Support.com 2007 Annual Report Download - page 32

turmoil in certain overseas regions have increased uncertainty and may exacerbate a decline in economic conditions, both domestically and internationally. If the
economy declines as a result of economic, political and social turmoil, or if there are further terrorist attacks in the United States or elsewhere, we may
experience decreases in the demand for our products and services, which would harm our operating results.
Compliance with public company rules and regulations is costly and requires significant resources.
The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the Securities and Exchange Commission and the Nasdaq Global Select
Market, has required changes in corporate governance practices of public companies. These rules and regulations require significant internal and external
resources to comply with and are costly. Additionally, such compliance has made some activities more time-consuming. These rules and regulations make it
more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur
substantially higher costs to obtain coverage. Also, these new rules and regulations could also make it more difficult for us to attract and retain qualified members
of our board of directors, particularly to serve on our audit committee, and qualified executive officers.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 2. PROPERTIES.
Our corporate headquarters lease covers approximately 37,400 square feet at 1900 Seaport Boulevard, 3rd Floor, Redwood City, California. This lease
expires in July, 2012. We believe this facility is adequate and suitable for our current business requirements.
ITEM 3. LEGAL PROCEEDINGS.
White v Basu et al. was dismissed with prejudice in February 2008. This matter was a derivative shareholder complaint filed in the Superior Court of the
State of California for the County of San Mateo. This complaint was filed on behalf of the Company as a nominal plaintiff against certain of our directors and
former directors and alleged that the director defendants harmed the Company by making or permitting the Company to make false and misleading statements
between January 20, 2004 and October 1, 2004. Plaintiffs filed a Second Amended Complaint on October 27, 2006, which the defendants answered on
November 6, 2006. In September, 2007, the parties reached an agreement in principle to settle the lawsuit. The court approved the settlement and dismissed the
lawsuit with prejudice on February 15, 2008. The settlement was fully funded by insurance.
In November 2001, a class action lawsuit was filed against us, two of our former officers, and certain underwriters in the United States District Court for the
Southern District of New York. The lawsuit alleged that our registration statement and prospectus dated July 18, 2000 for the issuance and initial public offering
of 4,250,000 shares of our common stock contained material misrepresentations and/or omissions related to alleged inflated commissions received by the
underwriters of the offering. The lawsuit seeks unspecified damages as well as interest, fees and costs. Similar complaints have been filed against 55 underwriters
and more than 300 other companies and other individual officers and directors of those companies. All of the complaints against the underwriters, issuers and
individuals have been consolidated for pre-trial purposes before U.S. District Court Judge Scheindlin of the Southern District of New York. On June 26, 2003,
the plaintiffs announced that a proposed settlement between the issuer defendants and their directors and officers had been reached. Under the proposed
settlement, which is subject to court approval, our insurance carrier would be responsible for any payments other than attorneys' fees prior to June 1, 2003. A
final settlement approval hearing on the
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Source: SUPPORTSOFT INC, 10-K, March 13, 2008