According to a Press Release dated Aug 2, 2001, the complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about February 5,1999, Modem Media
commenced an initial public offering of 2,600,000 of its shares of its common
stock at an offering price of $16 per share (the "Modem Media IPO"). In
connection therewith, Modem Media filed a registration statement, which
incorporated a prospectus (the "Prospectus"), with the SEC. The complaint
further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the Underwriter Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of Modem Media shares issued in connection with the Modem Media IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby they agreed to allocate Modem Media shares to those customers in the Modem Media IPO in exchange for which the customers agreed to purchase additional Modem Media shares in the aftermarket at pre-determined prices.