NOTE 14. COMMITMENTS

Leases

The Company has entered into lease agreements, lease amendments, and lease extensions ("Lease Agreements") for office, laboratory and manufacturing space located in Tucson, Arizona, the last of which expires in 2018. In addition to rental payments and other standard provisions, one of the leases requires the Company to relocate to Tucson and comply with certain employment provisions through the term of the lease. If such requirements are not met, the rental rate is increased. We are in compliance with the lease terms as of fiscal years ending December 31, 2015, 2014 and 2013, thus no increased rental rates were paid.

In October 2013, as a condition of a Lease Agreement, the Company expanded its lease premises whereby the landlord provided tenant improvements. These tenant improvements are treated as a capital lease whereby both an asset and a liability have been recorded and periodic interest based on an annual rate of 4% and depreciation are recorded to amortize the value of this asset and the liability over the remaining lease term. The Company incurred interest cost of $4,000, $7,000 and $0 for and the years ended December 31, 2015 , 2014, and 2013, respectively. Further details regarding this capital lease are included in Note 5, Property and Equipment.

The future minimum lease payments under the capital lease together with the present value of the net minimum lease payments as of December 31, 2015 are as follows:



Capital Lease Obligations (in thousands)
Year ending December 31:
2016	$	13
2017	—
2018	—
2019	—
2020	—
Total minimum lease payments	$	13
Less amount representing interest	—
Present value minimum lease payments	$	13

Total rent expense for the Tucson facility, including common area charges was $685,000, $293,000 and $168,000 for the years ended December 31, 2015, 2014 and 2013, respectively. Future minimum lease payments under this agreement are as follows (in thousands):



Operating Lease Obligations (in thousands)
Year ending December 31:
2016	$	954
2017	171
2018	4
2019	—
Thereafter	—
Total operating lease obligations	$	1,129

Clinical Trial Agreements

The Company has entered into master agreements with clinical trial sites in which we typically pay a set amount for start-up costs and then pay for work performed. These agreements typically indemnify the clinical trial sites from any and all losses arising from third party claims as a result of the Company's negligence, willful misconduct or misrepresentation. As of December 31, 2015 we had a payable of $512,000 to the clinical trial sites and incurred expense of $1.6 million. No amounts were incurred for these arrangements through December 31, 2014. The expense incurred as part of the clinical trial is included in research and development on the consolidated statements of operations and comprehensive loss.

Legal Matters

On March 19, 2015, a putative securities class action lawsuit was filed against Lawrence Mehren, and Steve Reichling, Rapp v. Accelerate Diagnostics, Inc., et al., U.S. District Court, District of Arizona, 2:2015-cv-00504. The complaint alleges that we violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5, by making false or misleading statements about our ID/AST System, formerly called the BACcel System. Plaintiff purports to bring the action on behalf of a class of persons who purchased or otherwise acquired our stock between March 7, 2014 and February 17, 2015. On June 9, 2015, Julia Chang was appointed Lead Plaintiff of the purported class. On June 23, 2015, Plaintiff filed an amended complaint alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b- 5, by making false or misleading statements or omissions about our ID/AST System and by allegedly employing schemes to defraud. Plaintiff seeks certification of the action as a class action, compensatory damages for the class in an unspecified amount, legal fees and costs, and such other relief as the court may order. Defendants moved to dismiss the amended complaint on July 21, 2015, which motion was pending before the Court as of December 31, 2015. Subsequently, the Court granted the motion and dismissed the case with prejudice on January 28, 2016. On February 26, 2016, plaintiff filed a notice of appeal with the United States Court of Appeals for the Ninth Circuit. Plaintiff challenges the dismissal of the amended complaint. Plaintiff’s opening brief, if she does not seek additional time, is due June 6, 2016. See Item 8, Note 16, Subsequent Events for an update on this lawsuit.

Employment Agreement and Consulting Agreement

In 2012, Thomas V. Geimer resigned as the Company’s Chief Executive Officer, Chief Financial Officer and Secretary. In connection with his resignation, Mr. Geimer had an agreement with the Company to receive staggered payments due to him such that $650,000 was paid upon the closing of the July 2013 Offering as described Item 8, Note 10, Rights Offering and $700,000 payable to him on July 1, 2013. From January 1, 2013 through December 31, 2013, Mr. Geimer’s aggregate consulting fee was $96,000. As of December 31, 2014, no additional amounts were due under the Agreement and no further amounts were incurred during the year ending December 31, 2015.