COMMITMENTS AND CONTINGENCIES Lease Commitments We occupy three office buildings in San Jose, California where our corporate headquarters are located. We reference these office buildings as the Almaden Tower and the East and West Towers. We own the land and the East and West Tower buildings, and lease the Almaden Tower building as of March3, 2017 . The lease agreement for the Almaden Tower is effective through March 2017. We are the investors in the lease receivable related to the Almaden Tower lease in the amount of $80.4 million , which is recorded as investment in lease receivable on our condensed consolidated balance sheets as of March3, 2017 .The carrying value of the lease receivable related to the Almaden Tower approximated fair value as of March3, 2017 . Under the agreement for the Almaden Tower, we have the option to purchase the building at any time during the lease term for $103.6 million . If we purchase the building, the investment in the lease receivable may be credited against the purchase price. The residual value guarantee under the Almaden Tower obligation is $89.4 million . Subsequent to March3, 2017 , we exercised our option to purchase the Almaden Tower for a total purchase price of $103.6 million . Upon purchase, our investment in the lease receivable of $80.4 million was credited against the total purchase price. We capitalized the Almaden Tower as property and equipment on our condensed consolidated balance sheets at $104.2 million , the lesser of cost or fair value, which represented the total purchase price plus other direct costs associated with the purchase. Royalties We have royalty commitments associated with the shipment and licensing of certain products. Royalty expense is generally based on a dollar amount per unit sold or a percentage of the underlying revenue. Indemnifications In the ordinary course of business, we provide indemnifications of varying scope to customers and channel partners against claims of intellectual property infringement made by third parties arising