e60680887ex10_1.htm


     

    

      Subscription
Terms

      


      Delcath
Systems, Inc.

      Rockefeller
Center

      600 Fifth
Avenue, 23rd Floor

      New York,
NY 10020

      


      Ladies
and Gentlemen:

       

      The
undersigned (the “Investor”) hereby confirms
and agrees with Delcath Systems, Inc., a Delaware corporation (the “Company”) as
follows:

       

      1.           As
of the Closing (as defined below) and subject to the terms and conditions
hereof, the Investor will purchase from the Company and the Company will issue
and sell to the Investor (i) such number of shares (the “Shares”) of common stock,
$0.01 par value per share, of the Company (the “Common Stock”) and (ii)
warrants to purchase such number of shares of Common Stock (the “Warrants” and together with
the Shares, the “Securities”) as is set forth
on the signature page hereto (the “Signature Page”) for a
purchase price of $3.45 per unit (each unit consisting of one share of Common
Stock and a warrant to buy 1.2 shares of Common Stock) (the “Unit”).  The form
of Warrant is set forth in Exhibit A attached
hereto.

       

      2.           The
closing is expected to occur on or about June 15, 2009 (the “Closing”) in accordance with
Rule 15c6-1 promulgated under the Securities Exchange Act of 1934, as amended,
subject to the Company’s satisfaction of certain closing conditions set forth in
an agreement entered into between the Company and the placement agent for the
Offering (as defined below).

       

      3.           The
offering and sale of the Securities (the “Offering”) are being made
pursuant to the Registration Statement and the Prospectus (as such terms are
defined below).

       

      4.           The
Company has filed or will file with the Securities and Exchange Commission (the
“Commission”) (i) a
prospectus included in the registration statement (File No. 333-143280), which
became effective as of June 7, 2007 (the “Base Prospectus”), (ii) if
applicable, a preliminary prospectus related to the Offering (together with the
Base Prospectus, the “Statutory Prospectus”), and
(iii) if applicable, any issuer free writing prospectus as defined in Rule 433
under the Securities Act of 1933, as amended (the “Securities Act”), relating to
the Securities and delivered to the Investor on or prior to the date hereof (the
“Issuer Free Writing
Prospectus”), and will file with the Commission a final prospectus
supplement (together with the Base Prospectus, the “Prospectus”) with respect to
the registration statement (File No. 333-143280) reflecting the Offering,
including all amendments thereto, the exhibits and any schedules thereto, the
documents otherwise deemed to be a part thereof or included therein by the rules
and regulations of the Commission (the “Rules and Regulations”) and
any registration statement relating to the Offering and filed pursuant to Rule
462(b) under the Rules and Regulations (collectively, the “Registration Statement”), in
conformity with the Securities Act, including Rule 424(b)
thereunder.  The Base Prospectus, any Statutory Prospectus, any Issuer
Free Writing Prospectus and the pricing information contained in this
Subscription are collectively the “Time of Sale Disclosure
Package”.

       

      5.           The
Company’s obligation to issue and sell the Securities to the Investor shall be
subject to the receipt by the Company of the purchase price for the Securities
being purchased hereunder as set forth on the Signature Page and the accuracy of
the representations and warranties made by the Investor and the fulfillment of
those undertakings of the Investor to be fulfilled prior to the Closing
Date.

       

      6.           The
Company shall before the opening of trading on the Nasdaq Stock Market LLC on
the next trading day after the date hereof, (i) issue a press release,
disclosing all material aspects of the transactions contemplated hereby and (ii)
file a Current Report on Form 8-K with the Commission describing the terms of
the Offering (and including as exhibits to such
          

       


      
        
           


        

        
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      Current
Report on Form 8-K this Subscription, the Warrant and the Placement
Agreement).  Upon the issuance of the press release and the filing of
the Current Report on Form 8-K described in the immediately preceding sentence,
the Investor will not be in receipt of any material, non-public information
provided to it by the Company, its officers or directors.  The Company
shall not identify the Investor by name in any press release or public filing,
or otherwise publicly disclose the Investor’s name, without the Investor’s prior
written consent, unless required by applicable laws, rules and
regulations.

       

      7.           The
Investor represents that (i) it has had full access to the Time of Sale
Disclosure Package prior to or in connection with its receipt of this agreement
and is relying only on such information and documents in making its decision to
purchase the Securities, and (ii) it is acquiring the Securities for its own
account, or an account over which it has investment discretion, and does not
have any agreement or understanding, directly or indirectly, with any person or
entity to distribute any of the Securities.

       

      8.           The
Investor and the Company each has the requisite power and authority to enter
into this Subscription and to consummate the transactions contemplated
hereby.

       

      9.           The
Investor represents that neither the Investor nor any person acting on behalf
of, or pursuant to any understanding with or based upon any information received
from, the Investor has, directly or indirectly, as of the date of this
agreement, engaged in any purchases or sales in the securities of the Company or
has violated its obligations of confidentiality with respect to the Offering
since the time that the Investor was first contacted by the Company or its
agents with respect to the transactions contemplated hereby.  The
Investor covenants that neither it, nor any Person acting on behalf of, or
pursuant to any understanding with or based upon any information received from,
the Investor will engage in any purchases or sales in the securities of the
Company prior to the time that the transactions contemplated by this agreement
are publicly disclosed.  Notwithstanding the foregoing, in the case of
an Investor and/or its affiliates that is, individually or collectively, a
multi-managed investment bank or vehicle whereby separate portfolio managers
manage separate portions of such Investor's or affiliates assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Investor's or affiliates
assets, the representation set forth above shall only apply with respect to the
portion of assets managed by the portfolio managers that have knowledge about
the financing transaction contemplated by this agreement.

       

      10.           The
Investor represents that, except as set forth below, (i) it has had no position,
office or other material relationship within the past three years with the
Company or persons known to it to be affiliates of the Company, (ii) it is not a
FINRA member or an Associated Person (as such term is defined under FINRA
Membership and Registration Rules Section 1011(b)) as of the date hereof, and
(iii) neither it nor any group of investors (as identified in a public filing
made with the Commission) of which it is a member, acquired, or obtained the
right to acquire, 20% or more of the Common Stock (or securities convertible or
exercisable for Common Stock) or the voting power of the Company on a
post-transaction basis.  Exceptions:

       

      
        
          

        

      

      (If no
exceptions, write “none.” If left blank, response will be deemed to be
“none.”)

       

      11.           This
agreement will involve no obligation or commitment of any kind until this
agreement is accepted and countersigned by or on behalf of the
Company.  All covenants, agreements, representations and warranties
herein will survive the execution of this agreement, the delivery of the
Securities being purchased and the payment therefor.  This agreement
may not be modified or amended except pursuant to an instrument in writing
signed by the Company and the Investor.  This agreement will be
governed by the internal laws of the State of New York.  This
agreement may be executed in one or more counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute
but one
               

       


      
        
           


        

        
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      instrument.  The
Investor acknowledges and agrees that the Investor’s receipt of the Company’s
counterpart to this agreement shall constitute written confirmation of the
Company’s sale of Securities to such Investor.

       

      12.           For
so long as any Warrants remain outstanding, the Company shall not, in any
manner, issue or sell any rights, warrants or options to subscribe for or
purchase Common Stock, or directly or indirectly convertible into or
exchangeable for Common Stock at a price which resets as a function of market
price of the Common Stock, unless the conversion, exchange or exercise price of
any such security cannot be less than the then applicable Exercise Price (as
defined in the Warrants) with respect to the Common Stock into which any Warrant
is exercisable (other than as a result in the ordinary course of business of the
issuance of Common Stock issued pursuant to the exercise of stock options under
the Company’s stock plans, the issuance of Common Stock under the Company’s
stock plans, and the issuance of Common Stock pursuant to employee stock
purchase plans)

       

      13.           The
Company has entered into a Placement Agency Agreement, dated June 9, 2009 (the
“Placement Agreement”),
with the placement agent that contains representations, warranties, covenants
and agreements of the Company that may be relied upon by the Investor, which
shall be a third party beneficiary thereof.

       

      


       

      [Signature
Page Follows]

       


      
        
           


        

        
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      INVESTOR
SIGNATURE PAGE

       

       

      Number of
Shares:   869,565                                                                          

       

      Number of
Warrants:    1,043,478                                                                  

      (such
number equal to 120% of the number of Shares being purchased by the
Investor)

       

      Purchase
Price Per Unit: $3.45                                                                                     

       

      Aggregate
Purchase Price: $2,999,999.25                                                                  

      


       

      Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.

       

      


       

      Dated as
of: June 8, 2009

       

      


       

      
        	
                Capital
      Ventures International

                by: Heights Capital Management, Inc.

                its authorized agent

                __________________________

                INVESTOR

                By: /s/ Martin
      Kobinger                  

                Print
      Name:  Martin
      Kobinger                       

                Title:   Investment
      Manager              

                Name
      that Securities are to be registered:   Capital Ventures
      International     

                Mailing
      Address for Shares:       c/o Heights Capital Management, Brad
      Alles

                 401 City Line Avenue Suite
      220                       
      

                 Bala Cynwyd, PA
      19004                                    

                 

                Mailing
      Address for Warrants (if different than
      above):                                           

                                                                        ____________________________

                ____________________________

                ____________________________

                 

                Taxpayer
      Identification Number:   
      20-8897884                                        
      

                 

                Manner
      of Settlement:  Delivery Versus Payment (DVP)

              	 
      
	 
      	
                 

                Name
      of DTC Participant (broker-dealer at which the account 
or
      accounts to be credited with the Shares are maintained)

                 

              	
                 
      

                 

                 Merrill
      Lynch         
                                    
      

              
	 
      	
                DTC
      Participant Number

                 

              	
                 5198               
                                              
      

              
	 
      	
                Name
      of Account at DTC Participant being credited with the Shares

                 

              	
                 MLI GEF
      CVI                                        
      

              
	 
      	
                Account
      Number at DTC Participant being credited with the Shares

                 

              	
                 2US01600     
                                              
      

              


      


      
        
           


        

        
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      Agreed
and Accepted this 9th day of June, 2009:

      


      
        	
                DELCATH
      SYSTEMS, INC.

              	 
      
	 
      	 
      
	 
      	 
      
	
                By:

              	 
      /s/ Richard L. Taney	 
      
	
                Title:

              	 
      President and Chief Executive Officer	 
      


      

      


      


      


       

      Sales
of the Securities purchased hereunder were made pursuant to a registration
statement or in a transaction in which a final prospectus would have been
required to have been delivered in the absence of Rule 172 promulgated under the
Securities Act.

       

       

       

       

       

       

       

      
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