Commitments and Contingencies

3 Months Ended

Sep. 30, 2014

Commitments and Contingencies

Commitments and Contingencies

11. Commitments and Contingencies

Operating Leases

During fiscal 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 will commence on November 1, 2014 with respect to 105,874 square feet of office space, 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. Future minimum non-cancelable lease payments amount to approximately $35.7 million over the lease term. As of September 30, 2014, estimated aggregate capital expenditures with respect to the build out of our newly leased premises in Bedford, Massachusetts, including leasehold improvements, furniture and equipment, are expected to total approximately $8.4 million, net of a tenant improvement allowance, of which $7.3 million represent binding contractual obligations. As of September 30, 2014, we have made cumulative payments of approximately $3.1 million under these obligations and expect to make remaining payments of $4.2 million during fiscal 2015.

Other

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 were no such matters, as of September 30, 2014 that, in the opinion of management, were 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 September 30, 2014, and were not material to our financial position for the periods then ended. As of September 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.