Document:

Transition Services Agreement

 Exhibit 10.2 
  
 EXECUTION COPY 
  
 TRANSITION SERVICES AGREEMENT 
  
 This Transition Services Agreement (this “Agreement”) is made and entered into as of January 16, 2006, by and between CELSION
CORPORATION, a Delaware corporation (“CELSION”) and CELSION (CANADA) LIMITED, an Ontario, Canada corporation (“CANADA”). The parties hereto are sometimes referred to collectively herein as the
“Parties” and individually as a “Party”. 
  
 Recitals 
  
 A. Celsion and Canada are parties to
a Contribution Agreement dated as of January 16, 2006 whereby Celsion has contributed certain assets to Canada. Canada has requested that Celsion continue to provide the services described herein to Canada during the term of this Agreement in
order to provide Canada with an opportunity to obtain such services from third parties or to begin to provide such services itself. 
  
 B. Celsion, Canada and Dr. Augustine Y. Cheung, a Maryland resident (“Buyer”), intend to enter into a stock purchase agreement (the
“Stock Purchase Agreement”) whereby Celsion will sell and transfer one hundred (100) shares of the capital stock of Canada (the “Shares”), representing all of the outstanding capital stock of Canada. 
  
 C. Celsion, Canada and Buyer intend that the payments due and payable by
Canada pursuant to Section 4 below shall be secured by shares of common stock, par $0.01, of Celsion, which are being pledged by Buyer as collateral (the “Collateral”) pursuant to a Stock Pledge Agreement in the form attached hereto
as Exhibit A. 
  
 D. Following the execution of closing of
the transactions contemplated by the Stock Purchase Agreement, Canada plans to sell approximately an 80% interest in Canada to investors through the process of Canada being merged into a Capital Pool Company (“CPC”). The transaction
contemplates a two phase process, phase 1 being the establishment and registration of the CPC and phase 2 the merger of Canada into the CPC simultaneously funded by a private placement of shares of the merged corporation. Phase 2 is hereinafter
referred to as the “Qualifying Transaction.” 
  
 NOW,
THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: 
  
 1. COMMENCEMENT AND TERM OF AGREEMENT. 
  
 (a) Beginning as of the date hereof (the “Effective Date”),
Celsion shall provide to Canada in a manner consistent with past practices those services set forth in Section 2 of this Agreement (“Transition Services”) for the period provided with regard to each Transition Service in
Section 2 below. 

 (b) This Agreement and the provision of any or all of the Transition Services hereunder may be terminated
by mutual agreement of the Parties or by either Party in the event that the other Party hereto has breached this Agreement and fails to cure such breach within thirty (30) days following written notice setting forth the nature of such breach.

  
 2. TRANSITION SERVICES. 
  
 The Transition Services provided under this Agreement and the term for the
provision of such services (the “Term”) will be as follows: 
  

	 	a)	for a period of up to six (6) months from the Effective Date, Celsion will sublease (the “Sublease”) to Canada space in which Canada may carry on it business at 10220
Old Columbia Road, Columbia, Maryland 21046 subject to the terms set forth in Exhibit B (“Facilities Services”) 

  

	 	b)	for so long as Canada is occupying the space described in Section 2(a) above pursuant to the Sublease, Celsion shall provide reasonable administrative support services as
needed in the operation of Canada; 

  

	 	c)	for the shorter of the period ending (1) June 30, 2006 and (2) the date of the closing of a Qualifying Transaction, Celsion shall pay the reasonable: salary and
health and dental insurance of Buyer, salary and dental insurance of John Mon, and salaries of Charles Shelton and Stephen Shelton (together, the “Canada Employees”), totaling, in the aggregate, approximately forty-five thousand dollars
($45,000.00) per month; and 

  

	 	d)	for the shorter of the period ending (1) June 30, 2006 and (2) the date of the closing of a Qualifying Transaction, Celsion shall reimburse Canada for expenses
reasonably incurred in connection with the operation of its business; provided that Canada shall submit, in accordance with Celsion’s policies and procedures, appropriate vouchers, receipts or other substantiating evidence acceptable to Celsion
for such expenses before reimbursement will be made hereunder and the aggregate reimbursement under this Section 2(d) shall not exceed One Hundred Thousand Dollars ($100,000.00). 

  
 3. PROVISION OF PAYROLL AND HUMAN RESOURCES PROCESSING 
  
 Celsion shall not be responsible for providing payroll and human resources
processing for Canada from and after the Effective Date, except in connection with amounts that Celsion pays pursuant to Section 2(c) hereof. In no event shall Celsion be responsible for any reporting relating to any time periods later than
June 30, 2006. 
  
 4. COSTS AND FEES FOR TRANSITION SERVICES.

  
 Within ten (10) days of the closing of a Qualifying
Transaction, in return for Transition Services provided hereunder, Canada shall pay Celsion as follows: 
  

	 	a)	the amount equal to the sum of (i) Sixteen Dollars and Eighty-Two Cents ($16.82) per square foot of space subleased by Canada pursuant to Section 2(a) hereof, plus
(ii) Two-Hundred Dollars fees for each month (or portion of a month) during which Canada occupies the space provided pursuant to the Facilities Services; and 

  

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	 	b)	the amount equal to all payments made by or on behalf of Celsion to Canada or the Canada Employees pursuant to Sections 2(c) and 2(d) above. 

  
 In the event that any payment due under this Section 4 is not made within ten
(10) days after the closing of a Qualifying Transaction, interest shall accrue on amounts outstanding at the rate of Prime plus one percent (1%). In the event that amounts due hereunder plus accrued interest thereon have not been paid in full
on the first anniversary of the closing of a Qualifying Transaction such failure shall be deemed to be an “Event of Default” hereunder. Celsion shall have the right to sell the Collateral as set forth in Section 7.3 of the Stock
Pledge Agreement upon the occurrence of an Event of Default. 
  
 5.
COOPERATION. 
  
 Celsion and Canada shall cooperate with each
other with respect to all provisions of this Agreement and the Transition Services provided hereunder. Celsion may agree, in writing, to provide additional Transition Services at its discretion and for such additional fees as the Parties may agree.

  
 6. LIMITATION OF LIABILITY. 
  
 CELSION, ITS SUBSIDIARIES, AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND PERMITTED
ASSIGNS (EACH, A “CELSION PARTY”) SHALL NOT BE LIABLE TO CANADA, ANY SUBSIDIARY OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, AGENT OR PERMITTED ASSIGN OF CANADA OR ANY OF ITS SUBSIDIARIES, (EACH, A “CANADA PARTY”) FOR ANY
LIABILITIES, CLAIMS, DAMAGES, LOSSES OR EXPENSES (“DAMAGES”), OF A CANADA PARTY ARISING IN CONNECTION WITH THIS AGREEMENT OR THE PROVISION OF OR FAILURE TO PROVIDE ANY TRANSITION SERVICES. ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING,
NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT LIMITED TO LOSS OF DATA OR AS A RESULT OF INCORRECT DATA), WHETHER IN AN ACTION OR PROCEEDING FOR BREACH OF CONTRACT,
NEGLIGENCE OR OTHER TORT OR BASED ON ANY OTHER THEORY OF LIABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. CELSION’S TOTAL LIABILITY TO CANADA UNDER THIS AGREEMENT SHALL NOT EXCEED, IN TOTAL AGGREGATE AMOUNT,
THE AMOUNT OF FEES PAID TO CELSION PURSUANT TO THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THIS LIMITATION ON LIABILITY WAS AN ESSENTIAL ELEMENT IN CELSION’S DETERMINATION TO ENTER INTO THIS AGREEMENT AND IN SETTING THE FEES AND OTHER
CONSIDERATION PROVIDED UNDER THIS AGREEMENT. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. 
  

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 7. CANADA INDEMNIFICATION. 
  
 Canada shall indemnify, defend and hold harmless each of the Celsion Parties, from and against all Damages of any kind or
nature, caused by or arising in connection with this Agreement or the performance (or non-performance) of the Transition Services so long as (i) Celsion acted in good faith pursuant to and within the scope of authority granted to it by this
Agreement and in a manner it believed to be in the best interest of Canada and (ii) Celsion’s conduct did not constitute gross negligence or willful misconduct. In the event that Celsion has actual knowledge of a claim that may be the
subject of indemnification under this Section 7, it shall promptly notify Canada of such claim and Canada shall defend such claim or, with the consent of Celsion (which consent shall not be unreasonably withheld) settle such claim. 

 
 8. INFORMATION. 
  
 Subject to applicable law, each Party hereto covenants and agrees to provide the other Party with all information regarding
itself and transactions under this Agreement as are required by such other Party to comply with all applicable federal, state, county and local laws, ordinances, regulations and codes, including, but not limited to, securities laws and regulations.

  
 9. FURTHER ASSURANCE. 
  
 Each of the Parties will make execute, acknowledge and deliver such other
instruments and documents, and take all such other actions, as the other Party may reasonably request and as may reasonably be required in order to effectuate the purposes of this Agreement and to carry out the terms hereof. 
  
 10. SUCCESSORS AND ASSIGNS. 
  
 This Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the Parties hereto, provided that this Agreement, or any of the rights or duties under this Agreement, may not be assigned or transferred to any person or entity without the prior written consent of the other
Party. 
  
 11. NOTICES. 
  
 Any notice, instruction, direction or demand under the terms of this
Agreement required to be in writing will be duly given upon delivery, by hand, or facsimile transmission or five (5) days after posting if sent by U.S. mail, return receipt requested to the following addresses: 
  

			
	If to Celsion:	 	Celsion Corporation
	 	 	Attention: Anthony P. Deasey, Chief Financial Officer
	 	 	10220 Old Columbia Road
	 	 	Columbia, Maryland 21046

  

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	If to Canada:	 	Celsion (Canada) Limited
	 	 	Attention: Augustine Y. Cheung, President
	 	 	10220 Old Columbia Road
	 	 	Columbia, Maryland 21046

  
 or to
such other address as either Party may have furnished to the other in writing in accordance with this Section 11. 
  
 12. GOVERNING LAW. 
  
 This Agreement shall be construed in accordance with and governed by the laws of the State of Maryland except its choice of law rules. 
  
 13. SUSPENSION. 
  
 The obligations of any Party to perform any acts hereunder may be suspended if such performance is prevented by fires,
strikes, embargoes, riot, invasions, governmental interference, inability to secure goods or materials, or other circumstances outside the reasonable control of the Parties. 
  
 14. SEVERABILITY. 
  
 If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid.
Rather, the Agreement shall be construed as if not containing the particular invalid or unenforceable provision, and the rights and obligations of each Party shall be construed and enforced accordingly. 
  
 15. RIGHTS UPON ORDERLY TERMINATION; SURVIVAL. 
  
 Upon termination of this Agreement by mutual agreement of the Parties or
expiration or termination of the Term of any of the Transition Services described herein, each Party shall, upon request, forthwith return to the other Party: (1) in the event of termination of this Agreement, all such reports, papers,
materials and other information required to be provided to the other Party by this Agreement; and (2) in the event of the expiration or termination of the Term of a Transition Service, all reports, paper, materials and other information
relating to such Transition Service required to be provided to the other Party by this Agreement in connection with such Transition Service. In addition, each Party shall assist the other in the orderly termination of this Agreement or any of the
Transition Services described herein. Notwithstanding any termination of this Agreement, the obligations of the Parties hereto to make payments hereunder and the provisions of Sections 6 (Limitation on Liability) and 7 (Canada Indemnification) shall
survive. Anything to the contrary herein notwithstanding, Celsion shall have no obligation under this Agreement to provide any Transition Services or other services following the expiration or termination of this Agreement. 
  

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 16. AMENDMENT. 
  
 This Agreement may only be amended by a written agreement executed by all of the Parties hereto. 
  
 17. NO REPRESENTATIONS; HEADINGS. 
  
 Neither Party makes any representation or warranty to the other Party except
as expressly set forth herein. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 
  
 18. ENTIRE AGREEMENT; NATURE OF RELATIONSHIP. 
  
 This Agreement constitutes the entire agreement between the Parties, and supersedes all prior agreements, representations,
negotiations, statements or proposals related to the subject matter hereof. The Parties’ relationship is that of an independent contractor and nothing in this Agreement is intended to, or should be construed to, create a partnership, joint
venture, or employer-employee relationship. 
  
 19. COUNTERPARTS.

  
 This Agreement may be executed in separate counterparts,
each of which deemed an original and all of which, when taken together, shall constitute one agreement. 
  
 {SIGNATURES APPEAR ON THE FOLLOWING PAGE} 
  

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 IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their duly authorized
representatives. 
  

			
	CELSION (CANADA) LIMITED
		
	By:	 	 /s/ Anthony P. Deasey

	Name:	 	Anthony P. Deasey
	Title:	 	Treasurer
	
	CELSION CORPORATION
		
	By:	 	 /s/ Lawrence S. Olanoff

	Name:	 	Lawrence S. Olanoff
	Title:	 	President and Chief Executive Office

  

					
	Transition Services Agreement	 	S-1	 	 

 Exhibit A 
  
 Form of Stock Pledge Agreement 

 Exhibit B 
  
 Facilities Services 
  

	1.	Celsion will make up to one thousand (1,000) square feet of office space (including an allocation of common space) available to Canada. 

  

	2.	Additional offices services that will be included with the provision of office space will include coffee service, security services and janitorial services.Separation Agreement and General Release

 Exhibit 10.3 
  
 SEPARATION AGREEMENT AND GENERAL RELEASE 
  
 This Separation Agreement and General Release (hereinafter “Agreement”) is hereby entered into effective this 16th
day of January 2006, between Celsion Corporation (hereinafter “Celsion”) and Dr. Augustine Cheung (hereinafter “Dr. Cheung”), who are collectively referred to herein as the “Parties.” 
  
 WHEREAS the Parties desire and agree to fully and finally resolve any and all
existing or potential issues, claims, causes of action, grievances and disputes that do, or could relate thereto or arise out of their employment relationship or severance thereof, without any admission of liability or finding or admission that any
of Dr. Cheung’s or Celsion’s rights, under any statute, claim or otherwise, were in any way violated. In consideration of the mutual promises contained herein, and other good and valuable consideration as hereinafter recited, the
receipt and adequacy of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows: 
  
 1. The Parties agree that Dr. Cheung’s employment as the Chief Science Officer and his position as a Director of Celsion voluntarily terminate
effective January 16, 2006. The Parties further agree that they will cooperate regarding all announcements of the Dr. Cheung’s decision to depart from Celsion and that neither party will issue any release without consulting with and
obtaining the consent of the other Party regarding the statements to be contained therein. The Parties agree that they will not unreasonably withhold consent to such announcements. 
  
 2. In consideration of Dr. Cheung’s promises in this Agreement, Celsion agrees that the provisions of paragraphs
5(b)(1) and (4) of Dr. Cheung’s January 1, 2004 Employment Agreement will not be enforced by it against Dr. Cheung, and he will be released from his obligations thereunder, solely insofar as the restrictions contained in
those paragraphs relate to the Adaptive Phased Array (“APA”) technology being transferred by Celsion to Celsion (Canada) Limited for the treatment of breast cancer. In all other respects, the provisions of Paragraph 5 of
Dr. Cheung’s Employment Agreement are incorporated herein as if written here in full and remain in effect. 
  
 3. As further consideration for this Agreement, Celsion agrees that Dr. Cheung’s stock options, as described in Paragraph 3(c) of his
January 1, 2004 Employment Agreement with Celsion, shall vest immediately and remain fully exercisable in accordance with their respective terms. 
  
 4. Dr. Cheung agrees and acknowledges that Celsion owes him no wages, benefits, compensation, property, stock or money of any kind or nature relating
to his employment with Celsion under the terms of his January 1, 2004 Employment Agreement with Celsion, except as expressly provided herein. 

 5. Celsion agrees that Dr. Cheung has fully performed his obligations under the terms of his
January 1, 2004 Employment Agreement with it and that, except as provided herein with respect to Paragraph 5 thereof, he does not owe Celsion further performance thereunder. 
  
 6. Dr. Cheung agrees that upon the separation of his employment with Celsion, he will surrender to Celsion every item
and every document that is Celsion’s property (including but not limited to keys, records, vehicles, computers, peripherals, computer files and disks, notes, memoranda, software, data, inventory and equipment) or contains Company information,
in whatever form. All of these materials are the sole and absolute property of Celsion. 
  
 7. Dr. Cheung hereby agrees that he will, and hereby does, forever and irrevocably release and discharge Celsion, its officers, directors, employees, agents, affiliates, parents, subsidiaries, divisions,
predecessors, purchasers, assigns, representatives, successors, successors in interest, and customers from any and all grievances, claims, demands, debts, defenses, actions or causes of action, obligations, contracts, promises, damages, judgments,
expenses, and liabilities, known or unknown, whatsoever which he now has, has had, or may have, whether the same be at law, in equity, or mixed, in any way arising from or relating to any act, occurrence, or transaction before the date of this
Agreement, including without limitation his separation of employment. This is a General Release. Dr. Cheung expressly acknowledges that this General Release includes, but is not limited to, Dr. Cheung’s intent to release Celsion from
any claim relating to his employment at Celsion, including, but not limited to, tort and contract claims, arbitration claims, statutory claims, claims under any state or federal wage and hour law or wage collection law, and claims of age, race,
color, sex, religion, handicap, disability, national origin, ancestry, citizenship, marital status, retaliation, or any other claim of employment discrimination under the Age Discrimination in Employment Act (29 U.S.C. §§ 626
et seq., “ADEA”), Title VII of the Civil Rights Acts of 1964 and 1991 as amended (42 U.S.C. §§ 2000e et seq.), the Employee Retirement Income Security Act (29 U.S.C. §§ 1001 et
seq.), the Consolidated Omnibus Budget Reconciliation Act of 1985 (29 U.S.C. §§ 1161 et seq.), the Americans With Disabilities Act (42 U.S.C. §§ 12101 et seq.), the Rehabilitation Act of
1973 (29 U.S.C. §§ 701 et seq.), the Family and Medical Leave Act (29 U.S.C. §§ 2601 et seq.), the Fair Labor Standards Act (29 U.S.C. §§ 201 et seq.), the
Annotated Codes of Maryland, and any other law prohibiting employment discrimination. 
  
 8. Dr. Cheung agrees not to sue Celsion or to join in any lawsuit against Celsion, or any other person or entity specified in Paragraph 7, concerning any matter which arose prior to the date of this Agreement.

  

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 Dr. Cheung further agrees and covenants not to make, file, assist or encourage others in making or filing any
lawsuits, complaints, or other proceedings, including but not limited to any suits in the local or state courts, the United States federal District Courts or any other court, against Celsion, or any other person or entity specified in Paragraph 7,
and that, as to any such lawsuits, complaints, or other proceedings which have already been made or filed by or on behalf of Dr. Cheung, Dr. Cheung agrees to withdraw or dismiss with prejudice immediately all such lawsuits. 
  
 9. Celsion hereby forever releases and irrevocably discharges Dr. Cheung
from any and all claims, demands, debts, actions, causes of action, obligations, damages and liabilities which it has ever had, now has or could have with respect to him, arising from or relating in any way, directly or indirectly, to his employment
with or separation from Celsion, Celsion expressly acknowledges that this constitutes a General Release in tort, contract and under any federal, state or local law with respect to such matters. 
  
 10. Dr. Cheung agrees that neither this Agreement nor the negotiations
in pursuance thereof shall be construed or interpreted to render him a prevailing party for any reason, including but not limited to an award of attorney’s fees or costs under any statute or otherwise. 
  
 11. Dr. Cheung represents that he has not heretofore assigned or
transferred, or purported to assign or transfer, to any person or entity, any claim against Celsion or portion thereof or interest therein, and that any such claim is not assignable or transferable. 
  
 12. The Parties further agree that this Agreement shall be binding upon and
inure to the benefit of the assigns, personal representatives, heirs, executors, and administrators of Dr. Cheung and the assigns, personal representatives, heirs, executors, administrators, affiliates, successors, predecessors, subsidiaries,
divisions, officers, purchasers, agents, representatives, directors and employees of Celsion, that this Agreement contains and comprises the entire agreement and understanding of the Parties, that there are no additional promises or terms among the
Parties other than those contained herein, and that this Agreement shall not be modified except in writing signed by each of the Parties hereto. 
  
 13. The Parties further agree that this Agreement and the rights and obligations hereunder shall be governed by, and construed in accordance with, the
laws of the State of Maryland regardless of any principles of conflicts of laws or choice of laws of any jurisdiction. The state courts of Maryland and, if the jurisdictional prerequisites exist at the time, the United States District Court for the
District of Maryland, shall have sole and exclusive jurisdiction to hear and determine any dispute or controversy arising under or concerning this Agreement. 
  

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 14. If any terms of the above provisions of this Agreement are found null, void or inoperative, for any
reason, the remaining provisions will remain in full force and effect. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against either of the Parties.

  
 15. If Celsion seeks a restraining order, injunction or any
other relief, including but not limited to damages, against Dr. Cheung as a result of his breach of any provision of this Agreement, and recovers any such relief, Dr. Cheung shall reimburse Celsion for the attorney’s fees, costs and
other expenses it incurred obtaining that relief (even if other relief were denied). 
  
 16. Dr. Cheung represents that he has read this Agreement, that he understands all of its terms, that he had a reasonable amount of time to consider his decision to sign it, that he had the opportunity to discuss
the terms of this Agreement with an attorney of his choice, that in executing this Agreement he does not rely and has not relied upon any representation or statements made by any of Celsion’s agents, representatives, or attorneys with regard to
the subject matter, basis, or effect of the Agreement, and that he enters into this Agreement voluntarily, of his own free will and with knowledge of its meaning and effect. 
  
 17. Dr. Cheung understands that he has had twenty-one (21) days from the date of his receipt of this Agreement, to
consider his decision to sign it with respect to claims arising under the ADEA. Dr. Cheung expressly agrees that any changes made will not restart the 21 day period for considering whether to sign this Agreement as to such claims. By signing
this Agreement, Dr. Cheung expressly acknowledges that his decision to sign this Agreement was knowing and voluntary, not induced by fraud, misrepresentation, or improper means, and of his own free will. 
  
 18. Dr. Cheung acknowledges that he may revoke this Agreement only as it
pertains to claims under the ADEA for up to and including seven (7) days after his execution of this Agreement, and that the aspects of this Agreement regarding his release of claims under the ADEA shall not become effective until the
expiration of seven (7) days from the date of his execution of this Agreement. This provision regarding revocation shall have no effect on the validity and enforceability of any other term, condition or provision of this Agreement, which
becomes effective when signed. 
  

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 19. Celsion hereby advises Dr. Cheung to consult with an attorney prior to executing this agreement.

  
 IN WITNESS WHEREOF, the parties have duly executed this
Agreement effective as of the day and year first above written. 
  

			
	 /s/ Augustine Cheung

	 	 1-16-06

	Dr. Augustine Cheung	 	Date
		
	 /s/ Lawrence S. Olanoff

	 	 1-16-06

	Dr. Lawrence S. Olanoff	 	Date
	For: Celsion Corporation	 	 

  

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