8-K

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): January 6, 2005

RITA Medical Systems, Inc.

(Exact name of registrant as specified in its charter)

000-30959

(Commission File Number)

Delaware	94-3199149
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

967 N. Shoreline Blvd.

Mountain View, CA 94043

(Address of principal executive offices, with zip code)

(650) 314-3400

(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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01     Entry into a Material Definitive Agreement.

On January 6, 2005, Horizon Medical Products, Inc., a Georgia corporation (“Horizon”) and a wholly owned subsidiary of RITA Medical Systems, Inc. (the “Company”) entered into a Consent and Wavier Agreement (the “Agreement”) with ComVest Venture Partners, L.P., a Delaware limited partnership (“ComVest”), and Medtronic, Inc., a Minnesota corporation (“Medtronic”). Horizon, ComVest and Medtronic are parties to that certain Note Purchase Agreement by and among Horizon, ComVest, and certain other parties, including Medtronic, dated as of March 1, 2002 and as amended June 10, 2002, July 29, 2002, October 21, 2003 and May 12, 2004 (collectively, the “Note Purchase Agreement”).

Pursuant to the Agreement, ComVest and Medtronic, representing the holders of a majority of the principal amount of notes issued by Horizon pursuant to the Note Purchase Agreement (the “Notes”), among other things, agreed to waive each of ComVest’s and Medtronic’s right under the Note Purchase Agreement to receive a pro rata portion of the principal amount of the Notes held by ComVest and Medtronic upon the payment of any portion of the Notes by Horizon.

In addition, pursuant to the Agreement, ComVest and Medtronic, representing the holders of a majority of the principal amount of notes issued by Horizon pursuant to the Note Purchase Agreement, consented to the pre-payment by Horizon of the principal amount of the Notes not held by ComVest or Medtronic, and any and all accrued interest thereon, on or before February 20, 2005.

The description of the terms and conditions of the Agreement set forth herein does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement attached hereto as Exhibit 10.80 and incorporated herein by reference.

Item 8.01. Other Events.

On January 7, 2005, the Company announced that Horizon had entered into an agreement permitting it to prepay $6,500,998 of debt coming due in July 2005 (together with any and all accrued interest thereon), on or before February 20, 2005. The full text of the press release issued in connection with this announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.

SIGNATURES

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 hereunto duly authorized.

	RITA MEDICAL SYSTEMS, INC.
Date: January 7, 2005	By: /s/ Donald Stewart
	Donald Stewart
	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
10.80	Consent and Waiver Agreement dated as of January 6, 2005, by and among Horizon Medical Products, Inc., ComVest Venture Partners, L.P., and Medtronic, Inc.
99.1	Press release of RITA Medical Systems, Inc. dated January 7, 2005.

EX-10.80

Exhibit 10.80

CONSENT AND WAIVER AGREEMENT

THIS CONSENT AND WAIVER AGREEMENT (“Agreement”) is made as of January 6, 2005 by and among Horizon Medical Products, Inc., a Georgia corporation (“Horizon”), ComVest Venture Partners, L.P., a Delaware limited partnership (“ComVest”), and Medtronic, Inc., a Minnesota corporation (“Medtronic”).

RECITALS

A. Horizon, ComVest and Medtronic are parties to that certain Note Purchase Agreement by and among Horizon, ComVest, and the Additional Note Purchasers (as defined in the Note Purchase Agreement and including Medtronic), dated as of March 1, 2002 and as amended June 10, 2002, July 29, 2002, October 21, 2003 and May 12, 2004 (collectively, the “Note Purchase Agreement”).

B. Section 3.2 of the Note Purchase Agreement provides, in part, that any payment of the principal amount of the Notes (as defined in the Note Purchase Agreement) shall be applied to the Notes pro rata in accordance with the respective unpaid principal amount of the Notes then outstanding.

C. Horizon intends to prepay, within 45 days after the execution of this Agreement by Horizon, the principal amount of the Non-Electing Notes (as defined in Amendment No. 4 to Note Purchase Agreement dated May 12, 2004), and any and all accrued interest thereon, prior to July 16, 2005.

D. Section 16.1 of the Note Purchase Agreement provides, in part, that no amendment, waiver of consent of the provisions of the Note Purchase Agreement shall be effective unless the same shall be in writing and signed by the Requisite Noteholders (as defined in the Note Purchase Agreement).

E. ComVest and Medtronic together constitute the Requisite Noteholders.

AGREEMENT

NOW, THEREFORE, in consideration of the above recitals, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1. Consent. Notwithstanding any provision in the Note Purchase Agreement to the contrary, ComVest and Medtronic, representing the Requisite Noteholders, hereby consent to the pre-payment by Horizon of the principal amount of the Non-Electing Notes, and any and all accrued interest thereon, prior to July 16, 2005, provided that the pre-payment occurs within 45 days after the execution of this Agreement by Horizon.

2. Waiver. Notwithstanding any provision in the Note Purchase Agreement to the contrary, ComVest and Medtronic, representing the Requisite Noteholders, hereby waive the right of each holder of an Electing Note (as defined in Amendment No. 4 to Note Purchase Agreement dated May 12, 2004) to receive such holder’s pro rata portion of the principal amount of such Electing Note (as determined pursuant to Section 3.2 of the Note Purchase Agreement), and any and all accrued interest thereon, upon the payment of any portion of the Notes by Horizon.

3. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

4. Capitalized Terms. Capitalized terms not defined in this Agreement shall having the meaning attributed to them in the Note Purchase Agreement.

5. Continuing Effect. Except as expressly provided for herein, the Note Purchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.

6. Counterparts. This Agreement may be executed in any number of identical counterparts, including by electronic or facsimile transmission, any set of which signed by all the parties hereto shall be deemed to constitute a complete, executed original for all purposes.

7. Successors and Assigns. All the terms and provisions of this Agreement shall be binding and inure to the benefit of the respective successors and assigns of Horizon, ComVest, Medtronic and holders of the Notes.

[Signature Pages Follow]

IN WITNESS WHEREOF, the undersigned parties have caused this Consent and Waiver Agreement to be duly executed by their respective officers thereunto duly authorized, as of the date first above written.

HORIZON MEDICAL PRODUCTS, INC.

By: /s/ JOSEPH DE VIVO 

Name: Joseph De Vivo 

Title: President and Chief Executive Officer 

COMVEST VENTURE PARTNERS, L.P.

By: /s/ CARL KLEIDMAN 

Name: Carl Kleidman 

Title: Partner/President 

MEDTRONIC, INC.

By: /s/ MICHAEL E. ELLWEIN 

Name: Michael D. Ellwein 

Title: Vice President and Chief Development Officer 

[Signature Page to Consent and Waiver Agreement]

EX-99.1

Contact:	Allen & Caron Inc.	RITA Medical Systems, Inc.
	Jill Bertotti (investors)	Don Stewart, Chief Financial Officer
	jill@allencaron.com	Stephen Pedroff, VP Marketing Communications
	949-474-4300	650-314-3400
		dstewart@ritamed.com
	SurfMedia Communications	spedroff@ritamed.com
	Juliana Minsky (media)
	jm@surfmedia.com
	805-962-3700

RITA MEDICAL TO PRE-PAY $6.5 MILLION IN DEBT RELATED TO HORIZON MERGER

Mountain View, Calif., January 7, 2005, RITA Medical Systems, Inc. (Nasdaq: RITA) today announced that its wholly owned subsidiary Horizon Medical Products, Inc. has entered into an agreement allowing it to repay $6.5 million in debt held by creditors of Horizon. The eight percent notes, which are expected to be paid in full by mid-February 2005, are due in July 2005.

Joseph DeVivo, President and CEO of RITA Medical Systems, commented, “Our decision to pay off the debt early made sense in a number of ways. We believe that paying down debt is a prudent use of cash, resulting in a healthier balance sheet and reduced interest expense. We also expect that combined with our continued operational progress this reduction in debt will help us meet our objective of achieving profitability.”

In order to pay off these notes in full, Horizon obtained an agreement from ComVest Venture Partners, L.P., and Medtronic, Inc., Horizon’s two majority debt holders, to, among other things, waive their rights to receive a pro rata portion of any payment made against the principal amount of any portion of the outstanding Horizon debt.

About RITA Medical Systems, Inc.

RITA Medical Systems develops manufactures and markets innovative products for cancer patients including radiofrequency ablation (RFA) systems for treating cancerous tumors as well as percutaneous vascular and spinal access systems. The Company's oncology product lines include implantable ports, some of which feature its proprietary Vortex® technology; tunneled central venous catheters; safety infusion sets and peripherally inserted central catheters used primarily in cancer treatment protocols. The proprietary RITA system uses radiofrequency energy to heat tissue to a high enough temperature to ablate it or cause cell death. In March 2000, RITA became the first RFA Company to receive specific FDA clearance for unresectable liver lesions in addition to its previous general FDA clearance for the ablation of soft tissue. In October 2002, RITA again became the first company to receive specific FDA clearance, this time, for the palliation of pain associated with metastatic lesions involving bone.

The statements in this news release related to the Company's planned prepayment of outstanding debt, its achievement of profitability, the benefits of its merger with Horizon and its future financial and operating performance are forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Information regarding these risks is included in the Company's filings with the Securities and Exchange Commission.

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