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Case Status:    SETTLED
On or around 05/01/2006 (Date of order of final judgment)

Filing Date: February 21, 2001

According to the Order and Final Judgment, entered on May 1, 2006, the $8,500,000 Settlement is approved as fair, reasonable and adequate, and all claims are dismissed with prejudice. The Plan of Allocation is also approved and certain lead plaintiffs were awarded amounts representing unreimbursed expenses and/or lost wages. Further, plaintiffs’ counsel is awarded 33% of the Gross Settlement Fund and $312,023.31 in reimbursement of expenses.

On February 13, 2006, the Court entered the Order and Final Judgment as to claims asserted against defendant Arthur Andersen LLP as a result of the pending settlement.

On January 6, 2006, a Stipulation of Dismissal of Defendant Xchange, Inc. was filed by the plaintiffs. According to the Stipulation, Plaintiffs hereby dismiss Defendant Xchange, Inc., without prejudice. The parties agree that, if the settlement becomes final, this dismissal shall become with prejudice. That same day, a motion for partial settlement was filed by the plaintiffs. According to the Stipulation of Settlement, the Stipulation is entered into among Lead Plaintiffs on behalf of themselves and the Settlement Class, the Individual Defendants and together with Defendant Xchange, Inc., a/k/a Exchange Applications, Inc. The proposed Settlement Fund is in the amount of $8.5 million.

As summarized by the Stipulation of Settlement, by the Order dated August 26, 2002, the Court granted, in part, and denied, in part, the motions to dismiss filed by Xchange, the Individual Defendants and Arthur Andersen. Specifically, the Court allowed Plaintiffs' Section 10(b) and 20(a) claims to proceed, and it dismissed Plaintiffs ' Section 11 and 15 claims, as against the Company and the Individual Defendants. The Court also dismissed all of Plaintiffs' claims against Arthur Andersen. On October 21, 2002, Defendants filed an answer to the CAC denying the material allegations set forth therein, and asserting that they did not commit any wrongdoing and that they have no liability whatsoever for the alleged acts or omissions alleged therein. On November 3, 2002, Lead Plaintiffs filed a Motion seeking certification of a class of all persons or entities who purchased or otherwise acquired the common stock of Xchange between December 9, 1998 and September 29, 2000, with certain defined exclusions. After discovery from the proposed class representatives Paul Isaac, Joseph Butkiewicz, Stephen Moore, and Steven Jakobsen, the Defendants filed an Opposition to Class Certification on June 14, 2005. Plaintiffs' Motion for Class Certification was pending at the time parties entered into the Memorandum of Understanding regarding this settlement (the "MOU").

As previously disclosed by the Company’s Form 10-Q for the quarterly period ended September 30, 2002, Xchange and certain of its current and former officers and its former certified public accountants, Arthur Andersen, LLP, have been named defendants in a consolidated class action lawsuit originally filed on February 21, 2001 and subsequently filed as a Consolidated Amended Class Action Complaint on August 3, 2001, filed on behalf of a purported class of purchasers of Xchange’s common stock during the period from December 9, 1998 through September 29, 2000. The Amended Class Action Complaint alleges that Xchange made false or misleading statements that inflated its common stock price during the class period. The relief sought is damages on behalf of the class; however, at this time, Xchange is unable to ascertain the monetary damages sought by the class. Through its attorneys, Xchange has filed a Motion to Dismiss the Amended Class Action Complaint on October 3, 2001.

The original complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b(b), by issuing a series of material misrepresentations to the market during the class period. The complaint also alleges that the defendants issued numerous statements touting the contracts it entered into even though the nature of these contracts required that revenue be recognized over an extended period of time, rather than in the third quarter. As a result, the price of the company's shares was artificially inflated throughout the class period.

COMPANY INFORMATION:

Sector: Technology
Industry: Computer Networks
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: EXAP
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: D. Massachusetts
DOCKET #: 01-CV-10322
JUDGE: Hon. Rya W. Zobel
DATE FILED: 02/21/2001
CLASS PERIOD START: 07/24/2000
CLASS PERIOD END: 09/29/2000
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Johnson & Perkinson
    1690 Williston Road, Johnson & Perkinson, VT 05403
    802.862.0030 802.862.0060 · JPLAW@adelphia.net
No Document Title Filing Date
COURT: D. Massachusetts
DOCKET #: 01-CV-10322
JUDGE: Hon. Rya W. Zobel
DATE FILED: 08/03/2001
CLASS PERIOD START: 12/09/1998
CLASS PERIOD END: 09/29/2000
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Johnson & Perkinson
    1690 Williston Road, Johnson & Perkinson, VT 05403
    802.862.0030 802.862.0060 · JPLAW@adelphia.net
  2. Law Office of Peter A. Lagorio
    63 Atlantic Avenue, Law Office of Peter A. Lagorio, MA 02110
    617-367-4200 617-227-3384 · plagorio@conversent.net
No Document Title Filing Date