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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
April 16, 2007 (April 10, 2007)
DELCATH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 001-16133 06-1245881
(State of incorporation) (Commission File No.) (IRS Employer
Identification No.)
1100 SUMMER STREET, STAMFORD, CONNECTICUT 06905
(Address of principal executive offices, including zip code)
(203) 323-8668
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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ITEM 1.01- ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On April 10, 2007, Delcath Systems, Inc. (the "Company") issued a press release
stating that it has entered into a Modification Agreement (the "Modification
Agreement") with Laddcap Value Partners, LP, Laddcap Associates, LLC, and
Laddcap Value Associates, LLC (collectively "Laddcap"). The Modification
Agreement amends the October 8, 2006 Settlement Agreement (the "Settlement
Agreement") previously entered into by the Company with Laddcap and allows
Laddcap to increase its position in the Company, through open market purchases
of the Company's shares, beyond the previous 14.9% limitation established under
the Settlement Agreement to just under 20%. The Modification Agreement also
provides that the Company will no longer be required to elect two directors
nominated by Laddcap or to appoint at least one Laddcap nominee to each of its
committees, as stipulated in the Settlement Agreement. The Board of Directors of
the Company also voted unanimously to increase the threshold level for
triggering the Shareholder Rights Plan ("Rights Plan") from 15% to 20%,
effective immediately.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) NOT APPLICABLE.
(b) NOT APPLICABLE.
(c) NOT APPLICABLE.
(d) EXHIBITS.
EXHIBIT NO. DESCRIPTION
-------------- -------------
10.1 Modification Agreement dated April 9, 2007
99.1 Press Release dated April 10, 2007
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned.
Dated: April 16, 2007 DELCATH SYSTEMS, INC.
By: /s/ Richard L. Taney
--------------------
Richard L. Taney
Chief Executive Officer
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MODIFICATION AGREEMENT
MODIFICATION AGREEMENT, dated as of April 9, 2007 (this "MODIFICATION
AGREEMENT") by and between DELCATH SYSTEMS, INC., a Delaware corporation
("DELCATH"), and LADDCAP VALUE PARTNERS LP, a Delaware limited partnership,
LADDCAP ASSOCIATES LLC, a Delaware limited liability company, LADDCAP VALUE
ASSOCIATES LLC, a Delaware limited liability company, any affiliate (as defined
under the Securities Exchange Act of 1934, as amended) of any of the foregoing,
and Mr. ROBERT B. LADD ("LADD"), in his individual capacity (collectively,
"LADDCAP," and together with Delcath, the "PARTIES").
WHEREAS, Delcath and Laddcap are parties to a Settlement Agreement dated as
of October 8, 2006 (the "SETTLEMENT AGREEMENT"); and
WHEREAS, the parties agree that the issues which led the Parties to enter
into the Settlement Agreement have been largely resolved, that continuation of
most covenants under the Agreement serve no valuable purposes for the Parties
and certain of such covenants unnecessarily restrict the Parties activities at
little or no benefit to the counter-parties; and
WHEREAS, the Parties have accordingly agreed to modify the Settlement
Agreement with respect to certain obligations and rights of the Parties under
the Settlement Agreement;
NOW, THEREFORE, in consideration of the mutual execution of this
Modification Agreement and the mutual agreements set forth herein, the Parties
hereby agree as follows:
1. Except as otherwise expressly set forth in this Modification Agreement,
Laddcap and the Company hereby release one another from all future obligations
created under the Settlement Agreement, with the exception of the Parties'
obligations pursuant to Sections 5 and 6.
2. The provisions of Section 13 of the Settlement Agreement shall remain in
force.
3. In accordance with Section 13(k) of the Settlement Agreement, Delcath
hereby designates the following as the address to which all notices and other
communications to it under the Settlement Agreement or this Modification
Agreement shall be given:
Delcath Systems, Inc.
1100 Summer Street
Stamford, Connecticut 06905
Attention: Chief Executive Officer
Facsimile: (203) 961-0120
No copy of any such notice or other communication to Delcath needs to be
delivered to any other person.
4. This Modification Agreement may be executed in two or more counterparts,
all of which shall be considered as one and the same instrument and shall become
effective when one or more counterparts have been signed by each of the Parties
and delivered to the other party.
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5. This Modification Agreement may be executed by facsimile signature, and
a facsimile signature shall constitute an original for all purposes.
IN WITNESS WHEREOF, the Parties hereto have executed this Modification
Agreement as of the date first above written.
LADDCAP VALUE PARTNERS LP
By LADDCAP VALUE ASSOCIATES LLC,
Its General Partner
By: /s/ Robert B. Ladd
-------------------------------
Name: Robert B. Ladd
Title: Managing Member
LADDCAP VALUE ASSOCIATES LLC
By: /s/ Robert B. Ladd
-------------------------------
Name: Robert B. Ladd
Title: Managing Member
LADDCAP VALUE ADVISORS LLC
By: /s/ Robert B. Ladd
-------------------------------
Name: Robert B. Ladd
Title: Managing Member
ROBERT B. LADD
/s/ Robert B. Ladd
----------------------------------
Robert B. Ladd
DELCATH SYSTEMS, INC.
By: /s/ Richard Taney
-------------------------------
Name: Richard Taney
Title: Interim Chief Executive Officer
[DELCATH SYSTEMS LOGO] EXHIBIT 99.1
COMPANY CONTACT: INVESTOR RELATIONS CONTACTS:
Delcath Systems, Inc. Lippert/Heilshorn & Associates, Inc.
- --------------------- ------------------------------------
Richard Taney Anne Marie Fields
(203) 323-8668 (afields@lhai.com)
www.delcath.com (212) 838-3777
Bruce Voss (bvoss@lhai.com)
(310) 691-7100
www.lhai.com
LHA DRAFT 1
- -----------
DELCATH SYSTEMS ENTERS MODIFICATION AGREEMENT WITH
LADDCAP AND MODIFIES STOCKHOLDER RIGHTS PLAN
ALLOWS LADDCAP TO INCREASE HOLDINGS TO 20%
STAMFORD, CT, APRIL 10, 2007--Delcath Systems, Inc. (Nasdaq: DCTH) today
announced that the Company has entered into a Modification Agreement with
Laddcap Value Partners, LP, Laddcap Associates, LLC, and Laddcap Value
Associates, LLC (Collectively "Laddcap") to amend the October 8, 2006 Settlement
Agreement between Delcath and Laddcap. The key terms of the Modification
Agreement will allow Laddcap to increase its position in Delcath, if it so
chooses, through open market purchases of Delcath shares beyond the previous
14.9% limitation established by the October 8, 2006 settlement agreement to just
under 20%. Furthermore, Delcath will no longer be required to elect two
directors nominated by Laddcap or to appoint at least one Laddcap nominee to
each of its committees as stipulated in the original agreement. The Board of
Directors of Delcath also voted unanimously to increase the threshold level for
triggering the Shareholder Rights Plan ("Rights Plan") from 15% to 20%,
effective immediately.
Mr. Richard L. Taney, Chief Executive Officer of Delcath, commented on the
amended agreement, "We are pleased to have modified the original Settlement
Agreement with Laddcap and believe that this Modification Agreement benefits
both Delcath and its stockholders. The board undertook this action in
recognition of the changed circumstances and position of the company today. In
addition, we have amended the Company's "Rights Plan" to raise the trigger
threshold under the plan for all stockholders to the same level approved for
Laddcap, which is just under 20%. We view the raising of the threshold for
triggering the rights plan as a stockholder-friendly step, while still
maintaining the Boards flexibility to enhance shareholder value in case the 20%
threshold is crossed."
"With the recently announced expansion to our Clinical Research and Development
Agreement ("CRADA") with the National Cancer Institute ("NCI") and our planned
expansion of the pivotal Phase III trial of the Company's Delcath System into a
multi-center trial, we continue to move forward towards our goal of the
commercialization of our percutaneous perfusion technology for organ and
region-specific delivery of therapeutic and chemotherapeutic agents."
Delcath Board member Robert Ladd, who is also the Managing Member of Laddcap
Value Partners, stated, I am very pleased with the amended agreement. All
shareholders should applaud this step toward improved corporate governance and
transparency."
ABOUT DELCATH SYSTEMS, INC.
Delcath Systems is a developer of percutaneous perfusion technology for organ or
region-specific delivery of therapeutic and chemotherapeutic agents. The
Company's intellectual property portfolio currently consists of 12 patents on a
worldwide basis, including the United States, Europe, Asia and Canada. For more
information, please visit the Company's website, www.delcath.com.
THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS, WHICH ARE SUBJECT TO CERTAIN
RISKS AND UNCERTAINTIES THAT CAN CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE DESCRIBED. FACTORS THAT MAY CAUSE SUCH DIFFERENCES INCLUDE, BUT ARE NOT
LIMITED TO, UNCERTAINTIES RELATING TO OUR ABILITY TO SUCCESSFULLY COMPLETE PHASE
III CLINICAL TRIALS AND SECURE REGULATORY APPROVAL OF OUR CURRENT OR FUTURE
DRUG-DELIVERY SYSTEM AND UNCERTAINTIES REGARDING OUR ABILITY TO OBTAIN FINANCIAL
AND OTHER RESOURCES FOR ANY RESEARCH, DEVELOPMENT AND COMMERCIALIZATION
ACTIVITIES. THESE FACTORS, AND OTHERS, ARE DISCUSSED FROM TIME TO TIME IN OUR
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. YOU SHOULD NOT PLACE UNDUE
RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE
THEY ARE MADE. WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR REVISE THESE
FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE
THEY ARE MADE.
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