COMMITMENTS AND CONTINGENCIES

Lease Commitments

On January 20, 2016, the Company entered into an agreement with the landlord of its Cambridge, MA facility to terminate the lease effective July 31, 2016. Concurrent with the termination of its Cambridge lease, the Company entered into a lease agreement pursuant to which the Company leases approximately 30,000 square feet of office and research and development space located at 19 Presidential Way, Woburn, Massachusetts. The lease began on June 1, 2016 and will end on November 30, 2026.

Annual base rental payments remaining due under the Woburn lease are as follows:



Year ended December 31,	Minimum lease payment
2016 (July - December)	$	185
2017	725
2018	785
2019 and thereafter	7,346
Total	$	9,041

The Company provided the landlord with a security deposit in the form of a letter of credit in the amount of $307. Pursuant to the lease, the Company will also pay certain taxes and operating costs associated with the premises during the term of the lease. Under the terms of the lease agreement, the landlord paid $889 for tenant improvements to the facility and an additional $444 for tenant improvements that will result in increased rental payments by the Company. The landlord’s contributions toward the cost of tenant improvements are recorded as short and long-term lease incentive obligation on the Company's consolidated balance sheet. The lease incentive obligation will be amortized to the Company's consolidated statement of operations as reductions to rent expense over the lease term. As of June 30, 2016, the Company has a remaining lease incentive obligation of $1,322.

Contractual Commitments

In connection with the Company’s PHA biopolymers program, during May 2015 the Company entered into agreements with a U.S. supplier of toll fermentation services and with the owner/operator of its pilot recovery facility. Under the fermentation services agreement, the Company is obligated to pay fixed toll fermentation service fees of approximately $600 per quarter from February 2016 until July 2017. During May 2015, the Company prepaid $1,000 for these future fermentation services. At June 30, 2016, $167 remains available from this prepayment for offset against future service fees and is included in prepaid expenses and other current assets in the Company's consolidated balance sheet. The Company is currently incurring contractual fixed fees of approximately $520 per quarter for the biopolymer recovery facility that will continue until January 31, 2017. In addition to the fixed charges under these agreements, the Company is obligated to pay certain variable production costs as incurred. As a result of the Company's decision during July 2016 to discontinue its biopolymer operations, no further variable production charges are anticipated under either agreement.

Litigation

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. The Company is not currently aware of any such proceedings or claims that it believes will have, individually or in the aggregate, a material adverse effect on the business, financial condition or the results of operations.

Guarantees

As of June 30, 2016 and December 31, 2015, the Company did not have significant liabilities recorded for guarantees. The Company enters into indemnification provisions under various agreements with other companies in the ordinary course of business, typically with business partners, contractors, and customers. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of its activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. However, to date Metabolix has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of the indemnifications under these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of June 30, 2016 and December 31, 2015.