(13)	Commitments and Contingencies

 

(a)

Leases

We have operating lease commitments for our facilities that expire at various dates through 2020. For operating leases that contain rent escalation or rent concession provisions, we record the total rent expense on a straight-line basis over the term of the lease. We record the difference between the rent paid and the straight-line rent as a deferred rent liability on the accompanying consolidated balance sheets.

Rent expense was $4.0 million, $3.5 million and $2.9 million for 2015, 2014 and 2013, respectively.

We also lease certain equipment and furniture under non-cancelable capital lease agreements, which are included in other current and long-term liabilities in the accompanying consolidated balance sheets. As of December 31, 2015, we had one capital lease for equipment. Capital leases are capitalized using interest rates considered appropriate at the inception of each lease. Capital lease obligations amounted to $0.1 million and $0.3 million as of December 31, 2015 and 2014, respectively.

 

The approximate future minimum payments under non-cancelable operating leases and future minimum capital lease payments as of December 31, 2015 are as follows:

 

		Capital           leases				Operating           leases
Year ending December 31:		(in thousands)
2016		$	70			$	4,901
2017			—				5,003
2018			—				3,679
2019			—				2,431
2020			—				101
Total minimum lease payments		$	70			$	16,115
Less amount representing interest at 12%			2
Present value of net minimum capital lease payments			68
Less current installments of obligations under capital leases			68
Obligations under capital leases, excluding current installments		$	—

 

(b)

Warranty

We provide limited product warranties. Historically, any payments made under these provisions have been immaterial.

 

(c)

Litigation and Claims

From time to time, in the normal course of business, various claims are made by customers or other third parties against us, or such claims may be pending or threatened. When we believe that an adverse outcome from such a claim is both probable and estimable, a reserve for the estimated liability is recorded.

We do not expect any liabilities from claims to have a material adverse effect on our financial position or results of operations.

 

(d)

Indemnification Obligations

We agree to standard indemnification provisions in the ordinary course of business. Pursuant to these provisions, we agree to indemnify, hold harmless and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally our customers, in connection with any United States patent, copyright or other intellectual property infringement claim by any third party arising from the use of our products or services in accordance with the agreement or arising from our gross negligence, willful misconduct or violation of the law (provided that there is not gross or willful misconduct on the part of the other party) with respect to our products or services. The term of these indemnification provisions is generally perpetual from the time of execution of the agreement. We carry insurance that covers certain third-party claims relating to our services and limits our exposure. We have never incurred costs to defend lawsuits or settle claims related to these indemnification provisions.