7. COMMITMENTS AND CONTINGENCIES Facility lease Future minimum lease payments on the Companys non-cancelable operating lease for office and laboratory space are as follows: Years Ending December 31, Operating Lease Remaining 2018 $ 409 2019 1,678 2020* 1,581 Total $ 3,668 * The end of the lease term is November 30, 2020. Litigation On June 10, 2015, Alnylam filed a complaint against the Company in the Superior Court of Middlesex County, Massachusetts (the Court). The complaint alleged misappropriation of confidential, proprietary, and trade secret information, as well as other related claims, in connection with the Companys hiring of a number of former employees of Merck &amp; Co., Inc. (Merck) and its discussions with Merck regarding the acquisition of its subsidiary, Sirna Therapeutics, Inc., which was subsequently acquired by Alnylam. On April 18, 2018, the Company and Alnylam entered into a Confidential Settlement Agreement and General Release (the Settlement Agreement), resolving all ongoing litigation between the Company and Alnylam. The terms of the Settlement Agreement include mutual releases and dismissals with prejudice of all claims and counterclaims in the following litigation between the parties: (i) Alnylam Pharmaceuticals, Inc. v. Dicerna Pharmaceuticals, Inc. , No. 15-4126 pending in the Massachusetts Superior Court for Middlesex County and (ii) Dicerna Pharmaceuticals, Inc., v. Alnylam Pharmaceuticals, Inc. No.1:17-cv-11466 pending in the United States District Court for the District of Massachusetts. Pursuant to the terms of the Settlement Agreement, the Company has agreed to make the following payments to Alnylam: (i) a $2.0 million upfront payment in cash, which the Company made in May 2018; (ii) an additional $13.0 million in cash to be paid as 10% of any upfront or first year cash consideration that the Company receives pursuant to future collaborations related to Ga1NAc-conjugated RNAi research and development (excluding any amounts received or to be received by the Company from its existing collaboration with BI), provided that the $13.0 million must be paid by no later than April 28, 2022; and (iii) issuance of shares of the Companys common stock (the Shares) pursuant to a share issuance agreement between the parties (the Share Issuance Agreement). Under the Settlement Agreement, for periods ranging from 18 months up to four years, the Company will be restricted in its development and other activities relating to oligonucleotide-based therapeutics directed toward a defined set of eight Alnylam targets (the Oligo Restrictions). The Oligo Restrictions pertain to targets where Dicerna does not have, or does not currently intend to have, a therapeutic program, or are expected to be consistent with Dicernas execution on programs in the normal course of business. The Settlement Agreement does not include any admission of liability or wrongdoing by either party or any licenses to any intellectual property from either party. On April 20, 2018, the Company and Alnylam entered into the Share Issuance Agreement, pursuant to which the Company agreed to issue to Alnylam 983,208 Shares in satisfaction of the Companys obligation under the Settlement Agreement to deliver Shares to Alnylam. The Share Issuance Agreement contains customary representations and warranties of each party. Pursuant to the terms of the Share Issuance Agreement, Alnylam may not, without the prior approval of the Company, dispose of any of the Shares for a six-month period commencing on the closing date of the Share issuance. Thereafter, through the fifth anniversary of the closing date of the Share issuance, Alnylam will only dispose of the maximum number of Shares that it would be permitted to dispose if the Shares were subject to the volume restrictions set forth in Rule 144(e) of the Securities Act of 1933, as amended. The Company paid the upfront payment of $2.0 million dollars in May 2018 and recorded the cash obligation of $13.0 million as a liability discounted to the estimated present value of $8.7 million at an effective interest rate of 10.0%. Ten percent of any first year or upfront consideration or proceeds paid to the Company arising from any new collaboration agreements are payable to Alnylam until the cash obligation is satisfied. If the entire obligation is not paid by the fourth-year anniversary of the agreement, the balance is payable to Alnylam in cash at that time. Upon signing the agreement, the Company recorded a liability equal to the estimated present value of the obligation at that time. The Company applies the effective interest method, as the present value is accreted through maturity. As of September 30, 2018, $0.4 million of interest expense had been recorded on this liability. Upon receipt of certain upfront cash payments owed to the Company resulting from signing the Alexion and Lilly agreements in October 2018, the Company anticipates that the $13.0 million cash obligation will become payable in the fourth quarter of 2018. As a result, the estimated present value of $12.8 million, which was revised based on the expected timing of the remaining payments, is recorded in current liabilities. The impact of revising the expected timing of repayment is recorded as a component of litigation expense in the condensed consolidated statement of operations. The 983,208 shares issued pursuant to the Share Issuance Agreement was recorded at fair market value of $10.3 million based on the Companys closing share price on April 18, 2018, the date the Settlement Agreement was executed. The Company did not assign any value to the Oligo Restrictions as the Company did not incur additional losses or give up any value as a result of the restrictions. Total litigation expense was $3.7 million and $29.1 million for the three and nine months ended September 30, 2018, respectively, all of which related to the litigation and settlement agreement with Alnylam. The litigation expense for the nine months ended September 30, 2018 includes $24.7 million related to the Settlement Agreement. The Company recorded litigation expenses, also related to the Alnylam litigation, of $2.5 million and $6.2 million for three and nine months ended September 30, 2017, respectively, which was previously included as a component of general and administrative expenses and recast to litigation expense for comparative purposes. From time to time, the Company may be subject to various claims and legal proceedings. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount is reasonably estimable, the Company will accrue a liability for the estimated loss. There were no contingent liabilities recorded as of September 30, 2018 and December 31, 2017.