As reported in the Company’s Form 10-K for the fiscal year ended January 31, 2000, the terms of the settlement provided for the payment of $3.0 million in cash ($2.35 million was covered by the Company’s insurance policy) and the issuance of 550,000 shares of CLC Common Stock, subject to certain price protection features, which resulted in an additional 463,152 shares of CLC Common Stock being issued to guarantee a total settlement of $7.5 million. All cash settlements were paid in fiscal 2000.

According to the docket on March 19, 1999, a Stipulation and Agreement of Settlement was filed. On July 15, 1999, the Court entered the Order and Final Judgment approving the Stipulation, approving the Plan of Allocation, and awarding Plaintiff’s Counsel fees in the amount of 30% of the settlement amount and $356,262.71 in reimbursement of expenses paid from the gross settlement fund. The complaint was dismissed with prejudice and without costs, except as provided in the Stipulation, and the case was closed.

The original class action Complaint alleges a fraudulent scheme and deceptive course of conduct by CLC and certain of its officers and/or directors who disseminated materially misleading statements. Specifically, the Company failed to disclose the serious operational problems facing it, including the Company's inability to adequately staff its rapidly expanding number of educational centers with qualified instructors and to provide its mushrooming student enrollment with the latest technology. By concealing these adverse facts, the Company was able to maintain artificially inflated prices in the market for CLC's common stock and issue additional shares of stock.