8x8 2009 Annual Report Download - page 65
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Rent expense for the years ended March 31, 2009, 2008 and 2007 was $494,000, $486,000 and $434,000, respectively.
On May 1, 2009, the Company entered into a three year lease for a new primary facility in Sunnyvale, California, with a
scheduled commencement date of September 1, 2009. The lease is an industrial gross lease with monthly rent of approximately
$47,000 for the first 12 months, $52,000 for the next 12 months and $57,000 for the final 12 months of the lease term.
Capital Leases
In April 2005, June 2006 and March 2007, the Company entered into a series of non-cancelable five year capital lease
agreements for office equipment bearing interest at various rates. At March 31, 2009, future minimum annual lease payments
under noncancelable capital leases were as follows (in thousands):
Year ending March 31:
2010 $ 42
2011 26
2012 22
Total minimum payments 90
Less: Amount representing interes
t
(5)
85
Less: Short-term portion of capital lease obligations (39)
Long-term portion of capital lease obligations $ 46
Capital leases included in office equipment were $182,000 at March 31, 2009. Total accumulated amortization was $102,000
at March 31, 2009. Amortization expense for assets recorded under capital leases is included in depreciation expense.
Minimum Third Party Customer Support Commitments
In March 2009, the Company entered into a contract with one of its third party customer support vendors containing a
minimum monthly commitment of approximately $491,000 effective April 1, 2009. The agreement requires 150 day notice to
terminate. The total remaining obligation under the contract is $2.5 million.
Legal Proceedings
The Company, from time to time, is involved in various legal claims or litigation, including patent infringement claims that can
arise in the normal course of the Company’ s operations. Pending or future litigation could be costly, could cause the diversion
of management’ s attention and could upon resolution, have a material adverse effect on the Company’ s business, results of
operations, financial condition and cash flows.
Subsequent to year end, in April 2009, the Company entered into a license and settlement agreement with a patent holder. The
agreement requires the Company to pay eight quarterly payments over the next two years. At March 31, 2009, future
minimum annual payments under the license and settlement agreement were as follows (in thousands):
Year ending March 31:
2010 $ 550
2011 250
Total minimum payments 800
Less: Amount representing interest (29)
771
Less: Short-term portion of license fee (526)
Long-term portion of license fee obligation $ 245
63