COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2016

9. COMMITMENTS AND CONTINGENCIES

Operating Lease and Lease Guarantee

Upon the Spin-Off, our facility leases in South San Francisco, California were assigned to Theravance Biopharma. However, if Theravance Biopharma were to default on its lease obligations, we have in substance guaranteed the lease payments for these facilities. We would also be responsible for lease-related payments including utilities, property taxes, and common area maintenance, which may be as much as the actual lease payments. As of December 31, 2016, the total remaining lease payments, which run through May 2020, were $21.7 million. The carrying value of this lease guarantee was $1.1 million as of December 31, 2016 and is reflected in other long-term liabilities in our consolidated balance sheet. Amortization on the lease guarantee commenced in 2016 and amortization expense for the year ended December 31, 2016 was $0.2 million.

On June 10, 2016, we executed a lease for our new corporate headquarters in Brisbane, California. The term of the new lease is seven years, subject to our right to extend the lease. Minimum lease payments under the new lease are as follows as of December 31, 2016:

(In thousands)
Years ending December 31:
2017	$	380
2018		392
2019		403
2020		416
2121		428
Thereafter		642

Total	$	2,661

In connection with entering into the new lease, we terminated our sublease by and between us and Theravance Biopharma, dated June 2, 2014 (the "Gateway Sublease"). The Gateway Sublease was set to expire on May 31, 2020. On June 10, 2016, we executed a Sublease Termination Agreement with Theravance Biopharma to terminate the Gateway Sublease (the "Gateway Sublease Termination Agreement"). No termination fee was payable to Theravance Biopharma as a result of this Gateway Sublease Termination Agreement.

Guarantees and Indemnifications

We indemnify our officers and directors for certain events or occurrences, subject to certain limits. We believe the fair value of these indemnification agreements is minimal. Accordingly, we have not recognized any liabilities relating to these agreements as of December 31, 2016.