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MURTHA CULLINA LLP TWO WHITNEY AVENUE, P.O. BOX 704
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ATTORNEYS AT LAW TELEPHONE (203) 772-7700
FACSIMILE (203) 772-7723
www.murthalaw.com
PAUL G. HUGHES
(203) 772-7726 DIRECT TELEPHONE
(860) 240-5726 DIRECT FACSIMILE
PHUGHES@MURTHALAW.COM
June 9, 2004
The Board of Directors
Delcath Systems, Inc.
1100 Summer Street
Stamford, Connecticut 06905
Re: Registration Statement on Form S-3 (No. 333-114600)
Dear Sirs:
We have acted as special counsel to Delcath Systems, Inc., a Delaware
corporation (the "Company"), in connection with its Registration Statement on
Form S-3 (No. 333-114600), as amended (as so amended, the "Registration
Statement"), for the public offering by it of 3,098,070 shares (the "Primary
Shares") of its Common Stock, par value $0.01 (the "Common Stock"), and for the
public reoffer by certain selling stockholders of up to 3,111,410 shares (the
"Secondary Shares") of Common Stock. The Primary Shares consist of (i) 1,898,070
shares issuable upon exercise of the Company's outstanding Redeemable Common
Stock Purchase Warrants issued in 2003 (the "2003 Warrants") and (ii) 1,200,000
shares issuable upon exercise of the Company's outstanding Redeemable Common
Stock Purchase Warrants issued in 2000 (the "2000 Warrants"). The Secondary
Shares consist of (i) 240,000 shares (the "2000 Unit Warrant Shares") issuable
upon exercise of outstanding unit warrants (the "2000 Unit Warrants") held by
Whale Securities Co., L.P., the managing underwriter of the Company's initial
public offering in 2000, and the 240,000 shares issuable upon exercise of the
warrants issuable upon exercise of the 2000 Unit Warrants (the "2000 UW Warrant
Shares"); (ii) 20,265 shares issued upon exercise of warrants issued in
connection with a private placement to an accredited investor in 2002 (the "2002
Warrant Shares"), (iii) 338,705 shares issuable upon exercise of outstanding
unit warrants (the "2003 Unit Warrants") held by Roan/Meyers Associates, L.P.,
the managing underwriter of the Company's 2003 public offering or its
transferees, and the 338,705 shares issuable upon exercise of the warrants
issuable upon exercise of the 2003 Unit Warrants (the "2003 UW Warrant Shares");
(iv) 1,487,489 shares issued in connection with private placements in 2004 to
accredited investors (the "2004 Shares") and the 371,872 shares (the "2004
Warrant Shares") issuable upon exercise of the Company's outstanding Redeemable
Common Stock Purchase Warrants issued to such investors in 2004 (the "2004
Warrants"); and (v) 74,374 shares (the "Placement Agent Warrant Shares")
issuable upon exercise of outstanding warrants issued to the placement
The Board of Directors
Delcath Systems, Inc.
June 9, 2004
Page 2
agents in connection with the 2004 private placements to accredited investors
(the "Placement Agent Warrants").
We have examined originals or copies, certified or otherwise identified to
our satisfaction of the following documents: (a) the Amended and Restated
Certificate of Incorporation of the Company, as amended, in the form filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2004 (file No. 001-16133); (b) the Amended and Restated Bylaws of
the Company in the form filed as Exhibit 3.2 to Amendment No. 1 to the Company's
Registration Statement on Form SB-2 (No. 333-39470); (c) resolutions adopted by
the Board of Directors of the Company by unanimous written consent dated October
13, 2000 and at meetings held on December 5, 2002, March 27, 2003, March 17,
2004 and March 25, 2004; (d) resolutions adopted by the Pricing Committee of the
Board of Directors of the Company by written consent dated May 14, 2003; and (e)
such other documents as we have considered necessary to the rendering of the
opinions expressed below.
In our examination of the foregoing, we have assumed that: (a) the
statements made therein are accurate and complete; (b) the signatures on
documents and instruments submitted to us as originals are authentic; and (c)
documents submitted to us as certified, conformed or photostatic copies of
original documents conform with the originals thereof and the originals thereof
are authentic. We have also assumed that the 2002 Warrant Shares were issued
upon exercise of the warrants issued in connection with the private placement to
an accredited investor in 2002 in accordance with the terms thereof.
In rendering the opinions set forth below, we have also assumed that upon
issuance of the shares issuable upon exercise of the 2003 Warrants, the 2000
Warrants, the 2000 Unit Warrants, the warrants issuable upon exercise of the
2000 Unit Warrants, the 2003 Unit Warrants, the warrants issued or issuable upon
exercise of the 2003 Unit Warrants, the 2004 Warrants and the Placement Agent
Warrants, the total number of shares of Common Stock issued and outstanding will
not exceed the total number of shares of Common Stock that the Company is then
authorized to issue.
Based upon the foregoing, we are of the opinion that:
1. The Primary Shares, when issued upon exercise of the 2000 Warrants or
the 2003 Warrants, as the case may be, in accordance with their terms,
will be duly authorized, validly issued, fully paid and nonassessable.
The Board of Directors
Delcath Systems, Inc.
June 9, 2004
Page 3
2. The 2000 Unit Warrant Shares, when issued upon exercise of the 2000
Unit Warrants in accordance with their terms, will be duly authorized,
validly issued, fully paid and nonassessable.
3. The 2000 UW Warrant Shares, when issued upon exercise of the warrants
issuable upon exercise of the 2000 Unit Warrants in accordance with
their terms and assuming such 2000 Unit Warrants are exercised in
accordance with their terms, will be duly authorized, validly issued,
fully paid and nonassessable.
4. The 2002 Warrant Shares have been duly authorized and validly issued
and are fully paid and nonassessable.
5. The 2003 Unit Warrant Shares, to the extent issued upon exercise of
the 2003 Unit Warrants in accordance with their terms, have been duly
authorized and validly issued and are fully paid and nonassessable
and, to the extent issuable upon exercise of the 2003 Unit Warrants in
accordance with their terms, will be duly authorized, validly issued,
fully paid and nonassessable.
6. The 2003 UW Warrant Shares, when issued upon exercise of the warrants
issued or issuable upon exercise of the 2003 Unit Warrants in
accordance with their terms and assuming such 2003 Unit Warrants will
be exercised in accordance with their terms, will be duly authorized,
validly issued, fully paid and nonassessable.
7. The 2004 Shares have been duly authorized and validly issued and are
fully paid and nonassessable.
8. The 2004 Warrant Shares, when issued upon exercise of the 2004
Warrants in accordance with their terms, will be duly authorized,
validly issued, fully paid and nonassessable.
9. The Placement Agent Warrant Shares, when issued upon exercise of the
Placement Agent Warrants in accordance with their terms, will be duly
authorized, validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the General Corporation Law of the
State of Delaware, and we do not express any opinion herein concerning any other
law. We assume no obligation to supplement this opinion if any applicable law
changes after the date hereof or if we become aware of any fact that might
change the opinions expressed herein after the date hereof.
The Board of Directors
Delcath Systems, Inc.
June 9, 2004
Page 4
This opinion is being furnished to you for filing as an exhibit to the
Registration Statement and, accordingly, may not be relied upon by or quoted in
any manner or delivered to any other person or entity without, in each instance,
our prior written consent.
We consent to the filing of this opinion as an exhibit to the Registration
Statement, and to the reference to our firm appearing under the caption "Legal
Matters" in the Prospectus forming part of the Registration Statement. In giving
this consent, we do not admit that we are within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
MURTHA CULLINA LLP
By /s/ PAUL G. HUGHES
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Paul G. Hughes