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 an outstanding letter of credit in the amount of $608 as of September 30, 2019 and 2018, collateralized by a money market account. As of September 30, 2019 and 2018, the Company classified the money market account as long-term restricted cash.

The second lease, for office space located at 400 Talcott Avenue, was effective September 2018 with a lease term that extends through August 2024. The lease includes a rent-free period and lease incentives as well as escalating

rent payments over the course of the lease. The net amount of these escalations, incentives and rent-free period were accrued and recognized as rent expense on a straight-line basis over the term of occupancy.

For the years ended September 30, 2019, 2018, and 2017, the Company recognized rent expense of $2,492, $2,033, and $2,025, respectively, in the consolidated statements of operations, related to these facility leases.

Future minimum lease payments under both leases as of September 30, 2019 are as follows:

Years Ended September 30,	Operating Leases		Capital Leases
	(in thousands)
2020	$	2,728	$	93
2021		2,803		101
2022		2,684		99
2023		608		—
2024		519		—
Thereafter		—		—
Total	$	9,342	$	293

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 year ended September 30, 2017 the Company paid $115 under the agreement. The license agreement was terminated during the year ended September 30, 2017.

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 Company’s 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.

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, 2019 and 2018.