4. Commitments and Contingencies

We lease our facilities in Berkeley, California (“Berkeley Lease”) and Düsseldorf, Germany (“Düsseldorf Lease”) under operating leases that expire in June 2018 and March 2023, respectively. The Berkeley Lease provides for periods of escalating rent. The total cash payments over the life of the lease are divided by the total number of months in the lease period and the average rent is charged to expense each month during the lease period. We entered into sublease agreements under the Düsseldorf Lease for a certain portion of the leased space.

Total net rent expense related to our operating leases for three month periods ended June 30, 2016 and 2015, was $0.6 million and $0.5 million, respectively. Total net rent expense related to our operating leases for the six month periods ended June 30, 2016 and 2015, was $1.1 million and $1.0 million, respectively. Deferred rent was $0.4 million and $0.5 million as of June 30, 2016 and December 31, 2015, respectively.

Future minimum payments under the non-cancelable portion of our operating leases at June 30, 2016, excluding payments from sublease agreements, are as follows (in thousands):

Years ending December 31,
2016 (remaining)	$	1,276
2017		2,585
2018		1,516
2019		663
2020		668
Thereafter		1,132
Total	$	7,840

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 addition, 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, if any, or other payments contingent upon the occurrence of future events that cannot reasonably be estimated.

We rely on research institutions, contract research organizations, clinical investigators and sales and marketing organizations as well as clinical and commercial material manufacturers. As of June 30, 2016, under the terms of our agreements relating to HEPLISAV-B, we are obligated to make future payments of approximately $11.3 million through 2016. These agreements are terminable by us upon written notice. Generally, we are liable only for actual effort expended by the organizations at any point in time during the contract through the notice period.

From time to time, we may be involved in claims, suits, and proceedings arising from the ordinary course of our business, including actions with respect to intellectual property claims, commercial claims, and other matters. Such claims, suits, and proceedings are inherently uncertain and their results cannot be predicted with certainty. Regardless of the outcome, such legal proceedings can have an adverse impact on us because of legal costs, diversion of management resources, and other factors. In addition, it is possible that a resolution of one or more such proceedings could result in substantial damages, fines, penalties or orders requiring a change in our business practices, which could in the future materially and adversely affect our financial position, financial statements, results of operations, or cash flows in a particular period.

In April 2016, Dynavax reached an agreement in principle to settle the case entitled In re Dynavax Technologies Securities Litigation. The settlement, which is subject to final documentation as well as court approval, provides for a payment of $4.1 million by Dynavax and will result in a dismissal and release of all claims against all defendants, including the Company. The settlement will be paid for by the Company’s insurers. Based on our assessment that the loss is both probable and reasonably estimable, the Company recorded an accrual of $4.1 million reflected in accrued liabilities on the attached condensed and consolidated balance sheets. The Company does not expect any significant additional charges related to this matter. In addition, we record anticipated recoveries under existing insurance contracts when recovery is assured. As the settlement will be paid by our insurers, we have recorded a current asset in the amount of $4.1 million reflected in prepaid expenses and other current assets on the attached condensed and consolidated balance sheets. Amounts recorded for contingencies can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Use of Estimates in Note 1.