12. Commitments and Contingencies Leases The Company has two leases located in Watertown, Massachusetts. The first lease, for office and laboratory space at 500 Arsenal Street, was effective from fiscal 2011 to 2018. During the year ended September 30, 2015, the Company amended the lease to expand the rented space and extend the lease term through September 2022. Payment escalations specified in the lease agreement, as amended, are accrued such that rent expense is recognized on a straight-line basis over the term of occupancy. The amended lease also included a $598 tenant improvement allowance from the landlord, which was accounted for as a capital lease obligation. In connection with the 500 Arsenal Street lease, the Company has a total outstanding letter of credit in the amount of $608 as of September 30, 2018 and 2017, collateralized by a money market account. As of September 30, 2018 and 2017, the Company classified the money market account as long-term restricted cash. The second lease, for office space, located at 400 Talcott Avenue, was entered into on September 27, 2018 with a lease term that extends through August 1, 2024. The lease includes a free rent period as well as escalating rent payments over the course of the lease. The net amount of these escalations and the free rent period will be accrued and recognized as rent expense on a straight-line basis over the term of the lease. For the years ended September 30, 2018, 2017, and 2016, the Company recognized rent expense of $2,033, $2,025, and $2,025, respectively, in the consolidated statements of operations. Future minimum lease payments under both leases as of September 30, 2018 are as follows: Years Ended September 30, Operating Leases Capital Leases (in thousands) 2019 $ 2,209 $ 86 2020 2,728 93 2021 2,803 101 2022 2,684 99 2023 608  Thereafter 519  Total $ 11,551 $ 379 Intellectual Property Licenses In 2012 the Company entered into a non-exclusive intellectual property license agreement with a licensor of research technology under which the Company was required to pay the third party licensor an upfront license fee and additional fees up to the third anniversary of the agreement. In addition, the Company was required to pay annual maintenance fees for each year that the agreement remained in effect. During the years ended September 30, 2017 and 2016, the Company paid $115 and $120, respectively, under the agreement. The license agreement was terminated during the year ended September 30, 2017. During the year ended September 30, 2013, the Company amended an existing license agreement to extend rights to patents previously licensed for one of its programs for use in its HCV research. Under the license, the Company is obligated to pay milestones totaling up to $5,000 plus low single-digit royalties, for the development and regulatory approval of each HCV product outside of the Companys collaboration with AbbVie and any other collaboration it may enter into in the future with a partner that has already licensed these patents. During the year ended September 30, 2016, the Company paid a $500 milestone payment under this amended agreement as a result of the Companys filing to commence clinical development of its own HCV product candidate which was recorded as a research and development expense. The Company stopped further development of its own HCV product candidate in 2016 and there were no further payments made under this license. Litigation and Contingencies Related to Use of Intellectual Property From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company currently is not a party to any threatened or pending litigation. However, third parties might allege that the Company or its collaborators are infringing their patent rights or that the Company is otherwise violating their intellectual property rights. Such third parties may resort to litigation against the Company or its collaborators, which the Company has agreed to indemnify. With respect to some of these patents, the Company expects that it will be required to obtain licenses and could be required to pay license fees or royalties, or both. These licenses may not be available on acceptable terms, or at all. A costly license, or inability to obtain a necessary license, would have a material adverse effect on the Companys financial condition, results of operations or cash flows. The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Indemnification Agreements In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from services to be provided to the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. In addition, the Company maintains officers and directors insurance coverage. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and has not accrued any liabilities related to such obligations in its financial statements as of September 30, 2018 and 2017.