Netgear 2004 Annual Report Download - page 14

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Table of Contents
Item2.
Properties
Our principal administrative, sales, marketing and research and development facilities occupy approximately 74,000square feet in an
office complex in SantaClara, California, under a lease that expires in December 2007. Several of our domestic sales employees perform
their duties using leases of individual offices. Our international sales personnel reside in local sales offices in Australia, China, France,
Germany, Italy, Japan, Korea, Singapore, Spain, Sweden, the Netherlands and the UK. We also have operations personnel using a
facility in Hong Kong, which is subleased from our third party logistics provider, Kerry Logistics. We also maintain a research and
development facility in Taipei, Taiwan. We believe our existing facilities are adequate for our current needs.
We use third parties to provide warehousing services to us, consisting of facilities in Southern California, Hong Kong and the
Netherlands.
Item3.
Legal Proceedings
In June 2004, a lawsuit, entitled
Zilberman v.NETGEAR,
Civil Action CV021230, was filed against us in the Superior Court of California,
County of SantaClara. The complaint purports to be a class action on behalf of all persons or entities in the United States who
purchased our wireless products other than for resale. Plaintiff alleges that we made false representations concerning the data transfer
speeds of our wireless products when used in typical operating circumstances, and is requesting injunctive relief, payment of
restitution and reasonable attorney fees. Similar lawsuits have been filed against other companies within our industry. We have filed
an answer to the complaint denying the allegations. Limited discovery is currently under way and no trial date has been set.
In February 2005, a lawsuit, entitled
McGrew v.NETGEAR,
Civil Action CV035191, was filed against us in the Superior Court of
California, County of SantaClara. The complaint makes the same allegations and purports to represent the same class of persons and
entities as the Zilberman suit. We have not yet responded to the complaint, and no trial date has been set.
These claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of
management time, and result in the diversion of significant operational resources. Were an unfavorable outcome to occur, there exists
the possibility it would have a material adverse impact on our financial position and results of operations for the period in which the
unfavorable outcome becomes probable.
In June 2004, a lawsuit, entitled
Weaver v.NETGEAR,
Civil Action RG04161382, was filed against us in the Superior Court of California,
County of Alameda. The complaint purported to be a class action on behalf of persons who obtained any consumer product
manufactured by us and sold in California on or after January1, 2004. Plaintiff alleged that we violated California law because we did
not disclose on our website that the failure to register a product does not diminish the product’s warranty. In the fourth quarter of
2004, we and the plaintiff settled the lawsuit which provided for a payment of $17,500 by us, and the Superior Court approved the
settlement resulting in the dismissal of the matter.
Item4.
Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the security holders during the quarter ended December31, 2004.
10
2005. EDGAR Online, Inc.