Commitments

In October 2016, the Company entered into an office lease (the “new Lease”) for a property located at 6769 Mesa Ridge Road in San Diego, California. The total space is approximately 51,000 square feet. The Company intends to use the facility for office, manufacturing and research and development purposes. The term of the new Lease commences on the earlier to occur of the date the Company first conducts business from any portion of the premises, or June 1, 2017. The initial term of the new Lease is ten years, with a right to terminate on November 30, 2023, with appropriate notice to the landlord.

The base rent adjusts periodically throughout the term of the new Lease, with monthly payments ranging from $0 to $95,000, with a portion of the rent abated for certain periods during the first two years of the initial term. In addition, the Company will pay the landlord its share of operating expenses and has paid a security deposit of $95,000. As of December 31, 2016 the Company has capitalized $390,000 of tenant improvements to the new property which have been recorded as a leasehold improvement within fixed assets on the consolidated balance sheet, offset by a corresponding amount recorded in deferred rent.

In March 2014, the Company entered into an office lease (the "Lease") for its corporate headquarters located at 600 W. Germantown Pike, Suite 110, in Plymouth Meeting, Pennsylvania, and occupied the space in June 2014. The initial term of the Lease is 11.5 years and the Company is using the facility for office purposes.

The base rent adjusts periodically throughout the 11.5 year term of the Lease, with monthly payments ranging from $0 to $58,000. In addition, the Company will pay the landlord for its share of operating expenses and a property management fee and have paid a security deposit of $49,000. In July 2015, the Company amended the lease to increase the total leased space. The commencement of the amended lease was in the first quarter of 2016 and has increased monthly lease payments by approximately $16,000.

The Company has capitalized $933,000 of tenant improvements to the Plymouth Meeting headquarters which have been recorded as a leasehold improvement within fixed assets on the consolidated balance sheet, offset by a corresponding amount recorded in deferred rent.

The Company's corporate office in San Diego is located at 10480 Wateridge Circle in San Diego, California. This lease was signed in April 2013 and the building was occupied in early December 2013. The term of the Lease runs through December 1, 2023. The base rent adjusts periodically throughout the ten year term of the Lease, with monthly payments ranging from $0 to $83,000. In addition, the Company will pay the landlord its share of operating expenses and a property management fee and has paid a security deposit of $64,000.

In June 2015, the Company amended the lease for its corporate office in San Diego, California to increase the total leased space and occupy the entire building. The amendment required the lessor to complete and pay for certain improvements to the additional space before the commencement of the amended lease in January 2016. The amended lease has increased monthly lease payments by approximately $13,000.

The Company has capitalized $822,000 of tenant improvements on the additional corporate office space in San Diego which have been recorded as a leasehold improvement within fixed assets on the consolidated balance sheet, offset by a corresponding amount recorded in deferred rent.

Rent expense was $1.6 million, $1.3 million and $1.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. Future minimum lease payments under non-cancelable operating leases as of December 31, 2016 are as follows:



2017	$	1,818,000
2018	2,266,000
2019	2,682,000
2020	2,869,000
2021	2,950,000
Thereafter	13,548,000
Total	$	26,133,000

In the normal course of business, the Company is a party to a variety of agreements pursuant to which they may be obligated to indemnify the other party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by us under these types of agreements have not had a material effect on our business, consolidated results of operations or financial condition.