RESTRICTED STOCK AGREEMENT

RESTRICTED STOCK AGREEMENT

This Restricted Stock Agreement (“ Agreement ”) is made as of  September 14, 2009 (the “ Grant Date ”) between Delcath Systems, Inc. (the “ Company ”) and David A. McDonald (the “ Executive ”).

WHEREAS, the Company maintains the Delcath Systems, Inc. 2009 Stock Incentive Plan, as amended (the “ Plan ”), which is administered by a committee designated by the Company’s Board of Directors (the “ Committee ”), and

WHEREAS, in consideration of the Executive’s continued employment with the Company, the Committee has determined that the Executive shall be granted an award of Restricted Stock under the Plan, and

WHEREAS, to comply with the terms of the Plan and to further the interests of the Company and the Executive, the parties hereto have set forth the terms of such award in writing in this Agreement;

NOW, THEREFORE, the Company and the Executive agree as follows:

1.            Award.

(a)            Grant . The Executive is hereby granted 50,000 shares (the “ Restricted Stock ”) of the Company’s common stock, par value $.01 per share (“ Stock ”), which shall be issued in the Executive’s name subject to the restrictions contained in this Agreement. The Restricted Stock award pursuant to this Agreement is separate from and not in tandem with any other award(s) granted to the Executive under the Plan or otherwise.

(b)            Plan Incorporated . The Executive acknowledges receipt of a copy of the Plan and agrees that this award of Restricted Stock shall be subject to all of the terms and conditions set forth in the Plan, including future amendments thereto, if any, pursuant to the terms thereof, which Plan is incorporated herein by reference as a part of this Agreement. Any terms used in this Agreement and not defined herein have the meanings set forth in the Plan.

2.            Restrictions .  The shares of Restricted Stock are subject to the following restrictions (collectively, the “ Restrictions ”):

(a)            Forfeiture Restrictions .  If the Executive’s employment with the Company shall terminate for any reason other than death and Disability as provided in Section 3 below, the Executive shall forfeit the right to receive any shares of Restricted Stock with respect to which the Restrictions have not lapsed as provided in Section 3 below as of the effective date of termination of Executive’s employment.

(b)            Restrictions on Transfer . The Executive may not sell, assign, pledge, exchange, hypothecate or otherwise transfer, encumber or dispose of any shares of Restricted Stock with respect to which the Restrictions have not lapsed as provided in Section 3 below. Upon any

violation of this restriction, the shares of Restricted Stock with respect to which the Restrictions have not lapsed as provided in Section 3 below shall be forfeited.

3.            Lapse of Restrictions . Unless otherwise accelerated pursuant to this Section 3 or otherwise by the Committee pursuant to its authority under the Plan, the Restrictions will lapse with respect to the shares of Restricted Stock in accordance with the following schedule:

Number                                                                             Date

25,000 shares                                                                  March 14, 2010

25,000 shares                                                                  September 14, 2010

Notwithstanding the above, in the event the Executive’s employment is terminated by reason of the Executive’s death or Disability, the Restrictions with respect to all shares of Restricted Stock will lapse immediately and automatically as of the date of the Executive’s death or as of the effective date of the Executive’s termination of employment by reason of his Disability.  For purposes of this Agreement, the term “Disability” shall have the meaning set forth in the Employment Agreement dated September 13, 2009 between the Company and the Executive.

The shares of Restricted Stock with respect to which the Restrictions have lapsed shall cease to be subject to any Restrictions except as otherwise provided in the Plan.

4.            Custody of Restricted Stock .

(a)            Custody .  One or more stock certificates evidencing the shares of Restricted Stock granted hereunder shall be registered in the Executive’s name, however, such stock certificate(s) shall be delivered to and held by the Secretary of the Comp