Classmates.com 2004 Annual Report Download - page 106

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Other Financial Commitments
The Company's financial commitments, including its operating leases and purchase commitments for telecommunications and media at
December 31, 2004 are as follows (in thousands):
The Company leases its facilities under operating leases expiring at various periods through 2014. The leases generally contain annual
escalation provisions as well as renewal options. Total rental expense for operating leases for the year ended December 31, 2004, the six months
ended December 31, 2003 and the years ended June 30, 2003 and 2002 was $4.3 million, $1.3 million, $3.3 million and $4.0 million,
respectively.
Legal Contingencies
On April 20, 2001, Jodi Bernstein, on behalf of himself and all others similarly situated, filed a lawsuit in the United States District Court
for the Southern District of New York against NetZero, certain officers and directors of NetZero and the underwriters of NetZero's initial public
offering, Goldman Sachs Group, Inc., BancBoston Robertson Stephens, Inc. and Salomon Smith Barney, Inc. The complaint alleges that the
prospectus through which NetZero conducted its initial public offering in September 1999 was materially false and misleading because it failed
to disclose, among other things, that (i) the underwriters had solicited and received excessive and undisclosed commissions from certain
investors in exchange for which the underwriters allocated to those investors material portions of the restricted number of NetZero shares issued
in connection with the offering; and (ii) the underwriters had entered into agreements with customers whereby the underwriters agreed to
allocate NetZero shares to those customers in the offering in exchange for which the customers agreed to purchase additional NetZero shares in
the aftermarket at pre-determined prices. Plaintiffs are seeking injunctive relief and damages. Additional lawsuits setting forth substantially
similar allegations were also served against NetZero on behalf of additional plaintiffs in April and May 2001. The case against NetZero was
consolidated with approximately 300 other suits filed against more than 300 issuers that conducted their initial public offerings between 1998
and 2000, their underwriters and an unspecified number of their individual corporate officers and directors. In a court order dated February 15,
2005, the Court granted preliminary approval of the issuer defendants' proposed settlement.
On August 21, 2001, Juno commenced an adversary proceeding in U.S. Bankruptcy Court in the Southern District of New York against
Smart World Technologies, LLC, dba "Freewwweb" (the "Debtor"), a provider of free Internet access that had elected to cease operations and
had sought the protection of Chapter 11 of the Bankruptcy Code. The adversary proceeding arose out of a subscriber referral agreement between
Juno and the Debtor. In response to the commencement of the adversary proceeding, the Debtor and its principals filed a pleading with the
Bankruptcy Court asserting that Juno is obligated to pay compensation in an amount in excess of $80 million as a result of Juno's conduct in
connection with the subscriber referral agreement. In addition, a dispute arose between Juno and UUNET Technologies, Inc., an affiliate of MCI
WorldCom Network Services, Inc., regarding the value of services provided by UUNET, with UUNET claiming in excess of $1,000,000 and
Juno claiming less than $300,000. On April 25, 2003, Juno, the Committee of Unsecured Creditors, WorldCom and UUNET (allegedly the
largest secured creditor) entered into a Stipulation of Settlement. The Stipulation of Settlement provides for the payment by Juno of $5.5 million
in final
F-37
Year Ending December 31,
Contractual Obligations
Total
2005
2006
2007
2008
2009
Thereafter
Operating leases
$
48,283
$
5,141
$
6,291
$
6,390
$
6,308
$
5,297
$
18,856
Telecommunications purchases
18,275
11,038
7,125
112
Media purchases
46,876
46,876
Total
$
113,434
$
63,055
$
13,416
$
6,502
$
6,308
$
5,297
$
18,856