9. Commitments and Contingencies

Lease Agreements.

We lease our operating facilities in Mountain View, California, under a non-cancelable operating lease that was initially scheduled to expire in February 28, 2017. In February 2016, we executed an agreement to extend the term of the lease through February 28, 2019. There are no remaining options to extend or renew the terms of this lease. Rent expense for fiscal years 2016, 2015 and 2014 was $0.9 million, $0.8 million and $0.6 million, respectively.

Future minimum lease payments under current operating leases as of December 31, 2016 are summarized as follows (in thousands):

Fiscal Year	Operating Lease Payments
2017	$	1,068
2018		1,056
2019		206
2020		33
2021		3
Total future minimum lease payments	$	2,366

Manufacture and Supply Agreement.

Future minimum payments for manufacture and supply commitments as of December 31, 2016 are summarized as follows (in thousands):

Fiscal Year	Contract Manufacturing and Supply Commitments
2017	$	7,440
2018		1,087
Total contract manufacturing and supply commitments	$	8,527

License Agreements.

We are obligated to pay royalties equivalent to 5% of sales on certain products under certain license agreements with termination dates as early as the end of 2018 and as late as the end of 2021. Royalty expense, charged to cost of revenues, was approximately $0.3 million, $0.1 million, and $0.2 million for the fiscal years 2016, 2015 and 2014, respectively.

Indemnification Arrangements.

We enter into standard indemnification arrangements in our ordinary course of business. Pursuant to these arrangements, we indemnify, hold harmless, and agree to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, generally our business partners or customers, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to our products. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments we could be required to make under these agreements is not determinable. We have never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the estimated fair value of these agreements is minimal.

We have entered into indemnification agreements with our directors and officers that may require us to indemnify our directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of a culpable nature; to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified; and to make good faith determination whether or not it is practicable for us to obtain directors and officers insurance. We currently have directors and officers liability insurance.

In general, management believes that claims which are pending or known to be threatened, will not have a material adverse effect on our financial position or results of operations and are adequately covered by our liability insurance. However, it is possible that cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one of more of these contingencies or because of the diversion of management’s attention and the incurrence of significant expenses.