**Exhibit 10.23**

**EXTENSIONAND AMENDMENT AGREEMENT**

**AGREEMENT**dated as of January25, 2007 between Callisto Pharmaceuticals, Inc., a  Delaware corporation (the “Company”) andGabriele M. Cerrone (the “Consultant”).

TheCompany’s Board of Directors has determined, in light of the importance of theConsultant’s services to the stability and interests of the Company and itsstockholders, to extend the term of the Consulting Agreement dated as ofDecember 27, 2004 (the “Consulting Agremeent”).

NOW,THEREFORE, in consideration of the premises and the mutual covenants containedin this Agreement, it is agreed between the Company and the Consultant asfollows:

1.             EXTENSION AND AMENDMENT OF CONSULTING AGREEMENT.

(a)           Extension.   The “InitialTerm” defined in Section 1.2 of the Consulting Agreement is hereby extended toDecember 31, 2009, unless earlier terminated in accordance with Section 10 ofthe Consulting Agreement.

(b)           Compensation.   TheCompany agrees to increase Consultant’s “Base Compensation” (as defined in theConsulting Agreement) from $205,000 per year to $275,000 per year commencingJanuary 1, 2007, payable monthly in approximate equal installments inadvance.  In addition, the Consultantshall be granted an aggregate of 225,000 ten-year non-qualified stock optionspursuant to the Company’s Stock Option Plan (the “Plan”) at an exerciseprice  per share equal to the fair marketvalue of the Company’s Common Stock on the date of execution of this Agreement,as such value is defined in the Plan. Subject to the provisions of the Plan and Section 10 of the ConsultingAgreement, one third of such options shall vest on December 31, 2007, 2008 and2009.  Once vested, the options may beexercised until their expiration, notwithstanding any provision of the Plan whichrequires exercise following termination of services in a shorter period.  The Company will include the shares of equitysecurities of the Company which may be issued upon the exercise of the optionsin any registration statement under the Securities Act of 1933 which includessecurities issuable to any other executive officer of the Company.  In recognition of the services beyond thatrequired of Consultant during the period from July 1, 2006 to the date of this Amendment,the Company will set aside and accrue a bonus for the Consultant of $75,000,payable on March 31, 2007.  TheConsultant shall be eligible to earn a cash bonus of up to 22.5% of BaseCompensation for each twelve-month period during the Term based on meetingperformance objectives and bonus criteria to be mutually identified byConsultant and the Company’s Board of Directors and any additonal bonuses andoption grants as may be determined by the Compensation Committee of the Company’sBoard in its sole discretion.  In theevent no performance criteria has been set, the Consultant shall receive abonus of not less than 10% if bonuses are paid to any other of the Company’sexecutive officers during or for the year of this agreement.  For purposes of Section 3 and 4 of theAgreement, the Consultant’s advisory services in connection with the planning,financing and execution of one or more plans of corporate reorganization shallnot be covered within the scope of services provided under this Agreement, norwill the compensation under this Agreement be deemed to cover such services.

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(c)           Amendment to Section 5 of theConsulting Agreement.

(i)            Section 5.1 of the ConsultingAgreement is hereby amended, effective immediately to include in reasonableexpenses, the cost associatied with accessing office facilities andadministrative assistance outside of the Company’s principal executive officesat such times that the Consultant is attending to matters within the scope ofthis Agreement.

(ii)           Section 5.2 of the ConsultingAgreement is hereby amended, effective immediately to delete the Section in itsentirety and replace it with the following:

“Duringthe Term, the Company, at its sole expense, shall provide Consultant with onefully furnished and equipped executive office, one full-time qualified and experiencedadministrative assistant, and such legal and accounting support services as isdeemed appropriate by the Consultant and approved by the Company’s ChiefExecutive Officer.  Such services andfacilities will not be diminished without the Consultant’s prior consent.”

(d)           Amendment to Section 10.1(c) ofthe Consulting Agreement.   Section10.1(c) of the Consulting Agreement is hereby amended, effective immediately toadd the following paragraphs:

 “(iv)                   The severance compensation providedfor in subsection (9)(i) above shall be paid not later than the tenth dayfollowing the Date of Termination; provided, however, that if the amountof such compensation cannot be finally determined on or before such day, theCompany shall pay to the Consultant on such day an estimate, as determined ingood faith by the Company but subject to the provisions of Section 10.1(a)(v),of the minimum amount of such compensation and shall pay the remainder of suchcompensation (together with interest at the Federal short-term rateprovided in Section 1274(d)(7)(C)(1) of the Code) as soon as the amount thereofcan be determined but in no event later than the thirtieth day after the Dateof Termination. In the event the amount of the estimated payment exceeds theamount subsequently determined to have been due, such excess shall constitute aloan by the Company to the Consultant payable on the fifth day after demand bythe Company (together with interest at the Federal short-term rateprovided in Section 1274(d)(7)(C)(1) of the Code).

(v)                                 Ifthe payment of the Total Payments (as defined below) will be subject to the tax(the “Excise Tax”) imposed by Section 4999 of the Code, the Company shall paythe Consultant on or before the tenth day following the Date of Termination, anadditional amount (the “Gross-Up Payment”) such that the net amountretained by the Consultant, after deduction of any Excise Tax on Total Paymentsand any federal and state and local income tax and Excise Tax upon the paymentprovided for by this paragraph, shall be equal to the Total Payments. Forpurposes of determining whether any of the payments will be subject to theExcise Tax and the amount of such Excise Tax, (i) any payments or benefitsreceived or to be received by the Consultant in connection with a Change inControl of the 

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Company or the Consultant’s termination of employment,whether payable pursuant to the terms of Section 10 of this Agreement****or any other plan, arrangement or agreement with theCompany, its successors, any person whose actions result in a Change in Controlof the Company or any corporation affiliated (or which, as a result of thecompletion of transaction causing such a Change in control, will becomeaffiliated) with the Company within the meaning of Section 1504 of Code (the “TotalPayments”) shall be treated as “parachute payments” within the meaning ofSection 28OG(b)(2) of the Code, and all “excess parachute payments” within themeaning of Section 28OG(b)(1) shall be treated as subject to the Excise Tax,unless in the opinion of tax counsel selected by the Company’s independentauditors and acceptable to the Consultant, the Total Payments (in whole or inpart) do not constitute parachute payments, or such excess parachute payments(in whole or in part) represent reasonable compensation for services actuallyrendered within the meaning of Section 28OG(b)(4) of the Code either in theirentirety or in excess of the base amount within the meaning of Section28OG(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (ii)the amount of the Total Payments that shall be treated as subject to the ExciseTax shall be equal to the lesser of (A) the total amount of the Total Paymentsor (B) the amount of excess parachute payments or benefit shall be determinedby the Company’s independent auditors in accordance with the principles ofSection 28OG(d)(3) and (4) of the Code. For purposes of determining the amountof the Gross-Up Payment, the Consultant shall be deemed to pay federalincome taxes at the highest marginal rate of federal income taxation in thecalendar year in which the Gross-Up Payment is to be made and state andlocal income taxes at the highest marginal rate of taxation in the state andlocality of the Consultant’s residence an the Date of Termination, net of the maximumreduction in federal income taxes which could be obtained from deduction ofsuch state and local taxes. In the event the Excise Tax is subsequentlydetermined to be less than the amount taken into account hereunder at the timeof termination of the Consultant’s employment, the Consultant shall repay tothe Company at the time the amount of such reduction in Excise Tax is finallydetermined the portion of the Gross-Up Payment that can be repaid suchthat the Consultant remains whole on an after-tax basis following suchrepayment (taking into account any reduction in income or excise taxes to theConsultant from such repayment) plus interest on the amount of such repaymentat the Federal short-term rate provided in Section 1274(d)(1)(C)(i) ofthe Code. In the event the Excise Tax is determined to exceed the amount takeninto account hereunder at the time of the termination of the Consultant’semployment (including by reason of any payment the existence or amount of whichcannot be determined at the time of the Gross-Up Payment), the Companyshall make an additional gross-up payment in respect of such excess (plusany interest payable with respect to such excess) at the time that the amountof such excess is finally determined.”

(f)            Amendment to Section 12.2 of theConsulting Agreement.   Section 12.2of the Consulting Agreement is hereby amended, effective immediately, to addthe term “for Good Reason” after the term “Consultant” in the fifth line ofsuch Section.

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(f)            Effect on Consulting Agreement.   Exceptas modified by this Agreement, all of the terms of the Consulting Agreementshall continue in full force and effect. In the event of a discrepancy betweenthe Consulting Agreement and this Agreement, the terms of this Agreement shallbe controlling.

2.                                       NOOBLIGATION TO MITIGATE DAMAGES: NO EFFECT ON OTHER CONTRACTUAL RIGHTS,

(a)           The Consultant shall not be requiredto mitigate damages or the amount of any payment provided for under thisAgreement by seeking other employment or otherwise, nor  shall the amount of any payment provided forunder this Agreement be reduced by any compensation earned by the Consultant asa result of employment by another client after the termination of theConsultant’s consultancy, or otherwise.

(b)           The provisions of this Agreement, andany payment provided for hereunder, shall not reduce any amounts otherwisepayable, or in any****way diminishthe Consultant’s existing rights, or rights which would accrue solely as aresult of the passage of time, under any Benefit Plan, Consulting Agreement orother contract, plan or arrangement of the Company or any of its subsidiariesof which the Consultant shall be a beneficiary.

3.                                       SUCCESSORTO THE COMPANY.

(a)           The Company will require any successoror assign (whether direct or indirect, by purchase, merger, consolidation orotherwise) to all or substantially all of the business and/or assets of theCompany, by agreement in form and substance, satisfactory to the Consultant, toassume and agree to perform this Agreement and the Consulting Agreement in thesame manner and to the same extent that the Company would be required toperform it if no such succession or assignment had taken place. Any failure ofthe Company to obtain such agreement prior to the effectiveness of any suchsuccession or assignment shall be a material breach of the Consulting Agreementand in such case the Consultant shall have the right to terminate hisconsultancy for Good Reason and become fully entitled to the benefits ofSection 10 of the Consulting Agreement. As used in this Agreement, “Company”shall mean the Company as hereinbefore defined and any successor assign to itsbusiness and/or assets as aforesaid which executes and delivers the agreementprovided for in this Section 3 or which otherwise becomes bound by all theterms and provisions of this Agreement by operation of law.

(b)           This Agreement shall inure to thebenefit of and be enforceable by the Consultant’s personal and legalrepresentatives, executors, administrators, successors, heirs, distributees,devisees and legatees. If the Consultant should die while any amounts are stillpayable to the Consultant hereunder, all such amounts, unless otherwiseprovided herein, shall be paid in accordance with****theterms of this Agreement to the Consultant’s devisee, legatee, or other designeeor, if there be no such designee, to the Consultant’s estate.

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4.                                     NOTICE.

Forpurposes of this Agreement, notices and all other communications provided forin this Agreement shall be in writing and shall be deemed to have been dulygiven when delivered or mailed by United States registered mail, return receiptrequested, postage prepaid, as follows:

if to the Company:
|   | Callisto Pharmaceuticals,  Inc.   |
|--------|-----------------------------------|
|   | 420 Lexington  Avenue, Suite 1609 |
|   | New York, New  York 10070         |

 

or such otheraddress as either party may have furnished to the other in writing inaccordance herewith, except that notices of change of address shall beeffective only upon receipt.

5.                                       MISCELLANEOUS.

Noprovisions of this Agreement may be modified, waived or discharged unless suchwaiver, modification or discharge is agreed to in a writing signed by theConsultant and the Company. No waiver by either party hereto at any time of anybreach by the other party hereto of, or compliance with, any condition orprovision of this Agreement to be performed by such other party shall be deemeda waiver of similar or dissimilar provisions or conditions at the same or atany prior to subsequent time. No agreements or representations, oral orotherwise, express or implied, with respect to the subject matter hereof havebeen made by****either party which are not setforth expressly in this Agreement. This Agreement shall be governed by andconstrued in accordance with the laws of Delaware.

6.                                       VALIDITY.

The invalidity or enforceability of any provi­sions ofthis Agreement shall not affect the validity or enforce­ability of any other provision of this Agreement, which shallremain in full force and effect.

7.                                       COUNTERPARTS.

ThisAgreement may be executed in one or more counterparts, each of which shall bedeemed to be an original but all of which together will constitute one and sameinstrument*.*

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8.                                       LEGALFEES AND EXPENSES.

TheCompany or one of its subsidiaries shall pay all legal fees and expenses whichthe Consultant may incur as a result of the Company’s contesting the**validity, enforceability or the Consultant’s interpretationof, or determinations under, this Agreement.
|   |                            |
|--------|---------------------------------|
|        | CALLISTO PHARMACEUTICALS, INC., |
|   |                            |
|   |                            |
|   |                            |
|   | By:                             | /s/ | GARY S. JACOB |
|   | Name:                           | Gary S. Jacob |
|   | Title:                          | Chief Executive Officer |
|   |                            |   |
|   |                            |   |
|   |                            |   |
|   | /s/ GABRIELE M. CERRONE         |
|   | Gabriele M.  Cerrone            |

 

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