(5)	Commitments

Operating Leases

In February 2010, the Company entered into an agreement to lease (Initial Lease) 8,629 square feet of office space in New York, New York with an option to expand an additional 8,629 square feet. The term of the Initial Lease began in March, 2010 and provides for total annual base rental payments of $457,337 during years 1-3 and the first half of year 4 of the Initial Lease term, and of $491,853 during the second half of year 4 and years 5-7 of the Lease term. The Initial Lease also requires the Company to pay customary building operating expenses and a pro-rata share of real estate taxes.

In September 2010, the Company exercised its option right under the Initial Lease and entered into an agreement to lease (Lease Amendment) an additional 8,629 square feet of office space in New York, New York. The term of the Lease Amendment began in January 2011 and will expire in November 2020. In addition, the Lease Amendment extends the term of the Initial Lease to November 2020. The Lease Amendment provides for annual base rent of $504,078 for years 1-5 and of $547,533 for years 6-11 of the Lease Amendment term. In addition, the Lease Amendment provides for total base rent on the space leased under the Initial Lease of $543,627 for the extended term of November 2017 – November 2020. Combined, the Initial Lease and the Lease Amendment provide for annual rent of $961,000 in 2012, $970,000 in 2013, $996,000 in 2014 and 2015, $1.0 million in 2016, and $1.1 million in 2017-2020.

In September 2009, the Company entered into an agreement to lease 10,320 square feet located at 566 Queensbury Avenue, Queensbury, NY (the “Facility”) for a three year period with an option to purchase. The Facility houses a portion of the Company's research and manufacturing operations. The term of the lease commenced on September 1, 2009. The lease provides for annual base rent of $51,600, as well as the payment of customary building expenses and real estate taxes. The Company has an option to purchase the Facility upon delivery of written notice to the Landlord at least 120 days prior to expiration of the lease term. The purchase price for the Facility is $425,000 if the Company acquires the Facility by September 1, 2011, and $440,000 if the Company acquires the Facility by September 1, 2012.

In October 2010, the Company entered into an agreement of lease for the lease of 8,000 square feet located at 2 Country Club Road, Queensbury, NY for a two year period with an option to extend the lease for an additional two years. The location houses a portion of the Company's research and manufacturing operations. The term of the lease commenced on November 12, 2010. The lease provides for annual base rent of $96,000, as well as the payment of customary building operating expenses and real estate taxes.

In April 2011, the Company entered into an agreement of lease for the lease of 3,000 square feet located at 97-95 Park Road, Queensbury, NY for a one year period with an option to extend the lease for an additional year. The location houses a portion of the Company's warehouse, manufacturing and office space. The term of the lease commenced on May 6, 2011. The lease provides for annual base rent of $24,000, as well as the payment of customary building operating expenses and real estate taxes. In July 2011, the Company entered into an amendment to the lease agreement for 97-95 Park Road, agreeing to lease the remaining 3,000 square feet at that location. The term of this amendment began on July 18, 2012 and is effective for a one year period with an option to extend the lease for an additional year. In addition, this amendment extends the term of the original lease to July 18, 2013. The amendment provides for total annual base rent of $42,000.

In August 2011, Delcath Systems Limited entered into an agreement of lease for an office and manufacturing facility located in the city of Galway, Ireland. This facility is approximately 19,200 square feet and is intended to be the location of Delcath's European headquarters. The Lease is for a term of ten years, commencing August 2, 2011; although Delcath Limited has the option to terminate the Lease after the fifth year upon not less than six months notice. The Lease provides for fixed annual lease amounts payable in advance in equal quarterly installments. The annual lease amounts, which escalate annually, are as follows: Year 1 – €106,051, Year 2 – €134,974, Year 3 – €159,077 and Years 4 and 5 – €183,179. Annual lease amounts in years 6 through 10 are subject to adjustment based upon the percentage increase in the consumer price index as published by the Ireland Central Statistics Office. Delcath Limited is also required to pay for customary building operating expenses. Delcath Limited's payment obligations and performance of the Lease are guaranteed by Delcath.

Future minimum lease payments under all operating leases at December 31, 2011 are as follows (in thousands):

Year Ended December 31:
2012	$	1,258
2013		1,158
2014		1,215
2015		1,233
2016		1,273
	$	6,137

Rent expense totaled approximately $1.2 million, $0.5 million and $0.2 million, for the years ended December 31, 2011, 2010, and 2009, respectively.

Cooperative Research and Development Agreement

The principal goal of the Delcath's Cooperative Research and Development Agreement (CRADA) with the NCI is to continue the development of a novel form of regional cancer therapy by designing clinical protocols utilizing the Delcath chemosaturation system to regionally deliver chemotherapeutics to patients with unresectable malignancies confined to an organ or region of the body. Under the terms of the agreement, Delcath will pay $1.0 million in 2012 to the NCI for clinical support. These funds are payable in quarterly amounts of $250,000 and will be used for material support of the CRADA (including equipment, supplies, travel, and other related CRADA support), as well as for support of existing or new scientific or clinical staff to be hired by NCI who are to perform work under the CRADA. The Company incurred $1.0 million per year in expenses related to this agreement for each of the years ended December 31, 2011, 2010 and 2009.

Letters of Credit

Under the terms of the lease agreement for office space in New York City, the Company is required to maintain a letter of credit in the amount of $881,297. The letter of credit expires on February 1, 2013 if not renewed by the Company.