(12)	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. 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. The term of the Lease Amendment began in January 2011 and will expire in March 2021. In addition, the Lease Amendment extends the term of the Initial Lease to March 2021. 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. As discussed in Note 8, the Company has sub-leased this office space.

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 (USD conversions are based on the December 31, 2014 conversion rate): Year 1 – €106,051 ($128,322), Year 2 – €134,974 ($163,319), Year 3 – €159,077 ($192,483) and Years 4 and 5 – €183,179 ($221,647). 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.

In May 2012, the Company entered into an agreement to purchase 10,320 square feet located at 566 Queensbury Avenue, Queensbury, NY (the “Facility”), which was previously leased. The purchase price for the Facility was $440,000 as stated in the initial lease agreement, which commenced on September 1, 2009.

In June 2012, the Company entered into an agreement to lease 18,000 square feet at Suites 2 and 3 Country Club Road, Queensbury, NY for a three year period. This amends the initial lease at 2 Country Club Road, which commenced in November 2010. The location houses a portion of the Company’s research and manufacturing operations. The lease provides for annual base rent of $216,000, as well as the payment of customary building operating expenses and real estate taxes.

In September 2014, the Company entered into a license agreement to lease approximately 5,818 square feet of office space at 1301 Avenue of the Americas, New York, New York. The term began on October 1, 2014 and is effective through May 20, 2016. The agreement provides for total annual base rent of $200,000.

In October 2014, the Company entered into a lease agreement for 95-97 Park Road in Queensbury, NY, agreeing to lease the 6,000 square feet at that location. The term began on November 1, 2014 and is effective for a one year period. The agreement provides for total annual base rent of $45,900.

Future minimum lease payments under all operating leases at December 31, 2014 are as follows:

(in thousands)	Future Lease Payment
2015	$	869
2016		426
2017		252
2018		260
2019		239
	$	2,046

Rent expense totaled approximately $2.3 million, $1.5 million and $1.5 million, for the years ended December 31, 2014, 2013 and 2012, respectively. Of the $2.3 million in expense for 2014, approximately $1.3 million is related to restructuring charges discussed in Note 8.

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. Under the terms of the license agreement for office space at 1301 Avenue of the Americas, the Company is required to maintain a letter of credit in the amount of $200,000. The letters of credit expire in February 2016 if not renewed by the Company.