According to the docket dated August 28, 2000, on November 10, 1997, the plaintiffs filed an Amended Complaint. A Stipulation of Settlement was filed on May 10, 2000. Judge Ronald M. Whyte preliminarily approved the settlement on May 17, 2000. On August 9, 2000, the Court entered the Final Judgment dismissing the action with prejudice as well as the Orders granting the approval of the plan of allocation and awarding counsel’s fees and expenses.

On September 11, 1997, the Court granted the Company's motion to
dismiss. The Court granted plaintiff leave to file, and plaintiff has filed, an amended complaint. The Company has moved to dismiss the amended complaint. There has been no discovery in the federal action, and no trial date has been set.

The complaint charges Digital Link and certain of its officers and directors with violations of the federal securities laws. Digital Link manufactures and markets high speed digital access products for wide area networks ("WANs"), purchased mostly by telephone companies. This action complains of a scheme and course of business that operated as a fraud or deceit on purchasers of Digital Link stock during the Class Period. Plaintiff alleges that defendants made false and misleading statements about the development of Digital Link's W/ATM GateWay and PremisWay products, the strong international and domestic demand for and market acceptance of its products, and Digital Link's prospects for earnings growth.