15. SUBSEQUENT EVENTS

In February 2015, we entered into a Lease Termination Agreement with BMR-217TH Place LLC (“BMR”), pursuant to which we and BMR agreed to terminate that certain Lease, dated November 21, 2006, as amended, for the premises located at 1522 217th Place S.E. in Bothell, Washington (“Terminated Lease”), effective March 1, 2015 (“Termination Date”). Under the Lease Termination Agreement, we will pay BMR a $2.0 million termination fee no later than the Termination Date. We will also pay BMR an additional termination fee of $1.3 million within 30 days after we (i) meets the primary endpoint for our phase 3 clinical trial for the treatment of second line metastatic CRPC with custirsen and (ii) closes a transaction or transactions pursuant to which we receive funding in an aggregate amount of at least $20.0 million.  BMR will also draw approximately $0.1 million on our letter of credit with respect to its payment of deferred state sales tax and, when paid, will terminate any remaining balance on the letter of credit. No later than March 31, 2015, BMR will return to us the security deposit under the Terminated Lease, less any amounts deductible in accordance with the terms of the Terminated Lease.

With respect to the contingent payment of $1.3 million, we have assessed that the likelihood of meeting both contingent events is more likely than not. As a result, we have recognized the $1.3 million in lease termination liability on our balance sheet as at December 31, 2014.

In February 2015, we entered into an office lease (“New Lease”) with Grosvenor International (Atlantic Freeholds) Limited (“Landlord”), pursuant to which we will lease approximately 11,526 square feet located at 19820 North Creek Parkway, Bothell, Washington, 98011, commencing on February 15, 2015. We have the option to rent an additional 8,054 square feet before August 1, 2015. The initial term of the New Lease will expire on April 30, 2018, with an option to extend the term for one approximately three-year period. Our monthly base rent for the premises will start at approximately $18,000 commencing on May 1, 2015 and will increase on an annual basis up to approximately $20,000. The Landlord has agreed to provide us with a construction allowance of approximately $0.1 million. We will be responsible for 17.11% of taxes levied upon the building during each calendar year of the term. We will also be obligated to deliver to the Landlord a letter of credit in the amount of $0.2 million, which the Landlord may draw upon for base rent or other damages in the event of our default under the New Lease.

The future minimum annual lease payments under the New Lease Bothell lease are as follows (in thousands):