The Company conducts product research and development programs through a combination of internal and collaborative programs that include, among others, arrangements with universities, contract research organizations and clinical research sites. The Company has contractual arrangements with these organizations; however, these contracts are generally cancelable on 30 days’ notice and the obligations under these contracts are largely based on services performed.

As of December 31, 2018, the Company has operating leases for facilities consist of approximately 48,400 square feet of office and lab space in two facilities in South San Francisco, California, which will expire in January 2020.

In October 2018, the Company entered into a 15-month noncancelable operating lease for approximately 22,100 square feet of additional space in South San Francisco, California, which commenced in February 2019. Future minimum rental payments are $1.1 million in the aggregate excluding taxes and operating expenses.

In September 2018, the Company entered into a noncancelable operating lease for approximately 129,800 square feet of space in Brisbane, California which is currently under construction. The date on which the Company will become responsible for paying rent will be the date the premises are ready for occupancy, currently anticipated to be January 2020, and the lease will expire 10 years after that date. Included in the lease is one option to extend for an additional 10-year period. Future minimum rental payments are $93.2 million in the aggregate plus taxes and operating expenses payable to the landlord. In September 2018, the Company provided a standby letter of credit of $1.9 million as security for its obligations under this Lease. Standby letters of credit are classified as long-term assets within restricted cash and other on the consolidated balance sheet.

Future annual minimum lease payments due under the new and existing operating leases at December 31 of each year are as follows (in thousands):

Year ending December 31:	Amount¹
2019		2,752
2020		5,831
2021		8,461
2022		8,757
2023		9,063
Thereafter		61,444
Total	$	96,308

⁽¹⁾	The table above is prepared under the assumption that rent will commence at the Brisbane facility on January 1, 2020.

Rent expense, net was $2.1 million, $1.4 million and $1.3 million for the years ended December 31, 2018, 2017 and 2016, respectively. The operating leases require the Company to share in prorated operating expenses and property taxes based upon actual amounts incurred; those amounts are not fixed for future periods and, therefore, are not included in the future commitments listed above.

From time to time, the Company may have contingent liabilities that arise in the ordinary course of business activities. The Company accrues for such a liability when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There were no contingent liabilities requiring accrual or disclosure as of December 31, 2018 and 2017.

The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to certain of these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to the Company’s technology. The term of these indemnification arrangements is generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future, but have not yet been made.

The Company 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, as permitted under Delaware law and in accordance with its certificate of incorporation and bylaws, and agreements providing for indemnification entered into with its officers and directors. The term of the indemnification period lasts as long as an officer or director may be subject to any proceeding arising out of acts or omissions of such officer or director in such capacity.

The maximum amount of potential future indemnification of directors and officers is unlimited; however, the Company currently holds director and officer liability insurance. This insurance allows the transfer of risk associated with its exposure and may enable it to recover a portion of any future amounts paid.

The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations for any period presented.