11. Commitments and Contingencies

Capital Leases

The Company leases certain equipment under capital leases expiring on various dates through fiscal 2018. Future minimum lease payments under capital lease commitments as of January 31, 2014 are as follows:


Year ended January 31,
2015	$	2,704
2016		1,992
2017		852
2018		4

Total future minimum lease payments		5,552
Less: Interest		431

Present value of future minimum lease payments		5,121
Current portion of capital lease obligation		2,426

Long-term capital lease obligation	$	2,695

Operating Leases

The Company has a lease for the rental of office space for its corporate headquarters, which was entered into in July 2008. The lease covers the rental of up to 65,941 square feet available to the Company at certain time periods over eight years, expiring in 2016. In connection with the lease, the Company entered into a letter of credit agreement with a bank that allows the landlord, under certain default conditions, to draw up to $525. The Company deposited $525 into a restricted cash account as security for the letter of credit. This amount is included in other assets (non-current) in the consolidated balance sheets as of January 31, 2014 and 2013.

The Company leases office facilities for all its other locations under operating leases expiring on various dates through April 2021. The Company also leases certain office equipment under operating leases that expire on various dates through June 2016. Future minimum lease payments under operating lease commitments as of January 31, 2014 are as follows:


Year ended January 31,
2015	$	3,382
2016		3,033
2017		929
2018		590
2019		475
Thereafter		1,070

Total	$	9,479

Rent expense is calculated on a straight-line basis over the term of the lease. Rent expense recognized under all operating leases totaled $2,823, $2,720 and $2,481 for the fiscal years ended January 31, 2014, 2013 and 2012, respectively. The Company entered into a new sub-rental lease agreement effective January 1, 2014 with a third party which expires on March 31, 2016. Sub-rental income was $324, $318 and $318 for the fiscal years ended January 31, 2014, 2013 and 2012, respectively.

Purchase Obligations

As of January 31, 2014, the Company has purchase obligations payable in fiscal years 2015, 2016, 2017 and 2018 as follows: $2,087, $2,060, $1,142 and $600, respectively.

Legal Contingencies

From time to time the Company is involved in legal proceedings arising in the ordinary course of business. There is no litigation pending that could, individually or in the aggregate, have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

In 2011, the Company was notified by the Massachusetts Institute of Technology, or MIT, that MIT believes that Exa is utilizing the intellectual property covered by a license agreement between the Company and MIT, and therefore is in arrears in the payment of royalties under the agreement. The Company has advised MIT that it does not believe that the Company utilized the underlying technology at any time since at least 1998, or that any royalties are owed under the agreement.

As of January 31, 2014, MIT has not commenced suit against the Company with respect to its claims, and if any such suit is commenced by MIT, the Company intends to defend it vigorously. The Company believes that if MIT were to prevail in any such litigation, the royalties due under the terms of the license agreement, after giving effect to the approximately $200 in minimum royalties that the Company has already paid, would not exceed approximately $0 to $2,600 (excluding any interest or costs of litigation). The Company is not able to determine whether a loss is probable or estimate the reasonably possible or probable amount of such loss, therefore we have recorded a liability of $0, equal to the low end of the range.

Guarantees and Indemnification Obligations

The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with any United States patent, or any copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. The term of these indemnification provisions is generally perpetual after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these agreements is unlimited.

Based on historical experience and information known as of January 31, 2014 and 2013, the Company has not recorded any liabilities for the above guarantees and indemnities.