According to the Company’s FORM 10-K For the fiscal year ended September 30, 2007, in June 2005, the underwriters filed an appeal of the District Court’s order granting class certification in six focus cases. On December 5, 2006, the Court of Appeals issued an opinion, reversing the District Court’s order granting class certification and finding that plaintiffs cannot satisfy certain elements required for class actions. On June 25, 2007, in light of the Court of Appeals’ decision, the District Court entered an order terminating the proposed settlement based on a stipulation among the parties to the settlement. On August 14, 2007, the plaintiffs filed amended complaints in the focus cases, seeking to address the deficiencies raised in the Court of Appeals’ opinion. On September 27, 2007, plaintiffs moved to certify the classes in those focus cases. The parties are currently discussing further discovery that the plaintiffs seek from the underwriters and the issuers.

As summarized by the Company’s Form 10-Q for the quarterly period ended March 31, 2006 , in 2001, a number of purported shareholder class action complaints related to the Company’s and FreeMarkets’ initial public offerings (the “IPOs”) were filed in the United States District Court for the Southern District of New York against the Company and FreeMarkets, and against certain of the two companies’ former officers and directors. These complaints were later consolidated into single class action proceedings related to each IPO. In June 2003, a settlement was reached between plaintiffs and the Company and FreeMarkets (the individual defendants having been previously dismissed). A final fairness hearing on the settlement was held on April 24, 2006 but the Court has not yet issued its opinion. As part of the proposed settlement, the settling issuers were required to assign to the plaintiffs certain claims they had against their underwriters (“Assigned Claims”). Pending the Court’s final approval of the settlement, the Assigned Claims were conditionally assigned to a litigation trustee. Before the expiration of any relevant statutes of limitations, the litigation trustee filed lawsuits against the various issuers’ respective underwriters alleging the Assigned Claims. On February 24, 2006, the Court dismissed, with prejudice, the Assigned Claims brought by the litigation trustee against the underwriters on statute of limitations grounds. Because the Assigned Claims were part of the consideration contemplated under the settlement, it is unclear how the Court’s recent decision will impact the settlement and the Court’s final approval of it. Although the Court has preliminarily approved the settlement, there can be no assurance that the Court will provide final approval of the settlement.

The original complaint alleges violations of Sections 11, 12(a) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. On 06/23/1999, Ariba commenced an IPO of 5 million of its shares of common stock at an offering price of $23 per share. Coincidentally, Ariba also filed a registration statement, which incorporated a prospectus with the SEC. The complaint alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) Morgan Stanley had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Morgan Stanley allocated to those investors material portions of the restricted number of Ariba shares issued in connection with the Ariba IPO; and (ii) Morgan Stanley had entered into agreements with customers whereby Morgan Stanley agreed to allocate Ariba shares to those customers in the Ariba IPO in exchange for which the customers agreed to purchase additional Ariba shares in the aftermarket at a pre-determined prices.