[As Amended]


                              EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") amends and restates the agreement
made April 30, 1996 by and among Delcath Systems, Inc., a Delaware Corporation
with its principal offices at 1100 Summer Street, Stamford, Connecticut 06905
("the Company ") and Mr. M.S. Koly ("the Executive"). This Agreement is
effective as of July 1, 2003. [The Agreement was amended by Amendment No. 1
effective as of June 15, 2004.]

1. Position and Responsibilities.

1.1 The Executive currently serves as a Director and as Chief Executive Officer
of the Company. The Executive shall continue to serve in that capacity, or in
such other executive capacity as shall be designated by the Board of Directors
of the Company and reasonably acceptable to the Executive, and shall perform the
duties customarily associated with such capacity from time to time and at such
place or places as the Board of Directors of the Company shall designate as
appropriate and necessary in connection with such employment.

1.2 The Executive will, to the best of his ability, devote his full business
time (except for his existing directorships listed in Exhibit A or directorships
otherwise approved in advance by the Board of Directors), and his best efforts
and ability to the performance of his duties hereunder and to the business and
affairs of the Company. The Executive agrees to perform such executive duties as
may be assigned to him by or on authority of the Company's Board of Directors
from time to time. After receipt of notice of termination of his employment
hereunder, the Executive shall continue to be available to the Company on a
part-time basis at reasonable and customary hourly rates to assist in any
necessary transition.

1.3 The Executive will duly, punctually, and faithfully perform and observe any
and all rules and regulations which the Company may now or shall hereafter
reasonably establish governing his conduct as an employee and the conduct of its
business.

1.4 The Executive hereby ratifies and affirms the agreement relating to
proprietary information and inventions dated May 20, 1996 and attached hereto as
Exhibit B between the Executive and the Company (the "Proprietary Information
and Inventions Agreement").

2. Term of Employment.

2.1 The term of this Agreement shall be for a term ending on September 30, 2008.
Thereafter, this Agreement shall be automatically renewed for successive periods
of one (1) year, unless the Executive shall give


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the Company not less than ninety (90) days prior written notice of non-renewal.
The Company may terminate the Executive's employment as provided in Sections 2.4
or 2.5.

2.2 The Executive agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control, as defined in this
Section 2, he will remain in the employ of the Company until the earliest of (a)
a date which is 180 days from the occurrence of such Potential Change in
Control, (b) his termination of employment by the Company, (c) the termination
by him of his employment by reason of death, disability or Regular Retirement
after age 70.

2.3 For purposes of this Agreement, a "Potential Change in Control" shall be
deemed to have occurred if:

(a) the Company enters into an agreement, the consummation of which would result
in the occurrence of a Change in Control;

(b) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), including the
Company, publicly announces an intention to take or to consider taking actions
which if consummated would constitute a Change in Control;

(c) any person, other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company (or a company owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), who is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 9.5% or more of the combined voting power of the Company's then
outstanding securities increases his beneficial ownership of such securities by
5% or more over the percentage so owned by such person prior thereto; or

(d) The Board adopts a resolution to the effect that, for the purposes of this
Agreement, a Potential Change in Control has occurred.

2.4 The Company shall have the right to terminate the Executive's employment at
any time under this Agreement prior to the stated term in any of the following
ways:

(a) upon the death of the Executive;

(b) upon the disability of the Executive (disability shall be defined as his
inability to perform duties under this Agreement for an aggregate of ninety (90)
days out of any one hundred eighty (180) day period due to mental or physical
injury or illness);


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(c) immediately without prior notice to the Executive by the Company for Cause,
as hereinafter defined provided, however, that prior to any such termination for
Cause, he shall have had a reasonable opportunity to be heard thereon;

(d) immediately without prior notice to the Executive, in the event of the
liquidation or reorganization of the Company under the federal Bankruptcy Act or
any state insolvency or bankruptcy law;

(e) at any time without Cause, provided the Company shall be obligated to pay to
the Executive upon notice of termination, the Termination Payments, as defined
in Section 3.2.

2.5. The Executive shall also have the right to terminate his employment
hereunder in the event of a material change, without his consent, in his duties
or responsibilities. For the purposes of this Section 2.3, a material change
includes, but is not limited to:

(a) without the express written consent of the Executive, a material diminution
in his position, duties, responsibilities or status with the Company, a material
reduction or alteration (not in the nature of a promotion) in his reporting
responsibilities, titles or offices, or the removal from or failure to be
re-elected to the director or officer positions previously held;

(b) a reduction by the Company of the annual base salary of the Executive as the
same may be increased from time to time hereafter, or a failure by the Company
to increase such base salary each year at least by the percentage specified in
Section 4.1;

(c) the failure of the Company to continue in effect any incentive, benefit,
bonus or compensation, insurance, pension or other employee benefit plan of the
Company (or plans and benefits which are, in the aggregate, no less favorable to
the Executive than those he enjoyed immediately prior thereto);

(d) the relocation of the Company's principal executive offices to a location
outside a fifty mile radius of its present headquarters, the requirement by the
Company that he, without his consent, be based anywhere other than the Company's
principal executive offices, or, in the event he consents to such move, the
failure of the Company to reimburse him for moving expenses and any loss
realized on the sale of his principal residence in connection with such move;

(e) a reduction in the number of the Executive's yearly paid leave business
days;

(f) the failure by the Company to pay to the Executive any portion of his then
current compensation or to pay any portion of an installment of deferred
compensation under any


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deferred compensation program of the Company within seven (7) days of the date
such compensation is due.

2.6 If the Executive elects to terminate his employment due to a material change
in his duties or responsibilities, the Company shall be obligated to pay to him
immediately in one lump sum, upon notice to the Company, the Termination
Payments, as defined in Section 3.2.

2.7 "Cause" for the purpose of Section 2.4 of this Agreement shall mean:

(a) the falseness or material inaccuracy of any of the Executive's warranties or
representations herein;

(b) the willful failure or refusal to comply with explicit directives of the
Board of Directors or to render the services required herein;

(c) fraud or embezzlement involving assets of the Company, its customers,
suppliers or affiliates or other misappropriation of the Company's assets or
funds;

(d) the conviction of a criminal felony offense;

(e) the willful breach or habitual neglect of obligations under this Agreement
or duties as an employee of the Company.

The existence of Cause for termination of employment by the Company shall be
subject, upon the written election of the Executive or the Company, to binding
arbitration as provided in Section 9 hereof.

2.8 Notwithstanding the foregoing, after a "Change in Control" has occurred, the
Executive shall not be deemed to have been terminated for Cause without delivery
to him of a Notice of Termination, from the Board finding that in the good faith
opinion of at least three-fifths (3/5) of the Board (after reasonable notice to
him and an opportunity for the Executive, together with his counsel, to be heard
before the Board), he was guilty of conduct set forth above in Section 2.7,
above, and specifying the particulars thereof in detail. In the event of a
dispute concerning the application of this Section, no claim by the Company that
Cause exists shall be given effect unless the Company establishes to the Board
by clear and convincing evidence that Cause exists.

2.9 If his employment is terminated under Section 2.4 (a) through (d), above,
all obligations of the Company hereunder cease, except with respect to amounts
and obligations accrued to the Executive through the last day of the month
during which his employment ended.

3. Change in Control

3.1 For purposes of this Agreement, a "Change in Control" shall be deemed to
have occurred if:


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(a) any person (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any company owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of the stock of the Company), is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 30% or more of
the voting power of all classes of capital stock of the Company;

(b) the following individuals cease for any reason to constitute a majority of
the number of directors then serving: individuals, who on the date hereof,
constitute the Board, and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment or election by the Board
or nomination for election by the Company's stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof or whose appointment or
election or nomination for election was previously so approved or recommended
(the "Continuing Directors");

(c) the stockholders of the Company approve a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any other
company, other than (1) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) more than
50% of the combined voting power of the voting securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger
or consolidation or (2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no "person"
(as hereinabove defined) acquires more than 50% of the combined voting power of
the Company's then outstanding securities; or

(d) the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.

(e) The foregoing to the contrary notwithstanding, a Change in Control shall not
be deemed to have occurred with respect to the Executive (i) if the event first
giving rise to the Potential Change in Control involves a publicly-announced
transaction or publicly-announced proposed


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transaction which at the time of the announcement has not been previously
approved by the Board and (ii) the Executive is part of a purchasing group
proposing the transaction. A Change in Control shall also not be deemed to have
occurred with respect to the Executive if he is part of a purchasing group which
consummates the Change in Control transaction. The Executive shall be deemed
"part of a purchasing group" for purpose of the two preceding sentences if he is
an equity participant or has agreed to become an equity participant in the
purchasing company or group (except for (i) passive ownership of less than 5% of
the stock of a public company, (ii) ownership of equity participation in the
purchasing company or group which is otherwise not deemed to be significant, as
determined prior to the Change in Control by a majority of the non-employee
Continuing Directors, or (iii) beneficial ownership of any equity interest in
the purchasing company or group as a result of the grant to the Employee of an
incentive compensation award under one or more incentive plans of the purchasing
company or group (including, but not limited to, the conversion in connection
with a transaction of incentive compensation awards of the Company into
incentive compensation awards of the purchasing company or group), on terms and
conditions substantially equivalent to those applicable to other executives of
the Company immediately prior to the transaction, after taking into account
normal differences attributable to job responsibilities, title and the like).

3.2 In the event of a Change in Control, the Company shall pay to the Executive
immediately in one lump sum, and he shall be entitled to a payment (together
with the payments provided in Sections 3.3 and 3.4 below, the "Termination
Payments") equal to two times the sum of the amounts set forth in clauses (A),
(B) and (C) below:

(A) the Executive's base salary as in effect immediately prior to the Change in
Control;

(B) the average of the bonuses received by the Executive with respect to the
three completed fiscal years of the Company immediately preceding the Change in
Control; and

(C) the annual cost to the Company of all benefits to which the Executive is
entitled (other than contingent stock, stock options and other similar benefits)
immediately preceding the Change in Control, including, without limitation (but
without duplication), any pension, savings, or other employee benefit plans.

3.3 In the event of a Change in Control, the Company shall continue, for a
period of thirty six (36) months, to cover the Executive and his dependents
under those life, disability, accident and


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health insurance benefits which were applicable to him on the date of the Change
in Control at the same benefit levels then in effect, or shall provide
substantially similar benefits.

3.4 In the event of a Change in Control, upon the election of the Executive at
his sole discretion, the Company shall pay to him, in cash, an amount equivalent
to the excess, if any, of the aggregate market value (measured as of the close
of trading on the date of the Change in Control) of all shares of any class or
series of the Company's capital stock issuable upon exercise of then outstanding
employee stock options granted to him (whether or not then exercisable) over the
aggregate exercise price of such options, and such options shall thereupon be
cancelled and of no further force or effect.

3.5 The Company shall pay to the Executive legal fees and expenses incurred by
him as a result of any termination during the thirty-six (36) month period
following a Change in Control (including such fees and expenses, if any,
incurred in contesting or disputing any such termination or in seeking to obtain
or enforce any right or benefit provided by this Agreement or in connection with
any tax audit or proceeding to the extent attributable to the application of
section 4999 of the Code, to any payment or benefit provided hereunder.

3.6 In the event that the Executive becomes entitled to the Termination
Payments, if those Termination Payments would be subject to the tax imposed by
section 4999 of the Code (or any similar tax that may hereafter be imposed) (the
"Excise Tax"), the Executive shall return to the Company any amount which
constitutes an "excess parachute payment" within the meaning of section
280G(b)(2) of Code, unless, in the opinion of tax counsel selected by the
Company's independent auditors and acceptable to the Executive such other
payments or benefits (in whole or in part) do not constitute parachute payments,
or such excess parachute payments (in whole or part) represent reasonable
compensation for services actually rendered within the meaning of section
280G(b)(4) of the Code in excess of the base amount within the meaning of
section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax.

3.7 Any payment required to be made to the Executive under Section 3.2 shall be
independent of, and may be in addition to, any payment required to be made under
Section 2.4 or 2.6.

4. Compensation

4.1 Base Salary. The Executive's Base Salary shall be $300,000 per annum as of
July 1, 2004, payable in accordance with the Company's payroll policies and
practices, and subject to increases thereafter in amounts equal to the greater
of the change in the Cost of Living Index, as published by the


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American Chamber of Commerce Researchers Association, or the rate of increase
applied to employees, generally.

4.2 Bonus. The Executive may receive bonuses at the discretion of the Company's
Board of Directors or the Compensation Committee.

4.3 Vacation. The Executive shall be entitled to thirty paid leave business days
per annum, in lieu of all legal holidays, religious holidays, vacation days and
sick days. The Executive shall make all reasonable efforts to arrange for paid
leave business days in advance at such time or times as shall be mutually
agreeable to him and the Company. Any paid leave days not used in any particular
year may be carried forward into the subsequent year. The Executive may not
receive cash in lieu of paid leave business days.

4.4 Insurance and Benefits. The Executive shall be eligible for participation in
any health or other group insurance plan which may be established by the Company
or which the Company is required to maintain by law. He shall also be entitled
to participate in any employee benefit program which the Company may establish
for its key employees or for its employees generally, including, but in no way
limited to, bonuses and stock purchase or option plans. The Company shall
provide comprehensive health insurance for the Executive and his dependents.
Additionally, the Company shall maintain term life insurance in the amount of at
least three times his then annual base salary payable to a beneficiary or
beneficiaries of his own choosing in the event of his death. The Company shall
also maintain a long-term disability insurance policy payable to a beneficiary
or beneficiaries of his choosing should he suffer a long-term disability. Should
his employment be terminated for any reason, the Company will use its best
efforts to allow the Executive to assume these policies.

4.5 Expenses. The Company shall reimburse the Executive promptly for all
reasonable and ordinary business and out-of-pocket expenses incurred by him in
connection with the Company's business and in the scope of his employment
hereunder, as approved by the Company, including, without limitation, reasonable
and necessary travel, lodging, entertainment and meals incurred by him during
the term of this Agreement, provided the expenses are incurred in furtherance of
the Company's business and at the request of the Company. The Executive agrees
to keep and maintain records of the aforesaid expenses as may be requested by
the Company and to account to the Company for the expenses prior to
reimbursement.

5. Other Activities During Employment


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5.1 Except for the outside employments, consultancies and directorships
currently held by the Executive as listed on Exhibit A attached hereto, and
except with the prior written consent of the Company's Board of Directors,
exclusive of himself, which consent will not be unreasonably withheld, the
Executive will not, during the term of this Agreement, undertake or engage in
any other employment, occupation or business enterprise which directly competes
with the Company other than one in which he is an inactive investor.

5.2 The Executive hereby agrees that, except as disclosed on Exhibit A attached
hereto, during his employment hereunder, he will not, directly or indirectly,
engage (i) individually, (ii) as an officer, (iii) as a director, (iv) as an
employee, (v) as a consultant, (vi) as an advisor, (vii) as an agent (whether a
salesperson or otherwise), (viii) as a broker, or (ix) as a partner,
co-venturer, stockholder or other proprietor owning directly or indirectly more
than a five percent (5%) interest in any firm, corporation, partnership, trust,
association, or other organization which is engaged in the planning, research,
development, production, manufacture, marketing, sales, or distribution of drug
delivery and filtration systems, related products, equipment, or services (such
firm, corporation, partnership, trust, association, or other organization being
hereinafter referred to as a "Prohibited Enterprise"). Except as may be shown on
Exhibit A attached hereto, the Executive hereby represents that he is not
engaged in any of the foregoing capacities (i) through (ix) in any Prohibited
Enterprise.

6. Former Employees.

6.1 The Executive represents and warrants that his employment by the Company
will not conflict with and will not be constrained by any prior or current
employment, consulting agreement or relationship whether oral or written. The
Executive represents and warrants that he does not possess confidential
information arising out of any such employment, consulting agreement or
relationship which, in his best judgment, would be utilized in connection with
his employment by the Company in the absence of Section 6.2.

6.2 If, in spite of the second sentence of Section 6.1, the Executive should
find that confidential information belonging to any other person or entity might
be usable in connection with the Company's business, he will not intentionally
disclose to the Company or use on behalf of the Company any confidential
information belonging to any of his former employers; but during his employment
by the Company he will use in the performance of his duties all information
which is generally known and used by persons with training and experience
comparable to his own all


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information which is common knowledge in the industry or otherwise legally in
the public domain.

7. Post-Employment Activities.

7.1 For a period of one (1) year after the termination, for any reason, of his
employment with the Company hereunder, absent the Board of Directors' prior
written approval, the Executive will not directly or indirectly engage in
activities similar to those described in Section 5.2, nor render services
similar or reasonably related to those which he shall have rendered hereunder to
any person or entity whether now existing or hereafter established which
directly competes with (or proposes or plans to directly compete with) the
Company ("Direct Competitor") in the drug filtration and delivery systems
business, or any line of business engaged in or under demonstrable development
by the Company. Nor shall he entice, induce or encourage any of the Company's
other employees to engage in any activity which, were it done by him, would
violate any provision of the Proprietary Information and Inventions Agreement or
this Section 7. As used in this Section 7.1, the term "any line of business
engaged in or under demonstrable development by the Company" shall be applied as
at the date of termination of his employment, or, if later, as at the date of
termination of any post-employment consultation,

7.2 For a period of one (1) year after the termination of his employment with
the Company, the provisions of Section 5.2 shall be applicable to the Executive
and he shall comply therewith.

7.3 For a period of three (3) months after termination, for any reason, of his
employment with the Company hereunder, the Executive shall be entitled to the
use of his then current executive office space, with the continuation of his
then current secretarial and administrative assistance.

7.4 No provision of this Agreement shall be construed to preclude the Executive
from performing the same services which the Company hereby retains him to
perform for any person or entity which is not a Direct Competitor of the Company
upon the expiration or termination of his employment (or any post-employment
consultation) so long as he does not thereby violate any term of this Agreement
or the Proprietary Information and Inventions Agreement.

8. Remedies.

The obligations under the Proprietary Information and Inventions Agreement and
the provisions of Sections 5.2, 7, 8, 9, and 11 of this Agreement (as modified
by Section 15, if applicable) shall survive the expiration or termination of
employment (whether through his resignation or otherwise) with the Company. The
Executive acknowledgess that a remedy at law for any breach


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or threatened breach by him of the provisions of the Proprietary Information and
Inventions Agreement or Section 5 or 7 hereof would be inadequate and he
therefore agrees that the Company shall be entitled to such injunctive relief in
case of any such breach or threatened breach.

9. Arbitration.

Any dispute concerning this Agreement including, but not limited to, its
existence, validity, interpretation, performance or non-performance, arising
before or after termination or expiration of this Agreement, shall be settled by
a single arbitrator in Stamford, Connecticut, in accordance with the expedited
procedures of the commercial rules then in effect of the American Arbitration
Association. The cost of arbitration, exclusive of the cost of each party's
legal representation (which, except as otherwise provided in this Agreement,
shall be borne by the party incurring the expense), shall be borne by the
instigating party; provided, however, that the arbitrators' award may require
either party to reimburse the other for the reasonable cost of legal
representation in the arbitration proceedings.

10. Assignment.

This Agreement and the rights and obligations of the parties hereto shall bind
and inure to the benefit of any successor or successors of the Company by
reorganization, merger or consolidation and any assignee of all or substantially
all of its business and properties, but, except as to any such successor or
assignee of the Company, neither this Agreement nor any rights or benefits
hereunder may be assigned by the Company or by The Executive, except by
operation of law or by a further written agreement by the parties hereto.

11. Interpretation.

It is the intent of the parties that, in case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. Moreover, it is the intent of the
parties that, if any one or more of the provisions contained in this Agreement
is or becomes or is deemed invalid, illegal or unenforceable or in case any
shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, such provision shall be construed by
amending, limiting and/or reducing it to conform to applicable laws so as to be
valid and enforceable or, if it


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cannot be so amended without materially altering the intention of the parties,
it shall be stricken and the remainder of this Agreement shall remain in full
force and effect.

12. Notices.

Any notice which the Company is required to or may desire to give the Executive
shall be given by registered or certified mail, return receipt requested,
addressed to him at his address of record with the Company, or at such other
place as he may from time to time designate in writing under the terms of this
Section 12. Any notice which the Executive is required or may desire to give to
the Company hereunder shall be given by registered or certified mail, return
receipt requested, addressed to the Company at its principal office, or at such
other office as the Company may from time to time designate in writing under the
terms of this Section 12.

13. Waivers.

No waiver of any right under this Agreement shall be deemed effective unless
contained in a writing signed by the party charged with such waiver, and no
waiver of any right arising from any breach or failure to perform shall be
deemed to be a waiver of any future such right or of any other right arising
under this Agreement.

14. Complete Agreement.

The foregoing, including Exhibits A and B attached hereto, is the entire
agreement of the parties with respect to the subject matter hereof, superseding
any previous oral or written communications, representations, understandings, or
agreements with the Company or any officer or representative thereof.

15. Amendments.

This Agreement may be amended or modified or certain provisions waived only by a
written instrument signed by the parties hereto, upon authorization of the
Company's Board of Directors.

16. Headings.

The headings of the Sections contained in this Agreement are inserted for
convenience and reference only and in no way define, limit, extend or describe
the scope of this Agreement, the intent of any provisions hereof, and shall not
be deemed to constitute a part hereof nor to affect the meaning of this
Agreement in any way.

17. Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of
the State of Connecticut.


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In Witness Whereof, the Company has caused this Agreement to be signed by its
duly authorized officer and its seal affixed hereto, and the Executive has
hereunto set his hand and seal as of the day and year first above written.

Delcath Systems Inc.

By:     /s/ MARK A CORIGLIANO    9/25/03                     /s/ M. S. KOLY
   -------------------------------------                  --------------------
   Mark A. Corigliano, Director and                              M.S. Koly
   Chairman of the Compensation Committee



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Exhibit A

Outside Employments and Directorships of M.S. Koly

Madison Consulting, Inc.
Venkol, Inc.




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