12. COMMITMENTS AND CONTINGENCIES

The Company records rent expense under its sublease agreement on a straight-line basis. Differences between actual lease payments and rent expense recognized under these subleases resulted in a deferred liability of $498,000 and $525,000 as of September 30, 2011 and December 31, 2010, respectively.

In December 2009, the Company entered into a sublease agreement with a landlord for 46,000 square feet of office and laboratory space located in two buildings on adjacent properties in South San Francisco ("SSF"), California. The term of the lease is 5 years, commencing on February 1, 2010 through February 4, 2015. The Company pays its sublandlord monthly rent based on an escalating rent schedule as set forth in the sublease agreement. The Company will also pay its share of operating expenses based on certain leased square footage ratios. In January 2010, the Company entered into an amendment to its sublease agreement that provides for the expansion of the lease premises by approximately 28,000 square feet beginning in the second quarter of 2010. In July 2011, the Company entered into an amendment to its sublease agreement that provides for the expansion of the lease premises by 22,000 square feet of office space from its landlord beginning in the first quarter of 2012. Under both sublease amendments, the payment terms were modified to increase rent payments and the Company's share of operating expenses, commensurate to the increase in leased square footage.

In March 2011, the Company entered into a lease agreement for a facility in Brazil. The term of the lease is five years, commencing on April 1, 2011 and expiring on April 1, 2016. The rent is 29,500 Brazilian Real per month and is subject to an annual inflation adjustment. The Company will also pay its proportionate share of operating expenses. The Company may cancel this lease agreement at any time, but would be subject to paying the lessor the maximum of a three month rent penalty.

Future minimum lease payments under a noncancelable operating lease are as follows as of September 30, 2011 (in thousands):


Years Ending December 31,
Remainder of 2011	$	471
2012		2,499
2013		2,601
2014		2,681
2015 and thereafter		224

Total minimum lease payments	$	8,476

Rent expense was $0.5 million and $0.4 million for the three months ended September 30, 2011 and 2010, respectively. Rent expense was $1.5 million and $1.4 million for the nine months ended September 30, 2011 and 2010, respectively.

As of September 30, 2011, the Company had the following additional commitments and contingencies:

Contractual Obligations — The Company had non-cancelable purchase obligations of $3.7 million that primarily consisted of equipment orders and third-party manufacturing agreements.

The Company has various manufacturing, research, and other contracts with vendors in the conduct of the normal course of its business. All contracts are terminable with varying provisions regarding termination. If a contract with a specific vendor were to be terminated, the Company would only be obligated for the products or services that the Company had received at the time the termination became effective.

Guarantees and Indemnifications — In the ordinary course of its business, the Company makes certain indemnities, commitments, and guarantees under which it may be required to make payments in relation to certain transactions. The Company, as permitted under Delaware law and in accordance with its amended and restated certificate of incorporation and amended and restated bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company's request in such capacity. The duration of these indemnifications, commitments, and guarantees varies and, in certain cases, is indefinite. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that may enable it to recover all or a portion of any future amounts paid. The Company believes the fair value of these indemnification agreements is minimal. The Company has not recorded any liability for these indemnities in the accompanying condensed consolidated balance sheets. However, the Company accrues for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable. No such losses have been recorded to date.

Other Matters — The Company may be involved, from time to time, in legal proceedings and claims arising in the ordinary course of its business. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. The Company accrues amounts, to the extent they can be reasonably estimated, that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss that is reasonably estimable. While there can be no assurances as to the ultimate outcome of any legal proceeding or other loss contingencies involving the Company, management does not believe any pending matters will be resolved in a manner that would have a material effect on the Company's consolidated financial position, results of operations or cash flows. As of September 30, 2011, we are not involved in any material legal proceedings.