AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 26, 2004]
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CELSION CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
52-1256615
(I.R.S. Employer Identification Number)
10220-L OLD COLUMBIA ROAD
COLUMBIA, MD 21046-2364
(410) 290-5390
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
DR. AUGUSTINE Y. CHEUNG
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CELSION CORPORATION
10220-L OLD COLUMBIA ROAD
COLUMBIA, MD 21046-2364
(410) 290-5390
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
---------------
COPIES TO:
ANITA J. FINKELSTEIN, ESQUIRE
VICE PRESIDENT AND GENERAL COUNSEL
CELSION CORPORATION
10220-L OLD COLUMBIA ROAD
COLUMBIA, MD 21046-2364
(410) 290-5390
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
==============================================================================================================================
PROPOSED
AMOUNT MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE AGGREGATE PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED (1) PER UNIT PRICE FEE
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Common stock, par value $0.01 per share 8,652,441 $0.80(3) $6,921,953 $877
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.01 per share,
issuable upon exercise of Warrants 4,723,698 (2) $0.80(3) $3,778,958 $479
==============================================================================================================================
(1) Pursuant to Rule 416 under the Securities Act of 1933, this registration
statement also covers an indeterminate number of additional shares of
Common Stock as may be issued as a result of adjustments to prevent
dilution by reason of any stock split, stock dividend or similar
transaction.
(2) Consists of 1,000,000 shares of Common Stock underlying Options exercisable
at $0.25 per share, 250,000 shares of Common Stock underlying Warrants
exercisable at $0.44 per share, 121,680 shares of Common Stock underlying
Warrants exercisable at 0.77 per share, 473,200 shares of Common Stock
underlying Warrants exercisable at $0.88 per share, 283,636 shares of
Common Stock underlying Warrants exercisable at $1.10 per share, 100,000
shares of Common Stock underlying Warrants exercisable at $1.14 per share,
312,000 shares of Common Stock underlying Warrants exercisable at $1.20 per
share, 1,365,000 shares of Common Stock underlying Warrants exercisable at
$1.25 per share and 818,182 shares of Common Stock underlying Warrants
exercisable at $1.50 per share.
(3) Calculated pursuant to Rule 457(g) and Rule 457(c) under the Securities Act
of 1933. The above calculation is based on the average of the high and low
prices of the Common Stock on The American Stock Exchange on May 21, 2004.
--------------------
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OF WHICH THIS
PROSPECTUS IS A PART IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 26, 2004
PRELIMINARY PROSPECTUS
CELSION CORPORATION
13,376,139 SHARES
COMMON STOCK
This Prospectus of Celsion Corporation, or the Company, a Delaware
corporation, relates to the offer and sale from time to time by certain selling
stockholders (the "Selling Stockholders") of up to 8,652,441 shares of the
Company's common stock, par value $0.01 per share (the "Common Stock") that are
presently outstanding, and up 4,723,698 shares of Common Stock issuable upon the
exercise of certain Common Stock purchase warrants (the "Warrants"). The shares
of Common Stock offered hereby are referred to collectively as the "Shares." See
"Selling Stockholders" and "Plan of Distribution."
The Company will not receive any proceeds from sales of Shares by the
Selling Stockholders. However, the Company will receive proceeds upon exercise
of the Warrants, up to a maximum of $4,604,032, if all of the Warrants are
exercised for cash.
The Selling Stockholders or pledgees, donees, transferees or other
successors in interest that receive Shares by way of gift, partnership
distribution or other non-sale transfer, may offer and sell some, all or none of
the Shares under this Prospectus. The Selling Stockholders or their successors
may determine the prices at which they will sell their Shares, which may be the
then-prevailing market price or some other price. In connection with such sales,
the Selling Stockholders or their successors may use brokers or dealers, who may
receive compensation or commissions for such sales. The Company has agreed to
bear all expenses in connection with the registration of the Shares. However,
the Selling Stockholders will pay any brokerage commissions, discounts and fees
in connection with the sale of their Shares. A Selling Stockholder's net
proceeds from the sale of Shares will be the sales price of the Shares sold for
the account of such Selling Stockholder, less applicable commissions, discounts
and fees.
The Common Stock is traded on The American Stock Exchange under the
symbol "CLN." On May 21, 2004, the closing price of the Common Stock on The
American Stock Exchange was $0.78.
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INVESTMENT IN THE COMPANY'S COMMON STOCK INVOLVES A HIGH DEGREE OF
RISK. YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 9 OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF THE SHARES FROM THE SELLING STOCKHOLDERS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is June __, 2004
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TABLE OF CONTENTS
PAGE
----
Where You Can Find More Information...................... 1
Cautionary Statement About Forward-Looking Statements.... 2
Summary Information About the Company.................... 3
Risk Factors............................................. 9
Use of Proceeds.......................................... 15
Resales by Selling Stockholders.......................... 16
Plan of Distribution..................................... 17
Legal Matters............................................ 18
Experts.................................................. 18
We have informed the Selling Stockholders that the anti-manipulative
rules under the Securities Exchange Act of 1934, including Regulation M, may
apply to their sales of Shares in the market. We have furnished the Selling
Stockholders with a copy of these rules. We have also informed the Selling
Stockholders that they must deliver a copy of this Prospectus with any sale of
their Shares.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information
with the U.S. Securities and Exchange Commission, or the SEC. You may read and
copy any document that we have filed at the SEC's Public Reference Room at 450
Fifth Street, NW, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330
for further information about the operation of its public reference facilities.
Our SEC filings are also available to you free of charge at the SEC's web site
at http://www.sec.gov. The file number of the reports that we file under the
Securities Exchange Act of 1934 is 000-14242.
We have filed a registration statement on Form S-3 with the SEC (File
No. 333-_________) that covers the resale of the Shares offered hereby. This
Prospectus is a part of that registration statement, but does not include all of
the information included in the registration statement. You should refer to the
registration statement for additional information about us and the Shares.
Statements that we make in this Prospectus relating to any document filed as an
exhibit to or incorporated by reference into the registration statement may not
be complete. You should review the referenced document itself for a complete
understanding of its terms.
The SEC allows us to "incorporate by reference" certain information we
file with them, which means that we can disclose important information to you in
this Prospectus by referring you to those documents. The documents that have
been incorporated by reference are an important part of the Prospectus, and you
should be sure to review that information in order to understand the nature of
any investment by you in the Shares. In addition to previously filed documents
that are incorporated by reference, documents that we file with the SEC after
the date of this Prospectus will automatically update the registration
statement. The documents that we have previously filed and that are incorporated
by reference into this Prospectus include the following:
o Our Annual Report on Form 10-K for the fiscal year ended September
30, 2003;
o Our Transition Report on Form 10-Q for the three-month period ended
December 31, 2003;
o Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2004;
o Our Current Report on Form 8-K filed on May 25, 2004;
o Our Proxy Statement relating to our 2004 Annual Meeting of
Stockholders; and
o The description of our Common Stock included in our registration
statement on Form 8-A filed on May 26, 2000 (File No. 001-15911).
All documents and reports filed by us pursuant to Sections 13 (a), 13
(c), 14 or 15 (d) of the Securities Exchange Act of 1934 after the date of this
Prospectus and prior to the date that the offering of Shares made hereby is
terminated automatically will be incorporated by reference into this Prospectus.
Any statement contained in a document incorporated or deemed to be incorporated
by reference into this Prospectus shall be modified or superseded for the
purposes of this Prospectus to the extent that a statement contained in this
Prospectus, or in any other subsequently filed document which also is, or is
deemed to be, incorporated by reference, modifies or supersedes that statement.
Any statement modified or superseded shall not be deemed, except as modified or
superseded, to constitute a part of this Prospectus.
We will provide you with copies of any of the documents incorporated by
reference at no charge to you. However, we will not deliver copies of any
exhibits to those documents unless the exhibit itself is specifically
incorporated by reference. If you would like a copy of any document, please
write or call us at:
Celsion Corporation
10220-L Old Columbia Road
Columbia, MD 21046-2364
Attention: Corporate Secretary
(410) 290-5390
You should only rely upon the information included in or incorporated
by reference into this Prospectus or in any Prospectus supplement that is
delivered to you. We have not authorized anyone to provide you with additional
or different information. You should not assume that the information included in
or incorporated by reference into this Prospectus or any Prospectus Supplement
is accurate as of any date later than the date on the front of the Prospectus or
Prospectus Supplement.
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
Throughout this Prospectus and the other documents incorporated by
reference into this Prospectus, we make certain "forward-looking" statements.
These statements involve known and unknown risks, uncertainties and other
factors that may cause our or our industry's actual results, levels of activity,
performance, or achievements to be materially different from any future results,
levels of activity, performance or achievements predicted, implicitly or
explicitly, by such forward-looking statements. Such factors include, among
other things, those listed under "Risk Factors" as well as those discussed
elsewhere in this Prospectus and the documents incorporated by reference into
this Prospectus. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential" or "continue" or the negative of
such terms or other comparable terminology.
Forward-looking statements are only predictions and involve various
risks and uncertainties including:
o unforeseen changes in the course of research and development
activities and in clinical trials;
o possible changes in cost and timing of development and testing,
capital structure and other financial matters;
o changes in approaches to medical treatment;
o introduction of new products by others;
o possible acquisitions of other technologies, assets or businesses;
o possible actions by customers, suppliers, competitors, regulatory
authorities and others; and
o other risks detailed from time to time in the Company's reports
filed with the SEC.
Actual events or results may differ materially from those contemplated
by this Prospectus and the other documents incorporated by reference into this
Prospectus. In evaluating these statements, you should specifically consider
various factors, including those listed above and outlined under "Risk Factors."
Although we believe that our expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of such statements. We
are under no duty to update any forward-looking statements after the date of
this Prospectus to conform such statements to actual results or circumstances.
2
SUMMARY INFORMATION ABOUT THE COMPANY
This summary highlights selected information contained elsewhere in
this Prospectus and incorporated into this Prospectus by reference. This summary
may not contain all of the information that may be important to you in
considering an investment in our Common Stock. You should read the entire
Prospectus, including "Risk Factors" carefully before making an investment
decision.
GENERAL
Celsion Corporation, based in Columbia, Maryland, is a biotechnology
company dedicated to the development and commercialization of treatment systems
for cancer and other diseases using focused heat energy, either administered
alone or in combination with other therapeutic devices, heat-activated genes and
heat-activated drugs. In February 2004 we received premarketing approval (PMA)
from the Food and Drug Administration, or FDA for our Prolieve(TM)
Thermodilatation system for the treatment of Benign Prostatic Hyperplasia, or
BPH, a chronic condition of enlargement of the prostate common in older men, and
have begun to market. We also are currently in active clinical development and
testing of (i) systems using our Adaptive Phased Array (APA) focused microwave
technology, licensed from the Massachusetts Institute of Technology (MIT), to
treat both early stage cancer and locally advanced breast cancer, and (ii)
heat-activated liposome technology, licensed from Duke University, to deliver
chemotherapeutic drugs for the treatment of prostate and liver cancer. In
addition, our gene-based Cancer Repair Inhibitor (CRI), licensed from Memorial
Sloan-Kettering Cancer Center (Sloan-Kettering), is in late-stage animal testing
BPH TREATMENT SYSTEM
BENIGN PROSTATIC HYPERPLASIA
Millions of aging men experience symptoms resulting from BPH, a
non-cancerous urological disease in which the prostate enlarges and constricts
the urethra. The prostate is a walnut-sized gland surrounding the male urethra
that produces seminal fluid and plays a key role in sperm preservation and
transportation. The prostate frequently enlarges with age. As the prostate
expands, it compresses or constricts the urethra, thereby restricting the normal
passage of urine. This restriction of the urethra may require a patient to exert
excessive bladder pressure to urinate. Because the urination process is one of
the body's primary means of cleansing impurities, the inability to urinate
adequately increases the possibility of infection and bladder and kidney damage.
PREVALENCE OF BPH
As BPH is an age-related disorder, its incidence increases with
maturation of the population. Industry estimates suggest that 9 million men in
the United States experience BPH symptoms and that more than 26 million men are
affected by BPH worldwide. As the United States population continues to age, the
prevalence of BPH can be expected to continue to increase. It is generally
estimated that approximately 50% of all men over the age of 55 and 90% of all
men over 75 will have BPH symptoms at various times. Industry studies estimate
the overall costs of BPH therapy for those patients currently seeking treatment
to be approximately $2.5 to $3.0 billion annually in the United States and $8.0
to $10.0 billion worldwide.
CURRENT TREATMENT ALTERNATIVES FOR BPH
Like cancerous tumors, BPH historically has been treated by surgical
intervention or by drug therapy. The primary treatment for BPH currently is
transurethral resection of the prostate, or TURP, a surgical procedure in which
the prostatic urethra and surrounding diseased tissue in the prostate are
trimmed with a telescopic knife, thereby widening the urethral channel for urine
flow. While the TURP procedure typically has been considered the most effective
treatment available for the relief of BPH symptoms, the procedure has
shortcomings. In the first instance, TURP generally requires from one to three
days of post-operative hospitalization. In addition, a significant percentage of
patients who undergo TURP encounter significant complications, which can include
painful urination, infection, retrograde ejaculation, impotence, incontinence
and excessive bleeding. Furthermore, the cost of the TURP procedure and the
related hospitalization is high, ranging from $8,000 to $12,000. This cost does
not take into account the costs of lost work time, which could amount to several
weeks, or the costs related to adverse effects on patients' quality of life.
Other, less radical, surgical procedures, generally categorized as
"minimally invasive" (MI) therapies, are available as alternatives to the TURP
procedure. The primary MI treatments use microwave heating (TUMT) to treat BPH
by incinerating the obstructing portion of the prostate. TUMT involves sedation,
catheterization and high levels of heat to incinerate a portion of the prostate.
Two other MI therapies-- interstitial RF therapy and laser therapy - employ,
respectively, concentrated radio frequency (RF)
3
waves or laser radiation to reduce prostate swelling by cauterizing tissue
instead of removing it with a surgical knife. However, these procedures require
puncture incisions in order to insert cauterizing RF or laser probes into the
affected tissue and, therefore, also involve the use of a full operating
facility and anesthesia, as well as the burning of prostate tissue by the
probes. Although these procedures result in less internal bleeding and damage to
the urethra than the TURP procedure and may decrease the adverse effects and
costs associated with surgery, anesthesia and post-operative tissue recovery,
they do not entirely eliminate these adverse consequences.
Finally, drug therapy has emerged as an alternative to surgery in the
last several years. There are several drugs available for BPH treatment, the two
most widely prescribed being Hytrin and Proscar. Hytrin works by relaxing
certain involuntary muscles surrounding the urethra, thereby easing urinary
flow, and Proscar is intended actually to shrink the enlarged gland. However,
industry studies have asserted that drug therapy costs $500 to $800 per year or
more, must be maintained for life and does not offer consistent relief to a
large number of BPH patients. In fact, studies have shown that 45% of patients
who begin drug therapy for BPH drop out within the first year, primarily due to
the ineffectiveness of currently available drug therapies. Also, all of the
currently available BPH drugs have appreciable side effects.
Accordingly, neither the medicinal treatments nor the surgical
alternatives available for BPH appear to provide fully satisfactory,
cost-effective treatment solutions for BPH sufferers.
CELSION BPH TREATMENT SYSTEM
We have developed our Prolieve Thermodilatation system, a BPH treatment
system that combines our microwave thermotherapy capability with a proprietary
balloon compression technology licensed from MMTC, Inc. The system consists of a
microwave generator and conductors and a computer and computer software programs
that control the focusing and application of heat, plus a specially designed
balloon catheter and consists of two fundamental elements:
o Celsion's proprietary catheter, incorporating a balloon enlargement
device, delivers computer-controlled transurethral microwave
heating directly to the prostate at temperatures greater than
44(degree) C (111(degree) F).
o Simultaneously, the balloon inflates the device and expands to
press the walls of the urethra from the inside outward as the
surrounding prostate tissue is heated.
The combined effect of this "heat plus compression" therapy is twofold: first,
the heat denatures the proteins in the wall of the urethra, causing a stiffening
of the opening created by the inflated balloon. Second, the heat serves
effectively to kill off prostate cells outside the wall of the urethra, thereby
creating sufficient space for the enlarged natural opening.
Pre-clinical animal studies have demonstrated that a natural "stent,"
or reinforced opening, in the urethra forms after the combined heat plus
compression treatment. Also, the Prolieve system's relatively low temperature
(43(degree) C to 45(degree) C) appears to be sufficient to kill prostatic cells
surrounding the urethra wall, thereby creating space for the enlargement of the
urethra opening. However, the temperature is not high enough to cause swelling
in the urethra.
Celsion's Prolieve Thermodilatation system treatment system is designed
to overcome the limitations of all three of the current treatment systems. It is
designed to be a relatively painless, rapid procedure that delivers the efficacy
of surgical treatments without significant risks and the potential for
life-altering side effects. The potential benefits of the Prolieve system
include walk-in, outpatient treatment that can be completed in less than an
hour; no required sedation; generally no post-operative catheterization; and
rapid symptomatic relief from BPH.
We recently completed the FDA approval process and received a PMA,
which permitted us to begin to market the Prolieve system, on February 19, 2004.
Since that time we have begun to market the Prolieve system through Boston
Scientific Corporation, with which we entered into a strategic relationship in
January 2003.
We have received a warning letter from the FDA regarding the Phase I
and Phase II clinical trials of the Prolieve system. The warning letter reflects
matters that arose during the course of an inspection conducted by the FDA's
Baltimore regional office from December 9 through December 18, 2003 under a
program designed to ensure that data and information contained in certain
submissions to the FDA, including PMA applications, are scientifically valid and
accurate and to ensure that human subjects are protected from undue hazard or
risk during scientific investigations.
The warning letter addressed four general areas--monitoring,
investigational agreements, provision of information to certain investigators,
and FDA reporting--in connection with the Prolieve studies, both of which were
completed by January 2002. Subsequent to the inspection, we took certain actions
to address the observations of the FDA inspector and on December 23, 2003, made
a written submission to the agency regarding those corrective and compliance
actions. In addition, since receipt of the warning letter, the Company has
spoken with representatives of the FDA regarding compliance matters and has
initiated short- and long-term corrective and compliance measures to address
fully the issues raised by the FDA.
4
BREAST CANCER TREATMENT SYSTEM
PREVALENCE OF BREAST CANCER
Breast cancer is one of the leading causes of death among women in the
United States. According to statistics published in the American Cancer
Society's A Cancer Journal for Clinicians, there were an average of 183,000
newly diagnosed breast cancer cases in the United States in each of the years
from 1995 through 1999.
CURRENT TREATMENT FOR BREAST CANCER
Breast cancer is presently treated by mastectomy, the surgical removal
of the entire breast, or by lumpectomy, the surgical removal of the tumor and
surrounding tissue. Both procedures are often followed by radiation therapy or
chemotherapy. The more severe forms of surgical intervention can result in
disfigurement and a need for extended prosthetic and rehabilitation therapy.
In addition, heat therapy (also known as hyperthermia or thermotherapy)
is a historically recognized method of treatment of various medical conditions,
and heat therapy has been used in the past to treat malignant tumors in
conjunction with radiation and chemotherapy. As summarized in the Fourth Edition
of Radiobiology for the Radiologist, published in 1994 by J.B. Lippincott
Company, in 24 independent studies on an aggregate of 2,234 tumors, treatment
consisting of heat plus radiation resulted in an average doubling of the
complete response rate of tumors, compared to the use of radiation alone. The
complete response rate for this purpose means the total absence of a treated
tumor for a minimum of two years. Comparable increases in the complete response
rate were reported with the use of heat combined with chemotherapy. In addition,
it has been demonstrated on numerous occasions that properly applied heat, alone
and without the concurrent use of radiation, can also kill cancer cells.
HEAT THERAPY IN CONJUNCTION WITH RADIATION; FIRST GENERATION CELSION
EQUIPMENT
In 1989, we obtained FDA premarketing approval for our microwave-based
Microfocus 1000 heat therapy equipment for use on surface and subsurface tumors
in conjunction with radiation therapy. Until 1995, we marketed our Microfocus
equipment for this use in 23 countries, but microwave heat therapy was not
widely accepted in the United States medical community as an effective cancer
treatment. Moreover, due to the limitations of microwave technology available at
that time, it was difficult to deliver a controlled amount of heat to subsurface
tumors without overheating surrounding healthy tissue.
NEW MICROWAVE TECHNOLOGY FROM MIT
In 1993, we began working with researchers at the Massachusetts
Institute of Technology who had developed, originally for the United States
Defense Department, the microwave control technology known as "Adaptive Phased
Array" (APA). This technology permits properly designed microwave equipment to
focus and concentrate energy targeted at diseased tissue areas deep within the
body and to heat them selectively, without adverse impact on surrounding healthy
tissue. In 1996, MIT granted us an exclusive worldwide license to use this
technology for medical applications and since that time we have concentrated on
developing a second generation of equipment capable of focusing microwave energy
on specific tissue areas. We have incorporated the APA technology in our
second-generation microwave therapy equipment.
SECOND GENERATION CELSION BREAST CANCER TREATMENT SYSTEM
Using the APA technology, we have developed a prototype breast cancer
treatment system intended to destroy localized breast tumors through the
application of heat alone. The system consists of a microwave generator and
conductors, a computer and computer software programs that control the focusing,
application and duration of the thermotherapy, and a specially designed patient
treatment table.
In 1998, we completed pre-clinical animal testing of our prototype
system at the Massachusetts General Hospital, a teaching hospital for Harvard
Medical School in Boston, Massachusetts. Using breast tissue-equivalent phantoms
and tumors in live animals, these studies demonstrated that our system is
capable of selectively heating tumors at temperatures up to 46(degree) C
(115(degree) F) without damage to surrounding healthy tissues. High temperatures
maintained for eight to ten minutes can cause complete tumor necrosis (death),
leading to the death of viable cancer cells within the tumor and in its
immediate vicinity. A second prototype clinical breast cancer treatment system
at Oxford University in England was used to demonstrate successfully the ability
of our equipment to focus heat deep into animal tissue at precise locations and
in small target areas. In our view, these animal tests demonstrate that it is
possible to eliminate tumors by heat alone and without the use of radiation.
Using the pre-clinical data from Massachusetts General, the FDA
5
granted Celsion a supplemental premarketing approval to incorporate the APA
technology with Celsion's already approved Microfocus 1000 system. The APA
technology enhances the ability of the Microfocus 1000 system to focus energy.
In January 1999, we received an IDE from the FDA to permit clinical
testing of our breast cancer treatment system, and also received FDA approval to
proceed with Phase I human clinical studies. In August 2000, we completed the
treatment of ten patients in the Phase I study using our breast cancer equipment
at Columbia Hospital in West Palm Beach, Florida, and at Harbor UCLA Medical
Center in Torrance, California. In the study, our equipment was clinically
tested on female breast tumors on a minimally invasive basis through a single
application of precisely controlled and targeted heat. In December 2000, we
received approval from the FDA to commence Phase II trials for our breast cancer
system.
The Phase II trials consist of two protocols--the first is designed to
ablate (kill) small breast tumors including microscopic lesions in the margin of
the tumor, leaving the margins clear of viable cancer cells using heat alone and
the second is designed to downsize large breast cancer tumors using a
combination of heat and chemotherapy, thus allowing a surgeon to perform a
lumpectomy rather than a mastectomy, thereby preserving the affected breast.
These trials are currently under way at St. Joseph's Hospital Breast Center in
Orange, California, Harbor-UCLA Medical Center in Torrance, California, the
University of Oklahoma at Oklahoma City, Comprehensive Breast Center of Coral
Springs in Coral Springs, Florida, Mroz-Baier Breast Care Center in Memphis,
Tennessee, Lynne Clark, M.D. in Tacoma, Washington, Breast Care Specialists in
Norfolk, Virginia, and Bolton Breast Unit.
Effective May 25, 2004, we suspended both branches of our pivotal Phase
II trials using the Company's advanced phase array microwave technology in the
treatment of small and late stage breast cancer tumors. The decision to suspend
was taken after preliminary evaluation of interim (midpoint) data from the
trials. In the small tumor study, the Company determined that it was achieving
the primary endpoint of reducing second incisions, but that it was not
consistently meeting its secondary endpoint of reducing tumor burden as measured
by tumor necrosis. The Company believes that these inconsistent results may be
due to inconsistent delivery of an adequate thermal dose. In the late-stage
study, the Company was encountering difficulties in enrolling sufficient
patients in part due to a change in the prevailing standard of care specified in
the study protocol and in part due to a shortage of late-stage tumor patients,
due to earlier detection of breast cancer.
THERMODOX(TM) (DOXORUBICIN ENCAPSULATED IN HEAT-ACTIVATED LIPOSOME); DUKE
UNIVERSITY
BACKGROUND
Liposomes are man-made microscopic spheres with a liquid membrane,
developed in the 1980's to encapsulate drugs for targeted delivery. Commercial
liposomes can now encapsulate chemotherapeutic drugs, enabling them to avoid
destruction by the body's immune system, and allowing them to accumulate in
tumors. However, with presently available technology, it often takes two to four
hours for commercial liposomes to release their drug contents to the tumors,
severely limiting the clinical efficacy of liposome chemotherapy treatments.
DEVELOPMENT OF THERMO-SENSITIVE LIPOSOMES
A team of Duke University scientists has developed heat-sensitive
liposomes comprised of materials that rapidly change porosity when heated to a
specific point. As the heat-sensitive liposomes circulate within the small
arteries, arterioles, and capillaries, the drug contents of the liposomes are
released at significantly higher levels in those tissue areas that have been
heated for 30 to 60 minutes than in areas that do not receive heat. In animal
trials it has been determined that 50 times the amount of drugs carried by
heat-sensitive liposomes was deposited at a specific heated tissue site, when
compared to conventional liposomes. We have been a sponsor of this research,
which is part of a larger Duke University project to develop new
temperature-sensitive liposomes, temperature-sensitive gene promoters and
related compounds, and we are the exclusive licensee of Duke University's
heat-activated liposome technology.
Celsion's focused microwave equipment is used to provide minimally
invasive heating of cancerous tumors to trigger heat-activated liposomes within
the tumors. The heat-activated liposomes, which encapsulate chemotherapeutic
agents, are injected into the bloodstream where they remain encapsulated until
they release their drug payload inside the heated tumor. In preliminary tumor
growth delay studies conducted at Duke University, tumor-bearing mice received a
single intravenous injection of the liposome with a 5 mg per kilogram
Doxorubicin concentration. This was immediately followed by heating of the tumor
to 42(degree) C (108(degree) F) for one hour. The result of the study was a
complete regression of the tumors in 11 out of 11 mice. These animals remained
disease free through 60 days of the study.
In November 2001, we completed large animal toxicity studies involving
ThermoDox(TM), our Doxorubicin-laden thermo-liposome, at the Roswell Park Cancer
Institute, a cancer research organization in Buffalo, New York, and at Dartmouth
Hitchcock Medical Center, a teaching hospital associated with Dartmouth Medical
College. In March 2002, we filed an Investigational New Drug, or IND,
application with the FDA for the use of ThermoDox in the treatment of prostate
cancer using our Prolieve equipment as the means of heat-activation. The IND
became effective in June 2002 and we have had a Phase I clinical trial underway
at Roswell Park and Regional Urology in Shreveport, Louisiana.
6
In addition, in January 2001, we entered into a Material Transfer
Agreement, or MTA, with the National Cancer Institute, or NCI, under which we
are supplying ThermoDox to enable the NCI to conduct clinical trials on liver
cancer. NCI is using an RF heating device to ablate the tumors and to heat the
liver, activating ThermoDox to kill peripheral cancer cells. Liver cancer has
yet to be successfully treated with existing treatment modalities. NCI is
currently completing pre-clinical studies and we filed an IND for the treatment
of liver cancer on December 22, 2003.
Celsion's focused microwave equipment is used to provide minimally
invasive heating of cancerous tumors to trigger heat-activated liposomes within
the tumors. The heat-activated liposomes, which encapsulate chemotherapeutic
agents, are injected into the bloodstream where they remain encapsulated until
they release their drug payload inside the heated tumor. In preliminary tumor
growth delay studies conducted at Duke University, tumor-bearing mice received a
single intravenous injection of the liposome with a 5 mg per kilogram
Doxorubicin concentration. This was immediately followed by heating of the tumor
to 42(degree) C (108(degree) F) for one hour. The result of the study was a
complete disappearance of the tumors in 11 out of 11 mice. These animals
remained disease free through 60 days of the study.
In November 2001, we completed large animal toxicity studies involving
Thermodox(TM), our Doxorubicin-laden thermo-liposome at the Roswell Park Cancer
Institute, a cancer research organization in Buffalo, New York and at Dartmouth
Hitchcock Medical Center, a teaching hospital associated with Dartmouth Medical
College. In March 2002, we filed an IND application with the FDA for the use of
Thermodox(TM) in the treatment of prostate cancer using our Prolieve equipment
as the means of heat activation. The IND became effective in June 2002 and we
have had a Phase I clinical trial underway at Roswell Park and Regional Urology
in Shreveport, Louisiana since May 28, 2003.
In addition, in January 2001, we entered into a Material Transfer
Agreement (MTA) with the National Cancer Institute, or NCI, under which we are
supplying heat-activated liposomes to enable the NCI to conduct clinical trials
on liver cancer. NCI is using an RF heating device to isolate the tumors and to
heat the liver, activating Celsion's heat-activated liposomes to kill peripheral
cancer cells. Liver cancer has yet to be successfully treated with existing
treatment modalities. NCI is currently completing preclinical studies and we
hope to file an IND for the treatment of liver cancer early in 2004.
Celsion and Duke University are pursuing further development work and
pre-clinical studies aimed at using the new thermo-liposome technology in
conjunction with our APA focused heat technology for a variety of applications,
including cancer chemotherapy. We view the Duke thermo-liposome technology as a
highly promising improvement in the delivery of medicines used to combat serious
diseases. For example, the drugs used to fight cancer in chemotherapy regimens
are often toxic when administered in large quantities, and produce nausea,
vomiting, and exhaustion- all side effects of the body being poisoned. However,
if such a drug can be delivered directly to a tissue area where it is needed, as
opposed to being distributed through the entire circulatory system, the local
concentration of the drug could be increased without the side effects that
accompany large systemic dosing.
In addition, in the July 1, 2000 issue of Cancer Research, a Duke
University research scientist reported on his initial use of heat to activate
gene therapy and to increase the production in animals of Interleukin-12, a
genetic protein, in order to delay tumor growth. On August 8, 2000, we entered
into an agreement with Duke University, subsequently renewed for six-month
periods, under which Celsion has the right, for a period of six months
thereafter, to negotiate an exclusive license for this technology.
ALLIED TECHNOLOGY
On July 18, 2003, we entered into an additional license agreement with
Duke, pursuant to which we have obtained exclusive rights to an advanced phased
array radio frequency heating system designed specifically for use with
chemotherapeutic drugs for the treatment of locally advanced breast cancer. The
system, developed by Duke engineers, uses RF energy to warm a woman's breast to
approximately 42(degree) C to enhance the effectiveness of liposomal
chemotherapeutic compounds. During the treatment, the breast is immersed in a
pool of distilled water, which helps distribute the heat evenly around the
breast, thus preventing skin burns and "hot spots," which often create pain.
Skin burns and hot spots have, up to now, limited the use of RF hyperthermia as
an effective means for treatment of breast cancer.
This heating system is currently being clinically evaluated at Duke. A
Phase I trial has been completed and a Phase II trial is underway. The
combination of trials was designed to demonstrate the system's ability to
enhance the combined therapeutic effect of liposomal encapsulations of
Doxorubicin(R) plus traditional paclitaxel (Taxol(R)) in the management of
locally advanced breast cancer. Results of the Phase I study, which included 21
women, indicated that tumor growth was halted in all of the women participating
in the trial and that 50% of the treated tumors were reduced in size. Eleven
percent of the trial participants had complete pathologic
7
responses, meaning no cancer was found in the breast tissue upon analyzing its
surgical remains, and 33% of patients had complete clinical responses, meaning
visible signs of the tumor could no longer be detected. An additional 17% of
trial participants were converted from mastectomy candidates to lumpectomy
candidates. Celsion intends to work with Duke University staff to explore the
potential for using this heating system in combination with ThermoDox to treat
breast cancer.
PRODUCTION OF HEAT-SENSITIVE LIPOSOMES
We have established a relationship with Celator Corporation of
Vancouver, Canada to provide Quality System Regulation, or QSR (formerly Good
Manufacturing Practices, or GMP), production of our heat-activated liposome for
our completed large animal toxicity studies and our planned Phase I clinical
study in humans. Celator is a leading drug formulation and discovery company
that specializes in liposome drug development. In November 2002, Celsion engaged
Northern Lipids Limited, a Vancouver, Canada-based liposome consulting firm, to
develop a scaled-up manufacturing process for this product and, in September
2003, we engaged Baxter Pharmaceuticals to produce the liposomes on a commercial
scale.
SLOAN-KETTERING / CELSION HEAT-ACTIVATED GENE THERAPY COMPOUNDS
BACKGROUND
Cancer cells have the ability to repair themselves after radiation or
chemotherapy. Thus, patients require repeated treatments to destroy
substantially all of the cancer cells. Celsion has licensed from Sloan-Kettering
Cancer Center, a biomedical innovation that promises significant improvements in
cancer therapy. Sloan-Kettering has developed biological modifiers that inhibit
cancer cells' ability to repair themselves. Activated by focused heat, this
Cancer Repair Inhibitor, or CRI, temporarily disables the repair mechanism of
cancer cells, making it possible to reduce significantly the number of
radiation/chemotherapy treatments and/or lower the treatment dosage.
A standard approach to treating cancer is radiation therapy combined
with chemotherapy. High doses of radiation kill cancer cells or keep them from
dividing, but produce chronic or acute side effects, including fatigue,
neutropenia, anemia and leukopenia. Also, depending on the location of the
tumor, other acute side effects may occur, including diarrhea, allopecia and
various foreign ulcers. Chemotherapy presents comparable or more serious side
effects.
Oncologists are looking for ways to mitigate these side effects. In
radiation therapy, these include hyperfractionated radiation, intra-operative
radiation, three-dimensional radiation, stereotactic radiosurgery and the use of
radio-labeled monoclonal antibodies and radio sensitizers. CRI falls into this
latter category because it "sensitizes" a cancer cell for treatment by making it
more susceptible to DNA-damaging agents such as heat, chemicals or radiation. A
product of advances in the understanding of the biology of cancer, CRI is one of
a new class of "biologics" that are expected to become part of the cancer
treatment protocol.
THE CELSION TECHNOLOGY--CRI PLUS FOCUSED HEAT
CRI can be activated in tumors by minimally invasive focused heat in
the range of 41(degree) C (106(degree) F). This focused heat may be generated by
Celsion's Adaptive Phased Array microwave technology or other heating systems.
Having increased the susceptibility of cancer cells to DNA-damaging agents,
radiation and chemotherapy treatment may then be administered with less
frequency and/or at lower doses than currently is possible. CRI would then
deactivate and the patient would resume normal post-treatment care.
In September 2001, scientists at Sloan-Kettering successfully completed
pre-clinical laboratory feasibility demonstrations to assess safety and
biological activity of CRI. In December 2001, a small animal feasibility study
was completed at Sloan-Kettering's Good Laboratory Practice (GLP) facility to
assist in drug formulation. Further studies with large animals to assess
toxicity effects are expected to be conducted. Following completion of these
toxicity studies, the Company expects to file an IND.
In May 2000, we entered into an exclusive worldwide agreement with
Sloan-Kettering for the commercial rights to the heat-activated gene therapy
technology developed by Sloan-Kettering. In the June 15, 2003 issue of Cancer
Research, a Sloan-Kettering scientist summarized the scientific and clinical
rationale leading to the successful development of the heat-activated anti-sense
genetic modifier and the pre-clinical evaluations, which demonstrated the
feasibility of its use as a potent radiation sensitizer for the treatment of
cancer.
In addition, in the July 1, 2000 issue of Cancer Research, a Duke
University research scientist reported on his initial use of heat to activate
gene therapy and to increase the production in animals of Interleukin-12, a
genetic protein, in order to delay tumor
8
growth. On August 8, 2000, we entered into an agreement with Duke University,
subsequently renewed for consecutive six-month periods, under which Celsion has
the right, for a period of six months thereafter, to negotiate an exclusive
license for this technology.
RISK FACTORS
You should carefully consider the risks described below before making a
decision to invest in our Common Stock. You should also refer to the other
information in this Prospectus, as well as the information incorporated by
reference into this Prospectus, including our financial statements and the
related notes. The risks and uncertainties described below are not the only ones
that could affect our Company. Additional risks and uncertainties of which we
are unaware or that we currently believe are immaterial also may become
important factors affecting our business. If any one or more of the following
risks occur, our business, results of operations and financial condition could
be materially harmed. As a result, the trading price of our Common Stock could
decline, and you could lose all or part of your investment. The terms the
"Company," "we," "us" and "our" used throughout this Prospectus all refer to
Celsion Corporation.
WE HAVE A HISTORY OF SIGNIFICANT LOSSES AND EXPECT TO CONTINUE SUCH
LOSSES FOR THE FORESEEABLE FUTURE.
Since Celsion's inception in 1982, our expenses have substantially
exceeded our revenues, resulting in continuing losses and an accumulated deficit
of $66,297,896 at March 31, 2004, including losses of $14,293,081 for the 12
months ended December 31, 2003 and $6,065,680 for the quarter ended March 31,
2004. Because we presently have only limited revenues and are committed to
continuing our product research, development and commercialization programs, we
will continue to experience significant operating losses unless and until we
complete the development of new products and these products have been clinically
tested, approved by the FDA and successfully marketed. In addition, we have
funded our operations for many years primarily through the sale of the Company's
securities and have limited working capital for our product research,
development, commercialization and other activities.
WE DO NOT EXPECT TO GENERATE SIGNIFICANT REVENUE FOR THE FORESEEABLE FUTURE.
Since 1995 we have devoted our resources to developing a new generation
of thermotherapy and other products, but are not able to market these products
unless and until we complete clinical testing and obtain all necessary
governmental approvals. On February 19, 2004, we received a PMA from the FDA for
the first of our new generation of thermotherapy products--our Prolieve
Thermodilatation system for the treatment of BPH--and, since that time, our
distributor Boston Scientific has begun commercial introduction of the Prolieve
system. However, we can give no assurance as to how much revenue, if any, will
be generated by Prolieve sales or when sales of Prolieve systems may occur. In
addition, at the present time our other products are still in various stages of
development and testing and cannot be marketed until we have completed clinical
testing and obtained necessary governmental approval. Accordingly, current
revenue sources to sustain our operations are extremely limited and will remain
so until and unless our Prolieve system is marked successfully and/or until our
other new products are clinically tested, approved by the FDA and successfully
marketed. We cannot guarantee that any or all of our products will be
successfully tested, approved by the FDA or marketed, successfully or otherwise,
at any time in the foreseeable future or at all.
SOME OF OUR TECHNOLOGY IS STILL UNDERGOING CLINICAL TESTING; OUR TECHNOLOGIES
MAY NOT ACHIEVE SUFFICIENT ACCEPTANCE BY THE MEDICAL COMMUNITY TO SUSTAIN OUR
BUSINESS.
To date, microwave heat therapy has not been widely accepted in the
United States medical community as an effective treatment for BPH or for cancer
treatment, with or without the concurrent use of radiation. We believe that this
is primarily due to the inability of earlier technology adequately to focus and
control heat directed at specific tissue locations and to conclusions that were
drawn from a widely publicized study by the Radiation Oncology Therapy Group
that purported to show that thermotherapy in conjunction with radiation was only
marginally effective. Subsequent to the publication of this study, the
HealthCare Financing Administration, or HCFA (now known as the Centers for
Medicare and Medicaid Services, or CMS) established a low medical reimbursement
rate for all thermotherapy equipment designed to be used in conjunction with
radiation. While management believes that our new technology is capable of
overcoming the limitations of the earlier technology, the medical community may
not embrace the perceived advantages of our "Adaptive Phased Array," or APA,
focused heat therapy without more extensive testing and clinical experience than
we will be able to provide. To date, we have received a PMA from the FDA for our
Prolieve system for the treatment of BPH, but we can offer no assurance that the
Prolieve system will be accepted by the medical community widely or at all. Our
new cancer treatment technology is currently in Phase II trials. This technology
may not prove as effective in practice as we on anticipate. If further testing
and clinical practice do not confirm the safety and efficacy of our technology
or, even if further testing and practice produce positive results but the
medical community does not view this new form of heat therapy as effective and
desirable, our efforts
9
to market our new products may fail, with material adverse consequences to our
business. We intend to petition CMS for a new reimbursement code for our breast
cancer treatment. The success of our business model depends significantly upon
our ability to petition successfully for reimbursement codes. However, we cannot
offer any assurances as to when, if ever, CMS may act on our request to
establish a reimbursement code for our breast cancer treatment system. In
addition, there can be no assurance that the reimbursement level established for
our breast cancer treatment system, if established, will be sufficient for us to
carry out our business plan effectively.
IF WE ARE NOT ABLE TO OBTAIN NECESSARY FUNDING, WE WILL NOT BE ABLE TO COMPLETE
THE DEVELOPMENT, TESTING AND COMMERCIALIZATION OF OUR TREATMENTS AND PRODUCTS.
We will need substantial additional funding in order to complete the
development, testing and commercialization of our breast cancer treatment system
and heat-activated liposome and cancer repair inhibitor products, as well as
other potential new products. We expended approximately $14,333,740 in the
12-month period ended December 31, 2003 and an additional $6,155,472 in the
three months ended March 31, 2004. As of that date, we had available a total of
approximately $19,426,771 to fund our operations. We have both increased the
pace of development work on our present products and made a significant
commitment to our heat-activated liposome and cancer repair inhibitor research
and development projects and it is our intention to at least maintain, or
increase the pace and scope of these activities. The increase in the scope of
present development work and the commitment to these new projects will require
additional external funding, at least until we are able to generate sufficient
cash flow from sale of one or more of our products to support our continued
operations. We do not have any committed sources of financing and cannot offer
any assurances that additional funding will be available in a timely manner, on
acceptable terms or at all.
If adequate funding is not available, we may be required to delay,
scale back or eliminate certain aspects of our operations or attempt to obtain
funds through unfavorable arrangements with partners or others that may force us
to relinquish rights to certain of our technologies, products or potential
markets or that could impose onerous financial or other terms. Furthermore, if
we cannot fund our ongoing development and other operating requirements,
particularly those associated with our obligations to conduct clinical trials
under our licensing agreements, we will be in breach of these licensing
agreements and could therefore lose our license rights, which could have
material adverse effects on our business.
OUR BUSINESS IS SUBJECT TO NUMEROUS AND EVOLVING STATE, FEDERAL AND FOREIGN
REGULATIONS AND WE MAY NOT BE ABLE TO SECURE THE GOVERNMENT APPROVALS NEEDED TO
DEVELOP AND MARKET OUR PRODUCTS.
Our research and development activities, pre-clinical tests and
clinical trials, and ultimately the manufacturing, marketing and labeling of our
products, all are subject to extensive regulation by the FDA and foreign
regulatory agencies. Pre-clinical testing and clinical trial requirements and
the regulatory approval process typically take years and require the expenditure
of substantial resources. Additional government regulation may be established
that could prevent or delay regulatory approval of our product candidates.
Delays or rejections in obtaining regulatory approvals would adversely affect
our ability to commercialize any product candidates and our ability to generate
product revenues or royalties.
The FDA and foreign regulatory agencies require that the safety and
efficacy of product candidates be supported through adequate and well-controlled
clinical trials. If the results of pivotal clinical trials do not establish the
safety and efficacy of our product candidates to the satisfaction of the FDA and
other foreign regulatory agencies, we will not receive the approvals necessary
to market such product candidates.
Even if regulatory approval of a product candidate is granted, the
approval may include significant limitations on the indicated uses for which the
product may be marketed. In addition, manufacturing establishments in the United
States and abroad are subject to inspections and regulations by the FDA. Medical
devices must also continue to comply with the FDA's Quality System Regulation,
or QSR. Compliance with such regulations requires significant expenditures of
time and effort to ensure full technical compliance. The FDA stringently applies
regulatory standards for manufacturing.
We are also subject to record keeping and reporting regulations,
including FDA's mandatory Medical Device Reporting, or MDR regulation. Labeling
and promotional activities are regulated by the FDA and, in certain instances,
by the Federal Trade Commission.
10
Many states in which we do or in the future may do business or in which
our products may be sold impose licensing, labeling or certification
requirements that are in addition to those imposed by the FDA. There can be no
assurance that one or more states will not impose regulations or requirements
that have a material adverse effect on our ability to sell our products.
In many of the foreign countries in which we may do business or in
which our products may be sold, we will be subject to regulation by national
governments and supranational agencies as well as by local agencies affecting,
among other things, product standards, packaging requirements, labeling
requirements, import restrictions, tariff regulations, duties and tax
requirements. There can be no assurance that one or more countries or agencies
will not impose regulations or requirements that could have a material adverse
effect on our ability to sell our products.
The EU has a registration process that includes registration of
manufacturing facilities (known as "ISO certification") and product
certification (known as a "CE Mark"). We have obtained ISO certification for our
existing facilities. However, there is no guarantee that we will be successful
in obtaining European certifications for new facilities or for our products, or
that we will be able to maintain its existing certifications in the future.
Foreign government regulation may delay marketing of our new products
for a considerable period of time, impose costly procedures upon its activities
and provide an advantage to larger companies that compete with it. There can be
no assurance that we will be able to obtain necessary regulatory approvals, on a
timely basis or at all, for any products that it develops. Any delay in
obtaining, or failure to obtain, necessary approvals would materially and
adversely affect the marketing of our contemplated products subject to such
approvals and, therefore, our ability to generate revenue from such products.
Even if regulatory authorities approve our product candidates, such
products and our facilities, including facilities located outside the EU, may be
subject to ongoing testing, review and inspections by the European health
regulatory authorities. After receiving premarketing approval, in order to
manufacture and market any of its products, we will have to comply with
regulations and requirements governing manufacture, labeling and advertising on
an ongoing basis.
Failure to comply with applicable domestic and foreign regulatory
requirements, can result in, among other things, warning letters, fines,
injunctions and other equitable remedies, civil penalties, recall or seizure of
products, total or partial suspension of production, refusal of the government
to grant approvals, pre-market clearance or pre-market approval, withdrawal of
approvals and criminal prosecution of the Company and its employees, all of
which would have a material adverse effect on our business.
OUR BUSINESS DEPENDS ON LICENSE AGREEMENTS WITH THIRD PARTIES TO PERMIT US TO
USE PATENTED TECHNOLOGIES. THE LOSS OF ANY OF OUR RIGHTS UNDER THESE AGREEMENTS
COULD IMPAIR OUR ABILITY TO DEVELOP AND MARKET OUR PRODUCTS.
Currently, we have three utility patents pending in the United States
Patent & Trademark Office. Two are directed to our Prolieve system for the
treatment of BPH and the other is directed to our breast cancer treatment
system. However, even when our pending applications mature into United States
patents, our business will still depend on license agreements that it has
entered into with third parties until the third parties' patents expire.
Our success will depend, in substantial part, on our ability to
maintain our rights under license agreements granting us rights to use patented
technologies. We have entered into exclusive license agreements with MIT, for
APA technology and with MMTC, a privately owned developer of medical devices,
for microwave balloon catheter technology. We have also entered into a license
agreement with Duke University, under which we have exclusive rights to
commercialize medical treatment products and procedures based on Duke
University's thermo-liposome technology, an advanced phased array radio
frequency (RF) heating system designed specifically for use with
chemotherapeutic drugs for the treatment of locally advanced breast cancer and a
license agreement with Memorial Sloan-Kettering Cancer Center under which we
have rights to commercialize certain cancer repair inhibitor products. The MIT,
MMTC, Duke University and Sloan-Kettering agreements each contain license fee,
royalty and/or research support provisions, testing and regulatory milestones,
and other performance requirements that we must meet by certain deadlines. If we
were to breach these or other provisions of the license and research agreements,
we could lose our ability to use the subject technology, as well as compensation
for our efforts in developing or exploiting the technology. Further, loss of our
rights under the MIT license agreement would prevent us from proceeding with
most our current product development efforts, which are dependent on licensed
APA technology. Any such loss of rights and access to technology would have a
material adverse effect on our business.
Further, we cannot guarantee that any patent or other technology rights
licensed to us by others will not be challenged or circumvented successfully by
third parties, or that the rights granted will provide adequate protection. We
are aware of published
11
patent applications and issued patents belonging to others, and it is not clear
whether any of these patents or applications, or other patent applications of
which it may not have any knowledge, will require us to alter any of our
potential products or processes, pay licensing fees to others or cease certain
activities. Litigation, which could result in substantial costs, may also be
necessary to enforce any patents issued to or licensed by us or to determine the
scope and validity of others' claimed proprietary rights. We also rely on trade
secrets and confidential information that we seek to protect, in part, by
confidentiality agreements with our corporate partners, collaborators, employees
and consultants. We cannot guarantee that these agreements will not be breached,
that, even if not breached, that they are adequate to protect our trade secrets,
that we will have adequate remedies for any breach or that our trade secrets
will not otherwise become known to, or will not be discovered independently by,
competitors.
TECHNOLOGIES FOR THE TREATMENT OF CANCER ARE SUBJECT TO RAPID CHANGE AND THE
DEVELOPMENT OF TREATMENT STRATEGIES THAT ARE MORE EFFECTIVE THAN OUR
THERMOTHERAPY TECHNOLOGY COULD RENDER OUR TECHNOLOGY OBSOLETE.
Various methods for treating cancer currently are, and in the future
may be expected to be, the subject of extensive research and development. Many
possible treatments that are being researched, if successfully developed, may
not require, or may supplant, the use of our thermotherapy technology. These
alternate treatment strategies include the use of radio frequency (RF), laser
and ultrasound energy sources. The successful development and acceptance of any
one or more of these alternative forms of treatment could render our technology
obsolete as a cancer treatment method.
WE MAY NOT BE ABLE TO HIRE OR RETAIN KEY OFFICERS OR EMPLOYEES THAT WE NEED TO
IMPLEMENT ITS BUSINESS STRATEGY AND DEVELOP ITS PRODUCTS AND BUSINESSES.
Our success depends significantly on the continued contributions of our
executive officers, scientific and technical personnel and consultants, and on
our ability to attract additional personnel as we seek to implement our business
strategy and develop our products and businesses. During our operating history,
we have assigned many essential responsibilities to a relatively small number of
individuals. However, as our business and the demands on our key employees
expand, we have been, and will continue to be, required to recruit additional
qualified employees. The competition for such qualified personnel is intense,
and the loss of services of certain key personnel or our inability to attract
additional personnel to fill critical positions as we implement our business
strategy could adversely affect our business. Further, we do not carry "key man"
insurance on any of our personnel. Therefore, loss of the services of key
personnel would not be ameliorated by the receipt of the proceeds from such
insurance.
OUR SUCCESS WILL DEPEND IN PART ON OUR ABILITY TO GROW AND DIVERSIFY, WHICH IN
TURN WILL REQUIRE THAT WE MANAGE AND CONTROL OUR GROWTH EFFECTIVELY.
Our business strategy contemplates growth and diversification. As
manufacturing, marketing, sales, and other personnel, and expand our
manufacturing and research and development capabilities we add, our operating
expenses and capital requirements will increase. Our ability to manage growth
effectively will require that we continue to expend funds to improve our
operational, financial and management controls, reporting systems and
procedures. In addition, we must effectively expand, train and manage our
employees. We will be unable to manage our businesses effectively if we are
unable to alleviate the strain on resources caused by growth in a timely and
successful manner. There can be no assurance that we will be able to manage our
growth and a failure to do so could have a material adverse effect on our
business.
THE SUCCESS OF OUR PRODUCTS MAY BE HARMED IF THE GOVERNMENT, PRIVATE HEALTH
INSURERS AND OTHER THIRD- PARTY PAYORS DO NOT PROVIDE SUFFICIENT COVERAGE OR
REIMBURSEMENT.
Our ability to commercialize our thermotherapy technology successfully
will depend in part on the extent to which reimbursement for the costs of such
products and related treatments will be available from government health
administration authorities, private health insurers and other third-party
payors. The reimbursement status of newly approved medical products is subject
to significant uncertainty. We cannot guarantee that adequate third-party
insurance coverage will be available for us to establish and maintain price
levels sufficient for us to realize an appropriate return on our investment in
developing new therapies. Government, private health insurers and other
third-party payors are increasingly attempting to contain health care costs by
limiting both coverage and the level of reimbursement for new therapeutic
products approved for marketing by the FDA. Accordingly, even if coverage and
reimbursement are provided by government, private health insurers and
third-party payors for uses of our products, market acceptance of these products
would be adversely affected if the reimbursement available proves to be
unprofitable for health care providers.
12
WE FACE INTENSE COMPETITION AND THE FAILURE TO COMPETE EFFECTIVELY COULD
ADVERSELY AFFECT OUR ABILITY TO DEVELOP AND MARKET OUR PRODUCTS.
There are many companies and other institutions engaged in research and
development of thermotherapy technologies, both for prostate disease and cancer
treatment products that seek treatment outcomes similar to those that we are
pursuing. In addition, a number of companies and other institutions are pursuing
alternative treatment strategies through the use of microwave, infrared, radio
frequency, laser and ultrasound energy sources, all of which appear to be in the
early stages of development and testing. We believe that the level of interest
by others in investigating the potential of thermotherapy and alternative
technologies will continue and may increase. Potential competitors engaged in
all areas of prostate and cancer treatment research in the United States and
other countries include, among others, major pharmaceutical and chemical
companies, specialized technology companies, and universities and other research
institutions. Most of our competitors and potential competitors have
substantially greater financial, technical, human and other resources, and may
also have far greater experience, than do we, both in pre-clinical testing and
human clinical trials of new products and in obtaining FDA and other regulatory
approvals. One or more of these companies or institutions could succeed in
developing products or other technologies that are more effective than the
products and technologies that we have been or are developing, or which would
render our technology and products obsolete and non-competitive. Furthermore, if
we are permitted to commence commercial sales of any of our products, we will
also be competing, with respect to manufacturing efficiency and marketing, with
companies having substantially greater resources and experience in these areas.
LEGISLATIVE AND REGULATORY CHANGES AFFECTING THE HEALTH CARE INDUSTRY COULD
ADVERSELY AFFECT OUR BUSINESS.
There have been a number of federal and state proposals during the last
few years to subject the pricing of health care goods and services to government
control and to make other changes to the United States health care system. It is
uncertain which legislative proposals, if any, will be adopted (or when) or what
actions federal, state, or private payors for health care treatment and services
may take in response to any health care reform proposals or legislation. We
cannot predict the effect health care reforms may have on our business and we
can offer no assurances that any of these reforms will not have a material
adverse effect on that business.
WE MAY BE SUBJECT TO SIGNIFICANT PRODUCT LIABILITY CLAIMS AND LITIGATION.
Our business exposes us to potential product liability risks inherent
in the testing, manufacturing and marketing of human therapeutic products. We
presently have product liability insurance limited to $5,000,000 per incident.
If we were to be subject to a claim in excess of this coverage or to a claim not
covered by our insurance and the claim succeeded, we would be required to pay
the claim with our own limited resources, which could have a material adverse
effect on our business. In addition, liability or alleged liability could harm
the business by diverting the attention and resources of our management and by
damaging our reputation.
WE PRESENTLY HAVE LIMITED MARKETING AND SALES CAPABILITY AND WILL BE REQUIRED TO
DEVELOP SUCH CAPABILITIES AND TO ENTER INTO ALLIANCES WITH OTHERS POSSESSING
SUCH CAPABILITIES IN ORDER TO COMMERCIALIZE OUR PRODUCTS SUCCESSFULLY.
We have begun to commercialize and market our Prolieve Thermodilatation
system through Boston Scientific. Consequently, we are dependent upon Boston
Scientific for the successful introduction and marketing of our Prolieve system.
There can be no assurance that Boston Scientific will establish adequate sales
and distribution capabilities or be successful in gaining market acceptance for
Prolieve system. We intend to market our other products, if and when such
products are approved for commercialization by the FDA, through other strategic
alliances and distribution arrangements with third parties. There can be no
assurance that we will be able to establish such sales and marketing
capabilities successfully or successfully enter into third-party marketing or
distribution arrangements and, to the extent that we do enter into such
arrangements, we will be dependent, to some degree, on our marketing and
distribution partners. We have limited experience and capabilities in marketing,
distribution and direct sales, although we expect to attempt to recruit
experienced marketing and sales personnel as we pursue commercialization. In
attracting, establishing and maintaining a marketing and sales force or entering
into third-party marketing or distribution arrangements with other companies, we
expect to incur significant additional expense. There can be no assurance that,
to the extent we enter into any commercialization arrangements with third
parties as and when our other products or services receive FDA approval, such
third parties will establish adequate sales and distribution capabilities or be
successful in gaining market acceptance for our products and services. There
also can be no assurance that our direct sales, marketing, licensing and
distribution efforts would be successful or that revenue from such efforts would
exceed expenses.
13
WE DEPEND ON THIRD-PARTY SUPPLIERS TO PROVIDE US WITH COMPONENTS REQUIRED FOR
OUR PRODUCTS AND MAY NOT BE ABLE TO OBTAIN THESE COMPONENTS ON FAVORABLE TERMS
OR AT ALL.
We are not currently manufacturing any products, but are using our
facilities to assemble prototypes of the equipment for research and development
purposes. We currently purchase certain specialized microwave and thermometry
components and applicator materials and the catheter unit used for our clinical
trial products from single or limited source suppliers because of the small
quantities involved. While we have not experienced any significant difficulties
in obtaining these components, the loss of an important current supplier could
require that we obtain a replacement supplier, which could result in delays and
additional expense in being able to make prototype equipment available for
clinical trials and other research purposes. For our Prolieve equipment, we use
outside contractors to manufacture finished equipment and the disposable
catheter kit used in conjunction with the equipment. In turn, these suppliers
are dependent on single source and other components suppliers. Although we
believe that alternative sources of supply would be available if the need arose,
the loss of one or more of these suppliers would require that we obtain a
replacement source, which could result in delays and additional expense to
redesign the product to accept the replacement vendor.
WE HAVE NOT PAID DIVIDENDS IN THE PAST AND DO NOT INTEND TO DO SO FOR THE
FORESEEABLE FUTURE.
We have never paid cash dividends and do not anticipate paying cash
dividends on our common or preferred stock in the foreseeable future. Therefore,
our stockholders cannot achieve any degree of liquidity with respect to their
shares of Common Stock except by selling such shares.
THE EXERCISE OF OUR OUTSTANDING OPTIONS AND WARRANTS COULD RESULT IN SIGNIFICANT
DILUTION OF OWNERSHIP INTERESTS IN OUR COMMON STOCK OR OTHER CONVERTIBLE
SECURITIES.
As of April 30, 2004, we had outstanding and exercisable warrants and
options to purchase a total of 23,724,677 shares of our Common Stock at exercise
prices ranging from $0.25 to $5.00 per share (with a weighted average exercise
price of approximately $0.89 per share). In addition, we had outstanding but
unexercisable and unvested warrants and options to purchase a total of 1,965,000
shares of our Common Stock at exercise prices ranging from $0.40 to $1.50 per
share (with a weighted average exercise price of approximately $0.85 per share).
Some of the prices are below the current market price of our Common Stock, which
has ranged from a low of $0.40 to a high of $2.10 over the 20 trading days
ending April 30, 2004. If holders choose to exercise such warrants and options
at prices below the prevailing market price for the Common Stock, the resulting
purchase of a substantial number of shares of our Common would have a dilutive
effect on our stockholders and could adversely affect the market price of our
issued and outstanding Common Stock and convertible securities. In addition,
holders of these options and warrants who have the right to require registration
of the Common Stock under certain circumstances and who elect to require such
registration, or who exercise their options or warrants and then satisfy the
one-year holding period and other requirements of Rule 144 of the Securities
Act, will be able to sell in the public market shares of Common Stock purchased
upon such exercise.
IF THE PRICE OF OUR SHARES REMAINS LOW, WE MAY BE DELISTED BY THE AMERICAN STOCK
EXCHANGE AND BECOME SUBJECT TO SPECIAL RULES APPLICABLE TO LOW PRICED STOCKS
Our Common Stock currently trades on The American Stock Exchange (the
Amex). The Amex, as a matter of policy, will consider the suspension of trading
in, or removal from listing of, any stock when, in the opinion of the Amex, (i)
the financial condition and/or operating results of an issuer appear to be
unsatisfactory; (ii) it appears that the extent of public distribution or the
aggregate market value of the stock has become so reduced as to make further
dealings on the Amex inadvisable; (iii) the issuer has sold or otherwise
disposed of its principal operating assets; or (iv) the issuer has sustained
losses which are so substantial in relation to its overall operations or its
existing financial condition has become so impaired that it appears
questionable, in the opinion of the Amex, whether the issuer will be able to
continue operations and/or meet its obligations as they mature. For example, the
Amex will consider suspending dealings in or delisting the stock of an issuer if
the issuer has sustained losses from continuing operations and/or net losses in
its five most recent fiscal years. Another instance where the Amex would
consider suspension or delisting of a stock is if the stock has been selling for
a substantial period of time at a low price per share and the issuer fails to
effect a reverse split of such stock within a reasonable time after being
notified that the Amex deems such action to be appropriate We have sustained net
losses for our last five fiscal years (and beyond) and our Common Stock has been
trading at relatively low prices. Therefore, our Common Stock may be at risk for
delisting by the Amex.
Upon any such delisting, the Common Stock would become subject to the
penny stock rules of the SEC, which generally are applicable to equity
securities with a price of less than $5.00 per share (other than securities
registered on certain national securities
14
exchanges or quoted on the Nasdaq system, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prepared by the SEC that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with bid and ask
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customer's account. In addition, the penny
stock rules require that, prior to a transaction in a penny stock that is not
otherwise exempt from such rules, the broker-dealer must make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements are likely to have a material and adverse effect on
price and the level of trading activity in the secondary market for a stock that
becomes subject to the penny stock rules. If our Common Stock were to become
subject to the penny stock rules it is likely that the price of the Common Stock
would decline and that our stockholders would be likely to find it more
difficult to sell their shares.
OUR STOCK PRICE HAS BEEN, AND COULD BE, VOLATILE.
Market prices for our Common Stock and the securities of other medical,
high technology companies have been volatile. Our Common Stock has had a high
price of $0.40 and a low price of $2.10 in the 52-week period ending April 30,
2004. Factors such as announcements of technological innovations or new products
by us or by our competitors, government regulatory action, litigation, patent or
proprietary rights developments and market conditions for medical and high
technology stocks in general can have a significant impact on the market for our
Common Stock.
OUR STOCK HISTORICALLY HAS BEEN THINLY TRADED. THEREFORE, STOCKHOLDERS MAY NOT
BE ABLE TO SELL THEIR SHARES FREELY.
While our Common Stock is listed on the Amex, the volume of trading
historically has been relatively light. Although trading volume has increased
recently, there can be no assurance that this increased trading volume, our
historically light trading volume, or any trading volume whatsoever will be
sustained in the future. Therefore, there can be no assurance that our
stockholders will be able to sell their shares of our Common Stock at the time
or at the price that they desire, or at all.
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW COULD PREVENT
OR DELAY A CHANGE IN CONTROL.
Our Certificate of Incorporation and Bylaws may discourage, delay or
prevent a merger or acquisition that a stockholder may consider favorable by
authorizing the issuance of "blank check" preferred stock. The Board of
Directors may issue this preferred stock, on such terms as it determines,
without further stockholder approval. Therefore, the Board may issue such
preferred stock on terms unfavorable to a potential bidder in the event that is
opposes a merger or acquisition. In addition, our classified Board of Directors
may discourage such transactions by increasing the amount of time necessary to
obtain majority representation on the Board. We also have implemented a
stockholder rights plan and distributed rights to our stockholders. When these
rights become exercisable, these rights entitle their holders to purchase one
share of our Series C Junior Participating Preferred Stock at a price o f $4.46
per one ten-thousandth of a share of Series C Preferred Stock. If any person or
group acquires more than 15% of our Common Stock, the holders of rights (other
than the person or group crossing the 15% threshold) will be able to purchase,
in exchange for the $4.46 exercise price, $8.92 of our Common Stock or the stock
of any company into which we are merged. Because these rights may substantially
dilute stock ownership by a person or group seeking to take us over without the
approval of our Board of Directors, our rights plan could make it more difficult
for a person or group to take us over (or acquire significant ownership interest
in us) without negotiating with our Board regarding such a transaction. Certain
other provisions of our Bylaws and of Delaware law may also discourage, delay or
prevent a third party from acquiring or merging with us, even if such action
were beneficial to some, or even a majority, of our stockholders.
USE OF PROCEEDS
The Selling Stockholders will receive all of the net proceeds from the
sale of their respective Shares; we will not receive any proceeds from these
sales. The holders of the Warrants are under no obligation to exercise them at
any time or at all.
The exercise price for the Warrants is payable in cash (except that
Warrants to purchase 121,680 shares at $0.77 per share are subject to "cashless"
or "net" exercise provisions). If all of the Warrants (including those subject
to "cashless" exercise) are
15
exercised for cash, we will receive aggregate consideration of $4,504,032. We
intend to use any proceeds from exercise of the Warrants for working capital and
general corporate purposes.
RESALES BY SELLING STOCKHOLDERS
This Prospectus relates to the proposed resale by the Selling
Stockholders of the Shares, consisting of up to 8,652,441 shares of Common
Stock, and up to 4,723,698 shares of Common Stock issuable upon the exercise of
the Warrants. The following table sets forth, as of May 21, 2004, certain
information with respect to the persons for whom the Company is registering the
Shares for resale to the public. Except as indicated by footnote below, no such
person has had a material relationship or has held any position or office, with
the Company within the last three years and, to our knowledge, based on
information provided by the Selling Stockholders, no such person is a
broker-dealer or an affiliate of a broker-dealer. The Company will not receive
any of the proceeds from the sale of the Shares, but may receive up to
$4,604,032 upon the cash exercise of the Warrants.
SECURITIES SECURITIES
SECURITIES BENEFICIALLY OFFERED BENEFICIALLY OWNED
OWNED PRIOR TO OFFERING (1) HEREBY (2) AFTER OFFERING (3)
--------------------------- ---------- -------------------
COMMON COMMON
NAME OF SELLING STOCKHOLDER STOCK WARRANTS STOCK AMOUNT PERCENT
- ------------------------------------ --------- --------- --------- --------- -------
Silver Lake Investment Partners Ltd. 2,727,273 818,182 3,545,455 0 *
Gwynneth Gold Ltd. 550,000 165,000 715,000 0 *
Goldpac Investment Partners Ltd. 0 878,516 878,516 0 *
Zhitao He 2,750,000 825,000 3,575,000 0 *
Chan Wai 1,100,000 330,000 1,430,000 120,000 *
Sun Yiu Kwong 600,000 150,000 650,000 100,000 *
Liu Chi Kong 390,000 117,000 507,000 0 *
Ying Rong Shi 200,000 60,000 260,000 0 *
Tan Hong Jiu 100,000 30,000 130,000 0 *
Jacob l. Jacobson 194,076 0 194,074 0 *
Gloria Li 116,145 19,000 78,772 56,373 *
Alan J. Fenn 50,000 0 50,000 0 *
Kaijun Wu 12,320 0 12,320 0 *
John Mon (4) 348,288 1,160,000 600,000 908,288 *
Augustine Y. Cheung (5) 3,537,176 1,750,000 400,000 4,887,176 3%
Ira M. Weingarten 0 75,000 50,000 25,000 *
Steve Chizzik 0 50,000 50,000 0 *
Strategic Growth International, Inc. 0 450,000 250,000 200,000 *
- ----------
(1) We have computed "beneficial ownership" in accordance Rule 13d-3(d)
promulgated by the SEC under the Securities Exchange Act of 1934 for
purposes of this table. Therefore, the table reflects a person as
having "beneficial ownership" of shares of Common Stock if such person
has the right to acquire such shares within 60 days of May__, 2004. For
purposes of computing the percentage of outstanding shares of Common
Stock held by each person or group of persons named above, we have
assumed to be outstanding any security which such person or persons has
or have the right to acquire within that 60-day period. All of the
Warrants are currently exercisable and, therefore, the Selling
Stockholders may be deemed to be the beneficial owner of the shares of
Common Stock underlying such Warrants pursuant to Rule 13d-3(d).
However, securities that may be acquired within that 60-day period are
not deemed to be outstanding for purposes of computing the percentage
ownership of any other person. Notwithstanding the foregoing, for
purposes of this table, we have not, however, included the Shares
underlying warrants and registered hereby under the column "Securities
Beneficially Owned Prior to Offering--Common Stock." Instead, the
Shares are reflected under the column "Securities Offered Hereby."
Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the Company believes, based on
information supplied by such persons, that the persons named in this
table have sole voting and investment power with respect to all shares
of Common Stock which they beneficially own.
(2) Represents the maximum number of shares of Common Stock issuable to
each Selling Stockholder upon exercise in full of Warrants issued or
issuable thereto.
(3) Assumes the eventual sale of all Shares by each Selling Stockholder.
There can be no assurance that any Selling Stockholder will sell any or
all of the Shares owned thereby or issuable thereto.
(4) Until February 2004, Mr. Mon was a director of the Company and, until
May 2004, he served as corporate secretary. Mr. Mon has been, and
continues to be, a vice president of the Company.
(5) Dr. Cheung is a director and serves as president, chief executive
officer and chief scientific officer of the Company.
* Less than 1%.
16
PLAN OF DISTRIBUTION
The Selling Stockholders may, in their discretion, offer and sell
Shares from time to time on The American Stock Exchange or otherwise at prices
and on terms then prevailing at prices related to the then-current market price,
or at negotiated prices. The distribution of the Shares may be effected from
time to time in one or more transactions including, without limitation:
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o transactions involving block trades;
o purchases by a broker, dealer or underwriter as principal and
resale by that person for its own account under this Prospectus;
o put or call option transactions;
o privately negotiated transactions; or
o by any other legally available means.
In effecting sales, broker-dealers or agents engaged by the Selling
Stockholders may arrange for other broker-dealers or agents to participate. From
time to time, one or more of the Selling Stockholders may pledge, hypothecate or
grant a security interest in some or all of the Shares owned thereby, and the
pledgees, secured parties or persons to whom such securities have been
hypothecated shall, upon foreclosure in the event of default, be deemed to be
Selling Stockholders under this Prospectus. In addition, the Selling
Stockholders may from time to time sell short the Common Stock of the Company
and, in such instances, this Prospectus may be delivered in connection with such
short sale and the Shares offered hereby may be used to cover such short sale.
Sales of Selling Stockholders' Shares may also be made pursuant to Rule
144 under the Securities Act of 1933, where applicable. The Selling
Stockholders' Shares may also be offered in one or more underwritten offerings,
on a firm commitment or best efforts basis. The Company will receive no proceeds
from the sale of Shares by the Selling Stockholders, although it will receive
the exercise price upon any exercise of Warrants.
To the extent required under the Securities Act of 1933, the aggregate
amount of Selling Stockholders' Common Stock being offered and the terms of the
offering, the names of any such agents, brokers, dealers or underwriters and any
applicable commission with respect to a particular offer will be set forth in an
accompanying Prospectus supplement. Any underwriters, dealers, brokers or agents
participating in the distribution of the Shares may receive compensation in the
form of underwriting discounts, concessions, commissions or fees from a Selling
Stockholder and/or purchasers of Selling Stockholders' Shares, for whom they may
act. In addition, Selling Stockholders may be deemed to be underwriters under
the Securities Act and any profits on the sale of Shares by them may be deemed
to be discounts or commissions under the Securities Act. Selling Stockholders
may have other business relationships with the Company or its affiliates in the
ordinary course of business.
From time to time, each of the Selling Stockholders may transfer,
pledge, donate or assign their Shares to lenders, family members and others and
each of such persons will be deemed to be a Selling Stockholder for purposes of
this Prospectus. The number of Shares beneficially owned by those Selling
Stockholders who transfer, pledge, donate or assign Shares will decrease as and
when they take such actions. The plan of distribution for the Shares sold
hereunder will otherwise remain unchanged, except that the transferees,
pledgees, donees or other successors will be Selling Stockholders hereunder.
17
Without limiting the foregoing, in connection with distributions of
the Shares, a Selling Stockholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the Common
Stock in the course of hedging the positions they assume with such Selling
Stockholder. A Selling Stockholder may also enter into option or other
transactions with broker-dealers that involve the delivery of Shares to the
broker-dealers, who may then resell or otherwise transfer such Shares. A Selling
Stockholder may also lend or pledge Shares to a broker-dealer and the
broker-dealer may sell the Shares so borrowed or, upon default, may sell or
otherwise transfer the pledged Shares.
Under applicable rules and regulations under the Securities Exchange
Act, any person engaged in the distribution of the Common Stock may not bid for
or purchase shares of Common Stock during a period which commences one business
day (five business days, if the Company's public float is less than $25 million
or its average daily trading volume is less than $100,000) prior to such
person's participation in the distribution, subject to exceptions for certain
passive market making activities. In addition and without limiting the
foregoing, each Selling Stockholder will be subject to applicable provisions of
the Securities Exchange Act and the rules and regulations thereunder, including,
without limitation, Regulation M, which provisions may limit the timing of
purchases and sales of shares of the Company's Common Stock by such Selling
Stockholder.
The Company is bearing all costs relating to the registration of the
Shares (other than fees and expenses, if any, of counsel or other advisors to
the Selling Stockholders). Any commissions, discounts or other fees payable to
broker-dealers in connection with any sale of the Shares will be borne by the
Selling Stockholders selling such Shares.
The Company may indemnify the Selling Stockholders in certain
circumstances, against certain liabilities, including liabilities arising under
the Securities Act of 1933.
LEGAL MATTERS
The legality of the securities in this offering is being passed upon
for us by Anita J. Finkelstein, Esquire, our Vice President and General Counsel.
EXPERTS
Our financial statements at September 30, 2001, 2002 and 2003 and for
the years ended September 30, 2001, 2002 and 2003 are incorporated by referenced
into this Prospectus from our Annual Report on Form 10-K for the year ended
September 30, 2003 have been audited by Stegman & Co., independent accountants,
and are so incorporated by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
We estimate that our expenses to be paid in connection with the
offering (other than placement agent discounts, commissions and reasonable
expense allowances), all of which will be paid by the Company, will be as
follows:
SEC Registration Fee........................... $ 1,356
Accounting Fees and Expenses................... $ 500*
Printing and Engraving......................... $ 300*
Miscellaneous.................................. $ 1000*
-------
Total....................................... $ 3,116
=======
- -----
*These are estimated amounts.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is organized under the laws of the State of Delaware. Our
Certificate of Incorporation provides that we shall indemnify our current and
former directors and officers, and may indemnify our current and former
employees and agents, against any and all liabilities and expenses incurred in
connection with their services in those capacities to the maximum extent
permitted by Delaware law.
The Delaware General Corporation Law (the "DGCL") provides that a
Delaware corporation has the power generally to indemnify its current and former
directors, officers, employees and other agents (each, a "Corporate Agent")
against expenses and liabilities (including amounts paid in settlement) in
connection with any proceeding involving such person by reason of his being a
Corporate Agent, other than a proceeding by or in the right of the corporation,
if such person acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and, with respect to
any criminal proceeding, such person had no reasonable cause to believe his
conduct was unlawful.
In the case of an action brought by or in the right of the corporation,
indemnification of a Corporate Agent is permitted if such person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation. However, no indemnification is permitted in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation, unless and only to the extent that the
court in which such proceeding was brought shall determine upon application that
despite the adjudication of liability, but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to such indemnification.
To the extent that a Corporate Agent has been successful on the merits
or otherwise in the defense of such proceeding, whether or not by or in the
right of the corporation, or in the defense of any claim, issue or matter
therein, the corporation is required to indemnify such person for expenses in
connection therewith. Under the DGCL, the corporation may advance expenses
incurred by a Corporate Agent in connection with a proceeding, provided that the
Corporate Agent undertakes to repay such amount if it shall ultimately be
determined that such person is not entitled to indemnification. Our Certificate
of Incorporation requires us to advance expenses to any person entitled to
indemnification, provided that such person undertakes to repay the advancement
if it is determined in a final judicial decision from which there is no appeal
that such person is not entitled to indemnification.
The power to indemnify and advance the expenses under the DGCL does not
exclude other rights to which a Corporate Agent may be entitled to under the
Certificate of Incorporation, by laws, agreement, vote of stockholders or
disinterested directors or otherwise.
Our Certificate of Incorporation permits us to secure insurance on
behalf of our directors, officers, employees and agents for any expense,
liability or loss incurred in such capacities, regardless of whether the
Certificate of Incorporation or Delaware law would permit indemnification
against such expense, liability or loss.
II-1
The purpose of these provisions is to assist us in retaining qualified
individuals to serve as our directors, officers, employees and agents by
limiting their exposure to personal liability for serving as such.
ITEM 16. EXHIBITS.
EXHIBIT NO. DESCRIPTION
----------- -----------------------------------------------------
3.1.1 + Certificate of Incorporation of Celsion (the
"Company"), as amended, incorporated herein by
reference to Exhibit 3.1 to the Quarterly Report on
Form 10-Q of the Company for the transition period
from October 1, 2003 to December 31, 2003.
3.1.2 + Certificate of Ownership and Merger of Celsion
Corporation (a Maryland Corporation) into Celsion
(Delaware) Corporation (inter alia, changing the
Company's name to "Celsion Corporation" from "Celsion
(Delaware) Corporation), incorporated herein by
reference to Exhibit 3.1.3 to the Annual Report on
Form 10-K of the Company for the Year Ended September
30, 2000.
3.1.3 + Certificate of Designations of Series C Junior
Participating Preferred Stock of Celsion Corporation,
incorporated herein by reference to Exhibit 4.4 to
the Form S-3 Registration Statement (File No.
333-100638) filed October 18, 2002.
3.2 + By-laws of the Company, as amended, incorporated
herein by reference to Exhibit 3.2 to the Quarterly
Report on Form 10-Q of the Company for the transition
period from October 1, 2003 to December 31, 2003.
4.1 + Form of Common Stock Certificate, par value $0.01,
incorporated herein by reference to Exhibit 4.1 to
the Annual Report on Form 10-K of the Company for the
Year Ended September 30, 2001.
4.2 + Celsion Corporation and American Stock Transfer &
Trust Company Rights Agreement dated as of August 15,
2002, incorporated by reference to Exhibit 99.1 to
the Current Report on Form 8-K filed August 21, 2002.
4.3 + Agreement dated April 8, 2003 between the Company
and Strategic Growth International, Inc.
(incorporated by reference to Exhibit 4.5 of the
Registration Statement on Form S-3 filed on August
28, 2003).
4.4 Letter Agreement dated September 11, 2003 between the
Company and Goldpac Investment Partners Ltd
4.5 Letter Agreement dated October 1, 2003 between the
Company and Goldpac Investment Partners Ltd
4.6 Form of Warrant to Purchase Common Stock pursuant to
the Subscription Agreement of the Company dated
September 30, 2003 (the "September Subscription
Agreement").
4.7 Form of Finder's Warrant issued pursuant to the
September Subscription Agreement.
4.8 Letter Agreement dated December 3, 2003 between the
Company and Equity Communications [ab]
4.9 Form of Warrant to Purchase Common Stock pursuant to
the Term Sheet of the Company dated December 1, 2003
(the "December Term Sheet").
4.10 Form of Finder's Warrant issued pursuant to the
December Term.
4.11 Form of Warrant to Purchase Common Stock pursuant to
the Term Sheet of the Company dated January 1, 2004
(the "January Term Sheet").
4.12 Form of Finder's Warrant issued pursuant to the
January Term Sheet.
II-2
EXHIBIT NO. DESCRIPTION
----------- -----------------------------------------------------
4.13 + Form of Series 600 Warrant Issued to Certain
Employees and Directors on May 16, 1996 to Purchase
Common Stock of the Company , incorporated herein by
reference to Exhibit 10.17 to the Annual Report on
Form 10-K of the Company for the Year Ended September
30, 1998.
4.14 ++ Consulting Agreement Between Celsion and Gloria Li
Dated November 23, 2001.
4.15 Consulting Agreement Between Celsion and Jacob L.
Jacobson Dated October 1, 2003.
4.16 Letter to Alan J. Fenn dated February 1, 2003
4.17 Letter to Kaijun Wu dated December 1, 2002
5.1 ++ Opinion of Anita J. Finkelstein, Esquire re:
Legality.
23.1 Consent of Stegman & Company, independent public
accountants of the Company.
23.2 ++ Consent of Anita J. Finkelstein, Esquire (included
in Exhibit 5.1).
24.1 Power of Attorney (included in Signature Page).
+ Previously filed.
++ To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(A) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in this
registration statement or any material change to such information in the
registration statement;
provided, however, that paragraphs A(1)(i) and A(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act that are incorporated
by reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment to this registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(B) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(C) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised
II-3
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
SIGNATURES
Under the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Columbia, Maryland, on the 24th day of May 2004.
CELSION CORPORATION
By: /s/ Augustine Y. Cheung
-------------------------------------
Augustine Y. Cheung
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Augustine Y. Cheung and Anthony P.
Deasey, and each of them, as his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place, and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, or any
related registration statement that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their, or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Augustine Y. Cheung Director, President and Chief May 24, 2004
- ----------------------- Executive Officer (Principal
Augustine Y. Cheung Executive Officer)
/s/ Anthony P. Deasey Executive Vice May 24, 2004
- ----------------------- President--Finance
Anthony P. Deasey and Administration and Chief
Operating and Financial
Officer (Principal Financial
and Accounting Officer)
/s/ Max E. Link Chairman of the Board of May 24, 2004
- ----------------------- Directors
Max E. Link
/s/ Gary W. Pace Director May 24, 2004
- -----------------------
Gary W. Pace
/s/ Claude Tihon Director May 24, 2004
- -----------------------
Claude Tihon
/s/ Kris Venkat Director May 24, 2004
- -----------------------
Kris Venkat
II-5
EXHIBIT 4.4
GOLDPAC INVESTMENT PARTNERS LTD.
September 11, 2003
Celsion Corporation
102201 Old Columbia Road
Columbia MD USA 21046
Attention: Dr. Augustine Y. Cheung
President and Chief Executive Officer
RE: CELSION CORPORATION--INTRODUCTION OF
STRATEGIC CANADIAN AND HONG KONG INVESTORS
------------------------------------------
Dear Sir:
We refer to the various discussions with you recently and propose to act as an
advisor to Celsion Corporation (the "COMPANY") in respect of the introduction of
strategic investors in Canada and Hong Kong (the "ENGAGEMENT") on the terms and
conditions set forth in this letter agreement (this "AGREEMENT").
1. BACKGROUND INFORMATION
Based on our various discussions, we understand the following:
(A) The Company is a research and development company dedicated to
commercializing medical treatment systems, for cancer and
other diseases using focused heat technology delivered by
patented microwave technology,
(B) The Company currently is seeking up to US $800,800 through a
private placements abroad to fund its further development and
the commercialization of certain of its products
(collectively, the "FINANCING").
2. SCOPE OF SERVICES
Goldpac Investment Partners Ltd., a British Virgin Islands corporation
("GOLDPAC") shall act as an advisor to the Company with respect to potential
participation in the Financing by one or more investors in Canada and/or Hong
Kong. In its role as advisor, Goldpac will, at the request and subject to the
control of the Company, identify, on a "best efforts" basis, investors who are
residents of Canada and/or Hong Kong (or otherwise are non-resident aliens in
the United States) willing to make an aggregate investment of up to
US $3.0 million pursuant to the Financing and facilitate meetings between such
potential investors and Company representatives. In addition, to the extent that
the Company deems necessary and appropriate and so directs Goldpac, Goldpac will
arrange road shows in Hong Kong and/or Canada for such potential investors. All
activities of Goldpac will be conducted outside of the United States and all
investors identified or contacted by Goldpac will be either individuals who are
neither U.S. citizens, nor resident aliens of the U.S. or who are foreign
(non-U.S.) corporations or other entities not engaged in any U.S. trade or
business ("PERMITTED INVESTORS"). Anything to the contrary contained herein
notwithstanding, Celsion shall have the right, in its sole and absolute
discretion, to reject any proposed investment from any Permitted Investor for
any reason or for no reason.
3. FEE STRUCTURE
As compensation for its services hereunder, Celsion shall compensate
Goldpac as follows:
(A) The Company shall pay to Goldpac a Success Fee, in U.S.
dollars, in an amount equal to seven and one half percent
(7.5%) of the purchase price of any securities of Celsion
purchased by Permitted Investors introduced to the Company by
Goldpac.
(B) The Company will grant to Goldpac common stock purchase
warrants ("WARRANTS"), exercisable for a period of five (5)
years from the date of the final closing of the Financing, at
an exercise price equal to the price per common share paid by
the Permitted Investors. Goldpac shall be entitled to receive
Warrants to purchase nine (9) shares of the Company's Common
Stock, par value $0.01 per share, for each 100 shares acquired
in the Financing by each Permitted Investor introduced to the
Company by Goldpac pursuant hereto. Additionally, Goldpac
shall be entitled to receive Warrants to purchase nine (9)
shares of the Company's Common Stock, par value $0.01 per
share, for each warrant to purchase 100 shares acquired by
each Permitted Investor introduced to the Company by Goldpac
pursuant hereto.
4. TERM AND TERMINATION OF ENGAGEMENT
(A) Subject to Section 4(B) below, the Engagement will be for a
period of one (1) month commencing with the date of this
Agreement and will be subject to extension or renewal upon
mutual agreement by the parties.
(B) The Engagement may be terminated by the Company or by Goldpac
at any time, for any reason, upon written notice to that
effect to Goldpac or the Company, as the case may be;
provided, however, that Sections 3(A), 3(B), 7, 8 and 9 under
this Agreement shall survive any such termination and shall
remain in full force and effect.
5. RESPONSIBILITIES OF THE COMPANY
In agreeing to the terms of this letter, the Company undertakes to:
(A) Bear and pay all of its own professional fees and
out-of-pocket expenses, such as the fees of legal and other
financial advisors and the expenses such as printing,
translation, photocopying and issuance of press releases, if
any;
(B) Provide Goldpac with, and allow Goldpac to disclose to
potential Permitted Investors, the same information that the
Company makes available to Sterling, including, without
limitation, such number of copies of the Private Placement
Package prepared in connection with the Financing as
2
Goldpac reasonably may request; and
(C) Accept full responsibility for the accuracy of all information
and facts provided by the Company to Goldpac pursuant to
clause (B) above, and promptly notify Goldpac of any of any
material events or developments relating to the Company's
financial condition, business operation or prospects that have
not been previously disclosed to Goldpac.
6. REPRESENTATIONS AND WARRANTIES
(A) The Company hereby represents and warrants to Goldpac that, as
of the date hereof:
(1) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware. The Company has all necessary
corporate power and authority to own its assets and
to carry on its business as now being conducted and
presently proposed to be conducted. The Company is
duly qualified to do business as a foreign
corporation and is in good standing in each
jurisdiction in which its ownership or leasing of
assets, or the conduct of its business, makes such
qualification necessary, except where the failure to
be so qualified or in good standing would not have a
material adverse effect on the Company.
(2) The Company has all necessary corporate power and
authority to execute, deliver and carry out the terms
of this Agreement. All corporate action on the part
of the Company required for the lawful execution and
delivery of this Agreement has been taken. Upon
execution and delivery, this Agreement constitutes a
valid and binding obligation of the Company,
enforceable in accordance with its terms, except as
enforcement may be limited by insolvency and similar
laws affecting the enforcement of creditors' rights
generally and equitable; remedies, and except as the
indemnity Provisions or Section 7 this Agreement may
be limited by law.
(3) Neither the execution and delivery of, nor the
consummation by the Company of any transaction or
execution of any instrument contemplated by, this
Agreement has constituted or resulted in, or will
constitute or result in, a material default under or
breach or violation of any term or provision of the
Company's Bylaws, Certificate of Incorporation or of
any material contracts with third parties.
(B) Goldpac hereby represents and warrants to the Company that, as
of the date hereof:
(1) Goldpac is a corporation duly organized, validly
existing and in good standing under the laws of the
British Virgin Islands. Goldpac has all necessary
corporate power and authority to own its assets and
to carry on its business as now being conducted and
presently proposed to be conducted. Goldpac is duly
qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which its
ownership or leasing of assets, or the conduct of its
business, makes such qualification necessary, except
where the failure to be so qualified or in good
standing would not have a material adverse effect on
Goldpac.
(2) Goldpac has all necessary corporate power and
authority to execute, deliver and carry out the terms
of this Agreement. All corporate action on the part
of Goldpac required for the lawful execution and
delivery of this Agreement has been taken. Upon
execution and delivery, this Agreement constitutes a
valid and binding obligation of Goldpac, enforceable
in accordance with its terms, except as enforcement
may be
3
limited by insolvency and similar laws affecting the
enforcement of creditors' rights generally and
equitable remedies, and except as the indemnity
provisions of Section 7 of this Agreement may be
limited by law.
(3) Neither the execution and delivery of, nor the
consummation by Goldpac of any transaction or
execution of any instrument contemplated by, this
Agreement, has constituted or resulted in, or will
constitute or result in, a material default under or
breach or violation of any term or provision of
Goldpac's Bylaws, Certificate of Incorporation, other
constitutive documents, or material contracts with
third parties, or of the laws of the United States or
any jurisdiction thereof or of any non-U.S.,
jurisdiction or any rules or regulations thereunder.
Without limiting the generality of the foregoing,
Goldpac acknowledges and agrees that it is
responsible for compliance with all securities laws,
rules and regulations applicable to it or to the
Company or to the Company's securities by virtue of
the Financing, this Agreement or any agreement with
Permitted Investors entered into pursuant to or in
connection with this Agreement and Goldpac's
activities pursuant hereto and to the Engagement,
such rules and regulations to include, without
limitation any registration requirements applicable
to brokers, dealers, finders, issuer's agents or
others acting in a similar capacity.
7. INDEMNIFICATION AND CONTRIBUTION
(A) The Company will indemnify Goldpac and its officers,
directors, employees, authorized agents and representatives
(collectively, "Goldpac Representatives") against all claims,
damages, liability and litigation expenses (including
Goldpac's reasonable attorney fees and expenses) arising out
of the Company's activities hereunder, except as provided in
Section 7(B) below and to the extent that any claims, damages,
liability or expenses are found in a final judgment by a court
of competent jurisdiction to have resulted from Goldpac's
misconduct or negligence in performing the services described
above. The indemnity provisions contained in this Section 7(A)
will remain in full force and effect regardless of any
termination of this Agreement or the Engagement.
(B) Goldpac will indemnify the Company and its officers,
directors, employees, authorized agents and representatives
(collectively, "Company Representatives") against all claims,
damages, liability rind litigation expenses (including the
Company's reasonable attorney fees and expenses) arising out
of Goldpac's activities hereunder including, without
limitation, (i) any untrue statement or alleged untrue
statement of a material fact, made either orally or in writing
or any omission or alleged omission to state a material fact
by Goldpac or any Goldpac Representative in connection with
this Agreement or the Engagement, (ii) the failure of Goldpac
to comply with any laws of any jurisdiction applicable to it
by virtue of its activities pursuant this Agreement or the
Engagement or otherwise as contemplated by Section 6(B)(3)
hereof, or (iii) any violation of any securities laws, rules
and regulations applicable to Goldpac, to the Company or to
the Company's securities by virtue of this Agreement or any
agreement with any Permitted Investor entered into pursuant to
or in connection with this Agreement. The indemnity provisions
contained in this Section 7(B) will remain in full force and
effect regardless of any termination of this Agreement or the
Engagement.
(C) If for any reason the foregoing indemnity is unavailable to
Goldpac and the Goldpac Representatives on the one hand, or to
the Company and the Company Representatives on the other
(each, an "Indemnified Person") or is insufficient to hold the
Indemnified Person
4
harmless, then the party required to provide indemnification
hereunder (the "Indemnifying Person") shall contribute to the
amount paid or payable to the Indemnified Person as a result
of such claims, liability, loss or damage in such proportion
as is appropriate to reflect not only the relative benefits
received by the Indemnifying Person on the one hand and the
Indemnified Person on the other, but also the relative fault
of the Indemnifying Person on the one hand, and Indemnified
Person on the other, that result in such losses, claims,
damages or liability, as well as any relevant suitable
considerations. The contribution provisions contained in this
Section shall remain in full force and effect regardless of
the termination of this Agreement or the Engagement.
8. CONFIDENTIALITY
All information and documents received by Goldpac or Goldpac
Representatives shall be used by Goldpac solely for the purposes described in
this Agreement and in furtherance of the Engagement shall be held in the
strictest confidence, except for such information and documents that are
available to the general public through no act or omission of Goldpac or the
Goldpac Representatives or are required to be disclosed by applicable law. With
respect to disclosures required by law, prior to making any such disclosure
Goldpac will provide the Company with a written opinion of Goldpac's counsel to
the effect that such disclosure is required and will use its best efforts to
provide the Company with sufficient time to seek a protective order or otherwise
preserve the confidentiality of the subject information. In all events, Goldpac
shall disclose only such information as its counsel advises it, in a written
opinion, is legally required to be disclosed. If the Engagement is terminated,
Goldpac, upon written request of the Company, shall return to the Company all
documents concerning the Company received by Goldpac or the Goldpac
Representatives or developed or created by Goldpac or the Goldpac
Representatives on the basis of or containing information obtained from the
Company, except for documents that are or solely contain information then
available to the general public through no act of Goldpac or the Goldpac
Representatives.
9. GENERAL
(A) This Agreement shall be governed by the laws of the State of
Maryland governing contracts made and to be performed in such
state without giving effect to the principles of conflicts of
law.
(B) This Agreement shall be assignable by either party only upon
the prior written consent of the other party, provided,
however, that any such assignment (including, without
limitation, any assignment of any of the Warrants issuable
pursuant to Section 3(B) hereof) shall comply in all respects
with applicable US and other securities laws. Subject to the
foregoing, this Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their
respective representatives and permitted successors and
assignees.
(C) In the event that any one or more of the provisions contained
in this Agreement, or the application thereof to any person(s)
or under any circumstance(s), shall, for any reason, be found
by a regulatory body or court of competent jurisdiction to be
invalid, illegal or unenforceable, such regulatory body or
court shall have the power, and hereby is directed, to
substitute for or limit such provision(s) in order as closely
as possible to effectuate the original intent of the parties
with respect to such invalid, illegal or unenforceable
provision(s) and this Agreement generally and to so enforce
such substituted provision(s). Subject to the foregoing, the
invalidity, illegality or unenforceability of any one or more
of the provisions contained herein shall not affect the
validity of any other provision of this Agreement.
(D) This Agreement represents the entire understanding of the
parties pertaining to the subject matter hereof and supersedes
any and all prior agreements, understandings, negotiations and
5
discussions, whether written or oral, between the parties with
respect to such subject matter.
(E) No amendment, supplement, modification, waiver, termination,
rescission, discharge or cancellation of this Agreement or any
provision hereof shall be binding unless in writing and
executed by each of the parties hereto. No waiver of any
provision hereof or any default hereunder shall be deemed to
be, or shall constitute, a waiver of any other such provision
or default (whether or not similar) and no such. waiver shall
constitute a continuing waiver unless expressly so provided.
(F) Captions to and headings of the various provisions hereof are
solely .for the convenience of the parties, are not a part of
this agreement, and shall not be used for the interpretation
of or determination of the validity of this Agreement or any
term or provision hereof.
(G) Notices or other communications required or contemplated
hereby or in connection herewith shall be deemed adequately
given if in writing and delivered in person or by recognized
international courier for first possible delivery or facsimile
transmission (in the case of courier, notice to be deemed
received on the date following the date of delivery contracted
for and in the case of facsimile transmission on the date
following confirmation of successful transmission) or mailed
by certified mail, postage prepaid and return receipt
requested (such notice to be deemed received on the earlier of
the date of actual receipt or the fifth (5th) business day
following dispatch) as follows:
CELSION CORPORATION
Celsion Corporation
102201 Old Columbia Road
Columbia, MD USA 21046
Attention: Chief Financial Officer
Facsimile No. (410) 290-5394
GOLDPAC:
Goldpac Investment Partners Ltd.
Yaminj Building Market Sq.
Road Town Tortola
British Virgin Island
Attention: Mr. Joseph Tai
Facsimile No. 604 484 3225
or any other addresses of which either party shall notify the
other party in writing in accordance with the terms hereof.
(H) As the context requires, any term used herein in the singular
shall extend to and include the plural, any term used in the
plural shall extend to and include the singular and any term
used in either gender or the neuter shall extend to and
include each gender or be neutral.
(I) This Agreement may be executed in counterparts, each of which
when so executed and delivered shall constitute an original,
but all of such counterparts taken together shall constitute
one and the same instrument.
6
We very much look forward to being of service to you and should be
grateful if you could signify your agreement and acceptance of the above terms
of Engagement by signing and returning the enclosed copy of this letter to us.
Should you have any queries or require any further explanation, please do not
hesitate to contact the undersigned at 604-483-8878.
Agreed and accepted by:
For and on behalf of For and on behalf of
Goldpac Investment Partners Ltd. Celsion Corporation
/s/Joe Tai /s/Augustine Y. Cheung
- ----------------------------- -------------------------------
Signature Signature
Joe Tai Augustine Y. Cheung
- ----------------------------- -------------------------------
Print Name Print Name
Managing Director President & CEO
- ----------------------------- -------------------------------
Title Title
7
EXHIBIT 4.5
GOLDPAC INVESTMENT PARTNERS LTD.
October 1, 2003
Celsion Corporation
10220-L Old Columbia Road
Columbia MD USA 21046
Attention: Dr. Augustine Y. Cheung
President and Chief Executive Officer
RE: CELSION CORPORATION--INTRODUCTION OF
STRATEGIC CANADIAN AND HONG KONG INVESTORS
------------------------------------------
Dear Sir:
We refer to the various discussions with you recently and propose to act as an
advisor to Celsion Corporation (the "COMPANY") in respect of the introduction of
strategic investors in Canada and Hong Kong (the "ENGAGEMENT") on the terms and
conditions set forth in this letter agreement (this "AGREEMENT").
1. BACKGROUND INFORMATION
Based on our various discussions, we understand the following:
(A) The Company is a research and development company dedicated to
commercializing medical treatment systems, for cancer and
other diseases using focused heat technology delivered by
patented microwave technology,
(B) The Company currently is seeking up to US $8,000,000 through a
private placements abroad to fund its further development and
the commercialization of certain of its products
(collectively, the "FINANCING").
2. SCOPE OF SERVICES
Goldpac Investment Partners Ltd., a British Virgin Islands corporation
("GOLDPAC") shall act as an advisor to the Company with respect to potential
participation in the Financing by one or more investors in Canada and/or Hong
Kong. In its role as advisor, Goldpac will, at the request and subject to the
control of the Company, identify, on a "best efforts" basis, investors who are
residents of Canada and/or Hong Kong (or otherwise are non-resident aliens in
the United States) willing to make an aggregate investment of up to US $8.0
million pursuant to the Financing and facilitate meetings between such potential
investors and Company representatives. In addition, to the extent that the
Company deems necessary and appropriate and
so directs Goldpac, Goldpac will arrange road shows in Hong Kong and/or Canada
for such potential investors. All activities of Goldpac will be conducted
outside of the United States and all investors identified or contacted by
Goldpac will be either individuals who are neither U.S. citizens, nor resident
aliens of the U.S. or who are foreign (non-U.S.) corporations or other entities
not engaged in any U.S. trade or business ("PERMITTED INVESTORS"). Anything to
the contrary contained herein notwithstanding, Celsion shall have the right, in
its sole and absolute discretion, to reject any proposed investment from any
Permitted Investor for any reason or for no reason.
3. FEE STRUCTURE
As compensation for its services hereunder, Celsion shall compensate
Goldpac as follows:
(A) The Company shall pay to Goldpac a Success Fee, in U.S.
dollars, in an amount equal to seven and one half percent (8%)
of the purchase price of any securities of Celsion purchased
by Permitted Investors introduced to the Company by Goldpac.
(B) The Company will grant to Goldpac common stock purchase
warrants ("WARRANTS"), exercisable for a period of five (5)
years from the date of the final closing of the Financing, at
an exercise price equal to the price per common share paid by
the Permitted Investors. Goldpac shall be entitled to receive
Warrants to purchase eight (8) shares of the Company's Common
Stock, par value $0.01 per share, for each 100 shares acquired
in the Financing by each Permitted Investor introduced to the
Company by Goldpac pursuant hereto. Additionally, Goldpac
shall be entitled to receive Warrants to purchase eight (8)
shares of the Company's Common Stock, par value $0.01 per
share, for each warrant to purchase 100 shares acquired by
each Permitted Investor introduced to the Company by Goldpac
pursuant hereto.
4. TERM AND TERMINATION OF ENGAGEMENT
(A) Subject to Section 4(B) below, the Engagement will be for a
period of six (6) months commencing with the date of this
Agreement and will be subject to extension or renewal upon
mutual agreement by the parties.
(B) The Engagement may be terminated by the Company or by Goldpac
at any time, for any reason, upon written notice to that
effect to Goldpac or the Company, as the case may be;
provided, however, that Sections 3(A), 3(B), 7, 8 and 9 under
this Agreement shall survive any such termination and shall
remain in full force and effect.
5. RESPONSIBILITIES OF THE COMPANY
In agreeing to the terms of this letter, the Company undertakes to:
(A) Bear and pay all of its own professional fees and
out-of-pocket expenses, such as the fees of legal and other
financial advisors and the expenses such as printing,
translation, photocopying and issuance of press releases, if
any;
(B) Provide Goldpac with, and allow Goldpac to disclose to
potential Permitted Investors, the same information that the
Company makes available to Sterling, including, without
limitation, such number of copies of the Private Placement
Package prepared in connection with the Financing as Goldpac
reasonably may request; and
2
(C) Accept full responsibility for the accuracy of all information
and facts provided by the Company to Goldpac pursuant to
clause (B) above, and promptly notify Goldpac of any of any
material events or developments relating to the Company's
financial condition, business operation or prospects that have
not been previously disclosed to Goldpac.
6. REPRESENTATIONS AND WARRANTIES
(A) The Company hereby represents and warrants to Goldpac that, as
of the date hereof:
(1) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware. The Company has all necessary
corporate power and authority to own its assets and
to carry on its business as now being conducted and
presently proposed to be conducted. The Company is
duly qualified to do business as a foreign
corporation and is in good standing in each
jurisdiction in which its ownership or leasing of
assets, or the conduct of its business, makes such
qualification necessary, except where the failure to
be so qualified or in good standing would not have a
material adverse effect on the Company.
(2) The Company has all necessary corporate power and
authority to execute, deliver and carry out the terms
of this Agreement. All corporate action on the part
of the Company required for the lawful execution and
delivery of this Agreement has been taken. Upon
execution and delivery, this Agreement constitutes a
valid and binding obligation of the Company,
enforceable in accordance with its terms, except as
enforcement may be limited by insolvency and similar
laws affecting the enforcement of creditors' rights
generally and equitable; remedies, and except as the
indemnity Provisions or Section 7 this Agreement may
be limited by law.
(3) Neither the execution and delivery of, nor the
consummation by the Company of any transaction or
execution of any instrument contemplated by, this
Agreement has constituted or resulted in, or will
constitute or result in, a material default under or
breach or violation of any term or provision of the
Company's Bylaws, Certificate of Incorporation or of
any material contracts with third parties.
(B) Goldpac hereby represents and warrants to the Company that, as
of the date hereof:
(1) Goldpac is a corporation duly organized, validly
existing and in good standing under the laws of the
British Virgin Islands. Goldpac has all necessary
corporate power and authority to own its assets and
to carry on its business as now being conducted and
presently proposed to be conducted. Goldpac is duly
qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which its
ownership or leasing of assets, or the conduct of its
business, makes such qualification necessary, except
where the failure to be so qualified or in good
standing would not have a material adverse effect on
Goldpac.
(2) Goldpac has all necessary corporate power and
authority to execute, deliver and carry out the terms
of this Agreement. All corporate action on the part
of Goldpac required for the lawful execution and
delivery of this Agreement has been taken. Upon
execution and delivery, this Agreement constitutes a
valid and binding obligation of Goldpac, enforceable
in accordance with its terms, except as enforcement
may be limited by insolvency and similar laws
affecting the enforcement of creditors' rights
generally and equitable remedies, and except as the
indemnity provisions of Section 7
3
of this Agreement may be limited by law.
(3) Neither the execution and delivery of, nor the
consummation by Goldpac of any transaction or
execution of any instrument contemplated by, this
Agreement, has constituted or resulted in, or will
constitute or result in, a material default under or
breach or violation of any term or provision of
Goldpac's Bylaws, Certificate of Incorporation, other
constitutive documents, or material contracts with
third parties, or of the laws of the United States or
any jurisdiction thereof or of any non-U.S.,
jurisdiction or any rules or regulations thereunder.
Without limiting the generality of the foregoing,
Goldpac acknowledges and agrees that it is
responsible for compliance with all securities laws,
rules and regulations applicable to it or to the
Company or to the Company's securities by virtue of
the Financing, this Agreement or any agreement with
Permitted Investors entered into pursuant to or in
connection with this Agreement and Goldpac's
activities pursuant hereto and to the Engagement,
such rules and regulations to include, without
limitation any registration requirements applicable
to brokers, dealers, finders, issuer's agents or
others acting in a similar capacity.
7. INDEMNIFICATION AND CONTRIBUTION
(A) The Company will indemnify Goldpac and its officers,
directors, employees, authorized agents and representatives
(collectively, "Goldpac Representatives") against all claims,
damages, liability and litigation expenses (including
Goldpac's reasonable attorney fees and expenses) arising out
of the Company's activities hereunder, except as provided in
Section 7(B) below and to the extent that any claims, damages,
liability or expenses are found in a final judgment by a court
of competent jurisdiction to have resulted from Goldpac's
misconduct or negligence in performing the services described
above. The indemnity provisions contained in this Section 7(A)
will remain in full force and effect regardless of any
termination of this Agreement or the Engagement.
(B) Goldpac will indemnify the Company and its officers,
directors, employees, authorized agents and representatives
(collectively, "Company Representatives") against all claims,
damages, liability rind litigation expenses (including the
Company's reasonable attorney fees and expenses) arising out
of Goldpac's activities hereunder including, without
limitation, (i) any untrue statement or alleged untrue
statement of a material fact, made either orally or in writing
or any omission or alleged omission to state a material fact
by Goldpac or any Goldpac Representative in connection with
this Agreement or the Engagement, (ii) the failure of Goldpac
to comply with any laws of any jurisdiction applicable to it
by virtue of its activities pursuant this Agreement or the
Engagement or otherwise as contemplated by Section 6(B)(3)
hereof, or (iii) any violation of any securities laws, rules
and regulations applicable to Goldpac, to the Company or to
the Company's securities by virtue of this Agreement or any
agreement with any Permitted Investor entered into pursuant to
or in connection with this Agreement. The indemnity provisions
contained in this Section 7(B) will remain in full force and
effect regardless of any termination of this Agreement or the
Engagement.
(C) If for any reason the foregoing indemnity is unavailable to
Goldpac and the Goldpac Representatives on the one hand, or to
the Company and the Company Representatives on the other
(each, an "Indemnified Person") or is insufficient to hold the
Indemnified Person harmless, then the party required to
provide indemnification hereunder (the "Indemnifying Person")
shall contribute to the amount paid or payable to the
Indemnified Person as a result
4
of such claims, liability, loss or damage in such proportion
as is appropriate to reflect not only the relative benefits
received by the Indemnifying Person on the one hand and the
Indemnified Person on the other, but also the relative fault
of the Indemnifying Person on the one hand, and Indemnified
Person on the other, that result in such losses, claims,
damages or liability, as well as any relevant suitable
considerations. The contribution provisions contained in this
Section shall remain in full force and effect regardless of
the termination of this Agreement or the Engagement.
8. CONFIDENTIALITY
All information and documents received by Goldpac or Goldpac
Representatives shall be used by Goldpac solely for the purposes described in
this Agreement and in furtherance of the Engagement shall be held in the
strictest confidence, except for such information and documents that are
available to the general public through no act or omission of Goldpac or the
Goldpac Representatives or are required to be disclosed by applicable law. With
respect to disclosures required by law, prior to making any such disclosure
Goldpac will provide the Company with a written opinion of Goldpac's counsel to
the effect that such disclosure is required and will use its best efforts to
provide the Company with sufficient time to seek a protective order or otherwise
preserve the confidentiality of the subject information. In all events, Goldpac
shall disclose only such information as its counsel advises it, in a written
opinion, is legally required to be disclosed. If the Engagement is terminated,
Goldpac, upon written request of the Company, shall return to the Company all
documents concerning the Company received by Goldpac or the Goldpac
Representatives or developed or created by Goldpac or the Goldpac
Representatives on the basis of or containing information obtained from the
Company, except for documents that are or solely contain information then
available to the general public through no act of Goldpac or the Goldpac
Representatives.
9. GENERAL
(A) This Agreement shall be governed by the laws of the State of
Maryland governing contracts made and to be performed in such
state without giving effect to the principles of conflicts of
law.
(B) This Agreement shall be assignable by either party only upon
the prior written consent of the other party, provided,
however, that any such assignment (including, without
limitation, any assignment of any of the Warrants issuable
pursuant to Section 3(B) hereof) shall comply in all respects
with applicable US and other securities laws. Subject to the
foregoing, this Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their
respective representatives and permitted successors and
assignees.
(C) In the event that any one or more of the provisions contained
in this Agreement, or the application thereof to any person(s)
or under any circumstance(s), shall, for any reason, be found
by a regulatory body or court of competent jurisdiction to be
invalid, illegal or unenforceable, such regulatory body or
court shall have the power, and hereby is directed, to
substitute for or limit such provision(s) in order as closely
as possible to effectuate the original intent of the parties
with respect to such invalid, illegal or unenforceable
provision(s) and this Agreement generally and to so enforce
such substituted provision(s). Subject to the foregoing, the
invalidity, illegality or unenforceability of any one or more
of the provisions contained herein shall not affect the
validity of any other provision of this Agreement.
(D) This Agreement represents the entire understanding of the
parties pertaining to the subject matter hereof and supersedes
any and all prior agreements, understandings, negotiations and
discussions, whether written or oral, between the parties with
respect to such subject matter.
5
(E) No amendment, supplement, modification, waiver, termination,
rescission, discharge or cancellation of this Agreement or any
provision hereof shall be binding unless in writing and
executed by each of the parties hereto. No waiver of any
provision hereof or any default hereunder shall be deemed to
be, or shall constitute, a waiver of any other such provision
or default (whether or not similar) and no such. waiver shall
constitute a continuing waiver unless expressly so provided.
(F) Captions to and headings of the various provisions hereof are
solely .for the convenience of the parties, are not a part of
this agreement, and shall not be used for the interpretation
of or determination of the validity of this Agreement or any
term or provision hereof.
(G) Notices or other communications required or contemplated
hereby or in connection herewith shall be deemed adequately
given if in writing and delivered in person or by recognized
international courier for first possible delivery or facsimile
transmission (in the case of courier, notice to be deemed
received on the date following the date of delivery contracted
for and in the case of facsimile transmission on the date
following confirmation of successful transmission) or mailed
by certified mail, postage prepaid and return receipt
requested (such notice to be deemed received on the earlier of
the date of actual receipt or the fifth (5th) business day
following dispatch) as follows:
CELSION CORPORATION
Celsion Corporation
10220-L Old Columbia Road
Columbia, MD USA 21046
Attention: Chief Financial Officer
Facsimile No. (410) 290-5394
GOLDPAC:
Goldpac Investment Partners Ltd.
Yaminj Building Market Sq.
Road Town Tortola
British Virgin Island
Attention: Mr. Joseph Tai
Facsimile No. 604 484 3225
or any other addresses of which either party shall notify the
other party in writing in accordance with the terms hereof.
(H) As the context requires, any term used herein in the singular
shall extend to and include the plural, any term used in the
plural shall extend to and include the singular and any term
used in either gender or the neuter shall extend to and
include each gender or be neutral.
(I) This Agreement may be executed in counterparts, each of which
when so executed and delivered shall constitute an original,
but all of such counterparts taken together shall constitute
one and the same instrument.
We very much look forward to being of service to you and should be
grateful if you could signify your agreement and acceptance of the above terms
of Engagement by signing and returning the enclosed copy of
6
this letter to us. Should you have any queries or require any further
explanation, please do not hesitate to contact the undersigned at 604-483-8878.
Agreed and accepted by:
For and on behalf of For and on behalf of
Goldpac Investment Partners Ltd. Celsion Corporation
/s/Joe Tai /s/Augustine Y. Cheung
- ----------------------------- -------------------------------
Signature Signature
Joe Tai Augustine Y. Cheung
- ----------------------------- -------------------------------
Print Name Print Name
Managing Director President and CEO
- ----------------------------- -------------------------------
Title Title
7
EXHIBIT 4.6
Definitive
CORPORATION
FORM OF WARRANT
THE SECURITIES REPRESENTED HEREBY AND ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION THEREUNDER OR EXEMPTIONS FROM SUCH REGISTRATION
REQUIREMENTS. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER
OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS
IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Serial Number:
(REPLACING WARRANT #: JULY2003PPW-01 ISSUED TO SILVER LAKE ENTERPRISES, LLC)
CELSION CORPORATION
WARRANT TO PURCHASE SHARES OF COMMON STOCK
VOID AFTER ______________, 2008
1. Warrant to Purchase Common Stock.
1.1 Warrant to Purchase Shares. This warrant (this "Warrant")
certifies that for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, ______________(the "Warrant Holder") is
entitled, effective as of ________________, 2003, subject to the terms and
conditions of this Warrant, to purchase from Celsion Corporation, a Delaware
corporation (the "Company"), up to a total of ____________shares (the "Shares")
of Common Stock, par value $0.01 per share, of the Company (the "Common Stock"),
at the price of $1.20 per share (the "Exercise Price") prior to 5:00 p.m.
prevailing Eastern time on ___________, 2008 (the "Expiration Date"), subject to
earlier call by the Company as provided in Section 4 hereof (the "Call"). The
Warrant must be exercised, if at all, in whole or in part, any time on or before
the Expiration Date, subject to earlier Call by the Company. Unless the context
otherwise requires, the term "Shares" shall mean and include the Common Stock of
the Company and other securities and property at any time receivable or issuable
upon exercise of this Warrant. The term "Warrant" as used herein, shall include
this Warrant and any warrants delivered in substitution or exchange therefor as
provided herein.
Definitive
1.2 Adjustment of Exercise Price and Number of Shares. The
number and character of Shares issuable upon exercise of this Warrant (or any
shares of stock or other securities or property at the time receivable or
issuable upon exercise of this Warrant) and the Exercise Price therefor, are
subject to adjustment upon occurrence of the following events:
(a) Adjustment for Stock Splits, Stock Dividends,
Recapitalizations, etc. The Exercise Price of this Warrant and the number of
Shares issuable upon exercise of this Warrant each shall be proportionally
adjusted to reflect any stock dividend, stock split, reverse stock split,
combination of shares, reclassification, recapitalization or other similar event
altering the number of outstanding shares of the Company's Common Stock.
(b) Adjustment for Other Dividends and Distributions.
In case the Company shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive, a dividend or other
distribution with respect to the Common Stock payable in securities of the
Company then, and in each such case, the Warrant Holder, on exercise of this
Warrant at any time after the consummation, effective date or record date of
such event, shall receive, in addition to the Shares (or such other stock or
securities) issuable on such exercise prior to such date, the securities of the
Company to which such Warrant Holder would have been entitled upon such date if
such Warrant Holder had exercised this Warrant immediately prior thereto (all
subject to further adjustment as provided in this Warrant).
(c) Adjustment for Capital Reorganization,
Consolidation, Merger. If any capital reorganization of the capital stock of the
Company, or any consolidation or merger of the Company with or into another
corporation, or the sale of all or substantially all of the Company's assets to
another corporation shall be effected in such a way that holders of the
Company's Common Stock will be entitled to receive stock, securities or assets
with respect to or in exchange for the Company's Common Stock, then in each such
case the Warrant Holder, upon the exercise of this Warrant at any time after the
consummation of such capital reorganization, consolidation, merger, or sale,
shall be entitled to receive, in lieu of the stock or other securities and
property receivable upon the exercise of this Warrant prior to such
consummation, the stock or other securities or property to which such Warrant
Holder would have been entitled upon such consummation if such Warrant Holder
had exercised this Warrant immediately prior to the consummation of such capital
reorganization, consolidation, merger, or sale, all subject to further
adjustment as provided in this Section 1.2; and in each such case, the terms of
this Warrant shall be applicable to the shares of stock or other securities or
property receivable upon the exercise of this Warrant after such consummation.
2. Manner of Exercise.
2.1 Exercise Agreement. This Warrant may be exercised, in
whole or in part, on any business day on or prior to the Expiration Date,
subject to earlier Call by the Company. To exercise this Warrant, the Warrant
Holder must surrender to the Company this Warrant and deliver to the Company:
(a) a duly executed exercise agreement in the form attached hereto as Exhibit A,
or in such other form as may be approved by the Company from time to time (the
"Warrant Exercise Agreement"); (b) if applicable, a spousal consent in the form
attached hereto as Exhibit B (a "Spousal Consent"); and
2
Definitive
(c) payment in full of the Exercise Price for the number of Shares to be
purchased upon exercise hereof. If someone other than the Warrant Holder
exercises this Warrant, then such person must submit to the Company each of the
items set forth in clauses (a) through (c) of the foregoing sentence (to the
extent applicable) and, in addition, must submit documentation acceptable to the
Company that such person has the right to exercise this Warrant. Upon a partial
exercise, this Warrant shall be surrendered, and a new Warrant of like tenor for
purchase of the number of remaining Shares not previously purchased shall be
issued by the Company to the Warrant Holder. This Warrant shall be deemed to
have been exercised immediately prior to the close of business on the date of
its surrender or, if such date is not a business day, then as of the close of
business on the next succeeding business day, for exercise as provided above,
and the person entitled to receive the Shares issuable upon such exercise shall
be treated for all purposes as the holder of record of such Shares as of the
close of business on such deemed exercise date.
2.2 Limitations on Exercise. This Warrant may not be exercised
as to fewer than one hundred (100) Shares unless it is exercised as to all
Shares as to which this Warrant is then exercisable.
2.3 Payment. The Exercise Agreement shall be accompanied by
full payment of the Exercise Price for the Shares being purchased in cash (by
certified or cashiers check or wire transfer or other immediately available
funds) or, where permitted by law and provided that a public market for the
Company's stock exists, (a) through a "same day sale" commitment from the
Warrant Holder and a broker-dealer that is a member of the National Association
of Securities Dealers (an "NASD Dealer"), whereby the Warrant Holder irrevocably
elects to exercise this Warrant and to sell a portion of the Shares so purchased
to pay for the Exercise Price and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise Price directly to the
Company or (b) through a "margin" commitment from the Warrant Holder and an NASD
Dealer, whereby the Warrant Holder irrevocably elects to exercise this Warrant
and to pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise Price and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company.
2.4 Tax Withholding. Prior to the issuance of the Shares upon
exercise of this Warrant, the Warrant Holder must pay or provide for any
applicable federal or state withholding obligations of the Company.
2.5 Issuance of Shares. Provided that the Exercise Agreement,
the spousal consent, if necessary, and payment have been received by the Company
as provided in Section 2.3 hereof, the Company shall issue the Shares (adjusted
as provided herein) registered in the name of the Warrant Holder, the Warrant
Holder's authorized assignee, or the Warrant Holder's legal representative, and
shall deliver one or more certificates representing the Shares as the Warrant
Holder reasonably may request with the appropriate legends affixed thereto.
3. Registration of the Shares. The Shares are subject to registration
under the Securities Act of 1933, as amended pursuant to Section 4 of the
Subscription Agreement entered into between the Company and the Warrant Holder
in connection with the sale and purchase of this Warrant (the "Subscription
Agreement").
3
Definitive
4. Redemption. The Company, at its sole discretion, may, at any time
and from time to time after the date hereof, Call, redeem and cancel all or any
part of the outstanding Warrants upon the payment of consideration consisting of
$0.0001 per Share for each Share subject to a Warrant redeemed and cancelled;
provided, however, that any such redemptions and cancellations may be made by
the Company only upon thirty (30) calendar days' prior written notice (the
"Redemption Date" being the close of business on the thirtieth (30th) day
following the date the notice is deemed to be given to Warrant Holders pursuant
to Section 9 hereof or, if such day is not a business day, then the close of
business on the next succeeding business day) and only if the closing sales
price for a share of the Company's Common Stock as reported on The American
Stock Exchange or similar national market has been equal to or greater than
$2.75 for any period of at least twenty (20) consecutive trading days commencing
on or after the date hereof; and provided further that the holder of any Warrant
subject to such redemption and cancellation may exercise such Warrant at any
time prior to the expiration of the thirty (30)-day notice period; and provided
further that the Company's right to redeem and cancel the Warrant shall be
suspended in the event the shelf registration statement required under Section 4
of the Subscription Agreement is subject to a stop order or is otherwise not in
effect or if a Warrant Holder is advised under Section 4(c) of the Subscription
Agreement that the prospectus thereto contains a material misstatement or
omission during any portion of the thirty (30)-day notice period, with such
suspension to terminate and the Company's right to redeem and cancel to be
reinstated on the day following the day on which (i) a registration statement
covering the Shares is effective and not subject to any stop orders and (ii) the
Company has delivered to the Warrant Holder a prospectus covering the Shares of
such Warrant Holder under Section 4(c) of the Subscription Agreement. The notice
period shall then be extended for a period equal to the number of days during
the notice period during which registration was not effective or the prospectus
was not available or contained a material misstatement or omission. If less than
all of the outstanding Warrants are Called, redeemed and cancelled, Warrants
shall be Called, redeemed and cancelled on a pro rata basis.
5. Compliance with Laws and Regulations. The exercise of this Warrant
and the issuance and transfer of Shares shall be subject to compliance by the
Company and the Warrant Holder with all applicable requirements of federal and
state securities laws and with all applicable requirements of any stock exchange
and/or over-the-counter market on which the Company's Common Stock may be listed
at the time of such issuance or transfer.
6. Transfer and Exchange. This Warrant and the rights hereunder may not
be transferred in whole or in part without the Company's prior written consent,
which consent shall not be unreasonably withheld, and may not be transferred
unless such transfer complies with all applicable securities laws. If a transfer
of all or part of this Warrant is permitted as provided in the preceding
sentence, then this Warrant and all rights hereunder may be transferred, in
whole or in part, on the books of the Company or its agent maintained for such
purpose at the principal office of the Company or its agent, as the case may be,
by the Warrant Holder hereof in person or by duly authorized attorney, upon
surrender of this Warrant properly endorsed and upon payment of any necessary
transfer tax or other governmental charge imposed upon such transfer. Upon any
permitted partial transfer, the Company will issue and deliver to the Warrant
Holder a new Warrant or Warrants of like tenor with respect to the portion of
the Warrant not so transferred. Each taker and holder of this Warrant or any
portion hereof, by taking or holding the same,
4
Definitive
consents and agrees to be bound by the terms, conditions, representations and
warranties hereof, including the registration provisions contained in Section 4
of the Subscription Agreement, (and as a condition to any transfer of this
Warrant the transferee shall execute a Subscription Agreement or such other
document of instrument as the Company may require confirming the same), and,
when this Warrant shall have been so endorsed, the person in possession of this
Warrant may be treated by the Company, and all other persons dealing with this
Warrant, as the absolute owner hereof for any purpose and as the person entitled
to exercise the rights represented hereby, any notice to the contrary
notwithstanding; provided, however that until a transfer of this Warrant is duly
registered on the books of the Company or its agent, the Company may treat the
holder of this Warrant as the owner of this Warrant for all purposes.
7. Privileges of Stock Ownership. The Warrant Holder shall not have any
of the rights of a shareholder with respect to any Shares until such time, if
any, as the Warrant Holder exercises this Warrant and pays the Exercise Price in
accordance with the terms of Section 2 hereof and complies with any other
applicable provisions of this Agreement.
8. Entire Agreement. The Warrant Exercise Agreement attached as Exhibit
A hereto and, to the extent applicable, the Spousal Consent attached as Exhibit
B hereto, are incorporated herein by reference. This Warrant, the Warrant
Exercise Agreement, the Spousal Consent, to the extent applicable, the
Representations and Warranties of the Warrant Holder, as Investor, set forth in
the Subscription Agreement and the Subscription Agreement otherwise for the
purposes and to the extent set forth herein, constitute the entire agreement of
the parties and supersede all prior undertakings and agreements with respect to
the subject matter hereof.
9. Notices. Any notice required to be given or delivered to the Company
under the terms of this Warrant shall be in writing and addressed to the
Secretary of the Company at its principal corporate offices. Any notice required
to be given or delivered to the Warrant Holder shall be in writing and addressed
to the Warrant Holder at the address indicated below or at such other address as
such Warrant Holder may designate in writing from time to time to the Company.
All notices shall be deemed to have been given or delivered: upon personal
delivery; five (5) calendar days after deposit in the United States mail by
certified or registered mail (return receipt requested) with postage thereon
prepaid; one (1) business day after deposit for next business day delivery with
any reputable return receipt express courier (prepaid); or one (1) business day
after transmission by fax or telecopier with confirmation of transmission
thereof.
10. Successors and Assigns. This Warrant shall be binding upon and
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer set forth herein, this Warrant shall be binding
upon and inure to the benefit of the Warrant Holder and the Warrant Holder's
heirs, executors, administrators, legal representatives, successors and
permitted assigns.
11. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Maryland as such laws are applied to
agreements between Maryland residents entered into and to be performed entirely
within Maryland.
5
Definitive
12. Acceptance. The Warrant Holder has read and understands the terms
of this Warrant, and accepts this Warrant subject to all the terms and
conditions hereof. The Warrant Holder acknowledges that there may be adverse tax
consequences upon exercise of this Warrant or disposition of the Shares and that
the Warrant Holder should consult a tax adviser prior to such exercise or
disposition.
[Signature Page Follows.]
6
Definitive
COMPANY SIGNATURE
-----------------
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
Chief Financial Officer as of ________, 2003.
CELSION CORPORATION
Signed:
---------------------------------------------------
Printed: Anthony P. Deasey
--------------------------------------------------
Title: Executive Vice President-Finance and Administration,
----------------------------------------------------
Chief Financial Officer
-----------------------------------------------------
Address: 10220-L Old Columbia Road
Columbia, Maryland 21046-1785
WARRANT HOLDER SIGNATURE
IN WITNESS WHEREOF, the Warrant Holder has executed this Warrant or has caused
this Warrant to be executed by its __________ as of ___________ ____, 2003.
INDIVIDUAL WARRANT HOLDER:
Signed:
---------------------------------------------
Printed:
--------------------------------------------
Address:
--------------------------------------------
WARRANT HOLDER THAT IS AN ENTITY
Name of Entity:
-------------------------------------
Signed:
---------------------------------------------
Printed:
--------------------------------------------
Title:
----------------------------------------------
Address:
--------------------------------------------
--------------------------------------------
--------------------------------------------
[SIGNATURE PAGE TO WARRANT]
7
Definitive
EXHIBIT A
CELSION CORPORATION
WARRANT EXERCISE AGREEMENT
CELSION CORPORATION
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The Warrant Holder hereby elects to purchase the number of shares (the
"Shares") of the Common Stock, par value $0.01 per share, of Celsion Corporation
(the "Company"), as set forth below, pursuant to that certain Warrant dated as
of the date set forth below (the "Warrant"), the terms and conditions of which
are hereby incorporated by reference herein (please print):
Warrant Holder:
----------------------------------------------------------------
Social Security or Tax I.D. No.:
-----------------------------------------------
Address:
-----------------------------------------------------------------------
Warrant Date:
------------------------------------------------------------------
Date of Exercise:
--------------------------------------------------------------
Exercise Price Per Share:
------------------------------------------------------
Number of Shares Subject to Exercise and Purchase:
-----------------------------
Total Exercise Price:
----------------------------------------------------------
Exact Name of Title to Shares:
-------------------------------------------------
The Warrant Holder hereby delivers to the Company the Total Exercise
Price as follows (check and complete as appropriate):
1. in cash in the amount of $_______, receipt of which is acknowledged
by the Company;
2. through a "same day sale commitment" from the Warrant Holder and the
broker named below in the amount of $_________ and substantially in the form
attached hereto as Attachment 1; or
3. through a "margin commitment" from the Warrant Holder and the broker
named below in the amount of $_________ and substantially in the form attached
hereto as Attachment 2.
Broker: Brokerage Firm:
Tax Consequences. THE COMPANY IS UNDER NO OBLIGATION TO REPORT THE
EXERCISE OF THIS WARRANT TO THE INTERNAL REVENUE SERVICE OR ANY TAXING AUTHORITY
OF ANY STATE, LOCAL OR OTHER JURISDICTION. THE WARRANT HOLDER
A-1
Definitive
UNDERSTANDS THAT HE, SHE OR IT MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT
OF THE WARRANT HOLDER'S PURCHASE OR DISPOSITION OF THE SHARES. THE WARRANT
HOLDER REPRESENTS THAT HE, SHE OR IT HAS CONSULTED WITH ANY TAX CONSULTANT(S)
THE WARRANT HOLDER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT THE WARRANT HOLDER IS NOT RELYING ON THE
COMPANY FOR ANY TAX ADVICE.
- -------------------------------------
Name of Warrant Holder
- -------------------------------------
Signature of Warrant Holder
- -------------------------------------
Printed Name
- -------------------------------------
Title
A-2
Definitive
EXHIBIT B
CELSION CORPORATION
SPOUSAL CONSENT
TO
WARRANT EXERCISE AGREEMENT
The undersigned spouse of the Warrant Holder has read, understands, and
hereby approves the Warrant Exercise Agreement between the Warrant Holder and
the Company (the "Agreement"). In consideration of the Company's granting the
Warrant Holder the right to purchase the Shares as set forth in the Agreement,
the undersigned hereby agrees to be bound irrevocably by the Agreement and
further agrees that any community property interest shall similarly be bound by
the Agreement. The undersigned hereby appoints the Warrant Holder as his or her
attorney in fact with respect to any amendment or exercise of any rights under
the Agreement.
Date:
------------------ ------------------------------------
Signature of Warrant Holder's Spouse
Address:
---------------------------
---------------------------
---------------------------
B-1
Definitive
ATTACHMENT 1
SAME DAY SALE COMMITMENT
--------------, -------
Celsion Corporation
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to sell immediately
_________ of the Number of Shares (the "Same Day Sale Shares") through the
undersigned broker (the "Broker") and for the Broker to pay directly to the
Company from the proceeds from such sale $__________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to sell through the Broker the Same
Day Sale Shares and unconditionally authorizes the Company or its transfer agent
to deliver certificates representing the Same Day Sale Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Same Day Sale Shares, the Exercise
Price by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
- ----------------------------- ------------------------------
(Name) (Name of Firm)
- ----------------------------- ------------------------------
(Signature) (Signature)
- ----------------------------- ------------------------------
(Printed Name) (Printed Name)
- ----------------------------- ------------------------------
(Title) (Title)
Definitive
ATTACHMENT 2
MARGIN COMMITMENT
--------------, -------
CELSION CORPORATION
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to pledge immediately
________ of the Number of Shares (the "Margin Shares") through the undersigned
broker (the "Broker") as security for a loan from the Broker and for the Broker
to pay directly to the Company $________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to pledge to the Broker the Margin
Shares and unconditionally authorizes the Company or its transfer agent to
deliver certificates representing the Margin Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Margin Shares, the Exercise Price
by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
- ----------------------------- ------------------------------
(Name) (Name of Firm)
- ----------------------------- ------------------------------
(Signature) (Signature)
- ----------------------------- ------------------------------
(Printed Name) (Printed Name)
- ----------------------------- ------------------------------
(Title) (Title)
Definitive Copy
EXHIBIT 4.7
SERIAL NUMBER:
CELSION CORPORATION
FORM OF FINDER'S WARRANT
THE SECURITIES REPRESENTED HEREBY AND ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION THEREUNDER OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
CELSION CORPORATION
WARRANT TO PURCHASE SHARES OF COMMON STOCK
VOID AFTER SEPTEMBER______, 2008
1. Warrant to Purchase Common Stock.
1.1 Warrant to Purchase Shares. This warrant (this "Warrant")
certifies that for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, ______________ (the "Warrant Holder") is
entitled, effective as of September ______, 2003, subject to the terms and
conditions of this Warrant, to purchase from Celsion Corporation, a Delaware
corporation (the "Company"), up to a total of __________ shares (the "Shares")
of Common Stock, par value $0.01 per share, of the Company (the "Common Stock"),
at the price of $0.77 per share (the "Exercise Price") prior to 5:00 p.m.
prevailing Eastern time on September _____, 2008 (the "Expiration Date"),
subject to earlier call by the Company as provided in Section 4 hereof (the
"Call"). The Warrant must be exercised, if at all, in whole or in part, any time
on or before the Expiration Date, subject to earlier Call by the Company. Unless
the context otherwise requires, the term "Shares" shall mean and include the
Common Stock of the Company and other securities and property at any time
receivable or issuable upon exercise of this Warrant. The term "Warrant" as used
herein, shall include this Warrant and any warrants delivered in substitution or
exchange therefor as provided herein.
Definitive Copy
1.2 Adjustment of Exercise Price and Number of Shares. The number
and character of Shares issuable upon exercise of this Warrant (or any shares of
stock or other securities or property at the time receivable or issuable upon
exercise of this Warrant) and the Exercise Price therefor, are subject to
adjustment upon occurrence of the following events:
(a) Adjustment for Stock Splits, Stock Dividends,
Recapitalizations, etc. The Exercise Price of this Warrant and the number of
Shares issuable upon exercise of this Warrant each shall be proportionally
adjusted to reflect any stock dividend, stock split, reverse stock split,
combination of shares, reclassification, recapitalization or other similar event
altering the number of outstanding shares of the Company's Common Stock.
(b) Adjustment for Other Dividends and Distributions. In case
the Company shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive, a dividend or other
distribution with respect to the Common Stock payable in securities of the
Company then, and in each such case, the Warrant Holder, on exercise of this
Warrant at any time after the consummation, effective date or record date of
such event, shall receive, in addition to the Shares (or such other stock or
securities) issuable on such exercise prior to such date, the securities of the
Company to which such Warrant Holder would have been entitled upon such date if
such Warrant Holder had exercised this Warrant immediately prior thereto (all
subject to further adjustment as provided in this Warrant).
(c) Adjustment for Capital Reorganization, Consolidation,
Merger. If any capital reorganization of the capital stock of the Company, or
any consolidation or merger of the Company with or into another corporation, or
the sale of all or substantially all of the Company's assets to another
corporation shall be effected in such a way that holders of the Company's Common
Stock will be entitled to receive stock, securities or assets with respect to or
in exchange for the Company's Common Stock, then in each such case the Warrant
Holder, upon the exercise of this Warrant at any time after the consummation of
such capital reorganization, consolidation, merger, or sale, shall be entitled
to receive, in lieu of the stock or other securities and property receivable
upon the exercise of this Warrant prior to such consummation, the stock or other
securities or property to which such Warrant Holder would have been entitled
upon such consummation if such Warrant Holder had exercised this Warrant
immediately prior to the consummation of such capital reorganization,
consolidation, merger, or sale, all subject to further adjustment as provided in
this Section 1.2; and in each such case, the terms of this Warrant shall be
applicable to the shares of stock or other securities or property receivable
upon the exercise of this Warrant after such consummation.
2. Manner of Exercise.
2.1 Exercise Agreement. This Warrant may be exercised, in whole
or in part, on any business day on or prior to the Expiration Date, subject to
earlier Call by the Company. To exercise this Warrant, the Warrant Holder must
surrender to the Company this Warrant and deliver to the Company: (a) a duly
executed exercise agreement in the form attached hereto as Exhibit A, or in such
other form as may be approved by the Company from time to time (the "Warrant
Exercise Agreement"); (b) if applicable, a spousal consent in the form attached
hereto as Exhibit B (a "Spousal Consent"); and
2
Definitive Copy
(c) payment in full of the Exercise Price for the number of Shares to be
purchased upon exercise hereof in accordance with Section 2.3 hereof. If someone
other than the Warrant Holder exercises this Warrant, then such person must
submit to the Company each of the items set forth in clauses (a) through (c) of
the foregoing sentence (to the extent applicable) and, in addition, must submit
documentation acceptable to the Company that such person has the right to
exercise this Warrant. Upon a partial exercise, this Warrant shall be
surrendered, and a new Warrant of like tenor for purchase of the number of
remaining Shares not previously purchased shall be issued by the Company to the
Warrant Holder. This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender or, if such date is
not a business day, then as of the close of business on the next succeeding
business day, for exercise as provided above, and the person entitled to receive
the Shares issuable upon such exercise shall be treated for all purposes as the
holder of record of such Shares as of the close of business on such deemed
exercise date.
2.2 Limitations on Exercise. This Warrant may not be exercised as to
fewer than one hundred (100) Shares unless it is exercised as to all Shares as
to which this Warrant is then exercisable.
2.3 Payment.
(a) Cash; Same Day Sale; Margin Commitment. Except as otherwise
provided in Paragraph (b) of this Section 2.3, the Exercise Agreement shall be
accompanied by full payment of the Exercise Price for the Shares being purchased
in cash (by certified or cashiers' check or wire transfer or other immediately
available funds) or, where permitted by law and provided that a public market
for the Company's stock exists, (a) through a "same day sale" commitment from
the Warrant Holder and a broker-dealer that is a member of the National
Association of Securities Dealers (an "NASD Dealer"), whereby the Warrant Holder
irrevocably elects to exercise this Warrant and to sell a portion of the Shares
so purchased to pay for the Exercise Price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price
directly to the Company or (b) through a "margin" commitment from the Warrant
Holder and an NASD Dealer, whereby the Warrant Holder irrevocably elects to
exercise this Warrant and to pledge the Shares so purchased to the NASD Dealer
in a margin account as security for a loan from the NASD Dealer in the amount of
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company.
(b) Net Exercise. Notwithstanding any provisions herein to the
contrary, if the per share fair market value of the Common Stock is greater than
the Exercise Price (at the date of calculation as set forth below, which date
shall be the date of surrender of this Warrant or, if such date is not a
business day, then as of the close of business on the next succeeding business
day), the Holder may elect to receive Shares equal to the net value (as
determined below) of this Warrant by surrender of this Warrant at the principal
office of the Company together with the properly Warrant Exercise Agreement
reflecting such election, in which event the Company shall issue to the Holder a
number of shares of Common Stock computed using the following formula:
3
Definitive Copy
Y (A-B)
X=------
A
Where X = the number of Shares to be issued to the Holder
Y = the number of Shares purchasable under the Warrant
A = the fair market value of one Share (at the date of calculation)
B = the Exercise Price (as adjusted to the date of calculation)
For purposes of the above calculation, the fair market value of one Share shall
be determined by the Company's Board of Directors in good faith; provided,
however, that where there exists a public market for the Company's Common Stock
at the time of such exercise, the fair market value per Share shall be equal to
the average of last reported sale prices of the Common Stock or the closing
prices quoted on The American Stock Market or on any other exchange on which the
Common Stock is listed, whichever is applicable, for the five (5) trading days
prior to the date of determination of fair market value or, if the Common Stock
is not then traded on an exchange, then average of the closing bid and asked
prices of the Common Stock quoted in the Over-The-Counter Market Summary for
such five- (5)-day period.
2.4 Tax Withholding. Prior to the issuance of the Shares upon
exercise of this Warrant, the Warrant Holder must pay or provide for any
applicable federal or state withholding obligations of the Company.
2.5 Issuance of Shares. Provided that the Exercise Agreement,
the spousal consent, if necessary, and payment have been received by the Company
as provided in Section 2.3 hereof, the Company shall issue the Shares (adjusted
as provided herein) registered in the name of the Warrant Holder, the Warrant
Holder's authorized assignee, or the Warrant Holder's legal representative, and
shall deliver one or more certificates representing the Shares as the Warrant
Holder reasonably may request with the appropriate legends affixed thereto.
3. Registration of the Shares. The Shares are subject to
registration under the Securities Act of 1933, as amended pursuant to Section 4
of the Subscription Agreement entered into between the Company and the Warrant
Holder in connection with the issuance and acquisition of this Warrant (the
"Subscription Agreement").
4. Redemption. The Company, at its sole discretion, may, at any time
and from time to time after the date hereof, call, redeem and cancel ("Call")
all or any part of the outstanding Warrants upon the payment of consideration
consisting of $0.0001 per Share for each Share subject to a Warrant redeemed and
cancelled; provided, however, that any such redemptions and cancellations may be
made by the Company only upon thirty (30) calendar days' prior written notice
(the "Redemption Date" being the close of business on the thirtieth (30th) day
following the date the notice is deemed to be given to Warrant Holders pursuant
to Section 9 hereof or, if such day is not a business day, then the close of
business on
4
Definitive Copy
the next succeeding business day) and only if the closing sales price for a
share of the Company's Common Stock as reported on The American Stock Exchange
or similar national market has been equal to or greater than $2.75 for any
period of at least twenty (20) consecutive trading days commencing on or after
the date hereof; and provided further that the holder of any Warrant subject to
such redemption and cancellation may exercise such Warrant at any time prior to
the expiration of the thirty (30)-day notice period; and provided further that
the Company's right to redeem and cancel the Warrant shall be suspended in the
event the shelf registration statement required under Section 4 of the
Subscription Agreement is subject to a stop order or is otherwise not in effect
or if a Warrant Holder is advised under Section 4(c) of the Subscription
Agreement that the prospectus thereto contains a material misstatement or
omission during any portion of the thirty (30)-day notice period, with such
suspension to terminate and the Company's right to redeem and cancel to be
reinstated on the day following the day on which (i) a registration statement
covering the Shares is effective and not subject to any stop orders and (ii) the
Company has delivered to the Warrant Holder a prospectus covering the Shares of
such Warrant Holder under Section 4(c) of the Subscription Agreement. The notice
period shall then be extended for a period equal to the number of days during
the notice period during which registration was not effective or the prospectus
was not available or contained a material misstatement or omission. If less than
all of the outstanding Warrants are Called, redeemed and cancelled, Warrants
shall be Called, redeemed and cancelled on a pro rata basis.
5. Compliance with Laws and Regulations. The exercise of this
Warrant and the issuance and transfer of Shares shall be subject to compliance
by the Company and the Warrant Holder with all applicable requirements of
federal and state securities laws and with all applicable requirements of any
stock exchange and/or over-the-counter market on which the Company's Common
Stock may be listed at the time of such issuance or transfer.
6. Transfer and Exchange. This Warrant and the rights hereunder may
not be transferred in whole or in part without the Company's prior written
consent, which consent shall not be unreasonably withheld, and may not be
transferred unless such transfer complies with all applicable securities laws.
If a transfer of all or part of this Warrant is permitted as provided in the
preceding sentence, then this Warrant and all rights hereunder may be
transferred, in whole or in part, on the books of the Company or its agent
maintained for such purpose at the principal office of the Company or its agent,
as the case may be, by the Warrant Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant properly endorsed and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. Upon any permitted partial transfer, the Company will issue and
deliver to the Warrant Holder a new Warrant or Warrants of like tenor with
respect to the portion of the Warrant not so transferred. Each taker and holder
of this Warrant or any portion hereof, by taking or holding the same, consents
and agrees to be bound by the terms, conditions, representations and warranties
hereof, including the registration provisions contained in Section 4 of the
Subscription Agreement, (and as a condition to any transfer of this Warrant the
transferee shall execute a Subscription Agreement or such other document of
instrument as the Company may require confirming the same), and, when this
Warrant shall have been so endorsed, the person in possession of this Warrant
may be treated by the Company, and all other persons dealing with this Warrant,
as the absolute owner hereof for any purpose and as the person entitled to
exercise the rights represented hereby, any notice to the contrary
notwithstanding; provided, however
5
that until a transfer of this Warrant is duly registered on the books of the
Company or its agent, the Company may treat the holder of this Warrant as the
owner of this Warrant for all purposes.
7. Privileges of Stock Ownership. The Warrant Holder shall not have
any of the rights of a shareholder with respect to any Shares until such time,
if any, as the Warrant Holder exercises this Warrant and pays the Exercise Price
in accordance with the terms of Section 2 hereof and complies with any other
applicable provisions of this Agreement.
8. Entire Agreement. The Warrant Exercise Agreement attached as
Exhibit A hereto and, to the extent applicable, the Spousal Consent attached as
Exhibit B hereto, are incorporated herein by reference. This Warrant, the
Warrant Exercise Agreement, the Spousal Consent, to the extent applicable, the
Representations and Warranties of the Warrant Holder, as Investor, set forth in
the Subscription Agreement and the Subscription Agreement otherwise for the
purposes and to the extent set forth herein, constitute the entire agreement of
the parties and supersede all prior undertakings and agreements with respect to
the subject matter hereof.
9. Notices. Any notice required to be given or delivered to the
Company under the terms of this Warrant shall be in writing and addressed to the
Secretary of the Company at its principal corporate offices. Any notice required
to be given or delivered to the Warrant Holder shall be in writing and addressed
to the Warrant Holder at the address indicated below or at such other address as
such Warrant Holder may designate in writing from time to time to the Company.
All notices shall be deemed to have been given or delivered: upon personal
delivery; five (5) calendar days after deposit in the United States mail by
certified or registered mail (return receipt requested) with postage thereon
prepaid; one (1) business day after deposit for next business day delivery with
any reputable return receipt express courier (prepaid); or one (1) business day
after transmission by fax or telecopier with confirmation of transmission
thereof.
10. Successors and Assigns. This Warrant shall be binding upon and
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer set forth herein, this Warrant shall be binding
upon and inure to the benefit of the Warrant Holder and the Warrant Holder's
heirs, executors, administrators, legal representatives, successors and
permitted assigns.
11. Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Maryland as such laws are applied to
agreements between Maryland residents entered into and to be performed entirely
within Maryland.
12. Acceptance. The Warrant Holder has read and understands the
terms and provisions of this Warrant, and accepts this Warrant subject to all
the terms and conditions hereof. The Warrant Holder acknowledges that there may
be adverse tax consequences upon exercise of this Warrant or disposition of the
Shares and that the Warrant Holder should consult a tax adviser prior to such
exercise or disposition.
[Signature Page Follows.]
6
Definitive Copy
COMPANY SIGNATURE
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
Chief Financial Officer as of September ______, 2003.
CELSION CORPORATION
Signed:
------------------------------------
Printed: Anthony P. Deasey
----------------------------------
Title: Executive Vice President of
------------------------------------
Finance and Administration,
------------------------------------
Chief Financial Officer
------------------------------------
Address: 10220-I Old Columbia Road
Columbia, Maryland 21046-1785
WARRANT HOLDER SIGNATURE
IN WITNESS WHEREOF, the Warrant Holder has executed this Warrant or has caused
this Warrant to be executed by its ____________________ as of September _____,
2003.
INDIVIDUAL WARRANT HOLDER:
Signed:
-----------------------------------
Printed:
----------------------------------
Address:
----------------------------------
WARRANT HOLDER THAT IS AN ENTITY
Name of Entity:
----------------------
Signed:
------------------------------
Printed:
-----------------------------
Title:
-------------------------------
Address:
-----------------------------
[SIGNATURE PAGE TO WARRANT]
7
Definitive Copy
EXHIBIT A
CELSION CORPORATION
WARRANT EXERCISE AGREEMENT
CELSION CORPORATION
10220-I Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The Warrant Holder hereby elects to purchase the number of shares (the
"Shares") of the Common Stock, par value $0.01 per share, of Celsion Corporation
(the "Company"), as set forth below, pursuant to that certain Warrant dated as
of the date set forth below (the "Warrant"), the terms and conditions of which
are hereby incorporated by reference herein (please print):
Warrant Holder:
-----------------------------------------------------------------
Social Security or Tax I.D. No.:
------------------------------------------------
Address:
------------------------------------------------------------------------
Warrant Date:
-------------------------------------------------------------------
Date of Exercise:
---------------------------------------------------------------
Exercise Price Per Share:
-------------------------------------------------------
Number of Shares Subject to Exercise and Purchase:
------------------------------
Total Exercise Price:
-----------------------------------------------------------
Exact Name of Title to Shares:
-------------------------------------------------
The Warrant Holder hereby delivers to the Company the Total Exercise
Price as follows (circle and complete as appropriate):
1. in cash in the amount of $_______, receipt of which is acknowledged
by the Company;
2. through a "same day sale commitment" from the Warrant Holder and the
broker named below in the amount of $_________ and substantially in the form
attached hereto as Attachment 1; or
3. through a "margin commitment" from the Warrant Holder and the broker
named below in the amount of $_________ and substantially in the form attached
hereto as Attachment 2.
Broker: Brokerage Firm:
4. through the "net exercise" procedure set forth in Section 4.2 of the
Agreement.
A-1
Definitive Copy
Tax Consequences. THE COMPANY IS UNDER NO OBLIGATION TO REPORT THE
EXERCISE OF THIS WARRANT TO THE INTERNAL REVENUE SERVICE OR ANY TAXING AUTHORITY
OF ANY STATE, LOCAL OR OTHER JURISDICTION. THE WARRANT HOLDER UNDERSTANDS THAT
HE, SHE OR IT MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF THE WARRANT
HOLDER'S PURCHASE OR DISPOSITION OF THE SHARES. THE WARRANT HOLDER REPRESENTS
THAT HE, SHE OR IT HAS CONSULTED WITH ANY TAX CONSULTANT(S) THE WARRANT HOLDER
DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND
THAT THE WARRANT HOLDER IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.
- -------------------------------------
Name of Warrant Holder
- -------------------------------------
Signature of Warrant Holder
- -------------------------------------
Printed Name
- -------------------------------------
Title
Definitive Copy
EXHIBIT B
CELSION CORPORATION
SPOUSAL CONSENT
TO
WARRANT EXERCISE AGREEMENT
The undersigned spouse of the Warrant Holder has read, understands, and
hereby approves the Warrant Exercise Agreement between the Warrant Holder and
the Company (the "Agreement"). In consideration of the Company's granting the
Warrant Holder the right to purchase the Shares as set forth in the Agreement,
the undersigned hereby agrees to be bound irrevocably by the Agreement and
further agrees that any community property interest shall similarly be bound by
the Agreement. The undersigned hereby appoints the Warrant Holder as his or her
attorney in fact with respect to any amendment or exercise of any rights under
the Agreement.
Date:
------------- -------------------------------------
Signature of Warrant Holder's Spouse
Address:
-----------------------------
-----------------------------
-----------------------------
B-1
Definitive Copy
ATTACHMENT 1
SAME DAY SALE COMMITMENT
--------------, -------
Celsion Corporation
10220-I Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to sell immediately
_________ of the Number of Shares (the "Same Day Sale Shares") through the
undersigned broker (the "Broker") and for the Broker to pay directly to the
Company from the proceeds from such sale $__________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to sell through the Broker the Same
Day Sale Shares and unconditionally authorizes the Company or its transfer agent
to deliver certificates representing the Same Day Sale Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Same Day Sale Shares, the Exercise
Price by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
- ----------------------- -----------------------
(Name) (Name of Firm)
- ----------------------- -----------------------
(Signature) (Signature)
- ----------------------- -----------------------
(Printed Name) (Printed Name)
- ----------------------- -----------------------
(Title) (Title)
Definitive Copy
ATTACHMENT 2
MARGIN COMMITMENT
--------------, -------
CELSION CORPORATION
10220-I Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to pledge immediately
________ of the Number of Shares (the "Margin Shares") through the undersigned
broker (the "Broker") as security for a loan from the Broker and for the Broker
to pay directly to the Company $________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to pledge to the Broker the Margin
Shares and unconditionally authorizes the Company or its transfer agent to
deliver certificates representing the Margin Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Margin Shares, the Exercise Price
by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
- ----------------------- -----------------------
(Name) (Name of Firm)
- ----------------------- -----------------------
(Signature) (Signature)
- ----------------------- -----------------------
(Printed Name) (Printed Name)
- ----------------------- -----------------------
(Title) (Title)
EXHIBIT 4.8
Agreement between Celsion and EC
Page 1
December 3, 2003
Mr. Anthony Deasey
Chief Financial Officer
Celsion Corporation
10220-I Old Columbia Road
Columbia, MD 21046
Dear Tony:
This letter will confirm the following agreement and understanding between
Celsion Corporation (Celsion) and Equity Communications LLC, (EC) with respect
to the following:
1.) Celsion shall retain EC and EC agrees to be retained by Celsion as its
Financial Public Relations Counsel for a period of one (1) year commencing
December 5, 2003 and ending on December 4, 2004. A total professional fee of
Thirty-Six Thousand ($36,000) Dollars shall be payable for the one (1) year
services, which payments shall be due in increments of Three Thousand ($3,000)
Dollars per month.
2.) In addition to the compensation described in paragraph one above, Celsion
agrees to grant to EC and/or its assigns a non-qualified stock option ("The
Option") to purchase hundred thousand (100,000) shares of Celsion common stock,
at a strike price to be mutually determined by the parties.
(2a) The Option shall be fully and immediately vested.
(2b) The Option shall be exercisable for a period of five years beginning
December 5, 2003, and ending December 5, 2008.
(2c) In the event the shares underlying the Option are not currently
registered with the SEC, Celsion agrees to include these shares in its
next registration statement at the earliest possible date, and to
register the underlying shares at no cost to EC.
(2d) On or before January 31, 2004, Celsion shall deliver a document to
EC that reflects the terms and conditions described above, including a
strike price that has been mutually determined by the parties.
Agreement between Celsion and EC
Page 2
3.) Celsion may terminate this agreement upon presentation of written notice to
EC effective December 5, 2004. If this agreement it is notterminated at that
time, it shall automatically continue on month to month basis thereafter.
4.) Celsion agrees to reimburse EC for direct costs incurred by it on Celsion's
behalf for long distance telephone charges, photocopying, fax transmissions,
postage, messenger and courier service, express delivery service and comparable
items. Such costs will be itemized in a monthly invoice to Celsion and will not
exceed $750 per month in the aggregate without the express approval of a Celsion
officer.
(4a.) The following items would, if required, be rebilled to the Company
only as authorized, and include a standard service fee of 17.64%:
printing, production, package distribution, mailing list development and
maintenance, art work, consultants, photography, and visual
presentations. EC will not engage such vendors or undertake to provide
such services without the prior written approval of Celsion.
5.) The cost of travel, at coach-class rates, will be reimbursed by Celsion and
all travel commitments involving costs to be so reimbursed will be approved by
Celsion in advance. Where possible, transportation arrangements involving
service for Celsion will be made by a travel agent designated by the Company,
and such transportation will be billed directly to Celsion by the agent. In the
event Mr. Weingarten or Mr. Chizzik must fly cross-country utilizing red-eye
service, they shall be entitled to fly business class, or first class if
business class is not available using the least possible airfare, such as
frequent flyer upgrades, etc.
6.) EC, in consideration of the remuneration stated above, agrees to provide
comprehensive financial public relation services for Celsion, to include
introductions to various security dealers, investment advisors, analysts, and
other members of the financial community; organization of and participation in
meetings with prospective investors and their representatives; press releases
where appropriate and subject to the Company's review and approval; responding
to shareholder inquiries; editorial assistance in the development of discussion
materials, business plans and shareholder letters as may be appropriate; and
assistance as may be needed in helping Celsion to clarify and implement its long
term financial objectives.
Agreement between Celsion and EC
Page 3
Cooperation by both parties to insure uninterrupted communications is presumed.
Celsion agrees to keep EC continuously informed of its progress; to supply
information necessary to produce releases, letters and reports in a timely
manner, and to review such documents for accuracy and completeness before their
dissemination to the public.
7.) Representations and Procedures:
(7a.) Each person executing this agreement has the full right, power, and
authority to enter into this Agreement on behalf of the party for whom
they have executed this Agreement, and the full right, power, and
authority to execute any and all necessary instruments in connection with
this Agreement, and to fully bind such party to the terms and conditions
and obligations of this Agreement.
(7b.) This agreement, together with any and all exhibits, shall
constitute the entire agreement between the parties with respect to the
subject matter hereof and supersedes any and all prior or contemporaneous
oral and written agreements and discussions between or among any of them.
The parties hereto acknowledge and agree that there are no conditions,
covenants, agreements and understandings between or among any of them
except as set forth in this Agreement. This Agreement may be amended only
by a further writing signed by all parties hereto.
(7c.) Venue, in the event of litigation, shall be in the State of
California, County of Santa Barbara or in the State of Maryland in any
federal or state court located in the greater Baltimore area. The losing
party agrees to pay all reasonable legal costs of the prevailing party,
including attorney's fees up to a maximum of $6,000.
(7d.) Celsion hereby agrees and consents at its sole cost and expense to
indemnify, and hold EC and/or Ira Weingarten and/or Steve Chizzik
harmless from liability arising out of any legal or administrative action
in which EC and/or Ira Weingarten and/or Steve Chizzik is named and/or
which is brought against EC which directly or indirectly arises out of
any misstatement or omission of a material fact in any information,
verbal representation, or written documentation furnished to EC by
Celsion, which is incorporated, relied upon, or is utilized in any manner
by EC in drafting press releases and/or other financially and publicly
oriented communications.
Agreement between Celsion and EC
Page 4
(7e.) This Agreement may be executed either as single document or in one
or more counterparts, each of which shall be deemed an original and all
of which, taken together, shall constitute one and the same instrument.
Execution of this Agreement by facsimile signature shall be acceptable,
and each party agrees to provide the original executed pages to the other
party within 10 days.
(7f.) Any notice required to be given pursuant to this agreement shall be
deemed given and served when such notice is deposited in the United
States Mail, first class, certified or registered, and addressed to the
principal offices of the parties as they appear on this Agreement, unless
a written change of address notification has been sent and received.
Notice may also be given by overnight express service or by fax
transmission confirmed by delivery of a duplicate copy of such fax notice
by overnight express service or by first class mail.
Sincerely yours,
/s/Ira Weingarten
Equity Communications
By Ira Weingarten
President
Accepted by:
By: Anthony P. Deasey EXP/CFO Client
------------------------------------------------------
Signature Title
Date: 12/3/2003
EXHIBIT 4.9
Definitive
CORPORATION
FORM OF WARRANT
THE SECURITIES REPRESENTED HEREBY AND ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION THEREUNDER OR EXEMPTIONS FROM SUCH REGISTRATION
REQUIREMENTS. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER
OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS
IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Serial Number:
CELSION CORPORATION
WARRANT TO PURCHASE SHARES OF COMMON STOCK
VOID AFTER DECEMBER 12, 2008
1. Warrant to Purchase Common Stock.
1.1 Warrant to Purchase Shares. This warrant (this "Warrant")
certifies that for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, _________________ (the "Warrant Holder") is
entitled, effective as of DECEMBER 12, 2003, subject to the terms and conditions
of this Warrant, to purchase from Celsion Corporation, a Delaware corporation
(the "Company"), up to a total of __________________ shares (the "Shares") of
Common Stock, par value $0.01 per share, of the Company (the "Common Stock"), at
the price of $1.25 per share (the "Exercise Price") prior to 5:00 p.m.
prevailing Eastern time on DECEMBER 12, 2008 (the "Expiration Date"), subject to
earlier call by the Company as provided in Section 4 hereof (the "Call"). The
Warrant must be exercised, if at all, in whole or in part, any time on or before
the Expiration Date, subject to earlier Call by the Company. Unless the context
otherwise requires, the term "Shares" shall mean and include the Common Stock of
the Company and other securities and property at any time receivable or issuable
upon exercise of this Warrant. The term "Warrant" as used herein, shall include
this Warrant and any warrants delivered in substitution or exchange therefor as
provided herein.
1.2 Adjustment of Exercise Price and Number of Shares. The
number and character of Shares issuable upon exercise of this Warrant (or any
shares of stock or other securities or property at the time receivable or
issuable upon exercise of this Warrant) and the Exercise Price therefor, are
subject to adjustment upon occurrence of the following events:
Definitive
(a) Adjustment for Stock Splits, Stock Dividends,
Recapitalizations, etc. The Exercise Price of this Warrant and the number of
Shares issuable upon exercise of this Warrant each shall be proportionally
adjusted to reflect any stock dividend, stock split, reverse stock split,
combination of shares, reclassification, recapitalization or other similar event
altering the number of outstanding shares of the Company's Common Stock.
(b) Adjustment for Other Dividends and Distributions.
In case the Company shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive, a dividend or other
distribution with respect to the Common Stock payable in securities of the
Company then, and in each such case, the Warrant Holder, on exercise of this
Warrant at any time after the consummation, effective date or record date of
such event, shall receive, in addition to the Shares (or such other stock or
securities) issuable on such exercise prior to such date, the securities of the
Company to which such Warrant Holder would have been entitled upon such date if
such Warrant Holder had exercised this Warrant immediately prior thereto (all
subject to further adjustment as provided in this Warrant).
(c) Adjustment for Capital Reorganization,
Consolidation, Merger. If any capital reorganization of the capital stock of the
Company, or any consolidation or merger of the Company with or into another
corporation, or the sale of all or substantially all of the Company's assets to
another corporation shall be effected in such a way that holders of the
Company's Common Stock will be entitled to receive stock, securities or assets
with respect to or in exchange for the Company's Common Stock, then in each such
case the Warrant Holder, upon the exercise of this Warrant at any time after the
consummation of such capital reorganization, consolidation, merger, or sale,
shall be entitled to receive, in lieu of the stock or other securities and
property receivable upon the exercise of this Warrant prior to such
consummation, the stock or other securities or property to which such Warrant
Holder would have been entitled upon such consummation if such Warrant Holder
had exercised this Warrant immediately prior to the consummation of such capital
reorganization, consolidation, merger, or sale, all subject to further
adjustment as provided in this Section 1.2; and in each such case, the terms of
this Warrant shall be applicable to the shares of stock or other securities or
property receivable upon the exercise of this Warrant after such consummation.
2. Manner of Exercise.
2.1 Exercise Agreement. This Warrant may be exercised, in
whole or in part, on any business day on or prior to the Expiration Date,
subject to earlier Call by the Company. To exercise this Warrant, the Warrant
Holder must surrender to the Company this Warrant and deliver to the Company:
(a) a duly executed exercise agreement in the form attached hereto as Exhibit A,
or in such other form as may be approved by the Company from time to time (the
"Warrant Exercise Agreement"); (b) if applicable, a spousal consent in the form
attached hereto as Exhibit B (a "Spousal Consent"); and (c) payment in full of
the Exercise Price for the number of Shares to be purchased upon exercise
hereof. If someone other than the Warrant Holder exercises this Warrant, then
such person must submit to the Company each of the items set forth in clauses
(a) through (c) of the foregoing sentence (to the extent applicable) and, in
addition, must submit documentation acceptable to the Company that such person
has the right to exercise this Warrant. Upon a partial exercise, this Warrant
shall be surrendered, and a new
2
Definitive
Warrant of like tenor for purchase of the number of remaining Shares not
previously purchased shall be issued by the Company to the Warrant Holder. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender or, if such date is not a business day,
then as of the close of business on the next succeeding business day, for
exercise as provided above, and the person entitled to receive the Shares
issuable upon such exercise shall be treated for all purposes as the holder of
record of such Shares as of the close of business on such deemed exercise date.
2.2 Limitations on Exercise. This Warrant may not be exercised
as to fewer than one hundred (100) Shares unless it is exercised as to all
Shares as to which this Warrant is then exercisable.
2.3 Payment. The Exercise Agreement shall be accompanied by
full payment of the Exercise Price for the Shares being purchased in cash (by
certified or cashiers check or wire transfer or other immediately available
funds) or, where permitted by law and provided that a public market for the
Company's stock exists, (a) through a "same day sale" commitment from the
Warrant Holder and a broker-dealer that is a member of the National Association
of Securities Dealers (an "NASD Dealer"), whereby the Warrant Holder irrevocably
elects to exercise this Warrant and to sell a portion of the Shares so purchased
to pay for the Exercise Price and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise Price directly to the
Company or (b) through a "margin" commitment from the Warrant Holder and an NASD
Dealer, whereby the Warrant Holder irrevocably elects to exercise this Warrant
and to pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise Price and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company.
2.4 Tax Withholding. Prior to the issuance of the Shares upon
exercise of this Warrant, the Warrant Holder must pay or provide for any
applicable federal or state withholding obligations of the Company.
2.5 Issuance of Shares. Provided that the Exercise Agreement,
the spousal consent, if necessary, and payment have been received by the Company
as provided in Section 2.3 hereof, the Company shall issue the Shares (adjusted
as provided herein) registered in the name of the Warrant Holder, the Warrant
Holder's authorized assignee, or the Warrant Holder's legal representative, and
shall deliver one or more certificates representing the Shares as the Warrant
Holder reasonably may request with the appropriate legends affixed thereto.
3. Registration of the Shares. The Shares are subject to registration
under the Securities Act of 1933, as amended pursuant to Section 4 of the
Subscription Agreement entered into between the Company and the Warrant Holder
in connection with the sale and purchase of this Warrant (the "Subscription
Agreement").
4. Redemption. The Company, at its sole discretion, may, at any time
and from time to time after the date hereof, Call, redeem and cancel all or any
part of the outstanding Warrants upon the payment of consideration consisting of
$0.0001 per Share for each Share subject to a Warrant redeemed and cancelled;
provided, however, that any such redemptions and cancellations may be made by
the
3
Definitive
Company only upon thirty (30) calendar days' prior written notice (the
"Redemption Date" being the close of business on the thirtieth (30th) day
following the date the notice is deemed to be given to Warrant Holders pursuant
to Section 9 hereof or, if such day is not a business day, then the close of
business on the next succeeding business day) and only if the closing sales
price for a share of the Company's Common Stock as reported on The American
Stock Exchange or similar national market has been equal to or greater than
$3.00 for any period of at least twenty (20) consecutive trading days commencing
on or after the date hereof; and provided further that the holder of any Warrant
subject to such redemption and cancellation may exercise such Warrant at any
time prior to the expiration of the thirty (30)-day notice period; and provided
further that the Company's right to redeem and cancel the Warrant shall be
suspended in the event the shelf registration statement required under Section 4
of the Subscription Agreement is subject to a stop order or is otherwise not in
effect or if a Warrant Holder is advised under Section 4(c) of the Subscription
Agreement that the prospectus thereto contains a material misstatement or
omission during any portion of the thirty (30)-day notice period, with such
suspension to terminate and the Company's right to redeem and cancel to be
reinstated on the day following the day on which (i) a registration statement
covering the Shares is effective and not subject to any stop orders and (ii) the
Company has delivered to the Warrant Holder a prospectus covering the Shares of
such Warrant Holder under Section 4(c) of the Subscription Agreement. The notice
period shall then be extended for a period equal to the number of days during
the notice period during which registration was not effective or the prospectus
was not available or contained a material misstatement or omission. If less than
all of the outstanding Warrants are Called, redeemed and cancelled, Warrants
shall be Called, redeemed and cancelled on a pro rata basis.
5. Compliance with Laws and Regulations. The exercise of this Warrant
and the issuance and transfer of Shares shall be subject to compliance by the
Company and the Warrant Holder with all applicable requirements of federal and
state securities laws and with all applicable requirements of any stock exchange
and/or over-the-counter market on which the Company's Common Stock may be listed
at the time of such issuance or transfer.
6. Transfer and Exchange. This Warrant and the rights hereunder may not
be transferred in whole or in part without the Company's prior written consent,
which consent shall not be unreasonably withheld, and may not be transferred
unless such transfer complies with all applicable securities laws. If a transfer
of all or part of this Warrant is permitted as provided in the preceding
sentence, then this Warrant and all rights hereunder may be transferred, in
whole or in part, on the books of the Company or its agent maintained for such
purpose at the principal office of the Company or its agent, as the case may be,
by the Warrant Holder hereof in person or by duly authorized attorney, upon
surrender of this Warrant properly endorsed and upon payment of any necessary
transfer tax or other governmental charge imposed upon such transfer. Upon any
permitted partial transfer, the Company will issue and deliver to the Warrant
Holder a new Warrant or Warrants of like tenor with respect to the portion of
the Warrant not so transferred. Each taker and holder of this Warrant or any
portion hereof, by taking or holding the same, consents and agrees to be bound
by the terms, conditions, representations and warranties hereof, including the
registration provisions contained in Section 4 of the Subscription Agreement,
(and as a condition to any transfer of this Warrant the transferee shall execute
a Subscription Agreement or such other document of instrument as the Company may
require confirming the same), and, when this Warrant shall have been so
endorsed, the person in possession of this Warrant may be treated by the
Company, and all other
4
Definitive
persons dealing with this Warrant, as the absolute owner hereof for any purpose
and as the person entitled to exercise the rights represented hereby, any notice
to the contrary notwithstanding; provided, however that until a transfer of this
Warrant is duly registered on the books of the Company or its agent, the Company
may treat the holder of this Warrant as the owner of this Warrant for all
purposes.
7. Privileges of Stock Ownership. The Warrant Holder shall not have any
of the rights of a shareholder with respect to any Shares until such time, if
any, as the Warrant Holder exercises this Warrant and pays the Exercise Price in
accordance with the terms of Section 2 hereof and complies with any other
applicable provisions of this Agreement.
8. Entire Agreement. The Warrant Exercise Agreement attached as Exhibit
A hereto and, to the extent applicable, the Spousal Consent attached as Exhibit
B hereto, are incorporated herein by reference. This Warrant, the Warrant
Exercise Agreement, the Spousal Consent, to the extent applicable, the
Representations and Warranties of the Warrant Holder, as Investor, set forth in
the Subscription Agreement and the Subscription Agreement otherwise for the
purposes and to the extent set forth herein, constitute the entire agreement of
the parties and supersede all prior undertakings and agreements with respect to
the subject matter hereof.
9. Notices. Any notice required to be given or delivered to the Company
under the terms of this Warrant shall be in writing and addressed to the
Secretary of the Company at its principal corporate offices. Any notice required
to be given or delivered to the Warrant Holder shall be in writing and addressed
to the Warrant Holder at the address indicated below or at such other address as
such Warrant Holder may designate in writing from time to time to the Company.
All notices shall be deemed to have been given or delivered: upon personal
delivery; five (5) calendar days after deposit in the United States mail by
certified or registered mail (return receipt requested) with postage thereon
prepaid; one (1) business day after deposit for next business day delivery with
any reputable return receipt express courier (prepaid); or one (1) business day
after transmission by fax or telecopier with confirmation of transmission
thereof.
10. Successors and Assigns. This Warrant shall be binding upon and
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer set forth herein, this Warrant shall be binding
upon and inure to the benefit of the Warrant Holder and the Warrant Holder's
heirs, executors, administrators, legal representatives, successors and
permitted assigns.
11. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Maryland as such laws are applied to
agreements between Maryland residents entered into and to be performed entirely
within Maryland.
12. Acceptance. The Warrant Holder has read and understands the terms
of this Warrant, and accepts this Warrant subject to all the terms and
conditions hereof. The Warrant Holder acknowledges that there may be adverse tax
consequences upon exercise of this Warrant or disposition of the Shares and that
the Warrant Holder should consult a tax adviser prior to such exercise or
disposition.
[Signature Page Follows.]
5
Definitive
COMPANY SIGNATURE
-----------------
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
Chief Financial Officer as of December 12, 2003.
CELSION CORPORATION
Signed:
---------------------------------------------------
Printed: Anthony P. Deasey
--------------------------------------------------
Title: Executive Vice President-Finance and Administration,
----------------------------------------------------
Chief Financial Officer
----------------------------------------------------
Address: 10220-L Old Columbia Road
Columbia, Maryland 21046-1785
WARRANT HOLDER SIGNATURE
IN WITNESS WHEREOF, the Warrant Holder has executed this Warrant or has caused
this Warrant to be executed by its __________ as of ___________ ____, 2003.
INDIVIDUAL WARRANT HOLDER:
Signed:
------------------------------------------
Printed:
-----------------------------------------
Address:
-----------------------------------------
-----------------------------------------
-----------------------------------------
WARRANT HOLDER THAT IS AN ENTITY
Name of Entity:
----------------------------------
Signed:
------------------------------------------
Printed:
-----------------------------------------
Title:
-------------------------------------------
Address:
-----------------------------------------
-----------------------------------------
-----------------------------------------
[SIGNATURE PAGE TO WARRANT]
6
Definitive
EXHIBIT A
CELSION CORPORATION
WARRANT EXERCISE AGREEMENT
CELSION CORPORATION
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The Warrant Holder hereby elects to purchase the number of shares (the
"Shares") of the Common Stock, par value $0.01 per share, of Celsion Corporation
(the "Company"), as set forth below, pursuant to that certain Warrant dated as
of the date set forth below (the "Warrant"), the terms and conditions of which
are hereby incorporated by reference herein (please print):
Warrant Holder:
----------------------------------------------------------------
Social Security or Tax I.D. No.:
-----------------------------------------------
Address:
-----------------------------------------------------------------------
Warrant Date:
------------------------------------------------------------------
Date of Exercise:
--------------------------------------------------------------
Exercise Price Per Share:
------------------------------------------------------
Number of Shares Subject to Exercise and Purchase:
-----------------------------
Total Exercise Price:
----------------------------------------------------------
Exact Name of Title to Shares:
-------------------------------------------------
The Warrant Holder hereby delivers to the Company the Total Exercise
Price as follows (check and complete as appropriate):
1. in cash in the amount of $_______, receipt of which is acknowledged
by the Company;
2. through a "same day sale commitment" from the Warrant Holder and the
broker named below in the amount of $_________ and substantially in the form
attached hereto as Attachment 1; or
3. through a "margin commitment" from the Warrant Holder and the broker
named below in the amount of $_________ and substantially in the form attached
hereto as Attachment 2.
Broker: Brokerage Firm:
Tax Consequences. THE COMPANY IS UNDER NO OBLIGATION TO REPORT THE
EXERCISE OF THIS WARRANT TO THE INTERNAL REVENUE SERVICE OR ANY TAXING AUTHORITY
OF ANY STATE, LOCAL OR OTHER JURISDICTION. THE WARRANT HOLDER
A-1
Definitive
UNDERSTANDS THAT HE, SHE OR IT MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT
OF THE WARRANT HOLDER'S PURCHASE OR DISPOSITION OF THE SHARES. THE WARRANT
HOLDER REPRESENTS THAT HE, SHE OR IT HAS CONSULTED WITH ANY TAX CONSULTANT(S)
THE WARRANT HOLDER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT THE WARRANT HOLDER IS NOT RELYING ON THE
COMPANY FOR ANY TAX ADVICE.
- -------------------------------------
Name of Warrant Holder
- -------------------------------------
Signature of Warrant Holder
- -------------------------------------
Printed Name
- -------------------------------------
Title
A-2
Definitive
EXHIBIT B
CELSION CORPORATION
SPOUSAL CONSENT
TO
WARRANT EXERCISE AGREEMENT
The undersigned spouse of the Warrant Holder has read, understands, and
hereby approves the Warrant Exercise Agreement between the Warrant Holder and
the Company (the "Agreement"). In consideration of the Company's granting the
Warrant Holder the right to purchase the Shares as set forth in the Agreement,
the undersigned hereby agrees to be bound irrevocably by the Agreement and
further agrees that any community property interest shall similarly be bound by
the Agreement. The undersigned hereby appoints the Warrant Holder as his or her
attorney in fact with respect to any amendment or exercise of any rights under
the Agreement.
Date:
------------------------ ------------------------------------
Signature of Warrant Holder's Spouse
Address:
---------------------------
---------------------------
---------------------------
B-1
Definitive
ATTACHMENT 1
SAME DAY SALE COMMITMENT
--------------, -------
Celsion Corporation
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to sell immediately
_________ of the Number of Shares (the "Same Day Sale Shares") through the
undersigned broker (the "Broker") and for the Broker to pay directly to the
Company from the proceeds from such sale $__________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to sell through the Broker the Same
Day Sale Shares and unconditionally authorizes the Company or its transfer agent
to deliver certificates representing the Same Day Sale Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Same Day Sale Shares, the Exercise
Price by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
- ------------------------------ -------------------------------
(Name) (Name of Firm)
- ------------------------------ -------------------------------
(Signature) (Signature)
- ------------------------------ -------------------------------
(Printed Name) (Printed Name)
- ------------------------------ -------------------------------
(Title) (Title)
Definitive
ATTACHMENT 2
MARGIN COMMITMENT
--------------, -------
CELSION CORPORATION
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to pledge immediately
________ of the Number of Shares (the "Margin Shares") through the undersigned
broker (the "Broker") as security for a loan from the Broker and for the Broker
to pay directly to the Company $________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to pledge to the Broker the Margin
Shares and unconditionally authorizes the Company or its transfer agent to
deliver certificates representing the Margin Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Margin Shares, the Exercise Price
by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
- ------------------------------ -------------------------------
(Name) (Name of Firm)
- ------------------------------ -------------------------------
(Signature) (Signature)
- ------------------------------ -------------------------------
(Printed Name) (Printed Name)
- ------------------------------ -------------------------------
(Title) (Title)
EXHIBIT 4.10
SERIAL NUMBER:
CELSION CORPORATION
FORM OF FINDER'S WARRANT
THE SECURITIES REPRESENTED HEREBY AND ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION THEREUNDER OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
CELSION CORPORATION
WARRANT TO PURCHASE SHARES OF COMMON STOCK
VOID AFTER ___________, 2008
1. Warrant to Purchase Common Stock.
---------------------------------
1.1 Warrant to Purchase Shares. This warrant (this "Warrant")
certifies that for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, ____________________(the "Warrant Holder") is
entitled, effective as of ______________, 2003, subject to the terms and
conditions of this Warrant, to purchase from Celsion Corporation, a Delaware
corporation (the "Company"), up to a total of ______________shares (the
"Shares") of Common Stock, par value $0.01 per share, of the Company (the
"Common Stock"), at the price of $0.88 per share (the "Exercise Price") prior to
5:00 p.m. prevailing Eastern time on ____________, 2008 (the "Expiration Date"),
subject to earlier call by the Company as provided in Section 4 hereof (the
"Call"). The Warrant must be exercised, if at all, in whole or in part, any time
on or before the Expiration Date, subject to earlier Call by the Company. Unless
the context otherwise requires, the term "Shares" shall mean and include the
Common Stock of the Company and other securities and property at any time
receivable or issuable upon exercise of this Warrant. The term "Warrant" as used
herein, shall include this Warrant and any warrants delivered in substitution or
exchange therefor as provided herein.
1.2 Adjustment of Exercise Price and Number of Shares. The number
and character of Shares issuable upon exercise of this Warrant (or any shares of
stock or other securities or property at the time receivable or issuable upon
exercise of this Warrant) and the Exercise Price therefor, are subject to
adjustment upon occurrence of the following events:
Definitive Copy
(a) Adjustment for Stock Splits, Stock Dividends,
Recapitalizations, etc. The Exercise Price of this Warrant and the number of
Shares issuable upon exercise of this Warrant each shall be proportionally
adjusted to reflect any stock dividend, stock split, reverse stock split,
combination of shares, reclassification, recapitalization or other similar event
altering the number of outstanding shares of the Company's Common Stock.
(b) Adjustment for Other Dividends and Distributions. In case
the Company shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive, a dividend or other
distribution with respect to the Common Stock payable in securities of the
Company then, and in each such case, the Warrant Holder, on exercise of this
Warrant at any time after the consummation, effective date or record date of
such event, shall receive, in addition to the Shares (or such other stock or
securities) issuable on such exercise prior to such date, the securities of the
Company to which such Warrant Holder would have been entitled upon such date if
such Warrant Holder had exercised this Warrant immediately prior thereto (all
subject to further adjustment as provided in this Warrant).
(c) Adjustment for Capital Reorganization, Consolidation,
Merger. If any capital reorganization of the capital stock of the Company, or
any consolidation or merger of the Company with or into another corporation, or
the sale of all or substantially all of the Company's assets to another
corporation shall be effected in such a way that holders of the Company's Common
Stock will be entitled to receive stock, securities or assets with respect to or
in exchange for the Company's Common Stock, then in each such case the Warrant
Holder, upon the exercise of this Warrant at any time after the consummation of
such capital reorganization, consolidation, merger, or sale, shall be entitled
to receive, in lieu of the stock or other securities and property receivable
upon the exercise of this Warrant prior to such consummation, the stock or other
securities or property to which such Warrant Holder would have been entitled
upon such consummation if such Warrant Holder had exercised this Warrant
immediately prior to the consummation of such capital reorganization,
consolidation, merger, or sale, all subject to further adjustment as provided in
this Section 1.2; and in each such case, the terms of this Warrant shall be
applicable to the shares of stock or other securities or property receivable
upon the exercise of this Warrant after such consummation.
2. Manner of Exercise.
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2.1 Exercise Agreement. This Warrant may be exercised, in whole or
in part, on any business day on or prior to the Expiration Date, subject to
earlier Call by the Company. To exercise this Warrant, the Warrant Holder must
surrender to the Company this Warrant and deliver to the Company: (a) a duly
executed exercise agreement in the form attached hereto as Exhibit A, or in such
other form as may be approved by the Company from time to time (the "Warrant
Exercise Agreement"); (b) if applicable, a spousal consent in the form attached
hereto as Exhibit B (a "Spousal Consent"); and (c) payment in full of the
Exercise Price for the number of Shares to be purchased upon exercise hereof in
accordance with Section 2.3 hereof. If someone other than the Warrant Holder
exercises this Warrant, then such person must submit to the Company each of the
items set forth in clauses (a) through (c) of the foregoing sentence (to the
extent applicable) and, in addition, must submit documentation acceptable to the
Company that such person has the right to exercise this Warrant. Upon a partial
exercise, this Warrant shall be surrendered, and a new Warrant of like tenor for
purchase of the number of remaining Shares not
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previously purchased shall be issued by the Company to the Warrant Holder. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender or, if such date is not a business day,
then as of the close of business on the next succeeding business day, for
exercise as provided above, and the person entitled to receive the Shares
issuable upon such exercise shall be treated for all purposes as the holder of
record of such Shares as of the close of business on such deemed exercise date.
2.2 Limitations on Exercise. This Warrant may not be exercised as to
fewer than one hundred (100) Shares unless it is exercised as to all Shares as
to which this Warrant is then exercisable.
2.3 Payment.
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Cash; Same Day Sale; Margin Commitment. Except as otherwise
provided in Paragraph (b) of this Section 2.3, the Exercise Agreement shall be
accompanied by full payment of the Exercise Price for the Shares being purchased
in cash (by certified or cashiers' check or wire transfer or other immediately
available funds) or, where permitted by law and provided that a public market
for the Company's stock exists, (a) through a "same day sale" commitment from
the Warrant Holder and a broker-dealer that is a member of the National
Association of Securities Dealers (an "NASD Dealer"), whereby the Warrant Holder
irrevocably elects to exercise this Warrant and to sell a portion of the Shares
so purchased to pay for the Exercise Price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price
directly to the Company or (b) through a "margin" commitment from the Warrant
Holder and an NASD Dealer, whereby the Warrant Holder irrevocably elects to
exercise this Warrant and to pledge the Shares so purchased to the NASD Dealer
in a margin account as security for a loan from the NASD Dealer in the amount of
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company.
2.4 Tax Withholding. Prior to the issuance of the Shares upon
exercise of this Warrant, the Warrant Holder must pay or provide for any
applicable federal or state withholding obligations of the Company.
2.5 Issuance of Shares. Provided that the Exercise Agreement, the
spousal consent, if necessary, and payment have been received by the Company as
provided in Section 2.3 hereof, the Company shall issue the Shares (adjusted as
provided herein) registered in the name of the Warrant Holder, the Warrant
Holder's authorized assignee, or the Warrant Holder's legal representative, and
shall deliver one or more certificates representing the Shares as the Warrant
Holder reasonably may request with the appropriate legends affixed thereto.
3. Registration of the Shares. The Shares are subject to registration
under the Securities Act of 1933, as amended pursuant to Section 4 of the
Subscription Agreement entered into between the Company and the Warrant Holder
in connection with the issuance and acquisition of this Warrant (the
"Subscription Agreement").
4. Redemption. The Company, at its sole discretion, may, at any time
and from time to time after the date hereof, call, redeem and cancel ("Call")
all or any part of the outstanding Warrants upon the
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payment of consideration consisting of $0.0001 per Share for each Share subject
to a Warrant redeemed and cancelled; provided, however, that any such
redemptions and cancellations may be made by the Company only upon thirty (30)
calendar days' prior written notice (the "Redemption Date" being the close of
business on the thirtieth (30th) day following the date the notice is deemed to
be given to Warrant Holders pursuant to Section 9 hereof or, if such day is not
a business day, then the close of business on the next succeeding business day)
and only if the closing sales price for a share of the Company's Common Stock as
reported on The American Stock Exchange or similar national market has been
equal to or greater than $3.00 for any period of at least twenty (20)
consecutive trading days commencing on or after the date hereof; and provided
further that the holder of any Warrant subject to such redemption and
cancellation may exercise such Warrant at any time prior to the expiration of
the thirty (30)-day notice period; and provided further that the Company's right
to redeem and cancel the Warrant shall be suspended in the event the shelf
registration statement required under Section 4 of the Subscription Agreement is
subject to a stop order or is otherwise not in effect or if a Warrant Holder is
advised under Section 4(c) of the Subscription Agreement that the prospectus
thereto contains a material misstatement or omission during any portion of the
thirty (30)-day notice period, with such suspension to terminate and the
Company's right to redeem and cancel to be reinstated on the day following the
day on which (i) a registration statement covering the Shares is effective and
not subject to any stop orders and (ii) the Company has delivered to the Warrant
Holder a prospectus covering the Shares of such Warrant Holder under Section
4(c) of the Subscription Agreement. The notice period shall then be extended for
a period equal to the number of days during the notice period during which
registration was not effective or the prospectus was not available or contained
a material misstatement or omission. If less than all of the outstanding
Warrants are Called, redeemed and cancelled, Warrants shall be Called, redeemed
and cancelled on a pro rata basis.
5. Compliance with Laws and Regulations. The exercise of this Warrant
and the issuance and transfer of Shares shall be subject to compliance by the
Company and the Warrant Holder with all applicable requirements of federal and
state securities laws and with all applicable requirements of any stock exchange
and/or over-the-counter market on which the Company's Common Stock may be listed
at the time of such issuance or transfer.
6. Transfer and Exchange. This Warrant and the rights hereunder may not
be transferred in whole or in part without the Company's prior written consent,
which consent shall not be unreasonably withheld, and may not be transferred
unless such transfer complies with all applicable securities laws. If a transfer
of all or part of this Warrant is permitted as provided in the preceding
sentence, then this Warrant and all rights hereunder may be transferred, in
whole or in part, on the books of the Company or its agent maintained for such
purpose at the principal office of the Company or its agent, as the case may be,
by the Warrant Holder hereof in person or by duly authorized attorney, upon
surrender of this Warrant properly endorsed and upon payment of any necessary
transfer tax or other governmental charge imposed upon such transfer. Upon any
permitted partial transfer, the Company will issue and deliver to the Warrant
Holder a new Warrant or Warrants of like tenor with respect to the portion of
the Warrant not so transferred. Each taker and holder of this Warrant or any
portion hereof, by taking or holding the same, consents and agrees to be bound
by the terms, conditions, representations and warranties hereof, including the
registration provisions contained in Section 4 of the Subscription Agreement,
(and as a condition to any transfer of this Warrant the transferee shall execute
a Subscription Agreement or such other document of instrument as the Company may
require confirming the same), and, when this Warrant shall have been
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Definitive Copy
so endorsed, the person in possession of this Warrant may be treated by the
Company, and all other persons dealing with this Warrant, as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented hereby, any notice to the contrary notwithstanding; provided,
however that until a transfer of this Warrant is duly registered on the books of
the Company or its agent, the Company may treat the holder of this Warrant as
the owner of this Warrant for all purposes.
7. Privileges of Stock Ownership. The Warrant Holder shall not have any
of the rights of a shareholder with respect to any Shares until such time, if
any, as the Warrant Holder exercises this Warrant and pays the Exercise Price in
accordance with the terms of Section 2 hereof and complies with any other
applicable provisions of this Agreement.
8. Entire Agreement. The Warrant Exercise Agreement attached as Exhibit
A hereto and, to the extent applicable, the Spousal Consent attached as Exhibit
B hereto, are incorporated herein by reference. This Warrant, the Warrant
Exercise Agreement, the Spousal Consent, to the extent applicable, the
Representations and Warranties of the Warrant Holder, as Investor, set forth in
the Subscription Agreement and the Subscription Agreement otherwise for the
purposes and to the extent set forth herein, constitute the entire agreement of
the parties and supersede all prior undertakings and agreements with respect to
the subject matter hereof.
9. Notices. Any notice required to be given or delivered to the Company
under the terms of this Warrant shall be in writing and addressed to the
Secretary of the Company at its principal corporate offices. Any notice required
to be given or delivered to the Warrant Holder shall be in writing and addressed
to the Warrant Holder at the address indicated below or at such other address as
such Warrant Holder may designate in writing from time to time to the Company.
All notices shall be deemed to have been given or delivered: upon personal
delivery; five (5) calendar days after deposit in the United States mail by
certified or registered mail (return receipt requested) with postage thereon
prepaid; one (1) business day after deposit for next business day delivery with
any reputable return receipt express courier (prepaid); or one (1) business day
after transmission by fax or telecopier with confirmation of transmission
thereof.
10. Successors and Assigns. This Warrant shall be binding upon and
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer set forth herein, this Warrant shall be binding
upon and inure to the benefit of the Warrant Holder and the Warrant Holder's
heirs, executors, administrators, legal representatives, successors and
permitted assigns.
11. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Maryland as such laws are applied to
agreements between Maryland residents entered into and to be performed entirely
within Maryland.
12. Acceptance. The Warrant Holder has read and understands the terms
and provisions of this Warrant, and accepts this Warrant subject to all the
terms and conditions hereof. The Warrant Holder acknowledges that there may be
adverse tax consequences upon exercise of this Warrant or disposition of the
Shares and that the Warrant Holder should consult a tax adviser prior to such
exercise or disposition.
[Signature Page Follows.]
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Definitive Copy
COMPANY SIGNATURE
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
Chief Financial Officer as of December 12, 2003.
CELSION CORPORATION
Signed:
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Printed: Anthony P. Deasey
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Title: Executive Vice President of
Finance and Administration,
Chief Financial Officer
Address: 10220-L Old Columbia Road
Columbia, Maryland 21046-1785
WARRANT HOLDER SIGNATURE
IN WITNESS WHEREOF, the Warrant Holder has executed this Warrant or has caused
this Warrant to be executed by its ____________________ as of December_____,
2003.
INDIVIDUAL WARRANT HOLDER:
Signed:
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Printed:
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Address:
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WARRANT HOLDER THAT IS AN ENTITY
Name of Entity:
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Signed:
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Printed:
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Title:
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Address:
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[SIGNATURE PAGE TO WARRANT]
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Definitive Copy
EXHIBIT A
CELSION CORPORATION
WARRANT EXERCISE AGREEMENT
CELSION CORPORATION
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The Warrant Holder hereby elects to purchase the number of shares (the
"Shares") of the Common Stock, par value $0.01 per share, of Celsion Corporation
(the "Company"), as set forth below, pursuant to that certain Warrant dated as
of the date set forth below (the "Warrant"), the terms and conditions of which
are hereby incorporated by reference herein (please print):
Warrant Holder:
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Social Security or Tax I.D. No.:
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Address:
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Warrant Date:
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Date of Exercise:
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Exercise Price Per Share:
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Number of Shares Subject to Exercise and Purchase:
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Total Exercise Price:
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Exact Name of Title to Shares:
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The Warrant Holder hereby delivers to the Company the Total Exercise
Price as follows (circle and complete as appropriate):
1. in cash in the amount of $_______, receipt of which is acknowledged
by the Company;
2. through a "same day sale commitment" from the Warrant Holder and the
broker named below in the amount of $_________ and substantially in the form
attached hereto as Attachment 1; or
3. through a "margin commitment" from the Warrant Holder and the broker
named below in the amount of $_________ and substantially in the form attached
hereto as Attachment 2.
Broker: Brokerage Firm:
4. through the "net exercise" procedure set forth in Section 4.2 of the
Agreement.
A-1
Definitive Copy
Tax Consequences. THE COMPANY IS UNDER NO OBLIGATION TO REPORT THE
EXERCISE OF THIS WARRANT TO THE INTERNAL REVENUE SERVICE OR ANY TAXING AUTHORITY
OF ANY STATE, LOCAL OR OTHER JURISDICTION. THE WARRANT HOLDER UNDERSTANDS THAT
HE, SHE OR IT MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF THE WARRANT
HOLDER'S PURCHASE OR DISPOSITION OF THE SHARES. THE WARRANT HOLDER REPRESENTS
THAT HE, SHE OR IT HAS CONSULTED WITH ANY TAX CONSULTANT(S) THE WARRANT HOLDER
DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND
THAT THE WARRANT HOLDER IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.
- -------------------------------------
Name of Warrant Holder
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Signature of Warrant Holder
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Printed Name
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Title
A-2
Definitive Copy
EXHIBIT B
CELSION CORPORATION
SPOUSAL CONSENT
TO
WARRANT EXERCISE AGREEMENT
The undersigned spouse of the Warrant Holder has read, understands, and
hereby approves the Warrant Exercise Agreement between the Warrant Holder and
the Company (the "Agreement"). In consideration of the Company's granting the
Warrant Holder the right to purchase the Shares as set forth in the Agreement,
the undersigned hereby agrees to be bound irrevocably by the Agreement and
further agrees that any community property interest shall similarly be bound by
the Agreement. The undersigned hereby appoints the Warrant Holder as his or her
attorney in fact with respect to any amendment or exercise of any rights under
the Agreement.
Date:
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Signature of Warrant Holder's Spouse
Address:
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B-1
Definitive Copy
ATTACHMENT 1
SAME DAY SALE COMMITMENT
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Celsion Corporation
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to sell immediately
_________ of the Number of Shares (the "Same Day Sale Shares") through the
undersigned broker (the "Broker") and for the Broker to pay directly to the
Company from the proceeds from such sale $__________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to sell through the Broker the Same
Day Sale Shares and unconditionally authorizes the Company or its transfer agent
to deliver certificates representing the Same Day Sale Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Same Day Sale Shares, the Exercise
Price by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
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(Name) (Name of Firm)
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(Signature) (Signature)
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(Printed Name) (Printed Name)
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(Title) (Title)
Definitive Copy
ATTACHMENT 2
MARGIN COMMITMENT
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CELSION CORPORATION
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to pledge immediately
________ of the Number of Shares (the "Margin Shares") through the undersigned
broker (the "Broker") as security for a loan from the Broker and for the Broker
to pay directly to the Company $________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to pledge to the Broker the Margin
Shares and unconditionally authorizes the Company or its transfer agent to
deliver certificates representing the Margin Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Margin Shares, the Exercise Price
by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
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(Name) (Name of Firm)
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(Signature) (Signature)
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(Printed Name) (Printed Name)
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(Title) (Title)
EXHIBIT 4.11
Definitive
CORPORATION
FORM OF WARRANT
THE SECURITIES REPRESENTED HEREBY AND ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION THEREUNDER OR EXEMPTIONS FROM SUCH REGISTRATION
REQUIREMENTS. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER
OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS
IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Serial Number:
CELSION CORPORATION
WARRANT TO PURCHASE SHARES OF COMMON STOCK
VOID AFTER____________, 2009
1. Warrant to Purchase Common Stock.
1.1 Warrant to Purchase Shares. This warrant (this "Warrant")
certifies that for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, _______________________(the "Warrant Holder")
is entitled, effective as of___________, 2004, subject to the terms and
conditions of this Warrant, to purchase from Celsion Corporation, a Delaware
corporation (the "Company"), up to a total of ___________________ shares (the
"Shares") of Common Stock, par value $0.01 per share, of the Company (the
"Common Stock"), at the price of $1.50 per share (the "Exercise Price") prior to
5:00 p.m. prevailing Eastern time ON__________, 2009 (the "Expiration Date"),
subject to earlier call by the Company as provided in Section 4 hereof (the
"Call"). The Warrant must be exercised, if at all, in whole or in part, any time
on or before the Expiration Date, subject to earlier Call by the Company. Unless
the context otherwise requires, the term "Shares" shall mean and include the
Common Stock of the Company and other securities and property at any time
receivable or issuable upon exercise of this Warrant. The term "Warrant" as used
herein, shall include this Warrant and any warrants delivered in substitution or
exchange therefor as provided herein.
1.2 Adjustment of Exercise Price and Number of Shares. The
number and character of Shares issuable upon exercise of this Warrant (or any
shares of stock or other securities or property at the time receivable or
issuable upon exercise of this Warrant) and the Exercise Price therefor, are
subject to adjustment upon occurrence of the following events:
Definitive
(a) Adjustment for Stock Splits, Stock Dividends,
Recapitalizations, etc. The Exercise Price of this Warrant and the number of
Shares issuable upon exercise of this Warrant each shall be proportionally
adjusted to reflect any stock dividend, stock split, reverse stock split,
combination of shares, reclassification, recapitalization or other similar event
altering the number of outstanding shares of the Company's Common Stock.
(b) Adjustment for Other Dividends and Distributions.
In case the Company shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive, a dividend or other
distribution with respect to the Common Stock payable in securities of the
Company then, and in each such case, the Warrant Holder, on exercise of this
Warrant at any time after the consummation, effective date or record date of
such event, shall receive, in addition to the Shares (or such other stock or
securities) issuable on such exercise prior to such date, the securities of the
Company to which such Warrant Holder would have been entitled upon such date if
such Warrant Holder had exercised this Warrant immediately prior thereto (all
subject to further adjustment as provided in this Warrant).
(c) Adjustment for Capital Reorganization,
Consolidation, Merger. If any capital reorganization of the capital stock of the
Company, or any consolidation or merger of the Company with or into another
corporation, or the sale of all or substantially all of the Company's assets to
another corporation shall be effected in such a way that holders of the
Company's Common Stock will be entitled to receive stock, securities or assets
with respect to or in exchange for the Company's Common Stock, then in each such
case the Warrant Holder, upon the exercise of this Warrant at any time after the
consummation of such capital reorganization, consolidation, merger, or sale,
shall be entitled to receive, in lieu of the stock or other securities and
property receivable upon the exercise of this Warrant prior to such
consummation, the stock or other securities or property to which such Warrant
Holder would have been entitled upon such consummation if such Warrant Holder
had exercised this Warrant immediately prior to the consummation of such capital
reorganization, consolidation, merger, or sale, all subject to further
adjustment as provided in this Section 1.2; and in each such case, the terms of
this Warrant shall be applicable to the shares of stock or other securities or
property receivable upon the exercise of this Warrant after such consummation.
2. Manner of Exercise.
2.1 Exercise Agreement. This Warrant may be exercised, in
whole or in part, on any business day on or prior to the Expiration Date,
subject to earlier Call by the Company. To exercise this Warrant, the Warrant
Holder must surrender to the Company this Warrant and deliver to the Company:
(a) a duly executed exercise agreement in the form attached hereto as Exhibit A,
or in such other form as may be approved by the Company from time to time (the
"Warrant Exercise Agreement"); (b) if applicable, a spousal consent in the form
attached hereto as Exhibit B (a "Spousal Consent"); and (c) payment in full of
the Exercise Price for the number of Shares to be purchased upon exercise
hereof. If someone other than the Warrant Holder exercises this Warrant, then
such person must submit to the Company each of the items set forth in clauses
(a) through (c) of the foregoing sentence (to the extent applicable) and, in
addition, must submit documentation acceptable to the Company that such person
has the right to exercise this Warrant. Upon a partial exercise, this Warrant
shall be surrendered, and a new
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Definitive
Warrant of like tenor for purchase of the number of remaining Shares not
previously purchased shall be issued by the Company to the Warrant Holder. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender or, if such date is not a business day,
then as of the close of business on the next succeeding business day, for
exercise as provided above, and the person entitled to receive the Shares
issuable upon such exercise shall be treated for all purposes as the holder of
record of such Shares as of the close of business on such deemed exercise date.
2.2 Limitations on Exercise. This Warrant may not be exercised
as to fewer than one hundred (100) Shares unless it is exercised as to all
Shares as to which this Warrant is then exercisable.
2.3 Payment. The Exercise Agreement shall be accompanied by
full payment of the Exercise Price for the Shares being purchased in cash (by
certified or cashiers check or wire transfer or other immediately available
funds) or, where permitted by law and provided that a public market for the
Company's stock exists, (a) through a "same day sale" commitment from the
Warrant Holder and a broker-dealer that is a member of the National Association
of Securities Dealers (an "NASD Dealer"), whereby the Warrant Holder irrevocably
elects to exercise this Warrant and to sell a portion of the Shares so purchased
to pay for the Exercise Price and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise Price directly to the
Company or (b) through a "margin" commitment from the Warrant Holder and an NASD
Dealer, whereby the Warrant Holder irrevocably elects to exercise this Warrant
and to pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise Price and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company.
2.4 Tax Withholding. Prior to the issuance of the Shares upon
exercise of this Warrant, the Warrant Holder must pay or provide for any
applicable federal or state withholding obligations of the Company.
2.5 Issuance of Shares. Provided that the Exercise Agreement,
the spousal consent, if necessary, and payment have been received by the Company
as provided in Section 2.3 hereof, the Company shall issue the Shares (adjusted
as provided herein) registered in the name of the Warrant Holder, the Warrant
Holder's authorized assignee, or the Warrant Holder's legal representative, and
shall deliver one or more certificates representing the Shares as the Warrant
Holder reasonably may request with the appropriate legends affixed thereto.
3. Registration of the Shares. The Shares are subject to registration
under the Securities Act of 1933, as amended pursuant to Section 4 of the
Subscription Agreement entered into between the Company and the Warrant Holder
in connection with the sale and purchase of this Warrant (the "Subscription
Agreement").
4. Redemption. The Company, at its sole discretion, may, at any time
and from time to time after the date hereof, Call, redeem and cancel all or any
part of the outstanding Warrants upon the payment of consideration consisting of
$0.0001 per Share for each Share subject to a Warrant redeemed and cancelled;
provided, however, that any such redemptions and cancellations may be made by
the
3
Definitive
Company only upon thirty (30) calendar days' prior written notice (the
"Redemption Date" being the close of business on the thirtieth (30th) day
following the date the notice is deemed to be given to Warrant Holders pursuant
to Section 9 hereof or, if such day is not a business day, then the close of
business on the next succeeding business day) and only if the closing sales
price for a share of the Company's Common Stock as reported on The American
Stock Exchange or similar national market has been equal to or greater than
$3.00 for any period of at least twenty (20) consecutive trading days commencing
on or after the date hereof; and provided further that the holder of any Warrant
subject to such redemption and cancellation may exercise such Warrant at any
time prior to the expiration of the thirty (30)-day notice period; and provided
further that the Company's right to redeem and cancel the Warrant shall be
suspended in the event the shelf registration statement required under Section 4
of the Subscription Agreement is subject to a stop order or is otherwise not in
effect or if a Warrant Holder is advised under Section 4(c) of the Subscription
Agreement that the prospectus thereto contains a material misstatement or
omission during any portion of the thirty (30)-day notice period, with such
suspension to terminate and the Company's right to redeem and cancel to be
reinstated on the day following the day on which (i) a registration statement
covering the Shares is effective and not subject to any stop orders and (ii) the
Company has delivered to the Warrant Holder a prospectus covering the Shares of
such Warrant Holder under Section 4(c) of the Subscription Agreement. The notice
period shall then be extended for a period equal to the number of days during
the notice period during which registration was not effective or the prospectus
was not available or contained a material misstatement or omission. If less than
all of the outstanding Warrants are Called, redeemed and cancelled, Warrants
shall be Called, redeemed and cancelled on a pro rata basis.
5. Compliance with Laws and Regulations. The exercise of this Warrant
and the issuance and transfer of Shares shall be subject to compliance by the
Company and the Warrant Holder with all applicable requirements of federal and
state securities laws and with all applicable requirements of any stock exchange
and/or over-the-counter market on which the Company's Common Stock may be listed
at the time of such issuance or transfer.
6. Transfer and Exchange. This Warrant and the rights hereunder may not
be transferred in whole or in part without the Company's prior written consent,
which consent shall not be unreasonably withheld, and may not be transferred
unless such transfer complies with all applicable securities laws. If a transfer
of all or part of this Warrant is permitted as provided in the preceding
sentence, then this Warrant and all rights hereunder may be transferred, in
whole or in part, on the books of the Company or its agent maintained for such
purpose at the principal office of the Company or its agent, as the case may be,
by the Warrant Holder hereof in person or by duly authorized attorney, upon
surrender of this Warrant properly endorsed and upon payment of any necessary
transfer tax or other governmental charge imposed upon such transfer. Upon any
permitted partial transfer, the Company will issue and deliver to the Warrant
Holder a new Warrant or Warrants of like tenor with respect to the portion of
the Warrant not so transferred. Each taker and holder of this Warrant or any
portion hereof, by taking or holding the same, consents and agrees to be bound
by the terms, conditions, representations and warranties hereof, including the
registration provisions contained in Section 4 of the Subscription Agreement,
(and as a condition to any transfer of this Warrant the transferee shall execute
a Subscription Agreement or such other document of instrument as the Company may
require confirming the same), and, when this Warrant shall have been so
endorsed, the person in possession of this Warrant may be treated by the
Company, and all other
4
Definitive
persons dealing with this Warrant, as the absolute owner hereof for any purpose
and as the person entitled to exercise the rights represented hereby, any notice
to the contrary notwithstanding; provided, however that until a transfer of this
Warrant is duly registered on the books of the Company or its agent, the Company
may treat the holder of this Warrant as the owner of this Warrant for all
purposes.
7. Privileges of Stock Ownership. The Warrant Holder shall not have any
of the rights of a shareholder with respect to any Shares until such time, if
any, as the Warrant Holder exercises this Warrant and pays the Exercise Price in
accordance with the terms of Section 2 hereof and complies with any other
applicable provisions of this Agreement.
8. Entire Agreement. The Warrant Exercise Agreement attached as Exhibit
A hereto and, to the extent applicable, the Spousal Consent attached as Exhibit
B hereto, are incorporated herein by reference. This Warrant, the Warrant
Exercise Agreement, the Spousal Consent, to the extent applicable, the
Representations and Warranties of the Warrant Holder, as Investor, set forth in
the Subscription Agreement and the Subscription Agreement otherwise for the
purposes and to the extent set forth herein, constitute the entire agreement of
the parties and supersede all prior undertakings and agreements with respect to
the subject matter hereof.
9. Notices. Any notice required to be given or delivered to the Company
under the terms of this Warrant shall be in writing and addressed to the
Secretary of the Company at its principal corporate offices. Any notice required
to be given or delivered to the Warrant Holder shall be in writing and addressed
to the Warrant Holder at the address indicated below or at such other address as
such Warrant Holder may designate in writing from time to time to the Company.
All notices shall be deemed to have been given or delivered: upon personal
delivery; five (5) calendar days after deposit in the United States mail by
certified or registered mail (return receipt requested) with postage thereon
prepaid; one (1) business day after deposit for next business day delivery with
any reputable return receipt express courier (prepaid); or one (1) business day
after transmission by fax or telecopier with confirmation of transmission
thereof.
10. Successors and Assigns. This Warrant shall be binding upon and
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer set forth herein, this Warrant shall be binding
upon and inure to the benefit of the Warrant Holder and the Warrant Holder's
heirs, executors, administrators, legal representatives, successors and
permitted assigns.
11. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Maryland as such laws are applied to
agreements between Maryland residents entered into and to be performed entirely
within Maryland.
12. Acceptance. The Warrant Holder has read and understands the terms
of this Warrant, and accepts this Warrant subject to all the terms and
conditions hereof. The Warrant Holder acknowledges that there may be adverse tax
consequences upon exercise of this Warrant or disposition of the Shares and that
the Warrant Holder should consult a tax adviser prior to such exercise or
disposition.
[Signature Page Follows.]
5
Definitive
COMPANY SIGNATURE
-----------------
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
Chief Financial Officer as of _________, 2004.
CELSION CORPORATION
Signed:
---------------------------------------------------
Printed: Anthony P. Deasey
--------------------------------------------------
Title: Executive Vice President-Finance and Administration,
----------------------------------------------------
Chief Financial Officer
----------------------------------------------------
Address: 10220-L Old Columbia Road
Columbia, Maryland 21046-1785
WARRANT HOLDER SIGNATURE
IN WITNESS WHEREOF, the Warrant Holder has executed this Warrant or has caused
this Warrant to be executed by its __________ as of ___________ ____, 2004.
INDIVIDUAL WARRANT HOLDER:
Signed:
------------------------------------------
Printed:
-----------------------------------------
Address:
-----------------------------------------
WARRANT HOLDER THAT IS AN ENTITY
Name of Entity:
----------------------------------
Signed:
------------------------------------------
Printed:
-----------------------------------------
Title:
-------------------------------------------
Address:
-----------------------------------------
-----------------------------------------
-----------------------------------------
[SIGNATURE PAGE TO WARRANT]
6
Definitive
EXHIBIT A
CELSION CORPORATION
WARRANT EXERCISE AGREEMENT
CELSION CORPORATION
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The Warrant Holder hereby elects to purchase the number of shares (the
"Shares") of the Common Stock, par value $0.01 per share, of Celsion Corporation
(the "Company"), as set forth below, pursuant to that certain Warrant dated as
of the date set forth below (the "Warrant"), the terms and conditions of which
are hereby incorporated by reference herein (please print):
Warrant Holder:
----------------------------------------------------------------
Social Security or Tax I.D. No.:
-----------------------------------------------
Address:
-----------------------------------------------------------------------
Warrant Date:
------------------------------------------------------------------
Date of Exercise:
--------------------------------------------------------------
Exercise Price Per Share:
------------------------------------------------------
Number of Shares Subject to Exercise and Purchase:
-----------------------------
Total Exercise Price:
----------------------------------------------------------
Exact Name of Title to Shares:
-------------------------------------------------
The Warrant Holder hereby delivers to the Company the Total Exercise
Price as follows (check and complete as appropriate):
1. in cash in the amount of $_______, receipt of which is acknowledged
by the Company;
2. through a "same day sale commitment" from the Warrant Holder and the
broker named below in the amount of $_________ and substantially in the form
attached hereto as Attachment 1; or
3. through a "margin commitment" from the Warrant Holder and the broker
named below in the amount of $_________ and substantially in the form attached
hereto as Attachment 2.
Broker: Brokerage Firm:
Tax Consequences. THE COMPANY IS UNDER NO OBLIGATION TO REPORT THE
EXERCISE OF THIS WARRANT TO THE INTERNAL REVENUE SERVICE OR ANY TAXING AUTHORITY
OF ANY STATE, LOCAL OR OTHER JURISDICTION. THE WARRANT HOLDER
A-1
Definitive
UNDERSTANDS THAT HE, SHE OR IT MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT
OF THE WARRANT HOLDER'S PURCHASE OR DISPOSITION OF THE SHARES. THE WARRANT
HOLDER REPRESENTS THAT HE, SHE OR IT HAS CONSULTED WITH ANY TAX CONSULTANT(S)
THE WARRANT HOLDER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT THE WARRANT HOLDER IS NOT RELYING ON THE
COMPANY FOR ANY TAX ADVICE.
- -------------------------------------
Name of Warrant Holder
- -------------------------------------
Signature of Warrant Holder
- -------------------------------------
Printed Name
- -------------------------------------
Title
A-2
Definitive
EXHIBIT B
CELSION CORPORATION
SPOUSAL CONSENT
TO
WARRANT EXERCISE AGREEMENT
The undersigned spouse of the Warrant Holder has read, understands, and
hereby approves the Warrant Exercise Agreement between the Warrant Holder and
the Company (the "Agreement"). In consideration of the Company's granting the
Warrant Holder the right to purchase the Shares as set forth in the Agreement,
the undersigned hereby agrees to be bound irrevocably by the Agreement and
further agrees that any community property interest shall similarly be bound by
the Agreement. The undersigned hereby appoints the Warrant Holder as his or her
attorney in fact with respect to any amendment or exercise of any rights under
the Agreement.
Date:
------------------ ------------------------------------
Signature of Warrant Holder's Spouse
Address:
---------------------------
---------------------------
---------------------------
B-1
Definitive
ATTACHMENT 1
SAME DAY SALE COMMITMENT
--------------, -------
Celsion Corporation
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to sell immediately
_________ of the Number of Shares (the "Same Day Sale Shares") through the
undersigned broker (the "Broker") and for the Broker to pay directly to the
Company from the proceeds from such sale $__________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to sell through the Broker the Same
Day Sale Shares and unconditionally authorizes the Company or its transfer agent
to deliver certificates representing the Same Day Sale Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Same Day Sale Shares, the Exercise
Price by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
- ------------------------------ -------------------------------
(Name) (Name of Firm)
- ------------------------------ -------------------------------
(Signature) (Signature)
- ------------------------------ -------------------------------
(Printed Name) (Printed Name)
- ------------------------------ -------------------------------
(Title) (Title)
Definitive
ATTACHMENT 2
MARGIN COMMITMENT
--------------, -------
CELSION CORPORATION
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to pledge immediately
________ of the Number of Shares (the "Margin Shares") through the undersigned
broker (the "Broker") as security for a loan from the Broker and for the Broker
to pay directly to the Company $________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to pledge to the Broker the Margin
Shares and unconditionally authorizes the Company or its transfer agent to
deliver certificates representing the Margin Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Margin Shares, the Exercise Price
by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
- ------------------------------ -------------------------------
(Name) (Name of Firm)
- ------------------------------ -------------------------------
(Signature) (Signature)
- ------------------------------ -------------------------------
(Printed Name) (Printed Name)
- ------------------------------ -------------------------------
(Title) (Title)
Definitive Copy
EXHIBIT 4.12
SERIAL NUMBER:
CELSION CORPORATION
FORM OF FINDER'S WARRANT
THE SECURITIES REPRESENTED HEREBY AND ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION THEREUNDER OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
CELSION CORPORATION
WARRANT TO PURCHASE SHARES OF COMMON STOCK
VOID AFTER___________, 2009
1. Warrant to Purchase Common Stock.
--------------------------------
1.1 Warrant to Purchase Shares. This warrant (this "Warrant")
certifies that for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged,________________ (the "Warrant Holder") is
entitled, effective as of _________, 2004, subject to the terms and conditions
of this Warrant, to purchase from Celsion Corporation, a Delaware corporation
(the "Company"), up to a total of _______________shares (the "Shares") of Common
Stock, par value $0.01 per share, of the Company (the "Common Stock"), at the
price of $1.10 per share (the "Exercise Price") prior to 5:00 p.m. prevailing
Eastern time on _____________, 2009 (the "Expiration Date"), subject to earlier
call by the Company as provided in Section 4 hereof (the "Call"). The Warrant
must be exercised, if at all, in whole or in part, any time on or before the
Expiration Date, subject to earlier Call by the Company. Unless the context
otherwise requires, the term "Shares" shall mean and include the Common Stock of
the Company and other securities and property at any time receivable or issuable
upon exercise of this Warrant. The term "Warrant" as used herein, shall include
this Warrant and any warrants delivered in substitution or exchange therefor as
provided herein.
1.2 Adjustment of Exercise Price and Number of Shares. The number
and character of Shares issuable upon exercise of this Warrant (or any shares of
stock or other securities or property at the time receivable or issuable upon
exercise of this Warrant) and the Exercise Price therefor, are subject to
adjustment upon occurrence of the following events:
Definitive Copy
(a) Adjustment for Stock Splits, Stock Dividends,
Recapitalizations, etc. The Exercise Price of this Warrant and the number of
Shares issuable upon exercise of this Warrant each shall be proportionally
adjusted to reflect any stock dividend, stock split, reverse stock split,
combination of shares, reclassification, recapitalization or other similar event
altering the number of outstanding shares of the Company's Common Stock.
(b) Adjustment for Other Dividends and Distributions. In case
the Company shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive, a dividend or other
distribution with respect to the Common Stock payable in securities of the
Company then, and in each such case, the Warrant Holder, on exercise of this
Warrant at any time after the consummation, effective date or record date of
such event, shall receive, in addition to the Shares (or such other stock or
securities) issuable on such exercise prior to such date, the securities of the
Company to which such Warrant Holder would have been entitled upon such date if
such Warrant Holder had exercised this Warrant immediately prior thereto (all
subject to further adjustment as provided in this Warrant).
(c) Adjustment for Capital Reorganization, Consolidation,
Merger. If any capital reorganization of the capital stock of the Company, or
any consolidation or merger of the Company with or into another corporation, or
the sale of all or substantially all of the Company's assets to another
corporation shall be effected in such a way that holders of the Company's Common
Stock will be entitled to receive stock, securities or assets with respect to or
in exchange for the Company's Common Stock, then in each such case the Warrant
Holder, upon the exercise of this Warrant at any time after the consummation of
such capital reorganization, consolidation, merger, or sale, shall be entitled
to receive, in lieu of the stock or other securities and property receivable
upon the exercise of this Warrant prior to such consummation, the stock or other
securities or property to which such Warrant Holder would have been entitled
upon such consummation if such Warrant Holder had exercised this Warrant
immediately prior to the consummation of such capital reorganization,
consolidation, merger, or sale, all subject to further adjustment as provided in
this Section 1.2; and in each such case, the terms of this Warrant shall be
applicable to the shares of stock or other securities or property receivable
upon the exercise of this Warrant after such consummation.
2. Manner of Exercise.
------------------
2.1 Exercise Agreement. This Warrant may be exercised, in whole or
in part, on any business day on or prior to the Expiration Date, subject to
earlier Call by the Company. To exercise this Warrant, the Warrant Holder must
surrender to the Company this Warrant and deliver to the Company: (a) a duly
executed exercise agreement in the form attached hereto as Exhibit A, or in such
other form as may be approved by the Company from time to time (the "Warrant
Exercise Agreement"); (b) if applicable, a spousal consent in the form attached
hereto as Exhibit B (a "Spousal Consent"); and (c) payment in full of the
Exercise Price for the number of Shares to be purchased upon exercise hereof in
accordance with Section 2.3 hereof. If someone other than the Warrant Holder
exercises this Warrant, then such person must submit to the Company each of the
items set forth in clauses (a) through (c) of the foregoing sentence (to the
extent applicable) and, in addition, must submit documentation acceptable to the
Company that such person has the right to exercise this Warrant. Upon a partial
exercise, this Warrant shall be surrendered, and a new Warrant of like tenor for
purchase of the number of remaining Shares not
2
Definitive Copy
previously purchased shall be issued by the Company to the Warrant Holder. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender or, if such date is not a business day,
then as of the close of business on the next succeeding business day, for
exercise as provided above, and the person entitled to receive the Shares
issuable upon such exercise shall be treated for all purposes as the holder of
record of such Shares as of the close of business on such deemed exercise date.
2.2 Limitations on Exercise. This Warrant may not be exercised as to
fewer than one hundred (100) Shares unless it is exercised as to all Shares as
to which this Warrant is then exercisable.
2.3 Payment.
-------
Cash; Same Day Sale; Margin Commitment. Except as otherwise
provided in Paragraph (b) of this Section 2.3, the Exercise Agreement shall be
accompanied by full payment of the Exercise Price for the Shares being purchased
in cash (by certified or cashiers' check or wire transfer or other immediately
available funds) or, where permitted by law and provided that a public market
for the Company's stock exists, (a) through a "same day sale" commitment from
the Warrant Holder and a broker-dealer that is a member of the National
Association of Securities Dealers (an "NASD Dealer"), whereby the Warrant Holder
irrevocably elects to exercise this Warrant and to sell a portion of the Shares
so purchased to pay for the Exercise Price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price
directly to the Company or (b) through a "margin" commitment from the Warrant
Holder and an NASD Dealer, whereby the Warrant Holder irrevocably elects to
exercise this Warrant and to pledge the Shares so purchased to the NASD Dealer
in a margin account as security for a loan from the NASD Dealer in the amount of
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company.
2.4 Tax Withholding. Prior to the issuance of the Shares upon
exercise of this Warrant, the Warrant Holder must pay or provide for any
applicable federal or state withholding obligations of the Company.
2.5 Issuance of Shares. Provided that the Exercise Agreement,
the spousal consent, if necessary, and payment have been received by the Company
as provided in Section 2.3 hereof, the Company shall issue the Shares (adjusted
as provided herein) registered in the name of the Warrant Holder, the Warrant
Holder's authorized assignee, or the Warrant Holder's legal representative, and
shall deliver one or more certificates representing the Shares as the Warrant
Holder reasonably may request with the appropriate legends affixed thereto.
3. Registration of the Shares. The Shares are subject to
registration under the Securities Act of 1933, as amended pursuant to Section 4
of the Subscription Agreement entered into between the Company and the Warrant
Holder in connection with the issuance and acquisition of this Warrant (the
"Subscription Agreement").
4. Redemption. The Company, at its sole discretion, may, at any time
and from time to time after the date hereof, call, redeem and cancel ("Call")
all or any part of the outstanding Warrants upon
3
Definitive Copy
the payment of consideration consisting of $0.0001 per Share for each Share
subject to a Warrant redeemed and cancelled; provided, however, that any such
redemptions and cancellations may be made by the Company only upon thirty (30)
calendar days' prior written notice (the "Redemption Date" being the close of
business on the thirtieth (30th) day following the date the notice is deemed to
be given to Warrant Holders pursuant to Section 9 hereof or, if such day is not
a business day, then the close of business on the next succeeding business day)
and only if the closing sales price for a share of the Company's Common Stock as
reported on The American Stock Exchange or similar national market has been
equal to or greater than $3.00 for any period of at least twenty (20)
consecutive trading days commencing on or after the date hereof; and provided
further that the holder of any Warrant subject to such redemption and
cancellation may exercise such Warrant at any time prior to the expiration of
the thirty (30)-day notice period; and provided further that the Company's right
to redeem and cancel the Warrant shall be suspended in the event the shelf
registration statement required under Section 4 of the Subscription Agreement is
subject to a stop order or is otherwise not in effect or if a Warrant Holder is
advised under Section 4(c) of the Subscription Agreement that the prospectus
thereto contains a material misstatement or omission during any portion of the
thirty (30)-day notice period, with such suspension to terminate and the
Company's right to redeem and cancel to be reinstated on the day following the
day on which (i) a registration statement covering the Shares is effective and
not subject to any stop orders and (ii) the Company has delivered to the Warrant
Holder a prospectus covering the Shares of such Warrant Holder under Section
4(c) of the Subscription Agreement. The notice period shall then be extended for
a period equal to the number of days during the notice period during which
registration was not effective or the prospectus was not available or contained
a material misstatement or omission. If less than all of the outstanding
Warrants are Called, redeemed and cancelled, Warrants shall be Called, redeemed
and cancelled on a pro rata basis.
5. Compliance with Laws and Regulations. The exercise of this
Warrant and the issuance and transfer of Shares shall be subject to compliance
by the Company and the Warrant Holder with all applicable requirements of
federal and state securities laws and with all applicable requirements of any
stock exchange and/or over-the-counter market on which the Company's Common
Stock may be listed at the time of such issuance or transfer.
6. Transfer and Exchange. This Warrant and the rights hereunder may
not be transferred in whole or in part without the Company's prior written
consent, which consent shall not be unreasonably withheld, and may not be
transferred unless such transfer complies with all applicable securities laws.
If a transfer of all or part of this Warrant is permitted as provided in the
preceding sentence, then this Warrant and all rights hereunder may be
transferred, in whole or in part, on the books of the Company or its agent
maintained for such purpose at the principal office of the Company or its agent,
as the case may be, by the Warrant Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant properly endorsed and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. Upon any permitted partial transfer, the Company will issue and
deliver to the Warrant Holder a new Warrant or Warrants of like tenor with
respect to the portion of the Warrant not so transferred. Each taker and holder
of this Warrant or any portion hereof, by taking or holding the same, consents
and agrees to be bound by the terms, conditions, representations and warranties
hereof, including the registration provisions contained in Section 4 of the
Subscription Agreement, (and as a condition to any transfer of this Warrant the
transferee shall execute a Subscription Agreement or such other document of
instrument as the Company may require confirming the same), and, when this
Warrant shall have been
4
Definitive Copy
so endorsed, the person in possession of this Warrant may be treated by the
Company, and all other persons dealing with this Warrant, as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented hereby, any notice to the contrary notwithstanding; provided,
however that until a transfer of this Warrant is duly registered on the books of
the Company or its agent, the Company may treat the holder of this Warrant as
the owner of this Warrant for all purposes.
7. Privileges of Stock Ownership. The Warrant Holder shall not have
any of the rights of a shareholder with respect to any Shares until such time,
if any, as the Warrant Holder exercises this Warrant and pays the Exercise Price
in accordance with the terms of Section 2 hereof and complies with any other
applicable provisions of this Agreement.
8. Entire Agreement. The Warrant Exercise Agreement attached as
Exhibit A hereto and, to the extent applicable, the Spousal Consent attached as
Exhibit B hereto, are incorporated herein by reference. This Warrant, the
Warrant Exercise Agreement, the Spousal Consent, to the extent applicable, the
Representations and Warranties of the Warrant Holder, as Investor, set forth in
the Subscription Agreement and the Subscription Agreement otherwise for the
purposes and to the extent set forth herein, constitute the entire agreement of
the parties and supersede all prior undertakings and agreements with respect to
the subject matter hereof.
9. Notices. Any notice required to be given or delivered to the
Company under the terms of this Warrant shall be in writing and addressed to the
Secretary of the Company at its principal corporate offices. Any notice required
to be given or delivered to the Warrant Holder shall be in writing and addressed
to the Warrant Holder at the address indicated below or at such other address as
such Warrant Holder may designate in writing from time to time to the Company.
All notices shall be deemed to have been given or delivered: upon personal
delivery; five (5) calendar days after deposit in the United States mail by
certified or registered mail (return receipt requested) with postage thereon
prepaid; one (1) business day after deposit for next business day delivery with
any reputable return receipt express courier (prepaid); or one (1) business day
after transmission by fax or telecopier with confirmation of transmission
thereof.
10. Successors and Assigns. This Warrant shall be binding upon and
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer set forth herein, this Warrant shall be binding
upon and inure to the benefit of the Warrant Holder and the Warrant Holder's
heirs, executors, administrators, legal representatives, successors and
permitted assigns.
11. Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Maryland as such laws are applied to
agreements between Maryland residents entered into and to be performed entirely
within Maryland.
12. Acceptance. The Warrant Holder has read and understands the
terms and provisions of this Warrant, and accepts this Warrant subject to all
the terms and conditions hereof. The Warrant Holder acknowledges that there may
be adverse tax consequences upon exercise of this Warrant or disposition of the
Shares and that the Warrant Holder should consult a tax adviser prior to such
exercise or disposition.
[Signature Page Follows.]
5
Definitive Copy
COMPANY SIGNATURE
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
Chief Financial Officer as of February 1, 2004.
CELSION CORPORATION
Signed:
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Printed: Anthony P. Deasey
-----------------------------------
Title: Executive Vice President of
---------------------------
Finance and Administration,
---------------------------
Chief Financial Officer
-----------------------
Address: 10220-L Old Columbia Road
Columbia, Maryland 21046-1785
WARRANT HOLDER SIGNATURE
IN WITNESS WHEREOF, the Warrant Holder has executed this Warrant or has caused
this Warrant to be executed by its ____________________ as of January_____,
2004.
INDIVIDUAL WARRANT HOLDER:
Signed:
---------------------------------------
Printed:
--------------------------------------
Address:
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--------------------------------------
WARRANT HOLDER THAT IS AN ENTITY
Name of Entity:
-----------------------
Signed:
-------------------------------
Printed:
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Title:
--------------------------------
Address:
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[SIGNATURE PAGE TO WARRANT]
6
Definitive Copy
EXHIBIT A
CELSION CORPORATION
WARRANT EXERCISE AGREEMENT
CELSION CORPORATION
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The Warrant Holder hereby elects to purchase the number of shares (the
"Shares") of the Common Stock, par value $0.01 per share, of Celsion Corporation
(the "Company"), as set forth below, pursuant to that certain Warrant dated as
of the date set forth below (the "Warrant"), the terms and conditions of which
are hereby incorporated by reference herein (please print):
Warrant Holder:
-----------------------------------------------------------------
Social Security or Tax I.D. No.:
------------------------------------------------
Address:
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Warrant Date:
-------------------------------------------------------------------
Date of Exercise:
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Exercise Price Per Share:
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Number of Shares Subject to Exercise and Purchase:
------------------------------
Total Exercise Price:
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Exact Name of Title to Shares:
--------------------------------------------------
The Warrant Holder hereby delivers to the Company the Total Exercise
Price as follows (circle and complete as appropriate):
1. in cash in the amount of $_______, receipt of which is acknowledged
by the Company;
2. through a "same day sale commitment" from the Warrant Holder and the
broker named below in the amount of $_________ and substantially in the form
attached hereto as Attachment 1; or
3. through a "margin commitment" from the Warrant Holder and the broker
named below in the amount of $_________ and substantially in the form attached
hereto as Attachment 2.
Broker: Brokerage Firm:
4. through the "net exercise" procedure set forth in Section 4.2 of the
Agreement.
A-1
Definitive Copy
Tax Consequences. THE COMPANY IS UNDER NO OBLIGATION TO REPORT THE
EXERCISE OF THIS WARRANT TO THE INTERNAL REVENUE SERVICE OR ANY TAXING AUTHORITY
OF ANY STATE, LOCAL OR OTHER JURISDICTION. THE WARRANT HOLDER UNDERSTANDS THAT
HE, SHE OR IT MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF THE WARRANT
HOLDER'S PURCHASE OR DISPOSITION OF THE SHARES. THE WARRANT HOLDER REPRESENTS
THAT HE, SHE OR IT HAS CONSULTED WITH ANY TAX CONSULTANT(S) THE WARRANT HOLDER
DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND
THAT THE WARRANT HOLDER IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.
- -------------------------------------
Name of Warrant Holder
- -------------------------------------
Signature of Warrant Holder
- -------------------------------------
Printed Name
- -------------------------------------
Title
A-2
Definitive Copy
EXHIBIT B
CELSION CORPORATION
SPOUSAL CONSENT
TO
WARRANT EXERCISE AGREEMENT
The undersigned spouse of the Warrant Holder has read, understands, and
hereby approves the Warrant Exercise Agreement between the Warrant Holder and
the Company (the "Agreement"). In consideration of the Company's granting the
Warrant Holder the right to purchase the Shares as set forth in the Agreement,
the undersigned hereby agrees to be bound irrevocably by the Agreement and
further agrees that any community property interest shall similarly be bound by
the Agreement. The undersigned hereby appoints the Warrant Holder as his or her
attorney in fact with respect to any amendment or exercise of any rights under
the Agreement.
Date:
--------------- --------------------------------------
Signature of Warrant Holder's Spouse
Address:
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B-1
Definitive Copy
ATTACHMENT 1
SAME DAY SALE COMMITMENT
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Celsion Corporation
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to sell immediately
_________ of the Number of Shares (the "Same Day Sale Shares") through the
undersigned broker (the "Broker") and for the Broker to pay directly to the
Company from the proceeds from such sale $__________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to sell through the Broker the Same
Day Sale Shares and unconditionally authorizes the Company or its transfer agent
to deliver certificates representing the Same Day Sale Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Same Day Sale Shares, the Exercise
Price by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
- ----------------------- -----------------------
(Name) (Name of Firm)
- ----------------------- -----------------------
(Signature) (Signature)
- ----------------------- -----------------------
(Printed Name) (Printed Name)
- ----------------------- -----------------------
(Title) (Title)
Definitive Copy
ATTACHMENT 2
MARGIN COMMITMENT
--------------, -------
CELSION CORPORATION
10220-L Old Columbia Road
Columbia, Maryland 21046-1785
Attention: Chief Financial Officer
The undersigned Warrant Holder ("Warrant Holder") desires to exercise
that certain warrant described in the attached Warrant Exercise Agreement (the
"Warrant") with respect to _________ shares of Celsion Corporation (the
"Company") Common Stock (the "Number of Shares"), and to pledge immediately
________ of the Number of Shares (the "Margin Shares") through the undersigned
broker (the "Broker") as security for a loan from the Broker and for the Broker
to pay directly to the Company $________ (the "Exercise Price").
Accordingly, the Warrant Holder hereby represents that the Warrant
Holder: (i) hereby irrevocably exercises the Warrant with respect to the Number
of Shares and (ii) hereby irrevocably elects to pledge to the Broker the Margin
Shares and unconditionally authorizes the Company or its transfer agent to
deliver certificates representing the Margin Shares to the Broker.
The Broker hereby represents that the Broker: (i) is a member in good
standing of the National Association of Securities Dealers, Inc. and (ii)
irrevocably commits to pay to the Company, no more than one (1) business day
after receiving certificates representing the Margin Shares, the Exercise Price
by check or wire transfer to an account specified by the Company.
WARRANT HOLDER: BROKER:
- ----------------------- -----------------------
(Name) (Name of Firm)
- ----------------------- -----------------------
(Signature) (Signature)
- ----------------------- -----------------------
(Printed Name) (Printed Name)
- ----------------------- -----------------------
(Title) (Title)
4
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made and entered into
by and between CELSION CORPORATION, a Delaware Corporation, which has an address
of 10220-L Old Columbia Road, Columbia, MD 21046-1705 ("Celsion"), and Dr. Jacob
L Jacobson, Social Security #174-40-160, a consultant, whose address is 99-10
Florence Street, Chestnut Hill, MA 02467("Consultant") on October 1, 2003.
WHEREAS, Consultant specializes in the field of manufacturing and
supply chain management for medical devices with in-depth knowledge of the
manufacturing, supply and quality requirements of Boston Scientific Corporation
(BSC).
WHEREAS, Consultant advises on strategy formulation and implementation,
enhancing operational effectiveness, organizational development and management
coaching, and provides interim leadership as required.
WHEREAS, Celsion is transferring the production of its disposable BPH
Catheter Kits (Kits) from Catheter Research, Inc. (CRI) to an alternative
manufacturer acceptable to its distributor Boston Scientific Corporation.
WHEREAS, Celsion wishes to ensure that it is able to meet all of Boston
Scientific Corporation's supplier requirements and ship Catheter Kits from the
new supplier to Boston Scientific Corporation no later than June 25, 2004.
WHEREAS, Celsion, in order to ship Kits by June, 25 2004, expects by
April 16, 2003 to have completed transfer of manufacturing to an alternative
supplier and have completed a submission to the FDA for approval to change the
manufacturer
WHEREAS, Celsion through the process of changing the source supplier of
the Catheter Kit expects to generate a substantial reduction in the purchase
price of the Kits to meet a contractual BSC requirement that within 2 years from
initial sales to customers the purchase price shall be reduced by 50% from the
current price.
WHEREAS, Celsion has primary goal of systematic value enhancement
leading to a value realizing event in not more than 4 years and to achieve this
Celsion wishes to strengthen its strategy and implementation; and strengthen its
operational, organizational and management effectiveness
WHEREAS, Consultant is willing to advise and assist Celsion on the
basis set forth herein and for the consideration herein named.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises of the parties hereto, and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending legally to be bound, hereby agree as follows:
2. Services to be Performed.
2.1 It is understood and agreed that Consultant implement and
manage a process to ensure that Celsion meets Boston Scientific
Corporation's requirements by June 25, 2004.
2.2 It is understood and agreed that consultant will provide
counsel on strategy, operational and organizational
effectiveness, organizational development, recruiting and
development of people, management coaching, ad hoc interim
leadership and other management consulting as required by
Celsion
2.3 It is anticipated that the Consultant will work any amount of
time necessary to provide the services agreed to herein
including full time (5 days per week) if required from October
1, 2003 though April 30, 2004 to complete transfer of
manufacturing and submission to the FDA by April 16, 2004.
2.4 Subsequent to April 30, 2004 Consultant will work an amount of
time as required by Celsion and agreed to by the Consultant
that is sufficient to provide the services itemized in 2.1 and
2.2. It is anticipated that this should average 2 days per week
3. Compensation. for the period October 11, 2003 through April 30, 2004
--------------------------------------------------------------------
Celsion shall compensate Consultant as follows:
3.1 Consultant shall be compensated at a rate of $1,600 per day
which amount shall be paid 70% in cash and 30% in shares of
Celsion common stock ("Celsion Shares").
Celsion will make cash payments within 10 days of submission of
an invoice by the Consultant. The amount of stock due in lieu
of cash will be calculated by multiplying the total
compensation (number of days worked multiplied by $1,600) by
30% and dividing the product of that calculation by the closing
price of Celsion `s stock on the last trading day of each
month. A stock certificate will be issued within 30 days of the
end of each quarter for the total number of Celsion Shares due
for the preceding quarter.
2
3.2 Consultant understands that the stock certificates, or other
instruments representing any of the Celsion Shares may bear
legends substantially similar to the following:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or the securities
laws of any state and may not be sold or otherwise disposed
of except pursuant to an effective registration statement
under such act and applicable exemption to the registration
requirements of such act or such laws."
3.3 As an incentive to ensure that transfer of manufacturing and
submission to the FDA is completed by April 16, 2004 and that
approval of the alternate manufacturer by the FDA no later than
June 25, the Consultant will be eligible to receive a bonus of
$40,000, payable 50% in cash and 50% in shares of Celsion
common stock with a conversion price equal to the closing price
of Celsion common stock on April 30, 2004. In the event the
goal is not fully met the bonus shall be adjusted to an amount
mutually agreed upon by the Consultant and Celsion
3.4 Celsion will reimburse the Consultant for all out of pocket
expenses incurred in the performance of the obligations under
this agreement.
4 Compensation for the period subsequent to April 30, 2004
--------------------------------------------------------
Celsion shall compensate Consultant as follows:
4.1 Consultant shall be compensated at a rate of $13,600 per month
which amount shall be paid 70% in cash and 30% in shares of
Celsion common stock (Celsion Shares).
Celsion will make cash payments within 10 days of submission of
an invoice by the Consultant. The amount of stock due in lieu
of cash will be calculated by multiplying $13,600 by 30% and
dividing the product of that calculation by the closing price
of Celsion `s stock on the last trading day of each month. A
stock certificate will be issued within 30 days of the end of
each quarter for the total number of Celsion Shares due for the
preceding quarter.
4.2 This compensation shall be subject to the terms of 3.2 and 3.4
above
3
IN WITNESS WHEREOF, the parties hereto have hereunto affixed their signatures to
be effective as of the date and year first above written.
CONSULTANT CELSION CORPORATION
/s/Jacob L. Jacobson____________ By: /s/Anthony P. Deasey_________
- -------------------------------- -----------------------------
Jacob L Jacobson Name: Anthony P. Deasey
Consultant Title: Executive Vice President
4
CELSION -------------------------------------------------------------------
CELSION CORPORATION T 410.290.5390 www.celsion.com
10220-I, Old Columbia Road T 800.262.0394 celsion@celsion.com
Columbia MD 21046-1785 F 410.290.5394
February 1, 2003
Dr. Alan J. Fenn
4 Sherman Bridge Rd
Wayland, MA 01778
RE: Compensation for Consultant work in the Area of Intellectual Properties (IP)
Dear Dr. Fenn:
Celsion Corporation is pleased to issue 50,000 shares of its common stock to
your for your efforts in several new IP filings assigned to Celsion Corporation.
Sincerely,
/s/Augustine Y. Cheung
Augustine Y. Cheung
CEO and President
CELSION -------------------------------------------------------------------
CELSION CORPORATION T 410.290.5390 www.celsion.com
10220-I, Old Columbia Road T 800.262.0394 celsion@celsion.com
Columbia MD 21046-1785 F 410.290.5394
December 1, 2002
Dr. Kaijun Wu
President and Professor of Urology
First affiliated Hospital Guangzhou Medical College
No.1 Kang Da Road
Guangzhou, China
Dear Dr. Wu:
Further our conversation, I am happy to inform you that Celsion Corporation will
retain your service as medical consultant for 2003. A retainer of US$1,000 per
month will be offered as compensation. It is my understanding that you will be
willing to receive the compensation in form of Celsion Corporation restricted
common stock in lieu of cash. Your stipend will be paid quarterly and the number
of shares to be issued to you will be calculated using the closing stock price
of each calendar quarter.
Thank you for your assistance,
/s/Augustine Y. Cheung
Augustine Y. Cheung
President & CEO
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors
Celsion Corporation
We consent to the incorporation by reference in the Form S-3
Registration Statement of Celsion Corporation (the "Corporation") of our report
dated November 21, 2003 relating to the balance sheets of the Corporation as of
September 30, 2003 and 2002 and the related statements of operations, changes in
stockholders' equity and cash flows for each of the years in the three-year
period ended September 30, 2003 which report appears in the 2003 Annual Report
on Form 10-K of the Corporation and to all references to our Firm included in
the Registration Statement.
/s/ Stegman & Company
Baltimore, Maryland
May 24, 2004