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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND * * * * * * * * * * * ***** MEMORANDUM Now pending before the court is the defendants' Motion to Dismiss or For Change of Venue. Taking all of the assertions in the complaint as true for present purposes, the facts relevant to the disposition of this motion follow. Celsion is a Maryland company that engages in medical research concerning treatments for cancer and other diseases. In 1996, Celsion decided that it wanted to raise capital for its business operations. In April of 1996, one of the defendants, Warren C. Stearns ("Stearns"), the president, director and majority shareholder of Stearns Management Corporation ("SMC"), an Illinois financial consulting services corporation, represented to Celsion that he could help the medical research firm raise funds. Celsion and SMC entered into a consulting agreement, dated May 28, 1996, by which SMC would provide financial advisory services to Celsion. To induce SMC to enter into the agreement, Celsion granted it a certain number of common stock purchase warrants, which gave the holder the right to purchase a percentage of Celsion's equity at a given price. At Stearns' direction, 1

CELSION CORP., Plaintiff, v. STEARNS MANAGEMENT CORP., ET AL., Defendants.

Civil No. CCB 00-1214

Celsion assigned the warrants in August of 1998 to various people and entities, namely Warren R. Stearns (a son of Stearns and citizen of Illinois), Charles A. Stearns (a son of Stearns and citizen of Illinois), Anthony Riker, Ltd. (an Illinois corporation), John T. Horton (a citizen of Illinois) and the George T. Horton Trust (an Illinois trust). In March of 1999, SMC demanded that Celsion register with the Securities and Exchange Commission the shares of stock that the warrant holders would receive upon exercise of the warrants. Celsion refused to register the stock shares, which have a present value exceeding $15 million. Celsion has brought suit to rescind the contract and warrants under the Securities Exchange Act of 1934 ("the Act"). 15 U.S.C.

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Maryland Law