_______________________________________ F. KENNETH SHOCKLEY, M.D., DAVID SHOCKLEY, JOHN M. AND SANDRA M. MORRASH AND PATRICIA CLEMENT, Individually and on behalf of all others similarly situated,                       Plaintiff,            vs. ADAMS GOLF, INC., B.H. (BARNEY) ADAMS, RICHARD H. MURTLAND, DARL P. HATFIELD, PAUL F. BROWN, JR., ROLAND E. CASATI, FINIS F. CONNER, STEPHEN R. PATCHIN, LEHMAN BROTHERS HOLDINGS INC., BANC OF AMERICA SECURITIES LLC AND FERRIS, BAKER WATTS, INCORPORATED,                       Defendants. _______________________________________

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CIVIL ACTION NO. [99-CV-00371] CLASS ACTION COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS [filed Jun. 11, 1999] JURY TRIAL DEMANDED

Plaintiffs, for their Class Action Complaint, allege as follows:

1. Plaintiffs base the allegations of this Complaint on the investigation of their counsel. Counsel's investigation included, inter alia, review and analysis of the public filings of defendant Adams Golf, Inc. ("Adams Golf" or the "Company") with the Securities and Exchange Commission (the "SEC"); Adams Golf's public statements; media and securities analysts' reports, and information provided by sources knowledgeable with respect to the golf equipment industry.

2. This is a federal securities law class action filed individually and on behalf of all persons (the "Class") who purchased shares of Adams Golf in Adam Golf's initial public offering (the "IPO"). Defendants made the IPO pursuant to a registration statement (the "Registration Statement"), which became effective July 9, 1998, and the prospectus (the "Prospectus") included as an exhibit to the Registration Statement. Both the Registration Statement and the Prospectus were materially misleading and omitted material facts.

3. The claims asserted herein arise under §§11, 12(a)(2) and 15 of the Securities Act of 1933, as amended (the "Securities Act"), 15 U.S.C. §§77k, 77l(a)(2) and 77o.

4. This Court has jurisdiction pursuant to §22 of the Securities Act, 15 U.S.C. §77v and 28 U.S.C. §1331.

5. Venue, is proper in this District pursuant to §22 of the Securities Act. Defendant Adams Golf has its principal executive offices in this District; substantial acts in furtherance of the IPO occurred within this District; and many of the acts, transactions and conduct alleged herein occurred in substantial part within this District.

6. In connection with wrongful conduct alleged in this complaint, defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including, but not limited to, the mails, interstate telephone communications, and the facilities of the national securities markets.

7. Plaintiffs F. Kenneth Shockley, M.D., David Shockley, John M. Morrash and Sandra M, Morrash, and Patricia Clement purchased shares of Adams Golf as set forth in the accompanying Certifications, which are incorporated herein by reference, and were damaged thereby.

8. Defendant Adams Golf is a corporation organized under the laws of the State of Delaware with its principal executive offices located at 300 Delaware Avenue, Suite 572, Wilmington, DE 19801. Adams Golf common stock trades on the "NASDAQ". According to press releases issued by the Company, Adams Golf is the leading seller of fairway woods, golf clubs used for the purpose of driving the ball long distances from positions on the fairways.

9. Defendant B.H. (Barney) Adams ("Adams") founded Adams Golf and was at all relevant times Chairman of the Board of Directors, Chief Executive Officer and President of the Company. At the time of the IPO, defendant Adams owned 4,482,321, shares of the Company, and he sold 1,120,000 shares as part of the IPO.

10. Defendant Darl P. Hatfield ("Hatfield") was at all relevant tines Senior Vice President--Finance and Administration and Chief Financial Officer of the Company.

11. Defendant Richard H. Murtland ("Murtland") was at all relevant times Senior Vice President-Research and Development, Secretary and Treasurer of the Company. At the time of the IPO, defendant Murtland owned 333,952 shares of the Company, and he sold 83,488 shares as part of the IPO.

12. Defendant Paul F. Brown, Jr. ("Brown") was at all relevant times a director of the Company. At the time of the IPO, defendant Brown, together with defendant Stephen Patchin, owned 7,405,438 shares of the Company, and they sold 1,030,927 shares as part of the IPO.

13. Defendant Roland E. Casati ("Casati") was at all relevant times a director of the Company. At the time of the IPO, defendant Casati owned 1,838,600 shares of the Company.

14. Defendant Finis F. Conner ("Conner") was at all relevant times a director of the Company. At the time of the IPO, defendant Conner owned 1,942,776 shares of the Company, and he sold 388,555 shares as part of the IPO.

15. Defendant Stephen R. Patchin ("Patchin") was at all relevant times a director of the Company. At the time of the IPO, defendant Patchin, together with defendant Brown, owned 7,405,438 shares of the Company, and they sold 1,030,927 shares as part of the IPO.

16. Each of the individuals named as defendants herein (collectively, the "Individual Defendants") received substantial compensation because of his positions with Adams Golf. The Individual Defendants sold more than two million shares of the Company's stock in the IPO, for which they received more than $36 million in proceeds.

17. Each of the Individual Defendants, either personally or through an attorney-in-fact, signed the Registration Statement. By reason of their management positions and/or membership on the Company's Board of Directors, the Individual Defendants had the power and influence, which they exercised, to cause Adams Golf to issue the materially false and misleading Registration Statement and Prospectus as alleged in this Complaint. The Individual Defendants were, therefore, "control persons" of Adams Golf within the meaning of Section 15 of the Securities Act.

18. Defendants Lehman Brothers Holdings Inc., Banc of America Securities LLC¹ and Ferris, Baker Watts, Incorporated (the "Underwriter Defendants") were the lead underwriters for the IPO. Each of the Underwriter Defendants participated in any due diligence meetings, and in any road shows to solicit the sale of the Company's common stock. Each of the Underwriter Defendants obtained a major share of the fees paid to the underwriters in connection with the IPO.

19. Plaintiffs bring this action pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3) an behalf of all persons who purchased Adams Golf common stock in the IPO pursuant to the materially false and misleading Registration Statement and Prospectus. Excluded from the Class are the defendants and members of their immediate families, any entity in which a defendant has a controlling interest and the heirs, successors and assigns of any such excluded party.

20. The members of the Class are so numerous that joinder of all members is impracticable. While the exact number of Class members is unknown at the present time, in the IPO the Company and several insiders sold 6.9 million shares of common stock to thousands of shareholders throughout the country.

21. Plaintiffs' claims are typical of the claims of the other members of the Class, because plaintiffs and all the Class members sustained damages that arose out of the defendants' unlawful conduct complained of herein.

22. Plaintiffs are representative parties who will fully and adequately protect the interests of the Class members. Plaintiffs have retained counsel who are experienced and competent in both class action and securities litigation. Plaintiffs have no interests that conflict with those of the Class they seek to represent.

23. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy. Plaintiffs know of no difficulty to be encountered in the management of this action that would preclude its maintenance as a class action.

24. The prosecution of separate actions by individual Class members would create a risk of inconsistent and varying adjudications, which could establish incompatible standards of conduct for defendants. Questions of law and fact common to the Class predominate over any questions that may affect only individual members. Among the common questions of law and fact are:

(a) Whether the Registration Statement and the Prospectus omitted and/or misrepresented material facts;

(b) Whether the Securities Act was violated by defendants' acts as alleged herein; and

(c) Whether the members of the Class have sustained damages, and, if so, the proper measure of such damages.

25. The names and addresses of the record owners of Adams Golf common stock purchased in the IPO are available from Adams Golf's transfer agent. Notice can be provided to such record owners by first class mail, using techniques and a form of notice similar to those employed in other class actions arising under the federal securities laws.

26. Adams Golf designs, manufactures and markets what it purports to be premium quality, technologically innovative golf clubs. Adams Golf claims to be the leading seller of fairway woods. Adams Golf has touted its golf clubs as employing technology and design that provide golfers with the ability to hit the ball from virtually any lie while maximizing distance.

27. Founded by Adams in 1987, the Company operated initially as a components supplier and contract manufacturer. Thereafter, the Company established its custom fitting operation, which currently services a network of over 100 certified custom fitting accounts.

28. In fall 1995, the Company introduced the original "Tight Lies" fairway wood. In December 1996, the Company extended the Tight Lies line to include the Tight Lies Strong 3, Strong 5 and Strong 7, introducing the Tight Lies Strong 9 in January 1998.

29. Sales of the Tight Lies line of products increased significantly subsequent to the second quarter of 1997, when the Company launched an infomercial relating to the original Tight Lies fairway wood.

30. The Company's net sales are derived primarily from sales to on- and off-course golf shops and selected sporting goods retailers and, to a much lesser extent, from direct sales to consumers. International distributors and the Company's custom fitting accounts.

31. The Company completed an internal reorganization in 1997 and now conducts its operations through several direct and indirect wholly-owned subsidiaries, including: (i) Adams Golf Holding Corp., a Delaware corporation, which holds limited partnership interests of certain indirect subsidiaries of the Company; (ii) Adams Golf GP Corp., a Delaware corporation, which holds capital stock or limited partnership interests, as applicable, of certain indirect subsidiaries of the Company; (iii) Adams Golf Direct Response, Ltd., a Texas limited partnership, which operates the call-center and advertising activities; (iv) Adams Golf, Ltd., a Texas limited partnership, which operates the golf club design, assembly and sales business; (v) Adams Golf IP, L.P., a Delaware limited partnership, which holds the intellectual property rights of the Company; and (vi) Adams Golf Management Corp., a Delaware corporation, which provides management and consulting services to certain of the Company's indirect subsidiaries.

The Materially False and Misleading Registration Statement and Prospectus

32. The Registration Statement, which became effective July 9, 1998, and the incorporated Prospectus materially misled investors with respect to two critical subject areas. First, in the Registration Statement and the Prospectus defendants failed to disclose the material risk that Adams Golf's profits and revenues were severely threatened by extensive "gray market" distribution of Adams Golf's products. Second, the Registration Statement and the Prospectus failed to disclose the material risk, and the material fact, that an oversupply of inventory at the retail level was weakening club sales industry-wide for at least a full quarter prior to the IPO.

a. The Registration Statement and the Prospectus
Concealed Risks Arising from Gray Market Distribution

33. Gray market distribution is the distribution, unauthorized by the Company, of the Company's products to discounters. Sales in the gray market are made at a substantial discount to the suggested retail price at which the Company's authorized retailers sell. The gray market therefore takes sales away from the Company's authorized retailers, weakens the demand for the clubs sold by the authorized retailers and reduces the Company's profit margins. The gray market, also tends to skew the Company's revenues, causing higher sales in earlier periods (as products filter to discounters through gray market channels) and lower sales in later periods (as the Company's authorized retailers, losing sales to discounters, order fewer clubs from the Company).

34. At the time of the IPO, not only did gray market distribution pose a material risk, but also gray market distribution was and had been ongoing. In a press release issued June 9, 1998, only one month before the effective date of the Registration Statement, the Company stated that it had filed a Bill of Discovery against Costco, a discounter, "to determine whether Costco's claims that they had properly acquired Adams' Tight Lies fairway woods for resale were accurate." According to the press release:

Adams Golf became concerned when it learned that Costco was selling their Tight Lies fairway woods because Costco is not an authorized distributor.

35. At the time of the IPO, the Company was imperiled by the possibility of widespread discounting of the Tight Lies products, but the Registration Statement and the Prospectus were completely silent as to this important risk. Indeed, the Registration Statement and the Prospectus included an extensive risk section, detailing risks the Company faced ranging from "Uncertain Consumer Acceptance" to "Limited History of Profitability" to "Dependence on Key Personnel and Endorsements" and "Dilution". In addition, the Registration Statement and the Prospectus identified risks arising from rapid growth that had placed "a significant strain on the Company's management and operating and financial systems." The Registration Statement and the Prospectus also stated that "[t]he Company's success depends to a significant extent" upon the performance of senior management, and emphasized the importance of the Company's recent consulting and marketing agreement with Nick Faldo, a professional golfer. However, nowhere in this lengthy discussion of risks did the Registration Statement and the Prospectus disclose the risk that, as a result of gray market sales, the Company would suffer severe margin pressure as well as the loss of important retail outlets. This was despite the fact that gray market sales constituted a material and undisclosed change in the method of distribution of the Company's products to the public.

36. With respect to distribution of the Company's products, the Registration Statement and the Prospectus were materially false and misleading by stating:

To preserve the integrity of its image and reputation, the Company limits its distribution to retailers that market premium quality golf equipment and provide a high level of customer service and technical expertise. The Company currently sells its products to on-and off-course golf shops and selected sporting goods retailers. The Company believes its selective retail distribution helps its retailers to maintain profitable margins and maximize sales of Adams' products.

(Emphasis added.)

By the foregoing statement, the Registration Statement and the Prospectus materially misled investors in at least three respects: First, it was materially false and misleading to state that "the Company limits its distribution" to certain retailers, when in fact at the time of the IPO Costco was already receiving and selling at discounted prices significant numbers of Tight Lies clubs. Second, it was materially false and misleading to state that the Company "currently sells its products" to golf shops and selected retailers, when in fact, at the time of the IPO, Costco, a discounter, was obtaining and selling at discounted prices significant numbers of Tight Lies. Third, it was materially false and misleading to state that "selective retail distribution" helped retailers to maintain profitable margins and maximize the Company's sales, when in fact at the time of the IPO distribution of the Company's products was not "selective". The truth was that at the time of the IPO, the Company faced the grave risk -- undisclosed in the Registration Statement and the Prospectus -- that retailers' "profitable margins," and the Company's sales would decline as a result of the sale of material amounts, of Tight Lies at discounted prices by gray marketers. The Registration Statement and the Prospectus misled investors by failing to disclose the fact that, increasingly, the Company's retail distribution was not "selective", but was instead characterized by discounting, and that the Company's margins and future sales were in jeopardy as a result.

37. According to the Registration Statement and the Prospectus:

The Company sells a significant majority of its products to selected retailers. To maintain its high quality reputation and generate retailer loyalty, the Company does not sell its products through price sensitive general discount warehouses, department stores or membership clubs.

(Emphasis added.)

As quoted above, the Registration Statement and the Prospectus materially misled the public, because, contrary to the statement that "the Company does not sell its products through price sensitive general discount warehouses, department stores or membership clubs", in fact, at the time of the IPO, Costco, a discounter, was obtaining and selling to the golfing public significant amounts of Tight Lies.

38. On January 7, 1999, when the Company projected disappointing fourth quarter and 1998 results, defendants disclosed a material fact that, previously, the Registration Statement and the Prospectus had omitted: that fact that results had been, were currently, and would continue to be materially, adversely affected by discounting. Results were disappointing, according to the Press release, in part because of "the gray market distribution of its products to a membership warehouse club."

39. In the Company's 1998 Form 10-K Report, filed with the SEC in March 1998, the Company disclosed that:

Despite the Company's efforts to limit its distribution to selected retailers, Adams Golf products have been found in a certain membership warehouse club, which the Company believes has obtained the products through the use of unauthorized distribution channels. Adams Golf has taken steps to limit this unauthorized distribution through the serialization of all Adams Golf club heads but does not believe the gray marketing of its products can be totally eliminated.

(Emphasis added.)

The Company thus admitted two material facts that the Registration Statement and the Prospectus misrepresented and failed to disclose: first, that gray marketing represented a material risk to the Company; and second, that gray marketing represented a material problem that could not be "totally eliminated" by the Company's corporate controls.

b. The Registration Statement and the Prospectus Failed to
Disclose the Material Fact that, Even Prior to the IPO,
the Golf Equipment Industry Suffered from "Oversupply of
Inventory at the Retail Level"

40. Long after the IPO, on April 12, 1999, with reference to results for the quarter ended March 31, 1999, Adams Golf disclosed for the first time:

Adams Golf believes the oversupply of inventory at the retail level, a condition that has weakened club sales industry wide over the last 12 months, has resulted in substantial reductions in retailer purchases.

(Emphasis added.)

41. The Registration Statement and the Prospectus failed to disclose this "oversupply of inventory at the retail level" existing prior to the time of the IPO. On the contrary, the Registration Statement and the Prospectus represented:

In 1997, wholesale sales of golf equipment in the U S. reached an estimated $2.4 billion. Wholesale sales of golf clubs increased at an estimated compound annual growth rate of approximately 13% over the 5-year period from 1992 to 1997. The Company believes that a number of trends are likely to further increase the demand for Adams' products. These trends include: (i) significant growth in the number of golf courses; (ii) increasing interest in golf from women, junior and minority golfers; (iii) the large numbers of golfers entering their 40s and 50s, the age when most golfers begin to play more often and increase their spending on the sport; (iv) the correspondingly large population of "Echo Boomers," who are beginning to enter their 20s, the age of when golfers generally take up the sport; and (v) the rapid evolution of golf club designs and materials.

42. In addition, among risk factors, the Registration Statement and the Prospectus listed certain risks associated with conducting business in the golf equipment industry, including risks of competition:

The market for golf clubs is highly competitive. The Company's competitors include a number of established companies, many of which have greater financial and other resources than the Company. The purchasing decisions of many golfers are often the result of highly subjective preferences, which can be influenced by many factors, including, among others, advertising, media, promotions and product endorsements. The Company could therefore face substantial competition from existing or new competitors that introduce and successfully promote golf clubs that achieve market acceptance. Such competition would result in significant price erosion or increased promotional expenditures, either of which could have a material adverse effect on the Company's business, operating results and financial condition. There can be no assurance that Adams will be able to compete successfully against current and future sources of competition or that its business operating results or financial condition will not be adversely affected by increased competition in the markets in which it operates. See "Business--Competition."

The Registration Statement and the Prospectus also listed other industry risks, as follows:

Golf generally is regarded as a warm weather sport and sales of golf equipment historically have been strongest during the second and third quarters, with the weakest sales occurring during the fourth quarter. In addition, sales of golf clubs are dependent on discretionary consumer spending, which may be affected by general economic conditions. A decrease in consumer spending generally could result in decreased spending on golf equipment, which could have a material adverse effect on the Company's business, operating results and financial condition. In addition, the Company's future results of operations could be affected by a number of other factors, such as unseasonal weather patterns; demand for and market acceptance of the Company's existing and future products; new product introductions by the Company's competitors; competitive pressures resulting in lower than expected average selling prices; and the volume of orders that are received and that can be fulfilled in a quarter. Any one or more of these factors could result in the Company failing to achieve its expectations as to future sales or net income.

43. However, notwithstanding the foregoing risk discussions relating to competition and industry factors, the Registration Statement and the Prospectus nowhere disclosed material risks flowing from the then-current oversupply of inventory at the retail level either at Adams Golf itself or throughout the golf equipment industry. In fact, the Registration Statement and the Prospectus misled investors into believing that the Company's own retailers would not suffer from excess inventory. According to the Registration Statement and the Prospectus:

The Company generally has been successful in delivering product to its retailers within one week of a placed order. The Company believes its prompt delivery of products enables its retail accounts to maintain smaller quantities of inventory than may be required with other golf equipment manufacturers.

(Emphasis added.)

44. Defendants gave no indication to the public that any retailers were carrying excess inventory until January 7, 1999, when, in connection with disappointing results, the Company disclosed that it would offer extraordinary credits to its own retailers, at the cost of millions of dollars, in an attempt to alleviate problems arising from those retailers' excess inventory. Only on April 12, 1999, in reporting disappointing results for the first quarter of 1999, ending March 31, 1999, did defendants belatedly disclose that for at least 12 months -- since well prior to the IPO there had been an "oversupply of inventory at the retail level" on an industry-wide basis.

c. Violations of SEC Regulations and Generally Accepted
Accounting Principles ("GAAP")

45. By failing to disclose risks arising from gray market distribution and risks arising from retailers' inventory oversupply, the Registration Statement and the Prospectus, and the financial statements contained therein, failed to conform to SEC regulations and GAAP, as follows:

a) Item 303 of SEC Regulation S-K (Sec. 229.303(a)(3)(ii)) requires a description of any known trends or uncertainties that have had or that the registrant (i.e., the Company) reasonably expects will have a materially favorable or unfavorable impact on net sales or revenues or income from continuing operations. The Registration Statement and the Prospectus violated Regulation S-K, in that they failed to disclose that both gray market distribution and retailers' excess inventory constituted "known trends or uncertainties" that the Company reasonably expected to have a materially adverse impact on sales and income from continued operations.

b) Financial Accounting Standards Board Statement No. 5, Accounting for Contingencies ("FAS 5"), requires that an estimated loss from a loss contingency shall be recorded if the following conditions are met: (1) "Information available prior to the issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements. It is implicit in this condition that it must be probable that one or more future events will occur confirming the fact of the loss" and (2) "The amount of the loss can be reasonably estimated."

FAS #5 further states:

If no accrual is made for a loss contingency because one or both of the conditions in paragraph 8 are not met, or if an exposure to loss exists in excess of the amount accrued pursuant to the provisions of paragraph 8, disclosure of the contingency shall be made when there is at least a reasonable possibility that a loss or an additional loss may have been incurred. The disclosure shall indicate the nature of the contingency and shall give an estimate of the possible loss or range of loss or state that such an estimate cannot be made.

Footnote 6 to this paragraph states the following example:

For example, disclosure shall be made of any loss contingency that meets the condition in paragraph 8(a) but that is not accrued because the amount of loss cannot be reasonably estimated (paragraph 8(b)). Disclosure is also required of some loss contingencies that do not meet the condition in paragraph 8(a) - namely, those contingencies for which there is a reasonable possibility that a loss may have been incurred even though information may not indicate that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements.

The financial statement contained in the Registration Statement and the Prospectus (including the financial statements for the 12-month period ended December 1997 and the three-month period ended March 1998) violated FAS #5 in that, with respect to retailers' inventory oversupply, it was probable that the Company would incur losses by providing discounts and credits to retailers afflicted with too much inventory. (Indeed, the Company took a $4.3 million charge in connection with credits given retailers, lowering the suggested retail prices for the inventory the retailers had on hand.) As noted above, FAS #5 requires, at a minimum, disclosure of the contingency it is thought to be probable and material, but not estimable. If it is also estimable, FAS #5 requires the recording of an accrual and related expense.

d. The Class of Purchasers Suffered Loss

46. As the market gradually learned the truth, the price of Adams Golf stock collapsed from a high of $18.875 to $3.75 -- a drop of 80%. At the time this suit is brought the market value of the security is approximately $3.00 per share. Plaintiff F. Kenneth Shockley and plaintiffs Morrash sold their shares at $3.6339 per share on December 30, 1998. Plaintiff David M. Shockley sold his shares at $3.8125 on December 28,1999. Plaintiff Patricia Clement sold her shares at $3.875 on December 28, 1998 and at $3.6339 on December 30, 1998.

47. Plaintiffs repeat and reallege each and every allegation contained above.

48. This Count is brought pursuant to Section 11 of the Securities Act against all defendants.

49. The Registration Statement prepared by the defendants and distributed in connection with the IPO was inaccurate and misleading, contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading, and concealed and failed adequately to disclose material facts as described above.

50. The Company is the registrant of the securities issued. The defendants named herein were responsible for the contents and dissemination of the Registration Statement and the Prospectus.

51. As issuer of the securities, Adams Golf is strictly liable to plaintiffs and the class for the misstatements and omissions. The Individual Defendants are all liable as signatories of the Registration Statement. The Underwriter Defendants are liable as underwriters of the stock issued pursuant to the Registration Statement.

52. None of the defendants named herein made a reasonable investigation or possessed reasonable grounds for the belief that the statements contained in the Registration Statement and the Prospectus were true and without omission of any material facts. Each of the defendants (except for the Company, which is strictly liable) acted negligently.

53. Plaintiffs and the Class have sustained damages. The value of Adams Golf shares has declined substantially subsequent to the IPO due to defendants' violations.

54. At this times they purchased Adams Golf securities, plaintiffs and other members of the Class were without knowledge of the facts concerning the wrongful conduct alleged herein. Less than one year elapsed from the time that plaintiffs discovered, or reasonably could have discovered, the facts upon which this complaint is based until the time that plaintiffs filed this Complaint. Less than three years elapsed from the time that these securities upon which this count is brought were bona fide offered to the public until the time plaintiffs filed this Complaint.

55. This Count is not grounded in fraud.

56. Plaintiffs repeat and reallege each and every allegation contained above.

57. This Count is brought by plaintiffs pursuant to Section 12(a)(2) of the Securities Act on behalf of all persons who acquired Adams Golf's common stock in connection with the IPO, or who purchased or otherwise acquired Adams Golf common stock traceable thereto.

58. Defendants were sellers, offerors, and/or solicitors of sales of the shares offered pursuant to the Prospectus.

59. The Prospectus contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading, and concealed and failed to disclose material facts. Defendants' actions of solicitation included participating in the preparation of the false and misleading Prospectus.

60. The defendants owed to the purchasers of Adams Golf securities, including plaintiffs and other Class member purchasers of Adams Golf common shares, the duty to make a reasonable and diligent investigation of the statements contained in the IPO materials, including the Prospectus contained therein, to insure that such statements were true and that there was no omission to state a material fact required to be stated in order to make the statements contained therein not misleading. The defendants knew of, or in the exercise of reasonable care should have known of, the misstatements and omissions contained in the IPO material as set forth above.

61. The Defendant Underwriters were sellers of Adams Golf common stock within the meaning of §12 in that they held title to the stock and further engaged in the sale and/or solicitation of the stock for financial gain. The Defendant Underwriters were well positioned to control, and did control, the flow of information to potential purchasers of Adams Golf common stock and/or supplied or authorized the dissemination of the information contained in the Prospectus that was provided to purchasers of the common stock.

62. Plaintiffs and other members of the Class acquired Adams Golf common stock pursuant to and/or traceable to the defective Prospectus. Plaintiffs did not know, or in the exercise of reasonable diligence could not have known, of the untruths and omissions contained in the Prospectus.

63. By reason of the conduct alleged herein, the defendants violated, and/or controlled a person who violated, § 12(a)(2) of the Securities Act. Accordingly, those members of the Class who hold Adams Golf common shares acquired in the IPO have the right to rescind and recover the consideration paid for their Adams Golf shares and hereby elect to rescind and tender their Adams Golf shares to the defendants sued herein. Plaintiffs and those Class members who have sold their Adams Golf shares are entitled to rescissory damages.

64. Less than three years elapsed from the time that the securities upon which this Count is brought were sold to the public to the time of the filing of this action. Less than one year elapsed from the time when plaintiffs discovered or reasonably could have discovered the facts upon which this Count is based until the time of the filing of this action.

65. This Count is not grounded in fraud.

66. Plaintiffs repeat and reallege each and every allegation contained above.

67. This Count is brought pursuant to Section 15 of the Securities Act against the Individual Defendants.

68. Each of the Individual Defendants was a control person of Adams Golf by virtue of his position(s) as a director and/or as senior officer of Adams Golf. In addition, the Individual Defendants each had a series of direct and/or indirect business and/or personal relationships with other directors and/or major shareholders of Adams Golf.

69. Each of the Individual Defendants was a culpable participant in the violations of Sections 11 and 12(a)(2) of the Securities Act alleged in Counts I and II above, based on their having signed the Registration Statement and/or having otherwise participated in the process which allowed the offering to be completed.

70. This Count is not grounded in fraud.

WHEREFORE, plaintiffs pray for relief and judgment, as follows:

(i) Determining that this action is a proper class action, designating plaintiffs as Lead Plaintiffs and certifying plaintiffs as class representatives under Rule 23 of the Federal Rules of Civil Procedure and their counsel as Lead Counsel;

(ii) Awarding plaintiffs and the Class rescissory damages or, in the alternative, awarding compensatory damages in favor of plaintiffs and the other Class members against all defendants, jointly and severally, for all damages sustained as a result of defendants' wrongdoing, in an amount to be proven at trial, including interest thereon;

(iii) Awarding plaintiffs and the Class their reasonable costs and expenses incurred in this action, including counsel fees and expert fees; and

(iv) Such other and further relief as the Court may deem just and proper.

Plaintiffs hereby demand a trial by jury.

/s/ _______________________________ ROSENTHAL MONHAIT GROSS & GODDESS Joseph A. Rosenthal (DSBA No. 234) Carmella P. Keener (DSBA No. 2810) Suite 1401 Mellon Bank Center Wilmington, DE 19801 (302) 656-4433 Counsel for Plaintiffs

OF COUNSEL:
BERGER & MONTAGUE, P.C.
Todd S. Collins
Michael L. Block
Jacob Goldberg
1622 Locust Street
Philadelphia, PA 19103
(215) 875-3000

LAW OFFICES OF DONALD B. LEWIS
Donald B. Lewis
5 Cynwyd Road
Bala Cynwyd, PA 19004
(610) 668-0331

ABRAHAMS, LOEWENSTEIN,
BUSHMAN & KAUFFMAN, P.C.
Robert H. Lewis
Jeffrey P. Bates
One Liberty Place, Suite 3100
1650 Market Street
Philadelphia, PA 19103-7392
(215) 561-1030

THE OLSEN LAW FIRM
Kurt Olsen [Fed. Bar No. 22574]
2121 K Street, N.W.
Suite 800
Washington, D.C. 20037
(703) 351-5199

¹ At the time of the IPO, this entity was named Nationsbanc Montgomery Securities LLC.

F. KENNETH SHOCKLEY, M.D. ("Plaintiff") duly swears and says, as to the claims asserted under the federal securities laws, that:

1. I have reviewed the complaint and have authorized the filing of a substantially similar complaint on my behalf.

2. The security that is the subject of this action was not purchased at the direction of plaintiff's counsel or in order to participate in this private action.

3. Plaintiff is willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary.

4. The transactions in the security that is the subject of this action during the Initial Public Offering are as follows:

5. Plaintiff has not sought to serve as a class representative in any securities fraud class action in the last three (3) years, unless indicated below.

6. Plaintiff will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except as ordered or approved by the court for reasonable costs and expenses (including lost wages) directly relating to the representation of the class.

I declare under penalty of perjury under the laws of United States that the foregoing is true and correct. Executed this 28th day of May, 1999, at Voorhees, New Jersey.

/s/ F. Kenneth Shockley By:_______________________________

DAVID M. SHOCKLEY ("Plaintiff") duly swears and says, as to the claims asserted under the federal securities laws, that:

1. I have reviewed the complaint and have authorized the filing of a substantially similar complaint on my behalf.

2. The security that is the subject of this action was not purchased at the direction of plaintiff's counsel or in order to participate in this private action.

3. Plaintiff is willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary.

4. The transactions in the security that is the subject of this action during the Initial Public Offering are as follows:

5. Plaintiff has not sought to serve as a class representative in any securities fraud class action in the last three (3) years, unless indicated below.

6. Plaintiff will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except as ordered or approved by the court for reasonable costs and expenses (including lost wages) directly related to the representation of the class.

I declare under penalty of perjury under the laws of United States that the foregoing is true and correct. Executed this 28th day of May, 1999, at Jupiter, FL.

/s/ By:_______________________________

JOHN M. and SANDRA M. MORRASH ("Plaintiffs") duly swear and say, as to the claims asserted under the federal securities laws, that:

1. We have reviewed the complaint and have authorized the filing of a substantially similar complaint on my behalf.

2. The security that is the subject of this action was not purchased at the direction of plaintiff's counsel or in order to participate in this private action.

3. Plaintiffs are willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary.

4. The transactions in the security that is the subject of this action during the Initial Public Offering are as follows:

5. Plaintiffs have not sought to serve as a class representative in any securities fraud class action in the last three (3) years, unless indicated below.

6. Plaintiffs will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiffs' pro rata share of any recovery, except as ordered or approved by the court, for reasonable costs and expenses (including lost wages) directly relating to the representation of the class.

I declare under penalty of perjury under the laws of United States that the foregoing is true and correct. Executed this 28 day of May, 1999, at 3901 Sherwood Lane Doylestown, PA

/s/ John M. Morrash By:_______________________________ /s/ Sandra M. Morrash By:_______________________________

PATRICIA CLEMENT ("Plaintiff") duly swears and says, as to the claims asserted under the federal securities laws, that:

1. I have reviewed the complaint and have authorized the filing of a substantially similar complaint on my behalf.

2. The security that is the subject of this action was not purchased at the direction of plaintiff's counsel or in order to participate in this private action.

3. Plaintiff is willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary.

4. The transactions in the security that is the subject of this action during the Initial Public Offering are as follows:

5. Plaintiff has not sought to serve as a class representative in any securities fraud class action in the last three (3) years, unless indicated below.

6. Plaintiff will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except as ordered or approved by the court for reasonable costs and expenses (including lost wages) directly relating to the representation of the class.

I declare under penalty of perjury under the laws of United States that the foregoing is true and correct. Executed this 28th day of March, 1999, at Stratford, NJ.

/s/ Patricia Clement By:_______________________________

Source: Scanned paper copy of court-filed document