22.

Commitments and Contingencies

Contingent Consideration

As discussed in Note 3, in September 2015, the Company completed the ALF-X Acquisition using a combination of cash, stock and potential post-acquisition milestone payments. These milestone payments may be payable in the future, depending on the achievement of certain regulatory and commercial milestones. The maximum amount of the aggregate milestone payments could be €27.5 million. As of December 31, 2015, the fair value of the contingent consideration was $23.5 million.

Operating Leases

On November 2, 2009, TransEnterix Surgical entered into an operating lease for its corporate offices for a period of five years commencing in April 2010. On June 12, 2014, the Company entered into a lease amendment extending the term of the lease for a period of 3 years and 2 months commencing on May 1, 2015 and expiring on June 30, 2018, with an option to renew for an additional three years. On October 25, 2013, the Company entered into an operating lease for its warehouse for a period of four years and four months commencing in January 2014, with an option to renew for an additional six years. Rent expense was approximately $513,000, $ 424,000 and $360,000 for the years ended December 31, 2015, 2014 and 2013, respectively. The Company’s approximate future minimum payments for its operating lease obligations that have initial or remaining noncancelable terms in excess of one year are as follow:


	Years ending December 31,
	(In thousands)
2016	$	592
2017		609
2018		290

Total	$	1,491

In 2013, TransEnterix Surgical leased a manufacturing facility under a one-year lease from a third party. Rent expense under this lease was $55,000 for the year ended December 31, 2013. SafeStitch leases various office space on a month to month basis. Rent expense under these leases was $0, $89,000 and $55,000 for the years ended December 31, 2015, 2014 and 2013, respectively, including $89,000 and $48,000 to a company controlled by a shareholder for the years ended December 31, 2014 and 2013, respectively.

License and Supply Agreements

As discussed in Note 3, in September 2015, the Company completed the ALF-X Acquisition. As part of this transaction, the Company assumed certain license and supply agreements. Commitments under these agreements amount to approximately $730,000 in 2016, $654,000 in 2017, $872,000 in 2018, $872,000 in 2019, $545,000 in 2020 and $3.8 million thereafter until termination in 2027.

The Company is obligated to pay royalties to Creighton on the sales of products licensed by SafeStitch from Creighton pursuant to an exclusive license and development agreement. The Company is also obligated under an agreement with Dr. Parviz Amid to pay a royalty, for a period of ten years from the first commercial sale of a licensed product, at the rate of 1.5% for the first three years and then 4% in the following seven years to Dr. Amid on the net sales of any product developed with Dr. Amid’s assistance under such agreement. Such agreements covered products that were previously sold by the Company. No royalties were incurred under either of these agreements during the years ended December 31, 2015, 2014 and 2013.

On February 13, 2014, TransEnterix Surgical, Inc., a wholly owned subsidiary of the Company, entered into a Robotic Development and Supply Agreement (the “Robotic Agreement”) with Microline Surgical, Inc. (“Microline”). Under the Robotic Agreement, Microline is developing a flexible sealer product for exclusive use by the Company with the SurgiBot System in open, minimally invasive and laparoscopic surgery. Development of the contemplated products under the Robotic Agreement is ongoing. If such products are successfully developed and applicable regulatory approvals obtained, the Company will owe an aggregate of $1,000,000 to Microline in milestone fees. Actual payment of such milestone fees is substantially uncertain and is dependent on product development activities. Payments under the Robotic Agreement were $400,000 for the year ended December 31, 2015. If the products are successfully developed and applicable regulatory approvals obtained, the Company is committed to product supply commitments set forth in the Robotic Agreement.

The Company has placed orders with various suppliers for the purchase of certain tooling, supplies and contract engineering and research services. Each of these orders has a duration or expected completion within the next twelve months.