<p style= text-align: justify; >The parties have reached a settlement which provides for the payment of $3,600,000 to Class Members. The Lead Plaintiff alleges violations of §11 of the Securities Act of 1933 on behalf of investors who purchased the common stock of TNS, Inc. (“TNS”) pursuant to TNS’s September 16, 2005 Secondary Stock Offering (the “Secondary Offering”). In particular, Lead Plaintiff alleges, among other things, that the Registration Statement for the Secondary Offering was materially false and misleading for failing to adequately disclose the adverse impact of foreign exchange rates or its revenue and the status of contracts with two TNS customers, the Royal Bank of Scotland and the Pepsi Bottling Group. The proposed Settlement has been preliminarily approved by the Court.</p> <p style= text-align: justify; >The Court has scheduled a final approval hearing for June 20, 2008, at 10:00 a.m.</p>
<p style= text-align: justify; >On July 14, 2006, the defendants filed a motion to dismiss the plaintiff’s class action complaint with prejudice, but on September 13, 2006, the Court entered the Order denying the defendants’ motion to dismiss.</p>
<p style= text-align: justify; >The original complaint charges TNS and certain of its officers and directors with violations of the Securities Act of 1933. TNS describes itself as “one of the leading providers of business-critical, cost-effective data communications services for transaction-oriented applications and operates through its wholly owned subsidiary Transaction Network Services, Inc. TNS provides rapid, reliable and secure transaction delivery platforms to enable transaction authorization and processing across several vertical markets and trading communities.”</p>
<p style= text-align: justify; >Specifically, the complaint alleges that, in connection with the Secondary Offering, TNS filed a Registration Statement in which defendants negligently failed to disclose several “material changes” to TNS’s continuing operations which were required to be disclosed. Specifically, the Registration Statement failed to disclose that: (i) contrary to earlier statements, an agreement that the Company had with the Pepsi Bottling Group, Inc. (the “Pepsi Contract”) had been delayed beyond August 7, 2005; (ii) at the time of the Secondary Offering, TNS was generating less revenues and earnings than it had anticipated from its contract with the Royal Bank of Scotland (“RBS”); and (iii) at the time of the Secondary Offering, the Company’s International Services Division was experiencing declining revenues because of unfavorable exchange rates.</p>
<p style= text-align: justify; >The complaint further alleges that on or around October 20, 2005, the Company, in a press release and conference call, announced its financial results for the third quarter of 2005 and noted that it had missed its top-line revenue guidance because of delays in the Company’s Pepsi Contract, the impact of unfavorable exchange rates and a reduction in transaction volume from RBS. Following this announcement, shares of TNS common stock fell 25%. Then, on February 22, 2006, the Company reported declining financial results for the fourth quarter of 2005 and attributed the decline to a further delay associated with the Pepsi Contract and the continued impact of unfavorable exchange rates. Shares of TNS common stock declined an additional 19% in response to this announcement.</p>