Document:

<PAGE>

                                                                    EXHIBIT 10.9

                           ASSET PURCHASE AGREEMENT

                         dated as of February 26, 1999

                                 by and among

                        INTERSHOP COMMUNICATIONS, INC.,
                            A Delaware corporation

                        FOUNTAINHEAD MANAGEMENT, INC.,
                            A New York corporation

                                      and

                                AARON KAUFMAN,
                                 an individual
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                               TABLE OF CONTENTS
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                                                                           Page
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SECTION 1.  Purchase And Sale Of Assets...................................    1

     1.1    Sale of Assets................................................    1
     1.2    Excluded Assets; No Assumption of Liabilities.................    1
     1.3    Initial Purchase Price and Payment............................    1
     1.4    Earn-Out Payment..............................................    2
     1.5    Time and Place of Closing.....................................    3
     1.6    Transfer of the Assets........................................    3
     1.7    Assignment of the Leases......................................    3
     1.8    Possession; Delivery of Records...............................    3
     1.9    Further Assurances............................................    3

SECTION 2.  Representations And Warranties Of Fountainhead And The
            Selling Stockholder                                               3

      2.1   Organization and Qualification...............................     4
      2.2   Authority....................................................     4
      2.3   Subsidiaries.................................................     4
      2.4   Financial Statements.........................................     4
      2.5   Title to Properties; Liens; Condition of Properties..........     5
      2.6   Taxes........................................................     5
      2.7   Absence of Undisclosed Liabilities...........................     5
      2.8   Absence of Certain Changes...................................     5
      2.9   Patents, Trade Names and Trademarks..........................     6
     2.10   Contracts....................................................     6
     2.11   Litigation...................................................     7
     2.12   Compliance with Laws.........................................     7
     2.13   Warranty or Other Claims.....................................     7
     2.14   Disclosure of Material Information...........................     7
     2.15   Labor Relations; Employees...................................     7
     2.16   Creditors....................................................     8

SECTION 3.  Representations And Warranties Of Intershop..................     8

     3.1    Organization and Qualification...............................     8
     3.2    Authority....................................................     8
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                                       i
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                               TABLE OF CONTENTS
                                  (continued)
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SECTION 4.  Covenants....................................................     9

     4.1    Covenants of Fountainhead and the Selling Stockholder........     9
     4.2    Selling Stockholder's Covenant Not to Compete................     9
     4.3    Affirmative Covenants of INTERSHOP...........................     9
     4.4    Mutual Covenant..............................................    10

SECTION 5.  Conditions...................................................    10

     5.1    Conditions to the Obligations of INTERSHOP...................    10
     5.2    Conditions to Obligations of Fountainhead....................    11

SECTION 6.  Rights And Obligations Subsequent To Closing.................    11

     6.1    Survival of Warranties.......................................    11
     6.2    Sales Taxes..................................................    11

SECTION 7.  Indemnification..............................................    11

     7.1    Indemnification by Fountainhead and the Selling Stockholder..    11
     7.2    Indemnification by INTERSHOP.................................    12
     7.3    Notice; Defense of Claims....................................    13

SECTION 8.  Confidentiality..............................................    13

SECTION 9.  Miscellaneous................................................    13

     9.1    Fees and Expenses............................................    13
     9.2    Notices......................................................    13
     9.3    Entire Agreement.............................................    14
     9.4    Governing Law; Venue.........................................    14
     9.5    Broker's Fees................................................    15
     9.6    Assignability................................................    15
     9.7    Publicity and Disclosures....................................    15
     9.8    Waivers; Severability........................................    15
     9.9    Headings.....................................................    15
    9.10    Counterparts.................................................    15
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                                      ii
<PAGE>

                            SCHEDULES AND EXHIBITS

Schedule I:   Acquired Assets
Schedule II:  Excluded Assets
Exhibit A:    Leases
Exhibit B:    Disclosure Schedule
Exhibit C:    Landlord's Estoppel Certificate
Exhibit D:    Assignment of Leases
Exhibit E:    Employment Offer Letter: Aaron Kaufman

                                      iii
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

                           ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (the "Agreement") is made effective as of
February 26, 1999, by and among INTERSHOP Communications, Inc., a Delaware
corporation ("INTERSHOP"), Fountainhead Management, Inc., a New York corporation
("Fountainhead"), and Aaron Kaufman, the sole stockholder of Fountainhead (the
"Selling Stockholder").

     Whereas, INTERSHOP desires to purchase and Fountainhead desires to sell to
INTERSHOP certain properties and assets of Fountainhead for the consideration
specified herein without the assumption by INTERSHOP of any liabilities or
obligations of Fountainhead other than as specifically set forth below, all on
the terms and subject to the conditions hereof.

     Now, Therefore, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:

SECTION 1. Purchase and Sale of Assets.

     1.1  Sale of Assets. Subject to the provisions of this Agreement,
Fountainhead hereby agrees to sell and INTERSHOP hereby agrees to purchase all
of the properties, assets, rights and business of Fountainhead (other than cash)
including, without limitation, Fountainhead's accounts receivable, notes
receivable, inventories, real estate, properties, plants, equipment, leases,
proprietary rights on intellectual property rights, patents, trademarks, trade
names, trade secrets, service marks, routes, customer lists, covenants not to
compete with Fountainhead and all computer hardware and software associated with
Fountainhead (the "Assets"). Certain of the Assets are listed on Schedule I
attached hereto. INTERSHOP also agrees to assume the lease of real property
between Fountainhead and BDG 115 Broadhollow, L.P. for the offices located at
115 Broadhollow Road, Melville, New York (the "Office"), a copy of which is
attached hereto as Exhibit A, and two equipment leases between Fountainhead and
Norwest Financial Leasing, Inc. and Eastern Funding LLC (the "Leases").
Fountainhead and the Selling Stockholder hereby covenant and agree to use their
best reasonable efforts obtain the consent of the landlord and/or any other
required party to enable Fountainhead to assign or transfer the Leases to
INTERSHOP.

     1.2  Excluded Assets; No Assumption of Liabilities. INTERSHOP shall not
purchase the excluded asset set forth on Schedule II attached hereto. INTERSHOP
shall not assume any liabilities of Fountainhead, including without limitation
the principal and interest owed by Fountainhead to the Werner and Linda Schmitt
Trust Account, Werner Schmitt and Dru Doshi under three (3) separately executed
promissory notes (the "Notes"), whether accrued or contingent, except for (i)
obligations arising under the Leases, and (ii) any amounts remaining unpaid on
general business accounts payable and obligations included in deferred revenue.
Fountainhead acknowledges that it and Robert Kaufman remain solely liable for
the principal and interest owed under the Notes.

     1.3  Initial Purchase Price and Payment. In consideration of the sale by
Fountainhead to INTERSHOP of the Assets, at the Closing, INTERSHOP shall pay to
Fountainhead the aggregate amount of **** to be paid in ****

                                      1.
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

installments as follows (the payments after April 1, 1999 to be reflected in the
promissory note attached hereto as Exhibit F):

               (i)    ****,

               (ii)   ****,

               (iii)  ****,

               (iv)   ****.

     1.4  Earn-Out Payment.

          (a)  During ****, up to an additional **** will be payable by
INTERSHOP to the Selling Stockholder (the "Earn-Out Payment"), contingent upon
the Gross Revenues and Net Income/Loss of the Intershop Professional Services
U.S. (East) (that professional services entity located in Melville, New York)
recognized in fiscal year 1999 and calculated in accordance with the following
procedures:

               (i)       The Earn-Out Payment will be calculated by multiplying
****% by the 1999 Gross Revenues of the Intershop Professional Services U.S.
(East), provided however, that (a) such Earn-Out Payment be no more than ****
and (ii) the Earn-Out Payment will be Zero Dollars ($0) if the Intershop
Professional Services U.S. (East) runs a Net Loss for fiscal year 1999;

               (ii)      Not later than March 1, 2000, INTERSHOP shall prepare
and deliver to the Selling Stockholder a statement certified by the Chief
Financial Officer of INTERSHOP, setting forth the amount of Gross Revenues and
the Net Income/Loss of the Intershop Professional Services U.S. (East) for the
fiscal year ending December 31, 1999, the Earn-Out Payment amount, if any, and a
reasonably detailed description of the relevant calculations (the "Earn-Out
Statement). "Gross Revenue" and "Net Income/Loss" calculations will be for
recognized revenue for services (excluding software license, maintenance, and
technical support fees) and performed in accordance with generally accepted
accounting principles; and

               (iii)     If the Selling Stockholder has any objections to the
Earn-Out Statement, he shall deliver a reasonably detailed statement describing
his objections to INTERSHOP within thirty (30) days after receiving the Earn-Out
Statement. The Selling Stockholder and INTERSHOP shall use reasonable efforts to
resolve any objections to the calculations of Gross Revenues and Net
Income/Loss. If the parties do not obtain a final resolution within thirty (30)
days after INTERSHOP's receipt of a statement of objections, the Selling
Stockholder and INTERSHOP shall, within five (5) business days, select an
accounting firm mutually acceptable to them to resolve any remaining objections.
If the Selling Stockholder and INTERSHOP are unable to agree on a choice of an
accounting firm, such accounting firm will be selected by lot from a list of the
New York offices of the nationally recognized

                                      2.
<PAGE>

accounting firms (at the time) after excluding the regular outside accounting
firm of INTERSHOP. Such accounting firm shall render its determination within
thirty (30) days of being engaged. The determination of any accounting firm so
selected will be set forth in writing and will be conclusive and binding upon
the parties. If such accounting firm determines that the Selling Stockholder is
entitled to an additional portion of the Earn-Out Payment from INTERSHOP,
INTERSHOP shall, within ten (10) days, pay such amount with interest from March
31, 2000 to the date such amount is actually paid at the simple rate of ten
percent (10%) per annum. If such accounting firm determines that INTERSHOP
overpaid the Selling Stockholder, the Selling Stockholder shall, within ten (10)
days, remit such overpayment to INTERSHOP, with interest thereon at the simple
rate of ten percent (10%) per annum, from the date previously paid by INTERSHOP,
to the date the overpayment is actually repaid. The fees and expenses of the
accounting firm shall be borne by the Selling Stockholder if there is no change
in the calculation or the Selling Stockholder has been overpaid and by INTERSHOP
if the Selling Stockholder has been underpaid.

          (b) For purposes of Section 1.4(a), the Intershop Professional
Services U.S. (East) is defined as the existing market and industry segments to
which Fountainhead provides professional services, as of the Closing Date.

     1.5  Time and Place of Closing. The closing of the purchase and sale
provided for in this Agreement (the "Closing") shall be held at the offices of
Cooley Godward LLP, Five Palo Alto Square, 3000 El Camino Real, Palo Alto,
California, at 10:00 a.m. on February 26, 1999 immediately following the
execution of this Agreement (the "Closing Date").

     1.6  Transfer of the Assets. At the Closing, Fountainhead shall deliver to
INTERSHOP good and sufficient instruments of transfer transferring to INTERSHOP
all right, title and interest in and to all of the Assets. Such instruments of
transfer (i) shall be in the form and shall contain the warranties, covenants
and other provisions (not inconsistent with the provisions hereof) that are
usual and customary for transferring the type of property involved under the
laws of the jurisdictions applicable to such transfers, (ii) shall be in form
and substance satisfactory to counsel for INTERSHOP, and (iii) shall effectively
vest in INTERSHOP, good title to the Assets free and clear of all liens,
restrictions and encumbrances.

     1.7  Assignment of the Leases. At the Closing, Fountainhead shall use its
best efforts to deliver or cause to be delivered to INTERSHOP an effective
assignment of the Leases, with such assignment thereof and consents to
assignments as are necessary to assure INTERSHOP of the full benefit of the
same. To the extent that the assignment of the Leases shall require the consent
of any other parties thereto, this Agreement shall not constitute an assignment
thereof; provided however, that before the Closing, Fountainhead shall have
obtained any necessary consents or waivers to assure INTERSHOP of the benefits
of the Leases.

     1.8  Possession; Delivery of Records. At the Closing, Fountainhead shall
take all reasonable steps to put INTERSHOP in actual possession and operating
control of the Assets and the Office, and Fountainhead shall have vacated the
Office. After the Closing, Fountainhead shall afford to INTERSHOP and its
accountants and attorneys reasonable access to the books and records of
Fountainhead and shall permit INTERSHOP to make extracts and copies therefrom

                                      3.
<PAGE>

for the purpose of preparing such tax returns of INTERSHOP as may be required
after the Closing and for other proper purposes reasonably requested by
INTERSHOP.

     1.9  Further Assurances. After the Closing, Fountainhead shall from time to
time upon the request of INTERSHOP, execute and deliver further instruments of
transfer and assignment (in addition to those delivered under this Section 1)
and take such other actions as INTERSHOP may reasonably require to transfer,
assign to and/or vest in INTERSHOP any of the Assets and the Leases. Nothing
herein shall be deemed a waiver by INTERSHOP of its right to receive at the
Closing an effective transfer of the Assets and assignment of the Leases.

SECTION 2. Representations and Warranties of Fountainhead and the Selling
     Stockholder

     Except as set forth on the Disclosure Schedule attached hereto as Exhibit
B, Fountainhead and the Selling Stockholder jointly and severally represent and
warrant to INTERSHOP as follows:

     2.1  Organization and Qualification. Fountainhead is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and has full corporate power and authority to own or lease its
properties as such properties are owned or leased and to conduct its business as
such business is currently being conducted. Fountainhead is qualified to do
business as a foreign corporation in each jurisdiction in which the ownership of
its property or the conduct of its business makes such qualification necessary,
except where the failure to so qualify would not have a material adverse effect
on the business or the financial condition of Fountainhead.

     2.2  Authority. Each of Fountainhead and the Selling Stockholder has the
full power and authority to enter into this Agreement and the other documents
and agreements contemplated hereby and to carry out the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Fountainhead and the Selling Stockholder of this Agreement and the other
documents and agreements contemplated hereby have been duly and validly
authorized and approved by all necessary action on the part of Fountainhead, and
each of this Agreement and the other documents and agreements contemplated
hereby is a legal, valid and binding obligation of Fountainhead and the Selling
Stockholder, enforceable against Fountainhead and the Selling Stockholder in
accordance with its terms, subject to laws of general application from time to
time in effect affecting creditors' rights and to the exercise of judicial
discretion in accordance with general equitable principles. There are no
requirements applicable to Fountainhead to make any filing with, or give any
notice to, or to obtain any permit, authorization, consent or approval of, any
governmental or regulatory authority or any other person as a material condition
to the lawful consummation by Fountainhead of the transactions contemplated by
this Agreement, except as set forth on the Disclosure Schedule. Neither the
execution and delivery of this Agreement by Fountainhead nor the consummation by
Fountainhead of the transactions contemplated by this Agreement shall (a)
conflict with or result in any material breach of any provision of the
Certificate of Incorporation or Bylaws of Fountainhead, (b) result in a default
(or give rise to any right of termination, cancellation or acceleration) under
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license agreement, lease or any contract, instrument or obligation to
which

                                      4.
<PAGE>

Fountainhead is a party or by which Fountainhead, or any of the Assets or the
Leases may be bound, (c) violate in any material respects any statute, rule,
regulation, order, writ, injunction or decree applicable to Fountainhead, any of
the Assets or the Leases, or (d) result in the creation of any (individually or
in the aggregate) liens, charges or encumbrances on any of the Assets or the
Leases.

     2.3  Subsidiaries. Fountainhead does not own, directly or indirectly, any
securities issued by any business organization or governmental authority.

     2.4  Financial Statements. Fountainhead has delivered to INTERSHOP
unaudited balance sheets and statements of operations of Fountainhead as of and
for the year ended December 31, 1998 and for the two months ended February 28,
1999. Fountainhead's balance sheet as of February 28, 1999 is hereinafter
referred to as the "Base Balance Sheet." All of the aforementioned financial
statements have been prepared in accordance with generally accepted accounting
principles established by the American Institute of Certified Public Accountants
applied consistently during the periods covered thereby and to the best of
Fountainhead's and the Selling Stockholder's knowledge, present fairly the
financial condition of Fountainhead at the dates of such statements and the
results of its operations for the periods covered thereby.

     2.5  Title to Properties; Liens; Condition of Properties.

          (a) Fountainhead owns no real property and leases no real property
other than the Office as of the date hereof, and Fountainhead is not a party to
any leases for personal property [other than the Leases]. Fountainhead has good
and marketable title to the Assets, and the Leases are valid and subsisting. No
default by Fountainhead exists under the Leases, and none of the Assets or the
Leases are subject to any mortgage, pledge, lien, conditional sale agreement,
security interest, encumbrance or other charge, or license, except as reflected
in the Base Balance Sheet, and except for statutory liens for real property
taxes not yet delinquent or payable.

          (b) All of the Assets are in good working order and all the Assets
that are machinery or equipment have been properly maintained and conform with
all applicable ordinances, regulations and zoning or other laws.

     2.6  Taxes. Fountainhead has filed all federal, state and local income,
excise, franchise, real estate and sales and use tax returns required to be
filed by it and has paid all taxes owing by it except taxes, which have not yet
accrued or otherwise become due, for which adequate provision has been made in
the pertinent financial statements referred to in Section 2.4 above. The
provisions for taxes reflected in the Base Balance Sheet are adequate to cover
any and all tax liabilities of Fountainhead in respect of its business,
properties and operations during the periods covered by such financial
statements. No extensions of time for the assessment of deficiencies for any
year are in effect. Neither the Internal Revenue Service nor any other taxing
authority is now asserting or threatening to assert against Fountainhead any
deficiency or claim for additional taxes, interest thereon or penalties in
connection therewith.

     2.7  Absence of Undisclosed Liabilities. As of the date of the Base Balance
Sheet, Fountainhead had no liabilities of any nature, whether accrued, absolute,
contingent or otherwise

                                      5.
<PAGE>

(including, without limitation, liabilities as guarantor or otherwise with
respect to obligations of others, or liabilities for taxes due or then accrued
or to become due), except for the Leases and those certain liabilities reflected
in the Base Balance Sheet. As of the date hereof, Fountainhead has no
liabilities of any nature, whether accrued, contingent or otherwise (including,
without limitation, liabilities as guarantor or otherwise with respect to
obligations of others), except for the Leases and those certain liabilities
reflected on the Base Balance Sheet.

     2.8  Absence of Certain Changes. Except as disclosed on the Disclosure
Schedule and as otherwise provided in this Agreement, from the date of the Base
Balance Sheet to the date hereof, there has not been:

          (a) any change in the financial condition, properties, Assets, Leases,
liabilities, or business operations of Fountainhead, which change, by itself or
in conjunction with all other such changes, whether or not arising in the
ordinary course of business, has been or is likely to be materially adverse with
respect to the Assets, the Office or the Leases;

          (b) any contingent liabilities incurred by Fountainhead (as guarantor
or otherwise) with respect to the obligations of others that could have a
material adverse effect on the Assets, the Office or the Leases;

          (c) any mortgage, encumbrance or lien placed on any of the Assets or
the Leases which remains in existence on the date hereof;

          (d) any obligation or liability incurred by Fountainhead (not included
in the Base Balance Sheet) in excess of $1,000 individually provided that the
aggregate of such undisclosed individual items does not exceed $15,000;

          (e) any purchase, sale or other disposition, or any agreement (other
than this Agreement) or other arrangement for the purchase, sale or other
disposition, of any part of the Assets, the Office or the Leases in excess of
$1,000 individually provided that the aggregate of such undisclosed individual
items does not exceed $15,000;

          (f) any other transaction entered into by Fountainhead that could have
a material adverse effect on the Assets, the Office or the Leases;

          (g) any contracts entered into by Fountainhead;

          (h) any payments to, or contracts entered into with, any director,
officer, member or affiliate of Fountainhead or any loans or advances;

          (i) any write-down or write-up of the value of any of the Assets;
and/or

          (j) any agreement or understanding, whether in writing or otherwise,
for Fountainhead or the Selling Stockholder to take any of the actions specified
in paragraphs (a) through (i) above.

     2.9  Patents, Trade Names and Trademarks. All patents, patent applications,
registered copyrights, trade names, registered trademarks and trademark
applications that are

                                      6.
<PAGE>

owned by or licensed to Fountainhead are listed on the Disclosure Schedule
hereto, which Schedule indicates with respect to each, the nature of
Fountainhead's interest therein and the expiration date thereof or the date on
which Fountainhead's interest therein terminates. To the best of its knowledge,
Fountainhead is not in any way making an unlawful or wrongful use of any
confidential information, know-how or trade secrets of any third party,
including, without limitation, any former employer of any present or past
employee of Fountainhead.

     2.10 Contracts. Except as set forth on the Disclosure Schedule,
Fountainhead is not a party to or subject to:

          (a) any employment contract or contract for services not terminable
within 30 days by and without penalty or further liability to Fountainhead;

          (b) any contract or agreement for the sale of any commodity, material,
equipment or service material to the Assets, the Office or the Leases;

          (c) any contract or agreement material to the Assets, the Office or
the Leases; other than contracts for the purchase or sale of commodities,
material, equipment or services utilized in the ordinary course of business,
entered into after the date of the Base Balance Sheet;

          (d) any contract or agreement with any present or former officer,
director or member of Fountainhead or with any persons or organizations
controlled by or affiliated with any of them; or

          (e) other than the Leases, any lease or other agreement under which
Fountainhead is lessee of or holds or operates any items of tangible personal
property owned by any third party.

     Any copy of such contract, commitment, plan, agreement or license that has
been provided by Fountainhead to INTERSHOP or its counsel prior to the execution
of this Agreement is tree, correct and complete, has been subject to no
amendment, extension or other modification as of the date hereof and is
described on the Disclosure Schedule. Fountainhead is not in default under any
such contract, commitment, plan, agreement or license described on the
Disclosure Schedule (a "default" being defined for purposes hereof as an actual
default or any set of facts which would, upon receipt of notice or passage of
time, or both, constitute a default under any such instrument).

     2.11 Litigation. There is no litigation pending or threatened against
Fountainhead or the Selling Stockholder. Fountainhead is not engaged as a
plaintiff to any litigation.

     2.12 Compliance with Laws. To the best of Fountainhead's knowledge,
Fountainhead is not in violation of any laws or regulations, the violation of
which would have a material adverse effect upon the Assets, the Office or the
Leases, including, without limitation, laws and regulations relating to
employment, occupational safety and environmental matters. Fountainhead has not
received notice of, and, to the best of Fountainhead's knowledge, there has
never been any citation, fine or penalty imposed upon or asserted against
Fountainhead under any federal, state or local law or regulation relating to
employment, occupational safety, zoning or environmental matters.

                                      7.
<PAGE>

     2.13 Warranty or Other Claims. There are no material existing or threatened
claims against Fountainhead and no claims asserted against Fountainhead for
renegotiation or price redetermination of any business transaction, and there
are no facts upon which any such claim could be based.

     2.14 Disclosure of Material Information. Neither this Agreement nor the
Disclosure Schedule set forth any untrue statement of a material fact relating
to Fountainhead or the Selling Stockholder, or omit to state a material fact
necessary to make the statements herein or therein relating to Fountainhead not
misleading.

     2.15 Labor Relations; Employees. Upon consummation of the transactions
contemplated by this Agreement, INTERSHOP shall not by reason of anything done
prior to the Closing be liable to any Fountainhead employee for so-called
"severance pay" or any other payments arising from or in connection with the
employment of such employees by Fountainhead or the termination thereof.
Fountainhead is in compliance with all applicable laws arid regulations
respecting labor, employment and employment practices, terms and conditions of
employment and wages and hours. None of Fountainhead's employees belongs to any
labor union.

     2.16 Creditors. Each of Fountainhead's creditors (collectively, the
"Creditors") are listed in the Disclosure Schedule, and the amount owed each
such Creditor by Fountainhead as of the date hereof is set forth opposite such
Creditor's name.

SECTION 3. Representations and Warranties of Intershop.

     INTERSHOP represents and warrants as follows:

     3.1  Organization and Qualification. INTERSHOP is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to own or lease its
properties as such properties are owned or leased and to conduct its business as
such business is conducted. INTERSHOP is qualified to do business as a foreign
corporation in each jurisdiction in which the ownership of its property or the
conduct of its business makes such qualification necessary, except where the
failure to so qualify would not have a material adverse effect on the business
or the financial condition of INTERSHOP.

     3.2  Authority. INTERSHOP has full power and authority to enter into this
Agreement and the other documents and agreements contemplated hereby and to
carry out the transactions contemplated hereby and thereby. Subject to approval
by the Intershop Communications AG Vorstand of the 1998 Intershop Communications
AG Stock Option Plan, the execution, delivery and performance by INTERSHOP of
this Agreement and the other documents and agreements contemplated hereby have
been duly and validly authorized and approved by all necessary action on the
part of INTERSHOP, and each of this Agreement and the other documents and
agreements contemplated hereby executed by INTERSHOP is a legal, valid and
binding obligation of INTERSHOP enforceable against INTERSHOP in accordance with
its terms, subject to laws of general application from time to time in effect
affecting creditors' rights and to the exercise of judicial discretion in
accordance with general equitable

                                      8.
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

principles. Neither the execution and delivery of this Agreement by INTERSHOP
nor the consummation by INTERSHOP of the transactions contemplated by this
Agreement shall (a) conflict with or result in any breach of any material
provisions of the Certificate of Incorporation or Bylaws of INTERSHOP, (b)result
in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any material
note, bond, mortgage, indenture, license agreement, lease or other material
contract, instrument or obligation to which INTERSHOP is a party or by which
INTERSHOP or any of its assets may be bound, (c) violate in any material
respects any statute, role, regulation, order, writ, injunction or decree
applicable to INTERSHOP or any of its assets where the consequences of any such
violations would, in the aggregate, have a material and adverse effect on
INTERSHOP, or (d)result in the creation of any material (individually or in the
aggregate) liens, charges or encumbrances on any of the assets of INTERSHOP.

SECTION 4. Covenants.

     4.1  Covenants of Fountainhead and the Selling Stockholder. Each of
Fountainhead and the Selling Stockholder hereby covenants and agrees to do each
of the following:

          (a) Perform and fulfill all conditions and obligations on their part
to be performed and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement shall be fully carried out;

          (b) Use its best reasonable efforts to obtain all authorizations,
consents and permits of others required to permit the consummation of the
transactions contemplated by this Agreement;

          (c) File with any governmental agencies or departments or give persons
all notices, reports and other documents required by law with respect to this
Agreement and promptly submit any additional information or documentary material
properly requested by any such governmental agency or department; and

          (d) Deliver to INTERSHOP and cause their counsel to deliver to
INTERSHOP, the closing documents referenced in this Agreement.

     4.2  Selling Stockholder's Covenant Not to Compete. The Selling Stockholder
hereby covenants and agrees that he will not, without INTERSHOP's express
written consent:

          (a) For **** following the Closing Date, engage in any employment or
business activity which is competitive with INTERSHOP in the United States in
electronic commerce consulting or management; and

          (b) For **** after the date of termination of his employment with
INTERSHOP, directly or through others, either for himself or any other person:
(i)induce or attempt to induce any employee, independent contractor or
consultant of INTERSHOP to leave the employ of INTERSHOP; or (ii) induce or
attempt to induce any customer, supplier, licensee, or business relation of
INTERSHOP to cease doing business with INTERSHOP.

                                      9.
<PAGE>

     If any provision of Section 4.2 shall be held by a court of competent
jurisdiction to be excessively broad as to duration, activity or subject, it
shall be deemed to extend only over the maximum duration, activity or subject as
to which such provision shall be valid and enforceable under applicable law.

     4.3  Affirmative Covenants of INTERSHOP. INTERSHOP hereby covenants and
agrees that it shall do each of the following:

          (a) Assist Fountainhead in its efforts to obtain all authorizations,
consents and permits required to permit the consummation of the transactions
contemplated by this Agreement and the continuation of Fountainhead's business
after consummation of this transaction, including the moving of Fountainhead's
assets that are not being acquired by INTERSHOP; and

          (b) Deliver to Fountainhead and cause its counsel to deliver to
Fountainhead, the closing documents referred to in this Agreement.

     4.4  Mutual Covenant. Fountainhead, the Selling Stockholder and INTERSHOP
each agree that, for tax and other purposes, the fair market value of the Assets
and the Leases shall be as set forth in the Disclosure Schedule.

SECTION 5. Conditions.

     5.1  Conditions to the Obligations of INTERSHOP. The obligations of
INTERSHOP to consummate this Agreement and the transactions contemplated hereby
are subject to the fulfillment by Fountainhead and the Selling Stockholder,
prior to or at the Closing, of the following conditions precedent:

          (a)  Representations; Warranties; Covenants.

               (i)       Each of the representations and warranties of
Fountainhead and the Selling Stockholder set forth in Section 2 shall be true
and correct in all material respects on and as of the Closing Date.

               (ii)      Fountainhead and the Selling Stockholder shall have
performed, on or before the Closing Date, all of their obligations hereunder
which by the terms hereof are to be performed on or before the Closing Date.

               (iii)     All action necessary to authorize the execution,
delivery and performance of this Agreement by Fountainhead and the Selling
Stockholder and the consummation of the transactions contemplated herein shall
have been duly and validly taken by Fountainhead and the Selling Stockholder.

               (iv)      Fountainhead and the Selling Stockholder shall have
obtained all authorizations, consents and permits of others required to permit
the consummation of the transactions contemplated herein.

                                      10.
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

               (v) Fountainhead shall have delivered to INTERSHOP a certificate
of Fountainhead's President, dated as of the Closing Date, attesting to the
effectiveness and validity of Section 5.1(a)(i) through (iv) hereof.

          (b) Delivery of Certain Documents. Fountainhead and the Selling
Stockholder shall have delivered to INTERSHOP copies of all contracts,
commitments, leases and other documents required to be delivered as set forth
herein.

          (c) Landlord's Estoppel Certificate. Fountainhead shall have delivered
to INTERSHOP an executed Landlord's Estoppel Certificate in the form attached
hereto as Exhibit C.

          (d) Assignment of Leases. Fountainhead shall have delivered to
INTERSHOP an executed Assignment of Lease and Assumption of Lease Obligations in
the form attached hereto as Exhibit D for each of the Leases.

          (e) Employment Offer Letter. The Selling Stockholder shall have
executed the Employment Offer Letter in the form attached hereto as Exhibit E.

     5.2  Conditions to Obligations of Fountainhead. Fountainhead's obligations
to consummate this Agreement and the transactions contemplated hereby are
subject to the fulfillment by INTERSHOP, or the written waiver by Fountainhead,
prior to or at the Closing Date of the following conditions precedent:

          (a)  Representations; Warranties; Covenants.

               (i)       Each of the representations and warranties of INTERSHOP
contained in Section 3 shall be true and correct in all material respects on and
as of the Closing Date.

               (ii)      INTERSHOP shall, on or before the Closing Date, have
performed all of its obligations hereunder which by the terms hereof are to be
performed on or before the Closing Date.

               (iii)     All action necessary to authorize the execution,
delivery and performance of this Agreement and the Employment Letter by
INTERSHOP and the consummation of the transactions contemplated herein shall
have been duly and validly taken.

               (iv)      INTERSHOP shall have delivered to Fountainhead a
certificate of INTERSHOP's President, dated as of the Closing Date, attesting to
the effectiveness and validity of this Section 5.2(a)(i) through (iii) hereof.

          (b) Employment Offer Letter. INTERSHOP shall have executed the
Employment Offer Letter in the form attached hereto as Exhibit E. Pursuant to
such Employment Offer Letter, INTERSHOP has agreed to issue to the Selling
Stockholder two Incentive Stock Options to purchase up to an aggregate ****
shares of INTERSHOP Communications AG common stock, subject to the vesting terms
as stated therein.

                                      11.
<PAGE>

SECTION 6. Rights and Obligations Subsequent to Closing.

     6.1  Survival of Warranties. All representations, warranties, agreements,
covenants and obligations herein or in any scheduled certificate or financial
statement delivered by any party to another party incident to the transactions
contemplated hereby are material, shall be deemed to have been relied upon by
the other party and shall survive until the second anniversary of the Closing
regardless of any investigation and shall not merge into the performance of any
obligation by any party hereto.

     6.2  Sales Taxes. Fountainhead shall pay all taxes due with respect to the
sale of the Assets and the assignment to INTERSHOP of the Leases.

SECTION 7. Indemnification.

     7.1  Indemnification by Fountainhead and the Selling Stockholder. Each of
Fountainhead and the Selling Stockholder agrees to defend, indemnify and hold
INTERSHOP and its officers, directors, employees and agents harmless from and
against any damages, liabilities, losses and expenses (including, without
limitation, reasonable counsel fees and disbursements and expenses) of any kind
or nature whatsoever which may be sustained or suffered by INTERSHOP based upon
(a) a breach of any representation, warranty or covenant made by Fountainhead in
this Agreement, or in any Schedule or Exhibit hereto or any certificate or
financial statement delivered hereunder; (b) by reason of any claim, action or
proceeding asserted or instituted arising out of any matter or thing covered by
such representations, warranties or covenants, including, without limitation,
any tax liabilities of Fountainhead for periods prior to or ending on the
Closing Date, any liabilities of Fountainhead not disclosed to INTERSHOP in the
Disclosure Schedule or any liabilities arising from any breach of such
representations, warranties or covenants; (c) any claims, action or proceeding
arising or asserted on or before the Closing Date; (d) any claim, action or
proceeding (for severance pay or otherwise) arising in connection with the
termination of any employee of Fountainhead, whether or not such termination
occurs in connection with the transactions contemplated hereby; or (e) any
claims of creditors with respect to the Assets or the Leases ("INTERSHOP
Indemnifiable Claims"). INTERSHOP may proceed against Fountainhead or the
Selling Stockholder at any time or times for recovery of INTERSHOP Indemnifiable
Claims. Notwithstanding any contrary provision of this Section 7.1, Fountainhead
and the Selling Stockholder shall have no liability pursuant to this Section 7.1
for INTERSHOP Indemnifiable Claims arising after the date two (2) years from the
date of the Closing, other than those arising from or in connection with (i)
state, local and federal income and other taxes and penalties and interest
thereon or (ii) claims, actions or proceedings (whether arising or asserted
before or after the date hereof) asserted or instituted by persons or entities
not parties to this Agreement. Neither Fountainhead nor the Selling Stockholder
shall be required to make any indemnification payment pursuant to this Section
7.1 until such time as the total amount of all damages that have been directly
or indirectly suffered or incurred by INTERSHOP exceeds $10,000 in the
aggregate. At such times as the total amount of such damages exceeds $10,000 in
the aggregate, INTERSHOP shall be entitled to be indemnified only against the
portion of such damages exceeding $10,000.

     7.2  Indemnification by INTERSHOP. INTERSHOP agrees to defend, indemnify
and hold Fountainhead and the Selling Stockholder harmless from and against any
damages,

                                      12.
<PAGE>

liabilities, losses and expenses (including, without limitation, reasonable
counsel fees and disbursements and expenses) of any kind or nature whatsoever
that may be sustained or suffered by Fountainhead or the Selling Stockholder
based upon (a) a breach of any representation, warranty or covenant made by
INTERSHOP in this Agreement or in any Schedule or Exhibit hereto or any
certificate or financial statement delivered hereunder or (b) by reason of any
claim, action or proceeding asserted or instituted arising out of any matter or
thing covered by such representations, warranties or covenants ("Fountainhead
Indemnifiable Claims"). Notwithstanding any contrary provision of this Section
7.2, INTERSHOP shall have no liability pursuant to this Section 7.2 for
Fountainhead Indemnifiable Claims arising after the date two (2) years from the
date of the Closing. INTERSHOP shall not be required to make any indemnification
payment pursuant to this Section 7.2 until such time as the total amount of all
damages that have been directly or indirectly suffered or incurred by
Fountainhead and the Selling Stockholder exceeds $10,000 in the aggregate. At
such times as the total amount of such damages exceeds $10,000 in the aggregate,
Fountainhead and the Selling Stockholder shall be entitled to be indemnified
only against the portion of such damages exceeding $10,000.

     7.3  Notice; Defense of Claims.

          (a) A party claiming indemnification under Section 7 or Section 8
hereunder (the "Indemnified Party") shall give prompt written notice to the
party obligated to indemnify of each claim for indemnification hereunder (the
"Indemnifying Party"), specifying the amount and nature of the claims and of any
matter which in the opinion of the Indemnified Party is likely to give rise to
an indemnification claim. Failure to give notice of a matter which may give rise
to an indemnified claim shall not affect the rights of the Indemnified Party to
collect such claim from the Indemnifying Party or any transferee in liquidation,
except to the extent the Indemnifying Party is prejudiced thereby.

          (b) The Indemnifying Party shall have the right to control the defense
of any third-party claim, action or proceeding giving rise to a claim for
indemnification at its own expense in the defense of any such matter or its
settlement. The Indemnified Party and the Indemnifying Party agree to render to
each other assistance as they may reasonably require of each other in order to
ensure the proper and adequate defense of any such claims, action or proceeding.
In connection with any such claims, action or proceeding, no Indemnifying Party
shall consent to entry of any judgment or enter into any settlement without the
prior written consent of the Indemnified Party.

SECTION 8. Confidentiality.

     Except for the use of such information and documents in connection with the
transactions contemplated by this Agreement or as otherwise required by and law
or regulation (including the rules of the United States Securities and Exchange
Commission, Deutsche Borse and Germany), each of Fountainhead and the Selling
Stockholder agree to keep in strict confidence any non-public information
obtained by them from INTERSHOP in connection with their investigations or
otherwise in connection with the transactions.

                                      13.
<PAGE>

SECTION 9. Miscellaneous.

     9.1  Fees and Expenses. Each of the parties shall bear such party's own
expenses in connection with the negotiation and the consummation of the
transactions contemplated by this Agreement, and no expenses of Fountainhead or
the Selling Stockholder relating in any way to the purchase and sale of the
Assets and assumption of the Leases hereunder shall be charged to or paid by
INTERSHOP.

     9.2  Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if delivered or mailed by
registered mail:

          To:                 INTERSHOP Communications, Inc.
                              600 Townsend St., Top Floor West
                              San Francisco, CA 94103
                              Attention: Craig W. Harding, Esq.

          With a copy to:     Thomas Grohnert
                              INTERSHOP Communications AG
                              Amsinckstr. 57
                              D-20097 Hamburg Germany

          To:                 Fountainhead Management, Inc.
                              115 Broadhollow Road, Suite 275
                              Melville, NY 11747
                              Attention: President

          To:                 Aaron Kaufman
                              21 Branwood Road
                              Dix Hills, NY 11747
                              With a copy to: Mathew O'Connell, Esq.
                              Crest Media Com Capital
                              320 Park Ave., /17th/ Floor
                              New York, NY 10022

or to such other address of which either party may by registered mail notify the
other party.

     9.3  Entire Agreement. This Agreement, including the Schedules and Exhibits
referred to herein, is complete; and all communications, promises,
representations, understandings, warranties and agreements with reference to the
subject matter hereof, and all inducements to the making to this Agreement
relied upon by any party hereto, have been expressed herein or in such Schedules
or Exhibits.

     9.4  Governing Law. This Agreement, and the rights of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
California as such laws apply to agreements among California residents made and
to be performed entirely within the laws of the State of California.

                                      14.
<PAGE>

     9.5  Broker's Fees. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 6.14 being untrue.

     9.6  Assignability. This Agreement shall be assignable by INTERSHOP to an
affiliate of INTERSHOP or otherwise upon written notice to Fountainhead and the
Selling Stockholder, although no such assignment shall relieve INTERSHOP of any
liabilities or obligations under this Agreement. This Agreement may not be
assigned by Fountainhead or the Selling Stockholder without the prior written
consent of INTERSHOP. This Agreement shall be enforceable by, and shall inure to
the benefit of, the parties hereto and their permitted successors and assigns,
and no others.

     9.7  Publicity and Disclosures. No press releases or general public
announcements, either written or oral, of the transactions contemplated by this
Agreement, shall be made without the prior knowledge and written consent of the
parties.

     9.8  Waivers; Severability. The failure of any of the parties to this
Agreement to require the performance of a term or obligation under this
Agreement or the waiver by any of the parties to this Agreement of any breach
hereunder shall not prevent subsequent enforcement of such term or obligation or
be deemed a waiver of any subsequent breach hereunder. In case any one or more
of the provisions of this Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement but this Agreement shall be construed as if such invalid or
illegal or unenforceable provision or part of a provision had never been
contained herein.

     9.9  Headings. The headings of the Sections and paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.

     9.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement.

                                      15.
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this ASSET PURCHASE
AGREEMENT to be executed as of the date set forth above by their duly authorized
representatives.

                                 INTERSHOP Communications, Inc.

                                 By:  /s/ Stephan Schambach
                                    -------------------------------------
                                      Stephan Schambach
                                      President and CEO

                                 Fountainhead Management, Inc.

                                 By:  /s/ Aaron Kaufman
                                    -------------------------------------
                                      Aaron Kaufman
                                      President and CEO

                                 Selling Stockholder

                                 By:  /s/ Aaron Kaufman
                                    -------------------------------------
                                      Aaron Kaufman

                                      16.
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

                                  SCHEDULE I

                                Acquired Assets

1) RECEIVABLES, NET     $****

2) SECURITY DEPOSITS     ****

3) FIXED ASSETS, NET     ****

                                      17.
<PAGE>

                                  SCHEDULE II

                                Excluded Assets

1.   Cash in Fountainhead's bank account at Citibank as of the effective date of
     the Agreement.
<PAGE>

                                   EXHIBIT A

                                    Leases
<PAGE>

                                   EXHIBIT B

                              DISCLOSURE SCHEDULE

This Disclosure Schedule sets forth all the disclosures comprising exceptions to
the representations and warranties of Fountainhead Management, Inc. in
connection with that certain Asset Purchase Agreement, dated as of February 26,
1999:

Section 2.2:   None

Section 2.8a:  None

Section 2.8b:  None

Section 2.8c:  None

Section 2.8d:  None

Section 2.8e:  None

Section 2.8f:  None

Section 2.8g:  Sub Contractor Agreement with SysGen

Section 2.8h:  None, other than normal recurring payroll.

Section 2.8i:  None

Section 2.8j:  None

Section 2.9:   None

Section 2.10:  None

Section 2.14:  None

Section 2.16:  None, except as for the holders of the Notes described on the
attached.
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

                              NON-BANK FINANCING
                              ------------------

                                                    3/4/99

1.   Promissory Note (Unsecured)
     Parties: Fountainhead Management, Inc. and Werner Schmitt
     Date: 9/28/97
     Term: 9/28/98 (no notice of default or claim by lendor)
     Amount:  $****
     Interest: 15%

2.   Promissory Note (Unsecured)
     Parties: Fountainhead Management, Inc. and Werner Schmitt
     Date: 5/6/98
     Term: 12 months (?)
     Amount:  $****
     Interest: 15%

3.   Promissory Note (Unsecured)
     Parties: Fountainhead Management, Inc. and Dru Doshi
     Date: 8/5/97
     Term: 7/15/98 (no notice of default or claim by lendor)
     Amount: $****
     Interest: 15%
<PAGE>

                                   EXHIBIT C

                        Landlord's Estoppel Certificate
<PAGE>

                                   EXHIBIT D

                              Assignment of Leases
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT E

                     EMPLOYMENT OFFER LETTER: AARON KAUFMAN

                               February 26, 1999

Aaron Kaufman
21 Branwood Road
Dix Hills, NY 11747

          RE: Employment Terms

     Dear Aaron:

          Intershop Communications, Inc. is pleased to offer you the position of
Director of Professional Services - East Coast on the following terms:

          1.  You initially will report to the Senior Vice President of Sales
and Marketing. You will work out of our office in Melville, New York. Intershop
may change your position, duties, and work location from time to time due to
business necessity provided that any material diminution of your position or
duties or a change in your work location which requires you to relocate your
home will be considered a termination without cause.

          2.  Commencing on March 26, 1999, your compensation will be $****
per semi-monthly pay period (annualized at $****), less payroll deductions and
all required withholdings.

          3.  You will be eligible for the standard Company benefits on the
first of the month following the your first 60 days of employment at Intershop.
Details about these benefits are provided in the Summary Plan Description
available for your review.

          4.  You will receive incentive stock options (the "Initial Options")
to purchase up to **** shares of the Intershop Communications AG common stock
at the average closing price for Intershop Communications AG common stock for
the 10 business days prior to your date of hire (**** euros). The Initial
Options will be subject to the terms and conditions of the Intershop
Communications AG 1998 Stock Option Plan, except with regard to vesting,
pursuant to a stock option agreement in a form acceptable to both you and
Intershop Communications AG. The vesting will commence on March 26, 1999. If
your employment is terminated (a) by your death or (b) by Intershop without
"cause" then 100% of the shares subject to purchase under the Initial Options
will vest upon the date of termination. However, if (a) you voluntarily
terminate your employment with Intershop or (b) Intershop terminates your
employment with "cause" then the Initial Options shall vest pursuant to the
terms and conditions of the Intershop Communications AG 1998 Stock Option Plan.
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

          For purposes of this Section 4, unless otherwise agreed to by the
parties "cause" will be determined by an independent panel of arbitrators (one
selected by each party, and a third appointed by the two selected arbitrators)
in accordance with the Commercial Rules of the American Arbitration Association
(the "Rules"); provided, however, that in the event of conflict between the
Rules and the terms of this Agreement, the terms of this Agreement shall govern.
The place of arbitration shall be San Francisco, California, and the law
applicable to the arbitration procedure shall be California Labor Code,
applicable California judicial decisions, and the Federal Arbitration Act (9 USC
(S) 2). To commence arbitration of any such dispute, the party desiring
arbitration shall notify the other party in writing in accordance with the
Rules.

          On the thirtieth business day following the appointment of the
arbitrator, each party shall submit to the arbitrator a form of final decision
specifying the relief to which such party in good faith believes it is entitled.
Such form of final decision shall not be subject to further modification by the
party making such submission after it is received by the arbitrator. Within
thirty (30) days after the submission of such proposed forms of decision, or as
soon thereafter as may be reasonably possible, the arbitrator shall adopt as its
decision one of the two alternative submissions made by the respective parties.
The alternative chosen by the arbitrator shall be chosen in its entirety and
shall not be subject to modification by the arbitrator. The arbitrator shall
choose the form of final decision that, in its judgment, is most consistent with
the terms of this Agreement and the intent of the parties, as supported by
evidence presented by the parties in the arbitration proceedings or, if the
subject matter of the dispute is not clearly addressed in or determinable under
this Agreement, that, in its opinion, is legally correct under the
circumstances. The arbitrator shall not be required to provide the reasons for
its decision. The parties agree that the award of the arbitrator shall (1) be
the sole and exclusive remedy between them regarding any claims, counterclaims,
or issues presented to the arbitrator; and (2) be final and subject to no
judicial review. The parties hereto agree that judgment on the arbitration award
may be entered and enforced in any court having jurisdiction over the parties or
their assets. Each party shall, except as otherwise provided herein, be
responsible for its own expenses, including legal fees, incurred in the course
of any arbitration proceedings. The fees of the arbitrator shall be divided
evenly between the parties.

5.  You will also receive incentive stock options to purchase up to **** shares
of the Intershop Communications AG common stock on March 26, 1999 at the average
closing price for the ten (10) business days prior to the date of grant. The
options shall vest pursuant to and be subject to the Intershop Communications AG
1998 Stock Option Plan.

6.  As an Intershop employee, you will be expected to sign and comply with a
Proprietary Information and Inventions Agreement which prohibits unauthorized
use or disclosure of Intershop proprietary information.

7.  Your employment relationship with Intershop is at-will. You may terminate
your employment with Intershop at any time and for any reason whatsoever simply
by notifying Intershop. Likewise, Intershop may terminate your employment at any
time and for any reason whatsoever, with or without cause or advance notice.
This at-will employment relationship cannot be changed except in writing signed
by a Company officer.
<PAGE>

8.  The employment terms in this letter supersede any other agreements or
promises made to you by anyone, whether oral or written. As required by law,
this offer is subject to satisfactory proof of your right to work in the United
States.

9.  Your employment will start as of February 26, 1999. For the period through
March 26, 1999, you will be entitled to "wind down" the Fountainhead business.

    We look forward to your favorable reply and to a productive and enjoyable
work relationship.

                                    Sincerely yours,

                                    /s/ Stephan Schambach

                                    INTERSHOP COMMUNICATIONS, INC.
                                    Stephan Schambach
                                    President and CEO

   Accepted:

 /s/ Aaron Kaufman
-----------------------------------
Aaron Kaufman

    2/26/99
-----------------------------------
Date
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT F

                                PROMISSORY NOTE

    FOR VALUE RECEIVED, the undersigned hereby jointly and severally promise to
pay to the order of Fountainhead Management Inc., the sum of ****, together with
interest thereon at the rate of 8 1/4% per annum on the unpaid balance, as
follows:

               (i)   ****,

               (ii)  ****,

               (iii) ****,

               (iv)  ****.

    All payments shall be first applied to interest and the balance to
principal. This Note may be prepaid, at any time, in whole or in part, without
penalty.

    This Note shall at the option of the holder hereof be immediately due and
payable upon failure to make any payment due hereunder or for breach of any
condition of any security interest, mortgage, pledge agreement or guaranty
granted as collateral security for this Note or breach of any condition of any
security agreement or mortgage, if any, having a priority over any security
agreement or mortgage on collateral granted, in whole or in part, as collateral
security for this Note or upon the filing by any of the undersigned of an
assignment for the benefit of creditors, bankruptcy, or for relief under any
provisions of the Bankruptcy Code; or by suffering an involuntary petition in
bankruptcy or receivership not vacated within thirty days.

    In the event this Note shall be in default, and placed with an attorney for
collection, then the undersigned agree to pay all reasonable attorney fees and
costs of collection. Jurisdiction and venue for any such collection proceedings
will be the State of New York. Payments not made within 10 business days of
written notice by the holder (which notice can be provided at any time following
due date). All payments hereunder shall be made to such address as may from time
to time be designated by any holder hereof. The undersigned and all other
parties to this Note, whether as endorsers, guarantors or sureties waive demand,
presentment and protest and all notices thereto and further agree to remain
bound, notwithstanding any extension, modification, waiver, or other indulgence
by any holder or upon the discharge or release of any obligor hereunder or to
this Note, or upon the exchange, substitution, or release of any collateral
granted as security for this Note.

    Signed and sealed under pains and penalties of perjury this 26 day of
                                                                --
February, 1999.

 /s/ Philip Oreste
Philip Oreste
Vice President, Finance
INTERSHOP Communications, Inc.<PAGE>

                                                                   EXHIBIT 10.10

                             Cooperation Agreement

                                    between

                         Intershop Communications GmbH
                                Leutagraben 2-4
                                  07743 Jena

                                      and

                              Deutsche Telekom AG
                         - Zentrale [Central Office] -
                           Friedrich Ebert Allee 140
                                  53133 Bonn

Preamble

Intershop Communications GmbH (referred to herein as IS) and Deutsche Telekom AG
(referred to hereinafter as DT) intend to enter into a partnership in the area
of electronic commerce (Internet) as described below.

This cooperation should make it possible for DT to develop new fields of
business and new sales markets with the utilization of IS technology. IS will
support DT in utilizing the best technology currently available. DT will use its
own resources and distribution channels to implement and market IS technology.
Both parties will work closely to develop new markets throughout the world and
to implement business models. IS will actively support DT in construction of the
DT Technology Center in Palo Alto, USA.

This contract shall not establish grounds for exclusivity for either party.

Section 1: Object of the agreement

IS shall supply DT with the current version of INTERSHOP Mall software for UNIX
and Windows NT. The scope of the delivery shall include a version which is
currently in the planning stage and will support Oracle and Informix, the source
text, technical documentation, all handbooks in printed and digital form and
training sessions to be conducted.

INTERSHOP Mall software and end user documentation shall be supplied in German,
English and French. DT shall also be supplied with translations planned for the
future. Translations into more complicated languages (such Chinese and Arabic)
shall be delivered to DT against a
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

corresponding cost contribution. The scope of the service rendered shall also
include the Japanese translation of the software and documentation planned for
the third quarter of 1998.

The scope of the services rendered shall also include the cost of the Sybase
licenses needed for the operation of INTERSHOP Mall. Licenses for Oracle or
Informix databases shall not be covered by this agreement.

DT shall provide suitable protection for the source text to prevent access by
any unauthorized third parties (e.g., by depositing it with a notary or an
attorney).

Section 2: Scope of the license

IS shall grant DT a license to INTERSHOP Mall software without quantity
restrictions for a period of **** years after the signing of this agreement. The
License shall be granted only for DT's own use. DT's own use shall also include
use by 100% subsidiaries of DT and subsidiaries whose majority interest and
whose operative control lie with DT upon signing of this agreement and shall
continue to lie with DT in the future. Should DT decide in the future to
disincorporate and legally divest itself of the TMS department, then the TMS
department shall also be entitled to DT's own use. In case of doubt, the parties
shall reach an agreement by mutual consent.

In the event DT wants to sell sublicenses to third parties, a separate
distribution agreement shall be concluded. The list prices in effect shall be
appended to this agreement as Addendum 1.

The authorization to prepare copies of the master version or to circulate
previously prepared copies without the consent of IS shall expire on expiration
of the license. However, DT shall have the right to supply copies and to
complete all business relationships planned and/or in the bidding phase during
the term of the agreement with a binding bid time of half a year.

DT shall have the option of claiming maintenance service after expiration of the
term of the agreement. The cost of such maintenance service shall amount to US
$**** p.a. Of this amount,. US $**** shall be due at the start of the accessory
maintenance service agreement, and US $**** shall be due **** after the
accessory agreement goes into effect. The maintenance service shall be optional
and must be requested at least six months before expiration of this cooperation
agreement. It shall run for **** with the option of a final extension of ****.

The maintenance service agreement shall include the following services:

-      supplying technical papers, documentation, marketing materials in an
       electronic file format,
-      **** max days of engineering support for each year of the extension,
-      elimination of any software mistakes and delivery of minor updates
       (patches) within a suitable period of time.
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

During the term of the maintenance service agreement, IS shall grant DT the same
conditions for claiming additional services as described in the cooperation
agreement (in particular (S) 5, (S) 6).

Delivery of new software releases shall be excluded from this agreement.

Section 3: Remuneration

DT shall pay IS the amount of US $**** plus the statutory value-added tax.

Payment of the agreed remuneration shall be made within thirty (30) days after
signing of the cooperation agreement.

All prices shall be considered as price plus statutory value-added tax.

Section 4: Update package

The scope of the agreement shall include the update package described below.
This shall grant DT and its subsidiaries and affiliates described in (S) 2
worldwide use of INTERSHOP Mall software with the following services:

During the term of the cooperation agreement, IS shall

-      deliver the latest software version (planned updates at least once a
       year),
-      supply technical documents, documentation and marketing materials in an
       electronic file format (for reproduction),
-      conduct an initial training session for each software release for a study
       group to be appointed by DT (maximum 20 people),
-      provide **** days of engineering support in the first year of the
               agreement
               **** days of engineering support in the second year of the
               agreement and
               **** days of engineering support in the third year of the
       agreement for a study group within DT to be appointed on a permanent
       basis (no end user support!),
-      eliminate any software errors and provide minor updates (patches) within
       a suitable period of time,
-      provide DT with the improved plug-ins (modules) that are also to be made
       available to other customers at no cost; more far-reaching developments
       and those containing third party technologies shall be supplied against
       appropriate remuneration and shall not be included in the update package.

IS shall to the best of their ability take into account suggestions by DT for
special features in all new software versions.

DT shall pay the following additional remuneration for the update package:
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

Start of agreement -       December 31, 1997      US $****
January 1, 1998    -       December 31, 1998      US $****
January 1, 1999    -       December 31, 1999      US $****
January 1, 2000    -       end of agreement       US $****

The additional remuneration shall be payable in quarterly portions in advance.

The support and training bids included in this service shall not be applicable
in this form for the subsidiaries and affiliated companies of DT as described in
(S) 2 or for departments outside the specified study group or for customer of
DT. Agreements for service, maintenance, programming and support can be
concluded by all other departments and subsidiaries of DT at the respective
prevailing hourly and daily rates.

Section 5: Professional services

Subsequent to the initial support services to be rendered by IS to DT and
contained in the update package, the following terms shall be in effect with
regard to professional services:

IS shall provide DT with resources from their Professional Service Team for
planning services and reference installations (e.g., in planning and
construction of a data center). IS shall offer DT reduced daily rates for this
purpose for services as listed below:

Project management        **** DM per man day
Engineering               **** DM per man day
Prototyping               **** DM per man day
Web design                **** DM per man day
Quality assurance         **** DM per man day
Support                   **** DM per man day

On request, IS shall assist DT in establishing its own end user hotline. In view
of the personnel resources and accommodations available at DT, an additional
source of revenue shall be created for DT in this regard. For support in
establishing its own DT hotline department (merchant and distribution partners'
hotline and training sessions) the parties shall count on a time expenditure of
**** weeks ****. The goal shall be to establish a scalable hotline and training
concept with which the size of the hotline and training department can be
individualized to conform to the given customer requirements.

IS shall make available to DT at no cost the internal database as cased-based
[sic; case-based?] reasoning or similar technologies as part of the support
provided in establishing the end user hotline.

Section 6: Technical support
<PAGE>

                                            ****CONFIDENTIAL TREATMENT REQUESTED

The following terms shall apply to technical support services that are not
covered by the remuneration for the update package:

IS shall offer technical support to DT at a reduced hourly rate. The technical
support shall include all technical services not covered by the remuneration for
the update package. Regular support shall be offered at the rate of DM ****
weekdays from 9 a.m. to 5 p.m. as well as 24-hour support including weekends at
the rate of ****.

Section 7: Contract hierarchy

For the contract services regulated in the preceding (S) 1 through (S) 6, the
following shall be in effect in the order listed:

a.     this agreement:

       The specific terms of this agreement for the transfer of data processing
       programs (BVB transfer); the contractual terms of Deutsche Telekom AG for
       consulting and support services in the data processing field (on a
       contractual basis) (Addendum 2) and the contractual terms for consulting
       and support services of Deutsche Telekom AG in the data processing field
       (based on a shop agreement) (Addendum 3);

b.     the General Terms of Business for Acquisitions by Deutsche Telekom AG
       (AGBE) (Addendum 4).

Section 8: Obligations of IS

In view of the proposed activities, IS shall render the following services that
shall be paid for by the remuneration for the update package specified in
Section 4:
<PAGE>

1.   Technical obligations:
--   ---------------------

a.   Providing, on demand, the specific OEM adaptation of the user interfaces
     for DT with respect to the DT corporate identity;

b.   Supplying project directors and developers at the reduced daily rates given
     in the addendum to implement DT projects,

c.   Providing the engineering support days listed in (S) 4;

d.   Informing DT regularly regarding the release status and planned new version
     features as well as the general stares of projects related to DT,

e.   Preparing special documentation as part of DT projects;

f.   Supplying Intershop Mall software updates as part of the service described
     above;

g.   Supplying alpha and beta versions of Intershop Mall software to DT;

h.   Supplying all current Intershop products to DT for internal evaluation;

i.   Provide initial training for DT developer teams with each software release.

The parties shall reach a separate agreement regarding remuneration for other
technical obligations.

2.   Marketing activities:
--   --------------------

The following marketing activities represent a mutual declaration of intent:

a.   The presentation of DT as a partner of IS on its web site with a link to
     the DT web site;

b.   Inclusion of DT in all IS marketing and sales materials;

c.   Participation in joint marketing, distribution, press and PR activities;

d.   Inclusion of DT in IS training programs.

3.   PR obligations:
--   ---------------

a.   Use of worldwide IS PR activities for disclosure of the partnership with
     DT;

b.   Preparation of press reports for important joint projects;

c.   Participation in the press conference organized by DT for presentation of
     the partnership with IS;
<PAGE>

d.     Participation in press conferences and conventions;

e.     Joint appearances at fairs and exhibitions.

Section 9: Obligations of DT

In view of the proposed activities, DT shall render the following services:

1.     Technical obligations:
--     ----------------------

a.     Supplying a special project manager and a suitable developer team;

b.     Participation of DT in training sessions organized by IS;

c.     Holding training sessions by DT for DT's own customers.

2.     Marketing activities:
--     ---------------------

The following marketing activities represent a mutual declaration of intent:

a.     Presenting IS as the partner of DT at its TMS web site with a link to the
       IS web site;

b.     Inclusion of IS in all electronic commerce, marketing and sales
       materials;

c.     Participation in joint marketing, distribution, press and PR activities;

d.     Inclusion of IS in the DT training program;

e.     Transfer of text and graphic elements to IS for use in IS branding.

3.     PR obligations:
--     ---------------

a.     Use of worldwide DT PR activities for disclosure of the partnership with
       IS;

b.     Preparation of press releases for important joint projects;

c.     Participation in press conferences and conventions;

d.     Joint appearances at fairs and exhibitions;

e.     DT and IS shall disclose their partnership at a joint press conference
       immediately after the signing of the agreement.

The main thematic point shall be the influence of the two partners on the
economic future of
<PAGE>

worldwide electronic commerce.

Section 10: Mutual declaration of consent further regarding areas of cooperation

IS and DT intend to collaborate in the following fields and enter into
negotiations regarding corresponding agreements:

a.      Development of a worldwide marketing and sales plan to identify and
        safeguard joint distribution potentials;

b.      Joint preparation of marketing materials and brochures; for joint
        marketing activities, a median value shall be determined to permit
        establishment of mutual compensation services and advertising cost
        allowances;

c.      Developing a joint worldwide PR strategy;

d.      Joint participation in fairs, exhibitions, road shows and seminars;

e.      Joint development and promotion of reference installations;

f.      Establishing contact with the respective technology partners;

g.      Corporate participation of DT in Intershop Communications Inc. in the
        amount of 7.84% of the joint capital by stipulation of a corresponding
        option for DT which shall be limited to a term of March 31, 1998.

Section 11: Antitrust clause

The parties are aware of the fact that the cooperation agreements based on the
declarations of intent as per (S) 8 through (S) 10 of this agreement, in
particular the option agreement intended as per (S) 10 g of this agreement
regarding the acquisition of shares in Intershop Communications Inc. by DT,
shall be reviewed from the standpoint of antitrust laws before the signing of
this agreement and may possibly require legalization by antitrust authorities.
<PAGE>

Section 12: Confidentiality

The parties agree to the strictest mutual confidentiality regarding all business
and industrial secrets of which the other party becomes aware as part of this
cooperation. This confidentiality requirement shall remain in effect even after
the duration of this agreement. The parties are aware of the fact that violation
of this confidentiality obligation would incur liability for damages. Each party
shall admonish his own employees to take the greatest possible care in handling
the other party's confidential information.

Section 13: Guarantee

IS shall provide a guarantee within the framework of statutory provisions.
Liability for indirect losses or consequential damages for deficiencies shall be
precluded in any case. The guarantee shall expire as soon as there is any
interference by DT or any other third party in the products transferred by IS.

In the event that IS is obligated to correct errors, eliminate shortcomings and
provide support and fails to comply with this obligation, DT shall grant IS a
suitable grace period to comply with said obligation. If IS again fails to
comply with such a demand, DT shall grant IS a final grace period and then shall
be entitled to eliminate said shortcomings itself at the expense of IS or to
commission a third party to eliminate said shortcomings or to perform file
required service.

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