Letter of Engagement Callisto Pharmaceuticals, Inc. July 18, 2005
EX-10.1 3 ex10-1.htm LETTER OF ENGAGEMENT BETWEEN TRILOGY CAPITAL PARTNERS, INC. AND CALLISTO PHARMACEUTICALS, INC. DATED JULY 18, 2005. Letter of Engagement between Trilogy Capital Partners, Inc. and Callisto Pharmaceuticals, Inc. dated July 18, 2005.
Exhibit 10.1
Letter of Engagement
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 | 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. |
| Objective | 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. |
| 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. |
| 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. | |
| Responsibilities | 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. |
| 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. |
| 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. |
| Indemnification | The Company agrees to provide the indemnification set forth in “Exhibit A” attached hereto. |
| 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. |
| 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. |
| 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). |
| 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.” |
| 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 | California, without giving effect to the principles of conflicts of law thereof. |
| Board Approval | This Agreement is subject to approval of the Board of Directors of KAL. KAL agrees to submit this Agreement for approval no later than July 22, 2005. If KAL 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. |
[Signatures on following page.]
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Agreed and Accepted:
| Callisto Pharmaceuticals, Inc. | Trilogy Capital Partners, Inc. | ||||
| By | /s/ Gary S. Jacob | By | /s/ Paul Karon | ||
| | | ||||
| Gary S. Jacob Chief Executive Officer | Paul Karon President | ||||
Wiring:
Trilogy Capital Partners, Inc.
Signature Bank New York
Private Client Group
New York, NY 10016
Account: 1500565515
ABA: 026013576
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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.
