Commitments and Contingencies

Facilities Lease

As of March 31, 2015, the Company leases 168,189 square feet for its corporate headquarters in Sunnyvale, California. Of this total space, 79,776 square feet are leased under an operating lease that expires in November 2017, with an option to extend the lease term for an additional five years. An additional 52,400 square feet are leased under an operating lease which expires in February 2023, which provides for an option to early terminate the lease in 2018 and an option to extend the lease term for an additional five years. In January 2015, the Company entered into a lease agreement for additional office space for its corporate headquarters in Sunnyvale, California for approximately 36,000 square feet with annual rental expense of $0.5 million under an operating lease that expires in May 2016. In addition, the Company leases approximately 8,000 square feet for its Pharmacyclics Switzerland GmbH office under an agreement that expires in May 2015 and approximately 7,000 square feet of office space in South San Francisco, California under an agreement that expires in May 2015. In February 2015, the Company entered into a lease agreement for approximately 10,000 square feet of office space in South San Francisco, California, with annual rental expense of $0.4 million under an operating lease, expiring in February 2017.

The Company recognizes rental expense on the facilities on a straight-line basis over the lease term. Differences between the straight line rent expense and rent payments are classified as deferred rent liability on the balance sheet. As of March 31, 2015, the Company's future minimum lease payments under non-cancelable operating leases are as follows (in thousands):



Fiscal year	Operating Lease Commitments
2015 (remaining 9 months)	$	2,376
2016	2,752
2017	2,143
2018	857
2019	882
2020	909
Thereafter	1,981
Total	$	11,900

Purchase Commitments

The Company had non-cancelable purchase obligations for approximately $76.8 million and $85.9 million as of March 31, 2015 and December 31, 2014, respectively.

Excess Amounts under collaboration and license agreement with Janssen

Under the Agreement, Excess Amounts will become payable to Janssen, together with interest, in calendar quarters subsequent to the three months ended March 31, 2015, which represented the Company's third profitable quarter for the collaboration. Excess Amounts are expected to become payable in subsequent quarters of profitability for the collaboration until the Excess Amounts and applicable interest has been fully repaid. As of March 31, 2015, total Excess Amounts were $139.2 million (which was comprised of the cumulative amount funded by Janssen to-date of $134.3 million and interest of $4.9 million).

Legal Proceedings

The Company is involved in various claims and legal proceedings, including the class actions suits described below. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. The Company accrues amounts, to the extent they can be reasonably estimated, that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss. These accruals are adjusted periodically as assessments change or additional information becomes available. While there can be no assurances as to the ultimate outcome of any legal proceeding or other loss contingency involving the Company, management does not believe any pending matter will be resolved in a manner that would have a material adverse effect on the Company’s condensed consolidated financial position, results of operations or cash flows.

In March 2015, four putative class action lawsuits were filed against the members of the Pharmacyclics board of directors and certain others (the Defendants) in the Superior Court of the State of California, Santa Clara County. Each alleges generally that the members of the Pharmacyclics board of directors breached their fiduciary duties in connection with AbbVie's offer to acquire all of the outstanding shares of Pharmacyclics and the Mergers by, among other things, (i) failing to maximize the value of Pharmacyclics to its public stockholders, (ii) ignoring or failing to protect against conflicts of interests and (iii) agreeing to unreasonable deal protection devices (see Note 14 for a brief discussion of AbbVie's offer and the Mergers). The plaintiffs seek, among other relief, equitable relief to enjoin consummation of the offer and the Mergers, rescission of the offer and the Mergers and/or rescissory damages, and attorneys' fees and costs.

On April 16, 2015, all parties to the shareholder suits entered into a Memorandum of Understanding ("MOU") to settle these lawsuits. The Defendants in the MOU have denied, and continue to deny, that any of them has committed, threatened to commit, or aided and abetted in the commission of, any wrongdoing, violations of law or breaches of duty to the plaintiffs, the class or anyone else in connection with the settled claims. The Company currently anticipates that the MOU will undergo judicial review for approval during the second half of 2015.