Commitments

Operating Leases

The Company had an operating lease for office facilities in San Diego, California, which commenced in September 2008 and expired in April 2012. In April 2012, prior to the expiration of this lease, the Company entered into a new operating lease for office facilities located in San Diego, California, which commenced on April 23, 2012 and will expire on November 27, 2014. The Company received free rent for the second, third and fourth months of the lease term. The base rent will increase approximately 3% on an annual basis throughout the term. The lease also requires the Company to pay, following the first 12 lease months, additional rent consisting of a portion of common area and pass-through expenses in excess of base year amounts. This space is used for general and administrative and sales and marketing operations and personnel.

The Company also leases office space for its supply chain and inventory management and research and product development operations in Emeryville, California under a non-cancelable operating lease that expires, as extended, in September 2015. The base rent is subject to a 3.0% increase each year for the duration of the lease. Under the terms of the lease, as amended, the Company received an option to expand into additional space. The Company also received free rent for two months and a tenant improvement allowance of $305,000.

In August 2009, the Company entered an operating lease agreement to lease up to 95 vehicles. Each vehicle has a lease term of 36 months with a fixed monthly rental payment. As security for the vehicle leases, the lessor required a letter of credit for $200,000, which is collateralized by a certificate of deposit in the same amount.

The Company recognizes rent expense on a straight-line basis over the non-cancelable term of its operating leases. Rent expense for the years ended December 31, 2012, 2011 and 2010 was $828,000, $826,000 and $839,000, respectively.

Future minimum lease payments as of December 31, 2012 are as follows (in thousands):



2013	$	1,572
2014	1,473
2015	643
2016 and thereafter	—
Total	$	3,688

Manufacturing and Supply Agreements

The Company has a manufacturing services agreement with Patheon UK Limited (Patheon) for the aseptic capsule assembly, filling and inspection, final device assembly and purchasing of Sumavel DosePro, as well as other manufacturing and support services, which agreement expires on October 31, 2013. In February 2013, the Company entered into an additional manufacturing services agreement (the Amended Services Agreement), with Patheon which will replace the Company's original manufacturing services agreement upon its expiration on October 31, 2013. The Amended Services Agreement has similar terms to the original agreement and will expire on April 30, 2015. The parties may mutually agree in writing to renew the term for additional terms prior to the expiration of the then-current term.

The Company has manufacturing and supply agreements with several third-party suppliers for the production of key components of Sumavel DosePro, which expire on various dates between 2012 and 2020. As of December 31, 2012, the Company has non-cancellable purchase orders for 2013 totaling approximately $3,327,000 under these arrangements. In addition, the Company is required to pay Patheon a monthly manufacturing fee of £311,000 or approximately $502,000 (based on the exchange rate as of December 31, 2012). As of December 31, 2012, the Company was committed to pay Patheon a total manufacturing fee of £3,111,000, or approximately $5,025,000 (based on the exchange rate as of December 31, 2012), which is payable monthly over the remaining 10 months of the original Patheon manufacturing services agreement.