Classmates.com 2006 Annual Report Download - page 25
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injunctive and declaratory relief and damages. NetZero has filed a response to the lawsuit denying the material allegations of the complaint. On
January 29, 2007, counsel for Mr. Ewart advised the trial court that Mr. Ewart would be withdrawing from the action as a class representative
and that counsel would seek permission from the court to add one or more new class representatives. On that same date, the court ordered
counsel for Mr. Ewart to file their motion to substitute a new class representative by March 2, 2007. As of February 27, 2007, Mr. Ewart has not
withdrawn from the action and his counsel has not filed a motion to substitute a new class representative.
The pending lawsuits involve complex questions of fact and law and may require the expenditure of significant funds and the diversion of
other resources to defend. Although we do not believe the outcome of the above outstanding legal proceedings, claims and litigation will have a
material adverse effect on our business, financial condition, results of operations or cash flows, the results of litigation are inherently uncertain
and we cannot assure you that we will not be materially and adversely impacted by the results of such proceedings. At December 31, 2006, other
than an immaterial reserve for the then unpaid portion of the Freewwweb settlement payment, we had not established reserves for any of the
matters described above.
We are subject to various other legal proceedings and claims that arise in the ordinary course of business. We believe the amount, and
ultimate liability, if any, with respect to these actions will not materially affect our business, financial condition, results of operations or cash
flows. We cannot assure you, however, that such actions will not be material and will not adversely affect our business, financial condition,
results of operations or cash flows.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
We did not submit any matters to a vote of security holders during the quarter ended December 31, 2006.
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