Salesforce.com 2009 Annual Report Download - page 32

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Table of Contents
Our management will have broad discretion over the use of the proceeds from our debt issuance and might not apply the proceeds in ways that
increase the value of your investment.
Our management will have broad discretion to use the net proceeds from debt issuance, and you will be relying on the judgment of our management
regarding the application of these proceeds. They might not apply the net proceeds of this offering in ways that increase the value of your investment. We
expect to use the net proceeds from this offering for general corporate purposes, including possible investments in, or acquisitions of, complementary
businesses, joint ventures, services or technologies, working capital and capital expenditures; however, other than paying the cost of the convertible note
hedge (after taking into account the proceeds from the warrant transactions), we have not allocated these net proceeds for any specific purposes. Our
management might not be able to yield a significant return, if any, on any investment of these net proceeds.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our executive offices and principal office for domestic marketing, sales, professional services and development occupy over 400,000 square feet in San
Francisco, California under leases that expire at various times through November 2017. We also lease space in various locations throughout the United States
for local sales and professional services personnel. Our foreign subsidiaries lease office space for their operations including local sales and professional
services personnel.
We believe that our existing facilities and offices are adequate to meet our current requirements. See Note 8, "Commitments," in the Notes to the
Consolidated Financial Statements for more information about our lease commitments. If we require additional space, we believe that we will be able to
obtain such space on acceptable, commercially reasonable terms.
ITEM 3. LEGAL PROCEEDINGS
We are involved in various legal proceedings and receive claims from time to time, arising from the normal course of business activities. In our opinion,
resolution of these matters is not expected to have a material adverse impact on our consolidated results of operations, cash flows or our financial position.
During fiscal 2009, we received a communication from a large technology company alleging that we infringed some of their patents. We continue to
analyze the potential merits of these claims, the potential defenses to such claims and potential counter claims, and the possibility of a license agreement as an
alternative to litigation. We are currently in discussions with this company and no litigation has been filed to date. However, there can be no assurance that
this claim will not lead to litigation in the future. The resolution of this claim is not expected to have a material adverse effect on our financial condition, but it
could be material to the net income or cash flows or both of a particular quarter. We have been, and may in the future be, sued by third parties for alleged
infringement of their proprietary rights. Our technologies may be subject to injunctions if they are held to infringe the rights of a third party. The outcome of
any litigation is inherently uncertain. Any intellectual property claims, including the one referenced above, with or without merit, could be time-consuming
and expensive to resolve, could divert management attention from executing our business plan and could require us to change our technology, change our
business practices and/or pay monetary damages or enter into short- or long-term royalty or licensing agreements which may not be available in the future at
the same terms or at all.
ITEM 4. RESERVED
29