According to the Company’s FORM 10-K For the fiscal year ended December 31, 2004, on May 11, 2004, the Court granted the Company’s motion to dismiss the second amended complaint with prejudice and without leave to amend. Plaintiffs appealed the dismissal to the Ninth Circuit Court of Appeals but withdrew the appeal on August 30, 2004. The case has concluded with no payments to the plaintiffs or their counsel by the Company or the Company’s insurance carriers.

As previously disclosed by the Company’s FORM 10-Q for the quarterly period ended: June 30, 2004, on September 27, 2003, the court granted the Company’s motion to dismiss plaintiffs’ amended complaint, but allowed plaintiffs leave to file an amended complaint, which they did on October 31, 2003. On May 11, 2004, the court granted the Company’s motion to dismiss the second amended complaint with prejudice and without leave to amend. Plaintiffs have appealed the dismissal to the Ninth Circuit Court of Appeals.

The original complaint charges Insight and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Insight is a direct marketer of computers, hardware and software, primarily to small and medium-sized enterprises through a combination of outbound telemarketing, direct mail catalogs and advertising in magazines and other publications. The complaint alleges that throughout the Class Period, defendants represented that the Company would achieve sequential earnings per share ("EPS") growth in Q2 2002. The true facts, which were known by the defendants during the Class Period but were actively concealed by the defendants, were as follows: (a) That in April 2002, the defendants learned that the Company was not on track to achieve Q2 EPS growth or Q2 EPS of $0.31-$0.35; (b) That the Company's United Kingdom operations required a massive restructuring; (c) That the Company's purchase of Action plc in Q4 2001 had not been properly integrated into the Company's operations and moreover was suffering from material adverse trends; and (d) That on or about May 1, 2002, defendants decided internally to send senior executives from its recently acquired Comark acquisition to the Company's Action plc division to try to solve the division's problems, including the effect of the adverse trends (reduced demand, greater than projected operating expenses and declining market share) which defendants became aware of by April 2002. During the Class Period defendants sold over $10 million worth of their own Insight shares at prices as high as $28 per share, or double the price to which Insight shares dropped as Insight's true prospects began to reach the market. On July 17, 2002, Insight revealed that, contrary to prior assurances by defendants of Insight's continuing revenue and EPS growth, it would post sequential EPS declines, sending Insight's shares into a free fall.