Stamps.com 2001 Annual Report Download - page 24

subsequently transferred it to us. The third party is also a named defendant in the suit. The complaint seeks legal resolution and recognition of
Cybershop's ownership of the "stamps.com" domain name and seeks unspecified monetary damages against the third party. On January 9, 2001,
we filed a motion to dismiss the suit. On February 16, 2001, Cybershop filed an amended complaint, alleging new causes of action, including
conversion, invasion of privacy, trespass, and private nuisance, and seeking declaratory judgment for return of the domain name registration to
Cybershop. Cybershop later filed third and fourth amended complaints. On February 13, 2002, the court granted our summary judgment motion
and dismissed all of Cybershop's pending claims against us with prejudice. Cybershop has filed a motion asking the court to reconsider its
decision.
The final outcome of that litigation is uncertain, and we can give no assurance that Cybershop and its general partners will not prevail. See Risk
Factors--Success by Cybershop in its suit against us seeking damages and recognition of its ownership of the domain name stamps.com could
prevent us from using the domain name stamps.com and could require a change of name of the Company, severely harming our business or
causing it to fail.
On or about April 6, 2000, Metro Fulfillment, Inc. filed a lawsuit against Weigh-Tronix, Inc. for breach of contract, fraud, negligent
misrepresentation, intentional inference with contract, negligent interference, breach of implied warranty and breach of express warranty. Metro
Fulfillment, Inc. alleges that pursuant to its agreement with Weigh-Tronix, Inc., Metro Fulfillment, Inc. was not required to pay for postal scales
that were purchased from Weigh-Tronix, Inc. until Metro Fulfillment, Inc. had actually sold those scales to end users. These scales were
supposed to be sold through our Web site. Metro Fulfillment, Inc. further alleged that Weigh-Tronix, Inc. breached the agreement by seeking
payment before the scales were actually sold to customers in breach of the agreement. Weigh-Tronix, Inc. in turn filed a third party complaint
against us and Metro Fulfillment, Inc. for breach of contract and several common counts. The third party complaint seeks approximately
$700,000 in compensatory damages, plus interest and attorney's fees. We have filed an answer to the third party complaint denying the
allegations of the lawsuit. The parties reached a tentative settlement agreement, pursuant to which we would pay Weigh-Tronix, Inc. $200,000
and Metrofulfillment, Inc. would pay Weigh-Tronix, Inc. $25,000, in return for Weigh-Tronix, Inc. and Metrofulfillment, Inc. dismissing all of
their claims in this lawsuit. In addition, we would receive all of the postage scales that Metrofulfillment, Inc. still has in its inventory, the
amount of which are unknown at this time. This settlement agreement is conditioned upon the parties successfully reducing the settlement to a
signed writing. On February 28, 2001, Metro Fulfillment, Inc. filed a lawsuit against us stemming from services allegedly performed by Metro
Fulfillment, Inc. under a Fulfillment Services Agreement. The complaint alleges claims for breach of contract, common counts and negligent
misrepresentation. The complaint seeks damages of approximately $1.3 million. We have filed an answer to the complaint denying the
allegations in the lawsuit. Metro Fulfillment, Inc. filed for Bankruptcy protection on December 18, 2001. Attempts to mediate this case have
been unsuccessful as of this date. It is not possible at this time to predict the final outcome of this matter.
In May and June, 2001, we were named, together with certain of our current or former board members and/or officers, as a defendant in eleven
purported class-action lawsuits, filed in the United States District Court for the Southern District of New York. The lawsuits allege violations of
the Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with our initial public offering and secondary offering of our
common stock. The lawsuits also name as defendants the principal underwriters in connection with our initial and secondary public offerings,
including Goldman, Sachs & Co. (in some of the lawsuits sued as The Goldman Sachs Group Inc.) and BancBoston Robertson Stephens, Inc.
The lawsuits allege that the underwriters engaged in allegedly improper commission practices and stock price manipulations in connection with
the sale of our common stock. The lawsuits also allege that we and/or certain of our officers or directors knew of or recklessly disregarded these
practices by the underwriter defendants, and failed to disclose them in our public filings. Plaintiffs seek damages and statutory compensation,
including prejudgment and post-judgment interest, costs and expenses (including attorneys' fees), and rescissionary damages. In addition to the
class action lawsuits against us, over 1,000 similar lawsuits have also been brought against over 250 companies which issued stock to the public
in 1998, 1999, and 2000, and their underwriters. These lawsuits (including those naming the Company)
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2002. EDGAR Online, Inc.