FILED: NEW YORK COUNTY CLERK 05/23/2012 INDEX NO /2010 NYSCEF DOC. NO. 166 RECEIVED NYSCEF: 05/23/2012

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1 FILED NEW YORK COUNTY CLERK 05/23/2012 INDEX NO /2010 NYSCEF DOC. NO. 166 RECEIVED NYSCEF 05/23/2012 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK NEW MILLENIUM CAPITAL PARTNERS III, LLC, NEW MILLENIUM CAPITAL PARTNERS II, LLC, AJW PARTNERS, LLC, AJW OFFSHORE, LTD., AJW QUALIFIED PARTNERS, LLC, AJW MASTER FUND, LTD., AJW PARTNERS II LLC, AJW OFFSHORE II, LTD., AJW QUALIFIED PARTNERS II, LLC and AJW MASTER FUND II, LTD., -against- SYSTEMS EVOLUTION, INC., SYSTEMS EVOLUTION, INC., -against- Plaintiffs, Defendant. Counterclaim and Third- Party Plaintiff, NEW MILLENIUM CAPITAL PARTNERS III, LLC, NEW MILLENIUM CAPITAL PARTNERS II, LLC, AJW PARTNERS, LLC, AJW OFFSHORE, LTD., AJW QUALIFIED PARTNERS, LLC, AJW MASTER FUND, LTD., AJW PARTNERS II LLC, AJW OFFSHORE II, LTD., AJW QUALIFIED PARTNERS II, LLC and AJW MASTER FUND II, LTD., Counterclaim Defendants, COREY RIBOTSKY, N.I.R. GROUP, LLC, STEVEN HUMPHRIES, CABAL COMMUNICATIONS CORP. (f/k/a Dealer Advance, Inc.), STI GROUP, INC., MONARCH BAY CAPITAL GROUP, LLC and DAVID WALTERS, Third-Party Defendants. X X X X Index No /2010 IAS Part 54 (Kornreich, J.)

2 AFFIRMATION OF VINCENT T. CHANG IN SUPPORT OF ORDER TO SHOW CAUSE BY THIRD PARTY DEFENDANTS ATTORNEYS TO WITHDRAW VINCENT T. CHANG hereby affirms under penalty of perjury that 1. I am an attorney-at-law licensed to practice in the State of New York and am fully familiar with the facts and circumstances in this proceeding. I state the following upon personal knowledge except for those things stated upon information and belief. With statements made upon information and belief, I believe they are true to the best of my knowledge. 2. I am attorney of record for each of the Third-Party Defendants STI Group, Inc., Monarch Bay Capital Group, LLC and David Walters (collectively referred to as the Third- Party Defendants ) and am co-counsel with Steven B. Shapiro. I submit this affirmation in support of my application and that of Steven B. Shapiro to withdraw as attorneys of record for the Third-Party Defendants. 3. On February 4, 2011, Wollmuth Maher & Deutsch LLP entered into a retainer agreement with STI Group, Inc., Monarch Bay Capital Group, LLC and David Walters in the instant matter (the Systems Evolution Retainer Agreement ). Wollmuth Maher & Deutsch LLP and Steven B. Shapiro were both retained by the Third-Party Defendants to be attorney-of-record of STI Group, Inc., Monarch Bay Capital Group, LLC and David Walters. (A copy of the Systems Evolution Retainer Agreement is attached hereto as EXHIBIT A). 4. Incorporated in the retainer agreements was a provision reserving the attorneys right to withdraw from this litigation in the event of non-payment of fees. 5. Third-Party Defendants have failed to pay certain invoices of Wollmuth Maher & Deutsch LLP and Steven B. Shapiro dating back to June 16, Despite repeated requests, Third-Party Defendants have provided no timetable for the payment of the total outstanding 2

3 amount of nearly $70,000, almost all of which has been outstanding for more than 120 days and most of it outstanding for more than six months. In fact, Mr. Shapiro has received no payment at any point for any of his work on this case. 6. Nor have Third-Party Defendants made any credible assurance that such payment will ever be made. Nor have they provided any assurance that payments can be made to cover substantial future expenses that will likely be incurred in this case as a result of document discovery and depositions and potential summary judgment motions and trial. 7. In addition, for other reasons (protected by the attorney-client privilege and the work product doctrine), we have determined that it is in the best interest of Third-Party Defendants and moving counsel that moving counsel withdraw as attorneys for Third-Party Defendants. These reasons affect the very essence of the attorney-client relationship and make it impossible for us to be an effective advocate for the Third-Party Defendants in this action. 8. Moreover, for other reasons (protected by the attorney-client privilege and the work product doctrine) and in accordance with the Rules For Professional Conduct as articulated in N.Y.C.R.R. Part 1200 Rules 1.16(c)(1), (4), (5) and (7), we have determined that it is in the best interest of Defendants and moving counsel that moving counsel withdraw as attorneys for Defendants. These reasons affect the very essence of the attorney-client relationship and make it impossible to be an effective advocate for Defendants in this action. 9. No prior application has been made for the relief requested herein. 10. Third-Party Defendants will suffer no undue prejudice because the work required to complete the case going forward will largely not duplicate any of the work already conducted by the undersigned counsel. 3

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