According to the latest docket posted, on September 20, 2000, the Court entered the Order by U.S. District Judge Marilyn H. Patel granting plaintiffs' motion of approval of plan of allocation of settlement proceeds and plaintiffs' motion for attorney fees and reimbursement of expenses. The court awarded Representative Plaintiffs' Counsel attorneys' fees in the amount of thirty percent (30%) of the settlement fund plus litigation expenses incurred in an aggregate amount of $324,194.57 together with the interest earned. Finally, the Court granted the plaintiff's motion of final approval of class action settlement. The case is closed.

As reported by the Company’s FORM 10-Q For The Quarterly Period Ended July 2, 2000, in January 2000, the Company reached an agreement with the plaintiffs to settle the class action law-suit. The parties to the class action submitted a Stipulation of Settlement to the court for preliminary approval. On July 17, 2000, the Court preliminarily approved the settlement, certified the class for settlement purposes, and approved the notice of the settlement to be sent to class members. Notice has been sent to the settlement class. Pursuant to the class action settlement, the plaintiff class will receive $20 million in full settlement of their claims. In January, 2000, the Company also reached an agreement-in-principle to settle the derivative action; it is expected that the derivative settlement will be finalized in the near future and presented for court approval. Settlement of both of these actions is contingent upon the satisfaction of numerous conditions, including among others, final court approval.

Commencing in December 1998, a total of eleven class action lawsuits were filed in federal court by or on behalf of stockholders who purchased Company stock between January 10, 1996 and December 28, 1998. These actions named as defendants the Company and certain of its present and former officers and directors. The complaints alleged various violations of the federal securities laws in connection with the restatement of the Company's financial statements and sought unspecified but potentially significant damages. In April 1999, these actions were ordered consolidated and, in July 1999, the plaintiffs filed a consolidated amended complaint. A stockholder derivative action, purportedly on behalf of the Company and naming as defendants Company officers and directors was also filed in state court seeking recovery for the Company based on stock sales by these defendants during the above time period.

The original complaint charged ADAC and defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing regarding the Company's 1996, 1997 and 1998 financial results, which were materially false and misleading because defendants knew that the strong growth and positive results reported for those periods were due to the defendants' improper recognition of revenue in violation of generally accepted accounting principles (FASB Statement of Concepts No. 5, para. 83) and ADAC's stated revenue recognition policy.

The complaint further alleged that on December 29, 1998, the Company announced that its financial results for fiscal years 1996, 1997 and 1998 will be restated. According to the Company, 'As part of this restatement, the Company will adjust the timing of certain revenues over the 1996-1998 period.' In addition, the Company announced that, 'the Company believes that the net effect of these adjustments will have a material adverse impact on the Company's fiscal 1996 and 1997 financial results but are not expected to have a material impact on its previously released fiscal 1998 revenue, although the effect on revenue in individual quarters may be material.'