Vistaprint 2011 Annual Report Download - page 81

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lessor for certain claims that may arise under the lease for which we have not recorded a liability as
we have determined that the associated fair value is not material. We carry insurance policies that we
believe would provide, in most cases, some, if not total, recourse to any claims arising from this lease
indemnification provision.
Other Obligations
We have also entered into arrangements with financial institutions and vendors to provide
guarantees for the obligations of our subsidiaries under banking arrangements and purchase
contracts. The guarantees vary in length of time but, in general, guarantee the financial obligations of
the subsidiaries under such arrangements. The financial obligations of our subsidiaries under such
arrangements are reflected in our consolidated financial statements and these notes.
We enter 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 by us, our employees, agents or representatives, or third party
claims alleging that our 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, we and our subsidiaries have agreed to indemnify our directors,
executive officers and employees, 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 our historical experience and information known to us as of June 30, 2011, we
believe our liability with respect to the above guarantees and indemnities at June 30, 2011 is
immaterial.
Purchase Obligations
At June 30, 2011, we had unrecorded commitments under contract of $23,020, which were
principally composed of site development and construction of our Jamaican customer service, sales
and design support centers of approximately $14,803, production and computer equipment purchases
of approximately $6,559, and other unrecorded purchase commitments of $1,658.
Legal Proceedings
On July 21, 2009, Vistaprint Limited and OfficeMax Incorporated were named as defendants in
a complaint for patent infringement filed by ColorQuick LLC in the United States District Court for the
Eastern District of Texas. In March 2011, the U.S. District Court dismissed all of ColorQuick’s claims
against OfficeMax pursuant to an agreement among ColorQuick and the defendants, but we remained
a defendant. In June 2011, the case went to trial, and the jury determined that we did not infringe
ColorQuick’s patent. The U.S. District Court entered the jury’s verdict and closed the case in its
entirety in July 2011. ColorQuick has agreed not to appeal the District Court’s decision.
We are not currently party to any other material legal proceedings. We are involved, from time
to time, in various legal proceedings arising from the normal course of business activities. Although
we cannot predict with certainty the results of litigation and claims, we do not expect resolution of
these matters to have a material adverse impact on our consolidated results of operations, cash flows
or financial position. In all cases, at each reporting period, we evaluate whether or not a potential loss
amount or a potential range of loss is probable and reasonably estimable under the provisions of the
authoritative guidance that addresses accounting for contingencies. Legal proceedings previously
disclosed in our SEC filings may not be presented in this report or future reports filed with the SEC to
the extent that we believe that such matters are no longer material or there has not been significant
activity during the period. Legal costs relating to legal proceedings are expensed as incurred.
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