9. Commitments and Contingencies

(a) Lease Commitments

The Company leases its facilities in Cambridge, Massachusetts and Exton, Pennsylvania. During 2016, 2015 and 2014, rent expense, including real estate taxes, was $1.9 million, $1.7 million and $1.7 million, respectively. As part of the Cambridge facility lease, the Company is required to restrict approximately $0.3 million of cash for a security deposit as of December 31, 2016 and 2015. The leases are classified as operating leases. Future minimum commitments as of December 31, 2016 under the Company’s lease agreements are approximately:



December 31,	Operating Lease
	(In thousands)
2017	$	1,842
2018		2,024
2019		2,084
2020		2,018
2021		1,984
Thereafter		1,348
	$	11,300

The Cambridge facility lease was amended on November 17, 2016 to, among other things, extend the expiration date to August 31, 2022 subject to a five-year renewal option exercisable by the Company. The Cambridge facility lease amendment includes certain lease incentives in the form of premises improvement allowance of up to $0.3 million. Amounts will be recorded in future periods when such premises improvements are made. The Company entered into the Exton facility lease on April 1, 2015 and amended it on September 23, 2015 to include additional space. The Exton facility lease term ends on May 31, 2020 subject to a three-year renewal option exercisable by the Company.

The Company has employment agreements with its executive officers that include future minimum commitments of approximately $2.7 million per year.

In the normal course of business, the Company enters into contracts with clinical research organizations, drug manufacturers and other vendors for preclinical and clinical research studies, research and development supplies and other services and products for operating purposes. These contracts generally provide for termination on notice, and therefore are cancellable contracts and not included in contract obligations.

(d) Related-Party Transactions

In November 2011, the Company issued and sold, for an aggregate purchase price of $9.5 million, 1,124,260 shares of Series D preferred stock and warrants to purchase 2,810,650 shares of its common stock with an exercise price of $1.63 per share (“Series D warrants”) pursuant to a Convertible Preferred Stock and Warrant Purchase Agreement with Pillar I, an investment partnership managed by one of the Company’s current directors and significant shareholders. The Series D warrants expired on November 4, 2016. As a result of an anti-dilution adjustment triggered by the sale of the Company’s Series E preferred stock in November, 2012, the exercise price of the Series D warrants was reduced to $1.46 per share. As discussed in Note 7(g), all shares of Series D preferred stock were converted to 6,266,175 shares of common stock in February, 2014. In November 2012, the Company issued and sold, for an aggregate purchase price of $7.0 million, 424,242 shares of Series E preferred stock and warrants to purchase 8,484,840 shares of its common stock with an exercise price of $0.70 per share (“Series E warrants”) pursuant to a Convertible Preferred Stock and Warrant Purchase Agreement with Pillar Pharmaceuticals II, L.P. (“Pillar II”), an investment partnership managed by two of the Company’s directors (one of the Company’s current directors) and one of its significant shareholders and an entity affiliated with Pillar II (together with Pillar II, the “Pillar II Entities”). The Series E warrants expire on November 9, 2017. As discussed in Note 7(h), all shares of Series E preferred stock were converted to 8,484,840 shares of common stock in December 2014.

In connection with the Company’s follow-on underwritten public offering on May 7, 2013, the Company sold 5,000,000 shares of common stock and warrants to purchase 5,000,000 shares of common stock at $0.47 per share for an aggregate purchase price of $2,500,000 to Pillar Pharmaceuticals III, L.P. (“Pillar III”) and an entity affiliated with Pillar III (together with Pillar III, the “Pillar III Entities”), which is described in Note 14. In connection with the Company’s follow-on underwritten public offering on September 30, 2013, the Company sold 1,774,193 shares of common stock for an aggregate purchase price of $2,750,000 to Pillar Pharmaceuticals IV, L.P. (“Pillar IV”) and an entity affiliated with Pillar IV (together with Pillar IV, the “Pillar IV Entities”), which is described in Note 14.

Youssef El Zein, a member of the Company’s board of directors, is a director and controlling stockholder of Pillar Invest Corporation (“Pillar Invest”), which is the general partner of Pillar I, Pillar II, Pillar III and Pillar IV. Mr. El Zein has voting and investment control over the securities beneficially owned by the Pillar III Entities and the Pillar IV Entities. In addition, Abdul-Wahab Umari, who was also a member of the Company’s board of directors until June 2014, is a managing partner of Pillar Invest.

During 2016, the Pillar I exercised 1,370,000 warrants to purchase common stock at a total exercise price of $2,000,200. The warrant exercise prices had been established at the time that the warrants were purchased.

During 2015, the Pillar II Entities exercised 232,759 warrants to purchase common stock at a total exercise price of $163,000 and the Pillar III Entities exercised 2,600,000 warrants to purchase common stock at a total exercise price of $1,222,000. The warrant exercise prices had been established at the time that the warrants were purchased.

During 2014, Pillar I exercised 1,575,758 warrants to purchase common stock at a total exercise price of $1,065,000, the Pillar II Entities exercised 1,424,242 warrants to purchase common stock at a total exercise price of $1,035,000 and the Pillar III Entities exercised 500,000 warrants to purchase common stock at a total exercise price of $235,000. The warrant exercise prices had been established at the time that the warrants were purchased.

The Company issued common stock in lieu of director board and committee fees of approximately $172,000, $122,000, and $82,000 during 2016, 2015 and 2014, respectively. Such shares were issued at the market closing price on the purchase date.

Additional information on related party transactions associated with the April 2013 agreements between the Company and the Pillar Entities (as defined in Note 14) is included in Note 14.

See also Note 6, “Collaboration and License Agreements” and Note 14, “Financings,” for additional information on related party transactions.