EMPLOYMENT AGREEMENT



         THIS EMPLOYMENT AGREEMENT  ("Agreement") is made and entered into as of

the 2nd day of July,  2007 by and  between  Delcath  Systems,  Inc.,  a Delaware

corporation   (hereinafter   called  the   "Company"),   and  Richard  L.  Taney

(hereinafter called the "Executive").



                                    RECITALS



         WHEREAS, the Company desires to employ Executive as the Chief Executive

Officer of the Company; and



         WHEREAS,  Executive  is willing to be employed  as the Chief  Executive

Officer of the Company in the manner  provided  for  herein,  and to perform the

duties  of the  Chief  Executive  Officer  of the  Company  upon the  terms  and

conditions herein set forth;



                                    AGREEMENT



         NOW,  THEREFORE,  in consideration of the promises and mutual covenants

set forth herein, the parties agree as follows:



         1. EMPLOYMENT.



                  1.1  EMPLOYMENT  AND TERM. The Company hereby agrees to employ

the Executive and the Executive hereby agrees to serve the Company, on the terms

and  conditions set forth herein,  for the period  commencing on the date hereof

and expiring on July 1, 2009 (the "Initial  Term")  unless sooner  terminated as

hereinafter set forth;  provided,  however,  that commencing on July 1, 2009 the

Initial  Term  of  this  Agreement  shall  automatically  be  extended  for  one

additional  year  unless at least  ninety  (90)  days  prior to such  date,  the

Executive  shall have  delivered to the Company  written notice that the term of

the Executive's employment hereunder will not be extended.



                  1.2 DUTIES OF  EXECUTIVE.  The  Executive  shall  serve as the

Chief  Executive  Officer of the  Company  and shall have  powers and  authority

superior to any other officer or employee of the Company or of any subsidiary of

the Company,  including,  without  limitation,  the duties and  responsibilities

customarily  associated  with a chief  executive  (e.g.,  control of  day-to-day

operations,  signing checks,  hiring and firing,  etc.).  The Executive shall be

required to report solely to, and shall be subject solely to the supervision and

direction of the Board of Directors  and no other person or group shall be given

authority to supervise or direct Executive in the performance of his duties.  In

addition,  the Executive shall regularly  consult with the Chairman of the Board

with respect to the Company's  business and affairs.  The Executive shall devote

substantially  all his working time and attention to the business and affairs of

the Company  (excluding  any vacation  and sick leave to which the  Executive is

entitled),  render  such  services  to the  best  of his  ability,  and  use his

reasonable best efforts to promote the interests of the Company. It shall not be

a violation of this Agreement for the Executive to (A) serve on corporate, civic

or charitable  boards or  committees,  (B) deliver  lectures,  fulfill  speaking

engagements  or teach  at  educational  institutions,  and (C)  manage  personal

investments,  so long as such activities do not significantly interfere with the

performance of the Executive's responsibilities as an employee of the Company in

accordance with this Agreement.  The Executive's obligations hereunder shall run

only to the Company, and not to the Company's affiliates, if any.





                  1.3 PLACE OF PERFORMANCE. In connection with his employment by

the Company,  the Executive shall be based at the Company's  principal executive

offices except for travel reasonably  necessary in connection with the Company's

business.





{PAGE}



         2. COMPENSATION.



                  2.1 BASE  SALARY.  Commencing  on the  effective  date of this

Agreement,  the Executive shall receive a base salary at the monthly rate of not

less than $33,000 (the "Base Salary")  during the term of this  Agreement,  with

such Base Salary payable in installments  consistent  with the Company's  normal

payroll  schedule,  subject to applicable  withholding and other taxes. The Base

Salary shall not be decreased for any reason.



                  2.2 INCENTIVE COMPENSATION. The Executive shall be entitled to

receive such bonus  payments or incentive  compensation  as may be determined at

any time or from time to time by the Board (or any authorized committee thereof)

in its discretion.  Such potential bonus payments and/or incentive  compensation

shall be considered at least annually by the Board or committee.



                  2.3 STOCK OPTIONS.



                                    (a)  The  Executive  shall  be  entitled  to

participate in all stock option plans (the "Plans")

in effect during the term of this Agreement.



                                    (b)  The  Company  hereby  agrees  that  the

Executive shall receive stock options to purchase

50,000  shares of common  stock for each six months  that this  Agreement  is in

effect. Such options shall be priced based on the closing price of the Company's

common  stock  on  each   applicable  six  month   anniversary.   The  Company's

compensation  committee shall determine the vesting schedule for such options in

accordance with its policy.

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