(8) Commitments and Contingencies

Operating Leases

We lease certain facilities and various office equipment under non-cancellable operating leases with terms in excess of one year. Rental expense, including short term leases, maintenance charges and taxes on leased facilities, was approximately $7.1 million, $6.7 million and $6.3 million for fiscal years 2014, 2013 and 2012, respectively.

Future minimum lease payments under these leases and scheduled sublease payments as of June 30, 2014 are as follows:

Year Ended June 30,	Gross Payments		Scheduled Sublease Payments		Net Payments

	(Dollars in Thousands)
2015	$	8,639	$	159	$	8,480
2016		6,800		159		6,641
2017		4,255		13		4,242
2018		3,847		—		3,847
2019		3,584		—		3,584
Thereafter		21,401		—		21,401


Total	$	48,526	$	331	$	48,195

Due to various restructuring activities (refer to Note 4) in past years we have vacated certain of our leased space and are subleasing a portion of this space. Sublease rental payments received during fiscal 2014, 2013 and 2012 were $0.2 million, $0.8 million and $3.1 million, respectively. Scheduled sublease payments in connection with these activities are included in the table above.

In January 2014, we entered into a lease agreement for our new principal executive offices to be located in Bedford, Massachusetts. The initial term of the lease with respect to 105,874 square feet of office space will commence on November 1, 2014, and on February 1, 2015 with respect to an additional 36,799 square feet of space. The initial term of the lease will expire approximately ten years and five months following the term commencement date. Subject to the terms and conditions of the lease, we may extend the term of the lease for two successive terms of five years each. Base annual rent is subject to escalating payments over the term of the lease and will range between approximately $2.2 million and $3.9 million in addition to our proportionate share of operating expenses and real estate taxes. Future minimum non-cancelable lease payments amount to approximately $35.8 million over the lease term and are included in the table above. Aggregate capital expenditures, including leasehold improvements, furniture and equipment, with respect to the leased premises are estimated to total approximately $8.9 million, net of a tenant improvement allowance. Payments of $2.0 million for binding contractual obligations related to the new facility capital expenditures are expected to be made in fiscal 2015.

Standby letters of credit for $2.2 million secure our performance on professional services contracts and certain facility leases. The letters of credit expire at various dates through fiscal 2025.

Legal Matters

In the ordinary course of business, we are, from time to time, involved in lawsuits, claims, investigations, proceedings and threats of litigation, including proceedings related to intellectual property rights. These matters include an April 2004 claim by a customer that certain of our software products and implementation services failed to meet the customer's expectations. In March 2014, a judgment was issued in favor of the claimant customer against us in the amount of approximately $2.6 million plus interest and a portion of legal fees. We have filed an appeal of the judgment.

While the outcome of the proceedings and claims referenced above cannot be predicted with certainty, there are no such matters, as of June 30, 2014 that, in the opinion of management, are reasonably possible to have a material adverse effect on our financial position, results of operations or cash flows. Liabilities, if applicable, related to the aforementioned matters discussed in this Note have been included in our accrued liabilities at June 30, 2014, and are not material to our financial position for the periods then ended. As of June 30, 2014, we do not believe that there is a reasonable possibility of a material loss exceeding the amounts already accrued for the proceedings or matters discussed above. However, the results of litigation (including the above-referenced appeal) and claims cannot be predicted with certainty; unfavorable resolutions are possible and could materially affect our results of operations, cash flows or financial position. In addition, regardless of the outcome, litigation could have an adverse impact on us because of attorneys' fees and costs, diversion of management resources and other factors.