Document:

Exhibit 10.39

September 2, 2004

Bruce R. Spector

Pinnacle Care International
   111 South Calvert St.
   Suite 2850
   Baltimore, MD 21202

  
          Re:    Indemnification Agreement

Dear Bruce:

          We are aware that you previously signed a Non-Competition Agreement dated January 28, 2003 for the benefit of e.Magination Networks, LLC (“e.Magination”) and Roche Capital, LLC (“Roche,” and, together with e.Magination, the “Counter-parties”) (the “Non- Compete Agreement”).  The Non-Compete Agreement purports to limit your right to control a business that engages in the ownership and/or operation of a network integration sales and consulting business, and a graphic design and computer software programming business, along with the performance of related advertising services, within Maryland, Virginia or the District of Columbia.  We do not believe that your becoming one of Tier Technologies, Inc.’s (the “Company”) directors and fulfilling your obligations as such in the ordinary course will cause you to breach the Non-Compete
Agreement.  However, given the existence of the Non-Compete, there is a risk that either or both of the Counter-parties may sue you or take other actions in an attempt to have the Non-Compete Agreement restrict you from serving on the Company’s Board of Directors (the “Board”).  Given this possibility, and the fact that you are investing significant time and energy to become one of the Company’s directors, the Company has agreed to the terms stated in this indemnification agreement (this “Letter Agreement”), which is intended to supplement the Indemnification Agreement to be entered into between you and the Company (the “Indemnification Agreement”).

          The Company
agrees to (i) assume the defense, with counsel mutually agreeable to both
parties, of any action, suit, claim or proceeding (each, a “Non-Compete
Action”) by any Counter-party against you based upon your alleged violation
of the Non-Compete Agreement arising out of your service as a director of the
Company and (ii) indemnify you against, and advance, without requiring a
preliminary determination of entitlement to indemnification, any and all
expenses (including attorneys’ fees, if applicable), witness fees, damages,
judgments, fines and amounts paid in settlement, and any other amounts actually
incurred by you in connection with the Non-Compete Action.  To the extent
that the provisions of the Indemnification Agreement do not conflict with any
undertaking of the Company set forth in this Letter Agreement, such provisions,
including Section 6 of the Indemnification Agreement (relating to notification
and defense of claims), shall apply with respect to the defense against any
Non-Compete Action.

10780 Parkridge Blvd., Suite 400, Reston, VA 20191 Phone: (571) 382-1000 Fax: (571) 382-1004

	
  
Bruce L. Spector
  	
  
 
  
	
  
Indemnification Agreement
  	
  
Page 2
  

          You acknowledge and agree that you will promptly resign from the Board in the event that the Non-Compete Agreement is deemed by a court of appropriate jurisdiction  to bar you from serving on the Board (whether in conjunction with a court-imposed injunction or otherwise), and that the Company will have no obligation to nominate you for a position on the Board or to make any further payment or option or other equity grant to you that would otherwise have been made had you not been prohibited by a court of appropriate jurisdiction  from serving on the Board because of the Non-Compete Agreement; provided, however, that any options granted to you under the Company’s Amended and Restated 1996 Equity Incentive Plan (the “Plan”) shall remain outstanding and exercisable by you in accordance with the terms of the Plan and any applicable Option Agreement(s).

          This agreement contains the complete, final and exclusive agreement between you and the Company regarding the Company’s agreement or obligation to indemnify you in connection with any Non-Compete Action and amends any conflicting provision in the Indemnification Agreement with respect to such Non-Compete Actions.  This agreement shall be interpreted and enforced in accordance with the laws of the State of California.

          You and the Company agree to the terms contained herein.

	
  
 
  	
  
 
  	
  
THE COMPANY:
  
	
  
 
  	
  
 
  	
  
TIER TECHNOLOGIES, INC.,
  
	
  
 
  	
  
 
  	
  
a California corporation
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  /s/ BRUCE R. SPECTOR
  	
   
  	
  By:
  	
  /s/ JAMES R. WEAVER
  
	
  

  	
   
  	
   
  	
  

  
	
  Bruce R. Spector
  	
   
  	
  Name:
  	
  James R. Weaver
  
	
   
  	
   
  	
  Title:
  	
  CEO, Chairman
  

10780 Parkridge Blvd., Suite 400, Reston, VA 20191 Phone: (571) 382-1000 Fax: (571) 382-1004Exhibit 10.40

James L. Bildner
 10780 Parkridge Blvd., Suite 400
 Reston, VA  20191

December 13, 2004

Tier Technologies, Inc.
 10780 Parkridge Blvd, Suite 400
 Reston, Virginia  20191
 Attn:  Deanne Tully, General Counsel

                    Re:  Cross-Collateralization Agreement

Ladies and Gentlemen:

          Reference is made to the following six promissory notes made by me payable to Tier Technologies, Inc. (“Tier”):  (1) Amended and Restated Full Recourse Secured Promissory Note dated April 1,1998 in the principal amount of $1,218,800 (“Note One”); (2) Amended and Restated Full Recourse Secured Promissory Note dated April 1,1998 in the principal amount of $283,600 (“Note Two”); (3) Full Recourse Promissory Note dated July 26, 2000 in the principal amount of $300,000 (“Note Three”); (4) unsecured promissory note dated January 2, 1997 in the principal amount of $161,652 (“Note Four”); (5) unsecured promissory note dated May 31, 1997 in the principal amount of $25,000 (“Note Five”); and (6) unsecured promissory note dated July 15, 1997 in the principal amount of $35,000 (“Note Six”).  These six notes together are referred to herein
as the “Notes.”

          Reference is also made to the following three pledge agreements between Tier and me pursuant to which I have pledged stock of Tier to secure certain of the Notes:  (1) Third Amended and Restated Pledge Agreement dated as of June 30, 1999, securing obligations under Note One (“Pledge One”); (2) Second Amended and Restated Pledge Agreement dated as of June 30, 1999, securing obligations under Note Two (“Pledge Two”); and (3) Pledge Agreement dated as of April 1, 2004, securing obligations under Note Three (“Pledge Three”).  These three pledge agreements together are referred to herein as the “Pledge Agreements.”

          In exchange for valuable consideration, which is hereby acknowledged and received,  Tier has requested, and I have agreed, that the collateral pledged under each of the Pledge Agreements shall serve as security for my obligations under each of the Notes.  Accordingly, I agree as follows:

          1.          Each of the Pledge Agreements secures the payment of all of my present and future obligations, duties, and liabilities under each of the Notes and under each of the Pledge Agreements (collectively, the “Obligations”).  All references to the “Obligations” contained in each of the Pledge Agreements shall hereafter be deemed to refer to the Obligations as defined in this letter agreement.  

Tier Technologies, Inc.
 December 13, 2004
 Page 2

          2.          The Pledged Collateral under each of the Pledge Agreements shall hereafter secure all of the Obligations.

          3.          All references to (1) the “April 1998 Note” or “Section 2 of the April 1998 Note” in Pledge One; (2) the “April 1998 Note” or “Section 2 of the April 1998 Note” in Pledge Two; and (3) the “Note” or “Section 2 of the Note” in Pledge Three shall hereafter be deemed to be references to the Notes as defined in this letter agreement.  These include, without limitation, the references in Sections 3(a), 6(a), 6(b), 8(a)(i), 8(a)(iv), 8(c), 10 and 12 of each of the Pledge Agreements.

          4.          All references to (1) the “Second Amended and Restated Pledge Agreement” in Note One and (2) the “Amended and Restated Pledge Agreement” in Note Two shall hereafter be deemed to be references to the Pledge Agreements as defined in this letter agreement.  

          5.          Each Pledge Agreement is amended hereby to provide that the address for notice to Tier set forth in Section 13 thereof shall hereafter be the address set forth above, attention Chief Financial Officer.

          6.          Except as set forth in this letter agreement, all other terms and provisions of each of the Notes and, as amended hereby, each of the Pledge Agreements is confirmed to be in full force and effect. 

          7.          I understand that Tier may, in consultation with its outside corporate counsel, request that I execute a more formal agreement amending each of the Pledge Agreements and/or each of the Notes to effectuate the intent of this letter, and I agree to work with Tier in good faith to enter into such an agreement and amendments if reasonably requested by Tier.

	
  
 
  	
  
Very truly yours,
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  
/s/ JAMES L. BILDNER
  
	
   
  	
  

  
	
  
 
  	
  
James L. Bildner
  

Acknowledged and Accepted:

TIER TECHNOLOGIES, INC.

	
  
By:  
  	
  
/s/ JAMES R. WEAVER
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
  
Name: 
  	
  
James R. Weaver
  	
  
 
  
	
  
Title:  
  	
  
Chairman & CEOTHIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR DELCATH SYSTEMS, INC. SHALL HAVE RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO DELCATH SYSTEMS, INC. THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

                          SERIES D WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                              DELCATH SYSTEMS, INC.

                            Expires December __, 2009

No.: W-D-04-__                                        Number of Shares: _______
Date of Issuance: December __, 2004

     FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Delcath Systems, Inc., a Delaware corporation (together with its
successors and assigns, the "Issuer"), hereby certifies that _______________ or
its registered assigns is entitled to subscribe for and purchase, during the
Term (as hereinafter defined), up to __________________ (______________) shares
(subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non-assessable Common Stock of the Issuer, at an exercise
price per share equal to the Warrant Price then in effect, subject, however, to
the provisions and upon the terms and conditions hereinafter set forth.
Capitalized terms used in this Warrant and not otherwise defined herein shall
have the respective meanings specified in Section 9 hereof.

     1. Term. The term of this Warrant shall commence on December __, 2004 and
shall expire at 5:00 p.m., eastern time, on December __, 2009 (such period being
the "Term").

     2. Method of Exercise Payment; Issuance of New Warrant; Transfer and
Exchange.

     (a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part during the Term.

     (b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at

<PAGE>

the principal office of the Issuer, and by the payment to the Issuer of an
amount of consideration therefor equal to the Warrant Price in effect on the
date of such exercise multiplied by the number of shares of Warrant Stock with
respect to which this Warrant is then being exercised, payable at such Holder's
election (i) by certified or official bank check or by wire transfer to an
account designated by the Issuer, (ii) by "cashless exercise" in accordance with
the provisions of subsection (c) of this Section 2, but only until the date that
a registration statement under the Securities Act providing for the resale of
the Warrant Stock has been declared effective by the Securities and Exchange
Commission or (iii) by a combination of the foregoing methods of payment
selected by the Holder of this Warrant. The Holder shall surrender this Warrant
to the Issuer within three (3) Trading Days of the date of exercise.

     (c) Cashless Exercise. Notwithstanding any provisions herein to the
contrary, if (i) the Per Share Market Value of one share of Common Stock is
greater than the Warrant Price (at the date of calculation as set forth below)
and (ii) a registration statement under the Securities Act providing for the
resale of the Warrant Stock has not been declared effective by the Securities
and Exchange Commission by the date such registration statement is required to
be effective pursuant to the Registration Rights Agreement (as defined in the
Purchase Agreement), in lieu of exercising this Warrant by payment of cash, the
Holder may exercise this Warrant by a cashless exercise and shall receive the
number of shares of Common Stock equal to an amount (as determined below) by
surrender of this Warrant at the principal office of the Issuer together with
the properly endorsed Notice of Exercise in which event the Issuer shall issue
to the Holder a number of shares of Common Stock computed using the following
formula:

                  X = Y - (A)(Y)
                          ------
                             B

Where     X = the number of shares of Common Stock to be issued to the Holder.

          Y    = the number of shares of Common Stock purchasable upon exercise
               of all of the Warrant or, if only a portion of the Warrant is
               being exercised, the portion of the Warrant being exercised.

          A    = the Warrant Price.

          B    = the Per Share Market Value of one share of Common Stock.

     (d) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three (3) Trading Days after such
exercise (the "Delivery Date") or, at the request of the Holder (provided that a
registration statement under the Securities Act providing for the resale of the
Warrant Stock is then in effect), issued and delivered to the Depository Trust
Company ("DTC") account on the Holder's behalf via the Deposit Withdrawal Agent
Commission System ("DWAC") within a reasonable time, not exceeding three (3)
Trading Days after such exercise, and the Holder hereof shall be deemed for all
purposes to be the holder of the shares of Warrant Stock so purchased as of the
date of such exercise and (ii) unless this Warrant has expired, a new Warrant
representing the number of shares of Warrant Stock, if any, with respect to
which this Warrant shall not then

                                       2

<PAGE>

have been exercised (less any amount thereof which shall have been canceled in
payment or partial payment of the Warrant Price as hereinafter provided) shall
also be issued to the Holder hereof at the Issuer's expense within such time. In
addition to any other rights available to the Holder, if the Issuer fails to
deliver to the Holder such certificate or certificates pursuant to Section 2(d)
by the Delivery Date and if after the Delivery Date the Holder purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Holder of the Warrant Stock which the Holder
anticipated receiving upon such exercise (a "Buy-In"), then the Issuer shall pay
in cash to the Holder an amount equal to (A) the aggregate amount paid by such
Holder for the shares of Common Stock so purchased minus (B) the aggregate
amount of net proceeds received by such Holder from the sale of the shares of
Common Stock issued by the Issuer pursuant to such exercise. The Holder shall
provide the Issuer written notice indicating the amounts payable to the Holder
in respect of the Buy-In.

     (e) Transferability of Warrant. Subject to Section 2(g), this Warrant may
be transferred by a Holder without the consent of the Issuer. If transferred
pursuant to this paragraph and subject to the provisions of subsection (g) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder's executing an assignment in the form attached hereto) and upon payment
of any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant thereto.

     (f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such Holder shall fail to make any such request, the
failure shall not affect the continuing obligation of the Issuer to afford such
rights to such Holder.

     (g) Compliance with Securities Laws.

          (i) The Holder of this Warrant, by acceptance hereof, acknowledges
     that this Warrant and the shares of Warrant Stock to be issued upon
     exercise hereof are being acquired solely for the Holder's own account and
     not as a nominee for any other party, and for investment, and that the
     Holder will not offer, sell or otherwise dispose of this Warrant or any
     shares of Warrant Stock to be issued upon exercise hereof except pursuant
     to an effective registration statement, or an exemption from registration,
     under the Securities Act and any applicable state securities laws.

          (ii) Except as provided in paragraph (iii) below, this Warrant and all
     certificates representing shares of Warrant Stock issued upon exercise
     hereof shall be stamped or imprinted with a legend in substantially the
     following form:

                                       3

<PAGE>

          THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON
          EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
          ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
          OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
          SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
          DELCATH SYSTEMS, INC. SHALL HAVE RECEIVED AN OPINION OF
          COUNSEL REASONABLY SATISFACTORY TO DELCATH SYSTEMS, INC.
          THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES
          ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
          LAWS IS NOT REQUIRED.

          (iii) The Issuer agrees to reissue this Warrant or certificates
     representing any of the Warrant Stock, without the legend set forth above
     if at such time, prior to making any transfer of any such securities, the
     Holder shall give written notice to the Issuer upon the occurrence of: (a)
     either (i) the Issuer has received an opinion of counsel reasonably
     satisfactory to the Issuer, to the effect that the registration of such
     securities under the Securities Act is not required in connection with such
     proposed transfer, (ii) a registration statement under the Securities Act
     covering such proposed disposition has been filed by the Issuer with the
     Securities and Exchange Commission and has become effective under the
     Securities Act, (iii) the Issuer has received other evidence reasonably
     satisfactory to the Issuer that such registration and qualification under
     the Securities Act and state securities laws are not required, or (iv) the
     Holder provides the Issuer with reasonable assurances that such security
     can be sold pursuant to Rule 144 under the Securities Act; and (b) either
     (i) the Issuer has received an opinion of counsel reasonably satisfactory
     to the Issuer, to the effect that registration or qualification under the
     securities or "blue sky" laws of any state is not required in connection
     with such proposed disposition, or (ii) compliance with applicable state
     securities or "blue sky" laws has been effected or a valid exemption exists
     with respect thereto. The Issuer will respond to any such notice from a
     holder within five (5) business days. In the case of any proposed transfer
     under this Section 2(g), the Issuer will use reasonable efforts to comply
     with any such applicable state securities or "blue sky" laws, but shall in
     no event be required, (x) to qualify to do business in any state where it
     is not then qualified, (y) to take any action that would subject it to tax
     or to the general service of process in any state where it is not then
     subject, or (z) to comply with state securities or "blue sky" laws of any
     state for which registration by coordination is unavailable to the Issuer.
     The restrictions on transfer contained in this Section 2(g) shall be in
     addition to, and not by way of limitation of, any other restrictions on
     transfer contained in any other section of this Warrant. Whenever a
     certificate representing the Warrant Stock is required to be issued to the
     Holder without a legend, in lieu of delivering physical certificates
     representing the Warrant Stock, provided the Issuer's transfer agent is
     participating in the DTC Fast Automated Securities Transfer program, the
     Issuer shall use its reasonable best efforts to cause its transfer agent to
     electronically transmit the Warrant Stock to the Holder by crediting the
     account of the Holder's Prime Broker with DTC through its DWAC system (to
     the extent not inconsistent with any provisions of this Warrant or the
     Purchase Agreement).

                                       4

<PAGE>

     (h) In no event may the Holder exercise this Warrant in whole or in part
unless the Holder is an "accredited investor" as defined in Regulation D under
the Securities Act.

     3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.

     (a) Stock Fully Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, when issued in accordance with the terms of
this Warrant, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by or through the Issuer. The
Issuer further covenants and agrees that during the period within which this
Warrant may be exercised, the Issuer will at all times have authorized and
reserved for the purpose of the issue upon exercise of this Warrant a sufficient
number of shares of Common Stock to provide for the exercise of this Warrant.

     (b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its reasonable best efforts as expeditiously as possible at its
expense to cause such shares to be duly registered or qualified. If the Issuer
shall list any shares of Common Stock on any securities exchange or market it
will, at its expense, list thereon, maintain and increase when necessary such
listing, of all shares of Warrant Stock from time to time issued upon exercise
of this Warrant or as otherwise provided hereunder (provided that such Warrant
Stock has been registered pursuant to a registration statement under the
Securities Act then in effect), and, to the extent permissible under the
applicable securities exchange rules, all unissued shares of Warrant Stock which
are at any time issuable hereunder, so long as any shares of Common Stock shall
be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.

     (c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will (i) not permit the par value, if any, of its
Common Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the Certificate of Incorporation or by-laws of the
Issuer in any manner that would adversely affect the rights of the Holders of
the Warrants in their capacity as Holders of the Warrants, (iii) take all such
action as may be reasonably necessary in order that the Issuer may validly and
legally issue fully paid and nonassessable shares of Common Stock, free and
clear of any liens, claims, encumbrances and restrictions (other than as
provided herein) upon the exercise of this Warrant, and (iv) use its reasonable
best efforts to obtain all such authorizations,

                                       5

<PAGE>

exemptions or consents from any public regulatory body having jurisdiction
thereof as may be reasonably necessary to enable the Issuer to perform its
obligations under this Warrant.

     (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.

     4. Adjustment of Warrant Price and Warrant Share Number. The number of
shares of Common Stock for which this Warrant is exercisable, and the price at
which such shares may be purchased upon exercise of this Warrant, shall be
subject to adjustment from time to time as set forth in this Section 4. The
Issuer shall give the Holder notice of any event described below which requires
an adjustment pursuant to this Section 4 in accordance with Section 5.

     (a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.

          (i) In case the Issuer after the Original Issue Date shall do any of
     the following (each, a "Triggering Event"): (a) consolidate or merge with
     or into another corporation where the holders of outstanding Voting Stock
     prior to such merger or consolidation do not own over 50% of the
     outstanding Voting Stock of the merged or consolidated entity immediately
     after such merger or consolidation, or (b) sell all or substantially all of
     its properties or assets to any other Person, or (c) change the Common
     Stock to the same or a different number of shares of any class or classes
     of stock, whether by reclassification, exchange, substitution or otherwise
     (other than by way of a stock split or combination of shares or stock
     dividends or distributions provided for in Section 4(b) or Section 4(c)),
     or (d) effect a capital reorganization (other than by way of a stock split
     or combination of shares or stock dividends or distributions provided for
     in Section 4(b) or Section 4(c)), then, and in the case of each such
     Triggering Event, proper provision shall be made so that, upon the basis
     and the terms and in the manner provided in this Warrant, the Holder of
     this Warrant shall be entitled upon the exercise hereof at any time after
     the consummation of such Triggering Event, to the extent this Warrant is
     not exercised prior to such Triggering Event, to receive at the Warrant
     Price in effect at the time immediately prior to the consummation of such
     Triggering Event in lieu of the Common Stock issuable upon such exercise of
     this Warrant prior to such Triggering Event, the securities, cash and
     property to which such Holder would have been entitled upon the
     consummation of such Triggering Event if such Holder had exercised the
     rights represented by this Warrant immediately prior thereto, subject to
     adjustments (subsequent to such corporate action) as nearly equivalent as
     possible to the adjustments provided for elsewhere in this Section 4.

          (ii) Notwithstanding anything contained in this Warrant to the
     contrary, a Triggering Event shall not be deemed to have occurred if, prior
     to the consummation thereof, each Person (other than the Issuer) which may
     be required to deliver any securities, cash or property upon the exercise
     of this Warrant as provided herein shall assume, by written instrument
     delivered to, and reasonably satisfactory to, the Holder of

                                       6

<PAGE>

     this Warrant, (A) the obligations of the Issuer under this Warrant (and if
     the Issuer shall survive the consummation of such Triggering Event, such
     assumption shall be in addition to, and shall not release the Issuer from,
     any continuing obligations of the Issuer under this Warrant) and (B) the
     obligation to deliver to such Holder such shares of securities, cash or
     property as, in accordance with the foregoing provisions of this subsection
     (a), such Holder shall be entitled to receive, and such Person shall have
     similarly delivered to such Holder a written acknowledgement executed by
     the President or Chief Financial Officer of the Issuer, stating that this
     Warrant shall thereafter continue in full force and effect and the terms
     hereof (including, without limitation, all of the provisions of this
     subsection (a)) shall be applicable to the securities, cash or property
     which such Person may be required to deliver upon any exercise of this
     Warrant or the exercise of any rights pursuant hereto.

     (b) Stock Dividends, Subdivisions and Combinations. If at any time the
Issuer shall:

          (i) make or issue or set a record date for the holders of its Common
     Stock for the purpose of entitling them to receive a dividend payable in,
     or other distribution of, shares of Common Stock,

          (ii) subdivide its outstanding shares of Common Stock into a larger
     number of shares of Common Stock, or

          (iii) combine its outstanding shares of Common Stock into a smaller
     number of shares of Common Stock,

then (1) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (2) the Warrant Price then in
effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable immediately after
such adjustment.

Notwithstanding the foregoing, if such record date shall have been fixed and
such dividend is not fully paid or if such distribution is not fully made on the
date fixed therefor, the Warrant Price shall be adjusted pursuant to this
paragraph as of the time of actual payment of such dividends or distributions.

     (c) Certain Other Distributions. If at any time the Issuer shall make or
issue or set a record date for the determination of the holders of its Common
Stock for the purpose of entitling them to receive any dividend or other
distribution of:

          (i) cash (other than a cash dividend payable out of earnings or earned
surplus legally available for the payment of dividends under the laws of the
jurisdiction of incorporation of the Issuer),

                                       7

<PAGE>

          (ii) any evidences of its indebtedness, any shares of stock of any
class or any other securities or property of any nature whatsoever (other than
cash), or

          (iii) any warrants or other rights to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property of any nature whatsoever (other than cash),

then (1) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
adjustment multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Per Share Market Value minus the amount
allocable to one share of Common Stock of any such cash so distributable and of
the fair value (as determined in good faith by the Board of Directors of the
Issuer and supported by an opinion from an investment banking firm of recognized
national standing acceptable to (but not affiliated with) the Holder) of any and
all such evidences of indebtedness, shares of stock, other securities or
property or warrants or other subscription or purchase rights so distributable,
and (2) the Warrant Price then in effect shall be adjusted to equal (A) the
Warrant Price then in effect multiplied by the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares of Common Stock for which this Warrant is
exercisable immediately after such adjustment. A reclassification of the Common
Stock (other than a change in par value, or from par value to no par value or
from no par value to par value) into shares of Common Stock and shares of any
other class of stock shall be deemed a distribution by the Issuer to the holders
of its Common Stock of such shares of such other class of stock within the
meaning of this Section 4(c) and, if the outstanding shares of Common Stock
shall be changed into a larger or smaller number of shares of Common Stock as a
part of such reclassification, such change shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of Common Stock
within the meaning of Section 4(b).

Notwithstanding the foregoing, if such record date shall have been fixed and
such dividend is not fully paid or if such distribution is not fully made on the
date fixed therefor, the Warrant Price shall be adjusted pursuant to this
Section 4(c) as of the time of actual payment of such dividends or
distributions.

     (d) Intentionally Omitted.

     (e) Other Provisions applicable to Adjustments under this Section. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect provided for in this Section 4:

          (i) When Adjustments to Be Made. The adjustments required by this
Section 4 shall be made whenever and as often as any specified event requiring
an adjustment shall occur, except that any adjustment of the number of shares of
Common Stock for which this Warrant is exercisable that would otherwise be
required may be postponed (except in the case of a subdivision or combination of
shares of the Common Stock, as provided for in Section 4(b)) up to, but not
beyond the date of exercise if such adjustment either by itself or with other

                                       8

<PAGE>

adjustments not previously made adds or subtracts less than one percent (1%) of
the shares of Common Stock for which this Warrant is exercisable immediately
prior to the making of such adjustment. Any adjustment representing a change of
less than such minimum amount (except as aforesaid) which is postponed shall be
carried forward and made as soon as such adjustment, together with other
adjustments required by this Section 4 and not previously made, would result in
a minimum adjustment or on the date of exercise. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at the close of
business on the date of its occurrence.

          (ii) Fractional Interests. In computing adjustments under this Section
4, fractional interests in Common Stock shall be taken into account to the
nearest one one-hundredth (1/100th) of a share.

          (iii) When Adjustment Not Required. If the Issuer shall take a record
of the holders of its Common Stock for the purpose of entitling them to receive
a dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then thereafter no adjustment shall be required by reason of the taking
of such record and any such adjustment previously made in respect thereof shall
be rescinded and annulled.

     (f) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.

     (g) Escrow of Warrant Stock. If after any property becomes distributable
pursuant to this Section 4 by reason of the taking of any record of the holders
of Common Stock, but prior to the occurrence of the event for which such record
is taken, and the Holder exercises this Warrant, any shares of Common Stock
issuable upon exercise by reason of such adjustment shall be deemed the last
shares of Common Stock for which this Warrant is exercised (notwithstanding any
other provision to the contrary herein) and such shares or other property shall
be held in escrow for the Holder by the Issuer to be issued to the Holder upon
and to the extent that the event actually takes place, upon payment of the
current Warrant Price. Notwithstanding any other provision to the contrary
herein, if the event for which such record was taken fails to occur or is
rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed property returned.

     5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to a national accounting
firm selected by the Holder, provided that the Issuer shall have ten (10) days
after

                                       9

<PAGE>

receipt of notice from such Holder of its selection of such firm to object
thereto, in which case such Holder shall select another such firm and the Issuer
shall have no such right of objection. The firm selected by the Holder of this
Warrant as provided in the preceding sentence shall be instructed to deliver a
written opinion as to such matters to the Issuer and such Holder within thirty
(30) days after submission to it of such dispute. Such opinion shall be final
and binding on the parties hereto.

     6. Fractional Shares. No fractional shares of Warrant Stock will be issued
in connection with any exercise hereof, but in lieu of such fractional shares,
the Issuer shall make a cash payment therefor equal in amount to the product of
the applicable fraction multiplied by the Per Share Market Value then in effect.

     7. Ownership Cap and Certain Exercise Restrictions.

          (a) Notwithstanding anything to the contrary set forth in this
Warrant, at no time may a Holder of this Warrant exercise this Warrant if the
number of shares of Common Stock to be issued pursuant to such exercise, when
aggregated with all other shares of Common Stock owned by such Holder at such
time, would exceed the number of shares of Common Stock which would result in
such Holder beneficially owning (as determined in accordance with Section 13(d)
of the Exchange Act and the rules thereunder) more than 4.99% of all of the
Common Stock outstanding at such time; provided, however, that upon the Holder
of this Warrant providing the Issuer with sixty-one (61) days notice (pursuant
to Section 12 hereof) (the "Waiver Notice") that such Holder would like to waive
this Section 7(a) with regard to any or all shares of Common Stock issuable upon
exercise of this Warrant, this Section 7(a) will be of no force or effect with
regard to all or a portion of the Warrant referenced in the Waiver Notice;
provided, further, that this provision shall be of no further force or effect
during the sixty-one (61) days immediately preceding the expiration of the term
of this Warrant. The Holder may waive this Section 7(a) by so indicating on the
signature page to the Purchase Agreement, any such waiver to be effective on and
as of the Original Issue Date.

          (b) The Holder may not exercise the Warrant hereunder to the extent
such exercise would result in the Holder beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules thereunder) in
excess of 9.99% of the then issued and outstanding shares of Common Stock,
including shares issuable upon exercise of this Warrant held by the Holder;
provided, however, that upon a Holder of this Warrant providing the Issuer with
a Waiver Notice that such Holder would like to waive this Section 7(b) with
regard to any or all shares of Common Stock issuable upon exercise of this
Warrant, this Section 7(b) shall be of no force or effect with regard to those
shares of Warrant Stock referenced in the Waiver Notice; provided, further, that
this provision shall be of no further force or effect during the sixty-one (61)
days immediately preceding the expiration of the term of this Warrant.

     8. Call. Notwithstanding anything herein to the contrary, commencing one
(1) year following the effective date of a registration statement under the
Securities Act providing for the resale of the Warrant Stock and the shares of
Common Stock issuable pursuant to the Purchase Agreement (the "Registration
Statement"), the Issuer, at its option, may call up to one hundred percent
(100%) of this Warrant if the average of the Per Share Market Value of the
Common Stock has been greater than one hundred fifty percent (150%) of the
Warrant Price (as may be adjusted for any stock splits or combinations of the
Common Stock) for a period of twenty (20)

                                       10

<PAGE>

consecutive Trading Days immediately prior to the date of delivery of the Call
Notice (a "Call Notice Period") by providing the Holder of this Warrant written
notice pursuant to Section 13 (the "Call Notice"); provided, that (a) the
Registration Statement is then in effect and has been effective, without lapse
or suspension of any kind, for a period of sixty (60) consecutive calendar days,
(b) trading in the Common Stock shall not have been suspended by the Securities
and Exchange Commission or Nasdaq and (c) the Issuer is in material compliance
with the terms and conditions of this Warrant and the other Transaction
Documents (as defined in the Purchase Agreement); provided, further, that the
Registration Statement is in effect from the date of delivery of the Call Notice
until the date which is the later of (i) the date the Holder exercises the
Warrant pursuant to the Call Notice and (ii) the 20th day after the Holder
receives the Call Notice (the "Early Termination Date"). The rights and
privileges granted pursuant to this Warrant with respect to the shares of
Warrant Stock subject to the Call Notice (the "Called Warrant Shares") shall
expire on the Early Termination Date if this Warrant is not exercised with
respect to such Called Warrant Shares prior to such Early Termination Date. In
the event this Warrant is not exercised with respect to the Called Warrant
Shares, the Issuer shall remit to the Holder of this Warrant (A) $.10 per Called
Warrant Share and (B) a new Warrant representing the number of shares of Warrant
Stock, if any, which shall not have been subject to the Call Notice upon the
Holder's tendering to the Issuer the applicable Warrant certificate.

     9. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:

          "Board" shall mean the Board of Directors of the Issuer.

          "Capital Stock" means and includes (i) any and all shares, interests,
     participations or other equivalents of or interests in (however designated)
     corporate stock, including, without limitation, shares of preferred or
     preference stock, (ii) all partnership interests (whether general or
     limited) in any Person which is a partnership, (iii) all membership
     interests or limited liability company interests in any limited liability
     company, and (iv) all equity or ownership interests in any Person of any
     other type.

          "Certificate of Incorporation" means the Certificate of Incorporation
     of the Issuer as in effect on the Original Issue Date, and as hereafter
     from time to time amended, modified, supplemented or restated in accordance
     with the terms hereof and thereof and pursuant to applicable law.

          "Common Stock" means the Common Stock, par value $0.01 per share, of
     the Issuer and any other Capital Stock into which such stock may hereafter
     be changed.

          "Governmental Authority" means any governmental, regulatory or
     self-regulatory entity, department, body, official, authority, commission,
     board, agency or instrumentality, whether federal, state or local, and
     whether domestic or foreign.

          "Holders" mean the Persons who shall from time to time own any
     Warrant. The term "Holder" means one of the Holders.

          "Independent Appraiser" means a nationally recognized or major
     regional investment banking firm or firm of independent certified public
     accountants of

                                       11

<PAGE>

     recognized standing (which may be the firm that regularly examines the
     financial statements of the Issuer) that is regularly engaged in the
     business of appraising the Capital Stock or assets of corporations or other
     entities as going concerns, and which is not affiliated with either the
     Issuer or the Holder of any Warrant.

          "Issuer" means Delcath Systems, Inc., a Delaware corporation, and its
     successors.

          "Majority Holders" means at any time the Holders of Warrants
     exercisable for a majority of the shares of Warrant Stock issuable under
     the Warrants at the time outstanding.

          "Nasdaq" means the Nasdaq SmallCap Market.

          "Original Issue Date" means December __, 2004.

                  "OTC Bulletin Board" means the over-the-counter electronic
bulletin board.

                  "Person" means an individual, corporation, limited liability
         company, partnership, joint stock company, trust, unincorporated
         organization, joint venture, Governmental Authority or other entity of
         whatever nature.

                  "Per Share Market Value" means on any particular date (a) the
         closing bid price per share of the Common Stock on such date on Nasdaq
         or another registered national stock exchange on which the Common Stock
         is then listed, as reported in The Wall Street Journal, or if there is
         no such price on such date, then the closing bid price on such exchange
         or quotation system on the date nearest preceding such date, or (b) if
         the Common Stock is not listed then on Nasdaq or any registered
         national stock exchange, the closing bid price for a share of Common
         Stock in the over-the-counter market, as reported by the OTC Bulletin
         Board or in the National Quotation Bureau Incorporated or similar
         organization or agency succeeding to its functions of reporting prices)
         at the close of business on such date, or (c) if the Common Stock is
         not then reported by the OTC Bulletin Board or the National Quotation
         Bureau Incorporated (or similar organization or agency succeeding to
         its functions of reporting prices), then the average of the "Pink
         Sheet" quotes for the five days preceding such date of determination,
         or (d) if the Common Stock is not then publicly traded the fair market
         value of a share of Common Stock as determined by an Independent
         Appraiser selected in good faith by the Majority Holders; provided,
         however, that the Issuer, after receipt of the determination by such
         Independent Appraiser, shall have the right to select an additional
         Independent Appraiser, in which case, the fair market value shall be
         equal to the average of the determinations by each such Independent
         Appraiser; and provided, further that all determinations of the Per
         Share Market Value shall be appropriately adjusted for any stock
         dividends, stock splits or other similar transactions during such
         period. The determination of fair market value by an Independent
         Appraiser shall be based upon the fair market value of the Issuer
         determined on a going concern basis as between a willing buyer and a
         willing seller and taking into account all relevant factors
         determinative of value, and shall be final and binding on all parties.
         The cost of such Independent Appraiser shall be borne equally by the
         Issuer and the Holder.

                                       12

<PAGE>

               "Purchase Agreement" means the Common Stock Purchase Agreement
          dated as of December __, 2004, among the Issuer and the investors a
          party thereto.

               "Securities" means any debt or equity securities of the Issuer,
          whether now or hereafter authorized, any instrument convertible into
          or exchangeable for Securities or a Security, and any option, warrant
          or other right to purchase or acquire any Security. "Security" means
          one of the Securities.

               "Securities Act" means the Securities Act of 1933, as amended, or
          any similar federal statute then in effect.

               "Subsidiary" means any corporation at least 50% of whose
          outstanding Voting Stock shall at the time be owned directly or
          indirectly by the Issuer or by one or more of its Subsidiaries, or by
          the Issuer and one or more of its Subsidiaries.

               "Term" has the meaning specified in Section 1 hereof.

               "Trading Day" means (a) a day on which the Common Stock is traded
          on Nasdaq, or (b) if the Common Stock is not listed on Nasdaq, a day
          on which the Common Stock is traded on any other registered national
          stock exchange, or (c) if the Common Stock is not traded on any other
          registered national stock exchange, a day on which the Common Stock is
          traded on the OTC Bulletin Board, or (d) if the Common Stock is not
          traded on the OTC Bulletin Board, a day on which the Common Stock is
          quoted in the over-the-counter market as reported by the National
          Quotation Bureau Incorporated (or any similar organization or agency
          succeeding its functions of reporting prices); provided, however, that
          in the event that the Common Stock is not listed or quoted as set
          forth in (a), (b) or (c) hereof, then Trading Day shall mean any day
          except Saturday, Sunday and any day which shall be a legal holiday or
          a day on which banking institutions in the State of New York are
          authorized or required by law or other government action to close.

               "Voting Stock" means, as applied to the Capital Stock of any
          corporation, Capital Stock of any class or classes (however
          designated) having ordinary voting power for the election of a
          majority of the members of the Board of Directors (or other governing
          body) of such corporation, other than Capital Stock having such power
          only by reason of the happening of a contingency.

               "Warrants" means the Warrants issued and sold pursuant to the
          Purchase Agreement, including, without limitation, this Warrant, and
          any other warrants of like tenor issued in substitution or exchange
          for any thereof pursuant to the provisions of Section 2(c), 2(d) or
          2(e) hereof or of any of such other Warrants.

               "Warrant Price" initially means U.S. $3.26, as such Warrant Price
          may be adjusted from time to time as shall result from the adjustments
          specified in this Warrant, including Section 4 hereto.

               "Warrant Share Number" means at any time the aggregate number of
          shares of Warrant Stock which may at such time be purchased upon
          exercise of this Warrant, after

                                       13

<PAGE>

          giving effect to all prior adjustments and increases to such number
          made or required to be made under the terms hereof.

               "Warrant Stock" means Common Stock issuable upon exercise of any
          Warrant or Warrants or otherwise issuable pursuant to any Warrant or
          Warrants.

          10. Other Notices. In case at any time:

                    (A)  the Issuer shall make any distributions to the holders
                         of Common Stock; or

                    (B)  the Issuer shall authorize the granting to all holders
                         of its Common Stock of rights to subscribe for or
                         purchase any shares of Capital Stock of any class or
                         other rights; or

                    (C)  there shall be any reclassification of the Capital
                         Stock of the Issuer; or

                    (D)  there shall be any capital reorganization by the
                         Issuer; or

                    (E)  there shall be any (i) consolidation or merger
                         involving the Issuer or (ii) sale, transfer or other
                         disposition of all or substantially all of the Issuer's
                         property, assets or business (except a merger or other
                         reorganization in which the Issuer shall be the
                         surviving corporation and its shares of Capital Stock
                         shall continue to be outstanding and unchanged and
                         except a consolidation, merger, sale, transfer or other
                         disposition involving a wholly-owned Subsidiary); or

                    (F)  there shall be a voluntary or involuntary dissolution,
                         liquidation or winding-up of the Issuer or any partial
                         liquidation of the Issuer or distribution to holders of
                         Common Stock;

then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the record date or effective date for the event specified in
such notice.

     11. Amendment and Waiver. Any term, covenant, agreement or condition in
this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written

                                       14

<PAGE>

instruments executed by the Issuer and the Majority Holders; provided, however,
that no such amendment or waiver shall reduce the Warrant Share Number, increase
the Warrant Price, shorten the period during which this Warrant may be exercised
or modify any provision of this Section 10 without the consent of the Holder of
this Warrant.

     12. Governing Law; Jurisdiction. This Warrant shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to any of the conflicts of law principles which would result in
the application of the substantive law of another jurisdiction. This Warrant
shall not be interpreted or construed with any presumption against the party
causing this Warrant to be drafted. The Issuer and the Holder agree that venue
for any dispute arising under this Warrant will lie exclusively in the state or
federal courts located in New York County, New York, and the parties irrevocably
waive any right to raise forum non conveniens or any other argument that New
York is not the proper venue. The Issuer and the Holder irrevocably consent to
personal jurisdiction in the state and federal courts of the state of New York.
The Issuer and the Holder consent to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in
effect for notices to it under this Warrant and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section 11 shall affect or limit any right to serve process in any other
manner permitted by law. The Issuer and the Holder hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
the this Warrant or the Purchase Agreement, shall be entitled to reimbursement
for reasonable legal fees from the non-prevailing party.

     13. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., eastern time, on a
Trading Day, (ii) the Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile telephone number
specified for notice later than 5:00 p.m., eastern time, on any date and earlier
than 11:59 p.m., eastern time, on such date, (iii) the Trading Day following the
date of mailing, if sent by overnight delivery by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:

                          Delcath Systems, Inc.
                          1100 Summer Street, 3rd Floor
                          Stamford, Connecticut 06905
                          Attention: President and Chief Executive Officer
                          Tel. No.: (203) 323-8668
                          Fax No.: (203) 961-0120

Copies of notices to the Issuer shall be sent to Murtha Cullina LLP, Whitney
Grove Square, Two Whitney Avenue, New Haven, Connecticut 06503, Attention: Paul
G. Hughes, Tel. No.: (203) 772-7700, Fax No.: (203) 772-7723. Any party hereto
may from time to time change its address for notices by giving at least ten (10)
days written notice of such changed address to the other

                                       15

<PAGE>

party hereto.

     14. Warrant Agent. The Issuer may, by written notice to each Holder of this
Warrant, appoint an agent having an office in New York, New York for the purpose
of issuing shares of Warrant Stock on the exercise of this Warrant pursuant to
subsection (b) of Section 2 hereof, exchanging this Warrant pursuant to
subsection (d) of Section 2 hereof or replacing this Warrant pursuant to
subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.

     15. Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.

     16. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.

     17. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.

     18. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

                                       16

<PAGE>

     IN WITNESS WHEREOF, the Issuer has executed this Series D Warrant as of the
day and year first above written.

                                 DELCATH SYSTEMS, INC.

                                 By:
                                    ------------------------------
                                 Name:   M.S. Koly
                                 Title:  President and Chief Executive Officer

                                       17

<PAGE>

                                  EXERCISE FORM
                                SERIES D WARRANT

                              DELCATH SYSTEMS, INC.

The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of Delcath
Systems, Inc. covered by the within Warrant.

Dated: _________________               Signature   ___________________________

                                       Address  ______________________________

                                                ______________________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise: ___________________

                                   ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated: _________________            Signature   ______________________________

                                    Address  _________________________________

                                             _________________________________

                               PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated: _________________            Signature  _______________________________

                                    Address  _________________________________

                                             _________________________________

                           FOR USE BY THE ISSUER ONLY:

This Warrant No. W-D-04-__ canceled (or transferred or exchanged) this _____ day
of ___________, _____, shares of Common Stock issued therefor in the name of

                                       18

<PAGE>

_______________, Warrant No. W-D-04-01 issued for ____ shares of Common Stock in
the name of _______________.

                                       19

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