On December 5, 2006, the hearing on the final approval of class action settlement was held before Chief Judge Vaughn R Walker. That day, the Court entered the Order granting final approval of the class action settlement and plan of allocation, and granting the application for award of attorney fees and reimbursement of expenses. Judgment was entered and the case is now closed.

According to a press release dated August 15, 2006, a hearing will be held on October 19, 2006 at 2:00 p.m. (the "Settlement Hearing") before the Honorable Vaughn R. Walker, in the United States District Court, Northern District of California, located at 450 Golden Gate Avenue, San Francisco, California 94102, for the purpose of determining: (i) whether the proposed Settlement of the Litigation for the principal amount of $10,100,000 should be approved by the Court as fair, reasonable and adequate; (ii) whether the Litigation should be dismissed on the merits and with prejudice pursuant to the terms of the Stipulation; (iii) whether the proposed Plan of Allocation should be approved as fair and reasonable; (iv) whether Lead Counsel's application for fees and expenses, including the award of reasonable costs and expenses (including lost wages, directly relating to the representation of the Settlement Class to the Lead Plaintiff serving on behalf of the Settlement Class) and interest thereon should be approved; and (v) whether the releases provided for in the Stipulation should be approved as fair, reasonable and adequate to the Members of the Settlement Class.

According to the docket posted, on October 28, 2005, a Motion for Preliminary Approval of the proposed settlement was filed with the Court. On February 7, 2006, Judge Vaughn Walker issued an Order requesting further briefing with regard to the proposed settlement.

In a press release dated December 7, 2004, Quintus Corporation announced that it has reached a settlement in connection with all of the securities litigation involving Quintus and its former officers and directors. This litigation includes a class action suit pending in the federal district court for the Northern District of California, state court lawsuits in California and Texas and suits and claims in the United States Bankruptcy Court for the District of Delaware. Under the terms of the settlement, the various plaintiff groups will be paid a total of $13 million. Quintus will contribute $1 million of this amount from existing cash, while the remaining $12 million will be paid by certain insurers and Quintus' former auditors. The settling parties will exchange releases. The settlement is subject to court approval by both the federal court in California and the Delaware Bankruptcy Court. The settlement funds will only be disbursed after the required court approval. Terms of the settlement also include the reacquisition or subordination of certain shares of Quintus stock held by its former Chief Executive Officer and its former Chief Financial Officer.

On January 16, 2001, motions for the appointment of Lead Plaintiff and Lead Counsel and to consolidate all related actions were filed with the court. The Court consolidated all related cases and appointed Lead Plaintiffs on April 12, 2001. The Court appointed Lead Counsel on May 31, 2001. Lead Plaintiffs filed an Amended Consolidated Class Action Complaint (“the Amended Complaint”) on July 30, 2001. Defendants moved to dismiss the Amended Complaint on October 29, 2001, which Plaintiffs opposed. On September 3, 2002, the Court granted in part and denied in part the Motions to Dismiss and gave Lead Plaintiffs an opportunity to file a First Amended Consolidated Class Action Complaint (the “1st Amended Complaint”). On February 10, Lead Plaintiffs filed their 1st Amended Complaint and on March 28, 2003 Defendants filed their Motions to Dismiss this Complaint. Plaintiffs filed their Opposition to the Motion to Dismiss on May 23, 2003. A hearing on Defendants’ motion was set and rescheduled numerous times. On December 7, 2004, prior to a ruling on Defendants’ Motion to Dismiss, Quintus announced that it reached a settlement.

The original action charges that Quintus and some of its top officers misled investors about the company’s revenues and earnings and that the company did not prepare its financial statements in accordance with Generally Accepted Accounting Principles. On November 15, 2000, the company announced it was investigating “certain financial reporting matters” and had delayed filing its Form 10-Q for the quarter ended September 30, 2000, “pending completion of the investigation of revenue and accounts receivable” for that and previous periods. As a result of the announcement, Quintus shares fell 50% from its closing price of $6 on November 14 to $3 at midday the following day before trading in the stock was halted on the Nasdaq Stock Market.

NOTE: On February 23, 2002, defendant Quintus Corporation filed a notice of bankruptcy.