10. Commitments and Contingencies

a. Operating Leases

At December 31, 2015, we leased laboratory and office space in Tarrytown, New York, pursuant to lease agreements expiring in December 2020 (subject to an early termination right), and additional office space in Lund, Sweden.

On December 31, 2015, in connection with its decision to relocate its headquarters, the Company entered into a lease for office space located in New York City expiring on September 30, 2030. The Company intends to use the leased premises as its headquarters and expects the lease term to commence in the second half of 2016.

Rental payments are recognized as rent expense on a straight-line basis over the term of the lease. In addition to rents due under these agreements, we are obligated to pay additional facilities charges, including utilities, taxes and operating expenses.

As of December 31, 2015, future minimum annual payments under all operating lease agreements are as follows:

Years ending December 31,	Minimum Annual Payments
2016	$	2,024
2017		3,825
2018		3,907
2019		3,901
2020		3,987
Thereafter		22,567
Total	$	40,211

Rental expense totaled approximately $1,864, $1,864 and $3,548 for 2015, 2014 and 2013, respectively. For 2015, 2014 and 2013, amounts paid exceeded rent expense by $49, $3 and $164, respectively, due to the recognition of lease incentives. Additional facility charges, including utilities, taxes and operating expenses, for 2015, 2014 and 2013 were approximately $2,456, $2,117 and $2,330, respectively.

b. Licensing, Service and Supply Agreements

Progenics and its subsidiaries have entered into intellectual property-based license and service agreements in connection with product development programs, and have incurred milestone, license and sublicense fees and supply costs, included in research and development expenses, totaling approximately $388, $498 and $567 during the last three years, respectively.

	Paid from inception/acquisition to December 31, 2015		Future ⁽¹⁾ Commitments		Terms
Seattle Genetics, Inc.	$	4,601	$	13,800	Milestone and periodic maintenance payments to use ADC technology to link chemotherapeutic agents to monoclonal antibodies that target prostate specific membrane antigen. ADC technology is based in part on technology licensed by SGI from third parties.
Amgen Fremont, Inc. (formerly Abgenix)		1,350		5,750	Milestones and royalties to use XenoMouse^® technology for generating fully human antibodies to PSMA LLC's PSMA antigen.
Former member of PSMA LLC		353		52,188	Annual minimum royalty payments and milestones to use technology related to PSMA.
University of Zurich and the Paul Scherrer Institute		270		1,070	Annual maintenance and license fee payments, milestones and royalties in respect of licensed technology related to 1404.
University of Western Ontario		27		274	Annual minimum royalty, administration and milestone payments in respect of licensed technology related to AZEDRA.
Johns Hopkins University Technology		150		2,760	Annual minimum royalty payments and milestones to use technology related to PyL.

⁽¹⁾ Amounts based on known contractual obligations as specified in the respective license agreements, which are dependent on the achievement or occurrence of future milestones or events and exclude amounts for royalties which are dependent on future sales and are unknown.

In addition, we are planning to out-license or terminate non-germane Molecular Insight licenses and service agreements, as to which we have paid $251 through December 31, 2015, and have future commitments of $14,375, subject to occurrence of future milestones or events.

c. Consulting Agreements

As part of our research and development efforts, we have from time to time entered into consulting agreements with external scientific specialists. These agreements contain various terms and provisions, including fees to be paid by us and royalties, in the event of future sales, and milestone payments, upon achievement of defined events, payable by us. Certain of these scientists are advisors to Progenics, and some have purchased our Common Stock or received stock options which are subject to vesting provisions. We have recognized expenses with regard to the consulting agreements of $54, $67 and $39 for 2015, 2014 and 2013, respectively. Those expenses include the fair value of stock options granted during 2013, of approximately $6, $17 and $7 for 2015, 2014 and 2013, respectively. Such amounts of fair value are included in research and development expense for each year presented (see Note 11).

d. Related Party Agreement

In December 2012, Progenics entered into a financial advisory agreement with MTS Health Partners, L.P., of which the Company's Board Chair is a Senior Managing Director and partner, whereby, in 2013, MTS received monthly retainers totaling $55 during the term of the agreement and $300 for MTS' services in connection with the Molecular Insight acquisition. This agreement was terminated in June 2013.

e. Legal Proceedings

Progenics is a party to a proceeding brought by a former employee on November 2, 2010 in the U.S. District Court for the Southern District of New York, complaining that Progenics had violated the anti-retaliation provisions of the federal Sarbanes-Oxley law by terminating the former employee. The former employee seeks reinstatement of his employment, compensatory damages and certain costs and fees associated with the litigation. In July 2013, the federal District Court hearing the case issued an order denying our motion for summary judgment dismissing the former employee's complaint. The case went to trial in July 2015 and on July 31, 2015 the jury awarded the former employee approximately $1.66 million in compensatory damages (held in escrow by the District Court as restricted cash and recorded in other current assets) primarily consisting of salary the former employee would have received during the period from his termination to the date of the verdict. We have accrued an amount in connection with this matter which we believe is probable and estimable. Certain ancillary matters in the case, including the former employee's claims for additional compensation, pre-judgment interest and the awarding of attorneys' fees, remain subject to dispute. Given that there are matters yet to be decided and an estimate of the additional exposure, if any, has yet to be determined there is a reasonable possibility that additional losses may be incurred. Progenics has moved for a new trial or, in the alternative, for remittitur and continues to assess the verdict and its options in the case, including a potential appeal.

In July 2015, Progenics was named as a defendant in a complaint brought by Lonza Sales AG ("Lonza") in the U.S. District Court for the District of Delaware arising from a multi-product license agreement entered into by Progenics and Lonza in April 2010. The complaint alleged that Progenics breached the multi-product license agreement and misappropriated trade secrets in connection with Progenics' sale of certain assets relating to the PRO 140 product to a third party, and sought unspecified damages and injunctive relief. On November 3, 2015, the District Court of Delaware denied Progenics' motion to dismiss the case. On November 17, 2015, Progenics answered Lonza's complaint and brought certain counterclaims against Lonza. On February 9, 2016, Progenics and Lonza agreed to settle and release their respective claims and to dismiss the litigation and, on February 19, 2016, the case was dismissed by the United States District Court for the District of Delaware. Other than the granting of the mutual releases, no consideration or damages were paid by either party to the other in connection with the settlement of the litigation.

On October 7, 2015 Progenics, Valeant and Wyeth LLC received notification of a Paragraph IV certification for certain patents for RELISTOR^® (methylnaltrexone bromide) subcutaneous injection, which are listed in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations, or the Orange Book. The certification resulted from the filing by Mylan Pharmaceuticals, Inc. of an Abbreviated New Drug Application ("ANDA") with the FDA, challenging such patents for RELISTOR subcutaneous injection and seeking to obtain approval to market a generic version of RELISTOR subcutaneous injection before some or all of these patents expire.

On October 28, 2015, Progenics, Valeant and Wyeth LLC (Valeant's predecessor as licensee of RELISTOR) received a second notification of a Paragraph IV certification with respect to the same patents for RELISTOR subcutaneous injection from Actavis LLC as a result of Actavis LLC's filing of an ANDA with the FDA, also challenging these patents and seeking to obtain approval to market a generic version of RELISTOR subcutaneous injection before some or all of these patents expire.

In accordance with the Drug Price Competition and Patent Term Restoration Act (commonly referred to as the Hatch-Waxman Act), Progenics and Valeant timely commenced litigation against each of these ANDA filers in order to obtain an automatic stay of FDA approval of the ANDA until the earlier of (i) 30 months from receipt of the notice or (ii) a District Court decision finding that the identified patents are invalid, unenforceable or not infringed.

In addition to the above described ANDA notifications, in October 2015 Progenics received notices of opposition to three European patents relating to methylnaltrexone. The oppositions were filed separately by each of Actavis Group PTC ehf. and Fresenius Kabi Deutschland GmbH.

Each of the above-described proceedings is in its early stages and Progenics and Valeant continue to cooperate closely to vigorously defend and enforce RELISTOR intellectual property rights. Pursuant to the RELISTOR license agreement between Progenics and Valeant, Valeant has the first right to enforce the intellectual property rights at issue and is responsible for the costs of such enforcement.

Progenics and its affiliates are or may be from time to time involved in various other disputes, governmental and/or regulatory inspections, inquires, investigations and proceedings that could result in litigation, and other litigation matters that arise from time to time. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters will adversely affect the Company, its results of operations, financial condition and cash flows.

In the third quarter of 2014, Progenics and Ono, its former licensee of RELISTOR in Japan, settled all claims between them relating to an arbitration commenced by Progenics in 2013, the parties' October 2008 License Agreement and the former licensee's development and commercialization of the drug. In connection therewith, the parties exchanged mutual releases and the former licensee paid Progenics $7.25 million, which was recorded as other operating income.