11. Commitments and Contingencies

Operating Leases

The Company leases certain office space and other facilities under operating leases. Most leases contain renewal options for varying periods, and provide for annual escalation in rent payments during the lease term. The Company amortizes the escalation in rental payments on a straight-line basis over the term of the lease.

Future minimum lease payments under all of the Company’s operating leases with initial non-cancellable lease terms in excess of one year were due as follows at December 31, 2017 (in thousands):


Year ending December 31,
2018	$	1,414
2019		1,969
2020		2,075
2021		2,126
2022		2,179
Thereafter		7,543
Total	$	17,306

Rent expense on all operating leases amounted to $1.2 million, $0.3 million and $0.1 million for the years ended December 31, 2017, 2016 and 2015, respectively.

License Agreements

See Note 3 for information regarding licenses entered into by the Company.

Guarantees and Indemnifications

See Note 6 for information regarding guarantees and indemnifications.

Additionally, in the normal course of business, the Company has entered into agreements that contain a variety of representations and provide for general indemnification. The Company's exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to these indemnification obligations. As of December 31, 2017 and 2016, the Company did not have any material indemnification claims related to these agreements that were probable or reasonably possible and consequently has not recorded any related liabilities.

Litigation

On September 8, 2016, Sophia's Cure Foundation (“SCF”), a non-profit 501(c)(3) public charity, filed a complaint in U.S. District Court, Southern District of Ohio, naming as defendants Nationwide Children’s Hospital (“NCH”) and other entities affiliated with NCH, the Company and certain of the Company's present and former executives (the “Complaint”). According to the complaint, in 2012, SCF and Nationwide Children’s Hospital Foundation (“NCH Foundation”) entered into a donation agreement under which SCF provided NCH a gift of $550,000 to fund clinical work associated with the study of the product candidate that the Company now refers to as AVXS-101 for SMA Type 1 patients, and NCH Foundation agreed in such donation agreement to reference SCF as the “primary sponsor” of such clinical work in all publications issued by NCH Foundation. The complaint also alleges that NCH breached the donation agreement by not naming SCF as the sponsor of the investigational new drug application (the “IND”) that it filed for AVXS-101. Additionally, the complaint alleges that the Company and the named Company executives tortiously interfered with SCF’s rights under the donation agreement by assuming sponsorship of the IND under the NCH License. There is no contractual relationship between the Company and SCF. The complaint seeks, among other relief, monetary damages of $500 million and equitable relief, including taking steps to designate SCF as the sponsor of the IND. On October 10, 2017, the Court granted all of the defendants’ motions to dismiss. On October 31, 2017, SCF filed a second amended complaint against all of the defendants except one current and one former executive of the Company, who were dropped from the second amended complaint. The Company believes that the complaint is without merit and intends to vigorously defend itself and its current executives from the allegations. The Company views the probability of loss in this matter to be remote.

Lawsuits may be asserted against the Company in the normal course of business. Based on information currently available, management believes that the disposition of any matters, including the matter involving SCF described above, will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.