Vistaprint 2007 Annual Report Download - page 94

VISTAPRINT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2007, 2006 and 2005
(in thousands, except share and per share data)
The Company enters into agreements in the ordinary course of business with, among others, vendors,
lessors, financial institutions, service providers, distributors and certain marketing customers, pursuant to
which it has agreed to indemnify the other party for certain matters, such as property damage, personal
injury, acts or omissions of the Company, its employees, agents or representatives, or third party claims
alleging that the Company’s intellectual property infringes a patent, trademark or copyright.
In accordance with their respective charter and by-laws and with various indemnification
agreements with specific employees, the Company and its subsidiaries have agreed to indemnify the
directors, executive officers and employees of the Company and its subsidiaries, to the extent legally
permissible, against all liabilities reasonably incurred in connection with any action in which the individual
may be involved by reason of such individual being or having been a director, officer or employee.
Based upon the Company’s historical experience and information known to the Company as of
June 30, 2007, the Company believes its liability on the above guarantees and indemnities at June 30,
2007 is immaterial.
Purchase Commitments
At June 30, 2007, the Company had unrecorded commitments under contracts to purchase print
production equipment and to complete construction relating to the expansion of the Canadian and
Dutch printing facilities of approximately $6,585 and $8,334, respectively
At June 30, 2006, the Company had unrecorded commitments under contracts to purchase print
production equipment and to complete construction of the Canadian printing facility of approximately
$9,270 and $5,862, respectively.
Legal Proceedings
One of the Company’s subsidiaries and its predecessor corporation were named as defendants in
a purported class action law suit filed in Los Angeles County (California) Superior Court on
September 14, 2004. The complaint alleged that the shipping and handling fees the Company charged
for free products were excessive and in violation of sections of the California Business and Professions
Code. The Los Angeles County Superior Court granted preliminary approval of a proposed settlement
on April 29, 2005 and, on June 17, 2005, gave final approval to the settlement. Under the terms of the
settlement, the Company agreed to change the term ‘shipping and handling’ to ‘shipping and
processing’ on its websites, to provide all class members who purchase free business cards from the
Company for a two year period in the future the opportunity to receive additional cards at reduced
rates, and to pay reasonable attorneys fees to plaintiffs’ counsel. In August 2005, an objector to the
settlement filed an appeal of the Court’s final approval of the settlement. On February 28, 2007, the
California Court of Appeals ruled in favor of the Company, affirming the Superior Court’s final approval
of the settlement. The period for the objector to appeal the Court of Appeals’ decision passed without
any appeal being filed, and the settlement became effective on April 9, 2007.
On July 27, 2006, our wholly-owned subsidiary VistaPrint Technologies Limited filed a patent
infringement lawsuit against print24 GmbH, unitedprint.com AG and their two managing directors in the
District Court in Düsseldorf Germany, alleging infringement by the defendants in Germany of one of
VistaPrint’s European patents related to computer-implemented methods and apparatus for generating
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