Commitments and Contingencies

Operating Lease

We lease office and laboratory space located in San Diego, California, for our corporate headquarters and research facility under an operating lease agreement (the "Lease"). The Lease commenced in July 2010 and provided office and laboratory space, expiring in June 2017.

In connection with the inception of the Lease, we were provided tenant incentives of $0.1 million which was used to construct a leasehold improvement. In addition, we were provided and fully utilized a tenant improvement allowance of approximately $0.6 million, which was used to fund additional leasehold improvements. In January 2011, the Lease was amended to memorialize the payback of the allowance into our base rent. In conjunction with the amendment of the Lease in November 2012 to increase rented space by 7,500 square feet, we were provided an additional tenant improvement allowance of approximately $0.7 million, which was utilized in 2013 to fund leasehold improvements in the newly occupied space. We are obligated to repay our landlord the tenant improvement allowance, plus interest at a fixed rate of 8%, on a monthly basis over the remaining term of the Lease.

The Lease provided for early termination rights after the 60th month of the lease, provided at least 9 months prior written notice however, no early termination rights were available for the additional space occupied in conjunction with the amendment of the Lease in November 2012.

In October 2015, we provided written notice to our landlord of our election to early terminate the Lease. The effective date of termination for the Lease is June 30, 2016. The additional space occupied in conjunction with the amendment of the Lease in November 2012 expires in June 2017. Termination fees associated with the early termination of the Lease are not material.

Rent expense under the Lease for the years ended December 31, 2015, 2014 and 2013 was approximately $0.6 million, $0.7 million and $0.7 million, respectively. We account for the difference between the minimum lease payments and the straight-line amount as deferred rent. Deferred rent under the Lease, which is included in other long-term liabilities, at December 31, 2015 and 2014 was approximately $0.4 million and $0.7 million, respectively. The tenant incentive obligation balance under the Lease at December 31, 2015 and 2014 was approximately $0.3 million and $0.6 million, respectively. We also pay property taxes, maintenance and insurance, which are expensed as incurred.

In July 2015, we entered into a new lease agreement for the lease of approximately 59,000 square feet of office and laboratory space in San Diego, California, for a term of 96 months from the lease commencement date, and anticipate moving the Company's headquarters into this new space in the first half of 2016. In conjunction with the new lease agreement, we received $1.4 million from our landlord in August 2015 for assistance with costs associated with the relocation of our corporate headquarters. These funds were received for a specific and limited purpose, and therefore are classified as restricted cash and tenant incentive obligation on the Company's balance sheet. As of December 31, 2015, the Company has used approximately $0.1 million for qualified purposes. In addition, the new lease agreement provided a tenant improvement allowance of up to $8.5 million, which may be used for non-structural leasehold improvements at the new facility. As of December 31, 2015 we have used approximately $1.7 million of the tenant improvement allowance, which is classified as construction in process and deferred rent on the Company's balance sheet and will be amortized against rent expense on a straight line basis over the term of the lease, commencing upon lease inception.

The future minimum payment summary below includes amounts payable over the remaining period of the Lease and the new lease agreement entered into in July 2015.

As of December 31, 2015, aggregate future annual minimum lease payments for our operating leases are as follows (in thousands):




2016	$	1,699
2017	2,330
2018	2,575
2019	2,654
2020	2,733
Thereafter	9,707
	$	21,698

License Agreements

We have license agreements with third parties that require us to make annual license maintenance payments and future payments upon the success of licensed products that include milestones and/or royalties. Minimum future payments over the next five years are not material.