Note L – Commitments and Contingencies

Operating Leases

The Company leases its laboratory and office facilities under non-cancelable operating leases. These operating leases expire at various dates through December 2020 and generally require the payment of real estate taxes, insurance, maintenance, utility and operating costs. The Company has approximately 49,000 square feet of office and laboratory space at our corporate headquarters in Fort Myers, Florida. In addition, we maintain laboratory and office space in Aliso Viejo, West Sacramento, Fresno and Irvine, California; Nashville, Tennessee; Houston, Texas and Tampa, Florida.

The following is a schedule of future minimum obligations under non-cancelable operating leases as of December 31, 2016 (in thousands):

Years ending December 31,
2017	$	3,129
2018		2,195
2019		2,003
2020		2,058
2021		492
Thereafter		226
Total minimum lease payments	$	10,103

Rent expense for the years ended December 31, 2016, 2015 and 2014 was approximately $4.2 million, $1.9 million and $1.7 million, respectively and is included in costs of revenues and in general and administrative expenses, depending on the allocation of work space in each facility. Certain of the Company’s facility leases include rent escalation clauses. The Company normalizes rent expense on a straight-line basis over the term of the lease for known changes in lease payments over the life of the lease.

Purchase Commitments

The Company has agreements in place to purchase a specified level of reagents from certain vendors. These purchase commitments expire at various dates through 2020. The purchase commitments as of December 31, 2016 are as follows (in thousands):

Years ending December 31,
2017	$	1,294
2018		942
2019		838
2020		378
2021		-
Thereafter		-
Total purchase commitments	$	3,452

Capital Lease Obligations

The Company’s capital lease obligations expire at various times through 2020 and the weighted average interest rates under such leases approximated 6.03% at December 31, 2016. Some of our leases contain bargain purchase options that allow us to purchase the leased property for a minimal amount upon the expiration of the lease term. The remaining leases have purchase options at fair market value. See Note F-Debt for more information about future minimum lease payments under capital lease obligations, including those described above. Property and equipment acquired under capital lease agreements, see Note C-Property and Equipment, Net are pledged as collateral to secure the performance of the future minimum lease payments shown in Note F-Debt.

Employment Contracts

The agreements with our Chief Executive Officer, Chief Medical Officer, Clinical Services President, Vice President of Operations, Chief Information Officer and Chief Financial Officer contain some or all of the following:

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Clauses that allow for continuous automatic extensions of one year unless timely written notice terminating the contract is provided to such officers (as defined in the agreements).

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Clauses that provide for accelerated vesting of the options granted pursuant to such agreements at the time of certain changes of control of the Company.

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Clauses that provided for 6-12 months of severance benefits in the event that such officers are terminated without “cause” (as defined in the agreements) by the Company. The base salaries for these officers in 2017 are expected to approximate $2.4 million.