NetSpend 2010 Annual Report Download - page 38

Download and view the complete annual report

Please find page 38 of the 2010 NetSpend annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 127

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127

Table of Contents
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our principal executive offices are located in Austin, Texas, where we lease approximately 54,000 square feet. We also maintain leased
offices in Atlanta, Georgia, San Mateo, California, Kansas City, Kansas and Charlotte, North Carolina. We believe that our existing and
planned facilities are adequate to support our existing operations and that, as needed, we will be able to obtain suitable additional facilities on
commercially reasonable terms.
ITEM 3. LEGAL PROCEEDINGS
We are involved from time to time in various litigation and regulatory matters arising in the ordinary course of business. The amount, if
any, of our ultimate liability with respect to these matters cannot be determined, but we do not expect the resolution of any pending matters to
have a material adverse effect on our business or financial condition.
On October 24, 2007, Alexsam, Inc. filed suit against us in the District Court of Travis County, Texas, 419th Judicial District, asserting
breach of a license agreement entered into between NetSpend and Alexsam in 2004 and seeking monetary damages, attorneys' fees, costs and
interest. The license agreement was entered into by the parties following Alexsam's assertion and subsequent dismissal without prejudice of a
claim of patent infringement filed by Alexsam against us in 2003. We have asserted counterclaims against Alexsam for breach of contract. In
April 2010, we filed a motion for summary judgment, and following a hearing, the court denied the motion without substantive comment. In
October 2010, Alexsam filed an amended petition, which added a claim by Alexsam that NetSpend fraudulently induced Alexsam to give up its
prior patent infringement claims against NetSpend and enter into the license agreement. In November 2010, we removed the case to the United
States District Court for the Western District of Texas. In January, 2011, the federal court remanded the case back to the Travis County District
Court for the 419th Judicial District for further proceedings. The case is not currently set for trial. We plan to vigorously contest Alexsam's
claims, including Alexsam's newly asserted claims.
ITEM 4. REMOVED AND RESERVED
34