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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2012
Commitments and Contingencies

10.    Commitments and Contingencies

We lease our facilities in Berkeley, California (the “Berkeley Lease”), and Düsseldorf, Germany (the “Düsseldorf Lease”), under operating leases that expire in June 2018 and March 2023, respectively. Total net rent expense related to our operating leases for the years ended December 31, 2012, 2011 and 2010, was $1.7 million, $1.7 million and $2.6 million, respectively. Deferred rent was $0.6 million as of both December 31, 2012 and 2011.

Future minimum payments under the non-cancelable portion of our operating leases at December 31, 2012, excluding payments from sublease agreements of $41 thousand, are as follows (in thousands):

 

Years ending December 31,

   

2013

    $ 2,064   

2014

      2,210   

2015

      2,260   

2016

      2,311   

2017

      2,360   

Thereafter

      3,727   
  

 

 

  

Total

    $ 14,932   
  

 

 

  

During the fourth quarter of 2004, we established a letter of credit with Silicon Valley Bank as security for our Berkeley Lease in the amount of $0.4 million. The letter of credit remained outstanding as of December 31, 2012, and is collateralized by a certificate of deposit which has been included in restricted cash in the consolidated balance sheets as of December 31, 2012 and 2011. Under the terms of the Berkeley Lease, if the total amount of our cash, cash equivalents and marketable securities falls below $20 million for a period of more than 30 consecutive days during the lease term, the amount of the required security deposit will increase to $1.1 million, until such time as our projected cash and cash equivalents will exceed $20 million for the remainder of the lease term, or until our actual cash and cash equivalents remains above $20 million for a period of 12 consecutive months.

We established a letter of credit with Deutsche Bank as security for our Düsseldorf Lease in the amount of approximately 0.2 million Euros. The letter of credit remained outstanding as of December 31, 2012 and is collateralized by a certificate of deposit which has been included in restricted cash in the consolidated balance sheets as of December 31, 2012, and 2011.

In addition to the non-cancelable commitments included above, we have entered into contractual arrangements that obligate us to make payments to the contractual counterparties upon the occurrence of future events. In the normal course of operations, we have entered into license and other agreements and intend to continue to seek additional rights relating to compounds or technologies in connection with our discovery, manufacturing and development programs. Under the terms of the agreements, we may be required to pay future up-front fees, milestones and royalties on net sales of products originating from the licensed technologies. We consider these potential obligations to be contingent and have summarized all significant arrangements below.

We rely on research institutions, contract research organizations, clinical investigators, material manufacturers and other consultants. As of December 31, 2012, under the terms of our agreements, we are obligated to make future payments as services are provided of approximately $9.9 million through 2015. These agreements are terminable by us upon written notice. We are generally only liable for actual effort expended by the organizations at any point in time during the contract, subject to certain termination fees and penalties.

Under the terms of our exclusive license agreements with the Regents of the University of California, as amended, for certain technology and related patent rights and materials, we pay annual license or maintenance fees and will be required to pay milestones and royalties on net sales of products originating from the licensed technologies, if any.