Commitments and Contingencies

Licenses, Royalties and Collaborative Agreements

Corning Incorporated — In December 2002, the Company entered into an agreement with Corning Incorporated (Corning) that granted Corning an exclusive sublicense relating to the Company’s cell transfection technology. Under the terms of the agreement, the Company retains exclusive rights to the applications of the technologies involving cells for therapeutic applications. In addition, the agreement provides for future royalty payments on net sales of licensed products sold under the sublicense amounting to 5% of such sales up to $50.0 million. However, the Company does not expect to receive material revenue from this source for several years, if ever.

RealBio Technologies — In May 2009, the Company entered into an agreement with RealBio Technologies, Inc. (RealBio) that granted RealBio an exclusive license to utilize our technology outside of the Company’s core area of focus - human regenerative medicine. In return for this license, the Company received a minority equity interest in RealBio, which was not material as of December 31, 2016 or 2015. The Company received a plan of complete liquidation, dissolution and termination of the existence of RealBio under which RealBio was to be liquidated no later than November 30, 2016. The Company entered into a license assignment, assumption, amendment and consent agreement as of January 23, 2017 pursuant to which RealBio’s license was transferred to RealBio Holdings LLC and amended to add royalties on future sales of licensed products.

Matricel — In October 2015, the Company signed a long-term supply agreement with Matricel GmbH for the ACI-Maix collagen membrane used in the manufacture of MACI™. Matricel supplied ACI-Maix membranes used in the production of MACI when it was previously marketed outside the U.S. by Genzyme Corporation, a Sanofi company. Under the agreement, the Company has committed to purchase annually approximately $0.6 million per year. The agreement is effective until December 31, 2022 and contains a 5-year renewal option by the Company and an additional 5-year automatic renewal, unless otherwise terminated.

Manufacture, Supply and Other Agreements — The Company has entered into various agreements relating to the manufacture of its products and the supply of certain components. If the manufacturing or supply agreements expire or are otherwise terminated, the Company may not be able to identify and obtain ancillary materials that are necessary to develop its product and such expiration and termination could have a material effect on the Company’s business.

Contractual Obligations

The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. In March 2016, the Company amended its current lease in Cambridge to extend the terms until February 2022. Under the amendment, the landlord will contribute approximately $2.0 million toward the cost of tenant improvements. The contribution toward the cost of tenant improvements is recorded as deferred rent on the Company's consolidated balance sheet and is amortized to our consolidated statement of operations as reductions to rent expense over the lease term. As of December 31, 2016, the Company has recorded a tenant improvement of $0.9 million. In addition to the property leases, the Company also leases an offsite warehouse, various vehicles and computer equipment.

Future minimum payments related to Vericel’s operating and capital leases are as follows:



			Payments Due by Period
Contractual Obligations	Total		2017		2018		2019		2020		2021		More than 5 Years
Operating leases	$	23,835	$	5,138	$	4,658	$	4,319	$	4,413	$	4,546	$	761
Purchase commitments	7,770		2,268		2,268		1,434		600		600		600
Capital leases	75		43		32
Total	$	31,680	$	7,449	$	6,958	$	5,753	$	5,013	$	5,146	$	1,361

Rent expense for the years ended December 31, 2016, 2015 and 2014, was $4.8 million, $4.9 million and $2.5 million, respectively.