According to a press release dated December 9, 2005, Intershop Communications AG announces a settlement with the plaintiffs of the securities class action, which had been pending in the USA for several years due to alleged misinformation by the Company in the year 2000. On December 5, 2005, a Court in California gave its final approval for the class action settlement. The court declared the settlement as fair to the class. The Company was convinced that this class action would not have been successful; yet decided to settle in order to avoid further litigation expenses.

By the Notice of Pendency and Proposed Settlement of Class Action dated September 30, 2005, a settlement fund in the amount of US$3,151,392.56 in cash has been established. The Court will hold a fairness hearing at 9:00 a.m., on December 5, 2005, at the United States Courthouse, 280 South 1st Street, San Jose, California. At this hearing the Court will consider whether the Settlement is fair, reasonable, and adequate. The Court will also consider how much to pay to Co-Lead Counsel.

According to the docket posted, on June 6, 2001, the Court entered the Stipulation and Order granting the motion to consolidate the cases, and appoint lead plaintiffs and lead plaintiff’s counsel. On August 9, 2001, a Consolidated Amended Complaint was filed. The defendants responded with motions to dismiss, and on April 25, 2002, the Court entered the Order granting in part and denying in part the motions to dismiss consolidated complaint. On July 19, 2002, a Second Amended Complaint was filed, and on April 14, 2003, a Third Amended Class Action Complaint was filed. Defendants filed a motion to dismiss the Third Amended Complaint, which was granted in part and denied in part in an Order entered on July 25, 2003. On September 30, 2005, a Stipulation of Settlement was filed and preliminarily approved that same day.

The original complaint charges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 by providing a materially false and misleading Registration Statement and Prospectus in connection with the Company's IPO. Specifically, the Complaint alleges that representations made in the Registration and Prospectus indicating that the Company was expanding their leadership position and was poised for success were false and misleading. Instead, the Company was experiencing a substantial decline is sales for core business as well as weakening of demand for many of its products. The Company disclosed the extent of the problems it was facing on January 1, 2001. This necessitated a reduction of both revenue and earnings expectations for the fourth quarter of 2000, the price of Intershop ADS plummeted, falling in excess of $10.00 per share to close at $4.8125.