[Richards, Layton & Finger Letterhead]
March 7, 2002
Celsion Corporation
10220-I Old Columbia Road
Columbia, Maryland 21046
RE: REGISTRATION FOR RESALE OF 33,825,821 SHARES OF
COMMON STOCK ON FORM S-3
Ladies and Gentlemen:
We have acted as special Delaware counsel to Celsion
Corporation, a Delaware corporation (the "Registrant"), in connection with a
registration statement on Form S-3 2002 (File No. 333-82450) (the "Registration
Statement") filed with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933 as amended (the "Securities Act") on
February 8, 2002, pertaining to the registration of 33,825,821 shares (the
"Registration Shares") of common stock, par value $.01 per share, of Registrant
("Common Stock") for issuance by the Registrant and for resale by certain
securityholders named in the Registration Statement (individually, a "Selling
Stockholder" and, collectively, the "Selling Stockholders"). In this connection,
you have requested our opinion as to certain matters of Delaware law.
For the purpose of rendering our opinion as expressed herein,
we have been furnished and have reviewed the following documents:
(i) the Certificate of Incorporation of the Registrant as
filed with the Secretary of State of the State of Delaware (the "Secretary of
State") on May 17, 2000, the Certificate of Designation of the Registrant as
filed with the Secretary of State on August 17, 2000, the Certificate of
Ownership and Merger of the Registrant filed with the Secretary of State on
August 17, 2000 and the Certificate of Amendment of the Registrant as filed with
the Secretary of State on June 5, 2001 (collectively, the "Certificate");
(ii) the bylaws of the Registrant, as amended through the
date hereof (the "Bylaws");
(iii) the Registration Statement;
Celsion Corporation
March 7, 2002
Page 2
(iv) a form of subscription agreement (the "Subscription
Agreement") relating to the issuance and sale of 12,500,000 units, each such
unit consisting of one share of Common Stock (the shares of Common Stock
included in such units being referred to collectively as the "Private Placement
Shares") and one warrant (the warrants included in such units being referred to
collectively as the "Private Placement Warrants") to purchase, at an exercise
price of $0.60 per share, 12,500,000 shares of Common Stock (the shares of
Common Stock issuable upon exercise of the Warrants being referred to
collectively as the "Private Placement Warrant Shares");
(v) a form of the Private Placement Warrants;
(vi) a form of the warrants dated January 9, 2002 (the
"Placement Agent Warrants") to purchase, at a price of $0.625 per unit, a total
of up to 1,110,000 units, each such unit consisting of one share of Common Stock
(the shares of Common Stock issuable upon exercise of the Placement Agent
Warrants being referred to collectively as the "Placement Agent Shares") and one
warrant (the warrants included in such units being referred to collectively as
the "Underlying Placement Agent Warrants") to purchase, at an exercise price of
$0.60 per share, one additional share of Common Stock (the shares of Common
Stock issuable upon exercise of the Underlying Placement Agent Warrants being
referred to collectively as the "Underlying Placement Agent Shares");
(vii) a form of the Underlying Placement Agent Warrants;
(viii) a copy of the letter agreement dated October 17, 2001
(the "Goldpac Warrant Agreement") between the Registrant and Goldpac Investment
Partners, Ltd. governing the issuance and sale of a warrant (the "Goldpac
Warrant") to purchase, at an exercise price of $.50 per share, up to 140,000
shares of Common Stock (the shares issuable pursuant to the Goldpac Warrant
Agreement and Goldpac Warrant being referred to collectively as the "Goldpac
Warrant Shares");
(ix) the Goldpac Warrant;
(x) a copy of the letter agreement dated November 5, 2001
(the "Equity Communications Agreement") between Registrant and Equity
Communications LLC covering the issuance and sale of 50,000 shares of Common
Stock (collectively, the "Equity Communications Shares");
(xi) a copy of the Settlement Agreement dated January 25,
2002 between the Registrant and Walter C. Stearns and certain others (the
"Settlement Agreement") covering the issuance of warrants (collectively, the
"Stearns Replacement Warrants") to purchase, at an exercise price of $0.01 per
share, up to 6,325,821 shares of Common Stock (the "Stearns Warrant Shares");
(xii) a form of the Stearns Replacement Warrants;
Celsion Corporation
March 7, 2002
Page 3
(xiii) certain resolutions of the Board of Directors of the
Registrant (the "Board"), certified by an officer of the Registrant, relating
to, among other things, (a) the issuance of the Private Placement Shares, the
Private Placement Warrants, the Private Placement Warrant Shares, the Placement
Agent Warrants, the Placement Agent Shares, the Underlying Placement Agent
Warrants, the Underlying Placement Agent Shares, the Goldpac Warrant, the
Goldpac Warrant Shares, the Equity Communications Shares, the Stearns
Replacement Warrants and the Stearns Warrant Shares and (b) the approval of the
Registration Statement, the Subscription Agreement, the Goldpac Warrant
Agreement, the Equity Communications Agreement, the Settlement Agreement and the
transactions contemplated thereby.
(xiv) a certificate of the Secretary of State, dated the
date hereof, as to the good standing of the Company; and
(xv) a certificate of an officer of the Registrant, dated
the date hereof, as to certain matters (the "Officer's Certificate").
The Private Placement Warrants, the Placement Agent Warrants,
the Underlying Placement Agent Warrants, the Goldpac Warrant and the Stearns
Replacement Warrants are sometimes collectively referred to herein as the
"Warrants." The Private Placement Warrant Shares, the Placement Agent Shares,
the Underlying Placement Agent Shares, the Goldpac Warrant Shares and the
Stearns Warrant Shares are sometimes collectively referred to herein as the
"Underlying Warrant Shares."
With respect to the foregoing documents, we have assumed: (a)
the genuineness of all signatures, and the incumbency, authority, legal right
and power and legal capacity under all applicable laws and regulations, of the
officers and other persons and entities signing any of the documents as or on
behalf of the parties thereto; (b) the authenticity of all documents submitted
to us as originals; (c) that the copies of the documents furnished for our
review conform to the originals thereof; and (d) that the copies of the
documents submitted to us for our review have not been and will not be altered
or amended in any respect material to our opinion as expressed herein. For the
purpose of rendering our opinion as expressed herein, we have not reviewed any
document other than the documents set forth above, and we assume there exists no
provision of any such other document that bears upon or is inconsistent with our
opinion as expressed herein. We have conducted no independent factual
investigation of our own, but rather have relied solely upon the foregoing
documents, the statements and information set forth therein, and the additional
matters recited or assumed herein, all of which we assume to be true, complete
and accurate in all material respects.
In addition to the foregoing, for the purpose of rendering our
opinion as expressed herein, we have, with your consent, assumed the following
matters:
Celsion Corporation
March 7, 2002
Page 4
(1) that (i) each of the Subscription Agreements conforms
in all material respect to the form of Subscription Agreement furnished for our
review, (ii) each of the Private Placement Warrants conforms in all material
respect to the form of the Private Placement Warrant furnished for our review,
(iii) each of the Placement Agent Warrants conforms in all material respect to
the form of Placement Agent Warrant furnished for our review, (iv) each of the
Underlying Placement Agent Warrants conform in all material respect to the form
of Underlying Placement Warrant furnished for our review and (v) each form of
Stearns Replacement Warrants conform in all material respect to the form of
Stearns Replacement Warrant furnished for our review;
(2) that each of the Subscription Agreements, the
Warrants, the Goldpac Warrant Agreement, the Equity Communications Agreement and
the Settlement Agreement has been duly authorized, executed and delivered by
each of the parties thereto;
(3) that the Registrant has received or will receive,
immediately prior to the time of issuance of the Private Placement Shares, the
Warrants, the Underlying Warrant Shares and the Equity Communications Shares, as
applicable, the entire amount of the consideration contemplated by (i) the
Warrants and Equity Communications Agreement, as applicable, and (ii) the
resolutions of the Board (a) authorizing the issuance of the Private Placement
Shares, the Warrants, the Underlying Warrant Shares and the Equity Communication
Shares and (b) approving the Equity Communications Agreement and the Settlement
Agreement;
(4) that the Registrant has at all times relevant to our
opinion as expressed herein sufficient authorized, unissued and otherwise
unreserved shares of Common Stock available for issuance at the time of each
issuance of Underlying Warrant Shares, Equity Communications Shares and Private
Placement Shares;
(5) that the relevant provisions of the Certificate of
Incorporation, the Bylaws and the General Corporation Law of the State of
Delaware (the "General Corporation Law") in effect at the time of issuance of
any of the Underlying Warrant Shares, the Equity Communications Shares and the
Private Placement Shares did not or will not differ in any relevant respect from
the analogous provisions of the Certificate of Incorporation, the Bylaws and the
General Corporation Law in effect as of the date of this opinion and that no
additional relevant provisions shall have been added subsequent to the date
hereof;
(6) that stock certificates (the "Stock Certificates")
representing the Common Stock, in the form attached as Exhibit D to the
Officer's Certificate, have been or will be duly completed, executed and
delivered by the President and the Secretary of the Registrant to reflect the
issuances of the Underlying Warrant Shares, the Equity Communications Shares and
the Private Placement Shares;
Celsion Corporation
March 7, 2002
Page 5
(7) that no Underlying Warrant Share shall be issued upon
exercise of any Warrant if the exercise price for such Warrant is less than the
par value of such Underlying Warrant Share;
(8) that the issuances of the Private Placement Shares,
the Underlying Warrant Shares and the Equity Communications Shares have been or
will be recorded in the stock ledger of the Registrant at the time of such
issuance; and
(9) that the Equity Communications Shares were issued in
accordance with the terms of the Equity Communications Agreement.
Based upon and subject to the foregoing and upon our review of
such matters of law as we have deemed necessary and appropriate in order to
render our opinion as expressed herein, and subject to the assumptions,
limitations, exceptions and qualifications set forth herein, it is our opinion
that (i) the Registration Shares have been duly authorized, (ii) that the
Private Placement Shares and the Equity Communications Shares have been validly
issued and are fully paid and nonassessable and (iii) that, when issued,
delivered and paid for in accordance with the terms of the Warrants, the
Settlement Agreement, or the Goldpac Warrant Agreement as the case may be, the
Underlying Warrant Shares will be validly issued, fully paid and nonassessable.
We are admitted to practice law in the State of Delaware and
do not hold ourselves out as being experts on the law of any other jurisdiction.
The foregoing opinion is limited to the laws of the State of Delaware currently
in effect, and we have not considered and express no opinion on the effect of
the laws of any other state or jurisdiction, including federal laws relating to
securities or other federal laws, or the rules and regulations of stock
exchanges or of any other regulatory body. In addition, we have not considered
and express no opinion as to the applicability of or any compliance with the
Delaware Securities Act, 6 Del. C. Section 7301 et seq., or any rules or
regulations promulgated thereunder.
The foregoing opinion is rendered solely for your benefit in
connection with the matters addressed herein and, without our prior written
consent, may not be relied upon by you for any other purpose or be furnished or
quoted to, or be relied upon by, any other person or entity for any purpose.
Notwithstanding the foregoing, we hereby consent to the use of and filing of
this opinion as an exhibit to the Registration Statement to be filed with the
Commission and to the use of our name under the caption "Legal Matters" in the
prospectus that forms a part of the Registration Statement, provided, however,
that in giving such consent we do not admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
MG/BVF