Overstock.com 2007 Annual Report Download - page 118

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Overstock.com, Inc.
Notes to Consolidated Financial Statements (Continued)
12. COMMITMENTS AND CONTINGENCIES (Continued)
In December 2006, the Company entered into a Data Center Agreement (the "OM I Agreement") to lease 3,999 square feet of space at Old Mill
Corporate Center I for an IT data center to allow the Company to consolidate other IT data center facilities at the Old Mill Corporate Center II and at its
current corporate offices facilities.
Operating leases
In June 2005 and 2006, the Company entered into non-cancelable operating leases for certain computer equipment expiring in April 2008 and June 2008,
respectively. It is expected that such leases will be renewed by exercising purchase options or replaced by leases of other computer equipment.
Minimum future payments under all operating leases are as follows (in thousands):
Twelve months Ending December 31,
2008 $ 7,647
2009 6,238
2010 5,987
2011 5,803
2012 5,526
Thereafter 11,196
$ 42,397
Rental expense for operating leases totaled $4.0 million, $11.5 million and $11.6 million for the years ended December 31, 2005, 2006 and 2007,
respectively.
Legal Proceedings
From time to time, the Company receives claims of and become subject to consumer protection, employment, intellectual property and other commercial
litigation related to the conduct of the Company's business. Such litigation could be costly and time consuming and could divert its management and key
personnel from its business operations. The uncertainty of litigation increases these risks. In connection with such litigation, the Company may be subject to
significant damages or equitable remedies relating to the operation of its business and the sale of products on the Company's website. Any such litigation may
materially harm its business, prospects, results of operations, financial condition or cash flows. However, the Company does not currently believe that any of
its outstanding litigation will have a material adverse effect on its financial statements.
On August 11, 2005, along with a shareholder plaintiff, the Company filed a complaint against Gradient Analytics, Inc.; Rocker Partners, LP; Rocker
Management, LLC; Rocker Offshore Management Company, Inc. and their respective principals in the Superior Court of California, County of Marin. On
October 12, 2005, the Company filed an amended complaint against the same entities alleging libel, intentional interference with prospective economic
advantage and violations of California's unfair business practices act. On March 7, 2006, the court denied the defendants demurrers to and motions to strike
the amended complaint. The defendants each filed a motion to appeal the court's decision, the Company responded and the California Attorney General
submitted an amicus brief supporting the Company's view; the court has ruled that this appeal stays discovery in the case. On May 30, 2007 the California
Court of Appeals upheld the lower court's ruling in the Company's
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