TeleNav 2011 Annual Report Download - page 68

Table of Contents
The following table summarizes our outstanding noncancelable contractual obligations as of June 30, 2011:
At June 30, 2011, we had a liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $4.5 million.
Due to uncertainties related to these tax matters, we are unable to make a reasonably reliable estimate of when cash settlements with the taxing
authority will occur.
Warranties and indemnifications
Our agreements with our wireless carrier customers that offer our LBS generally include certain provisions for indemnifying them against
liabilities if our LBS infringe a third party’s intellectual property rights or for other specified reasons. We have in the past received
indemnification requests or notices of their intent to seek indemnification in the future from our wireless carrier customers with respect to
litigation in which our wireless carrier customers have been named as defendants. See the section entitled “Legal Proceedings.” As it relates to
past indemnification requests or notices, in certain situations we have agreed to defend or indemnify our wireless carriers for the indemnity
demands. For those notices where we have not agreed to provide indemnity or defense to date, or future demands for indemnity, we may in the
future agree to defend and indemnify our wireless carriers or other customers, irrespective of whether we believe that we have an obligation to
indemnify them or whether we believe our LBS infringe the asserted intellectual property rights. Alternatively, we may reject certain of our
wireless carrier or other customers’
indemnity demands, including the outstanding demands, which may lead to disputes with our wireless carrier
or other customers, negatively impact our relationships with them or result in litigation against us. Our wireless carrier or other customers may
also claim that any rejection of their indemnity demands constitutes a material breach of our agreements with them, allowing them to terminate
such agreements. If we make substantial payments as a result of indemnity demands, our relationships with our wireless carrier or other
customers are negatively impacted or any of our wireless carrier or customer agreements is terminated, our business, operating results and
financial condition could be materially harmed. To date, we have not incurred material costs and do not have material liabilities related to such
obligations recorded in our consolidated financial statements.
We have agreed to indemnify our directors, officers and certain other employees for certain events or occurrences, subject to certain limits,
while such persons are or were serving at our request in such capacity. We may terminate the indemnification agreements with these persons
upon the termination of their services with us, but termination will not affect claims for indemnification related to events occurring prior to the
effective date of termination. The maximum amount of potential future indemnification is unlimited. We have a director and officer insurance
policy that limits our potential exposure. We believe the fair value of these indemnification agreements is minimal. We have not recorded any
liabilities for these agreements as of June 30, 2010 and 2011.
Based upon our historical experience and information known as of June 30, 2011, we do not believe it is likely that we will have
significant liability for the above indemnities at June 30, 2011.
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Payments due by period
Total
Less than
1 Year
1
-
3 Years
3
-
5 Years
More than
5 Years
(in thousands)
Operating lease obligations(1)
$
33,031
$
2,456
$
8,013
$
8,123
$
14,439
Purchase obligations(2)
22,356
15,140
7,216
—
—
Total contractual obligations
$
55,387
$
17,596
$
15,229
$
8,123
$
14,439
(1)
Consists of contractual obligations for office space under noncancelable operating leases.
(2) Consists of minimum noncancelable financial commitments primarily related to fees owed to certain third party content providers,
regardless of usage level.