(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 $8.3 million, $7.1 million and $6.7 million for fiscal years 2015, 2014 and 2013, respectively.

Future minimum lease payments under these leases and scheduled sublease payments as of June 30, 2015 are as follows:

Year Ended June 30,	Gross Payments		Scheduled Sublease Payments		Net Payments
	(Dollars in Thousands)
2016	$	8,325	$	159	$	8,166
2017		5,607		13		5,594
2018		5,015				5,015
2019		4,770				4,770
2020		4,469				4,469
Thereafter		17,775				17,775

Total	$	45,961	$	172	$	45,789

In August 2015, we executed a lease amendment for our Houston, Texas, location. The amendment extended the original lease termination date from July 2016 until February 2023 and increased future non-cancelable lease payments from $1.8 million, reflected in the above table, to $9.9 million. Base annual rent under the amended lease ranges between $1.3 million and $1.5 million, excluding our pro-rata share of taxes and expenses. In addition, under the amended lease we will not receive the $0.2 million of sub-lease income detailed in the above table.

In August 2015, we entered into a new lease agreement for our office location in Singapore. The initial term of the lease is for 60 months and approximately 11,343 square feet, commencing December 2015. Base annual rent will be $0.6 million, excluding our proportionate share of taxes and other expenses. Subject to the terms and conditions of the lease, we may extend the lease for an additional 36 month term. Future minimum non-cancelable lease payments due over the term of the lease amount to approximately $3.1 million. Aggregate capital expenditures, including leasehold improvements, furniture and equipment, with respect to the leased premises are estimated to total approximately $1.1 million. Payments of $0.7 million for binding contractual obligations related to the new facility capital expenditures are expected to be made in fiscal 2016.

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, 2015 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, 2015, and are not material to our financial position for the periods then ended. As of June 30, 2015, 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.