mingli li, et al. v. duoyuan global water, inc., et al. 10...

Case 1:10-cv-07233-GBD Document 199-1 Filed 09/12/13 of 102

EXHIBIT 1


STIPULATION AND AGREEMENT OF SETTLEMENT

This Stipulation and Agreement of Settlement (the "Stipulation"), dated as of

September 10, 2013 and submitted pursuant to Rule 23 of the Federal Rules of Civil Procedure

and Rule 408 of the Federal Rules of Evidence, is made and entered into by and between:

(i) Lead Plaintiffs Hoi Ming Michael Ho and Joseph E. Sciarro, Initial Plaintiff Mingli Li, and

Plaintiff Huaying Jin (collectively, "Plaintiffs"), on behalf of themselves and each of the

Settlement Class Members (as defined in ¶ 1.26), by and through Lead Counsel (as defined in

¶ 1.12); (ii) defendant Duoyuan Global Water, Inc. ("DGW"); (iii) defendants Wenhua Guo,

Stephen C. Park, Charles V. Firlotte, Christopher P. Holbert, Joan M. Larrea, Thomas S. Rooney

Jr., and Yuefeng Yu (collectively, the "Individual Defendants"); (iv) defendants Piper Jaffray &

Co., Oppenheimer & Co. Inc., and Janney Montgomery Scott LLC (collectively, the "IPO

Underwriters"); and (v) defendants Global Environment Fund ("GEF") and GEEMF III Holdings

MU ("GEEMF") (together with DGW, the Individual Defendants, and the IPO Underwriters, the

"Settling Defendants").

This is a global settlement and includes all parties to the Litigation (as defined in ¶ 1.14)

resolving all claims against all Defendants (as defined in ¶ 1.5). The Settling Parties (as defined

in ¶ 1.27) intend this Stipulation to fully, finally, and forever resolve, discharge, and settle the

Released Claims and Released Defendants' Claims (as defined in ¶ 1.21 and ¶ 1.22,

respectively), subject to the terms and conditions stated herein.

I. THE LITIGATION

On September 20, 2010, a putative class action was filed in the United States District

Court for the Southern District of New York (the "Court"), asserting claims for alleged violation

of federal securities laws against defendants DGW, Guo, and Park. On March 3, 2011, the Court


appointed Hoi Ming Michael Ho and Joseph E. Sciarro, two individual investors in DGW, as

Lead Plaintiffs. The Court further appointed Glancy Binkow & Goldberg LLP as Lead Counsel.

On June 15, 2011, Plaintiffs filed an Amended Complaint. On October 6, 2011, Plaintiffs

filed the operative Corrected Amended Complaint ("Complaint"). The Complaint asserted

claims on behalf of purchasers of DGW's American Depository Shares ("ADSs") between June

24, 2009, and April 5, 2011, for alleged violations of the Securities Act of 1933 and the

Securities Exchange Act of 1934. In particular, the Complaint asserted claims for violations of

Sections 11 and 15 of the Securities Act of 1933 (15 U.S.C. §§ 77k, 77o) based on allegations

that Defendants made material misrepresentations and/or omissions in (1) the offering materials

for DGW's initial public offering of ADSs commenced on or about June 24, 2009 (the "IPO"),

including the Form F-i Registration Statement, effective June 24, 2009, and amendments

thereto; and (2) the offering materials for DGW's secondary public offering of ADSs,

commenced on or about January 28, 2010 (the "SPO"), including the Form F-i Registration

Statement effective January 27, 2010, and amendments thereto. The Complaint also asserted

claims for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934

(15 U.S.C. §§ 78j(b), 78t(a)), and Rule lOb-5 promulgated thereunder (17 C.F.R. §240.10b-5),

based on alleged misstatements made in the offering materials for the IPO and SPO, as well as in

filings by DGW with the U.S. Securities and Exchange Commission ("SEC") other than the

offering materials for the IPO and SPO, and other public announcements by DGW officers and

directors.

On November 22, 2011, Defendants filed motions to dismiss. On August 24, 2012, the

Court ruled on Defendants' motions, granting and denying them in part. Among other things, the

Court dismissed all claims against minority investor GEEMF and the affiliated GEF and against

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Grant Thornton International Limited, as well as the Section 11 claim relating to the SPO. By

Order dated June 14, 2013, the Court clarified that it had only dismissed Plaintiffs' Section 15

claims against other various director defendants and that the Section 11 claim relating to the IPO

remained pending against directors Holbert, Larrea, Rooney, and Yu in light of the allegation

that they had signed the IPO registration statement.

The Complaint had additionally asserted claims against BDO Ltd. ("BDO"), one of the

successor entities to the Hong Kong office of Grant Thornton ("GT-HK") that had served as

DGW's outside auditor. Upon a showing that BDO was not a legal successor to GT-HK that

could be held liable for GT-HK's violations of the federal securities laws, Plaintiffs stipulated to

the dismissal without prejudice of their claims against BDO, subject to the claims' reinstatement

should Plaintiffs uncover facts contradicting BDO's showing.

Prior to a ruling on Plaintiffs' motion to amend the Memorandum Decision and Order, a

stay was entered, at the Settling Parties' request, to permit them to mediate a global settlement of

all claims asserted. On February 1, 2013, counsel for Plaintiffs, DGW, DGW's insurer, and the

IPO Underwriters engaged in a lengthy mediation to discuss a potential settlement of the

Litigation with the Honorable Layn R. Phillips, United States District Judge (Ret.). Following

the mediation, with the continued assistance of Judge Phillips, the Settling Parties continued to

negotiate a resolution, which culminated in the Settling Parties reaching an agreement in

principle to settle the Litigation on April 10, 2013.

II. CLAIMS OF LEAD PLAINTIFFS AND BENEFITS OF SETTLEMENT

Plaintiffs and Lead Counsel believe that the claims asserted in the Litigation have merit.

However, Plaintiffs and Lead Counsel recognize and acknowledge the expense and length of

continued proceedings necessary to prosecute the Litigation against Defendants through

discovery and trial. Plaintiffs and Lead Counsel also have taken into account the uncertain


outcome and the risk of any litigation, especially in complex actions such as the Litigation, as

well as the risks posed by the difficulties and delays inherent in such litigation. Plaintiffs and

Lead Counsel also are aware of the defenses to the alleged securities law violations asserted in

the Litigation, as well as the legal barriers to obtaining discovery from or enforcing a judgment

against any defendant located in the People's Republic of China. Plaintiffs and Lead Counsel

believe that the Settlement set forth in this Stipulation confers substantial benefits upon the

Settlement Class in light of the circumstances present here. Based on their evaluation, Plaintiffs

and Lead Counsel have determined that the Settlement set forth in this Stipulation is in the best

interests of Plaintiffs and the Settlement Class.

III. SETTLING DEFENDANTS' DENIALS OF WRONGDOING AND LIABILITY

The Settling Defendants have denied and continue to deny that they violated the federal

securities laws or any other laws. The Settling Defendants have denied and continue to deny,

specifically, each and all of the claims and contentions alleged in the Litigation, along with all

charges of wrongdoing or liability against them arising out of or relating to any of the conduct,

statements, acts, or omissions alleged, or that could have been alleged, in the Litigation. The

Settling Defendants also have denied and continue to deny, among other things, the allegations

that any of the Settling Defendants made any material misstatements or omissions; that any

Settlement Class Member has suffered damages; that the prices of DGW ADSs were artificially

inflated by reason of any alleged misrepresentations, omissions, or otherwise; that any

Settlement Class Member was harmed by the conduct alleged in the Litigation; or that the

Settling Defendants knew or were reckless with respect to the alleged misconduct. In addition,

the Settling Defendants maintain that they have meritorious defenses to all claims alleged in the

Litigation.

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Nonetheless, taking into account the uncertainty, risks, and costs inherent in any

litigation, especially in complex cases such as the Litigation, the Settling Defendants have

concluded that further conduct of the Litigation could be protracted and distracting. The Settling

Defendants have, therefore, determined that it is desirable and beneficial to them that the

Litigation be settled in the manner and upon the terms and conditions set forth in this Stipulation.

As set forth below, this Stipulation shall in no event be construed as or deemed to be evidence of

an admission or concession by the Settling Defendants with respect to any claim of any fault or

liability or wrongdoing or damage whatsoever.

IV. TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among

Plaintiffs (for themselves and the Settlement Class Members) and the Settling Defendants, by

and through their respective counsel of record, that, subject to the approval of the Court, in

consideration of the benefits flowing to the Settling Parties from the Settlement set forth herein,

the Litigation and the Released Claims and Released Defendants' Claims shall be finally and

fully compromised, settled, and released, and the Litigation shall be dismissed with prejudice, as

to all Defendants, upon and subject to the terms and conditions of the Stipulation, as follows.

1. Definitions

As used in this Stipulation, the following terms have the meanings specified below:

1.1 "Authorized Claimant" means any Settlement Class Member who submits a

timely and valid Proof of Claim and Release form and whose claim for recovery has been

allowed pursuant to the terms of the Stipulation.

1.2 "Claims Administrator" means the Garden City Group ("GCG").

1.3 "Class Period" or "Settlement Class Period" means the period of June 24, 2009,

through April 5, 2011, inclusive, and includes, without limitation, the IPO and SPO.

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1.4 "Court" means the United States District Court for the Southern District of New

York.

1.5 "Defendants" means current or former defendants DGW, Wenhua Guo, Stephen

C. Park, Charles V. Firlotte, Christopher P. Holbert, Joan M. Larrea, Thomas S. Rooney Jr., Ping

Wei, Yuefeng Yu, Piper Jaffray & Co., Oppenheimer & Co. Inc., Janney Montgomery Scott

LLC, Credit Suisse Securities (USA) LLC, Macquarie Capital (USA) Inc., Rodman & Renshaw,

LLC, GEF, GEEMF, and Grant Thornton International Limited.

1.6 "Effective Date" means the first date by which all of the events and conditions

specified in ¶ 8.1 of the Stipulation have been met and have occurred.

1.7 "Escrow Agent" means the Claims Administrator.

1.8 "Final" means, with respect to any judgment or order entered by the Court,

including but not limited to the Final Judgment (in the form of Exhibit B attached hereto), that

such judgment or order represents a final and binding determination of all issues within its scope

and is not subject to further review on appeal or otherwise. A judgment or order becomes "final"

when the last of the following shall occur: (a) the expiration of the time to file a motion to alter

or amend the Final Judgment under Federal Rule of Civil Procedure 59(e) has passed without

any such motion having been filed; (b) the expiration of the time in which to appeal the Final

Judgment has passed without any appeal having been taken; and (c) if a motion to alter or amend

is filed or if an appeal is taken, the determination of that motion or appeal in such a manner as to

permit the consummation of the Settlement, in accordance with the terms and conditions of this

Stipulation. For purposes of this paragraph, an "appeal" shall include any petition for a writ of

certiorari or other writ that may be filed in connection with approval or disapproval of this


Settlement, but shall not include any appeal which concerns only the issue of attorneys' fees and

expenses or any Plan of Distribution of the Settlement Fund.

1.9 "Final Judgment" or "Judgment" means the judgment and order of dismissal with

prejudice to be rendered by the Court upon approval of the Settlement, substantially in the form

attached hereto as Exhibit B.

1.10 "Final Approval Hearing" means the final hearing to be held by the Court to

determine whether the proposed Settlement should be approved as fair, reasonable and adequate;

whether an order approving the Settlement should be entered thereon; whether the Plan of

Allocation of the Settlement Fund should be approved; and whether and in what amounts to

award attorneys' fees and expenses to Lead Counsel and reimbursement to Lead Plaintiffs.

1.11 "Gross Settlement Fund" means the Settlement Amount plus all interest earned

thereon.

1.12 "Lead Counsel" means Glancy Binkow & Goldberg LLP.

1.13 "Lead Plaintiffs" means Hoi Ming Michael Ho and Joseph E. Sciarro.

1.14 "Litigation" means the lawsuit styled Ho, et al. v. Duoyuan Global Water, Inc., et

al., Case No. 1:1O-cv-07233 (GBD), in the United States District Court for the Southern District

of New York.

1.15 "Net Settlement Fund" means the portion of the Gross Settlement Fund that shall

be distributed to Authorized Claimants as allowed by the Stipulation, the Plan of Distribution, or

the Court, after provision for the amounts set forth in ¶ 6.4 of this Settlement Agreement.

1.16 "Notice and Administration Account" means the interest-bearing account to be

established from the Gross Settlement Fund and maintained by the Claims Administrator, The

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Notice and Administration Account may be drawn upon by the Claims Administrator for Notice

and Administration Expenses without prior approval of the Court.

1.17 "Notice and Administration Expenses" means the following expenses incurred in

connection with the settlement administration, including: the cost of publishing the Summary

Notice in accordance with ¶6.3, hereto; the cost of identifying claimants to whom notice should

be given; the cost of establishing and maintaining a website and toll-free number to assist

potential claimants; printing and mailing of the Notice, as directed by the Court; and the cost of

processing proofs of claim and distributing the Net Settlement Fund to Settlement Class

Members who timely submit a valid Proof of Claim and Release. Notice and Administration

Expenses expressly excludes the cost of notice to be given by defendants to government officials

pursuant to 28 U.S.C. §1715(b) of the Class Action Fairness Act of 2005 ("CAFA").

1.18 "Person" means an individual, corporation, partnership, limited partnership,

limited liability corporation, association, joint stock company, estate, legal representative, trust,

trustee, unincorporated association, government or any political subdivision or agency thereof,

and any other type of business, political or legal entity, and his, her or its spouses, heirs,

predecessors, successors, representatives, or assignees.

1.19 "Plan of Distribution" or "Plan of Allocation" means a plan or formula of

allocation of the Net Settlement Fund, to be approved by the Court, which plan or formula shall

govern the manner by which the Net Settlement Fund shall be distributed to Authorized

Claimants. Any Plan of Distribution is not part of this Stipulation and neither the Defendants nor

their Related Persons shall have any responsibility or liability with respect thereto.

1.20 "Related Persons" means

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(a) with respect to Plaintiffs: each and all of the Lead Plaintiffs, each and all of the

Plaintiffs, and each and all of their respective present and former parents,

subsidiaries, divisions, joint ventures, and affiliates, and each of their respective

present and former employees, members, general and limited partners and their

partnerships, principals, officers, directors, attorneys, advisors, accountants,

auditors, financial advisors, commercial bank lenders, insurers, underwriters,

investment bankers, representatives, and insurers; and the predecessors,

successors, spouses, estates, heirs, executors, trusts, trustees, administrators,

agents, fiduciaries, consultants, representatives and assigns of each of them, in

their capacity as such; and any trust of which any Person described in this

subparagraph is the settlor or which is for the benefit of any Person described in

this subparagraph and/or member(s) of his or her family; and any entity in which

any Person described in this subparagraph has a controlling interest; and

(b) with respect to Defendants: each and all of the Defendants, and each and all of

their respective present and former parents, subsidiaries, divisions, joint ventures,

and affiliates, and each of their respective present and former employees,

members, general and limited partners and their partnerships, principals, officers,

directors, attorneys, advisors, accountants, auditors, financial advisors,

commercial bank lenders, insurers, underwriters, investment bankers,

representatives, and insurers; and the predecessors, successors, spouses, estates,

heirs, executors, trusts, trustees, administrators, agents, fiduciaries, consultants,

representatives and assigns of each of them, in their capacity as such; and any

trust of which any Person described in this subparagraph is the settlor or which is


for the benefit of any Person described in this subparagraph and/or member(s) of

his or her family; and any entity in which any Person described in this

subparagraph has a controlling interest.

1.21 "Released Claims" means any and all claims, demands, losses, rights, causes of

action, liabilities, obligations, judgments, suits, matters and issues of any kind or nature

whatsoever, whether known or Unknown (as defined in ¶ 1.28), contingent or absolute,

suspected or unsuspected, disclosed or undisclosed, that have been or could have been asserted in

the Litigation or in any court, tribunal, forum or proceeding (including, but not limited to, any

claims arising under federal, state or foreign law, common law, statute, rule or regulation relating

to alleged fraud, breach of any duty, negligence, violations of the federal securities laws, or

otherwise), whether individual or class, arising from or relating to the purchase, acquisition, sale,

or holding, during the Class Period, of any securities issued by DGW, including DGW's ADSs,

and the acts, facts, statements, or omissions that were or could have been alleged by Plaintiffs in

the Litigation, as against any and/or all Defendants and any and/or all of their Related Persons.

"Released Claims" excludes any claims to enforce the Settlement.

1.22 "Released Defendants' Claims" means any and all claims, demands, losses, rights,

causes of action, liabilities, obligations, judgments, suits, matters and issues of any kind or nature

whatsoever, whether known or Unknown (as defined in ¶ 1.28), contingent or absolute,

suspected or unsuspected, disclosed or undisclosed, that have been or could have been asserted in

the Litigation or in any court, tribunal, forum or proceeding, by any of the Defendants, or their

successors, assigns, executors, administrators, representatives, attorneys, agents, affiliates, and

partners, and any Persons they represent or any of them, whether brought directly or indirectly

against the Lead Plaintiffs, Settlement Class Members, their attorneys, and/or any of their

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Related Persons, which arise out of or relate in any way to the institution, prosecution, or

Settlement of the Litigation. "Released Defendants' Claims" excludes any claims to enforce the

Settlement.

1.23 "Released Persons" means

(a) with respect to Plaintiffs ("Plaintiffs' Released Persons"): each and all of

Plaintiffs and each and all of their Related Persons; and

(b) with respect to Defendants ("Defendants' Released Persons"): each and all of

Defendants and each and all of their Related Persons.

1.24 "Settlement" means the settlement effected by the Stipulation.

1.25 "Settlement Amount" means Five Million One Hundred and Fifty Thousand

Dollars ($5,150,000) in cash that will be paid pursuant to ¶ 3.1 of this Stipulation.

1.26 "Settlement Class" or "Settlement Class Members" means all Persons who

purchased or otherwise acquired DGW ADSs in or traceable to the IPO or SPO, as well as all

Persons who purchased on the open market or otherwise acquired DGW ADSs between June 24,

2009, and April 5, 2011, inclusive. Excluded from the Settlement Class are: (a) any putative

members of the Settlement Class who submit valid and timely requests for exclusion from the

Settlement Class in accordance with the requirements set forth in the Mailed Notice and Rule 23

of the Federal Rules of Civil Procedure; and (b) Defendants, members of the immediate family

of any such Defendant, any parent or subsidiary of any such Defendant, any person, firm, trust,

corporation, officer, director, or other individual or entity in which any Defendant has or had a

controlling interest during the Class Period, the partners, officers and directors of any Defendant

during the Class Period, and legal representatives, agents, executors, heirs, successors, or assigns

of any such excluded Person. The Defendants or any entity in which any of the Defendants has

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or had a controlling interest (for purposes of this paragraph, together a "Defendant-Controlled

Entity") are excluded from the Settlement Class only to the extent that such Defendant-

Controlled Entity itself purchased a proprietary (i.e., for its own account) interest in DGW ADSs.

To the extent that a Defendant-Controlled Entity purchased any DGW ADSs in a fiduciary

capacity or otherwise on behalf of any third-party client, account, fund, trust, or employee

benefit plan that otherwise falls within the Settlement Class, neither such Defendant-Controlled

Entity nor the third-party client, account, fund, trust, or employee benefit plan shall be excluded

from the Settlement Class with respect to such fiduciary purchases.

1.27 "Settling Parties" means Plaintiffs and the Settling Defendants.

1.28 "Unknown Claims" means any Released Claims which Plaintiffs or any

Settlement Class Members do not know or suspect to exist -- as well as Released Defendants'

claims that Defendants do not know or suspect to exist -- in his, her, or its respective favor at the

time of the release, regardless of whether such Released Claim or Released Defendants' Claim, if

known by him, her, or it, might have affected his, her, or its settlement with and release of the

claim, or might have affected his, her, or its decision not to object to this Settlement. With

respect to any and all Unknown Claims, the Settling Parties stipulate and agree that, upon the

Effective Date, they shall expressly waive, and each of the Settlement Class Members shall be

deemed to have waived (by operation of the Final Judgment), to the fullest extent permitted by

law the provisions, rights, and benefits of California Civil Code § 1542, which provides:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

The Settling Parties shall expressly waive, and each of the Settlement Class Members shall be

deemed to have waived (by operation of the Final Judgment), any and all provisions, rights, and

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benefits conferred by any law of any state or territory of the United States, or principle of

common law, which is similar, comparable, or equivalent to California Civil Code § 1542. The

Settling Parties and Settlement Class Members may hereafter discover facts in addition to or

different from those which he, she, or it now knows or believes to be true with respect to the

subject matter of the Released Claims and Released Defendants' Claims, but they shall

expressly, and each Settlement Class Member, upon the Effective Date, shall be deemed to have,

and by operation of the Final Judgment shall have, fully, finally, and forever settled and released

any and all Released Claims and Released Defendants' Claims, known or unknown, suspected or

unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist,

or heretofore have existed, upon any theory of law or equity now existing or coming into

existence in the future, including, but not limited to, conduct that is negligent, intentional, with or

without malice, or a breach of any duty, law, or rule, without regard to the subsequent discovery

or existence of such different or additional facts. The Settling Parties acknowledge, and the

Settlement Class Members shall be deemed by operation of the Final Judgment to have

acknowledged, that the foregoing waiver was separately bargained for and a key element of the

Settlement of which this release is a part.

2. CAFA Notice

2.1 Lead Plaintiffs and the Settlement Class shall have no responsibility, financial or

otherwise, for the Settling Defendants' provision of CAFA notice in accordance with their

obligations pursuant to 28 U.S.C. § 1715. Subsequent to the provision of such notice, the

Settling Defendants shall provide Plaintiffs with proof of service thereof.

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3. Payment and Handling of the Settlement Fund

3.1 An escrow agent established by the Settling Defendants (the "Settling

Defendants' Escrow Agent") shall pay, on behalf of Defendants, the sum of Five Million One

Hundred and Fifty Thousand Dollars ($5,150,000.00) into an interest-bearing escrow account

selected and maintained by the Escrow Agent on behalf of Lead Plaintiffs and the Settlement

Class no later than fifteen (15) business days following the Court's execution of an order

preliminarily approving the Settlement, substantially in the form attached hereto as Exhibit A.

Except for the obligation as set forth in this paragraph to fund the Settlement Fund by making

timely payment of the Settlement Amount, Defendants shall have no other payment obligations

pursuant to this Stipulation and the Settlement. If the Settlement Fund is not fully and timely

funded as provided in this paragraph, Plaintiffs' sole and exclusive remedy is to terminate the

Settlement Agreement on 5 business days' notice to counsel for the Settling Defendants and, if

so, Plaintiffs and Defendants would return to their respective positions as of the date that the

Settling Parties executed this Stipulation.

3.2 The Escrow Agent shall invest the Gross Settlement Fund deposited into the

escrow account, pursuant to ¶ 3.1 hereof, in instruments backed by the full faith and credit of the

United States Government or fully insured by the United States Government or an agency

thereof and shall reinvest the proceeds of these instruments as they mature in similar instruments

at their then-current market rates. All risks related to the investment of the Settlement Fund in

accordance with the guidelines set forth in this paragraph shall be borne by the Settlement Fund.

3.3 The Gross Settlement Fund, net of any taxes on the income thereof, shall be used

to pay: (i) taxes and tax expenses, (ii) Notice and Administration Expenses, (iii) attorneys' fees

and expenses, (iv) reimbursement awards to Lead Plaintiffs, if any; and (v) Authorized

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Claimants. The Net Settlement Fund shall be distributed to the Authorized Claimants as set forth

in the Plan of Allocation.

3.4 The Escrow Agent shall not disburse the Gross Settlement Fund or the Net

Settlement Fund except: (a) as provided in the Stipulation, (b) by an order of the Court, or

(c) with the prior written agreement of counsel for the Settling Defendants and Lead Counsel.

3.5 Subject to further order(s) and/or directions as may be made by the Court, or as

provided in the Stipulation, the Escrow Agent is authorized to execute such transactions as are

prescribed herein in a manner consistent with the terms of the Stipulation. The Defendants'

Released Persons shall have no responsibility for, interest in, or liability whatsoever with respect

to the actions of the Escrow Agent, or any transaction executed by the Escrow Agent.

3.6 All funds held by the Escrow Agent shall be deemed and considered to be in

custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such

time as such funds shall be distributed pursuant to the Stipulation and/or further order(s) of the

Court.

3.7 The Escrow Agent, without further approval of Settling Defendants or the Court,

may establish a "Class Notice and Administration Fund," and may deposit up to $100,000.00

from the Gross Settlement Fund into that fund. The Class Notice and Administration Fund may

be used by the Claims Administrator to pay costs and expenses reasonably and actually incurred

in connection with providing notice to the Settlement Class (as set forth in ¶J 6.2 and 6.3 hereof),

locating Settlement Class Members, assisting with the filing of claims (including the

establishment of a website and toll-free phone line), administering and distributing the Net

Settlement Fund to Authorized Claimants, processing Proof of Claim and Release forms and

paying escrow fees and costs (collectively, "Class Notice and Administration Costs"), if any.

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The Class Notice and Administration Fund may also be invested and earn interest as provided for

in ¶ 3.2 of this Stipulation. Any costs or expenses expended for notice or claims administration

in excess of the amount set forth in this paragraph shall be paid from the Settlement Fund,

subject to approval of Lead Counsel. In no event shall the Defendants' Released Persons or their

counsel have any responsibility for or liability with respect to the actions of Lead Counsel, the

Escrow Agent, or the Claims Administrator relating to the establishment, administration, or

investment of the Class Notice and Administration Fund.

3.8 The Settling Parties and the Escrow Agent shall treat the Settlement Fund as

being at all times a "Qualified Settlement Fund" within the meaning of U.S. Treas. Reg.

§ 1.46813-1 on and after the date of the Court order preliminarily approving this Stipulation of

Settlement. All provisions of this Stipulation shall be interpreted in a manner that is consistent

with the Settlement Fund being a "Qualified Settlement Fund" within the meaning of Treas. Reg.

§ 1.46813-1. In addition, the Escrow Agent and, if necessary, the Settling Defendants, shall

timely make such elections as necessary or advisable to carry out the provisions of this

paragraph, including the "relation-back election" (as defined in Treas. Reg. § 1.46813-1) back to

the earliest permitted date. Such elections shall be made in compliance with the procedures and

requirements contained in such regulations. It shall be the responsibility of the Escrow Agent to

timely and properly prepare and deliver the necessary documentation for signature by all

necessary parties, and thereafter to cause the appropriate filing to occur. In connection with

these procedures, it is understood and agreed that:

(a) For the purpose of § 468B of the Internal Revenue Code of 1986, as amended,

and the regulations promulgated thereunder, the "administrator" shall be the Claims

Administrator. The Claims Administrator shall timely and properly file all informational

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and other tax returns required by the Internal Revenue Code and the regulations

promulgated thereunder with respect to the Gross Settlement Fund (including, without

limitation, the returns described in Treas. Reg. § 1.468B-2(k)). Such returns (as well as

the election described in this ¶ 3.8) shall be consistent with this ¶ 3.8 and in all events

shall reflect that all Taxes (including any estimated Taxes, interest, or penalties) on the

income earned by the Gross Settlement Fund shall be paid out of the Gross Settlement

Fund as provided in this ¶ 3.8;

(b) All (i) Taxes (including any estimated Taxes, interest, or penalties) arising

with respect to the income earned by the Gross Settlement Fund, including any Taxes or

tax detriments that may be imposed upon the Defendants' Released Persons or their

counsel with respect to any income earned by the Gross Settlement Fund for any period

during which the Gross Settlement Fund does not qualify as a "Qualified Settlement

Fund" for federal or state income tax purposes ("Taxes"), and (ii) expenses and costs

incurred in connection with the operation and implementation of this ¶ 3.8 (including,

without limitation, expenses of tax attorneys and/or accountants and mailing and

distribution costs and expenses relating to filing (or failing to file) the returns described in

this 13.8) ("Tax Expenses"), shall be paid out of the Gross Settlement Fund; in all events

the Defendants' Released Persons and their counsel shall have no liability or

responsibility for the Taxes or the Tax Expenses. The Gross Settlement Fund shall

indemnify and hold each of Defendants' Released Persons and their counsel harmless for

Taxes and Tax Expenses (including, without limitation, Taxes payable by reason of any

such indemnification). Further, Taxes and Tax Expenses shall be treated as, and

considered to be, a cost of administration of the Settlement Fund and shall be timely paid

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by the Claims Administrator out of the Settlement Fund without prior order from the

Court and the Claims Administrator shall be obligated (notwithstanding anything herein

to the contrary) to withhold from distribution to Authorized Claimants any funds

necessary to pay such amounts, including the establishment of adequate reserves for any

Taxes and Tax Expenses (as well as any amounts that may be required to be withheld

under Treas. Reg. § 1.468B-2(l)(2)); neither Defendants' Released Persons nor their

counsel are responsible nor shall they have any liability therefor. The Settling Parties

hereto agree to cooperate with the Claims Administrator, each other, and their tax

attorneys and accountants to the extent reasonably necessary to carry out the provisions

of this ¶ 3.8; and

(c) In the event this Stipulation is canceled or terminated, the Settling

Defendants shall be responsible for the payment of all taxes (including interest and/or

penalties), if any, on their portion of said income.

4. Preliminary Approval Order and Final Approval Hearing

4.1 Promptly after execution of the Stipulation, the Settling Parties shall submit the

Stipulation together with its exhibits (the "Exhibits") to the Court and shall apply for entry of an

order (the "Preliminary Approval Order"), in the form of Exhibit A attached hereto, requesting,

among other things, the preliminary approval of the Settlement set forth in the Stipulation,

certification of the Settlement Class (for settlement purposes only), and approval for the mailing

of a settlement notice (the "Notice") and publication of a summary notice (the "Summary

Notice"), in the forms of Exhibits A-i and A-2 attached hereto. The Notice shall include the

general terms of the Settlement set forth in the Stipulation, the proposed Plan of Distribution, the

18


general terms of any Fee and Expense Application by Lead Counsel, the general terms of any

request for reimbursement by Lead Plaintiffs, the procedure by which Persons who would

otherwise be members of the Settlement Class may request to be excluded from the Settlement

Class, the date, time and place of the Final Approval Hearing, the procedure by which Settlement

Class Members may object to any of the matters to be determined at the Final Approval Hearing,

the right of Settlement Class Members to appear at the Final Approval Hearing, and a proof of

claim, in substantially the form attached as Exhibit A-3 hereto (the "Proof of Claim and

Release").

4.2 The Settling Parties shall request that after notice is given to the Settlement Class,

by mailing and by publication in accordance with the terms of this Stipulation, the Court hold a

final settlement approval hearing (the "Final Approval Hearing").

4.3 At the Final Approval Hearing, the Settling Parties shall jointly request entry of a

Judgment in the form attached hereto as Exhibit B:

(a) finally approving the Settlement as fair, reasonable, and adequate, within

the meaning of Rule 23 of the Federal Rules of Civil Procedure, and directing its

consummation pursuant to its terms;

(b) directing that the Litigation be dismissed without costs and with prejudice,

and releasing the Released Claims and the Released Defendants' Claims;

(c) permanently barring, extinguishing, discharging, rendering unenforceable,

and enjoining the institution and prosecution, by Lead Plaintiffs and the Settlement Class

Members, on the one hand and Defendants, on the other hand, of any other action against

the Released Persons in any court asserting any Released Claims or any Released

Defendants' Claims, respectively;

19


(d) reserving jurisdiction over the Litigation, including all future proceedings

concerning the administration, consummation, and enforcement of this Stipulation;

(e) finding that the Complaint in the Litigation was filed on a good faith basis

in accordance with the Private Securities Litigation Reform Act of 1995 (the "PSLRA")

and Rule 11 of the Federal Rules of Civil Procedure;

(f) finding, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure,

that there is no just reason for delaying and directing entry of a final judgment; and

(g) containing such other and further provisions consistent with the terms of

this Stipulation to which the Settling Parties expressly consent in writing.

4.4 At or after the Final Approval Hearing, Lead Counsel also shall request that the

Court approve the proposed Plan of Distribution, the Fee and Expense Application by Lead

Counsel, and any request for an award for time and expenses expended by Lead Plaintiffs.

5. Releases

5.1 Upon the Effective Date, with the exception of claims to enforce the Settlement,

Plaintiffs and each of the Settlement Class Members who have not validly opted out of the

Settlement Class shall be deemed to have, and by operation of the Final Judgment shall have,

fully, finally, and forever released, relinquished, and discharged against the Defendants'

Released Persons (whether or not such Settlement Class Members execute and deliver the Proof

of Claim and Release forms) any and all Released Claims (including, without limitation,

Unknown Claims), as well as any claims arising out of, relating to, or in connection with, the

defense, settlement, or resolution of the Litigation or the Released Claims.



20


Settlement Class, and their respective predecessors, successors, agents, representatives,

attorneys, and affiliates, and the respective heirs, executors, administrators, successors, and

assigns of each of them, directly or indirectly, individually, derivatively, representatively, or in

any other capacity, shall be permanently barred and enjoined from the assertion, institution,

maintenance, prosecution, or enforcement against any of Defendants' Released Persons, in any

state or federal court or arbitral forum, or in the court of any foreign jurisdiction, of any and all

Released Claims (including, without limitation, Unknown Claims), as well as any claims arising

out of, relating to, or in connection with, the defense, settlement, or resolution of the Litigation

or the Released Claims.

5.3 The Proof of Claim and Release to be executed by Settlement Class Members

shall release all Released Claims against the Defendants' Released Persons.


Defendants and each of the Defendants' Released Persons shall be deemed to have, and by

operation of the Final Judgment shall have, fully, finally, and forever released, relinquished, and

discharged Plaintiffs, each and all of the Settlement Class Members, Lead Counsel, and

Plaintiffs' Released Persons from all Released Defendants' claims (including, without limitation,

Unknown Claims) arising out of, relating to, or in connection with, the institution, prosecution,

assertion, settlement, or resolution of the Litigation or the Released Claims.


Defendants and each of the Defendants' Released Persons, and their respective predecessors,

successors, agents, representatives, attorneys, and affiliates, and the respective heirs, executors,

administrators, successors, and assigns of each of them, directly or indirectly, individually,

derivatively, representatively, or in any other capacity, shall be permanently barred and enjoined

21


from the assertion, institution, maintenance, prosecution, or enforcement against any Lead

Plaintiff, Settlement Class Member, Lead Counsel, and each of Plaintiffs' Released Persons, in

any state or federal court or arbitral forum, or in the court of any foreign jurisdiction, of any and

all Released Defendants' Claims (including, without limitation, Unknown Claims), as well as

any claims arising out of, relating to, or in connection with, the defense, settlement, or resolution

of the Litigation or the Released Claims.

6. Administration and Calculation of Claims. Final Awards, and Supervision and Distribution of the Settlement Fund

6.1 The Claims Administrator, subject to such supervision and direction of the Court,

shall provide notice of the Settlement to the Settlement Class, administer and calculate the claims

submitted by Settlement Class Members, and oversee distribution of the Net Settlement Fund to

Authorized Claimants. Subject to further order(s) and/or directions as may be made by the

Court, or as provided in the Stipulation, the Claims Administrator is authorized to execute such

transactions as are prescribed herein in a manner consistent with the terms of the Stipulation.

The Defendants' Released Persons shall have no responsibility for, interest in, or liability

whatsoever with respect to the actions of the Claims Administrator, or any transaction executed

by the Claims Administrator.

6.2 Within five (5) days of entry of the Preliminary Approval Order, DGW will

request its ADR Depositary to provide to the Claims Administrator the names of all registered

holders of American Depositary Receipts ("ADRs") for DGW. The Settling Parties will request

that the Court order that the identified holders of DGW ADRs, and in turn any and all Brokers

and Nominees holding transfer, ownership interest, or similar records for DGW ADSs, provide,

in a usable electronic format, the last known names and addresses of all Persons who purchased

22


or otherwise acquired DGW ADSs during the Settlement Class Period, to Lead Counsel or their

Claims Administrator within 14 calendar days of receipt of a copy of the Preliminary Approval

Order. Any expense of providing such information will be paid from the Class Notice and

Administration Fund.

6.3 In accordance with the schedule set forth in the Preliminary Approval Order, the

Claims Administrator will cause to be mailed to all Persons who purchased or otherwise acquired

DGW ADSs during the Class Period, as identified through the process set forth in ¶ 6.2: (a) the

Notice, substantially in the form of Exhibit A-i attached hereto; and (b) a Proof of Claim and

Release, substantially in the form of Exhibit A-3 attached hereto. The Claims Administrator

shall also make reasonable efforts to give notice to nominee owners such as brokerage firms and

other persons or entities who purchased DGW ADSs during the Class Period. The Settling

Parties shall propose, in the Preliminary Approval Order, that the Court order such nominee

purchasers to forward copies of the Notice and Proof of Claim and Release to their beneficial

owners or to provide the Claims Administrator with lists of the names and addresses of the

beneficial owners, and further that the Claims Administrator shall promptly send the Notice and

Proof of Claim and Release to such beneficial owners. Additional copies of the Notice and Proof

of Claim and Release shall be made available to any record holder requesting same for the

purpose of distribution to beneficial owners, and such record holders shall be reimbursed from

the Settlement Fund, upon receipt by the Claims Administrator of proper documentation, for the

reasonable expense of sending the Notice and Proof of Claim and Release to beneficial owners.

The Notice and Proof of Claim and Release form shall also be posted on the Claims

Administrator's website. In accordance with the schedule set forth in the Preliminary Approval

Order, a summary notice, substantially in the form of Exhibit A-2 attached hereto, will also be

23


published once in the national edition of Investor's Business Daily and once over the Business

Wire. The cost of providing such notice shall be paid out of the Settlement Fund.

6.4 The Settlement Fund shall be applied as follows:

(a) to pay all the costs and expenses reasonably and actually incurred in

connection with providing notice, locating Settlement Class Members, soliciting

Settlement Class Member claims, assisting with the filing of claims, paying escrow fees

and costs, if any, processing Proof of Claim and Release Forms, and distributing the Net

Settlement Fund to Authorized Claimants;

(b) to pay all Taxes and Tax Expenses as described in ¶ 3.8 hereof

(c) to pay Plaintiffs' Counsel's attorneys' fees and expenses (the "Fee and

Expense Award") and Plaintiffs' fees, if and to the extent allowed by the Court;

(d) to distribute the Net Settlement Fund to Authorized Claimants as allowed

by the Stipulation, the Plan of Distribution, or the Court.

6.5 Upon the Effective Date and thereafter, and in accordance with the terms of the

Stipulation, the Plan of Distribution, or such further approval and further order(s) of the Court as

may be necessary or as circumstances may require, the Net Settlement Fund shall be distributed

to Authorized Claimants, subject to and in accordance with the following.

6.6 Each Person claiming to be an Authorized Claimant shall be required to submit to

the Claims Administrator a completed Proof of Claim and Release, substantially in the form of

Exhibit A-3 attached hereto, by first class mail, postage prepaid, postmarked no later than one

hundred and twenty (120) calendar days after entry of the Preliminary Approval Order by the

Court to the Post Office Box address listed in the Notice, or such other time as may be set by the

24


Court (the "Bar Date"), signed under penalty of perjury and supported by such documents as are

specified in the Proof of Claim and Release and as are reasonably available to such Person.

6.7 Except as otherwise ordered by the Court, all Settlement Class Members who fail

to submit a Proof of Claim and Release by the Bar Date, or such other period as may be ordered

by the Court, or otherwise allowed, or who file a Proof of Claim and Release that is rejected,

shall be forever barred from receiving any payments pursuant to the Stipulation and the

Settlement set forth herein, but will in all other respects be subject to and bound by the

provisions of the Stipulation, the releases contained herein, and the Final Judgment.

Notwithstanding the foregoing, Lead Counsel may, in their discretion, accept for processing late

submitted claims so long as the distribution of the Net Settlement Fund to Authorized Claimants

is not materially delayed.

6.8 Subject to the approval of and further order(s) of the Court, the Claims

Administrator shall distribute the Net Settlement Fund to Authorized Claimants as provided

herein and in the manner set forth in the Notice (which shall include the Plan of Distribution) or

as otherwise ordered by the Court.

6.9 The Settling Defendants shall not have a reversionary interest in the Net

Settlement Fund. If, for any reason, there is a balance remaining in the Net Settlement Fund

after six (6) months from the date of the initial distribution of the Net Settlement Fund, the

Claims Administrator shall, if feasible, distribute such balance among Authorized Claimants who

cashed the checks sent to them in the initial distribution in an equitable and economical fashion.

These redistributions shall be repeated until the balance remaining in the Net Settlement Fund is

no longer cost efficient and such remaining balance shall then be donated to a secular § 501(c)(3)

organization designated by Lead Counsel.

25


6.10 The Released Persons shall have no responsibility for, interest in, or liability

whatsoever with respect to the distribution of the Net Settlement Fund, the Plan of Distribution,

the determination, administration, or calculation of claims, the payment or withholding of Taxes,

or any losses incurred in connection therewith.

6.11 The Settling Defendants shall take no position with respect to the Plan of

Distribution or any other such plan as may be approved by the Court.

6.12 It is understood and agreed by the Settling Parties that any proposed Plan of

Distribution of the Net Settlement Fund including, but not limited to, any adjustments to an

Authorized Claimant's claim set forth therein, is not a part of the Stipulation and is to be

considered by the Court separately from the Court's consideration of the fairness,

reasonableness, and adequacy of the Settlement set forth in the Stipulation, and any order or

proceeding relating to the Plan of Distribution shall not operate to terminate or cancel the

Stipulation or affect the finality of the Court's Final Judgment approving the Stipulation and the

Settlement set forth therein, or any other orders entered pursuant to the Stipulation. Settlement

Class Members and the Settling Defendants shall be bound by the terms of this Stipulation,

irrespective of whether the Court disapproves or modifies the Plan of Distribution.

6.13 No Person shall have any claim against Lead Plaintiffs, Lead Counsel, Plaintiffs'

Released Persons or their counsel, or the Claims Administrator, based on distributions made

substantially in accordance with the Settlement, the Stipulation, and the Plan of Distribution, or

otherwise as further ordered by the Court. No Person shall have any claim against the

Defendants, Defendants' Released Persons, or their counsel arising from or relating to the

management of, distributions from, or the disposition of the Settlement Fund or the Net

Settlement Fund.

26


7. Lead Counsel's Attorneys' Fees and Expenses

7.1 Lead Counsel may submit an application or applications (the "Fee and Expense

Application") for distributions from the Settlement Fund for (a) an award of attorneys' fees to be

paid out of the Settlement Fund, plus (b) expenses incurred in connection with prosecuting the

Litigation (including, but not limited to, the fees and expenses of expert consultants), plus

(c) interest on both amounts at the same rate and for the same periods as earned by the

Settlement Fund (until paid) as may be awarded by the Court. Lead Plaintiffs may submit

requests for reimbursement for representing the Settlement Class. Lead Counsel reserves the

right to make an additional application should circumstances so warrant. Neither Lead Counsel

nor any Settlement Class Member shall be entitled to terminate the Stipulation if the Court

disapproves of or modifies the terms of this Stipulation with respect to attorneys' fees or

expenses or the distribution of the Net Settlement Fund.

7.2 The attorneys' fees and expenses, as awarded by the Court, shall be paid to Lead

Counsel from the Gross Settlement Fund, as ordered, immediately after the Court executes an

order awarding such fees and expenses. This provision shall apply notwithstanding timely

objections to, potential for appeal from, or collateral attack on the Settlement. Lead Counsel

shall thereafter allocate the attorneys' fees amongst other Plaintiffs' Counsel in a manner that

Lead Counsel in good faith believes reflects the contributions of such counsel to the prosecution

and settlement of the Litigation. Any such awards shall be paid solely from the Gross Settlement

Fund. In the event that the judgment or the order awarding such fees and expenses paid to Lead

Counsel pursuant to ¶ 7.1 is reversed or modified, or if the Settlement is cancelled or terminated

for any reason, then Lead Counsel and other Plaintiffs' Counsel shall, in an amount consistent

27


with such reversal or modification, refund such fees or expenses to the Settlement Fund, plus

interest thereon at the same rate as earned on the Settlement Fund, within twenty (20) business

days from receiving notice from counsel for the Settling Defendants or from a court of

competent jurisdiction.

7.3 The procedure for and the allowance or disallowance by the Court of the Fee and

Expense Application, to be paid out of the Gross Settlement Fund, are not part of the Settlement

set forth in the Stipulation, and any order or proceeding relating to the Fee and Expense

Application, or any appeal from any order relating thereto or reversal or modification thereof,

shall not operate to terminate or cancel the Stipulation, or affect or delay the finality of the Final

Judgment approving the Stipulation and the Settlement of the Litigation.

7.4 The Defendants, Defendants' Released Persons, and their counsel shall have no

responsibility for any payment of attorneys' fees and expenses to Lead Counsel or any

Settlement Class Member's counsel over and above payment of the Settlement Fund pursuant to

¶ 3.1.

7.5 Defendants and their Released Persons shall have no responsibility for the

allocation among Plaintiffs' Counsel or any Settlement Class Member's counsel, and/or any

other Person who may assert some claim thereto, of any Fee and Expense Award that the Court

may make in the Litigation.

8. Conditions of Settlement, Effect of Disapproval, Cancellation, or Termination

8.1 The Effective Date of the Stipulation shall be conditioned on the occurrence of all

of the following events:

28


(a) execution of the Stipulation and such other documents as may be required

to obtain final Court approval of the Stipulation in a form satisfactory to the Settling

Parties;

(b) deposit of the Settlement Amount into the Settlement Fund with the

Claims Administrator;

(c) entry of the Court of a Preliminary Approval Order, as required by ¶ 4.1

hereof, which, inter alia, certifies a Settlement Class;

(d) Settling Defendants have not exercised their option to terminate the

Stipulation pursuant to ¶ 8.3 hereof;

(e) following notice to the Settlement Class and a hearing, as prescribed by

Rule 23 of the Federal Rules of Civil Procedure, the entry by the Court of the Final

Judgment that, among other things, dismisses with prejudice the claims asserted in the

Litigation as set forth above; and

(0 finality of the Final Judgment as set forth in 11.8 hereof.

8.2 Upon the occurrence of all of the events referenced in ¶ 8.1 hereof, any and all

remaining interest or right of the Settling Defendants in or to the Net Settlement Fund, if any,

shall be absolutely and forever extinguished. If the conditions specified in ¶ 8.1(c) or ¶ 8.1 (e)

hereof are not met, or if the condition in ¶ 8.1(0 is not met and there is no possibility that the

condition in ¶ 8.1 (0 can be met, then the Stipulation shall be canceled and terminated subject to

¶ 8.4 hereof unless Lead Counsel and counsel for the Settling Defendants mutually agree in

writing to proceed with the Settlement.

8.3 If, prior to the Final Approval Hearing, Persons who otherwise would be

Settlement Class Members have timely requested exclusion from the Settlement Class in

29


accordance with the provisions of the Preliminary Approval Order and the Notice given pursuant

thereto, and the amount of such requests exceeds the threshold specified in the separate

"Supplemental Agreement," executed between Plaintiffs and the Settling Defendants, the

Settling Defendants shall have, in their sole and absolute discretion, the option to terminate this

Stipulation and Settlement in accordance with the procedures set forth in the Supplemental

Agreement. The Supplemental Agreement will not be filed with the Court unless and until a

dispute among Plaintiffs and the Settling Defendants concerning its interpretation or application

arises. Lead Counsel shall provide counsel for the Settling Defendants with copies of any

Requests for Exclusion no later than sixteen (16) days prior to the Final Approval Hearing. The

Settling Defendants may terminate the Stipulation and Settlement by serving written notice of

termination on the Court and Lead Counsel by electronic mail on or before seven (7) days prior

to the Final Approval Hearing. Lead Counsel may attempt to cause retraction of any Request for

Exclusion by a Member of the Settlement Class. If the Settling Defendants have exercised the

option to terminate the Stipulation and if Lead Counsel, on or before the date of the Final

Approval Hearing, unless otherwise agreed between the Settling Parties, succeeds in causing the

retraction of sufficient Requests for Exclusion such that the remaining Requests for Exclusion do

not equal or exceed the threshold specified in the Supplemental Agreement, then the Defendants'

notice of termination of the Stipulation shall not be effective.

8.4 Unless otherwise ordered by the Court, in the event that the Effective Date does

not occur or the Stipulation is terminated, cancelled, or fails to become effective for any reason,

including, without limitation, in the event the Final Judgment is reversed or vacated following

any appeal taken therefrom, or the Stipulation is successfully collaterally attacked, then:

30


(a) within five (5) business days after written notification of such event is sent

by counsel for the Settling Defendants or Lead Counsel to the Claims Administrator, the

Settlement Fund (including accrued interest), less expenses actually incurred or due and

owing for Class Notice and Administration Costs, Taxes, or Tax Expenses pursuant to

¶J 3.7 and 3.8 hereof, shall be refunded pursuant to written instructions from counsel for

the Settling Defendants;

(b) at the request of counsel for the Settling Defendants, the Claims

Administrator or its designee shall apply for any tax refund owed on the Gross Settlement

Fund and pay the proceeds, after deduction of any expenses incurred in connection with

such application(s) for refund, at the written direction of counsel for the Settling

Defendants;

(c) the Settling Parties shall be restored to their respective positions in the

Litigation as of date of the execution of this Stipulation;

(d) the terms and provisions of the Stipulation, with the exception of ¶J 1.1-

1.28, 3.6-3.8, the last sentence of 7.2, this ¶ 8.4, and ¶j 9.4 and 9.5, below, shall have no

further force and effect with respect to the Settling Parties and shall not be used in this

Litigation or in any other proceeding for any purpose; and

(e) any Final Judgment or order entered by the Court in accordance with the

terms of the Stipulation shall be treated as vacated, nunc pro tunc, and the Settling Parties

shall be deemed to return to their status as of the date of execution of this Stipulation.

8.5 No order of the Court or modification or reversal on appeal of any order of the

Court concerning the Plan of Distribution or the amount of any attorneys' fees, expenses, and

31


interest awarded by the Court to Lead Counsel or Plaintiffs shall constitute grounds for

cancellation or termination of the Stipulation.

8.6 If the Court does not enter the Judgment in the form attached as Exhibit B hereto,

or if the Court enters the Judgment and appellate review is sought and, on such review, the entry

of the Judgment is finally vacated, modified, or reversed, then this Stipulation and the Settlement

incorporated therein shall be cancelled and terminated, unless all parties who are adversely

affected thereby, in their sole discretion within thirty (30) days from the date of the mailing of

such ruling to such parties, provide written notice to all other parties hereto of their intent to

proceed with the Settlement under the terms of the Judgment as modified by the Court or on

appeal. Such notice may be provided on behalf of Lead Plaintiffs and the Settlement Class

Members by Plaintiffs' Lead Counsel. No Settling Party shall have any obligation whatsoever to

proceed under any terms other than substantially in the form provided and agreed to herein;

provided, however, that no order of the Court concerning any Fee and Expense Application or

Plan of Distribution, or any modification or reversal on appeal of such order, shall constitute

grounds for cancellation or termination of this Stipulation by any Settling Party. Without

limiting the foregoing, each of the Settling Defendants shall have, in his, her, or its sole and

absolute discretion, the option to terminate the Settlement in its entirety in the event that the

Judgment, upon becoming Final, does not provide for the dismissal with prejudice of the

Litigation against him, her, or it. The Settling Defendants may not, however, terminate the

Stipulation or the Settlement based upon their failure, or the failure of any of their Related or

Released Persons, to timely make the payment of the Settlement Amount, or any portion thereof,

as set forth in ¶ 3.1.

32


8.7 In the event this Stipulation shall be terminated as set forth in ¶IJ 8.1, 8.2 or 8.3,

above, within two weeks, the Settling Parties will jointly request a scheduling conference with

the Court. Until such conference occurs and new dates are scheduled, the stay order shall remain

in place. Until the stay is lifted, all members of the Settlement Class shall be barred and enjoined

from prosecuting any of the Released Claims against any of Defendants or their Released

Persons and the Defendants and their Released Persons shall be barred and enjoined from

prosecuting any of the Released Defendants' Claims against Lead Plaintiffs, the Settlement

Class, Lead Counsel, and Plaintiffs' Released Persons.

9. Miscellaneous Provisions

9.1 The Settling Parties (a) acknowledge that it is their intent to consummate this

Stipulation; and (b) agree to cooperate to the extent reasonably necessary to effectuate and

implement all terms and conditions of the Stipulation and to exercise their best efforts to

accomplish the foregoing terms and conditions of the Stipulation expeditiously.

9.2 The Settling Parties intend this Settlement to be a final and complete resolution of

all disputes between them with respect to the Litigation. The Settlement shall not be deemed an

admission by any of the Defendants or Defendants' Released Person as to the merits of any claim

or defense, or an admission by any of the Lead Plaintiffs or Plaintiffs' Released Persons as to the

infirmity of any claim or the merits of any affirmative defenses thereto.

9.3 The Settling Parties and their counsel agree that they shall not assert or allege in

any action, proceeding, or claim that any party hereto or any of the Released Persons violated

Rule 11 of the Federal Rules of Civil Procedure, and the Final Judgment shall contain a finding

that all Settling Parties, Defendants, and their respective counsel complied with the requirements

33


of Rule 11 with respect to the institution, prosecution, defense, and resolution of the Litigation.

The Settling Parties agree that the amount paid to the Settlement Fund and the other terms of the

Settlement were negotiated in good faith by the Settling Parties and reflect a settlement that was

reached voluntarily after consultation with competent legal counsel and with the assistance of an

experienced mediator, the Honorable Layn R. Phillips (Ret.). The Settling Parties reserve their

right to rebut, in a manner that such party determines to be appropriate, any contention made in

any public forum regarding the Litigation, including that the Litigation was brought or defended

in bad faith or without a reasonable basis.

9.4 Neither the Stipulation nor the Settlement contained herein, nor any act performed

or document executed pursuant to or in furtherance of the Stipulation or the Settlement (a) is or

may be deemed to be or may be used as an admission of, or evidence of, the validity of any

Released Claim, or of any wrongdoing or liability of the Defendants or their Released Persons;

or (b) is or may be deemed to be or may be used as an admission of, or evidence of, any fault or

omission of any of the Defendants or their Released Persons; or (c) is or may be deemed to be or

may be used as an admission or evidence that any claims asserted by Plaintiffs were not valid or

that the amount recoverable was not greater than the Settlement Amount, in any civil, criminal,

or administrative proceeding in any court, administrative agency, or other tribunal. Neither this

Stipulation nor the Settlement, nor any act performed or document executed pursuant to or in

furtherance of this Stipulation or the Settlement shall be admissible in any proceeding for any

purpose, except to enforce the terms of the Settlement.

9.5 All agreements made during the course of the Litigation relating to the

confidentiality of information shall survive this Stipulation.

34


9.6 The Stipulation may be amended or modified only by a written instrument signed

by or on behalf of all Settling Parties or their respective successors-in-interest.

9.7 The Stipulation and the Exhibits attached hereto (which are a material and integral

part of the Settling Parties' agreement), together with the Supplemental Agreement referred to in

¶ 8.3, constitute the entire agreement between the Plaintiffs and the Settling Defendants and no

representations, warranties, or inducements have been made by and between Plaintiffs and the

Settling Defendants concerning the Stipulation or its Exhibits other than the representations,

warranties, and covenants contained and memorialized in such documents. Except as otherwise

provided herein (or, as between Defendants, in any separate agreements between them), each

Settling Party shall bear its own costs.

9.8 Lead Counsel, on behalf of the Settlement Class, is expressly authorized by Lead

Plaintiffs to take all appropriate action required or permitted to be taken by the Settlement Class

pursuant to the Stipulation to effectuate its terms and also is expressly authorized to enter into

any modifications or amendments to the Stipulation on behalf of the Settlement Class which it

deems appropriate.

9.9 Plaintiffs and Lead Counsel represent and warrant that none of the Lead

Plaintiffs' claims or causes of action referred to in this Litigation or this Stipulation has been

assigned, encumbered, or in any manner transferred in whole or in part.

9.10 Each counsel or other Person executing the Stipulation, any of its Exhibits, or any

documents prepared in furtherance of the Stipulation on behalf of any Settling Party hereby

warrants that such Person has the full authority to do so.

35


9.11 The 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. A complete

set of executed counterparts shall be filed with the Court.

9.12 The Stipulation shall be binding upon, and inure to the benefit of, the heirs,

successors, and assigns of the Settling Parties hereto.

9.13 The Court shall retain jurisdiction with respect to implementation and

enforcement of the terms of the Stipulation, and all Settling Parties hereto submit to the

jurisdiction of the Court for purposes of implementing and enforcing the Settlement embodied in

the Stipulation.

9.14 With the exception of implementation of the settlement process, pursuant to

which the Settling Parties will seek the Preliminary Approval Order and, after notice and

hearing, the Final Judgment, the Litigation will remain stayed.

9.15 Defendants and their Released Persons may file the Stipulation and/or the Final

Judgment in any action that may be brought against them in order to support a defense or

counterclaim based on principles of res judicata, collateral estoppel, release, good faith

settlement, judgment bar or reduction or any other theory of claim preclusion or issue preclusion

or similar defense or counterclaim.

9.16 This Stipulation and the Exhibits hereto shall be considered to have been

negotiated, executed, and delivered, and to be wholly performed, in the State of New York, and

the rights and obligations of the parties to the Stipulation shall be construed and enforced in

accordance with, and governed by, the internal, substantive laws of the State of New York

without giving effect to that State's choice-of-law principles.

36


IN WITNESS WHEREOF, the parties hereto have caused the Stipulation to be executed,

by their duly authorized attorneys, and dated as of September 10, 2013.

GLANCY BINKOW & GOLDBERG LLP

Lionel Z. Glancy 1925 Century Park East Suite 2100 Los Angeles, CA 90067 (310) 201-9150 LGlancyGlancylaw.com

Robin B. Howald 122 East 42 n6 Street Suite 2920 New York, NY 10168 (212) 682-5340

rhowa1dglancylaw.com

Attorneys for Plaintiffs

CR0 WE & DUNLEVY, P.C.

Harry A. Woods, Jr. Bruce W. Day Charles B. Goodwin 20 North Broadway Avenue, Suite 1800 Oklahoma City, OK 73102-8273 (405) 235-7700 (405) 239-6651 (Facsimile) harry.woodscrowedunIevy.com

-and-

Thomas J. Mullaney Leventhal, Sliney & Mullaney, LLP 15 Remsen Avenue Roslyn, NY 11576

Attorneys for Defendants Duoyuan

37


IN WITNESS WHEREOF, the parties hereto have caused the Stipulation to be executed,

by their duly authorized attorneys, and dated as of September 10, 2013.

GLANCY BINKOW & GOLDBERG LLP

Lionel Z. Glancy 1925 Century Park East Suite 2100 Los Angeles, CA 90067 (310) 201-9150 [email protected]

Robin B. Howald 122 East 42nd Street Suite 2920 New York, NY 10168 (212) 682-5340

rhowa1dg1ancy1aw.com

Attorneys for Plaintiffs

CR0 WE & DUNLE

(iifaA,t Harry A. Wof)ds, Jr. Bruce W. Day Charles B. Goodwin 20 North Broadway Avenue, Suite 1800 Oklahoma City, OK 73102-8273 (405) 235-7700 (405) 239-6651 (Facsimile) harry.woodscrowedun1evy.com

-and-

Thomas J. Mullaney Leventhal, Sliney & Mullaney, LLP 15 Remsen Avenue Roslyn, NY 11576

Attorneys for Defendants Duoyuan

37


Global Water, Inc., Wenhua Guo, Yuefeng Yu, and Christopher Holbert

AKIN GUMP ST >J

HAUER & FELD LLP ii

Nany Chg Jacquelirl'e G. Yeci One Bryant Park New York, NY 10036 (212) 872-1000

Attorneys for GEF and GEEMF

MAYER BROWN LLP

Joseph De Simone James Ancone 1675 Broadway New York, NY 10019 (212) 506-2500

Attorneys for Defendants Stephen C. Park and Thomas S. Rooney, Jr.

SKADDEN ARPS SLATE MEAGHER & FLOM LLP

Lea Haber Kuck Four Times Square 40th Floor New York, NY 10036 (212) 735-3000

Attorneys for Defendant Charles V. Firlotte



AKIN GUMP STRAUSS HAUER & FELD LLP

Nancy Chung Jacqueline G. Yecies One Bryant Park New York, NY 10036 (212) 872-1000


vL uk

t pl {)e Simone es Ancone 5 Broadway

New York, NY 10019 (212) 506-2500


SKADDEN ARPS SLATE MEAGHER & FLOM LLP

Lea Haber Kuck Four Times Square 40th Floor New York, NY 10036 (212) 735-3000


38



AKIN GUMP STRAUSS HAUER & FELD LLP

Nancy Chung Jacqueline G. Yecies One Bryant Park New York, NY 10036 (212) 872-1000


MAYER BROWN LLP

Joseph Dc Simone James Ancone 1675 Broadway New York, NY 10019 (212) 506-2500


SKADDEN ARPS SLATE MEAGHER &

Z" k4j(:~j ek Lea Haber Kuck Four Times Square 40th Floor New York, NY 10036 (212) 735-3000


38


LATHAM

885 Third Avenue New York, NY 10022 (212) 906-1200

Michele E. Rose J. Christian Word 55 Eleventh Street, NW Suite 1000 Washington DC 20004 (202) 637-1008

Attorneys for Defendant Joan M Larrea

SHEARMAN & STERLING LLP

Adam S. Hakki Jaculin Aaron Christopher R. Fenton 599 Lexington Avenue New York, New York 10022 Telephone: (212) 848-4000 Facsimile: (212) 848-7179

Attorneys for the IPO Underwriters


LATHAM & WATKINS LLP

Robert J. Malionek 885 'Third Avenue New York, NY 10022 (212) 906-1200

Michele E. Rose J. Christian Word 55 Eleventh Street, NW Suite 1000 Washington DC 20004 (202) 637-1008

Attorneys/or DeJLndani Joan Al Larrea

SHEARMAN & STERLING LLP

Adam S. Hakki Jaculin Aaron Christopher R. Fenton 599 Lexington Avenue New York, New York 10022 Telephone: (212) 848-4000 Facsimile: (212) 848-7179

Attorneys for the IPO Underwriters

39


UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

HOT MING MICHAEL HO, et al.,

Plaintiffs,

vs. Civil Action No. 1:10-cv-07233 (GBD)

DUOYUAN GLOBAL WATER, INC., et al.,

EXHIBIT A - [PROPOSED] ORDER PRELIMINARILY APPROVING SETTLEMENT OF CLASS ACTION

Defendants.

[PROPOSED] PRELIMINARY APPROVAL ORDER

WHEREAS, certain parties to this Litigation - including (i) Lead Plaintiffs Hoi Ming

Michael Ho and Joseph E. Sciarro, Initial Plaintiff Mingli Li, and Plaintiff Huaying Jin, on

behalf of themselves and each of the Settlement Class Members (as defined in ¶ 1.26 of the

Stipulation), by and through Lead Counsel (as defined in ¶ 1.12 of the Stipulation); (ii) defendant

Duoyuan Global Water, Inc.; (iii) defendants Wenhua Guo, Stephen C. Park, Charles V. Firlotte,

Christopher P. Holbert, Joan M. Larrea, Thomas S. Rooney Jr., and Yuefeng Yu; (iv) defendants

Piper Jaffray & Co., Oppenheimer & Co. Inc., and Janney Montgomery Scott LLC; and (v)

defendants Global Environment Fund and GEEMIF III Holdings MU - have entered into a global

settlement of all claims asserted in the Litigation against all Defendants;

WHEREAS, that settlement was entered into through a Stipulation and Agreement of

Settlement, dated as of September 10, 2013 (the "Stipulation"), which is subject to review under

Rule 23 of the Federal Rules of Civil Procedure, and which, together with the exhibits thereto,

sets forth the terms and conditions for the proposed settlement of the claims alleged in the

Complaint filed in the Litigation on the merits and with prejudice; and


WHEREAS, this Court having read and considered the Stipulation, the proposed Notice,

the proposed Summary Notice, the proposed Proof of Claim and Release, and the proposed Final

Judgment, and finding that substantial and sufficient grounds exist for entering this Preliminary

Approval Order:

NOW, THEREFORE, IT IS HEREBY ORDERED, this day of 1 2013,

that:

1. All capitalized terms used herein shall have the same meaning as in the

Stipulation.

2. Pursuant to Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure and for

the purposes of the Settlement only, the Litigation is hereby preliminarily certified as a class

action on behalf of all Persons who purchased or otherwise acquired DGW ADSs in or traceable

to the IPO or SPO, as well as all Persons who purchased on the open market or otherwise

acquired DGW ADSs between June 24, 2009 and April 5, 2011, inclusive; provided that

excluded from the Settlement Class are (a) any putative members of the Settlement Class who

submit valid and timely requests for exclusion from the Settlement Class in accordance with the

requirements set forth in the Notice and Rule 23 of the Federal Rules of Civil Procedure; and (b)

Defendants, members of the immediate family of any such Defendant, any parent or subsidiary

of any such Defendant, any person, firm, trust, corporation, officer, director, or other individual

or entity in which any Defendant has or had a controlling interest during the Settlement Class

Period, the officers and directors of any Defendant during the Settlement Class Period, and legal

representatives, agents, executors, heirs, successors, or assigns of any such excluded Person.

The Defendants or any entity in which any of the Defendants has or had a controlling interest

(for purposes of this paragraph, together a "Defendant-Controlled Entity") are excluded from the

2


Settlement Class only to the extent that such Defendant-Controlled Entity itself purchased a

proprietary (i.e., for its own account) interest in DGW ADSs. To the extent that a Defendant-

Controlled Entity purchased any DGW ADSs in a fiduciary capacity or otherwise on behalf of

any third-party client, account, fund, trust, or employee benefit plan that otherwise falls within

the Settlement Class, neither such Defendant-Controlled Entity nor the third-party client,

account, fund, trust, or employee benefit plan shall be excluded from the Settlement Class with

respect to such purchase.

3. This Court finds, preliminarily and for purposes of Settlement only, that the

prerequisites for a class action under Rules 23(a) and (b)(3) of the Federal Rules of Civil

Procedure have been satisfied in that: (a) the number of Settlement Class Members is so

numerous that joinder of all members of the Settlement Class is impracticable; (b) there are

questions of law and fact common to the Settlement Class; (c) the claims of the Lead Plaintiffs

are typical of the claims of the Settlement Class they seek to represent; (d) the Lead Plaintiffs

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

and fact common to the Settlement Class predominate over any questions affecting only

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

methods for the fair and efficient adjudication of the controversy.

4. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, preliminarily and for

the purposes of settlement only, Lead Plaintiffs are certified as the class representatives on behalf

of the Settlement Class and the Lead Counsel previously selected by Lead Plaintiffs and

appointed by the Court is hereby appointed as Lead Counsel for the Settlement Class.

5. The Court finding that the parties' Settlement is within the range of approval as

being fair, reasonable and adequate to the Settlement Class, a hearing (the "Final Approval

3


Hearing") pursuant to Federal Rule of Civil Procedure 23(e) is hereby scheduled to be held

before this Court on at .m. for the following purposes:

(a) to finally determine whether the Litigation satisfies the applicable prerequisites

for class action treatment under Federal Rules of Civil Procedure 23(a) and (b) for

purposes of settlement;

(b) to determine whether the Settlement is fair, reasonable, and adequate, and should

be approved by this Court;

(c) to determine whether the Final Judgment as provided under the Stipulation should

be entered, dismissing all claims in the Complaint against all Defendants, on the

merits and with prejudice, and to determine whether the various releases set forth

in the Stipulation should be ordered;

(d) to determine whether the proposed Plan of Distribution for the Net Settlement

Fund is fair and reasonable and should be approved by this Court;

(e) to consider the application of Lead Counsel for an award of attorneys' fees and

expenses and, if requested, reimbursement awards to Lead Plaintiffs; and

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

6. 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 Final Judgment approving the Stipulation and the Settlement and dismissing the

claims in the Complaint as to the Defendants, on the merits and with prejudice, regardless of

whether it has approved the Plan of Distribution or awarded attorneys' fees and expenses or

awards to Lead Counsel and Lead Plaintiffs.

7. Lead Counsel has the authority to enter into the Stipulation on behalf of the

In


Settlement Class and is authorized to act on behalf of the members of the Settlement Class with

respect to all acts or consents required by or that may be given pursuant to the Stipulation or such

other acts that are reasonably necessary to consummate the Settlement.

8. The Escrow Agent is authorized to establish a "Class Notice and Administration

Fund," and may deposit therein up to $100,000.00 from the Gross Settlement Fund. The Class

Notice and Administration Fund may be used by the Claims Administrator to pay costs and

expenses reasonably and actually incurred in connection with providing notice to the Settlement

Class (as set forth in ¶J 6.2 and 6.3 of the Stipulation), locating Settlement Class Members,

assisting with the filing of claims (including the establishment of a website and toll-free phone

line), administering and distributing the Net Settlement Fund to Authorized Claimants,

processing Proof of Claim and Release forms and paying escrow fees and costs, if any. The

Class Notice and Administration Fund may also be invested and earn interest as provided for in

¶ 3.2 of the Stipulation. Any costs or expenses expended for notice or claims administration in

excess of the amount set forth in this paragraph shall be paid from the Settlement Fund, subject

to approval of Lead Counsel. In no event shall the Defendants' Released Persons or their

counsel have any responsibility for or liability with respect to the actions of Lead Counsel, the

Escrow Agent, or the Claims Administrator relating to the establishment, administration, or

investment of the Class Notice and Administration Fund.

9. Within five (5) days of entry of this Order, DGW will request its ADR Depositary

to provide to the Claims Administrator the names of all registered holders of American

Depositary Receipts ("ADRs") for DGW. The Court further orders that the identified holders of

DGW ADRs, and in turn any and all Brokers and Nominees holding transfer, ownership interest,

or similar records for DGW ADSs, provide, in a usable electronic format, the last known names

5


and addresses of all Persons who purchased or otherwise acquired DGW ADSs during the

Settlement Class Period, to Lead Counsel or their Claims Administrator within 14 calendar days

of receipt of a copy of this Order. The Claims Administrator is authorized to pay from the Class

Notice and Administration Fund all reasonable and necessary costs of obtaining such

information.

10. Within thirty (30) days of entry of this Order, but in no event prior to the payment

of the Settlement Amount in accordance with ¶ 3.1 of the parties' Stipulation of Settlement, the

Claims Administrator shall:

(a) cause to be mailed, to all Persons who purchased or otherwise acquired DGW

ADSs during the Class Period, the Notice and a Proof of Claim and Release. The

Claims Administrator shall also make reasonable efforts to give notice to nominee

owners such as brokerage firms and other persons or entities who purchased

DGW ADSs during the Class Period. Such nominee purchasers are hereby

directed to forward copies of the Notice and Proof of Claim and Release to their

beneficial owners or to provide the Claims Administrator with lists of the names

and addresses of the beneficial owners. Promptly upon receipt of any such

information from nominee purchasers, the Claims Administrator shall cause the

Notice and Proof of Claim and Release to be mailed to such beneficial owners.

Additional copies of the Notice and Proof of Claim and Release shall be made

available to any record holder requesting same for the purpose of distribution to

beneficial owners.

(b) cause the Notice and Proof of Claim and Release to be posted on the Claims

Administrator's website.


-and-

(c) cause the Summary Notice to be published once in the national edition of

Investor's Business Daily and once over the Business Wire.

11. The Claims Administrator is authorized to pay from the Class Notice and

Administration Fund all reasonable and necessary costs of providing notice as set forth in

paragraph 10 hereof. Further, the Claims Administrator is authorized to reimburse record

holders for all reasonable expenses incurred in distributing copies of the Notice and Proof of

Claim and Release to beneficial owners, upon receipt by the Claims Administrator of proper

documentation.

12. At or before the Final Approval Hearing, Lead Counsel shall file with this Court,

and serve upon counsel for the Settling Defendants, an affidavit(s) describing the Claims

Administrator's efforts to provide notice to Settlement Class Members and compliance with the

specific requirements set forth above. Further, Lead Counsel shall file with this Court proof of

publication of the Summary Notice.

13. The Court approves the form, substance and requirements of: (a) the Notice, (b)

the Summary Notice, and (c) the Proof of Claim and Release. The form and method set forth

herein of notifying the Settlement Class of the Settlement and its terms and conditions meet the

requirements of due process and Rule 23 of the Federal Rules of Civil Procedure and Section

2113(a)(7) of the Exchange Act, 15 U.S.C. § 78u-4(a)(7), as amended by the Private Securities

Litigation Reform Act of 1995; constitutes the best notice practicable under the circumstances;

and shall constitute due and sufficient notice to all persons and entities entitled thereto. Under

no circumstances shall any Settlement Class Member be relieved from the terms of the

Settlement, including the releases provided for therein, based upon the contention or proof that

7


such Settlement Class Member failed to receive actual or adequate notice.

14. To be entitled to participate in the Net Settlement Fund, as defined in the

Stipulation, in the event the Settlement is effected in accordance with all of the terms and

conditions thereof, each Settlement Class Member shall take the following action and be subject

to the following conditions:

(a) A properly executed Proof of Claim and Release, substantially in the form

attached to the Stipulation, shall be submitted, by first class mail, postage prepaid,

postmarked no later than one hundred and twenty (120) calendar days from the

date of this order, to the Post Office Box address listed in the Notice. Such

deadline may be further extended by Order of this Court. Each Proof of Claim

and Release shall be deemed to have been submitted when postmarked (if

properly addressed and mailed by first-class mail) provided it is actually received

before the filing of a motion for an Order of the Court approving distribution of

the Net Settlement Fund. Any Proof of Claim and Release submitted in any other

manner shall be deemed to have been submitted when it was actually received at

the address designated in the Notice.

(b) The Proof of Claim and Release submitted by the Settlement Class Member must:

(1) be fully and properly completed, without any material deletions or

modifications of any form provided to the Settlement Class Member; (ii) state, for

the Settlement Class Member, all purchases of DGW ADSs during the Settlement

Class Period, including the number and price of the ADSs purchased and the date

of each purchase, and also the number and price of ADSs sold, if any, during the

Settlement Class Period and the date of each sale; (iii) be accompanied by

8


adequate documentation to demonstrate the transaction(s) 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

Lead Counsel or the Claims Administrator; (iv) be executed under penalty of

perjury; and (v) be accompanied, if the person executing the Proof of Claim and

Release is acting in a representative capacity, by a certification of the executor's

current authority to act on behalf of the Settlement Class Member.

(c) Once the Claims Administrator has considered a timely submitted Proof of Claim,

Lead Counsel, through the Claims Administrator, shall determine, based upon the

Plan of Distribution, whether such claim is valid, deficient, or rejected. For each

claim determined to be either deficient or rejected, the Claims Administrator shall

send a deficiency letter or rejection letter as appropriate, describing the basis on

which the claim was so determined.

-and-

(d) As part of the Proof of Claim, each Settlement Class Member shall submit to the

jurisdiction of the Court with respect to the claim submitted.

15. Settlement Class Members shall be bound by all determinations and judgments in

the Litigation, whether or not they submit a valid and timely Proof of Claim and Release and are

thereby entitled to share in the proceeds of the Net Settlement Fund, unless such Person(s)

request exclusion from the Settlement Class in a timely and proper manner, as hereinafter

provided:

(a) A person eligible to be a Settlement Class Member, but who wishes to be


excluded from the Settlement Class, may request exclusion by mailing the request

in written form, by first class mail, postage prepaid, postmarked no later than

twenty-one (21) calendar days prior to the Final Approval Hearing or

2013, to the Post Office Box address listed in the Notice;

(b) The request for exclusion shall clearly indicate the name and address of the

person seeking exclusion and that the sender specifically requests to be excluded

from the Settlement Class;

(c) The request for exclusion shall be executed, under penalty of perjury, by the

person requesting exclusion from the Settlement Class, and accompanied, if the

executor is acting in a representative capacity, by a certification of the executor's

current authority to act on behalf of the person requesting exclusion from the

Settlement Class;

(d) The request for exclusion shall state, for the Settlement Class Member, all

purchases of DGW ADSs during the Settlement Class Period, including the

number and price of the ADSs purchased and the date of each purchase, as well as

the number and price of ADSs sold, if any, during the Settlement Class Period and

the date of each sale; and

(e) It is also requested that such persons provide their telephone number or other

contact information.

The request for exclusion shall not be effective unless the potential Settlement Class Member

provides the required information set forth in this ¶ 15, and is made within the time stated above,

or the exclusion is otherwise accepted by the Court.

16. Settlement Class Members requesting exclusion from the Settlement Class shall

10


not be entitled to receive any payment out of the Net Settlement Fund as described in the

Stipulation and Notice.

17. The Court will consider objections by a Settlement Class Member to the

Settlement, the Plan of Distribution, the potential request by Lead Counsel for an award of

attorneys' fees and expenses, and the potential request by Lead Plaintiffs for reimbursement of

their time and expense in prosecuting this action, only if the Settlement Class Member has timely

submitted a complete, executed Proof of Claim and Release, including all documentation

required by ¶ 14(b) of this Order. Objections, by Settlement Class Members or any other

authorized person or governmental entities, shall be submitted in accordance with the following

procedures:

(a) Objections must be stated in writing, in a clear, concise, and legible manner;

(b) Objections must be filed, along with any exhibits or briefs, with the Clerk of the

Court, U.S. District Court, Southern District of New York, Daniel Patrick

Moynihan U.S. Courthouse, 500 Pearl Street, New York, NY 10007, no later than

twenty-one (21) calendar days prior to the Final Approval Hearing, or before

2013;

(c) Objections must include a statement by the objector that he, she, or it intends to

appear at the Final Approval Hearing;

(d) Objections must identify any witnesses the objector intends to call to testify at the

Final Approval Hearing, and any exhibits the objector intends to introduce into

evidence at the Final Approval Hearing; and

(e) Objections must include a signed statement that the documents filed with the

Clerk of Court were served, on or before the date of filing, by first class mail,

11


postage prepaid, on each of the following:

GLANCY BINKOW & GOLDBERG LLP Lionel Z. Glancy 1925 Century Park East Suite 2100 Los Angeles, CA 90067 Attorneys for Plaintiffs

-and-

CR0 WE & DUNLEVY, P.C. Harry A. Woods, Jr. 20 North Broadway Avenue, Suite 1800 Oklahoma City, OK 73102-8273 Attorneys for Duoyuan Global Water, Inc., Wenhua Guo, Yuefeng Yu, and Christopher Holbert

Settlement Class Members who do not object to the Settlement, the Plan of Distribution, the

potential request by Lead Counsel for an award of attorneys' fees and expenses, or the potential

request by Lead Plaintiffs for an award of fees, or who merely wish to submit comments as

opposed to objections to the same, do not need to appear at the Final Approval Hearing.

18. Any objector, whether a Settlement Class Member or any other authorized person

or governmental entity, who does not object in the manner prescribed above shall be deemed to

have waived all such objections and shall forever be foreclosed from making any objection to the

fairness, adequacy, or reasonableness of the Settlement, the Plan of Distribution, the potential

request by Lead Counsel for an award of attorneys' fees and expenses, or any request by Lead

Plaintiffs for reimbursement awards.

19. The Court reserves the right to continue or adjourn the Final Approval Hearing

without any further notice other than an announcement prior to or at the Final Approval Hearing,

and to approve the Settlement without further notice to the Settlement Class.

20. All papers in support of the Settlement, the Plan of Distribution, the potential

12


request by Lead Counsel for an award of attorneys' fees and expenses, or any request by Lead

Plaintiffs for reimbursement awards shall be filed and served 35 calendar days before the

Settlement Hearing. All papers in further support of the Settlement, the Plan of Distribution, the

potential request by Lead Counsel for an award of attorneys' fees and expenses, or any request

by Lead Plaintiffs for reimbursement awards shall be filed and served seven (7) calendar days

before the Final Approval Hearing.

21. Pending final determination of whether the Settlement should be approved,


Settlement Class, and their respective predecessors, successors, agents, representatives,

attorneys, and affiliates, and the respective heirs, executors, administrators, successors, and

assigns of each of them, directly or indirectly, individually, derivatively, representatively, or in

any other capacity, shall be barred and enjoined from the assertion, institution, maintenance,

prosecution, or enforcement against any of Defendants' Released Persons, in any state or federal

court or arbitral forum, or in the court of any foreign jurisdiction, of any and all Released Claims

(including, without limitation, Unknown Claims), as well as any claims arising out of, relating

to, or in connection with, the defense, settlement, or resolution of the Litigation or the Released

Claims.

22. In the event that the Settlement shall not be consummated pursuant to its terms,

the Stipulation, except as otherwise provided therein, including any amendment(s) thereto, and

this Order, 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 action or proceedings by any

person or entity, and each party shall be restored to his, her, or its respective position as it existed

in the Litigation on the day that the Stipulation of Settlement was entered by the Settling Parties.

13


23. The Court retains exclusive jurisdiction over the action to consider all further

matters arising out of, or connected with, the Settlement.

Dated: .2013

Hon. George B. Daniels UNITED STATES DISTRICT JUDGE

14



HOI MING MICHAEL HO, et al., Individually and on Behalf of All Others Similarly Situated,

Plaintiffs,


Defendants.

Case No. 10-cv-07233 GBD

ECF Case

Exhibit A-1

NOTICE OF PROPOSED SETTLEMENT OF CLASS ACTION, MOTION FOR ATTORNEYS’ FEES AND EXPENSES, AND SETTLEMENT FAIRNESS HEARING


IF YOU PURCHASED OR ACQUIRED DUOYUAN GLOBAL WATER, INC.’S AMERICAN DEPOSITORY SHARES BETWEEN JUNE 24, 2009, AND APRIL 5, 2011, INCLUSIVE, YOU COULD RECEIVE A PAYMENT FROM A CLASS ACTION

SETTLEMENT.

A federal court authorized this Notice. This is not a solicitation from a lawyer.

Your legal rights are affected whether you act, or do not act.

Please read this Notice carefully.

Security and Time Period: American Depository Shares (“ADSs”) (stock symbol:

DGW) of Duoyuan Global Water, Inc. (“DGW” or the “Company”) purchased or acquired

between June 24, 2009, and April 5, 2011, inclusive (the “Settlement Class Period”).

Settlement Fund: $5,150,000 in cash. Your recovery will depend on: the number of

DGW ADSs you, and other Settlement Class Members who file claims, purchased and sold

during the Settlement Class Period; and the dates on, and prices at which, you, and the other

Settlement Class Members who file claims, purchased and sold those shares. The estimated

average recovery per ADS of DGW will be approximately $0.163 per share before deduction

of Court-approved fees and expenses and costs of notice and claims administration.

Reasons for Settlement: The case, which has been prosecuted since September 2010,

alleges that investors paid too much for DGW’s ADSs because DGW’s financial results were

overstated in various filings with the Securities and Exchange Commission and in public

statements issued by DGW during the Settlement Class Period. The Lead Plaintiffs and Lead

Counsel believe that the Settlement provides the Settlement Class with a benefit now, instead of

after years of further uncertain litigation, including disposition of summary judgment motions, a

contested trial and likely appeals, with the possibility of no recovery at all. In this case, a

further bar to recovery is the fact that, currently, it is highly unlikely that a United States

judgment will be enforceable in the People’s Republic of China.

1


The Settling Defendants have denied and continue to deny each and all of the allegations

made and claims brought by Plaintiffs, maintain that they have meritorious defenses, and

contend that many of the factual allegations are materially inaccurate. The Settling Defendants

also have denied and continue to deny, inter alia, the allegations that Plaintiffs or the Settlement

Class have suffered damages, that the price of DGW’s ADSs were artificially inflated by reason

of alleged misrepresentations, non-disclosures, or otherwise, or that Plaintiffs or the Settlement

Class were harmed by the conduct alleged in the operative complaint

Nonetheless, the Settling Defendants have concluded that further conduct of the

Litigation would be protracted and expensive, and that it is desirable that the Litigation be fully

and finally settled in the manner and upon the terms and conditions set forth in the Stipulation.

The Settling Defendants also have taken into account the uncertainty and risks inherent in any

litigation, especially in complex cases like this Litigation. The Settlement shall in no event be

construed as, or deemed to be evidence of, an admission or concession by any of the Defendants

with respect to any claim of any fault or liability or wrongdoing or damage to the Settlement

Class Members in this Litigation or any admission by Lead Plaintiffs and the Settlement Class

that they could not have recovered more than the Settlement Amount at trial.

If the Case Had Not Settled: The Settlement must be compared to the risk of no

recovery after contested dispositive motions, trial and likely appeals. A trial is a risky

proposition. The claims in the Litigation involve numerous complex legal and factual issues,

many of which would require expert testimony. The Settling Parties disagree on both liability

and damages and do not agree on the average amount of damages per share, if any, that would

be recoverable if Plaintiffs were to have prevailed on each claim alleged. Among the many key

issues about which Plaintiffs and the Settling Defendants do not agree are: (1) whether the

2


Defendants violated the securities laws or otherwise engaged in any wrongdoing; (2) whether

the misstatements, misrepresentations and omissions alleged by the Plaintiffs were material,

false, misleading or otherwise actionable under the securities laws; (3) the extent (if any) that

the alleged misrepresentations and omissions influenced the trading price of DGW’s ADSs

during the Settlement Class Period; and (4) the method for determining whether, and the extent

to which, purchasers of DGW’s ADSs suffered injury and damages that could be recovered at

trial.

Attorneys’ Fees and Expenses: Lead Counsel have not received any payment for their

work or expenses incurred in investigating the facts, conducting this Litigation and negotiating

the Settlement on behalf of the Plaintiffs and the Settlement Class. Lead Counsel will ask the

Court for attorneys’ fees not to exceed thirty-three percent (1/3 or 33%) of the Settlement Fund

and expenses not to exceed $150,000 to be paid from the Settlement Fund.

If the above amounts are requested and approved by the Court, the average cost per

share of DGW’s ADSs will be approximately $0.059 per share, making the estimated recovery

per share after fees and expenses approximately $0.104.

Dismissal and Releases: If the proposed Settlement is approved, the Court will enter a

Final Judgment. The Final Judgment will dismiss the Released Claims with prejudice as to the

Released Persons, which include the Defendants (including, but not limited to, their parents,

subsidiaries and affiliates, and all of their employees, directors and officers). The Final

Judgment will provide that all Settlement Class Members shall be deemed to have released and

forever discharged all Released Claims (to the extent Members of the Settlement Class have

such claims) against all Released Persons. The terms of the releases, including the meaning of

the term “Released Claims,” are set forth in the Proof of Claim and Release form that is

3


enclosed. In exchange for payment of the Settlement Amount and the receipt of releases from

Lead Plaintiffs and the Settlement Class, the Settlement also provides for releases by the

Settling Defendants of Lead Plaintiffs and Settlement Class members and their Released

Persons (“Released Defendants’ Claims”)

Deadlines:

Submit Claim: _______________, 2013

File Objection: _______________, 2013

Request Exclusion

2013

Court Hearing on Fairness of Settlement: _______________, 2013

More Information: www.gcginc.com/cases/DuoyuanGlobalWater

Claims Administrator:

Duoyuan Global Water Settlement

c/o GCG Po Box 9349 Dublin, OH 43017-4249 (800) 231-1815

Lead Counsel:

Lionel Z. Glancy, Esq. Glancy Binkow & Goldberg LLP 1925 Century Park East, Suite 2100

Los Angeles, California 90067 1-888-773-9224 [email protected]

4


YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT:

SUBMIT A CLAIM The only way to receive a payment.

OBJECT You may object to the Court if you do not like this

Settlement.

EXCLUDE Receive no payment. This is the only option that

YOURSELF allows you to participate in another lawsuit against the

Defendants relating to the class claims being released

in this case.

DO NOTHING Receive no payment.

You may submit a claim or object, or do both, or do nothing. However, if you timely

exclude yourself that is the only thing you can do: you may not object in writing, you may not

appear at the Court Hearing on Fairness of Settlement to state any objections, and you may not

submit a claim.

If you object and do not request exclusion, you will remain a member of the Settlement

Class, and if the Court approves the Settlement, you will be bound by the terms of the

Settlement in the same way as Settlement Class Members who do not object.

Unless you timely request exclusion from the Settlement Class, or unless the Court

rejects the proposed Settlement, you are bound by the Stipulation of Settlement and its releases,

whether or not you submit a claim or object.

These rights and options and the deadlines to exercise them are explained in this

Notice.

The Court presiding over this case must decide whether to approve the Settlement.

Payments will be made only if the Court approves the Settlement and, if there are any appeals,

after appeals are resolved. Please be patient.

5


The Court has authorized this Notice, but no money will be paid to anyone until the

Court holds the Settlement Hearing on __________,2013. The Court has not decided the

merits of this case.

WHAT THIS NOTICE CONTAINS BASIC INFORMATION

1. 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 CLASS

5. How do I know if I am part of the Settlement Class?

6. Where are the exceptions to being included?

7. I’m still not sure if I’m included.

THE SETTLEMENT BENEFITS – WHAT YOU GET

8. What does the settlement provide? 9. How much will my payment be?

HOW YOU GET A PAYMENT – SUBMITTING A CLAIM FORM

10. How can I obtain a payment? 11. When will I receive my payment? 12. What am I giving up to receive a payment?

EXCLUDING YOURSELF FROM THE SETTLEMENT CLASS

13. How do I get out of the Settlement Class?

14. If I do not exclude myself, can I sue the Defendants for the same thing later?

15. If I exclude myself, can I receive money from the Settlement?

THE LAWYERS REPRESENTING YOU

16. Do I have a lawyer in the case? 17. How will the lawyers be paid?

6


OBJECTING TO THE SETTLEMENT

18. How do I tell the Court that I do not like the Settlement?

THE COURT’S SETTLEMENT HEARING

19. 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

22. What happens if I do nothing at all?

GETTING MORE INFORMATION

23. Are there more details about the settlement?

UNDERSTANDING YOUR PAYMENT

BASIC INFORMATION

1. Why Did I Receive This Notice Package?

You or someone in your family may have purchased or acquired DGW’s ADSs between

June 24, 2009, and April 5, 2011, inclusive.

This Notice was sent because you have a right to know about a proposed settlement of a

class action lawsuit, and about all of your options, before the Court decides whether to approve

the Settlement. If the Court approves the Settlement and after any objections or appeals are

resolved, the Claims Administrator appointed by the Court will make the payments to those

persons who timely submit claims in the manner described below.

This package explains the lawsuit, the Settlement, your legal rights, what benefits are

available, who is eligible for them, and how to get them.

The Court in charge of the case is the United States District Court for the Southern

District of New York, and the case is known as Ho, et al. v. Duoyuan Global Water, Inc., et al. ,

7


Case No. 1:10-cv-07233 (GBD). Hoi Ming Michael Ho and Joseph E. Sciarro are called Lead

Plaintiffs, and the Lead Plaintiffs, together with Mingli Li and Huaying Jin are collectively

referred to as Plaintiffs. The companies and persons they have sued (and which remained in the

Litigation after certain preliminary motions), including DGW, are collectively called the

Settling Defendants. The Settling Parties include Plaintiffs and the Settling Defendants.

2. What Is This Lawsuit About?

This Litigation alleges violations of the Federal Securities Laws (specifically, Sections

11 and 15 of the Securities Act (15 U.S.C. §77k and 77(o)) and Sections 10(b) and 20(a) of the

Exchange Act (15 U.S.C. §78j(b) and 78(t)(a)), and Rule 10b-5 promulgated thereunder (17

C.F.R. §240.10b-5)) against Defendants.

DGW is a publicly traded British Virgin Island corporation with its principal executive

offices located in the People’s Republic of China. DGW is a China-based domestic water

treatment equipment supplier. The Company claims to develop advanced water treatment

technologies and products and to provide products and water treatment solutions for municipal,

industrial, residential, and agricultural water treatment. During the Settlement Class Period,

DGW’s ADSs traded on the New York Stock Exchange (“NYSE”) under the ticker symbol

“DGW.”

Plaintiffs alleged that the price of DGW’s ADSs was artificially inflated as a result of a

series of untrue or materially misleading statements concerning the Company’s financial results.

Plaintiffs alleged that certain of these material misstatements were contained in the registration

statement and prospectus filed and disseminated with respect to both DGW’s initial public

offering (“IPO”) and its secondary public offering (“SPO”), giving rise to the liability of those

Settling Defendants who bear legal responsibility for these offering documents to compensate

8


investors who paid more for their ADSs than they were worth. As to the material misstatements

and omissions alleged to have been made other than in the materials filed and disseminated in

connection with the two stock offerings, Plaintiffs further contend that certain of the Settling

Defendants made these statements knowing them to be false or misleading, or recklessly

disregarding their false or misleading natures, and that investors suffered injury as a result of

their acquisition of DGW’s ADSs at an artificially-inflated price, when the price declined as the

true facts were released during and at the end of the Settlement Class Period.

3. Why Is This A Class Action?

Class actions are generally used in lawsuits that affect a large number of individuals; in

effect, the class action operates to consolidate into a single action all of the claims of individuals

allegedly harmed by the same conduct or course of conduct, thus alleviating the need for

members of the class to file their own individual lawsuits to recover for the harm alleged. Once

the class is certified, a court is empowered to resolve all issues on behalf of members of the

class, except for those members of the class, if any, who specifically choose to exclude

themselves from the class.

As part of both the preliminary and final approval process, Plaintiffs ask the Court to

certify the Settlement Class for settlement purposes only. The proposed Settlement Class that

was preliminarily certified (for the purpose of providing this Notice to you and other proposed

Settlement Class Members), consists of all persons or entities who purchased or otherwise

acquired the publicly-traded ADSs of DGW between June 24, 2009, and April 5, 2011,

inclusive, and were allegedly damaged thereby. All Settlement Class Period purchasers of

DGW’s ADSs are members of the Settlement Class, except those persons who timely file a

request for exclusion by [21 days prior to the Settlement Hearing] ______________, 2013. All

9


persons who do not timely exclude themselves from the Settlement Class will be bound by the

proposed Settlement and its accompanying release.

4. Why Is There a Settlement?

The Court did not decide in favor of the Plaintiffs or the Settling Defendants. Instead,

both sides agreed to a Settlement. This permits them to avoid the cost and uncertainty of a trial,

and permits eligible Settlement Class Members who submit valid claims to receive some

compensation now, rather than wait for the result of trial and possible appeals. Additionally,

currently, it is highly unlikely that a United States judgment will be enforceable in the People’s

Republic of China. The Plaintiffs and their attorneys believe the Settlement is best for all

Settlement Class Members. The Settling Defendants have concluded that further defense of the

Litigation would be protracted and expensive, and that it is desirable that the Litigation be fully

and finally settled in the manner and upon the terms and conditions set forth in the Stipulation.

The Settling Defendants also have taken into account the uncertainty and risks inherent in any

litigation, especially in complex cases such as the Litigation.

WHO IS IN THE SETTLEMENT CLASS

To see if you will receive money from this Settlement, you first have to determine if you

are a Settlement Class Member.

5. How Do I Know if I Am Part of the Settlement?

The Settlement Class includes all persons or entities who purchased or otherwise

acquired the publicly traded ADSs of DGW between June 24, 2009, and April 5, 2011,

inclusive, and were allegedly damaged thereby.

6. What Are the Exceptions to Being Included?

10


You are not a Settlement Class Member if you are a Defendant, members of the

immediate family of any such Defendant, any parent or subsidiary of any such Defendant, any

person, firm, trust, corporation, officer, director, or other individual or entity in which any

Defendant has or had a controlling interest during the Settlement Class Period, the partners,

officers and directors of any Defendant during the Settlement Class Period, and legal


The Defendants or any entity in which any of the Defendants has or had a controlling

interest (together a “Defendant-Controlled Entity”) are excluded from the Settlement Class only

to the extent that such Defendant-Controlled Entity itself purchased a proprietary (i.e., for its

own account) interest in DGW ADSs. To the extent that a Defendant-Controlled Entity

purchased any DGW ADSs in a fiduciary capacity or otherwise on behalf of any third-party

client, account, fund, trust, or employee benefit plan that otherwise falls within the Settlement

Class, neither such Defendant-Controlled Entity nor the third-party client, account, fund, trust,

or employee benefit plan shall be excluded from the Settlement Class with respect to such

fiduciary purchases.

7. I’m Still Not Sure if I Am Included.

If you are still not sure whether you are included, you can ask for free help. You can

call Lionel Z. Glancy of Glancy Binkow & Goldberg LLP at 1-888-773-9224 for more

information. Or you can fill out and return the claim form described in question 10, to see if

you qualify.

11


THE SETTLEMENT BENEFITS — WHAT YOU GET

8. What Does the Settlement Provide?

The Settlement will result in a fund of $5,150,000 in cash. The balance of this fund after

payment of Court-approved attorneys’ fees and expenses, Lead Plaintiffs’ expenses, if any, and

the costs of claims administration, including the costs of printing and mailing this Notice and

the cost of publishing the newspaper notice (the “Net Settlement Fund”), will be divided among

all eligible Settlement Class Members who send in valid claim forms.

9. How Much Will My Payment Be?

Your share of the Net Settlement Fund will depend on the number of valid claim forms

that Settlement Class Members send in, the number of DGW ADSs you purchased or acquired

during the relevant period, and the timing of your purchases and sales. You will not receive a

payment, however, if your proportionate share of the Net Settlement Fund is less than $10.00.

You can calculate your Recognized Claim in accordance with the formula shown below

in the Plan of Allocation. After all Settlement Class Members have sent in their Proof of Claim

and Release forms, the payment you receive will reflect your Recognized Claim in relation to

the Recognized Claims of all persons submitting Claim Forms. The Recognized Claim is not

the amount of the payment that you can expect, but is used to determine how the Net Settlement

Fund is allocated among all persons submitting claims.

HOW YOU OBTAIN A PAYMENT — SUBMITTING A CLAIM FORM

10. How Will I Obtain a Payment?

To qualify for payment, you must be an eligible Settlement Class Member, send in a

valid Proof of Claim and Release form, and properly document your claim as requested in the

Claim Form. A Proof of Claim and Release form is enclosed with this Notice. You may also

12


get a Proof of Claim and Release form on the Internet at

www.gcginc.com/cases/DuoyuanGlobalWater . Read the instructions carefully, fill out the

Proof of Claim and Release form, include the documents the form asks for, sign it, and mail it

such that it is postmarked no later than __________, 2013.

11. When Will I Receive My Payment?

The Court will hold a hearing on __________, 2013, to decide whether to approve the

Settlement. If the Court approves the Settlement, there may be appeals. It is always uncertain

when these appeals will be resolved, and resolving them can take time, perhaps more than a

year. Even if no appeals are filed, it will take additional time for the Claims Administrator to

process all of the Proof of Claim and Release forms, determine the ultimate distribution

amounts, and apply for a Court Order for distribution.

12. What Am I Giving Up to Receive a Payment?

As a Settlement Class Member, you will be giving up certain rights that you currently

have if the Court approves the Settlement. Unless you timely exclude yourself from the

Settlement Class by the [21 days prior to the Settlement Hearing] __________,2013 deadline,

you are a Member of the Settlement Class and will be bound by the release of claims against the

Defendants and their Related Persons. That means that you cannot sue, continue to sue, or be

part of any other lawsuit against the Defendants about the Released Claims in this case. It also

means that all of the Court’s orders will apply to you and legally bind you and you will release

your claims in this case against the Defendants. The terms of the release are included in the

claim form that is enclosed. Note: If you object, but the Court approves the Settlement, you

will be bound by the terms of the Settlement in the same way as Members of the Settlement

Class who do not object.

13


EXCLUDING YOURSELF FROM THE SETTLEMENT CLASS

If you do not want a payment from the class action Settlement, but you want to keep the

right to sue or continue to sue the Defendants on your own for the Released Claims in the class

action then you must take steps to get out of the Settlement Class. This is called excluding

yourself or is sometimes referred to as “opting out” of the Settling Class.

13. How Do I Get Out of the Settlement Class?

To exclude yourself from the Settlement Class, you must send a letter by mail stating

that you want to be excluded from the class in Ho, et al. v. Duoyuan Global Water, Inc., et al. ,

Case No. 1:10-cv-07233 (GBD). You must include your name, address, telephone number,

your signature, information about DGW ADSs you purchased or acquired between June 24,

2009, and April 5, 2011, inclusive (including date, price, and amount), and information about

DGW ADSs you sold during this time period, if any (including date, price, and amount). You

must mail your exclusion request postmarked no later than __________, 2013 to:



You cannot exclude yourself on the phone or by e-mail. If you ask to be excluded, you

are not eligible to receive any settlement payment, you cannot object to the Settlement, and you

will not be legally bound by the Settlement.

14. If I Do Not Exclude Myself, Can I Sue the Settling Defendants for the Same

Thing Later?

No. Unless you exclude yourself from the Settlement Class, you give up any right to sue

the Defendants or Defendants’ Related Persons for the Released Claims. If you have a pending

14


lawsuit against any of the Defendants, speak to your lawyer in that case immediately.

Remember, the exclusion deadline is [21 days prior to the Settlement Hearing] __________,

2013.

15. If I Exclude Myself, Can I Receive Money from the Settlement?

No. If you exclude yourself, do not send in a Claim Form.

THE LAWYERS REPRESENTING YOU

16. Do I Have a Lawyer in This Case?

The Court appointed the law firm of Glancy Binkow & Goldberg LLP to represent you

and other Settlement Class Members. These lawyers are called Lead Counsel. You will not be

personally liable for the fees and expenses incurred by these lawyers. If you want to be

represented by your own lawyer, you may hire one at your own expense.

17. How Will the Lawyers Be Paid?

Lead Counsel will ask the Court for attorneys’ fees of up to one-third (33 1/3%) of the

Settlement Fund and for expenses up to $150,000, which were advanced in connection with the

Litigation. Such sums as may be approved by the Court will be paid from the Settlement Fund.

Settlement Class Members are not personally liable for any such fees or expenses.

The attorneys’ fees and expenses requested will be the only payment to Lead Counsel

for their efforts in achieving this Settlement and for their risk in undertaking this representation

on a wholly contingent basis. Since the case began in 2010, Lead Counsel conducted an initial

investigation of the claims alleged (including an investigation in the People’s Republic of

China), prepared an extensive amended complaint, filed briefs on numerous motions, prepared

to conduct discovery in the United States and China, consulted experts regarding calculation of

damages, and negotiated an arms’-length settlement with the Settling Defendants (with the

15


assistance of an experienced, private mediator). To date, Lead Counsel has not been paid for

their services in conducting this Litigation on behalf of the Plaintiffs and the Settlement Class,

nor for their expenses. Lead Counsel have expended to date more than ___hours of attorney

time in prosecuting the Settlement Class’s claims and will ask the Court for actual expenses not

to exceed $150,000 in prosecuting the Litigation. The fee requested will compensate Lead

Counsel for their work in achieving the Settlement Fund.

Lead Counsel shall file formal motions with the District Court, for approval of the

Settlement and the Plan of Allocation, and to request payment of attorneys’ fees and

reimbursement of expenses, not later than 35 days prior to the Settlement Hearing. The

attorneys’ fees motion will argue that Lead Counsel’s requested fees are well within the range

of fees awarded to class counsel under similar circumstances in other cases of this type. The

Court determines what counsel should receive from the Settlement Fund for fees and expenses,

and may award less than this amount.

OBJECTING TO THE SETTLEMENT

You can tell the Court that you do not agree with the Settlement or some part of it.

18. How Do I Tell the Court that I Do Not Like the Settlement?

If you are a Settlement Class Member, you can object to the Settlement if you do not

like any part of it, including the Plan of Allocation and the request for attorneys’ fees. You can

state the reasons why you think the Court should not approve it, and the Court will consider

your views. To object, you must send a letter saying that you object to the Settlement in Ho, et

al. v. Duoyuan Global Water, Inc., et al. , Case No. 1:10-cv-07233 (GBD). Be sure to include

your name, address, telephone number, signature, and the number of DGW’s ADSs you

purchased and/or acquired between June 24, 2009, and April 5, 2011, inclusive. You must also

16


state the reasons you object, whether you intend to appear at the Settlement Hearing, and

identify any evidence you intend to present at the Settlement Hearing. The motions in support

of the Settlement and the request for attorneys’ fees will be filed no later than [35 days prior to

the Settlement Hearing], _____________, 2013, and they will be available from Lead Counsel,

the Claims Administrator or the Court. Their contact information is listed in Section 23, below.

Any objection must be mailed or delivered such that it is received by each of the following no

later than [21 days prior to the Settlement Hearing], _______________, 2013:

Court:

Clerk of the Court United States District Court Southern District of New York Daniel Patrick Moynihan United States Courthouse

500 Pearl Street New York, NY 10007-1312

Lead Counsel Designee:


Los Angeles, California 90067

Settling Defendants’ Counsel Designee :

Harry A. Woods, Jr. Crowe & Dunlevy, P.C. 20 North Broadway Avenue, Suite 1800 Oklahoma City, OK 73102-8273

THE COURT’S SETTLEMENT HEARING

The Court will hold a hearing to decide whether to approve the Settlement. You may

attend and you may ask to speak, but you do not have to.

17


19. When and Where Will the Court Decide Whether to Approve the

Settlement?

The Court will hold a Settlement Hearing on __________,2013, at __:__ __.m., before

The Honorable George B. Daniels, at the Daniel Patrick Moynihan United States Courthouse,

Courtroom 11A, 500 Pearl Street, New York, NY 10007-1312. At this hearing the Court will

consider whether both the Settlement and the Plan of Allocation are fair, reasonable, and

adequate. If there are objections, the Court will consider them. The Court will also consider

how much to pay to Lead Counsel as fees and expenses reimbursement and whether to

reimburse the Lead Plaintiffs for any of their expenses. The Court may decide these issues at

the hearing or take them under consideration for a later decision.

20. Do I Have to Come to the Hearing?

No, unless you object to the proposed Settlement or any part of it, including the Plan of

Allocation and the request for attorneys’ fees. If you do not object, you do not need to attend,

but you are welcome to do so at your own expense. You may also pay your own lawyer to

attend, but it is not necessary. If you send an objection, you or your lawyer will be given an

opportunity to be heard regarding your objection. If you object, but do not appear at the

Settlement Hearing, either in person or through counsel, the Court may or may not consider

your objection.

21. May I Speak at the Hearing?

You may ask the Court for permission to speak at the Settlement Hearing. To do so, you

must send a letter saying that it is your intention to appear in as Ho, et al. v. Duoyuan Global

Water, Inc., et al. , Case No. 1:10-cv-07233 (GBD). Be sure to include your name, address,

telephone number, your signature, the number of DGW ADSs purchased and/or acquired

18


between June 24, 2009, and April 5, 2011, inclusive. Your notice of intention to appear must be

received no later than [21 days prior to the Settlement Hearing], _____________, 2013, by the

Clerk of the Court, Lead Counsel Designee and the Settling Defendants’ Counsel Designee, at

the three addresses listed in question 18.

IF YOU DO NOTHING

22. What Happens if I Do Nothing at All?

If you do nothing, all of your claims against the Settling Defendants will be released, but

you will not receive any money from this Settlement because it is necessary to submit a Proof of

Claim and Release form.

GETTING MORE INFORMATION

23. Are There More Details About the Settlement?

This Notice summarizes the proposed Settlement. More details are in the Stipulation

and Agreement of Settlement dated as of August __, 2013. You can obtain a copy of the

Stipulation and Agreement of Settlement or more information about the Settlement by

contacting Lead Counsel:



or the Claims Administrator:



19


or by visiting www.gcginc.com/cases/DuoyuanGlobalWater

You can also obtain a copy from the Clerk’s office during regular business hours:

Clerk of the Court United States District Court Southern District of New York Daniel Patrick Moynihan United States Courthouse

500 Pearl Street New York, NY 10007-1312

UNDERSTANDING YOUR PAYMENT

The Net Settlement Fund shall be distributed to Settlement Class Members who submit

acceptable Proofs of Claim (“Authorized Claimants”) in the following manner:

a. The Claims Administrator shall determine each Authorized Claimant’s share of

the Net Settlement Fund based upon the recognized loss formula (the “Recognized Loss”)

described below. The Recognized Loss formula is intended to equitably apportion the Net

Settlement Fund among Settlement Class Members. The Recognized Loss formula, which is

also known as the Plan of Allocation, is not an estimate of what a Settlement Class Member

would have recovered after trial; nor is it the amount that the Authorized Claimant will be paid

pursuant to the Settlement.

b. A Settlement Class Member’s actual share of the Net Settlement Fund will be

determined by the ratio of the Settlement Class Member’s Recognized Loss divided by the

aggregate of the Recognized Loss of all Settlement Class Members.

c. This Plan of Allocation is based on the following general principles applicable to

Settlement Class Members if the Litigation had gone to trial:

i. Plaintiffs asserted claims pursuant to Section 10(b) of the Securities

Exchange Act of 1934 (“Section 10(b)”). Damages under Section 10(b) are calculated, among

20


other things, by determining the ADS price drop caused by the disclosure of information

correcting prior materially false and misleading statements or reflecting materializations of risks

which were a foreseeable consequence of the alleged concealment.

ii. Plaintiffs asserted claims pursuant to Section 11 of the Securities Act of

1933 (“Section 11”). Damages under Section 11 are calculated, among other things, by

determining the difference between the price paid for the ADS (not exceeding the IPO price)

and: (i) the price at which it was sold prior to the filing of the Litigation or (ii) the value at the

time the Litigation was filed.

d. Plan of Allocation details:

For shares of DGW’s ADSs purchased or otherwise acquired between June 24, 2009 and April 5,

2011:

A. For shares held at the end of trading on April 5, 2011, the Recognized Loss shall be that

number of shares multiplied by the lesser of:

(1) the applicable purchase date artificial inflation per share figure, as found in Table

A; or

(2) the difference between the purchase price per share and $3.21.

B. For shares sold between June 24, 2009 and April 5, 2011, the Recognized Loss shall be

that number of shares multiplied by the lesser of:

(1) the applicable purchase date artificial inflation per share figure less the applicable

sales date artificial inflation per share figure, as found in Table A; or

(2) the difference between the purchase price per share and the sales price per share.

21


Table A

Purchase or Sale Date Range 06/24/2009 – 09/10/2010 09/13/2010 – 10/22/2010 10/25/2010 – 03/22/2011 03/23/2011 – 04/01/2011 04/04/2011 04/05/2011

Artificial Inflation Per Share $12.57 $ 3.97 $ 3.24 $ 2.28 $ 0.78 $ 0.00

For purchasers between June 24, 2009 and January 27, 2010, the Recognized Loss as

calculated above shall be multiplied by 1.05. This adjustment is in recognition of the fact that

the Court upheld claims asserted by these purchasers under both Section 10(b) of the Securities

Exchange Act of 1934 and Section 11 of the Securities Act of 1933. Purchasers could not

collect damages under both claims even if proven at trial. However, Section 11 claims, as

opposed to Section 10(b) claims, do not require evidence of fraudulent or reckless intent, and

accordingly would likely be easier to prove at trial.

e. A purchase or sale of DGW’s ADSs shall be deemed to have occurred on the

“contract” or “trade” date as opposed to the “settlement” or “payment” date.

f. The receipt or grant by gift, devise or operation of law of DGW’s ADSs during

the Settlement Class Period shall not be deemed a purchase or sale of DGW’s ADSs for the

calculation of an Authorized Claimant’s Recognized Loss nor shall it be deemed an assignment

of any claim relating to the purchase of such securities. The grantor of the gift or devise, who

purchased DGW’s ADSs during the Settlement Class Period, shall retain the right to file a claim

in this Litigation unless that right to file a claim was specifically transferred in the instrument of

gift or assignment.

22


g. The receipt of DGW’s ADSs during the Settlement Class Period in exchange for

securities of any other corporation or entity shall not be deemed a purchase or sale of DGW’s

ADSs.

h. Any gains on sales of DGW’s ADSs shall be offset against losses in calculating

the Recognized Loss. To the extent a Claimant had an overall gain from transactions in DGW’s

ADSs during the Settlement Class Period, the value of the Recognized Loss will be zero.

i. No Authorized Claimant whose proportionate share of the Net Settlement Fund

is less than $10.00 shall receive a distribution from the Net Settlement Fund. Rather, that

Claimant’s proportionate share of the Net Settlement Fund shall be redistributed among all

remaining Authorized Claimants.

j. Settlement Class Members who do not submit a timely request for exclusion and

do not submit an acceptable Proof of Claim by the deadline for submitting claims, will not share

in the recovery, but nevertheless will be bound by the Settlement and the Order and Final

Judgment of the Court dismissing this Litigation.

k. Distributions will be made to Authorized Claimants after all claims have been

processed and after the Court has finally approved the Settlement.

DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE

23


SPECIAL NOTICE TO NOMINEES

The Court has ordered that if you held any ADSs of DGW purchased or acquired

between June 24, 2009, and April 5, 2011, inclusive, as nominee for a beneficial owner, then,

within fourteen (14) days after you receive this Notice, you must either: (1) forward a copy of

this Notice to all such Persons; or (2) provide a list of the names and addresses of such Persons

to the Claims Administrator, at the following address:



If you choose to mail the Notice and Proof of Claim and Release yourself, you may

obtain from the Claims Administrator (without cost to you) as many additional copies of these

documents as you will need to complete the mailing.

Regardless of whether you choose to complete the mailing yourself or elect to have the

mailing performed for you, you may obtain reimbursement for administrative costs actually

incurred in connection with forwarding the Notice and which would not have been incurred but

for the obligation to forward the Notice, upon submission of appropriate documentation to the

Claims Administrator.

24



HOI MING MICHAEL HO, et al., Individually and on Behalf of All Others Similarly Situated,

Plaintiffs,


Defendants.

Case No. 10-cv-07233 GBD

ECF Case

Exhibit A-3 2

SUMMARY NOTICE


TO: ALL PERSONS OR ENTITIES WHO PURCHASED OR ACQUIRED DUOYUAN GLOBAL WATER, INC.’S AMERICAN DEPOSITORY SHARES BETWEEN JUNE

24, 2009, AND APRIL 5, 2011, INCLUSIVE.

YOU ARE HEREBY NOTIFIED, pursuant to an Order of the United States District

Court for the Southern District of New York, that a hearing will be held on __________, 2013,

at __:__ __.m., before the Honorable George B. Daniels, at the Daniel Patrick Moynihan United

States Courthouse, Courtroom 11A, 500 Pearl Street, New York, NY 10007-1312, for the

purpose of determining: (1) whether the proposed Settlement of the claims in the Litigation for

the sum of $5,150,000.00 in cash should be approved by the Court as fair, reasonable, and

adequate to Members of the Settlement Class; (2) whether to certify the Settlement Class; (3)

whether, thereafter, this Litigation should be dismissed with prejudice pursuant to the terms and

conditions set forth in the Stipulation and Agreement of Settlement dated September 10, 2013;

(4) whether the proposed plan to distribute the settlement proceeds (the “Plan of Allocation”) is

fair, reasonable, and adequate and therefore should be approved; and (5) whether the application

of Lead Counsel for the payment of attorneys’ fees and expenses incurred in connection with

this Litigation, as well as Lead Plaintiff reimbursement, should be approved. If you purchased

or acquired Duoyuan Global Water, Inc.’s American Depository Shares between June 24, 2009,

and April 5, 2011, inclusive, your rights may be affected by this Settlement. If you have not

received a detailed Notice of Proposed Settlement of Class Action, Motion for Attorneys’ Fees

and Expenses, and Settlement Fairness Hearing (the “Notice”) and a copy of the Proof of Claim

and Release, you may obtain copies by writing to Duoyuan Global Water Settlement , c/o GCG,

Po Box 9349, Dublin, OH 43017-4249, or you can download a copy at

www.gcginc.com/cases/DuoyuanGlobalWater . If you are a Settlement Class Member, in order

to share in the distribution of the Net Settlement Fund, you must submit a Proof of Claim and


Release postmarked no later than ____________, 2013, establishing that you are entitled to

recovery.

PLEASE DO NOT CONTACT THE COURT OR THE CLERK’S OFFICE REGARDING

THIS NOTICE. If you have any questions about the Settlement, you may contact Lead Counsel

at the address listed below:

Lionel Z. Glancy Esq. Glancy Binkow & Goldberg LLP 1925 Century Park East, Suite 2100


or go to the following website: www.gcginc.com/cases/DuoyuanGlobalWater

DATED:



HOT MING MICHAEL HO, et al., Individually Case No. 10-cv-07233 GBD and on Behalf of All Others Similarly Situated,

ECF Case Plaintiffs,

Exhibit A-3 DUOYUAN GLOBAL WATER, INC., et al.,

Defendants.

PROOF OF CLAIM AND RELEASE


Must Postmarked I • I DGW•

No Later Than Duoyuan Global Water Settlement IIOII V Oil VI IH Ill 100 IIll II II 0 0 I 0I ii do GCG 2013 P.O. Box 9349

Dublin, OH 43017- 4249 1-800-231-1815 (Toll-Free)

www.gcginc.com!cases/DuoyuanGlobalWater

Claim Number:

Control Number:

PROOF OF CLAIM AND RELEASE

TO BE ELIGIBLE TO RECEIVE A SHARE OF THE NET SETTLEMENT FUND IN CONNECTION WITH THE SETTLEMENT OF THIS ACTION, YOU MUST MAIL YOUR COMPLETED AND SIGNED CLAIM FORM TO THE CLAIMS ADMINISTRATOR BY FIRST-CLASS MAIL, POSTAGE PREPAID, POSTMARKED BY

TO THE ADDRESS SET FORTH AT THE TOP OF THIS PAGE.

IF YOU FAIL TO SUBMITATIMELY, PROPERLYADDRESSED, AND COMPLETED CLAIM FORM, YOUR CLAIM MAY BE REJECTED AND YOU MAY BE PRECLUDED FROM RECEIVING ANY PROCEEDS FROM THE SETTLEMENT.

DO NOT MAIL OR DELIVER YOUR CLAIM FORM TO THE COURT, THE SETTLING PARTIES OR THEIR COUNSEL. SUBMIT YOUR CLAIM FORM ONLY TO THE CLAIMS ADMINISTRATOR AT THE ADDRESS SET FORTH ABOVE.

TABLE OF CONTENTS PAGE NO.

PART I - CLAIMANT IDENTIFICATION ..................................................................................................... 2

PART II- SCHEDULE OF TRANSACTIONS IN DUOYUAN GLOBAL WATER, INC. ADSs....................3

PART III - SUBMISSION TO JURISDICTION OF COURT ......................................................................... 4

PARTIV - RELEASE .................................................................................................................................. 4

PART V - CERTIFICATION......................................................................................................................... 5

REMINDER CHECKLIST............................................................................................................................ 6

Important - This form should be completed IN CAPITAL LETTERS using BLACK or DARK BLUE ballpoint/fountain pen. Characters and marks used should be similar in the style to the following:

A BCbEFGHIJKLMNOPQRSTUVWXYZ1 2345670

U U


• I IIOII P 01101 I0 III 100 IIII II II 0001 0I II PART I - CLAIMANT IDENTIFICATION

LAST NAME (CLAIMANT)

FIRST NAME (CLAIMANT)

Last Name (Beneficial Owner if Different From Claimant)

First Name (Beneficial Owner)

Last Four Digits of the Beneficial Owner's Employer Identification Number or Social Security Number"

Last Name (Co-Beneficial Owner)

Company/Other Entity (If Claimant Is Not an Individual)

Trustee/Nominee/Other

Account Number (If Claimant Is Not an Individual)

Address Line I

Address Line 2 (If Applicable)

City

Foreign Province

Telephone Number (Day)

First Name (Co-Beneficial Owner)

Contact Person (If Claimant is Not an Individual)

Trust/Other Date (if Applicable)

State

Zip Code

Foreign Country

Foreign Zip Code

Telephone Number (Night)

Email Address (Email address is not required, but if you provide it you authorize the Claims Administrator to use it In providing you with Infonnation relevant to this claim.)

IDENTITY OF CLAIMANT (check only one box):

Individual Joint Owners Estate Corporation Trust Partnership

Private Pension Fund Legal Representative

IRA, Keogh, or other type of Individual retirement plan (indicate type of plan, mailing address, and name of current custodian)

Other (specify, describe on separate sheet)

NOTICE REGARDING ELECTRONIC FILES: Certain claimants with large numbers of transactions may request to, or may be requested to, submit information regarding their transactions in electronic files. To obtain the mandatory electronic filing requirements and file layout, you may visit the settlement website at www gcginc.com/cases/DuoyuanGIobal Water or you may e-mail the Claims Administrator's electronic filing department at eClaimgcginc.com . Any file not in accordance with the required electronic filing formatwill be subject to rejection. No electronic files will be considered to have been properly submitted unless the Claims Administrator issues an email after processing your file with your claim numbers and respective account information. Do not assume that your file has been received or processed until you receive this email. If you do not receive such an email within 10 days of your submission, you should contact the electronic filing department at eClaimgcginc.com to inquire about your file and confirm it was received and acceptable.

To view GCG's Privacy Notice, please visit http://www.gcginc.com/pages/privacy-policy.php

'The last four digits of the taxpayer identification number (TIN), consisting of a valid Social Security Number (SSN) for individuals or Employer Identification Number (EIN) for business entities, trusts, estates, etc., and telephone number of the beneficial Owner(s) maybe used in verifying this claim.


U

IIOII 001101 IO Ill 100 IIII II II 0 01100 II • PART II - SCHEDULE OF TRANSACTIONS IN DUOYUAN GLOBAL WATER, INC. ADSs

A. Purchases/Acquisitions: List purchases of Duoyuan Global Water, Inc. American Depository Shares ("ADS5") made between June 24, 2009 through April 5, 2011, inclusive (Must be documented):

B. Sales: List sales of Duoyuan Global Water, Inc. ADSs made between June 24, 2009 and April 5, 2011, inclusive (Must be documented):

C. Unsold Holdings: Number of Duoyuan Global Water, Inc. ADSs held at the close of trading on April 5, 2011. If none, write "zero" or 0". (Must be documented if other than zero).

ADSs

IF YOU NEED ADDITIONAL SPACE TO LIST YOUR TRANSACTIONS YOU MUST PHOTOCOPY THIS PAGE AND CHECK THIS BOX

0 IF YOU DO NOT CHECK THIS BOX THESE ADDITIONAL PAGES WILL NOT BE REVIEWED 0


.

I IIII P PuP! IP III I IIII II II P H II II II PART lii - SUBMISSION TO JURISDICTION OF COURT

I (We) submit this Proof of Claim and Release under the terms of the Stipulation and Agreement of Settlement dated as of (Stipulation") described herein. I (We) also submit to the jurisdiction of the United States District Court, Southern District of New York, with respect to my (our) claim as a Settlement Class Member and for purposes of enforcing the release set forth herein. I (We) further acknowledge that I am (we are) bound by and subject to the terms of any judgment that may be entered in the Litigation. I (We) agree to furnish additional information to Counsel or the Claims Administrator to support this claim if required to do so. I (We) have not submitted any other claim covering the same purchases or sales of Duoyuan Global Water, Inc. ADSs during the Settlement Class Period and know of no other Person having done so on my (our) behalf.

PART IV - RELEASE

1. This Proof of Claim and Release form incorporates by reference the definitions in the Stipulation and all terms used herein shall have the same meanings as set forth in the Stipulation.

2. I (We) hereby acknowledge full and complete satisfaction of, and do hereby fully, finally, and forever settle, release, relinquish and discharge, (1) all of the Released Claims against each and all of the Defendants and all of the Released Persons and (2) any and all claims arising from the institution and prosecution of this Action against each and all of the Released Parties.

a. "Released Claims" means any and all claims, demands, losses, rights, causes of action, liabilities, obligations, judgments, suits, matters and issues of any kind or nature whatsoever, whether known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, that have been or could have been asserted in the Litigation or in any court, tribunal, forum or proceeding (including, but not limited to, any claims arising under federal, state or foreign law, common law, statute, rule or regulation relating to alleged fraud, breach of any duty, negligence, violations of the federal securities laws, or otherwise), whether individual or class, arising from or relating to the purchase, acquisition, sale, or holding, during the Settlement Class Period, of any securities issued by DGW, including DGW's ADSs, and the acts, facts, statements, or omissions that were or could have been alleged by Plaintiffs in the Litigation, as against any and/or all Defendants and any and/or all of their Related Persons. "Released Claims" excludes any claims to enforce the Settlement.

b. "Released Defendants' Claims" means any and all claims, demands, losses, rights, causes of action, liabilities, obligations, judgments, suits, matters and issues of any kind or nature whatsoever, whether known or Unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, that have been or could have been asserted in the Litigation or in any court, tribunal, forum or proceeding, by any of the Defendants, or their successors, assigns, executors, administrators, representatives, attorneys, agents, affiliates, and partners, and any Persons they represent or any of them, whether brought directly or indirectly against the Lead Plaintiffs, Settlement Class Members, their attorneys, and/or any of their Related Persons, which arise out of or relate in any way to the institution, prosecution, or Settlement of the Litigation. "Released Defendants' Claims" excludes any claims to enforce the Settlement.

C. "Released Persons" means

i. with respect to Plaintiffs ('Plaintiffs' Released Persons"): each and all of Plaintiffs and each and all of their Related Persons; and

with respect to Defendants ("Defendants' Released Persons"): each and all of Defendants and each and all of their Related Persons.

d. "Related Persons" means

(i) with respect to Plaintiffs: each and all of the Lead Plaintiffs, each and all of the Plaintiffs, and each and all of their respective present and former parents, subsidiaries, divisions, joint ventures, and affiliates, and each of their respective present and former employees, members, general and limited partners and their partnerships, principals, officers, directors, attorneys, advisors, accountants, auditors, financial advisors, commercial bank lenders, insurers, underwriters, investment bankers, representatives, and insurers; and the predecessors, successors, spouses, estates, heirs, executors, trusts, trustees, administrators, agents, fiduciaries, consultants, representatives and assigns of each of them, in their capacity as such; and any trust of which any Person described in this subparagraph is the settlor or which is for the benefit of any Person described in this subparagraph and/or member(s) of his or her family; and any entity in which any Person described in this subparagraph has a controlling interest; and

(ii) with respect to Defendants: each and all of the Defendants, and each and all of their respective present and former parents, subsidiaries, divisions, joint ventures, and affiliates, and each of their respective present and former employees, members, general and limited partners and their partnerships, principals, officers, directors, attorneys, advisors, accountants, auditors, financial advisors, commercial bank lenders, insurers, underwriters, investment bankers, representatives, and insurers; and the predecessors, successors, spouses, estates, heirs, executors, trusts, trustees, administrators, agents, fiduciaries, consultants, representatives and assigns of each of them, in their capacity as such; and any trust of which any Person described in this subparagraph is the settlor or which is for the benefit of any Person described in this subparagraph and/or member(s) of his or her family; and any entity in which any Person described in this subparagraph has a controlling interest

e. "Unknown Claims" means any Released Claims which Plaintiffs or any Settlement Class Members do not know or suspect to exist -- as well as Released Defendants' Claims that Defendants do not know or suspect to exist -- in his, her, or its respective favor at the time of the release, regardless of whether such Released Claim or Released Defendants' Claim, if known by him, her, or it, might have affected his, her, or its settlement with and release of the claim, or might have affected his, her, or its decision not to object to this Settlement.

U


U

I IIOII 001101 IH III I0 IIII II II 0 0 I I0 II With respect to any and all Unknown Claims, the Settling Parties stipulate and agree that, upon the Effective Date, they shall expressly waive, and each of the Settlement Class Members shall be deemed to have waived (by operation of the Final Judgment), to the fullest extent permitted by law the provisions, rights, and benefits of California Civil Code § 1542, which provides:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

The Settling Parties shall expressly waive, and each of the Settlement Class Members shall be deemed to have waived (by operation of the Final Judgment), any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable, or equivalent to California Civil Code § 1542. The Settling Parties and Settlement Class Members may hereafter discover facts in addition to or different from those which he, she, or it now knows or believes to be true with respect to the subject matter of the Released Claims and Released Defendants' Claims, but they shall expressly, and each Settlement Class Member, upon the Effective Date, shall be deemed to have, and by operation of the Final Judgment shall have, fully, finally, and forever settled and released any and all Released Claims and Released Defendants' Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct that is negligent, intentional, with or without malice, or a breach of any duty, law, or rule, without regard to the subsequent discovery or existence of such different or additional facts. The Settling Parties acknowledge, and the Settlement Class Members shall be deemed by operation of the Final Judgment to have acknowledged, that the foregoing waiver was separately bargained for and a key element of the Settlement of which this release is a part.

3. This Release shall be of no force or effect unless and until the Court approves the Settlement and it becomes effective on the Effective Date.

4. 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.

PART V - CERTIFICATION

Under penalty of perjury, I (we) hereby certify and represent that I (we) have included information about all of my (our) transactions in Duoyuan Global Water, Inc. ADSs that occurred during the Settlement Class Period as well as the number of shares of Duoyuan Global Water, Inc. ADSs held by me (us) at the close of trading on April 5, 2011. By executing this certification, I (we) acknowledge and agree to be bound by the Release and the Submission to Jurisdiction of Court set forth above.

Executed this _____ day of in (Month) (Year) (City, State, Country)

Signature of Claimant

Date

Print your name here

Signature of Joint Claimant, if any

Date

Print your name here

Capacity of person signing on behalf of Claimant, if other than an individual, e.g., executor, president, custodian, etc.

U U


U

I 11111111111111111111111111111111111111111111111111111111111111111 0 REMINDER CHECKLIST

1. Please sign the claim form at Part V above.

2. Remember to attach supporting documentation, if available.

3. For an overview of what constitutes adequate supporting documentation please visit www.gcginc.comlcases/DuoyuanGlobalWater to view "Acceptable Forms of Documentation".

4. Do not send original of any supporting documents.

5. Keep a copy of your claim form for your records.

6. The Claims Administrator will acknowledge receipt of your Proof of Claim Form and Release within 60 days. Your claim is not deemed filed until you receive an acknowledgment postcard or e-mail. If you do not receive a written acknowledgment within 60 days, please call the Claims Administrator toll-free at 1-800-231-1815.

7. If you move, please send us your new address to:

Duoyuan Global Water Settlement do GCG

P.O. Box 9349 Dublin, OH 43017- 4249

8. Do not use highlighter on the Proof of Claim form or supporting documentation.

THIS PROOF OF CLAIM FORM MUST BE POSTMARKED NO LATER THAN AND MAILED TO:

Duoyuan Global Water Settlement do GCG

P.O. Box 9349 Dublin, OH 43017- 4249

0 0



HOT MING MICHAEL HO, et al.,

Plaintiffs,

VS. Civil Action No. 1:10-cv-07233 (GBD)

DUOYUAN GLOBAL WATER, INC., EXHIBIT B - [PROPOSED] et al., FINAL JUDGMENT

)

Defendants. )

[PROPOSED] FINAL JUDGMENT

On the day of , 2013, a hearing having been held before this Court to

determine: (1) whether the terms and conditions of the Stipulation and Agreement of Settlement

dated September 10, 2013 (the "Stipulation") are fair, reasonable and adequate for the settlement

of all claims against defendants Duoyuan Global Water, Inc. ("DGW"), Wenhua Guo, Stephen

Park, Charles V. Firlotte, Christopher P. Holbert, Joan M. Larrea, Thomas S. Rooney Jr.,

Yuefeng Yu, Piper Jaffray & Co., Oppenheimer & Co. Inc., Janney Montgomery Scott LLC,

Global Environment Fund ("GEF"), and GEEMF III Holdings MU ("GEEMF") (collectively, the

"Settling Defendants"), Ping Wei, Credit Suisse Securities (USA) LLC, Macquarie Capital

(USA) Inc., Rodman & Renshaw, LLC (collectively, with the Settling Defendants, the

"Defendants"); (2) whether judgment should be entered dismissing the claims in the Corrected

Amended Complaint (the "Complaint") against the Defendants, on the merits and with prejudice,

of Plaintiffs and all Persons or entities who are members of the Settlement Class and have not

requested exclusion therefrom; (3) whether to approve the proposed Plan of Distribution

(described in the Notice) as a fair and reasonable method to allocate the settlement proceeds


among members of the Settlement Class; and (4) whether and in what amount to award fees and

reimbursement of expenses to Lead Counsel and reimbursement to Lead Plaintiffs;

The Court having considered all matters submitted to it at the hearing and otherwise; and

It appearing that notice of the Final Approval Hearing, and the issues to be considered

therein, was provided to potential Settlement Class Members in the forms approved in the

Preliminary Approval Order dated -, 2013, including by mail to all reasonably

identifiable potential Settlement Class Members and otherwise by publication;

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED

THAT:

1. This Court has jurisdiction over the subject matter of the Litigation, Plaintiffs, all

Settlement Class Members, and the Defendants.

2. All capitalized terms used herein shall have the same meaning as in the

Stipulation.

3. The Court finds that the prerequisites for a class action under Rule 23 (a) and

(b)(3) of the Federal Rules of Civil Procedure have been satisfied, for settlement purposes only,

in that: (a) the number of Settlement Class Members is so numerous that joinder of all members

thereof is impracticable; (b) there are questions of law and fact common to the Settlement Class;

(c) the claims of the Lead Plaintiffs are typical of the claims of the Settlement Class they seek to

represent; (d) Lead Plaintiffs fairly and adequately represent the interests of the Settlement Class;

(e) the questions of law and fact common to the members of the Settlement Class predominate

over any questions affecting only individual members of the Settlement Class; and (1) a class

action is superior to other available methods for the fair and efficient adjudication of the

controversy.

2


4. Pursuant to Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure and for

purposes of the Settlement only, the Court hereby certifies this action as a class action on behalf

of all Persons who purchased or otherwise acquired DGW ADSs in or traceable to the IPO or

SPO, as well as all Persons who purchased on the open market or otherwise acquired DGW

ADSs between June 24, 2009 and April 5, 2011, inclusive; provided that excluded from the

Settlement Class are (a) any putative members of the Settlement Class who submitted valid and

timely requests for exclusion from the Settlement Class in accordance with the requirements set

forth in the Notice and Rule 23 of the Federal Rules of Civil Procedure; and (b) Defendants,

members of the immediate family of any such Defendant, any parent or subsidiary of any such

Defendant, any person, firm, trust, corporation, officer, director, or other individual or entity in

which any Defendant has or had a controlling interest during the Settlement Class Period, the

officers and directors of any Defendant during the Settlement Class Period, and legal


The Defendants or any entity in which any of the Defendants has or had a controlling interest

(for purposes of this paragraph, together a "Defendant-Controlled Entity") are excluded from the

Settlement Class only to the extent that such Defendant-Controlled Entity itself purchased a

proprietary (i.e., for its own account) interest in DGW ADSs. To the extent that a Defendant-

Controlled Entity purchased any DGW ADSs in a fiduciary capacity or otherwise on behalf of

any third-party client, account, fund, trust, or employee benefit plan that otherwise falls within

the Settlement Class, neither such Defendant-Controlled Entity nor the third-party client,

account, fund, trust, or employee benefit plan shall be excluded from the Settlement Class with

respect to such purchase.

3


5. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, and for purposes of

the Settlement only, Lead Plaintiffs are certified as class representatives and the Lead Counsel

previously selected by Lead Plaintiffs and appointed by the Court are hereby appointed as Lead

Counsel for the Settlement Class.

6. The Stipulation, which is incorporated and made a part of this Order and Final

Judgment, is approved as fair, reasonable, and adequate, and in the best interests of the

Settlement Class. Lead Plaintiffs and the Settling Defendants are directed to consummate the

Settlement in accordance with the terms and provisions set forth in the Stipulation.

7. All claims made in the Litigation as to all Defendants are hereby dismissed with

prejudice and without costs.

8. Upon the Effective Date hereof, Plaintiffs and each of the Settlement Class

Members on behalf of themselves, their current or former heirs, joint tenants, tenants in common,

beneficiaries, executors, administrators, successors, attorneys, insurers and assigns, and any

person they represent, hereby release and forever discharge, and shall be deemed to have

released, dismissed and forever discharged, the Released Claims against each and all of the

Defendants' Released Persons, with prejudice and on the merits, without costs to any party.

Further, Lead Plaintiffs and all Settlement Class Members, on behalf of themselves, their current

and former heirs, joint tenants, tenants in common, beneficiaries, executors, administrators,

successors, attorneys, insurers and assigns, and any person they represent, expressly covenant not

to assert any claim or action against any of the Defendants' Released Persons, or any of their

agents, insurers, or their re-insurers, or derivatively on behalf of DGW, that (a) arises out of or

relates to any of the allegations, transactions, facts, matters, events, acts, representations or

omissions asserted, set forth, or referred to in the Complaint or otherwise alleged, asserted, or

4


contended in the Litigation, or (b) could have been alleged, asserted or contended in any forum

by the Plaintiffs, Settlement Class or any of the Settlement Class Members against any of the

Defendants' Released Persons which arises out of, relates to, or is based upon any of the

allegations, transactions, facts, matters, events, acts, representations, or omissions asserted, set

forth, or referred to in the Complaint, or otherwise alleged, asserted, or contended in the

Litigation; and such Persons shall forever be barred and enjoined from the assertion, institution,

maintenance, prosecution, or enforcement against any of Defendants' Released Persons, in any

state or federal court or arbitral forum, or in the court of any foreign jurisdiction, of any and all

such claims as well as any and all claims arising out of, relating to, or in connection with the

defense, settlement, or resolution of the Litigation or the Released Claims. Plaintiffs and all

Settlement Class Members, whether or not any such person submits a Proof of Claim and

Release, or otherwise shares in the Settlement Fund, on behalf of themselves and each of their

current or former heirs, joint tenants, tenants in common, beneficiaries, executors,

administrators, predecessors, successors, insurers, assigns, personal representatives, heirs, any

person they represent, and any other person who purports to claim through them, are hereby

deemed by this Final Judgment to have released and forever discharged the Defendants'

Released Persons from any and all of the Released Claims.

9. Upon the Effective Date hereof, each of the Defendants' Released Persons shall

be deemed to have, and by operation of this Final Judgment shall have, fully, finally, and forever

released, relinquished and discharged the Lead Plaintiffs, each and all of the Settlement Class

Members, and Plaintiffs' counsel (including Lead Counsel) from all claims (including Unknown

Claims and Released Defendants' Claims), arising out of, relating to, or in connection with the

institution, prosecution, assertion, settlement or resolution of the Litigation.

61


10. Plaintiffs and all Settlement Class Members, and anyone claiming through or on

behalf of any of them, are forever barred and enjoined from commencing, instituting,

prosecuting, or continuing to prosecute any action or other proceeding in any court of law or

equity, arbitration tribunal, administrative forum, or other forum of any kind, asserting against

any of the Defendants' Released Persons, and each of them, any of the Released Claims.

11. In accordance with Section 21D-4(f)(7)(A) of the Private Securities Litigation

Reform Act of 1995, 15 U.S.C. § 78U-4(f)(7)(A), the Defendants are discharged and/or released

from all claims for contribution that have been or may be brought by or on behalf of any Persons

relating to the Settlement of the Released Claims. As of the Effective Date, any and all Persons

are forever barred and enjoined from commencing, instituting, prosecuting, or continuing to

prosecute any action or proceeding asserting any such claim for contribution.

12. Neither this Final Judgment, nor the Stipulation, nor any of the negotiations,

documents, or proceedings connected with them shall be:

(a) referred to or used against the Defendants' Released Persons or against the

Settlement Class and Plaintiffs' Released Persons as evidence of wrongdoing by

anyone;

(b) construed against the Defendants' Released Persons as an admission or

concession that the consideration to be given hereunder represents an amount

which could be or would have been recovered after trial; or

(c) construed as, or received in evidence as, an admission, concession or presumption

against the Settlement Class or any of the Settlement Class Members, that any of

their claims are without merit, or that damages recoverable under the Complaint

would not have exceeded the Settlement Fund.


13. Exclusive jurisdiction is hereby retained over the Plaintiffs, Defendants, and

Settlement Class Members for all matters relating to the Litigation, including the administration,

interpretation, effectuation, and/or enforcement of the Stipulation and this Final Judgment, and

including any application for fees and expenses incurred in connection with administering and

distributing the settlement proceeds to the Settlement Class Members. Notwithstanding the

foregoing, the Defendants' Released Persons may file the Stipulation and/or this Final Judgment

in any action that may be brought against them in order to support a defense or counterclaim

based on principles of res judicata, collateral estoppel, release, good faith settlement, judgment

bar or reduction or any other theory of claim preclusion or issue preclusion or similar defense or

counterclaim.

14. 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.

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

immediate entry by the Clerk of the Court is directed pursuant to Rule 54(b) of the Federal Rules

of Civil Procedure.

16. The finality of this Final Judgment shall not be affected, in any manner, by rulings

that the Court may make on the Lead Counsel's application for an award of attorneys' fees and

reimbursement of expenses and/or for reimbursement awards to Lead Plaintiffs.

17. The Court hereby finds that the proposed Plan of Allocation is a fair and

reasonable method to allocate the settlement proceeds among the Settlement Class Members.

18. The Court hereby finds that the notice provided to the Settlement Class provided

the best notice practicable under the circumstances. Said notice provided due and adequate

notice of these proceedings and the matters set forth herein, including the Settlement and Plan of

7


Allocation, to all persons entitled to such notice, and said notice fully satisfied the requirements

of Rule 23 of the Federal Rules of Civil Procedure and the requirements of due process. A full

opportunity has been offered to the Settlement Class Members to object to the proposed

Settlement and to participate in the hearing thereon. Thus, it is hereby determined that all

Settlement Class Members are bound by this Final Judgment [except those persons set forth on

Exhibit A].

19. In the event that the Settlement does not become final and effective in accordance

with the terms and conditions set forth in the Stipulation, then this Final Judgment shall be

rendered null and void and be vacated, and the Settlement and all orders entered in connection

therewith shall be rendered null and void (except as provided in ¶ 1.1-1.28, 3.6-3.8, the last

sentence of 7.2, 8.4, 8.5, 9.4 and 9.5 in the Stipulation), and the parties shall be returned to their

respective positions in the Litigation as of the date the Stipulation was executed.

20. The Court finds that during the course of the Litigation and after review of the

record of this case, the Settling Parties and their respective counsel at all times complied with the

requirements of Federal Rule of Civil Procedure 11 and particularly with Rule 11(b) of the

Federal Rules of Civil Procedure.

21. In the event that the Settlement does not become effective in accordance with the

terms of the Stipulation or the Effective Date does not occur, then this Judgment shall be

rendered null and void and shall be vacated and, in such event, all orders entered and releases

delivered in connection herewith shall be null and void.

22. The Court hereby GRANTS Lead Counsel's attorneys' fees of % of

the Settlement Fund and expenses in an amount of $____________ together with the interest

earned thereon for the same time period and at the same rate as that earned on the Settlement

8


Fund until paid. Said fees shall be allocated by Lead Counsel among Plaintiffs' counsel in a

manner which, in Lead Counsel's good-faith judgment, reflects each counsel's contribution to

the institution, prosecution and resolution of the Litigation. The Court finds that the amount of

fees awarded is fair and reasonable in light of the time and labor required, the novelty and

difficulty of the case, the skill required to prosecute the case, the experience and ability of the

attorneys, awards in similar cases, the contingent nature of the representation and the result

obtained for the Settlement Class.

23. The awarded attorneys' fees and expenses, and interest earned thereon, shall be

paid to Lead Counsel and Lead Plaintiffs from the Settlement Fund immediately after the date

this Order is executed subject to the terms, conditions, and obligations of the Stipulation, which

terms, conditions, and obligations are incorporated herein.

Dated: .2013

Hon. George B. Daniels UNITED STATES DISTRICT JUDGE

mingli li, et al. v. duoyuan global water, inc., et al. 10...

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