Class Action Suit Filed Against Network Express, Inc., its Officers, Directors and its Underwriters Alleging Misrepresentations and Insider Trading.

SAN DIEGO--(BUSINESS WIRE)--Oct. 8, 1996--A class action has been commenced in the United States District Court for the Eastern District of Michigan by plaintiffs Fred S. Havenick, George L. Leland and Jacquelyn Leland on behalf of purchasers of Network Express, Inc. ("Network Express") common stock during the period March 13, 1995 to October 6, 1995.

Network Express sells integrated services digital network ("ISDN") equipment used for high-speed telecommunications. The defendants are Network Express, certain of its officers and directors and two investment banking firms, which acted as Network Express' financial advisors and underwriters of its huge secondary stock offering in May 1995. The complaint charges these defendants with violations of the federal securities laws. Network Express went public in mid-1994, and in early 1994 its stock was trading at approximately $7-$8 per share due to the apparent success Network Express had achieved in selling its ISDN products in Japan. During 1995, defendants made false and misleading representations that Network Express' business in Japan would continue to succeed and that Network Express was on the verge of explosive growth in revenues from its business in the United States and Europe, in large part due to the success of its new NELink 1000 product, while forecasting strong revenue and earnings per share growth for Network Express throughout 1995 and 1996. These representations pushed Network Express' stock price to much higher levels -- $19-5/8 per share by August 1995 -- enabling Network Express and its insiders to sell over 3 million shares of Network Express stock to the public at artificially inflated prices. This enabled the Company to raise $27 million it desperately needed in an attempt to continue to survive in an increasingly competitive business environment and Network Express' insiders to pocket over $3.8 million in insider trading proceeds. However, shortly after defendants had completed their large stock sales, Network Express reported lower than expected third quarter results and revealed that instead of the strong growth it had previously forecast, its sales in Japan would decline sharply, its United States business would not achieve strong revenue growth and that its NELink 1000 product did not have the remote access capabilities, which were indispensable for its commercial success. As Network Express then reported large operating losses for the fourth quarter of 1995 and the first two quarters of 1996, its stock plunged to a low of just $4-1/8 per share, and it was acquired by Cabletron Systems, Inc., ending its existence as a public company. Plaintiffs who have sued seek to recover damages on behalf of all purchasers of Network Express common stock during the Class Period (the "Class"). They are represented by several law firms, including Milberg Weiss Bershad Hynes & Lerach LLP, who have expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Milberg Weiss has been actively engaged in commercial litigation, emphasizing securities and antitrust class actions, for more than 20 years. The firm has offices in New York, San Diego, San Francisco and Los Angeles and is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts, which have appointed the firm to major positions in complex multi-district or consolidated litigations. Milberg Weiss has taken a lead role in numerous important actions on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total approximately $2 billion.

If you are a member of the Class described above, you may, no later than 60 days from today, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiffs' counsel, William Lerach of Milberg Weiss at 800/348-6192.

CONTACT: Milberg Weiss Bershad Hynes & Lerach LLP

William Lerach, 800/348-6192