Letter of Engagement Callisto Pharmaceuticals, Inc. July 18, 2005
Exhibit
10.1
![Trilogy Capital Partners Logo](https://www.sec.gov/Archives/edgar/data/1142380/000132154305000052/logo.jpg)
Callisto
Pharmaceuticals, Inc.
July
18, 2005
The
following sets forth the agreement for the engagement of Trilogy Capital
Partners, Inc. (“Trilogy”)
by
Callisto Pharmaceuticals, Inc. (“KAL”
or
the “Company”):
Term
and Termination
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Twelve months,
commencing as of the date set forth above (the “Initial
Term”),
and terminable thereafter by either party upon 30 days’ prior written
notice. In addition, either party may terminate this Agreement
by written
notice for material breach by the other party of any of its obligations
or
agreements under this Agreement or the Confidentiality Agreement
unless
such material breach is cured and corrected within 10 days following
receipt of such notice.
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Objective
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The
development and implementation of a proactive marketing program
to
increase the awareness of KAL and generate a significant increase
in
liquidity and market capitalization. In addition, upon request,
Trilogy
will advise KAL in business development and strategic advisory
services.
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The
Program
|
Trilogy
will structure and implement a marketing program designed to create
extensive financial market and investor awareness for KAL to drive
long-term shareholder support. The core drivers of the program
will be to
create institutional and retail buying in the Company’s stock through a
proactive sales and marketing program emphasizing technology-driven
communications, coupled with 1-to-1 selling and leveraging KAL’s image to
attract additional long term investors and to create additional
opportunities in M&A and Business Development. As share price is
affected by various factors, Trilogy can give no assurance that
the
marketing program will result in an increase in KAL’s stock
price.
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Trilogy
understands that during any period in which the Company is in
“registration” for a public offering of securities under the Securities
Act of 1933, and during the distribution of such securities,
the Company’s
investor relations and marketing efforts will be severely limited.
However, it will be the responsibility of the Company (with the
advice of
its securities counsel) to determine what investor relations
and financial
marketing efforts are permissible and non-permissible during
such periods,
and Trilogy will follow the direction of the Company and its
securities
counsel. Trilogy
agrees that it will not take any action to influence anyone to
purchase
the Company’s stock by making an improper or illegal payment, directly or
indirectly.
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Responsibilities
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In
addition to marketing and financial public relations, Trilogy
will assume
the responsibilities of an in-house Investor Relations Officer
for KAL on
a full turnkey basis, including the generation of corporate and
shareholder communications, retail and institutional investor
contact and
media. Trilogy will work in conjunction with the Company’s management,
securities counsel, investment bankers and auditors and under
supervision
of management. The content is as follows:
Trilogy
will not publish or publicly release any press release or other
document
(“IR
Documents”)
regarding the Company that has not been approved in writing by
the
Company. The Company assumes responsibility for the accuracy
and
completeness of all IR Documents and the compliance of such Documents
with
applicable laws, rules and regulations. The Company agrees that
Trilogy
has no obligation
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or duty to verify the accuracy or completeness of the IR Documents. | |
Fees
|
$12,500
per month, with first payment due on execution. Wiring information
is set
forth below.
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Equity
Compensation
|
KAL
has concurrently herewith issued to Trilogy 1,793,322 Warrants.
Each
Warrant represents the right to purchase one share of Common
Stock for
$1.03 per share at any time through the third year following
issuance. The
Company agrees to file a Registration Statement with the Securities
and
Exchange Commission registering the shares underlying the Warrants
no
later than August 30, 2005.
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Marketing
Budget
|
To
support the financial marketing program, KAL acknowledges that
it will
incur certain third party marketing costs. Trilogy will not
incur these
costs on behalf of the Company except with the approval of
the Company or
pursuant to a budget approved by the Company (which budget
shall not be
less than $200,000). The Company shall have no obligation to
reimburse
Trilogy for any third party marketing cost that exceeds the
approved
budget or is otherwise not approved by the Company. The Company
understands that prompt payment of these costs is vital to
the on-going
investor relations program, and therefore shall pay these costs
promptly
upon invoice, to Trilogy (to enable Trilogy to promptly reimburse
these
third parties). The Company shall indemnify and hold Trilogy
harmless from
any losses, claims, costs, expenses, liabilities and damages
from failure
to timely pay these third party marketing costs.
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Indemnification
|
The
Company agrees to provide the indemnification set forth in
“Exhibit A”
attached hereto.
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Corporate
Obligations
|
The
obligations of Trilogy are solely corporate obligations, and
no officer,
director, employee, agent, shareholder or controlling person
of Trilogy
shall be subject to any personal liability whatsoever to any
person, nor
will any such claim be asserted by or on behalf of any other
party to this
Agreement.
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Additional
Services
|
If
Trilogy is called upon to render services directly or indirectly
relating
to the subject matter of this Agreement, beyond the services
contemplated
above (including, but not limited to, production of documents,
answering
interrogatories, giving depositions, giving
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expert or other testimony, whether by agreement, subpoena or otherwise), the Company shall pay to Trilogy a reasonable hourly rates for the persons involved for the time expended in rendering such services, including, but not limited to, time for meetings, conferences, preparation and travel, and all related costs and expenses and the reasonable legal fees and expenses of Trilogy’s counsel. | |
Confidentiality
|
Trilogy
agrees to execute the confidentiality agreement with the
Company set forth
in “Exhibit B” attached hereto.
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Survival
of Certain Provisions
|
The
Sections entitled “Indemnification” (including “Exhibit A”), “Corporate
Obligations,”“Additional Services” and “Confidentiality” (including
“Exhibit B”) shall survive any termination of this Agreement and Trilogy’s
engagement pursuant to this Agreement. In addition, such
termination shall
not terminate Trilogy’s right to compensation accrued through the date of
termination and for reimbursement of expenses (including
third party
marketing costs). Any purported termination of this Agreement
by the
Company prior to the end of the Initial Term, or any termination
by
Trilogy as a result of non-payment or other material breach
by the Company
(including the failure to pay third-party marketing costs),
shall not
terminate Trilogy’s right to the fees through the entire Initial Term (as
Trilogy’s time and commitment are expected to be greater in the first
part
of its engagement).
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Services/Costs
|
The
compensation paid to Trilogy under this Agreement will cover
all costs for
Trilogy personnel. Travel and entertainment costs for Trilogy
personnel,
in addition to certain third-party costs, will be borne by
the Company.
Trilogy will provide reasonable documentation to support
reimbursement
claims. Trilogy will not incur any particular reimbursable
cost of $500 or
aggregate costs of $10,000 or more without the written approval
from the
Company. These costs do not included third-party marketing
costs under
“Marketing Budget.”
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Attorneys’
Fees
|
If
any action or proceeding is brought to enforce or interpret
any provision
of this Agreement, the prevailing party shall be entitled
to recover as an
element of its costs, and not its damages, reasonable attorneys’ fees to
be fixed by the court.
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Governing
Law
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California,
without giving effect to the principles of conflicts of law
thereof.
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Board
Approval
|
This
Agreement is subject to approval of the Board of Directors
of KAL. XXX
agrees to submit this Agreement for approval no later than
July 22, 2005.
If XXX does not advise Trilogy in writing that its Board
of Directors has
approved this Agreement by 5:00 P.S.T. on July 22, 2005,
Trilogy may
thereafter terminate this Agreement. In the event KAL terminates
this
Agreement because its Board of Directors does not approve
this Agreement,
or Trilogy terminates this Agreement under this provision,
this Agreement
shall be deemed void ab initio, and neither party shall have
any duty,
obligation or liability to the other under this Agreement
and Trilogy
shall return the Warrants to KAL.
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[Signatures
on following page.]
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Agreed
and Accepted:
Callisto Pharmaceuticals, Inc. | Trilogy Capital Partners, Inc. | ||||
By | /s/ Xxxx X. Xxxxx | By | /s/ Xxxx Xxxxx | ||
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Xxxx
X. Xxxxx
Chief
Executive Officer
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Xxxx
Xxxxx
President
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Wiring:
Trilogy
Capital Partners, Inc.
Signature
Bank New York
Private
Client Group
New
York, NY 10016
Account:
1500565515
ABA:
000000000
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EXHIBIT
A
Indemnification
Provisions
Callisto
Pharmaceuticals, Inc. (the
“Company”)
unconditionally, absolutely and irrevocably agrees to and shall indemnify and
hold harmless Trilogy Capital Partners, Inc. (“Trilogy”)
and
its past, present and future directors, officers, affiliates, counsel,
shareholders, employees, agents, representatives, contractors, successors and
assigns (Trilogy and such persons are collectively referred to as the
“Indemnified
Persons”)
from
and against any and all losses, claims, costs, expenses, liabilities and damages
(or actions in respect thereof) arising out of or related to this Agreement,
and
any actions taken or omitted to be taken by an Indemnified Person in connection
with this Agreement (“Indemnified
Claim”).
Without limiting the generality of the foregoing, such indemnification shall
cover losses, claims, costs, expenses, liabilities and damages imposed on or
incurred by the Indemnified Persons, directly or indirectly, relating to,
resulting from, or arising out of any misstatement of fact or omission of fact,
or any inaccuracy in any information provided or approved by the Company in
connection with the engagement, including information in any SEC filing, press
release, website, marketing material or other document, whether or not the
Indemnified Persons relied thereon or had knowledge thereof, claims of third
parties providing marketing services to the Company. In addition, the Company
agrees to reimburse the Indemnified Persons for legal or other expenses
reasonably incurred by them in respect of each Indemnified Claim at the time
such expenses are incurred. Notwithstanding the foregoing, the Company shall
not
be obligated under the foregoing for any loss, claim, liability or damage that
is finally determined by a court with proper jurisdiction to have resulted
primarily from the willful misconduct, bad faith or gross negligence of the
Indemnified Person or from the failure of the Indemnified Person to be
registered or licensed as a broker or dealer under the Securities Exchange
Act
of 1934 or applicable state securities laws or as an investment advisor under
the Investment Advisors Act of 1940 or applicable investment advisor state
laws.