COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2016

11. COMMITMENTS AND CONTINGENCIES

Operating Leases

We lease our corporate headquarters and an adjacent office facility from an entity controlled by our principal stockholders. The five-year operating lease for our corporate headquarters ends November 30, 2018 and has an option to renew for an additional five-year term. The operating lease for the adjacent facility began in August 2008 and has a ten-year term with the option to renew for two additional two-year terms. We also lease several other buildings from our principal stockholders on a month-to-month basis. We believe that the above operating lease transactions were consummated on terms comparable to terms we could have obtained with unrelated third parties. In addition, we lease offices from unrelated parties with remaining terms of one to ten years.

Future aggregate minimum annual lease payments under these leases at December 31, 2016 are as follows:


Year Ended December 31,	Related Parties		Others		Total
2017	$	1,511	$	2,943	$	4,454
2018		1,299		2,776		4,075
2019		—		2,275		2,275
2020		—		2,321		2,321
2021		—		1,487		1,487
2022 and thereafter		—		3,298		3,298

Total rent expense aggregated $4,753, $4,904, and $4,322 for the years ended December 31, 2016, 2015, and 2014, respectively, under the terms of the operating leases described above. Such amounts included $1,640, $1,633, and $1,639 in 2016, 2015, and 2014, respectively, paid to related parties.

Contingencies

We are subject to various legal proceedings and claims, including patent infringement claims, which have arisen during the ordinary course of business. In the opinion of management, the outcome of such matters is not expected to have a material effect on our business, financial position, results of operations, or cash flows.

We record a liability when we believe that a loss is both probable and reasonably estimable. On a quarterly basis, we review each of these legal proceedings to determine whether it is probable, reasonably possible, or remote that a liability has been incurred and, if it is at least reasonably possible, whether a range of loss can be reasonably estimated. Significant judgment is required to determine both the likelihood of there being a loss and the estimated amount of such loss. Until the final resolution of such matters, there may be an exposure to loss in excess of the amount recorded, and such amounts could be material. We expense legal fees in the period in which they are incurred.

We are subject to audits by states on sales and income taxes, unclaimed property, employment matters, and other assessments. While management believes that known and estimated liabilities have been adequately provided for, it is too early to determine the ultimate outcome of such audits, which could be assessed, and such outcomes could have a material negative impact on our financial position, results of operations, and cash flows.