Classmates.com 2006 Annual Report Download - page 102

The Company has not provided information about geographic segments because the vast majority of the Company’s revenues and related
results of operations and identifiable assets are in the United States of America and additional geographic information is thus not material nor
meaningful.
11. COMMITMENTS AND CONTINGENCIES
Financial Commitments
The Company’s financial commitments were as follows at December 31, 2006 (in thousands):
(1)
Includes $2 of imputed interest.
The Company leases its facilities under operating leases expiring at various periods through 2014. Rental expense for operating leases for
the years ended December 31, 2006, 2005 and 2004 was $6.6 million, $6.5 million and $4.3 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. The majority of issuers, including
NetZero, and their insurers have approved a settlement agreement. The district court
’s final approval of the settlement has been stayed pending
the outcome of the Second Circuit’s decision to vacate the district court’s decision granting class certification in six of the suits.
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
F- 40
Year Ending December 31,
Contractual Obligations:
Total
2007
2008
2009
2010
2011
Thereafter
Capital leases(1)
$
32
$
18
$
14
$
—
$
—
$
—
$
—
Operating leases
40,181
7,331
7,094
6,076
4,685
4,010
10,985
Telecommunications purchases
12,050
7,550
4,500
—
—
—
—
Media purchases
2,311
2,311
—
—
—
—
—
Total
$
54,574
$
17,210
$
11,608
$
6,076
$
4,685
$
4,010
$
10,985