Lease obligations

The Company leases office and laboratory facilities in California, Kansas, and New Jersey. These leases expire between 2014 and 2019, some of which are subject to annual increases which range from 3.0% and 3.5%. The Company currently subleases office and laboratory space in California and New Jersey. The following table provides a summary of operating lease obligations and payments expected to be received from sublease agreements as of March 31, 2013 (in thousands):



Operating lease obligations:	Lease Termination Date	Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
Corporate headquarters- San Diego, CA	July 2019	$	693	$	1,355	$	1,427	$	929	$	4,404
Bioscience and Technology Business Center- Lawrence, KS	December 2014	57		43		—		—		100
Vacated office and research facility-San Diego, CA	July 2015	2,191		3,018		—		—		5,209
Vacated office and research facility- Cranbury, NJ	August 2016	2,563		5,165		1,089		—		8,817
Total operating lease obligations		$	5,504	$	9,581	$	2,516	$	929	$	18,530

Sublease payments expected to be received:		Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
Office and research facility- San Diego, CA	July 2015	$	889	$	1,227	$	—	$	—	$	2,116
Office and research facility- Cranbury, NJ	August 2014 and 2016	190		564		113		—		867
Net operating lease obligations		$	4,425	$	7,790	$	2,403	$	929	$	15,547

In 2010, the Company ceased use of its facility located in New Jersey. As a result, the Company recorded lease exit costs of $9.7 million for costs related to the difference between the remaining lease obligations of the abandoned operating leases, which run through August 2016, and management's estimate of potential future sublease income, discounted to present value. In addition, the Company wrote-off property and equipment with a net book value of approximately $5.4 million related to the facility closure.

As of March 31, 2013 and December 31, 2012, the Company had lease exit obligations of $8.1 million and $9.0 million, respectively. For the three months ended March 31, 2013, the Company made cash payments, net of sublease payments received of $1.0 million. The Company recognized adjustments for accretion and changes in leasing assumptions of $0.1 million for the three months ended March 31, 2013.

As part of the lease for the corporate headquarters, the Company received a tenant improvement allowance of $3.2 million. The tenant improvements were used to build out the suite for general lab and office purposes. For the year ended December 31, 2012, the Company recorded a sale leaseback transaction whereby it removed all property from its balance sheet as of the completion date of the buildout. There was no gain on the sale-leaseback.

Total rent expense under all office leases for the three months ended March 31, 2013 and 2012 was $0.2 million and $0.1 million, respectively. The Company recognizes rent expense on a straight-line basis. Deferred rent at March 31, 2013 and December 31, 2012 was $0.4 million and $0.3 million, respectively, and is included in other long-term liabilities.