According to the Company’s FORM 10-Q for the quarterly period ended October 31, 2001, after receiving the Company's motion to dismiss, the plaintiffs themselves moved to dismiss the lawsuit with prejudice on April 23, 2001. The plaintiffs received no consideration for, and the Company assented to, the dismissal. On September 25, 2001 the United States District Court for the District of Massachusetts approved the plaintiffs' motion to dismiss the putative class action complaint filed against the Company.

As summarized by the same SEC filing, during February 2000, certain shareholders of the Company filed two substantially similar putative class action complaints against the Company and certain of the Company's officers and employees in the United States District Court for the District of Massachusetts that are captioned as follows: Liz Lindawati, et al. v. Inso Corp., et al., Civil Action No. 00-CV-10305GAO; Group One Limited, et al. v. Inso Corp., et al., Civil Action No. 00-CV-10318GAO. These lawsuits were filed following our preliminary disclosure of revenues for the fiscal year 2000 fourth quarter on February 1, 2000. They assert claims for violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b- 5 of the Securities and Exchange Commission, as well as a claim for violation of Section 20(a) of the Exchange Act. On June 14, 2000, the District Court ordered that both actions be consolidated into one lawsuit entitled In Re Inso Corporation Securities Litigation, Civil Action No. 00-103050-GAO. The plaintiffs filed a consolidated amended complaint on February 21, 2001. The plaintiffs alleged that the defendants prepared and issued deceptive and materially false and misleading statements to the investing public. They sought unspecified damages. On April 9, 2001, the Company filed a motion to dismiss the lawsuit on the grounds that the plaintiffs failed to state a claim under the relevant securities laws.

The original complaint charges that the Company and certain of its officers and directors violated the federal securities laws by providing materially false and misleading information concerning the Company's successful transition to an e-Business Internet company and by failing to disclose adverse trends in the demand for the Company's products and services. As a result of these false and misleading statements the Company's stock traded at artificially inflated prices during the class period. The complaint further alleges that prior to the disclosure of the above mentioned adverse facts, certain insiders took advantage of the inflated stock price by selling thousands of shares of Inso common stock to the investing public. When the truth about the Company was revealed, the price of the stock dropped significantly.