GOLDPAC INVESTMENT PARTNERS LTD.
October 17, 2001
Celsion Corporation
102201 Old Columbia Road
Columbia MD USA 210411
Attention: Dr. Augustine Y. Cheung
President and Chief Executive Officer
RE: CELSION CORPORATION--INTRODUCTION OF STRATEGIC 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 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) Tire 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 US$3 -US$5 million
through one or more private placements either within tire United States or
abroad to fund its further development and the commercialization of certain of
its products (collectively, the "FINANCING").
GOLDPAC INVESTMENT PARTNERS LTD.
Celsion Corporation
October 17, 2001
Page 2
(C) The Company has retained Moors & Cabot, Inc. ("MOORS &
CABOT") to serve as lead placement agent with respect to effecting the
Financing with investors within the United States and, in consultation with
Moors & Cabot, has developed a package of information to be utilized in
connection with the Financing (the "PRIVATE PLACEMENT PACKAGE").
2. SCOPE OF SERVICES
Goldpac Investment Partners Ltd., a British Virgin Islands corporation
("GOLDPAC") shall act as an advisor to the Company with respect to potential
investment in the Financing by one or more investors in Hong Kong. In its role
as advisor, Goldpac will, at the request and subject to the control of the
Company, identify, on a "best efforts" basis, investors who are residents of
Hong Kong (or otherwise non-resident aliens in the United States) wit ling to
make an aggregate investment of up to US$ 1.5 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 a road show in
Hong Kong 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 arc 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) Upon the execution of this Agreement, the Company shall pay
Goldpac US$20,000 as a non-accountable and non-refundable
Advisory Fee;
(B) The Company shall pay to Goldpac an additional Success Fee, in
U.S. dollars, in an amount equal to five percent (5%) of the
purchase price of any securities of Celsion purchased by
Permitted Investors introduced to the Company by Goldpac; and up
to an additional two point five percent (2.5%) of the purchase
price of any securities of Celsion purchased by Permitted
Investors introduced to Celsion by third parties engaged by
Goldpac.
Suite 630, 1090 West Pender Street
Vancouver, B.C. V6E 2N7 Canada
GOLDPAC INVESTMENT PARTNERS LTD.
Celsion Corporation
October 17, 2001
Page 3
(C) As a retainer to ensure the availability of Goldpac personnel to
perform the services contemplated hereby, the Company will grant
to Goldpac common stock purchase warrants ("WARRANTS"),
exercisable for a period of two (2) years from the date of the
final closing of the Financing, at an exercise price of US$0.50
per share. Goldpac shall be entitled to receive one (1) Warrant
to purchase one (1) share of the Company's Common Stock, par
value $0.01 per share, for each 10 shares acquired in the
Company by a Permitted Investor or Permitted Investors
introduced to the Company by Goldpac pursuant hereto. Goldpac
will inform the Company in writing no later than the Termination
Date (as defined below) of those Permitted Investors it has
involved in substantial negotiations concerning the Financing
pursuant hereto. If the Company obtains financing from such
named Permitted Investors on or before the First anniversary of
the Termination Date, the Company will be obligated grant
Goldpac Warrants in respect of such investment as provided
above.
4. TERM AND TERMINATION OF ENGAGEMENT
(A) Subject to Section 4(B) below, the Engagement will be for a
period o f three (3) 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;
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 Moors &
Suite 630, 1090 West Pender Street
Vancouver, B.C. V6E 2N7 Canada
GOLDPAC INVESTMENT PARTNERS LTD.
Celsion Corporation
October 17, 2001
Page 4
Cabot including, without limitation, such number of copies of
the Private Placement Package prepared in connection with the
Financing as 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
Suite 630, 1090 West Pender Street
Vancouver, B.C. V6E 2N7 Canada
GOLDPAC INVESTMENT PARTNERS LTD.
Celsion Corporation
October 17, 2001
Page 5
violation of any term or provision of the Company's Bylaws, Certificate of
Incorporation or of any or 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 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 tern or provision of Goldpac's Bylaws, Certificate of Incorporation, other
constitutive documents, or material contracts with third parties, state 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
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
Suite 630, 1090 West Pender Street
Vancouver, B.C. V6E 2N7 Canada
GOLDPAC INVESTMENT PARTNERS LTD.
Celsion Corporation
October 17, 2001
Page 6
(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 (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 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
7(C) shall
Suite 630, 1090 West Pender Street
Vancouver, B.C. V6E 2N7 Canada
GOLDPAC INVESTMENT PARTNERS LTD.
Celsion Corporation
October 17, 2001
Page 7
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 sock 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 developed or created by Goldpac 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 axed 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. 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
Suite 630, 1090 West Pender Street
Vancouver, B.C. V6E 2N7 Canada
GOLDPAC INVESTMENT PARTNERS LTD.
Celsion Corporation
October 17, 2001
Page 8
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.
(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 I 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, arc not a part of this agreement,
and shall nut 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 clay 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
Suite 630, 1090 West Pender Street
Vancouver, B.C. V6E 2N7 Canada
GOLDPAC INVESTMENT PARTNERS LTD.
Celsion Corporation
October 17, 2001
Page 9
GOLDPAC:
Goldpac Investment Partners Ltd.
Suite 630, 1090 West Pender Street
Vancouver, B.C. V6E 2N7 Canada
Attention: Mr. Joseph Tai
Facsimile No. 604 488 0868
or any other addresses of which either party shall notify the other party in
writing in accordance with the terms hereof.
(G) 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.
(H) 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 be 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.
Yours faithfully Agreed and accepted by:
For and on behalf of For and on behalf of
Goldpac Investment Partners Ltd. Celsion Corporation
- ----------------------- --------------------------------
Joe Tai Augustine Y. Cheung
Executive Director President and Chief Executive Officer
DC3/72194
Suite 630, 1090 West Pender Street
Vancouver, B.C. V6E 2N7 Canada