EXHIBIT 10.6
 
CONFIDENTIAL TREATMENT
[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission.
RESEARCH AND DISTRIBUTION AGREEMENT

This RESEARCH AND DISTRIBUTION AGREEMENT, dated as of February 9, 2010, is by
and among Delcath Systems, Inc., a corporation organized and existing under the
laws of the State of  Delaware, U.S.A., and having offices at Rockefeller
Center, 600 Fifth Avenue, 23rd Floor, New York, NY 10020, U.S.A. (“Delcath”) and
CHIFU Trading Co., Ltd., a corporation organized and existing under the laws of
Taiwan, and having offices at Rm. 901, No. 142, Min Chuan E. Rd. Sec. 3, Taipei,
Taiwan R.O.C. (“Distributor”).

WHEREAS, Delcath is developing the Delcath Percutaneous Hepatic Perfusion
System™  for use in the field of cancer treatment, which involves the use of a
series of catheters and extracorporeal filters to infuse high dose
chemotherapeutic agents to specific body regions or organs; and

WHEREAS, Distributor is a company that distributes medical devices and
pharmaceuticals in the Territory (as hereinafter defined); and

WHEREAS, Delcath is willing to grant, and Distributor desires to acquire, an
exclusive right to distribute the Delcath Percutaneous Hepatic Perfusion System™
in the Territory in the Field of Use (each as hereinafter defined);
 
NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
 
1.  Definitions
 
a. “Adverse Event” shall mean any adverse health event to which a PHP System (as
hereinafter defined) has or may have contributed.  The term is generally limited
to those events that would be reportable to Competent Authorities.
 
b. “Affiliate” shall mean, in regards to either party, any entity directly or
indirectly controlling, controlled by, or under common control with, that party.
 
c. “Applicable Laws” shall mean (1) with respect to Distributor,  all applicable
laws, rules, regulations and guidelines that may apply to the Research (as
hereinafter defined) and promotion, sale and/or distribution of the PHP System
(as hereinafter defined) under the laws of the Territory (as hereinafter
defined); (2) with respect to Delcath, all applicable laws, rules, regulations
and guidelines that may apply to the manufacture and/or sale of the PHP System
and including all guidelines promulgated by Competent Authorities in the U.S.
including the FD&C Act.
 
d. “Change in Control” shall mean a transaction or series of related
transactions as a result of which a person or entity, or a group of persons or
entities acting in concert directly or indirectly acquires control of a party or
acquires any of the party's assets that are, individually or in the aggregate,
material to its performance under this Agreement.  The transaction(s) may be in
any form or combination of forms, including an issuance of voting securities, a
grant of one or more proxies, the establishment of a voting agreement, a merger
(whether or not the party survives), a share exchange, a reorganization, a
recapitalization or an asset sale.  For this purpose, “control” of a party means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of the party, whether through the
ownership of voting securities, by contract or otherwise.
 
e. “Competent Authorities” shall mean the entities responsible for the
regulation of medical devices intended for use in treating humans, and shall
include, to the extent applicable, the FDA and the Taiwan FDA.
 
f.  “Contract Year” shall mean, in relation to the first Contract Year, the
twelve month period beginning on the first day of the month in which Taiwan FDA
Approval is obtained (as defined below) and, in relation to subsequent Contract
Years, shall mean the twelve month period beginning on each anniversary date of
the first day of the first Contract Year.
 
g. “Effective Date” shall mean the day and date first written above.
 
h. “FDA” shall mean the United States Food and Drug Administration.
 
i. “FD&C Act” shall mean the United States Federal Food, Drug and Cosmetic Act
and applicable regulations promulgated thereunder, as amended from time to time.
 
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j. “Field of Use” shall mean treatment of hepatic malignancies and infectious
disease, and any other Taiwan FDA approved indication.
 
k. “Governmental Approvals” shall mean any and all national, state, provincial
and/or local government licenses, permits, authorizations, registrations and/or
other approvals required for the marketing, importation, distribution, sale
and/or use of the PHP System and for government and/or private insurance
reimbursement for use of the PHP System, specifically including, without
limitation,  Taiwan FDA Approval (as hereinafter defined).
 
l. “PHP System” shall mean the Delcath Percutaneous Hepatic Perfusion System™
which shall include a series of catheters, but will not include any drug(s).
 
m. “Taiwan FDA” shall mean the Taiwan Food and Drug Administration.
 
n. “Territory” shall mean Taiwan.
 
2. Research
 
 
Distributor shall plan, fund, and manage at least two (2), but no more than four
(4) reference/clinical centers in the Territory where it will conduct clinical
studies of the PHP System in the Field of Use (the “Research”).  Distributor
will submit to Delcath a listing of the sites with the appropriate criteria for
consideration as reference/clinical centers.  Delcath will approve all
reference/clinical center sites.  The parties agree that the Research will focus
on the treatment of hepatic malignancies.
 
a. Distributor will use commercially reasonable efforts to obtain approvals to
operate a third reference/clinical center in the Territory.  If such approvals
are obtained, Distributor shall plan, fund and manage the third
reference/clinical center.
 
b. Delcath will train the personnel that will be directly involved in the
performance of the Research at each reference/clinical center.
 
c. Distributor will secure all necessary approvals, including approvals from the
applicable hospitals or health care facilities and/or the Taiwan FDA, including
but not limited to Institutional Review Board (“IRB”) approval(s), to conduct
the Research.  Delcath agrees to assist Distributor to obtain IRB approval(s).
 
d. The Research will be conducted in accordance with clinical protocol(s) which
will be created by Delcath.  The initial clinical protocol will focus on
hepatocellular carcinoma (“HCC,” also known as malignant hepatoma) and will be
sent by Delcath to Distributor within ninety (90) days of the Effective Date
(the “Initial Protocol”).  The clinical protocol(s)will be FDA approved, if such
approval is necessary in Delcath’s sole discretion.  The Research will also be
conducted in accordance with all applicable state and federal laws, rules and
regulations, including but not limited to, statutes and regulations pertaining
to the protection of human subjects in medical research in the
Territory.  Delcath shall have the right, but not the obligation, to retain
scientific advisors to review the results of the Research to determine, amongst
other things, whether the results are clinically adequate.
 
e. Distributor shall perform clinical studies on not less than 25 and up to a
maximum of 50 patients per reference/clinical center, or a maximum of 200
patients for all of the reference/clinical centers combined.
 
f. Delcath shall provide the support personnel required to support the
initiation, training and clinical proctoring of the reference/clinical centers
as it deems necessary in its sole discretion.
 
g. Distributor agrees that at least two (2) of the reference/clinical centers
will be operational and conducting the Research within [***] months after
Delcath provides the Initial Protocol.
 
3. Government Approvals
 
a. Delcath will apply for FDA Approval of the PHP System.
 
b. Promptly after Delcath’s receipt of FDA Approval, Distributor shall file for,
at Distributor’s sole cost and expense, approval of the use of the PHP System in
the Field of Use in the Territory from the Taiwan FDA with as many indications
as possible (“Taiwan FDA Approval”).  Delcath agrees to provide to Distributor,
within thirty (30) days of receipt of FDA Approval of the PHP System, any
documentation in its possession regarding the PHP System that is necessary for
Distributor’s application for Taiwan FDA Approval.  Distributor is expected to
obtain Taiwan FDA Approval within [***] of Delcath’s receipt of FDA
Approval.  If Distributor is unable to obtain Taiwan FDA Approval within this
time period, Delcath will be entitled to terminate this Agreement.
 
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c. The application for Taiwan FDA Approval shall be made and held in the name of
Delcath if permitted by Applicable Laws, and shall be owned by and belong solely
to Delcath.  Distributor shall take all necessary steps to ensure that the
Taiwan FDA Approval is the property of Delcath.  If Applicable Laws do not
permit the Taiwan FDA Approval to be made and held in the name of Delcath, then
the Taiwan FDA Approval may be made and held in the name of Distributor,
provided that, upon Delcath’s request, and at no cost to Delcath, Distributor
will take all necessary steps and execute all necessary documents to transfer
the Taiwan FDA Approval to Delcath or to another entity as designated by
Delcath.
 
       d. If any other Governmental Approval other than Taiwan FDA Approval are
necessary and required for the marketing, importation, distribution, sale and/or
use of the PHP System and for government and/or private insurance reimbursement
for use of the PHP System in the Field of Use in the Territory, Distributor
agrees to obtain the necessary and required Governmental Approvals within [***]
of Delcath’s receipt of FDA Approval.  If any such other Governmental Approvals
for the PHP System are not obtained within this time period, Delcath shall have
the right to terminate this Agreement.
 
e. All such Governmental Approvals shall be made and held in the name of Delcath
if permitted by Applicable Laws, and shall be owned by and belong solely to
Delcath.  If Applicable Laws do not permit the Governmental Approvals to be made
and held in the name of Delcath, then such Governmental Approvals may be made
and held in the name of Distributor, provided that, upon Delcath’s request, and
at no cost to Delcath, Distributor will take all necessary steps and execute all
necessary documents to transfer the Governmental Approvals to Delcath or to
another entity as designated by Delcath.
 
f. Distributor shall be responsible, including all costs and fees, for pursuing,
obtaining and, during the Term, amending and maintaining, any Governmental
Approvals, including Taiwan FDA Approval, required for the proper and fully
authorized importation, marketing and sale of the PHP Systems in the Territory.
 
g. Distributor shall undertake any necessary local testing and the development
of such additional data and information as may be necessary to obtain and
maintain the Governmental Approvals, including Taiwan FDA Approval, and shall
use its best efforts to bring about the issuance of all Governmental Approvals,
including Taiwan FDA Approval, required for the PHP Systems.
 
h. All clinical and other test protocols for the PHP System shall be subject to
prior written approval by Delcath before testing is undertaken; Distributor
shall promptly provide Delcath with all data and information resulting from such
tests or otherwise becoming available to Distributor during the Term hereof.
 
i. All files, documents, clinical and other data, studies, protocols and other
information and materials, regardless of medium (including but limited to paper,
computer diskettes, CD, videos, drawings, graphs, and photographs) with regards
to the Governmental Approvals, including Taiwan FDA Approval, or the
applications for Governmental Approvals, including Taiwan FDA Approval, shall be
the sole property of Delcath.
 
4. Distribution Rights
 
a. Subject to the terms set forth in this Agreement, Delcath hereby grants to
Distributor, and Distributor hereby accepts, the exclusive right to promote,
market, sell and distribute the PHP System throughout the Territory in the Field
of Use commencing on the date that Taiwan FDA Approval is granted and continuing
for the Term of this Agreement.  As used in this Section 4, the term “exclusive”
means to the exclusion of Delcath and any third party, except any subcontractors
of Distributor.
 
b. Distributor shall refer to Delcath all orders or inquiries received by it in
connection with the sales and distribution of the PHP System outside the Field
of Use and/or outside of the Territory, and Delcath shall refer to Distributor
all orders or inquiries received by it in connection with the sale and
distribution of the PHP System in the Field of Use in the Territory.
 
c. Distributor will be responsible for the costs associated with commercializing
the PHP System in the Territory, including sales, marketing, training and
inventory management.
 
d. Distributor agrees that during the Term and subject to the provisions of this
Agreement, Distributor shall:
 
i.  
use its best efforts to promote and market the PHP System in the Territory;

 
ii.  
purchase no less than the Minimum Purchase Requirements as described below in
Section 6;

 
iii.  
not, directly or indirectly, whether through Affiliates or otherwise, promote,
market or sell in or to the Territory any product that competes with the PHP
System;

 
iv.  
not, directly or indirectly, whether through Affiliates or otherwise, sell any
PHP System to competitors of Delcath or of Delcath’s Affiliates,
without  Delcath’s written consent;

 
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v.  
not, directly or indirectly, whether through Affiliates or otherwise, promote,
market or sell any PHP System outside the Territory or for use outside of the
Field of Use; and

 
vi.  
not, directly or indirectly, whether through Affiliates or otherwise, take any
action that could diminish or harm the goodwill or reputation of Delcath or its
Affiliates, the PHP System or any related assets, including but not limited to
intellectual property rights and regulatory approvals.

 
5. Payments from Distributor to Delcath
 
a. Within thirty (30) days of the Effective Date, Distributor will pay to
Delcath Three Hundred Thousand Dollars ($300,000.00) (USD).
 
b. Within [***] of Delcath’s receipt of CE Approval of the PHP System,
Distributor will pay to Delcath [***] (USD).
 
c. Within [***] of Delcath’s receipt of FDA Approval of the PHP System,
Distributor will pay Delcath an additional [***] (USD).
 
d. All payments made pursuant to this Section 5 shall be non-refundable.
 
6.  
Orders and Minimum Purchase Requirements

 
a. Distributor shall submit to Delcath annual sales forecast reports, by
quarter, not later than sixty (60) days prior to the beginning of each Contract
Year.
 
b. Distributor shall submit to Delcath a rolling four (4) quarter sales forecast
report not later than forty-five (45) days prior to the beginning of each
quarter.
 
c. Distributor shall submit firm orders for PHP Systems at least sixty (60) days
prior to the requested delivery date.  Orders may be submitted by fax or
e-mail.  The only effective portions of any purchase orders issued on
Distributor’s forms shall be product quantities and requested delivery dates,
subject to the restrictions set forth in this Agreement.
 
d. Distributor will be required to purchase the following minimum number of PHP
Systems (excluding units used in the Research and purchased at the “Research
Purchase Price” as hereinafter defined) from Delcath (the “Minimum Purchase
Requirements”):
 
First Contract Year:                                           [***]
Second Contract Year:                                      [***]
Third Contract Year:                                          [***]
 
Delcath and Distributor shall agree upon annual Minimum Purchase Requirements
for the Fourth and Fifth Contract Years of the Initial Term before the last
quarter in the Third Contract Year, with the understanding that the Minimum
Purchase Requirements for the Fourth and Fifth Contract Years shall be no less
than [***] of the Minimum Purchase Requirements for the Third and Fourth
Contract Years, respectively.
 
e. If Distributor fails to purchase the Minimum Purchase Requirements in any
Contract Year, Delcath shall provide written notice of such failure to
Distributor.  Distributor shall have ninety (90) days from the date of Delcath’s
written notice to remedy such failure to purchase the Minimum Purchase
Requirements; if Distributor fails to do so, Delcath may terminate this
Agreement.
 
f. Subsequent to the Date that Taiwan FDA Approval is granted and continuing for
the Term, Distributor agrees to maintain at all times a [***] minimum inventory
of PHP Systems based upon current sales forecasts, provided that such minimum
inventory shall in no event be less than one quarter of the annual minimum
purchase obligation.
 
g. On an annual basis, Distributor shall provide Delcath with Distributor’s
suggested price list in effect for the PHP Systems and shall promptly inform
Delcath of changes made or contemplated in such prices.  The parties acknowledge
and agree that price lists will not be developed until after Taiwan FDA Approval
is obtained and distribution has begun.
 
7. Option Regarding Distribution in Singapore
 
a. Distributor shall have the right of first refusal, but not the obligation, to
extend its exclusive distribution rights pursuant to this Agreement to include
distribution in Singapore of the PHP Systems (the “Singapore Option”).
 
b. The Singapore Option may only be exercised upon the occurrence of the
following conditions:
 
i.  
The parties shall have agreed on annual minimum purchase requirements for
Singapore;

 
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ii.  
Distributor can establish that it has adequate facilities in Singapore and the
capacity to distribute the PHP System in Singapore, which determination shall be
made in Delcath’s sole discretion; and

 
iii.  
The parties shall have agreed on appropriate provisions for gaining the
necessary Governmental Approvals of the PHP System in Singapore.

 
c. The Singapore Option may be exercised by providing written notice to Delcath,
no later than twenty four (24) months after the Effective Date of this
Agreement.  This Singapore Option will terminate twenty four (24) months after
the Effective Date of this Agreement.
 
8. Quality Agreement
 
The parties agree that they will negotiate, in good faith, a Quality Agreement
regarding the PHP System, which will be executed within one hundred eighty (180)
days of the Effective Date of this Agreement.
 
9. Safety Data and Exchange Agreement
 
The parties agree that they will negotiate, in good faith, a Safety Data and
Exchange Agreement, which will be executed within one hundred eighty (180) days
of the Effective Date of this Agreement.
 
10. Pricing and Delivery
 
a. Each PHP System that is being used in the Research will be sold by Delcath to
Distributor at a price of [***] (USD) per unit, ex-works (EXW)(Incoterms 2000)
Queensbury, New York (the “Research Purchase Price”).  The parties expect that
no more than [***] PHP Systems will be used for the Research.  If Distributor
desires to purchase more than [***] PHP Systems at the Research Purchase Price,
Distributor shall provide Delcath with documentation to establish that the
additional PHP Systems are necessary for the Research; such documentation shall
be satisfactory to Delcath, in its sole discretion.
 
b. All other PHP Systems sold by Delcath to Distributor will be sold at a price
of [***] (USD) per unit, ex-works Queensbury, New York.  This pricing will be
fixed for the Term (as defined below).  Delivery shall be ex-works
(EXW)(Incoterms 2000) Queensbury, New York.
 
c. [***]
 
d. Transfer of title to the PHP Systems shall occur when they are made available
for pick-up by Distributor at Delcath’s Queensbury, New York facility.
 
e. The cost of freight and insurance will be prepaid by Delcath on behalf of
Distributor and will be added to each invoice sent to Distributor.
 
11. Payment
 
All payments for PHP Systems shall be made by an irrevocable letter of credit,
confirmed by a New York, U.S.A. banking institution, at or before the date of
shipment, with actual payment being made within [***] days from the date of
shipment to Distributor.
 
12. Reports                      Distributor shall furnish the following reports
to Delcath:
 
a.           annual inventory report by month, not later than sixty (60) days
prior to the beginning of each Contract Year.

b.           annual report of end users and number of units sold to each, not
later than thirty (30) days after the end of each Contract Year.

c.           monthly reports showing inventory of PHP Systems at the beginning
of the period, sales during the period, inventory of PHP Systems at the end of
the period, and cumulative sales since the first date of the Contract Year by
month, by quarter and on a year-to-date basis and also showing end users and the
number of units sold to each.

d.           annual report on the medical economy, general competitive situation
and subjective analysis of the performance of the PHP Systems in the Territory;
and

e.           such other information as Delcath may reasonably request.
 
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13. Returns
 
PHP Systems may only be returned with the prior written approval of
Delcath.  Any such approval shall reference a return material authorization
number issued by Delcath.  Transportation costs for returned PHP Systems not
under warranty shall be borne by Distributor.  Transportation costs for PHP
Systems under warranty shall be borne by Delcath, provided, if Delcath
determines that the returned PHP Systems were not defective, such costs shall be
borne by Distributor.
 
14. Recalls
 
If, for any reason, it shall become necessary to trace back or recall any
particular batch of PHP Systems, or to identify the customer or customers to
whom any PHP System from such batch has been delivered, the parties shall
co-operate fully with each other in doing so.  In the event that either party
has reason to believe that one or more batches of PHP Systems should be recalled
or withdrawn from sale or distribution, such party shall immediately notify the
other party in writing.  The decision as to whether or not to initiate a recall
of any of the PHP Systems shall be made by Delcath.  If the recall is required
because of an act or omission by Distributor, Distributor shall promptly
reimburse Delcath for any costs and expenses Delcath incurs in carrying out such
recall.  If the recall is required because of an act or omission of Delcath,
then such recall shall be conducted by Delcath at its sole cost and expense.  If
such recall is required because of a joint act or omission of the parties
hereunder, the parties shall share equally in all of the costs and expenses of
such recall.
 
15. Right of First Refusal.
 
Delcath grants to Distributor a right of first refusal to become the distributor
in the Territory of any new products which are intended for targeted drug
delivery that Delcath begins to market and/or develop during the Term, on terms
to be agreed to by the parties in good faith.
 
16. Term and Termination
 
a. The term of this Agreement shall begin upon the Effective Date and shall
extend to the end of the Fifth Contract Year (“Term”).
 
b. This Agreement will automatically renew for another five (5) years, provided
that Distributor has met all of its obligations pursuant to this Agreement,
including but not limited to its Minimum Purchase Requirements.
 
c. This Agreement may be terminated by either party upon one hundred eighty
(180) days written notice in the event that:
 
i.  
there is a breach of this Agreement by the non-terminating party, provided that
the non-terminating party does not cure its breach within the first ninety (90)
days after said notice; or

 
ii.  
the non-terminating party becomes bankrupt, is placed into the hands of a
trustee, receiver, or manager on behalf of creditors as to the whole or a
substantial part of its business, makes an assignment for the benefit of
creditors, or ceases to carry on business.

 
d. This Agreement may be terminated immediately upon the mutual written consent
of both parties.
 
e. Upon expiration or termination of this Agreement, Delcath shall have the
option, solely at its discretion, to repurchase any PHP Systems remaining in
Distributor’s stock for an agreed upon price, not to exceed the price paid by
Distributor for such PHP System.  Distributor shall not sell to any party other
than Delcath any PHP Systems remaining in its inventory after the termination or
expiration of this Agreement.
 
f. Upon expiration or termination of this Agreement for any reason and at any
time, whether or not at the end of the Term,  Distributor shall take all
necessary or appropriate steps at no charge to Delcath and without delay, to
transfer to Delcath or to Delcath’s nominee, any Governmental Approvals and/or
tenders related to the PHP System held in the name of Distributor (or if such
transfer is not permitted, to cooperate in the cancellation of such Governmental
Approvals and/or tenders and the reissuance thereof to Delcath or its
designee).  Distributor shall provide Delcath with a list of all of
Distributor’s customers for the PHP System including contact information and
information on items purchased by customers, and all information regarding
pending tenders.
 
g. Upon termination of this Agreement, any amount due and owing to Delcath from
Distributor shall remain owed to Delcath and shall be paid by Distributor either
immediately upon termination or according to the applicable payment terms of
this Agreement, whichever is later.
 
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17. Representations and Warranties
 
a. Distributor warrants as follows:
 
i.  
It is duly organized and existing under the applicable laws of its jurisdiction
and has full corporate power and authority under any applicable laws to enter
into this Agreement and to carry out the provisions hereof.

 
ii.  
It is duly authorized to execute and deliver this Agreement and to perform its
obligations hereunder.

 
iii.  
This Agreement is a legal and valid obligation binding upon it of and is
enforceable in accordance with its terms.  The execution, delivery and
performance of this Agreement by each of the parties does not conflict with,
violate or give any person or entity rights under any agreement, instrument or
understanding, oral or written, to which it is a party or by which it or its
assets may be bound or affected, and does not violate any applicable laws.

 
18. Distributor Obligations and Covenants
 
a. Distributor shall be fully responsible for all patient tracking and similar
obligations in order to be in compliance with all Applicable Laws.  Distributor
is required to keep proper records to ensure lot number traceability for all PHP
Systems dispatched to its customers.
 
b. Distributor shall (i) use its best efforts to promote the sale of the PHP
Systems within the Territory and to maintain Delcath’s trademarks and trade
names on all PHP Systems; (ii) provide and maintain, at its own expense and to
the satisfaction of Delcath, an adequate organization for the continuous sale,
distribution and support of PHP Systems throughout the Territory; (iii) use its
best efforts to create and maintain a market for and to increase the sale of PHP
Systems within the Territory; (iv) promote the use of PHP Systems only in
accordance or consistent with the instructions, limitations and safeguards
promulgated by Delcath for the use of PHP Systems and in accordance with any
Applicable Laws; (v) not alter or modify the PHP Systems or packaging in any way
without the express prior written approval of Delcath; and (vi) store, handle
and ship PHP Systems in strict accordance with all specifications, instructions
and guidance from Delcath and any Applicable Laws.
 
c. Distributor shall be responsible for all costs in connection with
distribution of the PHP Systems, including, without limitation, brochures,
literature, graphics, trade shows, websites, demonstration and training, and
other materials needed to responsibly promote the sales of the PHP Systems in
the Territory.  All materials must be approved by Delcath before distribution to
the public.
 
d. Distributor shall be responsible for complying with all Applicable Laws in
the Territory and for translating any materials in connection with the sale of
the PHP Systems.  The foregoing not withstanding, Delcath shall retain all
copyrights to label design, contents and placement (including, without
limitation, insert leaflets) and shall have the right to review and approve (in
its sole discretion) the same prior to commercial release, and to have the same
amended in any way, at Delcath’s sole discretion, so long as such changes are
permissible under all Applicable Laws.  For such review, Distributor shall
provide accurate English language translations of all proposed non-English
language labeling.  In no event shall Distributor engage in or permit any
labeling or re-labeling.
 
e. In the event of any customer complaints regarding the PHP Systems, whether or
not Distributor would like the assistance of Delcath, Distributor shall
immediately notify Delcath of the complaints and, as soon thereafter as
possible, provide Delcath with a written notice in English.
 
f. Distributor shall promptly comply with any and all recall notices issued by
Delcath and Distributor shall cooperate and provide reasonable assistance to
Delcath in connection with any and all recalls.  Distributor shall be
responsible for obtaining from its customers any PHP System that is the subject
of a recall.
 
g. Distributor shall ensure that any sales of the PHP Systems Distributor makes
for resale are resold only within the Territory and Distributor shall take all
reasonable and appropriate action to enforce this obligation, including but not
limited to discontinuing to sell to any party reasonably believed to be
reselling the PHP Systems outside the Territory and reimbursing Delcath for any
damages sustained by Delcath as a result of any unauthorized sales or resales.
 
h. Distributor shall, upon Delcath’s request, provide copies of any tenders for
the PHP Systems in the Territory.  All activities with respect to tenders shall
be conducted so as to allow, upon termination of this Agreement for any reason,
transfer of such tenders to Delcath or to such party as Delcath designates in
writing.
 
19. Trademarks and Proprietary Property of Delcath
 
a. Delcath shall apply for patent protection of the PHP System in the Field of
Use in the Territory.
 
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b. During the Term, Delcath hereby grants Distributor a license and permission
to use the trademarks and trade names used by Delcath in connection with PHP
Systems.  Such permission is expressly limited to uses by Distributor necessary
for the performance of Distributor's obligations under this Agreement.  It is
agreed that Distributor’s use of such trademarks and trade names shall inure
solely to the benefit of Delcath.
 
c. Distributor hereby acknowledges Delcath’s exclusive ownership of  the
trademarks and trade names covered by the license set forth in Section 19(a) and
the renown of such trademarks and trade names both worldwide and in the
Territory.  Distributor agrees not to take any action inconsistent with such
ownership and names, logos and symbols and to cease any and all use or reference
to such names, logos and symbols immediately upon termination of this
Agreement.  At the request of Delcath, Distributor shall cooperate with Delcath
in any action taken by Delcath in the Territory to protect Delcath’s
trademarks.  Distributor shall promptly notify Delcath of any infringement or
apparent infringement of Delcath’s trademarks in the Territory.
 
d. Distributor expressly acknowledges and agrees that it does not have and shall
not acquire under this Agreement any rights in or to any of Delcath’s patents or
other proprietary property related to the PHP System.
 
20. Warranty
 
a. Delcath hereby warrants that at the time of manufacture, the PHP Systems were
free from defects in material or workmanship.  Descriptions or specifications in
Delcath’s literature are meant solely to describe the PHP Systems at the time of
manufacture and do not constitute any warranty of any type, express or implied,
including but not limited to a warranty of merchantability.  The duration of
this warranty is only until the stated expiration date indicated on the
applicable PHP System.  Due to biological differences in individuals, no PHP
System is one hundred percent (100%) effective under all circumstances.  In
addition, because Delcath has no control over the conditions under which the PHP
Systems are used, diagnosis of the patient, the method of use or administration,
and handling of the PHP Systems after they leave Delcath’s possession, Delcath
does not warrant either a good effect or against ill effect following the use of
the PHP Systems.  The sole obligation of Delcath under this warranty shall be to
provide Distributor free of charge with replacements for parts of the PHP
Systems, or, in the sole discretion of Delcath, complete PHP Systems, which are
found to be defective within this warranty period with the same delivery terms
as the original PHP Systems.  Distributor agrees to (i) extend the benefit of
this warranty to its customers, and (ii) provide Delcath with an opportunity to
inspect and recover defective parts replaced by Distributor under warranty to
verify warranty coverage.
 
b. THE FOREGOING WARRANTIES ARE EXCLUSIVE IN LIEU OF ANY OTHER WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT TO THE GOODS SOLD, INCLUDING BUT NOT LIMITED TO
THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
 
c. Delcath shall from time to time provide Distributor with Delcath’s standard
specifications as then in effect for the PHP Systems and with any test methods
to be used in checking compliance with such specifications.  Within thirty (30)
days after receipt of each shipment, Distributor shall carry out quality control
checking and notify Delcath of any claimed failure of the shipment to meet
specifications.  If Delcath agrees that a PHP System fails to meet
specifications, it shall promptly and at its expense provide replacement
quantities or make arrangements for correction of the below-specification PHP
System.  If Distributor has not notified Delcath of claimed failure of a
shipment to meet specifications within thirty (30) days after receipt thereof,
such shipment shall be irrevocably considered accepted by Distributor.
 
d. Delcath agrees that all PHP Systems provided to Distributor pursuant to this
Agreement, excluding any and all PHP Systems purchased at the Research Purchase
Price, shall have a labeled expiration date that is at least twenty four (24)
months from the date of manufacture of the applicable PHP System.
 
e. Distributor shall be responsible for all costs associated with any PHP System
that exceeds its expiration date.
 
f. Distributor agrees to store all PHP Systems in strict accordance with the
applicable labeling of the PHP System.  Failure to store any PHP System in
accordance with labeling shall invalidate and render void any applicable
warranty with regard to that PHP System.
 
21. Indemnification and Liability Actions
 
a. With respect to any claim arising from this Agreement or from any PHP Systems
sold hereunder, Distributor agrees that (i) Delcath shall not be liable to
Distributor or to any third party for indirect, incidental or consequential
damages and (ii) the liability of Delcath (whether arising from a claim based on
contract, warranty, tort or otherwise) shall not exceed the amount paid by
Distributor to Delcath for the actual PHP Systems directly involved with the
liability.
 
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b. Distributor agrees to defend, indemnify and hold harmless Delcath and its
Affiliates, and their respective directors, officers, employees and agents from
and against any and all claims, actions, suits, losses, judgments, damages and
expenses, including but not limited to, reasonable attorneys’ fees,
(collectively “Claims”), arising from (i) the unlawful sale, promotion and
distribution of the PHP Systems by Distributor; (ii) any representation made or
warranty given by Distributor to its customers with respect to the PHP Systems
which is inconsistent with the approved labeling; (iii) any modification or
alteration made by Distributor to the PHP System and/or packaging; (iv) any
negligent or willful misconduct or omission of Distributor in connection with
the marketing, sale or distribution of the PHP Systems; (v) the improper
storage, handling or shipping of the PHP Systems by Distributor; (vi) the
Research by Distributor; or (vii) a breach by Distributor of its representations
and warranties, covenants, obligations or responsibilities to Delcath hereunder.
 
c. Distributor shall give Delcath immediate written notice if it becomes aware
of any legal action deriving from the use of the PHP Systems by customers and
include in such notice all facts relating to the legal action of which it is
aware.  Delcath shall have the right, but not the obligation, to defend any such
claim during or after the Term of this Agreement, and Delcath shall have the
right, but not the obligation, to settle any such claim on such terms as Delcath
deems appropriate.  Distributor shall cooperate fully with Delcath in connection
with such defense.
 
22. Insurance
 
Each party shall carry comprehensive general liability insurance of a type as
may be necessary to protect their interests and fulfill their obligations under
this Agreement and comply with any Applicable Laws (including without limitation
product liability insurance) in an amount of at least [***] dollars (US $[***])
per occurrence during the term of this Agreement and for a period of three (3)
years after the expiration or termination of this Agreement.  Upon request, each
party shall provide the other party with a certificate of insurance evidencing
the minimum coverage required by this Section 22.  For greater certainty, this
Section 22 shall not limit the liability of either party pursuant to this
Agreement.
 
23. Notice of Adverse Event
 
Distributor shall provide written notice to Delcath of any Adverse Event within
twenty four (24) hours of Distributor becoming aware of the Adverse Event.
 
24. Disclaimer of Goodwill
 
Distributor disclaims any goodwill built up with respect to PHP Systems or the
advertising of the same.  Any amounts spent by Distributor (or by Delcath
mentioning Distributor) are spent with the knowledge that this Agreement may be
terminated; neither Delcath nor Distributor shall have claims against each other
as the result of any investment or amount spent for any advertising purposes as
the result of this Agreement.
 
25. Independent Contractors
 
Delcath and Distributor shall act as independent contractors under the terms of
this Agreement.  Delcath and Distributor are not and shall not be deemed to be
employees, agents, co-venturers, partners or legal representatives of each other
for any purpose.  Distributor is not granted any express or implied right or
authority by Delcath to assume or create any obligation or responsibility on
behalf of or in the name of Delcath, or to bind Delcath vis-à-vis any third
party in any manner whatsoever.
 
26. Confidentiality
 
Distributor agrees to abide by the terms of its Confidentiality Agreement with
Delcath dated November 25, 2009 for the entire Term of this Agreement and any
renewals hereof.
 
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27. Notices
 
Any notice required or permitted by this Agreement shall be in writing and shall
be deemed sufficient upon the sooner of (i) the date of personal delivery, (ii)
the date of confirmed transmittal by facsimile, or (iii) one (1) business day
following delivery to a nationally recognized United States overnight courier
service, costs prepaid for overnight delivery, to the addresses set forth below
or at such other addresses as any party may designate at any time by notice to
the other party hereunder:

a.  If to Distributor:  CHIFU Trading Co., Ltd.
Attention: Wayne Hsu, Managing Director
Rm. 901, No. 142
Min Chauan E. Rd Sec. 3
Taipei, Taiwan R.O.C.

b.  If to Delcath:   Delcath Systems, Inc.
Attention: Eamonn P. Hobbs
Rockefeller Center
600 Fifth Avenue, 23rd Floor
New York, NY 10020
 
28. Governing Law and Venue
 
This Agreement will be governed by and construed under the laws of the State of
New York without regard to conflicts of laws principles. Any claim or
controversy arising out of or related to this Agreement or any breach hereof
shall be venued in a State or Federal court located in New York State.  Both
parties hereby consent to and submit to the jurisdiction and venue of such
courts and agree to accept service of process by mail.
 
29. Severability
 
Should any non-material provision of this Agreement be found to be unenforceable
in any jurisdiction, then for such jurisdiction (defined in the most limited
context legally applicable) the remainder of the Agreement shall remain in full
force and effect as to the parties hereto but the unenforceable provisions shall
not be applicable in such jurisdiction.
 
30. Survival
 
Termination or expiration of this Agreement shall not relieve either of the
parties of their respective obligations under Sections 3(e), 11, 13, 14, 16,
18(e), 18(f), 21, 23, 26 and 28 of this Agreement.
 
31. Assignment, Integration, Amendment and Waiver
 
a. This Agreement may not be assigned or transferred by Distributor without the
prior written approval of Delcath.  Furthermore, Distributor may not appoint
sub-distributors without the prior written approval of Delcath.
 
b. Delcath may assign at its sole discretion this Agreement to any Affiliate of
Delcath or if it undergoes a Change in Control.
 
c. This Agreement constitutes the entire agreement between the parties hereto
with regard to the subject matter hereof and supersedes and cancels all prior
agreements pertaining to the subject or subjects hereof.
 
d. This Agreement shall not be modified or amended in any manner except by an
instrument in writing of subsequent date hereto duly executed by the duly
authorized representatives of each party.
 
e. All waivers must be made in writing.  Course of conduct between the parties,
whether or not contrary to the terms of this Agreement, shall not be construed
as a waiver of any term or condition of this Agreement.  The failure by either
party to require the other party's performance of any obligation under this
Agreement shall not affect, limit or waive such other party's right to require
strict compliance with this Agreement any time thereafter.  The waiver of any
breach of a provision of this Agreement shall not be construed in any way as a
waiver of any continuing or succeeding breach of such provision or as a
modification of such provision.
 
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32. Agreement Language
 
This Agreement is in the English language only, which language shall be
controlling in all respects, and all versions in any other language shall be for
accommodation only and shall not be binding upon the parties hereto.  All
communications made or given pursuant to this Agreement shall be in the English
language.
 
33. Counterparts
 
This Agreement may be executed in one or more counterparts, each of which shall
be seemed an original but all of which together will constitute one and the same
agreement.  Delivery of an executed counterpart by facsimile or by electronic
transmission shall be as effective as a manually signed counterpart.

IN WITNESS WHEREOF, Delcath and Distributor have caused this Research and
Distribution Agreement to be executed by their respective authorized
representatives to be effective as of the date first above written.

DELCATH SYSTEMS, INC.

By:           /s/ Agustin
Gago                                                                
Name:      Agustin Gago
Title:        Executive Vice President, Global Sales and
 Marketing

CHIFU TRADING CO., LTD.

By:           /s/ Wayne Hsu 
Name:      Wayne
Hsu                                                                
Title:        Managing
Director                                                               

 
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