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             C L A S S   A C T I O N   R E P O R T E R

              Tuesday, April 27, 1999, Vol. 1, No. 58

                            Headlines

CHICAGO ILLINOIS: City Pays $45,000 for Harassing Homeless
CHS ELECTRONICS: Henzel Firm Files Complaint in Florida
COCA-COLA: Discrimination Creates Barriers and Segregation
GENRAD INC: Too Early to Assess Outcome One Year After Service
IDENTIX INC: Insurance Proceeds Funded Securities Settlement

INCOMNET INC: Renegotiates Settlement, Faces More Opt Out Claims
KEANE INC: Hospitals Say Health System Won't Make it to Y2K
MITCHELL ENERGY: Final $5 Million for Royalty Owners Opting Out
NCAA SCHOOLS: Coaches Share $54.5 Million for Illegal Pay Caps
NETWORK ASSOCIATES: Lawyers Say Fraud was Ongoing Last Week

OSICOM TECHNOLOGIES: Abbey Gardy Files Complaint in California
OSICOM TECHNOLOGIES: Entwistle & Cappucci File California Suit
OSICOM TECHNOLOGIES: Henzel Firm Files Complaint in California
OSICOM TECHNOLOGIES: Milberg Weiss Files Suit in California
OSICOM TECHNOLOGIES: Pomerantz Haudek Files Suit in California

OSICOM TECHNOLOGIES: Schiffrin & Barroway File California Suit
PEGASYSTEMS INC: Seeks to Dismiss One, Waits to Defend Another
SEMX CORP.: Time Expires for Plaintiffs to Appeal Dismissal


                            *********


CHICAGO ILLINOIS: City Pays $45,000 for Harassing Homeless
----------------------------------------------------------
Federal Judge Wayne Anderson ruled that a $45,000 settlement
between homeless residents of Lower Wacker Drive and the city of
Chicago was fair, bringing to an end a lawsuit that was filed
more than three years ago. As many as 200 people will be
compensated for lost property as part of the settlement.

The class action lawsuit, Love v. City of Chicago, alleged that
City sweeps of Lower Wacker violated their rights by seizing and
destroying personal property. The lawsuit was filed to stop city
police and sanitation workers from conducting sweeps of Lower
Wacker. Property lost by homeless people during these sweeps
included blankets, asthma and diabetes medicine, marriage
certificates, and personal items including family photos.

"It was really frustrating to have your things just taken from
you," said Stanley Washington, one of the plaintiffs in the
lawsuit. "The money doesn't make up for all of that, but it will
help, I want to buy some new clothes and try to get an
apartment."

"This settlement is a start, but much more work needs to be
done," said John Donahue, executive director of the Chicago
Coalition for the Homeless. "Homelessness is a growing problem
in Chicago, and children are the fastest growing segment of the
population. What we really need is more affordable housing and
living wage jobs, because it takes a home to raise a child."

To learn more, call John Donahue of Chicago Coalition for the
Homeless at 312-435-4548.


CHS ELECTRONICS: Henzel Firm Files Complaint in Florida
-------------------------------------------------------
The Law Offices of Marc S. Henzel filed a class action lawsuit
in the United States District Court for the Southern District of
Florida, on behalf of all purchasers of the common stock of CHS
Electronics, Inc. (NYSE: HS) between June 19, 1998, and March
22, 1999. The complaint alleges that defendants issued a series
of false financial statements and failed to disclose material
facts concerning the Company's revenues and earnings.

To learn more, call Marc S. Henzel, Esq. at 888-643-6735 or 215-
625-9999 or write Mhenzel182@aol.com via email.


COCA-COLA: Discrimination Creates Barriers and Segregation
----------------------------------------------------------
The Associate Press reported that four black employees of Coca-
Cola Co. have filed a class-action lawsuit in federal court
charging the soft-drink giant with discrimination. Their
complaint, filed Thursday in U.S. District Court in Atlanta,
alleges the company pays black employees less, offers them fewer
promotions and gives them lower performance evaluation scores
than whites.

"Not only do barriers exist for African-American employees
seeking upward advancement within the company, but similar
barriers virtually segregate the company into divisions where
African-American leadership is acceptable and divisions where it
is not," said the suit, according to the AP report.

Coca-Cola spokesman Rob Baskin told AP that the company's
attorneys hadn't yet received a copy of the lawsuit and couldn't
comment directly on it. In general, he said, the company doesn't
believe the allegations have merit. "Coca-Cola doesn't tolerate
discrimination, and if any discrimination is found, we take
action to stop it and prevent it from occurring," he told AP.
Baskin said an estimated 27 percent of Coke's U.S. workers are
minorities, including 15 percent of U.S. managers.

The Associated Press wrote that the four plaintiffs brought the
suit on behalf of 1,500 black employees who hold or have held
salaried positions with Coke in the United States since April
1985. It says Coke pays its average black employee nearly
$27,000 per year less than the average white employee. The
complaint also says black workers' opportunities are limited.
Those who are promoted into management usually go into human
resources, public relations and community affairs, where they
run into "a glass ceiling," it said. AP reports that the suit
also said Coke has "failed to place the same importance on its
African-American employees" as it has on marketing to black
consumers, who make about 25 percent of the purchases of Coke
brands.


GENRAD INC: Too Early to Assess Outcome One Year After Service
--------------------------------------------------------------
On April 28, 1998, Genrad Inc. and James F. Lyons, its President
and Chief Executive Officer, were served with a class action
suit on behalf of persons who purchased Company stock entitled
Duck Enterprises, LPV GenRad and James F. Lyons, CA No. 98-
10706-PBS, filed in the United States District Court for the
District of Massachusetts. The complaint seeks unspecified
damages, as well as costs and attorney's fees.

The Company recently reported that it has reviewed the complaint
and believes that the allegations are without merit. The Company
intends to vigorously defend the suit and has notified its
insurance carrier of the claim. Due to the preliminary nature of
the action, the company says it is not possible at this time to
assess the outcome of the suit.


IDENTIX INC: Insurance Proceeds Funded Securities Settlement
------------------------------------------------------------
Identix Inc. was named as a defendant in a class action lawsuit,
filed in October 1996 in the United States District Court for
the Northern District of California. Certain executive officers
of the Company were also named as defendants. Plaintiffs sought
to represent a class of all persons who purchased the Company's
common stock between January 31, 1996 and August 26, 1996.

The complaint alleged claims under the federal securities laws
and California law. Plaintiffs alleged that the Company and
certain of its executive officers made false and misleading
statements regarding the Company that caused the market price of
its common stock to be "artificially inflated." The Company and
its officers denied plaintiffs' allegations. In December 1997,
the Company and its officers reached an agreement with
plaintiffs and their counsel to settle the lawsuit. The
settlement was funded largely with directors and officers
liability insurance proceeds. The settlement was approved by the
Court, following notice to the class members, and the lawsuit
was dismissed with prejudice on March 6, 1998.


INCOMNET INC: Renegotiates Settlement, Faces More Opt Out Claims
----------------------------------------------------------------
On October 17, 1995, Incomnet was served with a complaint in a
class action lawsuit entitled SANDRA GAYLES, ET AL. V. SAM D.
SCHWARTZ AND INCOMNET, INC., Case No. CV95-0399 AWT (BQRx),
filed in the United States District Court for the Central
District of California. As amended, the complaint alleges that
Incomnet violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 because Incomnet failed to
disclose and falsely denied the existence of a non-public
investigation of Incomnet by the Securities and Exchange
Commission.

The complaint also claims that Incomnet and its President and
former Chairman of the Board of Directors, Sam D. Schwartz,
violated Sections 10(b), 16(a), 20(a) and 23(a) of the
Securities Exchange Act of 1934, and Section 25400 of the
California Corporations Code, because they did not disclose
until August 1995 purchases and sales of Incomnet's stock made
in the open market by an affiliate of Mr. Schwartz between
September 1994 and August 1995. The amended complaint seeks
compensatory damages, interest, attorneys' fees and costs, and
other extraordinary, equitable and injunctive relief as may be
appropriate. On January 11, 1996, the court certified the case
as a class action pursuant to the parties' stipulation.

On October 7, 1997, Incomnet reached a tentative settlement of
the lawsuit. The proposed 1997 settlement consisted of an
agreement by Incomnet to pay $500,000 in cash plus 1.5 million
shares of Common Stock. If the value of such stock was not worth
at least $8.15 million, Incomnet would have been required to
make up the difference between the value of the stock and $8.15
million by issuing warrants with 5-year terms. Accordingly, the
tentative settlement had a total settlement value of $8.65
million. Because of the decline in the value of Incomnet's stock
beginning in July 1997, this proposed settlement could not
proceed under its terms. In 1998, Incomnet and the class
plaintiffs began to negotiate new settlement terms.

In September 1998, Incomnet entered into a new written
settlement agreement with the class plaintiffs. The settlement
agreement is subject to court approval and satisfaction of
certain other conditions. The terms of the settlement include
payment to the plaintiffs of a total of $500,000, reimbursement
of certain expenses up to a maximum of $100,000 and issuance of
a certain number of shares of Incomnet's Common Stock based on a
formula. The maximum number of shares of Incomnet Common Stock
that will be issued in accordance with the formula under the
settlement agreement is 4,125,000, assuming a $1 per share
trading price at the time the formula is applied. The minimum
number of shares of Common Stock that will be issued under the
settlement agreement is 1,375,000 shares, assuming a $3 per
share trading price at the time the formula is applied. Prior to
completion of the settlement agreement and issuance of the
shares in accordance with that agreement, Incomnet's
shareholders must approve an amendment to Incomnet's Articles of
Incorporation to increase the authorized number of shares of
Common Stock. It is anticipated that the closing of the
settlement agreement and issuance of shares will occur no
earlier than June 1999.

The Court has preliminarily approved the settlement. A hearing
on final approval is scheduled for May 20, 1999. There can be no
assurance that this new settlement will be approved and
consummated. Should the settlement not be approved, Incomnet
intends to vigorously defend the lawsuit. The case is still in
the discovery phase.

On July 22, 1997, Incomnet was named in a lawsuit, JAMES A.
BELTZ, ET. AL. V. SAMUEL D. SCHWARTZ, RITA SCHWARTZ, STEPHEN A.
CASWELL, JOEL W. GREENBERG, INCOMNET, INC., DAVID BODNER AND
MURRAY HUBERFELD, Case No. 97-1678 (MJD/AJB), in the United
States District Court for the District of Minnesota. The lawsuit
was filed by approximately twenty plaintiffs who were allowed to
opt out of the GAYLES class action lawsuit to pursue a lawsuit
on their own. The complaint alleges that Mr. Schwartz and the
other defendants created a fraudulent scheme to drive up the
price of Incomnet's stock in violation of Sections 9, 10(b) and
20(a) of the Securities Exchange Act of 1934, Rule 10b-5
promulgated thereunder, and Minnesota law. The lawsuit alleges
losses by the plaintiffs of approximately $1.5 million and seeks
unspecified damages. The case is in the discovery phase.

On or about March 24, 1998, the plaintiffs in this suit plus
several additional plaintiffs commenced a parallel state court
action entitled JAMES A. BELTZ, ET. AL. V. SAMUEL D. SCHWARTZ
AND RITA L. SCHWARTZ, STEPHEN A. CASWELL, JOEL W. GREENBERG,
INCOMNET, INC., DAVID BODNER, AND MURRAY HUBERFELD, Case No. MC
98-00674, in the State of Minnesota, County of Hennepin. This
state lawsuit brings causes of action for violations of
Minnesota statutes covering securities fraud, consumer fraud,
control person liability and conspiracy to defraud based on the
same factual allegations pleaded in the federal suit. Plaintiffs
allege losses of over $1.8 million and the lawsuit seeks
unspecified damages. The case will enter the discovery phase
should court-sponsored mediation efforts fail to resolve the
parties' disputes. Incomnet plans to vigorously defend this
lawsuit.

The Company also reported that a total of approximately 50
members of the class in the GAYLES class action lawsuit have
opted out of the class and may file separate lawsuits against
Incomnet. If such claims are filed as legal complaints, Incomnet
will seek to have them consolidated with other pending lawsuits,
if appropriate, or will defend them separately.

The Company also said that expenses of $12.5 million in 1997
were primarily attributable to the settlement of the class
action lawsuit for $8.7 million, which was renegotiated in 1998,
and that it is subject to pending litigation and has taken a
reserve of $8.5 million associated with anticipated settlement
of the class action lawsuit.


KEANE INC: Hospitals Say Health System Won't Make it to Y2K
-----------------------------------------------------------
Mineral Area Osteopathic Hospital and two other medical
facilities filed a class action complaint against Keane Inc. on
March 31, according to Mealey's Year 2000 Report. The lawsuit
asserts the "MEDNET" health care system sold by Keane and a
predecessor is not Year 2000 compliant. The complaint was filed
in the U.S. District Court for the Northern District of Iowa.

The hospitals complain that they spent $300,000 and more on
systems sold by Iowa-based Source Data Systems between 1990 and
1993, and paid an annual support fee for an automatically
renewable support agreement. The plaintiffs say that Keane
acquired SDS in 1995. In 1997, Keane told customers the MEDNET
system would be "sunsetted," plaintiffs complain. Keane sent a
form letter to customers on Dec. 30, 1998, informing them it was
canceling the support agreements pursuant to a 90-day
cancellation clause. The hospitals say requested extensions are
being offered only if customers waive any Year 2000 claims.

Causes of action include breach of warranty, breach of contract,
breach of implied covenant of good faith and a request for an
injunction forcing Keane to bring the hospitals' MEDNET systems
into compliance. The lawsuit was filed by the firms of Milberg,
Weiss, Bershad, Hynes & Lerach of New York, Belin Lamson
McCormick Zumbach Flynn in Des Moines, Iowa, and Azrael, Gann &
Franz in Towson, Md. Keane is defending a similar lawsuit by a
single hospital in Kentucky state court (Pineville Community
Hospital v. Keane). SDS and Pineville are themselves defendants
in a related declaratory judgment action filed by Cincinnati
Insurance Co.


MITCHELL ENERGY: Final $5 Million for Royalty Owners Opting Out
---------------------------------------------------------------
In July 1997, Mitchell Energy & Development Corp. recorded a
$26,000,000 financial statement provision for estimated costs to
be incurred in connection with settlements of litigation with
its North Texas royalty owners. Then, in October 1997, a
$21,000,000 payment was made to settle class-action litigation
brought on behalf of these royalty owners.

According to the company's recent announcement, payments
totaling approximately $5,000,000 were subsequently made to
royalty owners who chose not to participate in the class-action
litigation.


NCAA SCHOOLS: Coaches Share $54.5 Million for Illegal Pay Caps
--------------------------------------------------------------
In a story from Overland, Kansas, the Associated Press reports
that the NCAA approved a $54.5 million plan to pay coaches whose
earnings were illegally restricted, leading to the largest
judgment levied against the organization. The major powers, who
employed most of the coaches affected, will pay about $200,000
each. The smaller schools will be assessed about $80,000 each
even though some never had a restricted earnings coach but voted
for the rule and share in the wealth produced by the majors.

The AP writes that the payment plan stems from a class action
suit representing about 2,000-3,000 assistant coaches whose
salaries were capped at $16,000 a year. AP says that the plan is
designed to head off a ruinous fight between the big and small
schools among the 310 members in Division I. It received final
approval by the NCAA's board of directors and executive
committee. "It is a very workable solution, even though there
will be schools both large and small that may have preferred a
different formula," Graham Spanier, chairman of the NCAA board.
told the Associated Press. "As the president at Penn State, I
would like to have paid less. But as members of the board, we
have to look at the big picture, and we agreed that this is a
solution that will work."

AP says that the coaches will still have to wait for their
money. "We hope to have the money distributed within six to
eight months, assuming the court approves the settlement and
plan of distribution," Lori Schultz, one of the coaches' lead
attorneys, told AP. "Until we know the total number of coaches
who submit a claim, we cannot estimate the amount each coach
will receive or to what extent they will receive payment in
addition to their actual loss of income."

Most of the money will come from future funds schools get from
the CBS contract for the men's basketball tournament. AP says
that the coaches will be paid according to their sport, school
and coaching tenure.


NETWORK ASSOCIATES: Lawyers Say Fraud was Ongoing Last Week
-----------------------------------------------------------
Several law firms have extended their class action complaints
filed against Network Associates, Inc. (Nasdaq: NETA) to
encompass the period between January 20, 1998 and April 19,
1999. These class action complaints may include persons who
acquired their NETA shares in exchange for shares, ADRs, or
options in other companies which were acquired by Network
Associates. The law firms include Schiffrin & Barroway, LLP,
Milberg Weiss Bershad Hynes & Lerach LLP, Bernstein Liebhard &
Lifshitz, LLP, and Weiss & Yourman.

This action follow Network's announcement last week that its
problems would extend to the second quarter and beyond because
product inventories at the company's distributors swelled to the
point that it would take no new orders. The market's reaction
was swift and severe. Share prices plummeted 27% on the next
day. The announcement comes on the heels of its April 6
disclosure that first-quarter profits would fall short of
estimates as a result of a slowdown in demand and concerns that
it would have to restate fourth-quarter earnings downward after
a review by the Securities and Exchange Commission of write-offs
taken by Network in connection with its 1997 and 1998
acquisitions.

For more information, call Weiss & Yourman at 888-593-4771 or
212-682-3025 or write wynyc@aol.com via email, and Schiffrin &
Barroway, LLP (Andrew L. Barroway, Esq.) at 888-299-7706 or 610-
667-7706 or write info@scbclasslaw.com via email, and William
Lerach, Alan Schulman or Darren Robbins of Milberg Weiss at 800-
449-4900 or at wsl@mwbhl.com via email, and Sandy A. Liebhard,
Esq., or Michael S. Egan, Esq., at Bernstein Liebhard &
Lifshitz, LLP, at 800-217-1522 or 212-779-1414 or write to
egan@bernlieb.com via email.


OSICOM TECHNOLOGIES: Abbey Gardy Files Complaint in California
--------------------------------------------------------------
The law firm of Abbey, Gardy & Squitieri, LLP filed a class
action in the United States District Court for the Central
District of California on behalf of all purchasers of Osicom
Technologies Inc. (Nasdaq: FIBR) securities between July 2, 1998
and April 21, 1999. The Complaint charges Osicom and certain of
its officers and directors with violations of the federal
securities laws.

Among other things, plaintiff claims that defendants issued
materially false and misleading statements regarding Osicom's
exclusive agreement to supply wireless personal digital
assistant or "PDA" products to a customer in Japan. In its July
1, 1998 press release, Osicom Technologies estimated the value
of that PDA agreement at approximately $90 million. Osicom
Technologies shares soared 20 percent the next day in reaction
to the news. By April 21, 1999, Osicom Technologies Chief
Executive admitted that the PDA agreement was for just $175,000
in engineering work. In reaction to the stunning admission,
Osicom Technologies shares plunged as much as 49 percent,
inflicting enormous damage on investors.

Additional details may be obtained from Mark C. Gardy, Esq., or
James S. Notis, Esq., at 800-889-3701 or 212-889-3700 or write
to jnotis@a-g-s.com or contact James Jay Seirmarco, Esq., at
415-538-3725 or at jseirmarco@a-g-s.com via email.


OSICOM TECHNOLOGIES: Entwistle & Cappucci File California Suit
--------------------------------------------------------------
Entwistle & Cappucci LLP, filed a class action lawsuit for
violations of the federal securities laws against Osicom
Technologies, Inc. (Nasdaq: FIBR) and certain officers and
directors of the Company, in the United States District Court
for the Central District of California. The lawsuit was brought
on behalf of all persons who purchased Osicom common stock
between July 2, 1998 and April 20, 1999. The complaint charges
Osicom and certain officers and directors of the Company with
violations of the Sections 10(b) and 20(a) of the Exchange Act.

Specifically, the complaint alleges that defendants represented
to the investment community that Osicom had a $90 million
contract to sell wireless communication products in Japan.
Ultimately, defendants have admitted that the contract was only
worth $175,000 and that the products it was attempting to sell
were not really wireless. Because of the issuance of false and
misleading statements concerning such contract, the price of
Osicom common stork was artificially inflated.

For more details, call Vincent R. Cappucci, Esq. at 212-894-7200
or write to Entcapl@aol.com via email.


OSICOM TECHNOLOGIES: Henzel Firm Files Complaint in California
--------------------------------------------------------------
The Law Offices of Marc S. Henzel filed a class action in the
United States District Court for the Central District of
California on behalf of purchasers of the common stock of Osicom
Technologies, Inc. (Nasdaq: FIBR) during the period between July
2, 1998 and April 20, 1999. The complaint charges Osicom and
certain of its officers and directors with violations of the
Securities Exchange Act of 1934 by making misrepresentations
about Osicom's business and its growth.

Defendants allegedly represented to the investment community
that Osicom had a $90 million contract to sell wireless
communication products in Japan. Ultimately, defendants admitted
that the contract was only worth $175,000 and that the products
it was attempting to sell were not really wireless. As a result,
Osicom's stock price was artificially inflated to as high as
$28-3/4 per share. When Osicom ultimately admitted to its prior
false statements, its stock collapsed to as low as $9-5/8 on
volume of 3.2 million shares before trading was halted.

To learn more, call Marc S. Henzel, Esq. at 888-643-6735 or 215-
625-9999 or write to Mhenzel182@aol.com via email.


OSICOM TECHNOLOGIES: Milberg Weiss Files Suit in California
-----------------------------------------------------------
Milberg Weiss filed a class action in the United States District
Court for the Central District of California on behalf of
purchasers of the publicly traded securities of Osicom
Technologies, Inc. (NASDAQ: FIBR) during the period between July
2, 1998 and April 20, 1999. The complaint charges Osicom and
certain of its officers and directors with violations of the
Securities Exchange Act of 1934 by making misrepresentations
about Osicom's business and its growth.

Defendants allegedly represented to the investment community
that Osicom had a $90 million contract to sell wireless
communication products in Japan. Ultimately, defendants admitted
that the contract was only worth $175,000 and that the products
it was attempting to sell were not really wireless. As a result,
Osicom's stock price was artificially inflated during the Class
Period to as high as $28-3/4 per share. When Osicom ultimately
admitted to its prior false statements, its stock collapsed to
as low as $9-5/8 on volume of 3.2 million shares before trading
was halted.

For more information, call William Lerach, Alan Schulman or
Darren Robbins at 800-449-4900 or at wsl@mwbhl.com via email.


OSICOM TECHNOLOGIES: Pomerantz Haudek Files Suit in California
--------------------------------------------------------------
On April 22, 1999, Pomerantz Haudek Block Grossman & Gross LLP
filed a class action suit against Osicom Technologies Inc.
(Nasdaq: FIBR) and certain of its officers and directors on
behalf of a shareholder of the Company. The case was filed in
the United States District Court for the Central District of
California on behalf of all persons who purchased securities of
Osicom between July 1, 1998 and April 20, 1999.

The Complaint charges that Osicom and certain of its officers
and directors violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 by issuing materially false and
misleading statements to the investing public concerning a
purported exclusive contract with an overseas customer.
Specifically, the Complaint alleges that defendants materially
misrepresented the Company's prospects in connection with the
agreement by misrepresenting the value of the contract to be
worth more than $90 million over two years, when, in fact, the
agreement merely required the customer to pay $175,000 towards
certain design costs and provided no real commitment to purchase
any of the Company's product. The Complaint alleges defendants
artificially inflated the price of the Company's securities.

On April 20, 1999, Osicom issued a press release stating that it
had received no orders from the customer. Bloomberg News
subsequently reported the details of the contract the following
day. The market reaction to the news was disastrous. Recently,
the price of Osicom's common stock traded as high as $28 3/4 per
share. On April 21, 1999, Osicom's common stock price plummeted
to $10 / per share before trading was halted by NASDAQ.

To learn more, contact Mildred C. Frazzitta, Esq. or Julian Carr
at 888-476-6529 or at jpcarr@pomlaw.com by email.


OSICOM TECHNOLOGIES: Schiffrin & Barroway File California Suit
--------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP filed a class action
lawsuit in the United States District Court for the Central
District of California on behalf of all purchasers of the common
stock of Osicom Technologies, Inc. (Nasdaq: FIBR) from July 2,
1998 through April 20, 1999. The complaint charges Osicom and
certain of its officers and directors with issuing false and
misleading statements that the Company had a $90 million
contract with a customer in Japan when in fact the contract was
worth only $175,000.

To learn more, call Andrew L. Barroway, Esq. at 888-299- 7706 or
610-667-7706 or at info@scbclasslaw.com via email.


PEGASYSTEMS INC: Seeks to Dismiss One, Waits to Defend Another
--------------------------------------------------------------
In April 1998, a complaint purporting to be a class action was
filed with the United States District Court for the District of
Massachusetts alleging that Pegasystems Inc. and several of its
officers violated section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5. In December 1998, the plaintiffs filed
their First Amended Consolidated Complaint which names the
Company, the Company's President (Alan Trefler) and a former
officer and director (Ira Vishner) as defendants. The Amended
Complaint alleges that the defendants issued false and
misleading financial statements and press releases concerning
the Company's publicly reported earnings. The Amended Complaint
seeks certification of a class of persons who purchased the
Company's Common Stock between July 2, 1997 and October 29,
1997, and does not specify the amount of damages sought.

The defendants have filed a motion to dismiss this litigation to
which the plaintiffs have replied. The Company intends to defend
this matter vigorously.

In December 1998, a complaint also purporting to be a class
action was filed with the Court alleging that the Company and
Alan Trefler violated section 10(b)and Rule 10b-5, and that Mr.
Trefler also violated section 20(a) of the Exchange Act. The
litigation was filed after the Company's announcement on
November 24, 1998 that it might be recording revenue
adjustments, on behalf of a purported class of persons who
purchased the Company's Common Stock between October 29, 1998
through November 24, 1998. The Complaint does not specify the
amount of damages sought. Plaintiff's have indicated that they
intend to file an amended complaint.

The defendants have not yet filed an answer or other responsive
pleading in this action. The Company intends to defend this
matter vigorously.


SEMX CORP.: Time Expires for Plaintiffs to Appeal Dismissal
-----------------------------------------------------------
On January 5, 1998, Semx Corp. received notice that a
shareholder class action was filed against it, its Chief
Executive Officer and its Chief Financial Officer, in the United
States District Court for the Eastern District of Pennsylvania  
called Blum et. al. v. Semiconductor Packaging Materials Co.,
Inc., et. al. (97CV 7078)). On May 5, 1998, the United States
District Court for the Eastern District of Pennsylvania
dismissed the case. An appeal of the order dismissing this
lawsuit was not filed within the period permitted for such
appeal.



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