court of the Settlement.

March 1, 2011 Respectfully submitted,

,

reteph gfielmo (. ined pro hoc vice) Susan P. McWilliams Fed. ID # 3351h Kaswan (admitted pro hoc vice) NEXSEN PRUET LLC

SCOTT+SCOTT LLP 1230 Main Street, Suite 700 (29201)500 Fifth Avenue, 40th Floor Post Office Drawer 2426New York, NY 10110 Columbia, South Carolina 29202-2426Tele: (212) 223-6444 Tel: 803-253-8277Fax: (212) 223-6334 Fax: [email protected] [email protected]@scott-scon.com

David R. Scott (admitted pro hoc vice) Paul R. Bessette (admitted pro hoc vice)SCOTT+SCOTT LLP [email protected] South Main Street Jesse Z. Weiss (admitted pro hoc vice)P.O. Box 192 [email protected], CT 06415 Royale Price (admitted pro hoc vice)Tel: (860) 537-5537 [email protected]: (860) 537-4432 GREENBERG TRAURIG [email protected] 300 West 6th Street, Suite 2050

Austin, TX 78701Plaint ifs' Lead Counsel Tel: 512.320.7200

Fax: 512.320.7210Terry E. Richardson, Jr. (#3457)RICHARDSON PATRICK Counsel For Defendants Kevin F. Pickard,WESTBROOK & BRIC1CMAN LLC Robert C. Scheme, Budimir S. Drakulic, and1730 Jackson Street Pamela M. BunesBarnwell, SC 29812Tel: (803) 341-7850Fax: (803) [email protected]

Plaintiffs' Liaison Counsel

30ALIS 536,136,277v1 2-16-11


Settlement, and to promptly agree upon and execute all such other documentation as may be

reasonably required to obtain final approval by the Court of the Settlement.

March 1, 2011 Respectfully submitted,

•

kg WJoseph P. Guglielmo (admitted pro hoc vice) Susan P. McWilliams Fed. ID # 3351Beth Kaswan (admitted pro hoc vice) NEXSEN PRUET LLCSCOTT+SCOTT LLP 1230 Main Street, Suite 700 (29201)500 Fifth Avenue, 40th Floor Post Office Drawer 2426New York, NY 10110 Columbia, South Carolina 29202-2426Tele: (212) 223-6444 Tel: 803-253-8277Fax: (212) 223-6334 Fax: 803-727-1476bkaswan@scon-scott,com [email protected]@scott-scottcom

David IC Scott (admitted pro hoc vice) Paul R. Bessette (admitted pro hoc vice)SCOTT±SCO1 LLP [email protected] South Main Street Jesse Z. Weiss (admitted pro hoc vice)

P.O. Box 192 [email protected], CT 06415 Royale Price (admitted pro hoc wee)Tel: (860) 537-5537 priceragtlaw.comFax: (860) 537-4432 GREENBERG TRAURIG [email protected] 300 West 6th Street, Suite 2050

Austin, TX 78701Plaintiffs' Lead Counsel Tel: 512.320.7200

Fax: 512.320.7210Terry E. Richardson, Jr. (#3457)RICHARDSON PATRICK Counsel For Defendants Kevin F. Pickard,WESTBROOK & BR1CKMAN LLC Robert C Scheme, Budimir S Drakulic, and1730 Jackson Strcct Pamela At RunesBarnwell, SC 29812Tel: (803) 341-7850Fax: (803) 541-9625trichardsonidrpwb.com

Plaintiffs' Liaison Counsd

30AUS 536,136,277v1 2-15-11

6 . 08-cy -02995-JMC Date Filed 03/07/11 Entry Number 245-2 Page 33 of 37

/ Isea 4Robert'!. Knowlton $ (D.S: o. 2380) Leslie A, Cotter, Jr. Fed. ID # 320rknowIton@hsblawfi .com Icotter®richardsonplowden.comSarah P. Spruill (D.S.C. No. 8054) Anthony E. Reboil° Fed. ID # 7983sspruillghsblawfirm.com [email protected] S1NKLER BOYD, PA. Travis W. Vance Fed. ID # 101291201 Main Street, 22nd Floor [email protected], South Carolina 29201-3226 Richardson Plowden & Robinson, PATel: (803) 779-3080 1900 Barnwell StreetFax: (803) 765-1243 Columbia, South Carolina 29201

Tel: 803-771-4400Counsel for Defendant Lowell 7'. Harmison Fax: 803-779-0016

David H. Dickieson (admitted pro hoc vice)[email protected]

Mitchell J. Stein, Esq. In Propria Persona SCHERTLER & ONORATO, LLPAdvised by Counsel for the Estate of Mitchell Jay 601 Pennsylvania Avenue, NWStein, Joe M. Grant, Esq. North Building, 9th Floordo Mitchell 1, Stein Washington, DC 2000424600 John Colter Road Tel; (202) 824-1222Hidden Hills, California 91302 Fax: (202) 628-4177private.oceibcxl®gmail.comTelephone: (720) 290-5212 Counsel for Defendant William R. Matthews

Counsellor Defendant Mitchell J. Stein

Edwin Russell Jeter Fed. ID. #2178JETER & [email protected]. Box 7425Columbia, South Carolina 29202Tel: (803) 765-0619

Jared J. Scharf (admitted pro hac vice)[email protected] Westchester Avenue, Suite 305White Plains, New York 10604Tel: (914) 682-9777

Counsel far Defendants Signalife, Inc.

31AUS 536,136,2770 2-10-11


00:Robert Y. Knowlton (U.S.C. No, 2380) Leslie A. Cotter, Jr. ed. ID 4 320rknowIton@hsblawfirm,com Icotter@richardsonplowdemcomSarah P. Spruill (U.S.C. No. 8054) Anthony E. Rebollo Fed, ID 0 7983sspruill@hsblavvfirimcom trebollo@richardsonplowdemeomHAYNSWORTH SINKLER BOYD, P.A. Tr.oi5 W. Val ILe Fethq&h—i-B-It9

1201 Main Street, 22nd FloorColumbia, South Carolina 29201-3226 Richardson Plowden & Robinson, PATel: (803) 779-3080 1900 13arnwell StreetFax: (803) 765-1243 Columbia, South Carolina 29201

Tel: 803-771-4400Counsel for Defendant Lowell T. If ill'ItilS017 Fax: 803-779-0016

David H. Dickieson (admitted pro hoc vice)ddickiesonr&schertlerlaw.com

Mitchell J. Stein, Esq. In Proprio PeM011t1 SCHERTLER & ONORATO, LLPAdvised by Counsel for the Estate of Mitchell Jay 601 Pennsylvania Avenue, NWStein, Joe M. Grant, Esq. North Building, 9th Floorc/o Mitchell J. Stein Washington, DC 2000424600 John Colter Road Tel: (202) 824-1222Hidden Hills, California 91302 Fax: (202) 628-4177private.oceibodagmail.comTelephone: (720) 290-5212 Counsel for Defendant William R. Matthews

Counsel for Defendant Mitchell Stein


Jared J. Scharf (admitted pro hoc vice)[email protected] Westchester Avenue, Suite 305White Plains, New York 10604Tel: (914) 682-9777

Counsellor Defendants Signalife, Inc.

314U2 536 /35,2770 2-76-71


Robert Y. Knowlton (D.S.C. No. 2380) Leslie A. Cotter, Jr. Fed. ID # [email protected] [email protected] P. Spruill (D.S.C. No. 8054) Anthony E. Rebollo Fed. ID # 7983sspruill@hsblawfirmcom [email protected] WORTH SINKLER BOYD, P.A. Travis W. Vance Fed. ID # 101291201 Main Street, 22nd Floor [email protected], South Carolina 29201-3226 Richardson Plowden & Robinson, PATel: (803) 779-3080 1900 Barnwell StreetFax: (803) 765-1243 Columbia, South Carolina 29201

Tel: 803-771-4400Counsel for Defendant Lowell T. Harmison Fax: 803-779-0016

— David H. Dickieson (admitted pro hac vice)[email protected]

Mitchell J. Stein, Esq. In Proprza Persona SCHERTLER & ONORATO, LLPAdvised by Counsel for the Estate of Mitchell Jo 601 Pennsylvania Avenue, NWStein, Joe M. Grant, Esq. North Building, 9th Floorc/o Mitchell J. Stein Washington, DC 2000424600 John Colter Road Tel: (202) 824-1222Hidden Hills, California 91302 Fax: (202) [email protected]: (720) 290-5212 Counsel for Defendant William R. Matthews

Counsel for Defendant Mitchell J. Stein



Counsel for Defendants Signalife, Inc.

31AUS 536,136,277v1 2-16-11

6 . 08-cy-02995-JMC Date Filed 03/07/11 Entry Number 245-2 Page 36 of 37

Robert Y. Knowlton (D.S.C. No. 2380) Leslie A. Cotter, Jr, Fed. ID # [email protected] [email protected] P. Spruill (D.S.C. No. 8054) Anthony E. Rebollo Fed. ID # [email protected] [email protected] SINKLER BOYD, PA. Travis W. Vance Fed. ID # 101291201 Main Street, 22nd Floor tvancearichardsonplowden.comColumbia, South Carolina 29201-3226 Richardson Plowden & Robinson, PATel: (803) 779-3080 1900 Barnwell StreetFax: (803) 765-1243 Columbia, South Carolina 29201

Tel: 803-771-4400Counsel for Defendant Lowell T. Harmison Fax: 803-779-0016

David H. Dickieson (admitted pro hac vice)ddickieson@schertlerlaw,com

Mitchell J. Stein, Esq. In Propria Persona SCHERTLER & ONORATO, LLPAdvised by Counsel for the Estate of Mitchell Jay 601 Pennsylvania Avenue, NWStein, Joe M. Grant Esq. North Building. 9th Floorc/o Mitchell J. Stein Washington, DC 2000424600 John Colter Road Tel: (202) 824-1222Hidden Hills, California 91302 Fax: (202) [email protected]: (720) 290-5212 Counsel f r Detendant t tam R. Matt ews

Counsel for Defendant Mitchell .I. Stein.f/c111,/(1/144

Edwin Russell Jeter.,/

Fed. ID. 2 8JETER & [email protected]. Box 7425Columbia, South Carolina 29202Tel: (803) 765-0619


Counsel for Defendants Signalife, Inc.

31AL'S 536 136,277v1 2-1641


CERTIFICATE OF SERVICE

I hereby certify that on March 1, 20111 caused the foregoing to be electronically filed

with the Clerk of the Court using the CM/ECF system which will send notification of such filing

to the e-mail addresses denoted on the Electronic Mail Notice List, and I hereby certify that I

caused the foregoing document or paper to be mailed via the United States Postal Service to the

non-CM/ECF participants indicated on the Manual Notice List.

I certify under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct. Executed on March 1, 2011.

/s/ Terry E. Richardson, Jr.Terry E. Richardson, Jr. (#3457)RICHARDSON PATRICKWESTBROOK & BRICKMAN LLC1730 Jackson StreetBarnwell, SC 29812Tel: (803) 541-7850Fax: (803) [email protected]

32



GREENVILLE DIVISION

ROBERT A. LATHAM and THE TAYLOR :GROUP, Individually and on Behalf of All :Others Similarly Situated, :

:Plaintiffs, :

:Case No. 6:08-cv-02995-JMCv. :

:MITCHELL J. STEIN, BILL MATTHEWS, :PAMELA M. BUNES, BUDIMIR S. :DRAKULIC, ROBERT C. SCHERNE, :KEVIN F. PICKARD, LOWELL T. :HARMISON, MARVIN H. FINK and :SIGNALIFE, INC., :

:Defendants.

DARRYL K. ROTH and THE TAYLOR :GROUP, Individually and on Behalf of All :Others Similarly Situated, :

:Plaintiffs, :



:Defendants.

ORDER FOR NOTICE OF HEARING IN CONNECTION WITHSETTLEMENT PROCEEDINGS


WHEREAS, on March 1, 2011, the parties to the above-entitled actions (collectively

the “Action”) entered into a Stipulation and Agreement of Settlement (the “Stipulation”) which

is subject to review under Rule 23 of the Federal Rules of Civil Procedure and which sets forth

the terms and conditions for the proposed settlement of the claims alleged in the Complaint, on

the merits and with prejudice, as against the Defendants; and the Court having read and

considered the Stipulation and the accompanying documents; and the parties to the Stipulation

having consented to the entry of this Order; and all capitalized terms used herein having the

meanings defined in the Stipulation;

NOW, THEREFORE, IT IS HEREBY ORDERED, this __ day of , 2011

that:

1. Pursuant to Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure, and

for the purposes of the Settlement only, this Action is hereby certified as a Class Action on

behalf of all persons who purchased the publicly traded common stock of Signalife, Inc.,

formerly known as Recom Managed Systems, Inc, and now known as HeartTronics, Inc.

(collectively, “Signalife” or the “Company”) during the period between February 10, 2004 and

April 14, 2008, inclusive, as defined in the Complaint, and were damaged as alleged in the

Actions thereby. Excluded from the Class for Settlement purposes only are Defendants, any

entity in which a Defendant has or had a controlling interest, members of the Individual

Defendants’ families and legal representatives, agents, affiliates, heirs and successors-in-interest

or assigns of any such excluded party, and all current and former officers and directors of

Signalife who are not also Defendants. For purposes of this Settlement, the term “controlling

interest” shall include any interest of 5% or more of the stock of any entity.

2. The Court finds, for the purposes of the Settlement only, that the prerequisites

for a Class Action under Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure have

been satisfied 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 named representatives are typical of the claims of the Class they seek to

2


represent; (d) Lead Plaintiffs will fairly and adequately represent the interests of the Class;

(e) the questions of law and fact common to the members of the Class 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.

3. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, and for the

purposes of the Settlement only, Lead Plaintiffs Bryan D. Harris, Mark Taylor, and Greg Taylor

are certified as Class Representatives.

4. A hearing (the “Settlement Fairness Hearing”) pursuant to Rule 23(e) of the

Federal Rules of Civil Procedure is hereby scheduled to be held before the Court on ,

2011, at :___ __.m. for the following purposes:

(a) to finally determine whether this Action satisfies the applicable

prerequisites for Class Action treatment under Rule 23(a) and (b) of the Federal Rules of Civil

Procedure;

(b) to determine whether the proposed Settlement is fair, reasonable, and

adequate, and should be approved by the Court;

(c) to determine whether the Order and Final Judgment as provided under the

Stipulation should be entered, dismissing the Complaint filed herein, on the merits and with

prejudice, as against the Defendants only and to determine whether the release by the Class of

the Settled Claims, as set forth in the Stipulation, should be provided to the Released Parties;

(d) to determine whether the proposed Plan of Allocation for the proceeds of

the Settlement is fair and reasonable, and should be approved by the Court;

(e) to consider Plaintiff’s Counsel’s application for an award of attorneys’

fees and expenses; and

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

5. The Court reserves the right to approve the Settlement, with or without

modification, and with or without further notice of any kind. The Court further reserves the right

to enter its Order and Final Judgment approving the Stipulation and dismissing the Complaint,

3


on the merits and with prejudice, regardless of whether it has approved the Plan of Allocation or

awarded attorneys’ fees and expenses.

6. The Court approves the form, substance and requirements of the Notice of

Pendency of Class Action and Proposed Settlement with Defendants, Motion for Attorneys’ Fees

and Settlement Fairness Hearing (the “Notice”) and the Proof of Claim form, annexed hereto as

Exhibits 1 and 2 respectively.

7. The Court approves the appointment of Garden City Group, as the Claims

Administrator. The Claims Administrator shall cause the Notice and the Proof of Claim,

substantially in the forms annexed hereto, to be mailed, by first class mail, postage prepaid,

within twenty days of this Order, on or before , 2011, to all Class Members who can

be identified with reasonable effort. Signalife shall promptly make its transfer records and

shareholder information available to the Claims Administrator for the purpose of identifying and

giving notice to the Class. The Claims Administrator shall use reasonable efforts to give notice

to nominee owners such as brokerage firms and other persons or entities who purchased

Signalife publicly traded common stock during the Class Period as record owners but not as

beneficial owners. Such nominee purchasers are directed within seven (7) days of their receipt

of the Notice, to either forward copies of the Notice and Proof of Claim to their beneficial

owners, or to provide the Claims Administrator with lists of the names and addresses of the

beneficial owners, and the Claims Administrator is ordered to send the Notice and Proof of

Claim promptly to such identified beneficial owners. Nominee purchasers who elect to send the

Notice and Proof of Claim to their beneficial owners shall send a statement to the Claims

Administrator confirming that the mailing was made as directed. Additional copies of the Notice

shall be made available to any record holder requesting such for the purpose of distribution to

beneficial owners, and such record holders shall be reimbursed from the Gross Settlement Fund,

upon receipt by the Claims Administrator of proper documentation, for the reasonable expense of

sending the Notices and Proofs of Claim to beneficial owners. Plaintiffs’ Lead Counsel shall, at

4


or before the Settlement Fairness Hearing, file with the Court proof of mailing of the Notice and

Proof of Claim.

8. The Court approves the form of Publication Notice of the pendency of this Class

Action and the proposed settlement in substantially the form and content annexed hereto as

Exhibit 3 and directs that Plaintiffs’ Lead Counsel shall cause the Publication Notice to be

published in The Wall Street Journal and Investor’s Business Daily within ten days of the

mailing of the Notice. Plaintiffs’ Lead Counsel shall, at or before the Settlement Fairness

Hearing, file with the Court proof of publication of the Publication Notice.

9. The form and content of the Notice, and the method set forth herein of notifying

the Class of the Settlement and its terms and conditions, meet 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), and due process, constitute the best notice practicable under the

circumstances, and shall constitute due and sufficient notice to all persons and entities entitled

thereto.

10. In order to be entitled to participate in the Net Settlement Fund, in the event the

Settlement is effected in accordance with all of the terms and conditions set forth in the

Stipulation, each Class Member shall take the following actions and be subject to the following

conditions:

(a) A properly executed Proof of Claim (the “Proof of Claim”), substantially

in the form attached hereto as Exhibit 2, must be submitted to the Claims Administrator, at the

Post Office Box indicated in the Notice, postmarked no later than , 2011. Such

deadline may be further extended by Court Order. Each Proof of Claim shall be deemed to have

been submitted when postmarked (if properly addressed and mailed by first class mail, postage

prepaid) provided such Proof of Claim is actually received prior to the motion for an Order of the

Court approving distribution of the Net Settlement Fund. Any Proof of Claim submitted in any

other manner shall be deemed to have been submitted when it was actually received at the

address designated in the Notice.

5


(b) The Proof of Claim submitted by each Class Member must satisfy the

following conditions: (i) it must be properly completed, signed and submitted in a timely manner

in accordance with the provisions of the preceding subparagraph; (ii) it must be accompanied by

adequate supporting documentation for the transactions reported therein, in the form of broker

confirmation slips, broker account statements, an authorized statement from the broker

containing the transactional information found in a broker confirmation slip, or such other

documentation as is deemed adequate by Plaintiffs’ Lead Counsel; (iii) if the person executing

the Proof of Claim is acting in a representative capacity, a certification of his current authority to

act on behalf of the Class Member must be included in the Proof of Claim; and (iv) the Proof of

Claim must be complete and contain no material deletions or modifications of any of the printed

matter contained therein and must be signed under penalty of perjury.

(c) As part of the Proof of Claim, each Class Member shall submit to the

jurisdiction of the Court with respect to the claim submitted, and shall (subject to effectuation of

the Settlement) release all Settled Claims as provided in the Stipulation.

11. Class Members shall be bound by all determinations and judgments in this

Action, whether favorable or unfavorable, unless such persons request exclusion from the Class

in a timely and proper manner, as hereinafter provided. A Class Member wishing to make such

exclusion request shall mail the request in written form by first class mail postmarked no later

than , 2011 to the address designated in the Notice. Such request for exclusion

shall clearly indicate the name, address and telephone number of the person seeking exclusion,

that the sender requests to be excluded from the Class in the Signalife Securities Litigation, and

must be signed by such person. Such persons requesting exclusion are also directed to state: the

date(s), price(s), and number(s) of shares of all purchases and sales of Signalife securities during

the Class Period. The request for exclusion shall not be effective unless it provides the required

information and is made within the time stated above, or the exclusion is otherwise accepted by

the Court.

6


12. Class Members requesting exclusion from the Class shall not be entitled to

receive any payment out of the Net Settlement Fund as described in the Stipulation and Notice.

13. The Court will consider comments and/or objections to the Settlement, the Plan of

Allocation, or the award of attorneys’ fees and reimbursement of expenses only if such

comments or objections and any supporting papers are filed in writing with the Clerk of the

Court, United States District Court for the District of South Carolina, Greenville Division,

United States Courthouse, 300 E. Washington St., Greenville, SC, 29601, and copies of all such

papers are served, on or before , 2011, upon each of the following: David R.

Scott, Esq., Scott+Scott LLP, 156 South Main Street, Colchester, CT 06415 on behalf of the

Leads Plaintiff and the Class; and Paul Bessette, Esq., Greenburg Traurig LLP, 300 West Sixth,

Suite 2050, Austin, TX 78701 on behalf of the Defendants. Attendance at the hearing is not

necessary. However, persons wishing to be heard orally in opposition to the approval of the

Settlement, the Plan of Allocation, and/or the request for attorneys’ fees are required to indicate

in their written objection their intention to appear at the hearing. Persons who intend to object to

the Settlement, the Plan of Allocation, and/or counsel’s application for an award of attorneys’

fees and expenses and desire to present evidence at the Settlement Fairness Hearing must include

in their written objections the identity of any witnesses they may call to testify and exhibits they

intend to introduce into evidence at the Settlement Fairness Hearing. Class Members do not

need to appear at the hearing or take any other action to indicate their approval of the Settlement.

14. Pending final determination of whether the Settlement should be approved, Lead

Plaintiffs, all Class Members, and each of them, and anyone who acts or purports to act on their

behalf, shall not institute, commence or prosecute any action which asserts Settled Claims

against any Released Party.

15. As provided in the Stipulation, Plaintiffs’ Lead Counsel may pay the Claims

Administrator the reasonable and customary fees and costs associated with giving notice to the

Class and the review of claims and administration of the Settlement out of the Cash Settlement

Amount without further order of the Court.

7


16. If any specified condition to the Settlement set forth in the Stipulation is not

satisfied and Plaintiffs’ Lead Counsel or the Defendants elect to terminate the Settlement, then,

in any such event, the Stipulation, including any amendment(s) thereof, and this Preliminary

Order certifying the Class and the Class Representatives for purposes of the Settlement shall be

null and void, of no further force or effect, and without prejudice to any party, and may not be

introduced as evidence or referred to in any actions or proceedings by any person or entity, and

each party shall be restored to his, her or its respective position as it existed before the

Stipulation was executed.

17. The Court retains exclusive jurisdiction over the Action to consider all further

matters arising out of or connected with the Settlement.

Dated:

UNITED STATES DISTRICT COURT JUDGE

8



GREENVILLE DIVISION


:Plaintiffs, :

:Case No. 6:08-cv-02995-JMCv. :


:Defendants.


:Plaintiffs, :



:Defendants.

NOTICE OF PROPOSED SETTLEMENT OF CLASS ACTION


IF YOU PURCHASED THE PUBLICLY TRADED COMMON STOCK OF SIGNALIFE,INC. FOREMERLY KNOWN AS RECOM MANAGED SYSTEMS, INC. AND NOWKNOWN AS HEART TRONICS, INC. (“SIGNALIFE”) Signalife, Inc. (“Signalife” or the“Company”), BETWEEN FEBRUARY 10, 2004 AND APRIL 14, 2008, INCLUSIVE(“CLASS PERIOD”), YOU COULD RECEIVE A PAYMENT FROM A CLASS ACTIONSETTLEMENT.

A federal court authorized this notice. This is not a solicitation from a lawyer.

The Settlement will provide a Settlement Fund of Four Million ($4,000,000) Dollars incash (the “Settlement Fund”) to pay valid claims of investors who suffered alleged damages frompurchases of Signalife publicly traded common stock between February 10, 2004 and April 14,2008, inclusive. Lead Plaintiffs for the class estimate that there were approximately 35 millionSignalife common shares publicly traded one or more times during the Class Period that mayhave been damaged as alleged in the Action. Lead Plaintiffs estimate that if claims are filed onbehalf of 100% of these shares, then the Settlement represents an estimated average recovery of$0.09 per share. This recovery figure is an estimate and is before deduction of the cost of noticeand administration of the Settlement, attorneys’ fees and expenses. Your actual recovery, if any,will vary depending on your purchase price and sale price, the dates of your purchase and/or saleand the number of shareholders that file Proof of Claim and Release forms. See Question 8below for a more detailed explanation.

Lead Plaintiffs’ Counsel intend to ask the Court to award them attorneys’ fees not toexceed 33 1/3% of the Settlement Fund, along with reimbursement of out-of-pocket expenses, inan amount not to exceed $250,000. If the Court awards 33 1/3% of the Settlement Fund asattorneys’ fees, together with reimbursement of out-of-pocket expenses, the impact will affectthe per damaged share recovery by an estimated amount of $0.03. Lead Plaintiffs’ Counsel haveexpended considerable time and effort in the prosecution of this litigation on a contingent feebasis, and have advanced the expenses of the litigation in the expectation that if they weresuccessful in obtaining a recovery for the Class they would be paid from such recovery. In thistype of litigation, it is customary for plaintiffs’ counsel to be awarded a percentage of theSettlement Fund as their attorneys’ fees.

The Settlement resolves a lawsuit concerning whether during the Class Period,Defendants knowingly and/or recklessly disseminated materially false and misleading statementsor made material omissions concerning the business operations and financial condition ofSignalife. The lawsuit alleges that as a result of these alleged misrepresentations and omissions,the prices of Signalife stock during the Class Period were artificially inflated. The partiesdisagree on both liability and damages. The issues on which the parties disagree also include(a) the amount by which the price of Signalife stock was allegedly artificially inflated (if at all)during the Class Period; (b) the extent to which the various matters that Lead Plaintiffs allegedwere materially false or misleading influenced (if at all) the trading price of Signalife stock atvarious times during the Class Period; and (c) whether the statements made or facts allegedlyomitted in violation of law were material or otherwise actionable under the federal securitieslaws. Lead Plaintiffs’ Counsel considered that there was a substantial risk that Lead Plaintiffsand the Class might not have prevailed on all their claims at trial and that there were risks that

1


the decline in the price of Signalife stock could be attributed, in whole or in part, to other factors.Therefore, Lead Plaintiffs and the Class could have recovered nothing or substantially less thanthe amount of the Settlement. The Defendants deny that they are liable to Lead Plaintiffs or theClass and deny that Lead Plaintiffs or the Class have suffered any damages. Lead Plaintiffs’Counsel believes this Settlement is in the best interests of the Class considering the risks posedby further litigation. See Question 4 below for further explanation.

YOUR LEGAL RIGHTS ARE AFFECTED WHETHER YOU ACT OR DON ’ T ACT. READ THISNOTICE CAREFULLY.

YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT(DESCRIBED HEREIN)

SUBMIT A CLAIM FORM The only way to get a payment fromthe Settlement Fund.

EXCLUDE YOURSELF Receive no payment. This is the onlyoption that allows you to ever be partof any other lawsuit against Signalifeconcerning the legal claims beingreleased by this Settlement.

OBJECT BUT REMAIN IN THE Submit written objection to anySETTLEMENT aspect of the Settlement to the Court

GO TO A HEARING A hearing will be held on ______,2011 and is open to the public. Tospeak in Court, however, you needto give advance written notice to theCourt and to the parties.

DO NOTHING Receive no payment. Give up yourright to object to the Settlement, orany part of it, or to requestexclusion from the Settlement.

These rights and options – and the deadlines to exercise them – are explained in this notice.

The Court in charge of this case still has to decide whether to approve the Settlement.Payments will be made if the Court approves the Settlement, after appeals are resolved if any arefiled, and after the claims are processed. Please be patient.

Further information regarding this Settlement may be obtained by contacting LeadPlaintiffs’ Counsel, Scott+Scott LLP, 156 South Main Street, PO Box 192, Colchester, CT06415 (800) 404-7770.

2


WHAT THIS NOTICE CONTAINS Page

Basic Information .6-71. Why did I receive this notice package?2. What is this lawsuit about?3. Why is this a class action?4. Why is there a Settlement?

Who is in the Settlement 85. How do I know if I am part of the Settlement?6. Are there exceptions to being included?7. I’m still not sure if I am included.

The Settlement Benefits - What You Get 8-98. What does the Settlement provide?

How You Get a Payment - Submitting a Claim Form ....9-109. How can I obtain a payment?10. When could I receive my payment?11. What am I giving up to receive a payment or stay in the Class?

Excluding Yourself From the Settlement 1112. How do I get out of the Settlement?13. If I don’t exclude myself, can I sue Defendants for the claims being released

in this Settlement?14. If I exclude myself, can I obtain money from this Settlement?

The Lawyers Representing You 1115. Do I have a lawyer in the case?16. How will the lawyers be paid?

Objecting to the Settlement ..1217. How do I make any objections I may have to the Settlement?18. What is the difference between objecting to the Settlement and requesting

exclusion from the Settlement?

The Court’s Fairness Hearing 12-1319. When and where will the Court decide whether to approve the Settlement?20. Do I have to come to the hearing?21. May I speak at the hearing?

If You Do Nothing 13-1422. What happens if I do nothing at all?


Getting More Information 1423. Are there more details about the Settlement?24. How do I get more information?

Understanding Your Payment - The Plan of Allocation 14-18

Special Notice to Securities Brokers and Other Nominees 19

Inquiries 19

4


BASIC INFORMATION

1. WHY DID I RECEIVE THIS NOTICE PACKAGE?

The Court authorized this notice to be sent to you because you or someone in your familymay have purchased or acquired Signalife common stock between February 10, 2004 and April14, 2008 inclusive (the “Class Period”). The Court in charge of the case is the United StatesDistrict Court for the District of South Carolina, Greenville Division, and the case is known bythe names Latham v. Matthews, et al., Case No. 08-cv-2995-JMC and Roth v. Matthews, et al.,Case No. 08-cv-3183-JMC. The people who brought this lawsuit are called “Plaintiffs,” and theparticular plaintiffs chosen to litigate the claims in this case, Bryan D. Harris, Mark Taylor andGreg Taylor, are called the “Lead Plaintiffs.” Lead Plaintiffs also the “Class Representatives,”which means they represent your interests as a class member as well as their own. The companyand individuals they sued – Signalife, Inc., Pamela M. Bunes, Lowell T. Harmison, Robert C.Scherne, Kevin F. Pickard, William R. Matthews, Mitchell J. Stein and Budimir Drakulic– arecalled the “Defendants.”

The Court authorized this notice to be sent to you because you have a right to know aboutthe proposed Settlement of a class action lawsuit, and about all of your options, before the Courtdecides whether to approve the Settlement. If the Court approves the Settlement and resolvesany objections that may be filed in opposition to the Settlement, as explained below, and if anyappeals are resolved, then an administrator appointed by the Court will distribute the paymentsthat the Settlement permits. You may track the progress of the Settlement by visitingwww.signalifesettlement.com. This package explains the lawsuit, the Settlement, your legalrights, what benefits are available, who is eligible for them and how to obtain them.

2. WHAT IS THIS LAWSUIT ABOUT?

The lawsuit claims that Defendants used and manipulated Signalife as a vehicle to engagein a stock manipulation scheme. Signalife was in the business of manufacturing and developinga heart monitor based on proprietary technology that made its product clearly superior to anyother product available in the marketplace. During the Class Period, from February 10, 2004 toApril 14, 2008, Lead Plaintiffs allege that the Defendants issued false and misleading statementsabout Signalife’s technology, the commercially viability of its products and the Companyrecording and recognizing sales and revenues. The lawsuit claims that Defendants’ false andmisleading statements artificially increased the price of Signalife’s stock that was purchased bythe investors in this case. This lawsuit alleges that when investors learned the truth, the price ofSignalife’s stock dropped, which caused losses to Lead Plaintiffs and the other investors in theClass.

This lawsuit began on August 28, 2008. By Order dated November 20, 2008, the Courtappointed Bryan Harris, Greg Taylor and Mark Taylor as Lead Plaintiff and approved itsselection of Scott+Scott LLP as Lead Plaintiff’s Counsel for the Class. A ConsolidatedAmended Class Action Complaint (the “Complaint”) was filed on December 10, 2008, and onSeptember 4, 2009, the Court denied in part Defendants’ Motions to Dismiss the Complaint.


The claims and the amounts of investors’ losses are sharply disputed. Defendants havedenied and continue to deny each claim and contention alleged against them. Defendants haveasserted at all times that they acted properly and in compliance with the federal securities lawsthat apply to this case.

While Lead Plaintiffs believe that they can prove that Defendants were not fully truthfulabout the Company and its products, and that Defendants’ statements caused the assertedchanges in Signalife’s stock price, they recognize that a jury might find that the Defendants’position are correct and that they did not violate the securities laws, or did not cause investorslosses, or that the losses that resulted, if any, were much less than those asserted.

3. WHY IS THIS A CLASS ACTION?

In a class action, one or more people called Class Representatives (in this case Bryan D.Harris, Mark Taylor and Greg Taylor) sue on behalf of persons who have similar claims. Allthese persons and/or entities are referred to collectively as a Class, and are referred toindividually as Class Members. Bringing a case such as this as a class action allows adjudicationof many similar claims of persons and entities that might be economically too small to bring inindividual actions. One court resolves the issues for all Class Members, except for those whoexclude themselves from the Class.

4. WHY IS THERE A SETTLEMENT?

The Court did not decide in favor of Lead Plaintiffs and the Class, or Defendants.Instead, Lead Plaintiffs and Defendants have agreed to settle the lawsuit. The parties retainedthe services of Judge Daniel Weinstein, as mediator for this action. The Settlement was theproduct of extensive arms-length negotiations with the assistance of this respected mediator.

Lead Plaintiffs have agreed to settle the lawsuit based on the risks that would be involvedin a trial and their conclusion that the proposed Settlement is fair, reasonable and adequate andserves the best interests of the Class Members. Counsel for Lead Plaintiffs has determined thatby settling, the cost and risks of a trial will be avoided, while at the same time providingcompensation to the Class. Lead Plaintiffs and Lead Plaintiffs’ Counsel believe that theSettlement is best for all Class Members.

As described above, Lead Plaintiffs and Defendants do not agree regarding the merits ofLead Plaintiffs’ allegations with respect to liability or the amount of damages, if any, that wouldbe recoverable if Lead Plaintiffs were to prevail on each claim asserted. The issues on which theparties disagree include: (1) whether Defendants made any false and misleading statements;(2) whether the statements made were materially false when made, or are otherwise actionableunder the federal securities laws; (3) whether Lead Plaintiffs could establish loss causation forany misleading statements; (4) whether and to what extent, if at all, the Class was damaged; (5)the appropriate economic model for determining the amount by which Signalife common stockwas allegedly artificially inflated (if at all) during the Class Period; (6) the extent to which thevarious matters that Lead Plaintiffs alleged were materially false or misleading (if at all)influenced and artificially inflated (if at all) the trading price of Signalife common stock at

6


various times during the Class Period; (7) the extent to which external factors influenced thetrading price of Signalife common stock at various times during the Class Period; and(8) whether, and to what extent, factors other than the misrepresentations that Lead Plaintiffsalleged caused Signalife’s common stock prices to drop.

Although Lead Plaintiffs’ Counsel were prepared to defend against summary judgmentand go to trial, and were confident in the merits of their case, Lead Plaintiffs’ Counsel recognizethat the claims may not have survived summary judgment and that trial is a risky proposition andLead Plaintiffs and the Class may not have prevailed on all, or any, of their claims. In addition,Lead Plaintiffs’ Counsel believe that this Settlement provides a substantial recovery to the ClassMembers and that the Class may not have obtained a greater recovery if the case had gone totrial.

Defendants continue to deny liability and deny that Lead Plaintiffs and the ClassMembers were damaged. These disputes regarding both the merits of the Action and thedamages would be subject to expert testimony and, therefore, it would be impossible to predictwith certainty which of the parties’ arguments would find favor with the Court in a summaryjudgment context or with the jury at trial. In a trial, Lead Plaintiffs could have recovered nothingor substantially less than the amount of the Settlement. Further, even assuming that LeadPlaintiffs could have won at trial, any verdict would inevitably be the subject of appeal and therecovery to Class Members would have remained uncertain and been further delayed.

WHO IS IN THE SETTLEMENT?

5. HOW DO I KNOW IF I AM PART OF THE SETTLEMENT?

Everyone who fits the following description, and is not excluded by the definition of theClass, is a Class Member: All persons or entities who purchased Signalife publicly tradedcommon stock between February 10, 2004 and April 14, 2008, inclusive (the “Class Period”), asdefined in the Complaint, and were damaged as alleged in the action thereby. See Question 6 formore information.

6. ARE THERE EXCEPTIONS TO BEING INCLUDED?

You are not a Class Member if you are a Defendant in this lawsuit. For purposes of theSettlement, the Class also excludes any entity in which a Defendant has or had a controllinginterest, members of the Individual Defendants’ families and , the legal representatives, agents,affiliates, heirs, successors-in-interest or assigns of any such excluded person, and all currentand former officers and directors of Signalife who are not also Defendants. See Question 5 formore information.

Also, if you exclude yourself from the Class, as described below, you are not a part of theClass. If one of your mutual funds owns Signalife stock, that alone does not make you a ClassMember. You are a Class Member only if you purchased or acquired Signalife publicly tradedcommon stock during the Class Period. Contact your broker to see if you hold or held Signalifecommon stock during the Class Period.

7


To be a Member of the Class, you must have purchased or acquired Signalife publiclytraded common stock during the Class Period. The U.S. Supreme Court has interpreted thefederal law that forms the basis of the lawsuit as limiting damages to persons who sustainedlosses caused by the revelation of previously withheld information. As a practical matter, thismeans that only Members of the Class who acquired and held positions in Signalife commonstock during the Class Period sustained damages.

7. I’ M STILL NOT SURE IF I AM INCLUDED.

If you are still not sure whether you are included in the Class, you may ask for free helpby calling [insert claims administrator’s toll free number] for more information. Alternatively,you may fill out and return the claim form attached to this notice, described in Question 9, to seeif you qualify.

THE SETTLEMENT BENEFITS - WHAT YOU GET

8. WHAT DOES THE SETTLEMENT PROVIDE?

The terms of the proposed Settlement are summarized below, and the full Settlementterms are contained in a Stipulation and Agreement of Settlement (the “Stipulation”) datedMarch 1, 2011. You can obtain a copy of the Stipulation by writing to Lead Plaintiffs’ Counsel:,Scott+Scott LLP, 156 South Main Street, PO Box 192, Colchester, CT 06415 (800) 404-7770, orby visiting the following website: www.signalifesettlement.com .

The proposed Settlement calls for Defendants to create a Settlement Fund in the amountof Four Million ($4,000,000) Dollars. Lead Plaintiffs estimate there were approximately 35million Signalife common shares allegedly damaged during the Class Period, and that theaverage recovery per allegedly damaged share is approximately $0.09 before the accrual ofinterest, the payment of taxes on accrued interest, if any, and the deduction of Court-awardedattorneys’ fees and expenses, and costs of notice and claims administration. If you are a ClassMember, you may receive more or less than this average amount depending on: (1) the numberof valid claims submitted; (2) the price paid for the common stock; (3) whether you sold yourcommon stock; and (4) the date and amount you received upon sale. For purposes of theSettlement, your distribution from the Net Settlement Fund (the Settlement Fund less taxesowed, costs of notice and claims administration, attorneys’ fees and expenses as awarded by theCourt) will be governed by the proposed Plan of Allocation described in this notice, or suchother Plan of Allocation as may be approved by the Court.

HOW YOU GET A PAYMENT - SUBMITTING A CLAIM FORM

9. HOW CAN I OBTAIN A PAYMENT?

To qualify for payment, you must submit a claim form (“Proof of Claim”) to the ClaimsAdministrator. A claim form is attached to this notice. You may also obtain a claim form on theInternet at www.signalifesettlement.com. Read the instructions carefully, fill out the form,

8


include all the required documents, sign it, and mail it to the address provided, postmarked nolater than , 2011 to the Claims Administrator as follows:

Signalife Securities Litigationc/o The Garden City Group, Inc.

PO Box 9698Dublin, Ohio 43017-4998

The Claims Administrator will process your claim and advise you if you are an “AuthorizedClaimant” – meaning that your claim satisfies the requirements approved by the Court.

10. WHEN COULD I RECEIVE MY PAYMENT?

The Court will hold a hearing on , 2011 to decide whether to approve theSettlement. Even if Judge Childs approves the Settlement, it may take more than a year beforethe Settlement Fund is distributed to the Class Members because there may be appeals thatwould delay the implementation of the Settlement and resolving the appeals can take time, whichcan exceed a year. The other reason that it may take more than a year for the Settlement Fund tobe distributed is that once the Settlement has been approved, and any appeals are resolved, theClaims Administrator must process all of the Proof of Claim forms. The processing by itself is avery complicated process and will take many months. Please be patient.

11. WHAT AM I GIVING UP TO RECEIVE A PAYMENT OR STAY IN THE CLASS?

Unless you exclude yourself by following the procedures outlined below, you will remainin the Class. That means that, upon the Effective Date, you will release all Settled Claims,against all Released Parties (as defined below). It also means that all of the Court’s orders willapply to you and legally bind you.

“Released Parties” means Defendants and any and all of their present or formerparent companies, divisions, subsidiaries, affiliates, associates, representatives,predecessors, successors, heirs, assigns, executors, administrators and any of theirpresent, former or future directors, agents, partners, principals, officers,employees, trustees, representatives, insurers, including AXIS InsuranceCompany, or any of them, and their lawyers and all persons acting by, through,under or in concert with them or any of them.

“Settled Claims” means any and all claims, debts, demands, rights or causes ofaction or liabilities whatsoever (including, but not limited to, any claims fordamages, interest, attorneys’ fees, expert or consulting fees, and any other costs,expenses or liability whatsoever), whether based on United States federal, state,local, statutory or common law or any other law, rule or regulation, whetherforeign or domestic, fixed or contingent, accrued or unaccrued, liquidated orunliquidated, at law or in equity, matured or unmatured, foreseen or unforeseen,whether class or individual in nature, including, without limitation, both knownclaims and Unknown Claims (as defined below) (i) that have been asserted in the

9


Action by the Class Members or any of them against any of the Released Parties(whether pleaded in the Complaint or not), or (ii) that could have been asserted inthe Action or in any forum by the Class Members or any of them against any ofthe Released Parties, which also arise out of, relate to, or are based on any of theclaims, allegations, activities, press releases or public statements set forth in theComplaint and relate to the purchase, sale, transfer or acquisition of the publiclytraded securities of Signalife during the Class Period, or any actions,representations or omissions that were alleged or might have been alleged toaffect the price of any publicly traded common stock of Signalife during the ClassPeriod. Settled Claims shall include claims asserted by Lead Plaintiffs againstMitchell Stein in the action In re Mitchell J. Stein, 09-cv-14345-BKC-PHG,pending in the Untied States Bankruptcy Court for the Southern District ofFlorida.

“Unknown Claims” means any and all Settled Claims which any Lead Plaintiff orClass Member does not know or suspect to exist in his, her or its favor at the timeof the release of the Released Parties, and any Settled Defendants’ Claims whichDefendants do not know or suspect to exist in their favor, which if known by him,her or it might have affected his, her or its decision(s) with respect to theSettlement. With respect to any and all Settled Claims and Settled Defendants’Claims, the Parties stipulate and agree that by operation of the Order and FinalJudgment, upon the Effective Date, the Lead Plaintiffs and Defendants shall haveexpressly waived, and each Class Member shall be deemed to have waived, andby operation of the Final Judgment shall have expressly waived, any and allprovisions, rights and benefits conferred by any law of any state or territory of theUnited States, or principle of common law, which is similar, comparable, orequivalent to Cal. Civ. Code § 1542, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMSWHICH THE CREDITOR DOES NOT KNOW ORSUSPECT TO EXIST IN HIS OR HER FAVOR AT THETIME OF EXECUTING THE RELEASE, WHICH IFKNOWN BY HIM OR HER MUST HAVE MATERIALLYAFFECTED HIS OR HER SETTLEMENT WITH THEDEBTOR.

EXCLUDING YOURSELF FROM THE SETTLEMENT

If you do not want to receive a payment from this Settlement, and you want to keep theright to sue or continue to sue Defendants on your own about the legal issues in this case, thenyou must take steps to get out of the Settlement. This is called excluding yourself – or issometimes referred to as “opting out” of the Class.

12. HOW DO I GET OUT OF THE SETTLEMENT?

To exclude yourself from the Settlement, you must send a letter by mail saying that youwant to be excluded from the Settlement in Latham v. Matthews, et al., Case No. 08-cv-2995-

10


JMC and Roth v. Matthews, et al., Case No. 08-cv-3183-JMC (D.S.C.). Be sure to include yourname, address, telephone number, proof of the number of shares you purchased and sold duringthe Class Period, and your signature. Your exclusion request must be postmarked no later than , 2011 and sent to the Claims Administrator as follows:



You cannot exclude yourself by phone or by e-mail. If you ask to be excluded, you willnot receive a Settlement payment, and you cannot object to the Settlement. You will not belegally bound by anything that happens in this lawsuit. You may be able to sue (or continue tosue) Defendants in the future.

13. IF I DON ’ T EXCLUDE MYSELF, CAN I SUE THE DEFENDANTS FOR THE CLAIMS BEINGRELEASED IN THIS SETTLEMENT?

No. Unless you exclude yourself, you give up any right to sue the Defendants or theReleased Parties for the claims that this Settlement resolves. If you have a pending lawsuit,speak to your lawyer in that case immediately. You must exclude yourself from the Class tobring or to continue your own lawsuit. Remember, the exclusion deadline is , 2011.

14. IF I EXCLUDE MYSELF, CAN I OBTAIN MONEY FROM THIS SETTLEMENT?

No. If you exclude yourself, do not send in a claim form to ask for any money. But, ifyou exclude yourself, you may sue, continue to sue, or be part of a different lawsuit againstDefendants.

THE LAWYERS REPRESENTING YOU

15. DO I HAVE A LAWYER IN THIS CASE?

The Court appointed the law firm of Scott+Scott LLP as Lead Plaintiffs’ Counselrepresent you and other Class Members. You will not be charged directly for these lawyers. Ifyou want to be represented by your own lawyer, you may hire one at your own expense.

16. HOW WILL THE LAWYERS BE PAID?

Lead Plaintiffs’ Counsel have expended considerable time and effort in the prosecution ofthis litigation on a contingent fee basis and have advanced the expenses of the litigation in theexpectation that if they were successful in obtaining a recovery for the Class, they would be paidfrom such recovery. In this type of litigation, it is customary for counsel to be awarded apercentage of a recovery as their attorneys’ fees and reimbursement of their out-of-pocketexpenses. Therefore, Lead Plaintiffs’ Counsel will file a motion asking the Court at the FairnessHearing (see Question 19, below) to make an award of attorneys’ fees in an amount of not more

11


than 33 1/3% of the Settlement Fund and reimbursement of litigation expenses, including expertfees, not to exceed $250,000. The Court may award less or more than these amounts. Theseamounts will come out of the Settlement Fund. Defendants have stated that they take no positionregarding these fees and expenses. If the Court awards 33 1/3% of the Settlement Fund asattorneys’ fees and reimbursement of out-of-pocket expenses as set forth above, it will affect theper damaged share recovery by an estimated amount of approximately $0.03 per share.

OBJECTING TO THE SETTLEMENT

17. HOW DO I MAKE ANY OBJECTIONS I MAY HAVE TO THE SETTLEMENT?

If you are a Class Member, you may object to the Settlement, any part of the Settlement,or the request for attorneys’ fees and reimbursement of expenses. You may state why you thinkthe Court should not approve any part of the Settlement. The Court will consider your views.To object, you must send a written objection stating that you object to the Settlement in Lathamv. Matthews, et al., Case No. 08-cv-2995-JMC and Roth v. Matthews, et al., Case No. 08-cv-3183-JMC (D.S.C.). Be sure to include your name, address, telephone number, your signature,proof of the number of Signalife common shares subject to this settlement that you purchasedand sold during the Class Period, and the reasons why you object to the Settlement or any part ofthe Settlement. Be sure to mail the objection to each of the three places stated below,

postmarked no later than , 2011:

DEFENDANTS’LEAD PLAINTIFFS’ DESIGNATED

COURT COUNSEL COUNSELClerk of the Court

United States District Court David R. ScottDistrict of South Carolina Scott+Scott LLP Paul R. Bessette

Greenville Division 156 South Main St. Greenburg Traurig LLP300 East Washington Street PO Box 192 300 West Sixth, Suite 2050

Greenville, SC 29601 Colchester, CT 06415 Austin, TX 78701

By filing any objection, the objector consents to being deposed in his or her district ofresidence prior to the Fairness Hearing.

18. WHAT IS THE DIFFERENCE BETWEEN OBJECTING TO THE SETTLEMENT ANDREQUESTING EXCLUSION FROM THE SETTLEMENT?

Objecting is simply telling the Court that you don’t like something about the Settlement.You may object only if you stay in the Class. By excluding yourself from the Settlement, youare stating that you don’t want to be part of the Class. If you exclude yourself from theSettlement, you have no basis to object because the case no longer affects you.

THE COURT’S FAIRNESS HEARING

12


The Court will hold a hearing to decide whether to approve the Settlement. You mayattend and you may ask to speak.

19. WHEN AND WHERE WILL THE COURT DECIDE WHETHER TO APPROVE THESETTLEMENT?

The Court will hold a hearing at _:__ _.m. on , 2011, at the United States DistrictCourt for the District of South Carolina, Greenville Division, 300 East Washington StreetGreenville, South Carolina 29601. At this hearing the Court will consider whether theSettlement is fair, reasonable, and adequate. If there are objections, the Court will considerthem. Judge Childs will listen to Class Members (or their counsel) who have submitted writtenobjections and written indication(s) of their intention to appear and speak at the hearing, as longas they are postmarked no later than , 2011, and mailed to the three different places listedin the chart following Question 17, above. The Court may also decide how much to award LeadPlaintiffs’ Counsel for attorneys’ fees and expenses. After the hearing, the Court will decidewhether to approve the Settlement. We do not know how long these decisions will take.

20. DO I HAVE TO COME TO THE HEARING?

No. Lead Plaintiffs’ Counsel will answer questions Judge Childs may have. But, you arewelcome to come at your own expense. If you send an objection, you don’t have to come toCourt to talk about it. As long as you mailed your written objection on time, the Court willconsider it. You may also pay your own lawyer to attend to speak in support of any writtenobjection that you mailed on time, but it is not necessary. You may do so as long as you havefollowed the instructions set forth in the answer to Question 21, below.

21. MAY I SPEAK AT THE HEARING?

If you are a Class Member and have submitted a written objection to the Settlement or themotion of Lead Plaintiffs’ Counsel for attorneys’ fees and expenses, and follow the instructionsset out in response to Questions 17 and 19 above, you (or your counsel) may speak at theFairness Hearing in support of your objection. To do so, along with your written objection, youmust send a letter stating that it is your “Notice of Intention to Appear in Latham v. Matthews, etal., Case No. 08-cv-2995-JMC and Roth v. Matthews, et al., Case No. 08-cv-3183-JMC(D.S.C.).” Be sure to include your name, address, telephone number, and your signature. YourNotice of Intention to Appear must be postmarked no later than , 2011, and be sent tothe Court, Lead Plaintiffs’ Counsel, and Defendants’ Counsel, at the addresses listed in Question17. You cannot speak at the hearing if you exclude yourself.

IF YOU DO NOTHING

22. WHAT HAPPENS IF I DO NOTHING AT ALL?

If you do nothing, you will not receive any money from the Settlement. But if you are aMember of the Class, unless you exclude yourself from the Settlement, you won’t be able to start

13


a lawsuit, continue with a lawsuit, or be part of any other lawsuit against Defendants about thelegal issues in this case, ever again.

GETTING MORE INFORMATION

23. ARE THERE MORE DETAILS ABOUT THE SETTLEMENT?

This notice summarizes the proposed Settlement. More details are in the Stipulation.You may obtain a copy of the Stipulation by visiting: www.signalifesettlement.com .

24. HOW DO I GET MORE INFORMATION?

You may call (888) 885-9698 toll free; write to the Claims Administrator, SignalifeSecurities Litigation, c/o Garden City Group c/o The Garden City Group, Inc. PO Box 9698Dublin, Ohio 43017-4998 or visit the website at www.signalifesettlement.com where you willfind answers to common questions about the Settlement, a claim form, plus other information tohelp you determine whether you are a Class Member and whether you are eligible for a payment.

UNDERSTANDING YOUR PAYMENT - THE PLAN OF ALLOCATION(You do not need to make any of these calculations yourself. TheClaims Administrator will make all of these calculations for you.)

A. Defendants have agreed to pay Four Million ($4,000,000) Dollars. Lead Plaintiffs’damages expert estimates that there were approximately 35 million shares of the common stockof Signalife, Inc. publicly traded one or more times during the Class Period which may havebeen damaged. As discussed below, claims were asserted under the Securities Exchange Act of1934 (the “Exchange Act”). Lead Plaintiffs’ damages expert estimates that the average recoveryper damaged share under the Settlement is $0.09 per damaged Signalife share for Class Membersbefore deduction of Court-awarded attorneys’ fees and expenses and the costs of administration.A Class Member’s actual recovery will be determined in accordance with the Plan of Allocationwhich is approved by the Court. The Court may change the Plan of Allocation described below.

B. After approval of the Settlement by the Court, and upon satisfaction of the otherconditions to the Settlement, the Net Settlement Fund will be distributed to AuthorizedClaimants in accordance with the Plan of Allocation. If any funds remain in the Net SettlementFund because of uncashed distributions or other reasons, then, after the Claims Administrator hasmade reasonable and diligent efforts to have Authorized Claimants cash their distribution checks,any balance remaining in the Net Settlement Fund one (1) year after the initial distribution ofsuch funds shall be redistributed to Class Members who have cashed their initial distributionsand who would receive at least $10.00 from such redistribution based on their RecognizedClaim, after payment of any unpaid costs or fees incurred in administering the Net SettlementFund for such redistribution, if in the opinion of Lead Plaintiffs’ Counsel such redistributionwould be cost-effective. If any funds shall remain in the Net Settlement Fund after six (6)months after such redistribution, or if redistribution is not made because it was deemed not costeffective, then such balance shall be contributed to non-sectarian, not-for-profit 501(c)(3)organization(s) designated by Lead Plaintiffs’ Counsel after notice to the Court and subject todirection, if any, by the Court.

14


C. The Settlement Fund will be distributed as follows:

(i) First, to pay all federal, state, and local taxes on any income earned by theSettlement Fund and to pay the reasonable costs incurred in connection with determining theamount of, and paying, taxes owed by the Settlement Fund (including reasonable expenses of taxattorneys and accountants);

(ii) To pay costs and expenses in connection with providing Notice to Class Membersand administering the Settlement on behalf of Class Members;

(iii) To reimburse plaintiffs’ counsel for the costs and expenses they incurred incommencing and prosecuting the Action, with interest on such money, if and to the extentallowed by the Court;

(iv) To pay plaintiffs’ counsel’s attorneys’ fees, with interest on such amount, to theextent allowed by the Court; and

(v) To compensate Authorized Claimants with the balance of the Net Settlement Fundin accordance with the Plan of Allocation, subject to an Order of the Court approving theSettlement and the Plan of Allocation (or such other allocation plan as the Court may approve),and subject to such Order’s becoming Final (meaning that the time for appeal or appellate reviewof the Order granting final approval has expired, or, if the Order is appealed, that the appeal iseither decided without causing a material change in the Order or is upheld on appeal and nolonger subject to appellate review by further appeal or writ of certiorari).

D. The Net Settlement Fund will not be distributed until the Court has approved a Plan ofAllocation, and the time for any petition for rehearing, appeal, or review, whether by certiorari orotherwise, has expired.

E. Defendants are not entitled to get back any portion of the Settlement Fund once theCourt’s Order approving the Settlement becomes Final. Defendants have no liability, obligation,or responsibility for the administration of the Settlement or disbursement of the Net SettlementFund or the Plan of Allocation.

F. Approval of the Settlement is independent from approval of the Plan of Allocation. Anydetermination as to the Plan of Allocation will not affect the Settlement, if approved.

G. Only those Class Members who purchased Signalife common stock during the ClassPeriod AND WERE DAMAGED, as set forth below, will be eligible to share in the distributionof the Net Settlement Fund.

H. The Court has reserved continuing jurisdiction to allow, disallow, or adjust on equitablegrounds the Claim of any Class Member.

I. The Court has also reserved the right to modify the Plan of Allocation without furthernotice to Class Members. Any Orders regarding a modification of the Plan of Allocation will beposted on the settlement website, www.signalifesettlement.com .

J. Payment pursuant to the Plan of Allocation approved by the Court shall be conclusiveagainst all Authorized Claimants. No person shall have any claim against Lead Plaintiffs, LeadPlaintiffs’ Counsel, or the Claims Administrator or other agent designated by Lead Plaintiffs’Counsel arising from distributions made substantially in accordance with the Stipulation, thePlan of Allocation, or further orders of the Court. Lead Plaintiffs, Defendants, their respective

15


counsel, and all other Releasees shall have no responsibility or liability whatsoever for theinvestment or distribution of the Settlement Fund, the Net Settlement Fund, the Plan ofAllocation, or the determination, administration, calculation, or payment of any Proof of Claimor nonperformance of the Claims Administrator, the payment or withholding of Taxes owed bythe Settlement Fund, if any, or any losses incurred in connection therewith.

K. A “Recognized Loss Amount” will be calculated for each of a Claimant’s purchases ofSignalife common shares listed in the Proof of Claim form, and for which adequatedocumentation is provided. The calculation of the Recognized Loss Amount will depend uponseveral factors, including (i) when the shares were purchased and (ii) whether they were helduntil the Corrective Disclosure Date or to the conclusion of the Class Period or (iii) sold duringthe Class Period, and if so, when they were sold. The total of a Claimant’s Recognized LossAmounts, subject to adjustment for market gain or loss, shall be the Claimant’s RecognizedClaim.

L. Information Required on the Proof of Claim Form: Each Proof of Claim form muststate and provide sufficient documentation for each Authorized Claimant’s position in Signalifecommon shares as of the close of trading on February 9, 2004, the day before the first day of theClass Period, and the closing position in Signalife common shares as of the close of trading onApril 14, 2008, the last day of the Class Period. Each Proof of Claim form also must list andprovide sufficient documentation for all transactions in this security as set forth in the Proof ofClaim.

M. The objective of the Plan of Allocation is to equitably distribute the Settlement proceedsto those Class Members who suffered economic losses as a result of the alleged fraud, asopposed to losses caused by market and industry factors or Company-specific factors not relatedto the alleged fraud. The Plan of Allocation reflects Lead Plaintiffs’ damages expert’s analysisundertaken to that end, including a review of publicly available information regarding Signalifeand statistical comparisons of the price movements of the Signalife common stock with the priceperformance of relevant market and industry indices during the Class Period (February 10, 2004– April 14, 2008

N. The Plan of Allocation generally measures the amount of loss that a Class Member canclaim under the Settlement for the purpose of making pro rata allocations of the cash in the NetSettlement Fund to Class Members who submit acceptable Proofs of Claim. The Plan ofAllocation is not a formal damage analysis. Recognized Loss Amounts are based on the level ofalleged artificial inflation in the price of Signalife shares at the time of purchase and at the timeof sale. In this case, Lead Plaintiffs allege that Defendants made false statements and omittedmaterial facts beginning February 10, 2004, through and until April 14, 2008, regarding, amongother things, the Company’s technology, the commercially viability of its products and theCompany recording and recognizing sales and revenues. The following proposed Plan ofAllocation reflects plaintiffs’ allegations that the price of Signalife shares was artificially inflatedduring the Class Period due to misrepresentations and/or omissions regarding Signalife’stechnology, the commercially viability of its products and the Company recording andrecognizing sales and revenues.

O. In order to have recoverable damages, disclosure of the alleged misrepresentations mustbe the cause of the decline in the price of the security. The corrective disclosures that removedthe artificial inflation from the price of Signalife shares occurred at the opening of trading on

16


April 14, 2008 (the “Corrective Disclosure Date”). Accordingly, in order to have been damagedby the alleged fraud:

• a Signalife share purchased in the period from February 10, 2004 to the openingof trading April 14, 2008 must be held at least through the opening of New YorkStock Exchange trading (9:30 a.m. E.T.) on April 14, 2008, the day of the priceimpact of the corrective disclosure (which occurred at the opening of trading onApril 14, 2008).

If you did not hold Signalife shares purchased in the Class Period to the dates indicated, theRecognized Loss Amount for those Signalife shares is $0, and any loss suffered is notcompensable under the federal securities laws.

P. To the extent a Claimant had an overall market gain from his, her or its purchases ofthose Signalife shares during the Class Period which were held to the disclosure date above, thevalue of the Recognized Claim will be zero. To the extent a Claimant had an overall market lossfrom his, her, or its purchases of Signalife shares during the Class Period which were held to thedisclosure date above, the value of the Recognized Claim will be the lesser of the Claimant’stotal Recognized Loss Amounts or the market loss. The Recognized Loss Amount will becalculated as in ¶17 below. The market loss or gain will be calculated as in ¶26 below. SuchClaimants will in any event be bound by the Settlement. You may wish to consider this whendeciding whether to opt out.

Q. Recognized Loss Amount: A Claimant’s Recognized Loss Amount on a purchase of aSignalife share in the Class Period will be calculated as follows.

1. For Signalife common stock purchased between February 10, 2004 and April 14, 2008 andsold between February 10, 2004 and April 14, 2008, an Authorized Claimant’s RecognizedClaim shall be the lesser of, if a loss, the difference between: a) the purchase price and the saleprice; or b) the purchase price and $1.00.

2. For Signalife common stock purchased between February 10, 2004 and April 14, 2008 andretained as of the close of trading on April 14, 2008, an Authorized Claimant’s RecognizedClaim shall be the difference, if a loss, between the purchase price and $1.00 (the closing priceon April 15, 2008).

An Authorized Claimant’s Recognized Loss Amount shall be the basis for his, her or itsallocated pro rata portion of the settlement fund.

R. The Net Settlement Fund will be allocated among all eligible Class Members.

S. Each Authorized Claimant shall recover his, her, or its Recognized Claim. If the sumtotal of Recognized Claims of all Authorized Claimants who are entitled to receive payment outof the Net Settlement Fund is greater than the Net Settlement Fund, however, each suchAuthorized Claimant shall be allocated pro rata shares of the Net Settlement Fund based on his,her or its Recognized Claim as compared to the total Recognized Claims of all AuthorizedClaimants. Each Authorized Claimant shall be paid an amount determined by multiplying thetotal in the Net Settlement Fund by a fraction the numerator of which shall be his, her or itsRecognized Claim and denominator of which shall be the Total Recognized Claims of allAuthorized Claimants. This computation weighs each Class Member’s claim against every otherClass Member’s claim. Each Authorized Claimant will receive pro rata shares of the Net

17


Settlement Fund based on his, her or its Recognized Claim. If the prorated payment calculates toless than $10, then such payment shall be zero.

T. If the Net Settlement Fund exceeds the sum total amount of the Recognized Claims of allAuthorized Claimants entitled to receive payment out of the Net Settlement Fund, the excessamount in the Net Settlement Fund shall be distributed pro rata to all Authorized Claimantsentitled to receive payment.

U. The amount of a Class Member’s Recognized Claim as computed above is not intendedto be an estimate of what a Class Member might have been able to recover at trial, and it is notan estimate of the amount that will be paid pursuant to this Settlement. Instead, this computationis only a method to weigh Class Members’ claims against one another. Each AuthorizedClaimant will receive pro rata shares of the Net Settlement Fund based on his, her or itsRecognized Claim.

V. All purchases and sales of Signalife shares in the Class period shall be matched on a Last-In-First-Out (“LIFO”) basis; Class-Period sales will be matched first against the most recentSignalife shares purchased during the Class Period, and then against prior Class-Periodpurchases in backward chronological order, until the beginning of the Class Period. Purchasesand sales of Signalife shares shall be deemed to have occurred on the “contract” or “trade” dateas opposed to the “settlement” or “payment” date. The receipt or grant by gift, devise oroperation of law of Signalife shares during the Class Period shall not be deemed a purchase orsale for the calculation of an Authorized Claimant’s Recognized Claim nor shall it be deemed anassignment of any claim relating to the purchase of such Signalife shares unless specificallyprovided in the instrument of gift or assignment.

W. The date of covering a “short sale” is deemed to be the date of purchase or acquisition ofSignalife shares. The date of a “short sale” is deemed to be the date of sale of Signalife commonshares. In accordance with the Plan of Allocation, however, the Recognized Loss Amount on“short sales” is zero.

X. To the extent a Claimant had a market gain from his, her or its overall transactions inthose Signalife shares purchased during the Class Period which were held to at least one of thedisclosure dates, the value of the Recognized Claim will be zero. Such Claimants will in anyevent be bound by the Settlement. To the extent a Claimant suffered an overall market loss onhis, her or its overall transactions in those Signalife shares purchased during the Class Period andheld to at least one of the disclosure dates, but that market loss was less than the RecognizedClaim calculated above, then the Recognized Claim shall be limited to the amount of the actualmarket loss.

Y. Calculation of market gain or loss on Signalife shares purchased in the Class Period and held to April 14, 2008 (the “disclosure dates”): For purposes of determining a Claimant’smarket gain or loss from his, her or its overall transactions in Signalife shares purchased duringthe Class Period and held to the disclosure date, the Claims Administrator shall: (i) total theamount the Claimant paid for all such Signalife shares purchased and held to the disclosure date(the “Total Purchase Amount”); (ii) identify by matching under the LIFO convention any ClassPeriod share sales associated with those Class Period purchases; (iii) total the amount receivedfor those sales (the “Sales Proceeds”); and (iv) ascribe a holding value of $1.00,, for eachSignalife share purchased during the Class Period and still held at the end of the Class Period(the “Holding Value”). The difference between (A) the Total Purchase Amount ((i) above) and

18


(B) the sum of the Sales Proceeds received ((iii) above) plus the sum of Holding Values for allshares purchased in the Class Period and retained at the end of the Class Period ((iv) above) willbe deemed a Claimant’s market gain or loss on his, her or its overall transactions in the Signalifeshares purchased during the Class Period and held to one of the disclosure dates.

Z. The Plan of Allocation set forth herein is the Plan that is being proposed by LeadPlaintiffs and Lead Plaintiffs’ Counsel to the Court for approval. The Court may approve thisplan as proposed or it may modify the plan or approve a different plan of allocation withoutfurther notice to the Class.

SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES

If you purchased Signalife common stock during the Class Period as nominee for a beneficialowner, then within ten (10) days after you receive this Notice, you must either: (a) send a copyof this Notice and the accompanying Proof of Claim and Release by first- class mail to all suchbeneficial owners; or (b) provide a list of the names and addresses of such beneficial owners tothe Claims Administrator as follows:



If you chose option (a) above, you may request enough forms from the ClaimsAdministrator (at no charge) to complete your mailing. You may seek reimbursement of yourreasonable expenses actually incurred in complying with these directives, subject to approval ofLead Plaintiffs’ Counsel or the Court. All communications concerning this matter should beaddressed to the Claims Administrator.

INQUIRIES

All inquiries concerning this Notice, the Proof of Claim form, or any other questions byClass Members should be directed to the Claims Administrator as follows:



(888) 885-9698

PLEASE DO NOT CONTACT THE COURT REGARDING THIS NOTICE

Dated: , 2011 By Order of the District Court:

J. Michelle Childs, U.S.D.J.

19



GREENVILLE DIVISION

ROBERT A. LATHAM and THE TAYLOR :GROUP, Individually and on Behalf of All Others :Similarly Situated, :

:Plaintiffs, :

:Case No. 6:08-cv-02995-JMCv. :

:MITCHELL J. STEIN, BILL MATTHEWS, :PAMELA M. BUNES, BUDIMIR S. DRAKULIC, :ROBERT C. SCHERNE, KEVIN F. PICKARD, :LOWELL T. HARMISON, MARVIN H. FINK and :SIGNALIFE, INC., :

:Defendants. :

DARRYL K. ROTH and THE TAYLOR GROUP, :Individually and on Behalf of All Others Similarly :Situated, :

:Plaintiffs, :


:MITCHELL J. STEIN, WILLIAM R. MATTHEWS, :PAMELA M. BUNES, BUDIMIR S. DRAKULIC, :ROBERT C. SCHERNE, KEVIN F. PICKARD, :LOWELL T. HARMISON, MARVIN H. FINK and :SIGNALIFE, INC. :

:Defendants. :

PROOF OF CLAIM AND RELEASE

DEADLINE FOR SUBMISSION: , 2011.

IF YOU PURCHASED PUBLICLY TRADED COMMON STOCK OF SIGNALIFE, INC. FORMERLY KNOWN AS RECOMMANAGED SYSTEMS, INC. AND NOW KNOWN AS HEART TRONICS, INC. (“SIGNALIFE”) Signalife, Inc. (“Signalife” orthe “Company”), BETWEEN FEBRUARY 10, 2004 AND APRIL 14, 2008, INCLUSIVE (“CLASS PERIOD”), YOU MAY BE A“CLASS MEMBER” ENTITLED TO SHARE IN THE SETTLEMENT PROCEEDS. (EXCLUDED FROM THE CLASS FORPURPOSES OF SETTLEMENT ARE: (1) THE DEFENDANTS, (2) ANY ENTITY IN WHICH A DEFENDANT HAS OR HAD ACONTROLLING INTEREST, (3) MEMBERS OF THE INDIVIDUAL DEFENDANTS’ FAMILIES, (4) LEGALREPRESENTATIVES, AGENTS, AFFILIATES, HEIRS, AND SUCCESSORS-IN-INTEREST OR ASSIGNS OF ANY SUCHEXCLUDED PARTY (5) AND ALL CURRENT AND FORMER OFFICERS AND DIRECTORS OF SIGNALIFE WHO ARE NOTALSO DEFENDANTS. )

IF YOU ARE A MEMBER OF THE CLASS, YOU MUST COMPLETE AND SUBMIT THIS FORM IN ORDER TO BEELIGIBLE FOR ANY SETTLEMENT BENEFITS.

YOU MUST COMPLETE AND SIGN THIS PROOF OF CLAIM AND MAIL IT BY FIRST CLASS MAIL, POSTMARKED NOLATER THAN , 2011 TO THE FOLLOWING ADDRESS:




(888) 885-9698

YOUR FAILURE TO SUBMIT YOUR CLAIM BY , 2011 WILL SUBJECT YOUR CLAIM TO REJECTION ANDPRECLUDE YOUR RECEIVING ANY RECOVERY IN CONNECTION WITH THE SETTLEMENT OF THIS LITIGATION. DONOT MAIL OR DELIVER YOUR CLAIM TO THE COURT OR TO ANY OF THE PARTIES OR THEIR COUNSEL AS ANYSUCH CLAIM WILL BE DEEMED NOT TO HAVE BEEN SUBMITTED. SUBMIT YOUR CLAIM ONLY TO THE CLAIMSADMINISTRATOR.

YOU MUST ALSO READ THE RELEASE AND WAIVER IN THIS PROOF OF CLAIM FORM AND SIGN IT. FAILURE TOSIGN THIS PROOF OF CLAIM FORM AND RELEASE MAY RESULT IN DELAY OR REJECTION OF YOUR CLAIM.

PART I: CLAIMANT’S STATEMENT

1. I affirm that I purchased publicly traded common stock of Signalife between February 10, 2004 and August 14, 2008, inclusive,as listed herein. (Do not submit this Proof of Claim if you did not purchase Signalife publicly traded securities during this period).

2. By submitting this Proof of Claim, I state that I believe in good faith that I am a Class Member as defined above and in the Noticeof Proposed Settlement of Class Action (the “Settlement Notice”), or am acting for such person; that I am not a Defendant in theAction or anyone excluded from the Class; that I have read and understand the Settlement Notice; that I believe that I am entitledto receive a share of the Net Settlement Fund; that I elect to participate in the proposed Settlement described in the SettlementNotice; and that I have not previously submitted a request for exclusion. (If you are acting in a representative capacity on behalfof a Member of the Class (e.g., as an executor, administrator, trustee, or other representative), you must submit evidence of yourcurrent authority to act on behalf of that Class Member. Such evidence would include, for example, letters testamentary, letters ofadministration, or a copy of the trust documents).

3. I consent to the jurisdiction of the Court with respect to all questions concerning the validity of this Proof of Claim. I understandand agree that my claim may be subject to investigation and discovery under the Federal Rules of Civil Procedure, provided thatsuch investigation and discovery shall be limited to my status as a Class Member and the validity and amount of my claim. Nodiscovery shall be allowed on the merits of the Action or Settlement in connection with processing of the Proofs of Claim.

4. I have set forth where requested below all relevant information with respect to each purchase of Signalife publicly traded commonstock during the Class Period, and each sale, if any, of such stock. I agree to furnish additional information (including transactionsin other Signalife common stock) to the Claims Administrator to support this claim if requested to do so.

5. I have enclosed photocopies of the stockbroker’s confirmation slips, stockbroker’s statements, or other documents evidencingeach purchase, sale or retention of Signalife common stock listed below in support of my claim. (IF ANY SUCH DOCUMENTSARE NOT IN YOUR POSSESSION, PLEASE OBTAIN A COPY OR EQUIVALENT DOCUMENTS FROM YOUR BROKERBECAUSE THESE DOCUMENTS ARE NECESSARY TO PROVE AND PROCESS YOUR CLAIM).

6. I understand that the information contained in this Proof of Claim is subject to such verification as the Claims Administrator mayrequest or as the Court may direct, and I agree to cooperate in any such verification. (The information requested herein isdesigned to provide the minimum amount of information necessary to process most simple claims. The Claims Administrator mayrequest additional information as required to efficiently and reliably calculate your Recognized Claim. In some cases the ClaimsAdministrator may condition acceptance of the claim based upon the production of additional information, including, whereapplicable, information concerning transactions in any derivatives of the subject common stock such as options).

7. I hereby acknowledge that, as a Member of the Class, I (or the person or entity for whom or which I am executing this Proof ofClaim) will be bound by the terms of the Stipulation of Settlement and Order and Final Judgment in this action and, to the fullextent set forth in the Stipulation of Settlement, upon the Effective Date will have granted a release of all “Settled Claims” to all“Released Parties” on behalf of myself (or on behalf of the Member for whom or which I submit this Proof of Claim) and my (orsuch Member’s) heirs, agents, executors, administrators, beneficiaries, predecessors, successors and assigns.

8. NOTICE REGARDING ELECTRONIC FILES: Certain claimants with large numbers of transactions may request, or may berequested, to submit information regarding their transactions in electronic files in the required file layout. All Claimants MUSTsubmit a manually signed paper Proof of Claim form listing all their transactions whether or not they also submit electroniccopies. If you wish to file your claim electronically, you must contact the Claims Administrator at (888) 885-9698 or visitwww.signalifesettlement.com to obtain the required file layout. No electronic files will be considered to have been properly


submitted unless the Claims Administrator issues to the Claimant a written acknowledgment of receipt and acceptance ofelectronically submitted data.


Name(s) of Beneficial Owner(s):

I I IName

IJoint Owner’s Name (if any)

Account Number:

If you are a bank or other institution filing on behalf of a third-party, and an account number is needed to identify the claimant foryour records, indicate account number here:

IAddress if Beneficial Owner(s):

I I IStreet Number

I ICity

State Zip Code

I IForeign Province Country

I I I ITelephone Number (Day) Telephone Number (Night)

IE-mail Address

I ITaxpayer I.D. No. or Social Security No.

Check one:

q Individual Corporationq Joint Owners IRAq Estate Other (Specify)_____________________________________________________

Record Owner’s Name (if different from Beneficial Owner listed above):

I

Market Maker or Specialist:

I was / I was not a Market Maker or a Specialist in Signalife securities during the Class Period.


PART II: SCHEDULE OF TRANSACTIONS IN SIGNALIFE STOCK

Separately list each of your purchases or sales of Signalife common stock below. Photocopy this page if more space is needed. Besure to include and sign your name and the last four digits of your Social Security number or Tax ID number on anyadditional sheets. The dates of purchase, acquisition or sale is the “trade” or “contract” date, and not the “settlement” or “payment”date.

1. BEGINNING HOLDINGS: At the end of the day on February 9, 2004, I owned the following shares of Signalife commonstock. (If none, write “zero” or “0”) (If other than zero, must be documented).

2. PURCHASES: I made the following purchases of Signalife common stock between February 10, 2004 and April 14, 2008,inclusive (must be documented). (Persons who received Signalife stock during the Class Period other than by purchase are noteligible to submit claims for those transactions, except as otherwise provided in the Notice):

Date(s) of Purchase Number of Shares of Purchase Price Aggregate Cost Please Check the Box if(List Chronologically) Stock Purchased Per Share of (excluding commissions, this Transaction was

(Month/Date/Year) Stock taxes, and fees) the Result of theExercise of an Option

/ / $ $ q

/ / $ $ q

/ / $ $ q

Total shares of Signalife common stock purchased from February 10, 2004 through August 14, 2008, inclusive: .

3. SALES DURING THE CLASS PERIOD: I made the following sales (including short sales) of Signalife common stockbetween February 10, 2004 and April 14, 2008, inclusive (must be documented):

Date(s) of Sale Number of Shares of Sale Price Per Share Amount Received(List Chronologically) Stock Sold of Stock (excluding commissions,

(Month/Date/Year) taxes, and fees)

/ / $ $

/ / $ $

/ / $ $

Total shares of Signalife common stock sold from February 10, 2004 through April 14, 2008, inclusive: .

4. SHARES HELD AT THE END OF THE CLASS PERIOD: At the close of trading on April 14, 2008, I owned thefollowing shares of Signalife common stock (If none, write “zero” or “0”) (If other than zero, must be documented):

IF YOU NEED ADDITIONAL SPACE TO LIST YOUR TRANSACTIONS YOU MUST PHOTOCOPY THIS PAGE AND MUSTCHECK THIS BOX


SUBSTITUTE FORM W-9

PART 1Request for Taxpayer Identification Number (TIN) and Certification.

NAME: _____________________________________________________________________________________________________

Check appropriate box:q Individual Corporationq Joint Owners IRAq Estate Other

Enter TIN on appropriate line. For individuals, this is your Social Security number (“SSN”).For sole proprietors, you must show your individual name, but you may also enter your business or “doing business as” name.You may enter either your SSN or your Employer Identification Number (“EIN”). For other entities, it is your EIN.

I I ISocial Security Number Employer Identification Number

PART 2Certification

UNDER THE PENALTIES OF PERJURY, I (WE) CERTIFY THAT:

The number shown on this form is my/our correct Taxpayer Identification Number; and I (we) certify that I am (we are) NOT subject tobackup withholding under the provisions of Section 3406 (a)(1)(C) of the Internal Revenue Code because: (a) I am (we are) exempt from backupwithholding; or (b) I (we) have not been notified by the Internal Revenue Service that I am (we are) subject to backup withholding as a result of afailure 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,you must cross out the word “NOT” above and check here. q

The Internal Revenue Service does not require your consent to any provision of this document other than the certification required to avoidbackup withholding.

NOTE: If you require the instructions for Completing Substitute Form W-9, please make a written request to us at Claims Administrator,Signalife, Inc. Securities Litigation, ________________. Please note that your accountant should also be able to provide you with these instructions.

I/We declare under penalty of perjury under the laws of the United States of America that the foregoing information supplied by the undersigned istrue and correct.

Executed this _________ day of ___________________, in _____________________, ______________________________.(City) (State / Country)

_____________________________________________________________________ ____________________________(Signature) Date

_____________________________________________________________________(Type or print your name here)

_____________________________________________________________________ ____________________________(Signature) Date

_____________________________________________________________________(Type or print your name here)

______________________________________________________________________________Capacity of persons signing (e.g., Beneficial Owner, Executor, Administrator or Corporate Title)


RELEASE

1. I (we) hereby acknowledge on behalf of myself (ourselves), and any and all heirs, executors, administrators, predecessors, successors andassigns and all persons (now or in the future) acting in concert with, or who purported to act through, such persons, and do hereby fully, finally,and forever waive, release, discharge, dismiss and agree not to institute, maintain or prosecute and am (are) forever enjoined and bar red fromcommencing or prosecuting each and every Settled Claim either directly, indirectly or in a representative, derivative or other capacity againstany of the Released Parties (as defined below) in any action or proceeding of any nature. I (we) acknowledge that the Stipulation of Settlementprovides that the foregoing applies regardless of: whether I (we) ever seek to obtain any distribution from the settlement proceeds; whether I(we) execute and deliver a Proof of Claim; whether I (we) file an objection to the Settlement, to my (our) claim being rejected, to the proposedPlan of Allocation, to any application by Lead Counsel for any award of attorney’s fees and expenses; and whether my (our) claim has beenapproved or allowed or such objection has been overruled by the Court.

2. “Released Parties” means Defendants and any and all of their present or former parent companies, divisions, subsidiaries, affiliates, associates,representatives, predecessors, successors, heirs, assigns, executors, administrators and any of their present, former or future directors, agents,partners, principals, officers, employees, trustees, representatives, insurers, including AXIS Insurance Company, or any of them, and their

lawyers and all persons acting by, through, under or in concert with them or any of them.

3. “Settled Claims” means any and all claims, debts, demands, rights or causes of action or liabilities whatsoever (including, but not limited to, anyclaims for damages, interest, attorneys’ fees, expert or consulting fees, and any other costs, expenses or liability whatsoever), whether based onUnited States federal, state, local, statutory or common law or any other law, rule or regulation, whether foreign or domestic, fixed orcontingent, accrued or unaccrued, liquidated or unliquidated, at law or in equity, matured or unmatured, foreseen or unforeseen, whether class orindividual in nature, including, without limitation, both known claims and Unknown Claims (as defined below) (i) that have been asserted in theAction by the Class Members or any of them against any of the Released Parties (whether pleaded in the Complaint or not), or (ii) that couldhave been asserted in the Action or in any forum by the Class Members or any of them against any of the Released Parties, which also arise outof, relate to, or are based on any of the claims, allegations, activities, press releases or public statements set forth in the Complaint and relate tothe purchase, sale, transfer or acquisition of the publicly traded securities of Signalife during the Class Period, or any actions, representations oromissions that were alleged or might have been alleged to affect the price of any publicly traded common stock of Signalife during the ClassPeriod. Settled Claims shall include claims asserted by Lead Plaintiffs against Mitchell Stein in the action In re Mitchell J. Stein, 09-cv-14345-BKC-PHG, pending in the Untied States Bankruptcy Court for the Southern District of Florida.

4. “Unknown Claims” means any and all Settled Claims which any Lead Plaintiff or Class Member does not know or suspect to exist in his, her orits favor at the time of the release of the Released Parties, and any Settled Defendants’ Claims which Defendants do not know or suspect to existin their favor, which if known by him, her or it might have affected his, her or its decision(s) with respect to the Settlement. With respect to anyand all Settled Claims and Settled Defendants’ Claims, the Parties stipulate and agree that by operation of the Order and Final Judgment, uponthe Effective Date, the Lead Plaintiffs and Defendants shall have expressly waived, and each Class Member shall be deemed to have waived,and by operation of the Final Judgment shall have expressly waived, any and all provisions, rights and benefits conferred by any law of any stateor territory of the United States, or principle of common law, which is similar, comparable, or equivalent to Cal. Civ. Code § 1542, which

provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW ORSUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IFKNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THEDEBTOR.

5. I (We) hereby acknowledge full and complete satisfaction of, and do hereby fully, finally and forever release, relinquish and discharge all claimsthat have been or could have been asserted against any Plaintiff and/or Plaintiff’s Lead Counsel relating to the institution, prosecution orsettlement of the Action or the Settled Claims.

6. I (We) hereby acknowledge full and complete satisfaction of, and do hereby fully, finally, unconditionally, and forever settle, release andexpressly waive with prejudice any claims for abuse of process, for malicious prosecution and/or for sanctions under Rule 11 of the FederalRules of Civil Procedure, 28 U.S.C. § 1927 or otherwise.

7. This release shall be of no force or effect unless and until the Court approves the Stipulation and Agreement of Settlement and the Stipulationbecomes effective on the Effective Date (as defined in the Stipulation).

8. I (We) hereby warrant and represent that I (we) have not assigned or transferred or purported to assign or transfer, voluntarily or involuntarily,any matter released pursuant to this release or any other part or portion thereof.

9. I (We) hereby warrant and represent that I (we) have included information about all of my (our) transactions in Signalife common stock whichoccurred during the Class Period as well as: (1) the number of shares of Signalife common stock held by me (us) at the opening of trading onFebruary 10, 2004; and (2) the number of shares of Signalife common stock held by me (us) at the close of trading on April 14, 2008.


UNDER THE PENALTIES OF PERJURY, I (WE) CERTIFY THAT ALL OF THE INFORMATION I (WE) PROVIDEDON THIS PROOF OF CLAIM FORM IS TRUE, CORRECT AND COMPLETE.

Signature of Claimant (If this claim is being made on behalf of Joint Claimants, then each must sign)

Signature

/ /Signature Date

(Title/Capacity of person(s) signing, e.g. beneficial purchaser(s), president, executor, administrator, trustee, etc.)

ACCURATE CLAIM PROCESSING TAKES TIME.THANK YOU FOR YOUR PATIENCE.

REMINDER CHECKLIST

1. Please be sure to sign this Proof of Claim. If this Proof of Claim is submitted on behalf of joint claimants, then bothclaimants must sign.

2. Please remember to attach supporting documents. Do NOT send any stock certificates. Keep copies of everythingyou submit.

3. Do NOT use highlighter on the Proof of Claim or any supporting documents.

4. If you move after submitting this Proof of Claim, please notify the Claims Administrator of the change in youraddress.

THIS PROOF OF CLAIM AND RELEASE MUST BE POSTMARKED NO LATER THAN , 2011 AND MUST BEMAILED TO:





GREENVILLE DIVISION


:Plaintiffs, :

:Case No. 6:08-cv-02995-JMCv. :


:Defendants.


:Plaintiffs, :



:Defendants.

SUMMARY NOTICE OF SETTLEMENT

TO: ALL PERSONS WHO PURCHASED THE PUBLICLY TRADED COMMONSTOCK OF SIGNALIFE, INC. FORMERLY KNOWN AS RECOM MANAGEDSYSTEMS, INC. AND NOW KNOWN AS HEART TRONICS, INC. (“SIGNALIFE”)Signalife, Inc. (“Signalife” or the “Company”), BETWEEN FEBRUARY 10, 2004 ANDAPRIL 14, 2008, INCLUSIVE (“CLASS PERIOD”).

A federal court authorized this notice. This is not a solicitation from a lawyer.


YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil Procedureand by Order of the Court, that a class action settlement of the above-captioned actions has beenproposed that could affect your rights as a member of the Plaintiff Class. A hearing will be heldbefore the Honorable J. Michelle Childs at the United States District Court for the District ofSouth Carolina, Greenville Division, 300 East Washington Street, Greenville, SC 296015 on , 2011 at ___ AM/PM, to determine whether the proposed Settlement should be approvedby the Court as fair, reasonable, and adequate, as well as Lead Plaintiffs’ Counsels’ applicationfor costs and fees.

IF YOU ARE A MEMBER OF THE PLAINTIFF CLASS, YOUR RIGHTS WILL BEAFFECTED AND YOU MAY BE ENTITLED TO SHARE IN A $4.00 MILLIONSETTLEMENT FUND. If you have not yet received the full printed Notice of ProposedSettlement of Class Action and a Proof of Claim form, you may obtain copies of thesedocuments by contacting the Settlement Administrator at:



(888) 885-9698

You may also obtain a claim form from the Settlement Administrator on the Internet atwww.signalifesettlement.com. Read the instructions carefully, fill out the form, include all therequired documents, sign it, and mail it to the address provided above.

If you are a Plaintiff Class Member, in order to share in the distribution of the NetSettlement Fund, you must submit a Proof of Claim form postmarked by , 2011,establishing that you are entitled to recovery. If you are a Plaintiff Class Member, and do notrequest exclusion from the Class, you will be bound by any judgment rendered in the Actionwhether or not you make a claim.

If you desire to be excluded from the Plaintiff Class, you must file a request forexclusion postmarked by , 2011, in the manner and form explained in the detailedNotice referred to above. If you are excluded from the Plaintiff Class, you will not share in theSettlement and you will not be bound by any judgment entered in the Action.

Any objection to any of the matters to be considered at the Settlement Hearing must befiled with the Court and mailed or delivered to Lead Plaintiffs’ Counsel and designated Counselfor Defendants such that it is received no later than , 2011.

2


Any objection to any of the matters to be considered at the Settlement Hearing must bemailed or delivered such that it is received by each of the following no later than ,2011.

TO THE COURT:TO LEAD PLAINTIFFS’ TO COUNSEL FOR

COUNSEL: DEFENDANTS:Clerk of the Court

David R. Scott Paul R. BessetteUnited States District Court

Scott+Scott LLP Greenburg Traurig LLPDistrict of South Carolina 156 South Main St. 300 West Sixth, Suite 2050Greenville DivisionPO Box 192 Austin, TX 78701300 East Washington StreetColchester, CT 06415

Greenville, SC 29601

PLEASE DO NOT CONTACT THE COURT REGARDING THIS NOTICE

Dated: , 2011 By Order of the District Court:

J. Michelle Childs, U.S.D.J.

3



GREENVILLE DIVISION


:Plaintiffs, :

:Case No. 6:08-cv-02995-JMCv. :


:Defendants.


:Plaintiffs, :



:Defendants.

FINAL ORDER AND JUDGMENT

1


On the day of , 2011, a hearing having been held before this Court to

determine: (1) whether a Class should be certified; (2) whether the terms and conditions of the

Stipulation and Agreement of Settlement dated , 2011 (the “Stipulation”) are fair,

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

Defendants in the Complaint now pending in this Court under the above captions, including the

release of the Defendants and the Released Parties, and should be approved; (3) whether

judgment should be entered dismissing the Complaint on the merits and with prejudice in favor of

the Defendants only and against all persons or entities who are members of the Class herein who

have not requested exclusion therefrom; (4) whether to approve the Plan of Allocation as a fair

and reasonable method to allocate the settlement proceeds among the members of the Class; and

(5) whether and in what amount to award Plaintiffs’ Counsel fees and reimbursement of

expenses.

The Court 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 publicly traded common

stock of Signalife, Inc. (“Signalife” or the “Company”), formerly known as Recom Managed

Systems, Inc, and now known as Heart Tronics, Inc. during the period between February 10, 2004

and April 14, 2008, inclusive (the “Class Period”), except those persons or entities excluded from the

definition of the Class, as shown by the records of Signalife’s transfer agent, at the respective

addresses set forth in such records, and that a summary notice of the hearing substantially in the form

approved by the Court was published in The Wall Street Journal and Investor’s Business Daily

pursuant to the specifications of the Court; and the Court having considered and determined the

1


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:

1. The Court has jurisdiction over the subject matter of the Action, the Lead Plaintiffs, all

Class Members, and the Defendants.

2. The Court finds that the prerequisites for a class action under Federal Rule of Civil

Procedure 23 (a) and (b)(3) have been satisfied 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 Class Representatives are typical of the claims of the Class

they seek to represent; (d) the Class Representatives have and will fairly and adequately represent the

interests of the Class; (e) the questions of law and fact common to the members of the Class

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.

(a) Pursuant to Rule 23 of the Federal Rules of Civil Procedure, this Court hereby finally

certifies this Action as a class action on behalf of all persons who purchased the publicly traded

common stock of Signalife during the period between February 10, 2004 and April 14, 2008,

inclusive, as defined in the Complaint, and were damaged as alleged in the Action thereby. Excluded

from the Class for Settlement purposes only are Defendants, any entity in which a Defendant has or

had a controlling interest, members of the Individual Defendants’ families and legal representatives,

agents, affiliates, heirs and successors-in-interest or assigns of any such excluded party, and all

current and former officers and directors of Signalife who are not also Defendants. Again, for

Settlement purposes only, the term “controlling interest” shall include any interest of 5% or more of

the common stock of any entity. Also excluded from the Class are any putative Class members who

2


exclude themselves by filing a timely request for exclusion in accordance with the requirements set

forth in the Notice.

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

conditions of the proposed 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) and

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

4. The Settlement is approved as fair, reasonable and adequate, and the Class Members

and the parties are directed to consummate the Settlement in accordance with the terms and

provisions of the Stipulation.

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

with the §21D(c)(1) of the Securities Exchange Act of 1934, 15 U.S.C. §78u-4(c)(1), and Rule 11 of

the Federal Rules of Civil Procedure based upon all publicly available information, is hereby

dismissed with prejudice and without costs, as against the Defendants, except as provided in the

Stipulation.

(a) Lead Plaintiffs and Members of the Class on behalf of themselves, their heirs,

executors, administrators, predecessors, successors and assigns of any of them, and all persons (now

or in the future) acting in concert with, or who purport to act through, such persons, fully, finally and

forever waive, release, discharge, dismiss, and are hereby permanently and forever barred and

enjoined from instituting, commencing or prosecuting, either directly, derivatively, as a class

representative, or in any other capacity, any and all claims, debts, demands, rights or causes of action

or liabilities, (including, but not limited to, any claims for damages, injunctive relief, interest,

3


attorneys’ fees, expert or consulting fees, and any other costs, expenses or liability whatsoever),

whether based on United States federal, state, local, statutory or common law or any other law, rule

or regulation, whether foreign or domestic, fixed or contingent, accrued or unaccrued, liquidated or

unliquidated, at law or in equity, matured or unmatured, foreseen or unforeseen, whether class or

individual in nature, including, without limitation, both known claims and Unknown Claims (as

defined below) (i) that have been asserted in the Action by the Class Members or any of them against

any of the Released Parties (whether pleaded in the Complaint or not), or (ii) that could have been

asserted in the Action or in any forum by the Class Members or any of them against any of the

Released Parties, which also arise out of, relate to, or are based on any of the claims, allegations,

activities, press releases or public statements set forth in the Complaint and relate to the purchase,

sale, transfer or acquisition of the publicly traded securities of Signalife during the Class Period, or

any actions, representations or omissions that were alleged or might have been alleged to affect the

price of any publicly traded common stock of Signalife during the Class Period.

(b) “Released Parties” means Defendants and any and all of their present or former

parent companies, divisions, subsidiaries, affiliates, associates, representatives, predecessors,

successors, heirs, assigns, executors, administrators and any of their present or former directors,

agents, partners, principals, officers, employees, trustees, representatives, insurers, including AXIS

Insurance Company, or any of them, and their lawyers and all persons acting by, through, under or in

concert with them or any of them.

6. “Unknown Claims” means any and all Settled Claims which any Lead Plaintiff or

Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the

Released Parties, and any Settled Defendants’ Claims which Defendants do not know or suspect to

exist in their favor, which if known by him, her or it might have affected his, her or its decision(s)

4


with respect to the Settlement. With respect to any and all Settled Claims and Settled Defendants’

Claims, the Parties stipulate and agree that by operation of the Order and Final Judgment, upon the

Effective Date, the Lead Plaintiffs and Defendants shall have expressly waived, and each Class

Member shall be deemed to have waived, and by operation of the Final Judgment shall have

expressly waived, any and all provisions, rights and benefits conferred by any law of any state or

territory of the United States, or principle of common law, which is similar, comparable, or

equivalent to Cal. Civ. Code § 1542, which provides:

A general release does not extend to claims which the creditor does notknow or suspect to exist in his or her favor at the time of executing therelease, which if known by him or her must have materially affected his orher settlement with the debtor.

Lead Plaintiffs and Defendants acknowledge, and Class Members by operation of law shall be

deemed to have acknowledged, that the inclusion of “Unknown Claims” in the definition of Settled

Claims and Settled Defendants’ Claims was separately bargained for.

7. The Defendants and the successors and assigns of any of them, are hereby

permanently barred and enjoined from instituting, commencing or prosecuting, either directly or in

any other capacity, any and all claims, rights or causes of action or liabilities whatsoever, whether

based on United States federal, state, local, statutory or common law or any other law, rule or

regulation, whether foreign or domestic, fixed or contingent, accrued or unaccrued, liquidated or

unliquidated, at law or in equity, matured or unmatured, foreseen or unforeseen, whether class or

individual in nature, including both known claims and Unknown Claims, that have been or could

have been asserted in the Action or any forum by the Defendants or any of them or the successors and

assigns of any of them against each other, the Lead Plaintiffs, any of the Class Members or their

attorneys, or the attorneys for the Defendants, which arise out of or relate in any way to the

institution, prosecution, or settlement of the Action (except for claims to enforce the Settlement) (the

5


“Settled Defendants’ Claims”) against each other, the Lead Plaintiffs, any of the Class Members or

their attorneys, or the attorneys for Defendants. The Settled Defendants’ Claims of all the Released

Parties are hereby compromised, settled, released, discharged and dismissed on the merits and with

prejudice by virtue of the proceedings herein and this Order and Final Judgment.

8. Defendants and each of them, on behalf of themselves, their heirs, executors,

administrators, predecessors, successors and assigns and all persons or entities (now or in the future)

acting in concert with, or who purport to act through them, are hereby permanently barred and

enjoined from instituting, commencing or prosecuting each and every of the Settled Defendants’

Claims against the Released Parties in any action or proceeding of any nature.

9. Pursuant to §21D(f)(5) of the Securities Exchange Act of 1934, 15 U.S.C. §78u-

4(f)(5), the Released Parties are hereby discharged from all claims for contribution or equitable

indemnity, by any person or entity, whether arising under United States federal, state, local, statutory

or common law or any other law, based upon, arising out of, relating to, or in connection with the

claims of the Class or any Class Member in the Action. Accordingly, to the maximum extent

permissible under the Securities Exchange Act of 1934, the Court hereby bars and enjoins all such

claims for contribution or equitable indemnity: (a) by any person or entity against any Released

Party; and (b) by any Released Party against any person or entity other than a person or entity whose

liability to the Class has been extinguished pursuant to the Stipulation and Agreement of Settlement

and this Order and Final Judgment.

10. Neither this Order and Final Judgment, the Stipulation, nor any of its terms and

provisions, nor any of the negotiations or proceedings connected with it, nor any of the documents or

statements referred to therein shall be:

6


(a) offered or received against the Defendants as evidence of or construed as or

deemed to be evidence of any presumption, concession, or admission by any of the Defendants

with respect to the truth of any fact alleged by the Plaintiffs or the validity of any claim that has

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 the Action or in any litigation, or of any liability,

negligence, fault, or wrongdoing of the Defendants;

(b) offered or received against the Defendants as evidence of a presumption,

concession or admission of any fault, misrepresentation or omission with respect to any statement

or written document approved or made by any Defendant;

(c) offered or received against the Defendants as evidence of a presumption,

concession or admission with respect to any liability, negligence, fault or wrongdoing, or in any

way referred to for any other reason as against any of the Defendants, in any other civil, criminal or

administrative action or proceeding, other than such proceedings as may be necessary to effectuate

the provisions of the Settlement; provided, however, that Defendants may refer to the Settlement to

effectuate the liability protection granted them hereunder;

(d) construed against the Defendants 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; or

(e) construed as or received in evidence as an admission, concession or

presumption against Lead Plaintiffs or any of the Class Members that any of their claims are

without merit, or that any defenses asserted by the Defendants have any merit, or that damages

recoverable under the Complaint would not have exceeded the Gross Settlement Fund.

7


11. The Plan of Allocation is approved as fair and reasonable, and Plaintiffs’ Counsel and

the Claims Administrator are directed to administer the Stipulation in accordance with its terms and

provisions.

12. The Court finds that all parties and their counsel have complied with each requirement

of Rule 11 of the Federal Rules of Civil Procedure as to all proceedings herein.

13. Pursuant to F.R.C.P. 23(g)(1), the Court finds that Plaintiffs’ Counsel have satisfied

the requirements to be appointed as Class Counsel, as the Court has reviewed the work counsel has

done in the action, Class Counsel’s handling of the action, knowledge of the applicable law, and the

resources that Plaintiffs’ Counsel have committed to representing the Class.

14. Pursuant to F.R.C.P. 23(h), Plaintiffs’ Counsel are hereby awarded of the

Cash Settlement Amount in fees, which sum the Court finds to be fair and reasonable, and $

in reimbursement of expenses, which expenses shall be paid to Plaintiffs’ Lead Counsel

from the Cash Settlement Amount with interest from the date such the Settlement was funded to the

date of payment at the same net rate that the Settlement Fund earns such interest.

15. Lead Plaintiff Bryan D. Harris, Mark Taylor and Greg Taylor, are hereby awarded

$ for reimbursement of Lead Plaintiffs’ reasonable costs and expenses directly related to

their representation of the Class under the §21D(a)(4) of the Securities Exchange Act of 1934, 15

U.S.C. §78u-4(a)(4).

16. In making an award of attorneys’ fees and reimbursement of expenses to be paid from

the Gross Settlement Fund, the Court has considered and found that:

(a) the Settlement has created a fund of $4.00 million in cash that is available to

the Class, plus interest thereon as applicable, and that numerous Class Members who submit

acceptable Proofs of Claim will benefit from the Settlement created by Plaintiffs’ Counsel;

8


(b) over copies of the Notice were disseminated to putative Class

Members indicating that Plaintiffs’ Counsel were moving for attorneys’ fees in the amount of up to

33 1/3 % of the Gross Settlement Fund and for reimbursement of expenses in an amount of

approximately $ and [only] [no] objections were filed against the terms of the proposed

Settlement or the ceiling on the fees and expenses requested by Plaintiff’s Counsel contained in the

Notice;

(c) Plaintiffs’ Counsel have conducted the litigation and achieved the Settlement

with skill, perseverance and diligent advocacy;

(d) Defendants have denied and continue to deny liability and have vigorously

defended against the claims asserted in the Action;

(e) The Action involves complex factual and legal issues and was actively

prosecuted over two years and, in the absence of a settlement, would involve further lengthy

proceedings with uncertain resolution of the complex factual and legal issues;

(f) Had Plaintiffs’ Counsel not achieved the Settlement there would remain a

significant risk that Lead Plaintiffs and the Class may have recovered less or nothing from the

Defendants;

(g) Plaintiff’s Counsel have devoted over hours, with a lodestar value of

$ , to achieve the Settlement; and

(h) The amount of attorneys’ fees awarded and expenses reimbursed from the

Settlement Fund are consistent with awards in similar cases.

17. 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

9


attorney and other fees and expenses incurred in connection with administering and distributing the

settlement proceeds to the members of the Class.

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

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

Dated:

UNITED STATES DISTRICT COURT JUDGE

10


EXHIBIT 2


SCOTT+SCOTT LLP SCOTT

- SCOTT

ATTORNEYS A7 LAW

MISSION STATEMENT

Scott+Scott is a nationally recognized law firm headquartered in Connecticut withadditional offices in New York City, Ohio and California. The firm represents individuals aswell as businesses, corporations, public and private pension funds and others who have sufferedfrom corporate fraud and malfeasance. Scott+Scott has participated in recovering billions ofdollars and achieved precedent-setting reforms in corporate governance on behalf of its clients.In addition to being involved in complex shareholder securities and corporate governanceactions, Scott+Scott also has a significant national practice in antitrust, ERISA, consumer, civilrights and human rights litigation. Through its efforts, Scott+Scott promotes corporate socialresponsibility.

SECURITIES AND CORPORATE GOVERNANCE

Scott+Scott represents individual as well as institutional investors that have suffered fromcorporate stock fraud through securities class action and corporate governance/shareholderderivative litigation. Scott+Scott’s philosophy is simple – officers and directors of a corporationshould be responsible to their shareholders and the public markets. The Firm has participated inrecovering billions of dollars and achieved precedent-setting reforms in corporate governance onbehalf of investors and shareholders.

Since its inception, Scott+Scott’s securities and corporate governance litigationdepartment has developed and maintained a reputation of excellence and integrity recognized bystate and federal courts and law firms across the country. Below is a representative sampling ofthe cases litigated in the past three years under the Securities Act of 1933, the SecuritiesExchange Act of 1934, the Investment Advisor Act of 1940 and the Private Securities LitigationReform Act of 1995 (“PSLRA”) in which courts have recognized Scott+Scott’s legalqualification, appointing it and its clients to leadership positions:

• In re Tetra Technologies, Inc. Securities Litigation, No. 08-cv-00965 (U.S.District Court, Southern District of Texas)

• Fulton County Employees’ Retirement System, et al. v. MGIC InvestmentCorporation, et al., No. 08-cv-458 (U.S. District Court, Eastern District ofWisconsin)

• Boilermakers National Annuity Trust Fund v. WaMu Mortgage Pass ThroughCertificates, et al., No. 09-cv-0037 (U.S. District Court, Western District ofWashington)

• Baydale, et al. v. American Express Company, et al., No. 09-cv-03016 (U.S.District Court, Southern District of New York)


• West Palm Beach Police Pension Fund, et al. v. Lewis, et al., No. 09-cv-02581-DC (U.S. District Court, Southern District of New York)

• Fort Worth Employees Retirement Fund v. J. P. Morgan Chase & Co., No. 09-cv-03701 (U.S. District court, Southern District of New York)

• In re Priceline.com Securities Litigation, No. 00-cv-01884 (U. S. District Court,District of Connecticut) ($80 million settlement)

“The quality of representation here is demonstrated, in part, by the resultachieved for the class. Further, it has been this court’s experience,throughout the ongoing litigation of this matter, that counsel haveconducted themselves with the utmost professionalism and respect for thecourt and the judicial process.”

• Schnall v. Annuity and Life Re (Holdings) Ltd., No. 02-cv-2133 (U.S. DistrictCourt, District of Connecticut) ($26.5 million settlement)

• Wood v. Ionatron, Inc., No. 06-cv-00354 (U.S. District Court, District of Arizona)($6.5 million settlement)

• In Re Signalife, Inc. Securities Litigation, No. 08-cv-03183 (U.S. District Court,District of South Carolina)

In addition to these securities cases, Scott+Scott has a proven track record of handlingcorporate governance matters through its extensive experience litigating shareholder derivativeactions. The Firm held, or continues to hold, a leadership position in the following shareholderderivative actions.

• In re Marvell Tech. Group Ltd. Derivative Litigation, No. C-06-03894-RMW(RS) (U.S. District Court, Northern District of California)

• Carfagno v. Schnitzer, No. 08-cv-912-SAS (U.S. District Court, Southern Districtof New York)

• Tucker v. Scrushy, No. CV-02-5212 (Supreme Court of Ala.)• In re Lattice Semiconductor Corp. Deriv. Litig., Case No. C 043327CV (Cir. Ct.

Oregon)• In re Qwest Communications International, Inc., No. 01-RB-1451 (U.S. District

Court, District of Colorado)• In re VeriFone Holdings, Inc. Shareholder Derivative Litigation, No. CV 07-6347

MHP (U.S. District Court, Northern District of California)• In re The Colonial BancGroup Shareholder Derivative Litigation, No. CV-2009-

239 (Supreme Court of Ala.)• Cain v. Hassan, No. 08-cv-1022 (U.S. District Court, District of New Jersey)• The Estate of Jacquelin K. Stevenson v. Kavanaugh, No. 2008-CP-10-1735 (S.C.

Com. Pleas 9th Judicial Cir.)• Garcia v. Carrion, et al., No. 09-cv-1507 (U.S. District Court, District of Puerto

Rico)

ANTITRUST

The Firm is actively involved in litigating many complex antitrust cases throughout theUnited States. Scott+Scott has taken or is currently in a lead role in a number of antitrustactions. Scott+Scott represents plaintiffs in price-fixing, monopolization, bid-rigging, customerrestraints and other restraints of trade cases, including both individual and class action cases. In

2


such actions, Scott+Scott works to ensure that the markets remain free, open and competitive tothe benefit of both consumers purchasing and business enterprises operating in such markets. Inaddition to traditional price-fixing cases, the Firm and its lawyers have taken the lead in anumber of novel antitrust claims throughout the United States, including, among others, RedLion Medical Safety, Inc. v. Ohmeda, Inc. (tying claims in medical device industry), Dahl v. BainCapital Partners (market allocation by private equity firms), In re Payment Card InterchangeFee and Merchant Discount Antitrust Litigation and Weintraub v. Aetna, et al. (restraint inmarket for the provision of usual and customary rates used to establish out-of-networkreimbursement).

In addition to bringing antitrust class actions, Scott+Scott has represented and continuesto represent companies, including publicly-traded corporations, such as Parker HannifinCorporation, PolyOne Corporation and Lincoln Electric, in various opt-out antitrust litigation.Representative opt-out litigation includes In re Scrap Metal Antitrust Litigation, 1:02-cv-0844-KMO (N.D. Ohio), In re Rubber Chemicals Antitrust Litigation, MDL No. 1648, In rePolychloroprene Antitrust Litigation, MDL No. 1642, and In re Plastic Additives AntitrustLitigation (No. II), MDL No. 1684. Recently, the Sixth Circuit affirmed a trial verdict of$23,036,000 obtained by Scott+Scott in In re Scrap Metal Antitrust Litigation.

CONSUMER RIGHTS

Scott+Scott regularly represents aggrieved consumers in a variety of class action casespending throughout the United States. In addition to more typical cases involving consumerfinance issues, such as In re: Providian Credit Card Litigation (Superior Court of California,County of San Francisco), the Firm actively is litigating cases against a number of healthmaintenance organizations (HMO) and other corporate defendants, including: Albert v. PhysicianHealth Services of Connecticut, Inc. and O’Brien v. Aetna, Inc. and Aenta-U.S. Healthcare, Inc.(United States District Court, District of Connecticut); Medical Society of the State of New Yorkv. Connecticut General Corporation, et al. (New York Supreme Court, County of New York);and Granito, et al. v. International Business Machines, Inc. (Connecticut Superior Court).Scott+Scott also has been involved in a number of major consumer fraud cases under stateconsumer protection laws, including: Hamage v. Publishers Clearing House (ConnecticutSuperior Court); Gould v. IDT Corporation (United States District Court, District of NewJersey); In re: Kava Kava Litigation (Superior Court of California, County of Los Angeles);Fischer, et al. v. MasterCard International, Inc., et al. (New York Supreme Court, County ofNew York); and Paton, et al. v. Cingular Wireless, et al. (Superior Court of California, Countyof San Francisco).

EMPLOYEE BENEFITS (ERISA)

Scott+Scott actively litigates complex class actions across the United States on behalf ofcorporate employees alleging violations of the federal Employee Retirement Income SecurityAct. ERISA was enacted by Congress to prevent employers from exercising improper controlover retirement plan assets and requires that pension and 401(k) plan trustees, includingemployer corporations, owe the highest fiduciary duties to retirement plans and their participantsas to their retirement funds. Scott+Scott is committed to continuing its leadership in ERISA and

3


related employee-retirement litigation, as well as to those employees who entrust their employerswith hard-earned retirement savings.

4


ATTORNEY BACKGROUND AND EXPERIENCE

MELVIN SCOTT is a graduate of the University of Connecticut (B.A. 1950) and the Universityof Kentucky (M.A. 1953; LL.B. 1957). Mr. Scott founded the firm in 1975. He formerlypracticed in Kentucky and is presently admitted to practice in Connecticut and Pennsylvania.Mr. Scott was a member of the Kentucky Law Review, where he submitted several articles forpublication. He has served as an Attorney Trial Referee since the inception of this program inthe State of Connecticut and is a member of the Fee Dispute Committee for New LondonCounty. Mr. Scott also formerly served as a Special Public Defender in criminal cases and as amember of the New London County Grievance Committee. Mr. Scott actively representsaggrieved parties in securities, commercial and criminal litigation and served or serves ascounsel in Irvine, et al. v. ImClone Systems, Inc., et al.; Schnall, et al. v. Annuity and Life Re(Holdings) Ltd., et al.; In re 360networks Class Action Securities Litigation; In re GeneralMotors ERISA Litigation and Hohider v. UPS, among others.

DAVID R. SCOTT is a graduate of St. Lawrence University (B.A., cum laude, 1986) TempleUniversity School of Law (J.D., Moot Court Board, 1989) and New York University School ofLaw (LL.M. in taxation). He concentrates in commercial and class action trial work. Mr. Scott’strial work involves antitrust, intellectual property, commercial and complex securities litigation.Mr. Scott’s antitrust litigation experience includes matters dealing with illegal tying, price-fixingand monopolization actions. He has served as lead counsel in numerous antitrust and securitiesclass action lawsuits. Notably, Mr. Scott served as co-lead counsel in In re Priceline.comSecurities Litigation ($80 million settlement); Thurber v. Mattel, Inc. ($122 million settlement);In re Emulex Corp. Securities Litigation ($39 million settlement); In re Sprint SecuritiesLitigation ($50 million settlement); In re Northwestern Corporation Securities Litigation ($61million settlement); Irvine, et al. v. Imclone Systems, Inc., et al. ($75 million settlement);Schnall, et al. v. Annuity and Life Re (Holdings) Ltd., et al. ($27 million settlement); In re QwestCommunications International, Inc. (significant corporate governance reforms and $25 millionfor the company) and In re General Motors ERISA Litigation (significant enhancements toretirement plan administration in addition to a $37.5 million settlement for plan participants),among others. His securities litigation experience includes matters dealing with securities fraudclass actions, derivative/corporate governance litigation and representation of start-up technologycompanies in private securities litigation. Presently, Mr. Scott is serving as lead counsel in In reGeneral Motors ERISA Litigation; In re Priceline.com Securities Litigation; and In re MarvellTechnology Group Ltd. Derivative Litigation (option-backdating litigation) among others. Mr.Scott is admitted to practice in Connecticut, Pennsylvania, New York, the United States TaxCourt and many United States District Courts.

BETH KASWAN has represented plaintiffs in cases involving securities and consumer fraudsince 1998. Prior to 1998, Ms. Kaswan served in the Giuliani administration as New York City’sChief Procurement Officer, a Deputy Commissioner in the Department of Investigations and theFinance Department’s Chief Counsel. Ms. Kaswan, having majored in accounting at college,began her career at Peat, Marwick, Mitchell & Co. and later served as a trial attorney with theUS Department of Justice, Tax Division. In 1985, she joined the U.S. Attorney’s Office for theSouthern District of New York, and was promoted to Chief of Commercial Litigation and thenDeputy Chief of the Civil Division. While employed by the government, Ms. Kaswan litigated

5


several high-profile cases to judgment, including the landmark case of United States v.Gleneagles Inv. Co., where following a multi-stage, thirteen month trial, the fraudulentconveyance laws were first applied to set aside a leveraged buy-out. She also represented theFederal Reserve for its enforcement actions against the rogue bank, BCCI, leading to the globalRICO plea agreement and forfeiture of BCCI’s $550 million of United States assets; the IRS forits $5 billion claim against Drexel, the Defense Department and MARAD for qui tam and otherfalse claims actions against Goodyear Aerospace, Loral and General Dynamics and the FDA toenjoin the manufacture of adulterated generic drugs. See, e.g., United States v. Gleneagles Inv.Co., 565 F. Supp. 556 (“Gleneagles I'), 571 F. Supp. 935 (“Gleneagles II'), 584 F. Supp. 671(“Gleneagles III') (M.D. Pa. 1981), aff’d in part and rev’d in part sub. nom., United States v.Tabor Ct. Realty Corp., 803 F.2d 1288 (3d Cir. 1986); In re Smouha (“BCCI'), 136 B.R. 921(S.D.N.Y. 1992); United States v. Davis, 803 F. Supp. 830 (S.D.N.Y. 1992), aff’d in part andrev’d in part sub. nom., United States v. General Dynamics Corp., 19 F.3d 770 (2d Cir. 1994);United States v. Barr Laboratories, Inc., 812 F. Supp. 458 (D.N.J. 1993). Ms. Kaswan receivedseveral awards from the Justice Department and the agencies she represented, including theJustice Department’s John Marshall award, Special Commendation from the Attorney General, aSuperior Performance award from the Executive Office of U.S. Attorneys, Tax DivisionOutstanding Achievement awards, and awards from the FDA Commissioner and US CustomsService. She has testified before the New York legislature as a government expert on money-laundering and lectured in Justice Department training programs on evidence and other subjects.

CHRISTOPHER M. BURKE is a graduate of The Ohio State University (B.A. 1984), William& Mary (M.A. 1988) and the University of Wisconsin (M.A. 1989; J.D. 1993; Ph.D. 1996).Mr. Burke’s principal practice is in complex antitrust, consumer and other representativelitigation. Prior to joining Scott+Scott, his practice centered on complex antitrust litigation,including In re Payment Card & Merchant Fee Antitrust Litigation. Mr. Burke served as co-leadcounsel in In re Currency Conversion Antitrust Litigation ($336 million settlement), in In rePayment Card & Merchant Fee Antitrust Litigation and was one of the trial counsel in Schwartzv. Visa ($800 million plaintiff verdict). Currently, Mr. Burke is one of the lead counsel in Dahl,et al. v. Bain Capital Partners, et al., and serves on the Executive Committee in In re: Aetna,Inc. Out of Network “UCR ” Rates Litigation. Mr. Burke has also served as an AssistantAttorney General at the Wisconsin Department of Justice and has lectured on law-related topics,including constitutional law, law and politics and civil rights at the State University of New Yorkat Buffalo and at the University of Wisconsin. Mr. Burke’s book, The Appearance of Equality:The Supreme Court and Racial Gerrymandering (Greenwood, 1999), examines conflicts overvoting rights and political representation within the competing rhetoric of communitarian andliberal strategies of justification. Mr. Burke is admitted to practice by the Supreme Court of theState of California, the Supreme Court of the State of Wisconsin, and numerous additionalUnited States District Courts.

JUDY SCOLNICK is a graduate of New York University (B.A., cum laude, 1972), BrandeisUniversity (M.A. 1973) and Boston College Law School (J.D., summa cum laude, 1976) whereshe served on the Boston College Industrial and Commercial Law Review. She began her careeras a law clerk to the late Honorable Anthony Julian of the United States District Court inMassachusetts and then served as a trial attorney in the Civil Division of the United StatesDepartment of Justice from 1977 until 1981. As a trial attorney, Ms. Scolnick was the lead

6


counsel in several high-profile employment discrimination lawsuits against various U.S. agenciesaround the country. She also drafted the policy position followed by all U.S. Attorneys’ officesconcerning employment discrimination cases that ensured coordination between the positions ofthe Civil Rights Division as prosecutor of discrimination cases against private employer and theCivil Division as the defender of employment cases against U.S. agencies. Ms. Scolnick thenserved with the General Counsel’s office of British Airways, where she primarily practicedemployment law. Ms. Scolnick also played a primary role in negotiating key operating contractsand obtaining governmental approval of the alliance between British Airways and AmericanAirlines. Ms. Scolnick has lectured and written extensively in the areas of prosecution anddefense of Title VII, Americans with Disabilities Act, age discrimination, and compliance withthe discrimination provisions of the Air Carrier Access Act. Ms. Scolnick is admitted to practicein New York, New Jersey and Massachusetts.

GEOFFREY JOHNSON is a graduate of Grinnell College (B.A., with honors, 1996) and theUniversity of Chicago Law School (J.D., with honors, 1999), where he served on the law review.An attorney with the firm’s Ohio office, Mr. Johnson’s main practice areas include securities andERISA class action litigation, corporate governance and other complex commercial litigation,including among others In re Priceline.com Securities Litigation and In re GM ERISA Litigation.Prior to joining Scott+Scott, Mr. Johnson clerked for the Honorable Karen Nelson Moore, SixthCircuit United States Court of Appeals. Mr. Johnson has been active in pro bono matters,handling cases for the Legal Aid Society of Cleveland. Mr. Johnson is a member of the OhioBar.

JOSEPH P. GUGLIELMO graduated from Catholic University (B.A., cum laude, 1992; J.D.,1995) and also received a Certificate of Public Policy. Mr. Guglielmo specializes in complexlitigation on behalf of clients in both state and federal court throughout the United States.Mr. Guglielmo was extensively involved in In re Managed Care Litigation and participated inthe settlement negotiations with Aetna, CIGNA, Prudential, Health Net, Humana andWellpoint/Anthem that have provided monetary and practice changes to physicians valued inexcess of one billion dollars. Mr. Guglielmo was also extensively involved in Love, et al. v. BlueCross Blue Shield Association, et al., pending in the United States District Court for the SouthernDistrict of Florida and lead all discovery efforts concerning this action. A settlement wasrecently reached with the substantial majority of defendants in this action which provides for inexcess of $130 million of monetary benefits and practice change relief valued in excess of $2billion. Mr. Guglielmo has considerable experience and expertise in the area of electronicdiscovery and is responsible for numerous multi-party productions involving terabytes of dataand hundreds of millions of pages of electronic information. Mr. Guglielmo lectures onelectronic discovery and is a member of the Sedona Conference®, an organization devoted toproviding guidance and information concerning issues such as discovery and production issues,as well as areas focusing on antitrust law, complex litigation and intellectual property. Recently,Mr. Guglielmo was recognized for his achievements by his selection to the National LawJournal’s “Plaintiffs’ Hot List” and has co-authored a number of publications including: “ClassAction Health Care Litigation,” ALI-ABA Health Care Law and Litigation Conference, 1999;“Class Actions: HMOs and Health Care Providers Under Attack,” ALI-ABA Life and HealthInsurance Litigation Conference, 2000. Mr. Guglielmo is admitted to practice before UnitedStates Supreme Court, the New York State Bar, the District of Columbia Bar and the

7


Massachusetts State Bar. He is a member of the following organizations: Association of the Barof the City of New York; The District of Columbia Bar; New York State Bar Association,American Bar Association, Federal Bar Council, American Association for Justice and TheSedona Conference.

MARIA K. TOUGAS is a graduate of Bowdoin College (B.A., magna cum laude, 1985) andWestern New England College School of Law (J.D. 1989), where she was a member of theNational Moot Court Team. Ms. Tougas’ experience includes complex commercial litigation,creditor’s rights and bankruptcy. At Scott+Scott, Ms. Tougas is actively engaged in complexclass action litigation, including securities, consumer and antitrust litigation. She also focuses onbankruptcy and creditor’s rights issues associated with complex class action litigation.Ms. Tougas actively practices all types of commercial litigation. She is admitted to practice inConnecticut, as well as the U.S. Court of Appeals for the Second Circuit.

DEIRDRE DEVANEY is a graduate of New York University (B.A., cum laude, 1990) and theUniversity of Connecticut School of Law (J.D., with honors, 1998) where she was the ManagingEditor of the Connecticut Journal of International Law. Ms. Devaney’s experience includescommercial and probate litigation, as well as trusts and estates. Currently, Ms. Devaney’spractice areas include commercial and securities litigation. Ms. Devaney is involved in litigation,including In re Priceline.com Securities Litigation, among others. Ms. Devaney is admitted topractice in Connecticut, New York and the United States District Court for the District ofConnecticut.

WALTER NOSS is a graduate of the University of Toledo (B.A., magna cum laude, Economics1997) and from the Ohio State University College of Law (J.D., with honors, 2000), where heserved as a member of the Ohio State Law Journal. Mr. Noss’ main practice areas includesecurities, antitrust and complex litigation, including In re Rubber Chemicals AntitrustLitigation; In re Plastic Additives Antitrust Litigation and In re Polychlorprene Rubber AntitrustLitigation, among others. Mr. Noss is a member of the Ohio Bar.

DONALD A. BROGGI is a graduate of University of Pittsburgh (B.A. 1990) and DuquesneUniversity School of Law (J.D. 2000). He is engaged in the firm’s complex securities, antitrustand consumer litigation, including In re Priceline.com Securities Litigation, Irvine, et al. v.Imclone Systems, Inc., et al.; In re Rubber Chemicals Antitrust Litigation; In re Plastic AdditivesAntitrust Litigation and Hohider v. UPS, among others. Currently, Mr. Broggi dedicates hisefforts to the firm’s institutional investor department and consulting with institutional investorsin the United States and Europe on issues relating to corporate fraud in the U.S. securitiesmarkets, as well as corporate governance issues. Mr. Broggi presents at investor conferences inthe United States on the value of shareholder activism as a necessary component of preventingcorporate fraud abuses. Mr. Broggi is admitted to practice by the State of Pennsylvania.

MARY K. BLASY is a graduate of California State University, Sacramento (B.A. Governmentand Economics, 1996) and UCLA School of Law (J.D., Corporate Law Concentration 2000).While in law school, Ms. Blasy served as Editor-in-Chief of the UCLA Law Journal ofEnvironmental Law and Policy and as a Judicial Intern to the Honorable Edward Rafeedie of the

8


U.S. District Court, Central District of California. Ms. Blasy’s principal practice is complexsecurities and corporate governance and other representative litigation.

Early in her career, Ms. Blasy prosecuted securities class actions resulting in some of the largestrecoveries in recent history, including $50 million for Sprint FON and PCS investors,$37 million for Reliance Acceptance Group investors, $46.3 million for MP3.com investors and$137.5 million for Coca-Cola investors. Over the ensuing years, Ms. Blasy first recognized andthen commenced many important shareholder class actions involving complex, difficult to provetheories of recovery, including the civil insider trading class action against Martha Stewartcommenced months before the government brought its criminal charges ($30 million recovery);a shareholder class action for breach of fiduciary duty on behalf of Clayton Homes stockholderswhen Clayton Homes was taken private in a $1.2 billion acquisition by Berkshire Hathaway($5 million); and securities fraud class actions for investors in Divine, Inc. ($6.3 million);Dobson Comms. ($3.4 million); HCA ($20 million); Heely’s ($7.5 million); Imergent, Inc.($2.8 million); Isologen ($4.4 million); Liquid Metal ($7 million); LJ Int’l ($2 million); MBNA($25 million); Molex ($10.5 million); NewMont Mining ($15 million); OSI Pharmaceuticals($9 million); Pozen ($11.2 million); Teco Energy ($17.5 million); Telik ($5 million); Tenet($215 million); Titan Corp. ($15+ million); and Valueclick ($10 million).

Ms. Blasy has also initiated and successfully prosecuted a number of important shareholderderivative actions for investors in companies prosecuted for violating the nation’s environmental,labor, health & safety and securities laws. By permitting these shareholders to “step into theshoes” of the corporate boards of the companies they own stock in to seek recovery againstdefalcating fiduciaries and third parties, these actions increase executive accountability andrestore shareholder value. Ms. Blasy’s recent litigation successes include actions for investors inAshland Oil Inc. (environmental and labor law violations), BAE Systems plc (Foreign CorruptPractices Act violations), BP PLC (environmental and worker safety law violations), Hewlett-Packard, Inc. (boardroom pretexting and privacy law violations), Massey Energy (environmentaland labor law violations), Royal Dutch Shell (securities law violations involving a massive oilreserves overstatement), Electronic Data Systems (securities law violations), Merck & Co., Inc.(health & safety and securities law violations) and Regions Financial (excessive financial risktaking, securities law violations and unlawful executive compensation). Ms. Blasy alsodeveloped and commenced the first options backdating derivative action for a MercuryInteractive investor. Injunctive relief she has obtained in several of these derivative actions hasprotected and ensured recovery of hundreds of millions of dollars in wrongly-obtained corporateassets. Heralded for empowering investors to reign in corporate malfeasance and increasetransparency, the successful prosecution of these actions has been credited by corporategovernance experts and courts around the country with restoring billions of dollars in marketvalue through tailored governance therapeutics designed to prevent future harm and governancefailures.

Ms. Blasy is admitted to practice by the Supreme Court of the State of California, all CaliforniaUnited States District Courts and the federal courts of appeal for the Ninth Circuit and theDistrict of Columbia. Ms. Blasy has lectured concerning securities litigation, corporategovernance, and privacy rights to law school students and attorneys as part of continuing legaleducation.

9


ERIN GREEN COMITE is a graduate of Dartmouth College (B.A., magna cum laude, 1994)and the University of Washington School of Law (J.D. 2002). Prior to entering law school,Ms. Comite was a legal assistant at the White House. At Scott+Scott, she actively is engaged inthe firm’s complex securities, corporate governance and antitrust litigation, including Hohider v.UPS; In re Priceline.com Securities Litigation and In re Host America Securities Litigation,among others. Ms. Comite also assists in the firm’s institutional investor and class memberservices. She is licensed to practice in Connecticut.

KRISTEN M. ANDERSON is a graduate of St. Louis University (B.A., Philosophy, 2003) andthe University of California, Hastings College of the Law (J.D. 2006). During law school,Ms. Anderson served as an extern at the U.S. Department of Justice, Antitrust Division, in SanFrancisco. While at Hastings, Ms. Anderson also served as an extern to Justice Kathryn MickleWerdegar of the Supreme Court of California and was the research assistant to Professor JamesR. McCall in the areas of antitrust and comparative antitrust law. At Scott+Scott,Ms. Anderson’s practice focuses on complex antitrust, consumer securities and otherrepresentative litigation.

DAVID H. GOLDBERGER is a graduate of the University of Colorado (B.A. 1999) andCalifornia Western School of Law (J.D. 2002). Mr. Goldberger is currently actively involved inlitigation, including In re Priceline.com Securities Litigation; In re GM ERISA Litigation and Inre Plastic Additives Antitrust Litigation, among others. He is licensed to practice in Californiaand is currently involved in the firm’s complex securities and antitrust litigation.

HAL CUNNINGHAM is a graduate of Murray State University (B. S., Biological Chemistry,1997) and the University of San Diego School of Law (J.D. 2005). In addition to his lawpractice, Mr. Cunningham has over eight years of research and development experience in thechemical and pharmaceutical industries. Mr. Cunningham is licensed to practice in Californiaand currently is involved in the firm’s securities and consumer litigation.

THOMAS LAUGHLIN, is a graduate of Yale University (B.A., cum laude, History 2001) andThe New York University School of Law (J.D., cum laude, 2005). After graduating from lawschool, Mr. Laughlin clerked for the Honorable Irma E. Gonzalez, United States District Court,Southern District of California. Mr. Laughlin’s practice areas include securities class actionlitigation, corporate governance and other complex commercial litigation, including amongothers: In re Tetra Technologies, Inc. Securities Litigation and Fulton County Employees’Retirement System et. al v. MGIC Investment Corporation et. al. Mr. Laughlin is a member ofthe New York bar.

AMANDA F. LAWRENCE is a graduate of Dartmouth College (B.A., cum laude, 1998) andYale Law School (J.D. 2002). During law school, Ms. Lawrence worked for large firms inWashington, D.C., New York, and Cleveland. After graduating from Yale, she worked in-houseat a tax lien securitization company and for several years at a large Hartford-based law firm. AtScott+Scott, she is actively engaged in the firm’s complex securities, corporate governance andantitrust litigation. Ms. Lawrence is also an avid cyclist, having obtained five NCAA National

10


Champion titles and raced throughout the United States, Europe, Bermuda, and, most recently,Pakistan. She is licensed to practice in Connecticut.

PENELOPE D. ABDIEL is a graduate of the University of Melbourne (BA (Honors), DipML(Indon), 2005) and the Australian National University College of Law (JD, 2008,GradDipLegPrac, 2009). As an undergraduate, Ms. Abdiel assisted in writing and editing theOxford Companion to Australian Politics. While obtaining her law degree from the AustralianNational University, Ms. Abdiel was a Summer Clerk with the Australian Attorney-General’sDepartment and was a student editor for the University’s Federal Law Review. At Scott+Scott,Ms. Abdiel’s practice areas include complex antitrust, consumer and other representativelitigation. Ms. Abdiel is admitted to practice in Australia, New York and California.

GARY D. FOSTER is a graduate of West Virginia Wesleyan College (B.S. cum laude, Biologywith Honors, 1999) and of the West Virginia University College of Law (J.D., 2002), where heserved as a member of the Moot Court Board and Lugar Trial Association. During law school,Mr. Foster served as a law clerk for the West Virginia Supreme Court of Appeals, after which heassumed a full-time term position as a law clerk for the Hon. Thomas C. Evans, III, of the FifthCircuit Court of West Virginia. Following a period of time with a mid-size civil litigation firm,Mr. Foster moved to San Diego and associated with Scott+Scott. Mr. Foster’s main practiceareas include antitrust, securities and complex litigation, including In re: Plastic AdditivesAntitrust Litigation, In re GM ERISA, and Hohider, et al. v. UPS. Mr. Foster is a member of theWest Virginia State Bar.

STEPHANIE HACKETT is a graduate of the University of Iowa (B. S. Political Science,International Business Certificate, 2001) and from the University of Iowa College of Law (J.D.,with distinction, 2005), where she was a recipient of the Willard L. Boyd Public ServiceDistinction. Ms. Hackett primarily practices in the areas of securities, antitrust and employmentlaw, including: In re: Plastic Additives Antitrust Litigation; Tucker v. Scrushy and Hohider v.UPS. As a part of her pro bono work, Ms. Hackett has worked with the San Diego VolunteerLegal Program, providing assistance to immigrant victims of domestic violence, and was arecipient of the Wiley W. Manuel Award for Pro Bono Legal Services in 2008.

JOE PETTIGREW graduated from Carleton College (B.A., cum laude, Art History 1998) andfrom the University of San Diego School of Law (J.D., 2004). Mr. Pettigrew’s practice areasinclude securities, antitrust, and ERISA litigation, including work on the following cases: AonCorporation Securities Litigation; Visa/MasterCard Interchange Antitrust Litigation; and GMERISA Litigation. Mr. Pettigrew is admitted to practice in the State of California and theSouthern District of California.

BEN LIPPERT is a graduate of The University of Arizona (B.A., magna cum laude, PoliticalScience 2000) and The New York University School of Law (J.D. 2004). Mr. Lippert isinvolved in the firm’s antitrust and securities class action litigation, including In re: PaymentCard Interchange Fee and Merchant Discount Antitrust Litigation. Mr. Lippert is a member ofthe California Bar.

11

for the district of south carolina greenville division...

Documents