(10) Commitments and Contingencies (a) Royalty Commitments - We have entered into various license agreements that require payment of royalties based on a specified percentage of the sales of licensed products. Approximately 86% of our royalty expenses relate to our Diagnostics operating segment, where the royalty rates range from 4% to 8%. These royalty expenses are recognized on an as-earned basis and recorded in the year earned as a component of cost of sales. Annual royalty expenses associated with these agreements were approximately $2,579, $2,600 and $3,134 for the fiscal years ended September 30, 2018, 2017 and 2016, respectively. (b) Purchase Commitments - Excluding the operating lease commitments reflected in Note 10(c) below, we have purchase commitments primarily for inventory and service items as part of the normal course of business. Commitments made under these obligations are $11,271 for fiscal 2019 and $127 for fiscal 2020 through fiscal 2023. No purchase commitments have been made beyond fiscal 2023. (c) Operating Lease Commitments - Meridian and its subsidiaries are lessees of: (i) certain office and warehouse buildings in the U.S., Europe, Australia and China; (ii) automobiles for use by the direct sales forces in the U.S. and Europe; and (iii) certain office equipment such as facsimile and copier machines across all business units, under operating lease agreements that expire at various dates. Amounts charged to expense under operating leases were $2,457, $2,140 and $1,966 for fiscal 2018, 2017 and 2016, respectively. Operating lease commitments for each of the five succeeding fiscal years are as follows: fiscal 2019 - $1,866; fiscal 2020 - $1,700; fiscal 2021 - $1,461; fiscal 2022 - $978; and fiscal 2023 - $876. (d) Litigation - We are a party to various litigation matters from time to time that we believe are in the normal course of business. The ultimate resolution of these matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows. See Item 3. Legal Proceedings for a discussion of the status of certain litigation. (e) Indemnifications - In conjunction with certain contracts and agreements, we provide routine indemnifications related to our performance obligations. The terms of these indemnifications range in duration and in some circumstances are not explicitly defined. The maximum obligation under some such indemnifications is not explicitly stated and, as a result of our having no history of paying such indemnifications, cannot be reasonably estimated. We have not made any payments for these indemnifications and no liability is recorded at September 30, 2018 or September 30, 2017.