ex10-38.htm


     

    
 

    EXHIBIT
10.38


    [LEGEND
SECURITIES, INC. LETTERHEAD]


    Steven
Kriegsman

    President
and CEO

    CytRx
Corporation

    11726 San
Vicente Blvd Suite 650

    Los
Angeles, Ca 90049

    Phone:
310-826-5648

    Fax:
310-826-6139

    


    Re: Investment Banking Agreement with
Legend Securities, Inc.

    


     Dear
Mr. Kriegsman,

    


    This
letter (the "Agreement")
shall confirm the engagement of Legend Securities, Inc., ("Legend")
by CytRx Corporation (the "Company"
and collectively the "Parties") for
purposes of providing, on a non-exclusive basis, investor awareness and business
advisory services as set forth below in consideration for the fees and
compensation described hereinafter:

    


    1.           The
Agreement shall be effective as of the date it is executed by the Parties (the
"Effective Date").

    


    2.           The
Company agrees to provide Legend such information, historical financial data,
projections, proformas, business plans, due diligence documentation, and other
information (collectively the "Information")
in the possession of the Company that Legend may reasonably request or require
to perform the Services (as hereinafter defined) set forth herein. The
Information provided by the Company to Legend shall be true, complete and
accurate in all material respects as of the date specified therein and shall not
set forth any untrue statements nor omit any fact required or necessary to make
the Information provided not misleading. The Company acknowledges that Legend
may rely during the Term on the accuracy and completeness of all Information
provided by the Company without independent verification. The Company authorizes
Legend to use such Information solely in connection with its performance of the
Services.

    


    3.                     Legend
will use its best efforts to furnish ongoing investor awareness and business
advisory services (the
"Services") as the Company may
from time to time reasonably request the Services may include, without
limitation, the following:

    


    ·                      assistance
with investor presentations such as, but not limited to, PowerPoint slide
presentations,broker/dealer fact sheets, financial projections and budgets, and
news releases;

    


    ·                      sponsorship
to capital and life science conferences;

    


    ·                      identification
and evaluation of financing transactions;

    


    ·                      identification
and evaluation of acquisition and/or merger candidates;

    


    ·                      introductions
to broker dealers, research analysts, and investment companies that Legend
believes thatcould be helpful to the Company;

     

    ·                      set up
investor road shows in various cities as requested by the Company, both domestic
and foreign, including investor road shows to he held in conjunction with the
BIO CEO Conference, Natexis Bleichroeder Hidden Gems Conference, Rodman &
Renshaw Conferences, New York UBS Conference and the JP Morgan
Conference;


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    ·                      Diligently
follow up on all investor, broker and analyst leads provided by the
Company.

    


    4.                 The
term of this Agreement shall be Twelve (12) months from the
Effective Date of this Agreement; provided that the Company may, in its
discretion, extend the Term for up to an additional six (6) months by providing
notice of such extension to Legend at any time prior to the expiration of this
Agreement (such period, as it may be extended pursuant to this sentence, the
"Term"), and the
additional compensation owed to Legend during any such extension shall be the
Monthly Advisory Fee described in Section 5. The Agreement may not be terminated
by the Parties during the first ninety days following the Effective Date (the
"Introduction
Period") other than as a result of a material breach of any provision of
this agreement that is not uncured within ten (10) days following
notification thereof by the non-breaching party. Following the Introduction
Period and in the event that the Company desires to terminate this Agreement at
any time prior to the expiration date, it shall provide Legend with written
notice of its intention to terminate this Agreement and this Agreement shall so
terminate immediately following delivery of such notice by the Company (the
"Termination
Date"), without any further responsibility for either party; provided,
however, that Legend shall be entitled to receive all accrued compensation,
including all vested - fees (as set forth below) and un-reimbursed expenses, if
any, outstanding as of the Termination Date and Legend's obligations under
Section 2 regarding Information of the Company shall survive such termination.
Notice shall be deemed delivered when sent via e-mail, facsimile, or when
deposited with a bonded overnight courier.

    


    5.                 In
consideration for the services described herein, the Company shall pay to Legend
a monthly advisory fee of twenty thousand dollars ($20,000) per month (the "Monthly
Advisory Fee").
The first month advisory fee shall be paid to Legend on the Effective
Date and thereafter no later than the fifteenth (15th) day of each monthly
anniversary of the Effective Date during the Term of this Agreement. The Monthly
Advisory Fee shall be earned and payable each month and may not be deferred by
the Company unless the Company submits a written request to the Legend and
Legend approves such request in writing. Any fees that are deferred shall
accumulate interest at a compound interest rate of 12.0% per annum on the
aggregate balance of deferred Monthly Advisory Fees. The Monthly Advisory Fee
shall be mailed to Legend at the following address:

    


    Legend
Securities Inc.

    Attention:
Salvatore C. Caruso

    39
Broadway, Suite 740, New York, NY 10006

    Phone:
212-344-5747 ext 231

    Fax:
212-898-1224

    


    6.                 Simultaneously
with the execution of this Agreement, the Company shall issue and deliver to
Legend a common stock purchase warrant (the "Warrant")
for the purchase of eight hundred thousand (800,000) shares of the Company's
common stock. The Warrant shall have an exercise price equal to the average
closing bid price of the Company's common stock on the last ten (10) consecutive
trading days ending three days before the Effective Date. Notwithstanding the
foregoing, the Warrant shall vest completely and in favor of the Legend as
follows:

     

     

    Date     
                                                                                    Number of
Shares

     

    The
Effective
Date                                                                            200,000

    Each
quarterly anniversary of the Effective Date        200,000

    


    


     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    


    7.                 The
Warrant, upon issuance, shall be fully paid, non-assessable, and free of any
restrictions on transfer, but for those restrictions that are the result of
state or federal securities laws. The Warrant shall be issued to Legend in the
form of a warrant agreement (the "Warrant Agreement"),
which shall be in a form and content reasonably satisfactory to Legend and its
counsel and the Company and its counsel. The Warrant Agreement shall provide
for, among other provisions, the above terms and the following: (1) The Warrant
shall expire five years after the date that the Warrant Agreement is issued; (2)
The Warrant shall have customary anti-dilution provisions for stock dividends,
splits, mergers, and sale of substantially all assets of the Company; (3) Legend
may exercise the Warrant at any time after signing the Warrant Agreement to the
extent vested as described in Section 6; (4) The Warrants shall contain a
"Cashless Exercise" provision that may be utilized 180 after issuance if there
is not an effective Registration Statement covering the underlying common
shares; (5) The Company shall reserve, and at all times have available, a
sufficient number of shares of its common stock to be issued upon the exercise
of the Warrant; and (6) The Company shall grant unlimited "piggy back"
registration rights, at the Company's expense, to include the shares of the
underlying common stock in any registration statement filed by the Company under
the Securities Act of 1933 relating to an underwriting of the sale of shares of
common stock or other security of the Company, subject to existing contractual
obligations of the Company and excluding the Registration Statement on Form S-1
filed by the Company in connection with the private placement of the Company's
common stock completed in June of 2008.

    


    The
Warrant shall be issued in the name of Legend Securities Inc. and
mailed to the following address:

    


    Legend Securities Inc.

    Attention: Salvatore C.
Caruso

    39 Broadway Suite 740

    New York, NY 10006

    Phone: 212-344-5747 ext
231

    Fax: 212-898-1224

    


    8.                 The
Company will promptly notify Legend in writing upon the filing of any
registration statement or other periodic reporting documents filed pursuant to
the rules and regulations of the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended.

    


    9.                 The
Company recognizes that Legend now renders and may continue to render financial
consulting, management, investment banking and other services to other companies
that may or may not conduct business and activities similar to those of the
Company. Legend shall be free to render such advice and other services and the
Company hereby consents thereto. Legend shall not be required to devote its full
time and attention to the performance of its duties under this Agreement, but
shall devote only so much of its time and attention as it deems reasonable or
necessary to fulfill its obligation hereunder.

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    During
the Term of this Agreement the Company covenants, promises and agrees that
Company shall immediately notify Legend if it is the subject of any material
investigation or material litigation.

    


    10.                 This
Agreement shall be governed by and construed under the laws of the State of
California without regard to principals of conflicts of law provisions. In the
event of any dispute between the Company and Legend arising under or pursuant to
the terms of this Agreement, or any matters arising under the terms of this
Agreement, the same shall be settled only by arbitration through FINRA Dispute
Resolution in County of Los Angeles, State of California, in accordance with the
Code of Arbitration Procedure published by FINRA Dispute Resolution. The
determination of the arbitrators shall be final and binding upon the Company and
Legend and may be enforced in any court of appropriate jurisdiction. This
Agreement shall be construed by and governed exclusively under the laws of the
State of California, without regard to its conflicts of law provisions. The
venue shall be in County of Los Angeles, CA.

    


    11.                 The
Company shall reimburse Legend for all approved out of pocket expenses,
including without limitation acceptable travel and lodging, printing, legal, and
mailing cost that Legend may incur in performance of the Services under this
Agreement, provided Legend receives the Company's prior approval for any and all
out of pocket expenses above five hundred dollars.

    


    12.                 The
Company may disclose to Legend certain Information that is Proprietary
Information (as defined below) relating to certain privileged and confidential
business matters that it would like Legend to evaluate. These disclosures will
be given in strict secrecy and confidence and the Parties agree to use their
best efforts to protect the integrity and confidentiality of the Proprietary
Information. As used herein, Proprietary Information means any and all
non-public data, ideas and information, in whatever form, tangible or
intangible, which is provided to Legend by the Company in connection with the
Agreement. If oral, in order to be considered "Proprietary Information" it must
be followed by a written memo detailing the confidential nature of same and
stamped "Proprietary Information."

    


    13.                 [A]  The
Company shall indemnify and hold harmless Legend and its directors, officers,
employees, agents, attorneys and assigns from and against any and all losses,
claims, costs, damages or liabilities (including the reasonable fees and
expenses of legal counsel) to which any of them may become subject in connection
with the investigation, defense or settlement of any actions or claims: (i)
caused by any untrue statement or alleged untrue statement of any material fact
contained in any Information provided by the Company or the omission or alleged
omission to state a material fact required to be stated in any such Information
or necessary to make the statements in any Information not misleading, provided
such Information was used by Legend in rendering any Service hereunder; (ii)
arising in any manner out of or in connection with the rendering of Services by
Legend hereunder; or (iii) otherwise in connection with this Agreement;
provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, cost, damage or liability arises out of
any breach of this Agreement by Legend, or any misrepresentation or alleged
misrepresentation of the material facts provided to Legend by the Company or
arising from acts of gross negligence or malfeasance by Legend or any breach by
Legend of this Agreement.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [B]           Legend
shall indemnify and hold harmless the Company and its directors, officers,
employees, agents, attorneys and assigns from and against any and all losses,
claims, costs, damages or liabilities (including the reasonable fees and
expenses of legal counsel) to which any of them may become subject in connection
with the investigation, defense or settlement of any actions or claims: (i)
caused by any untrue statement or alleged untrue statement of any material fact
contained in any information provided by Legend other than Information provided
to Legend by the Company ("Legend Information") or the omission or alleged
omission to state a material fact required to be stated in any such Legend
Information or necessary to make the statements in any Legend Information not
misleading; (ii) arising in any manner out of or in connection with the
rendering of Services by Legend hereunder; or (iii) otherwise in connection with
this Agreement; provided, however, that Legend will not be liable in any such
case if and to the extent
that any such loss, claim, cost, damage or liability arises out of any breach of
this Agreement by the Company or arising from acts of gross negligence or
malfeasance by the Company or any breach by the Company of this
Agreement.

    


    [C]           Promptly
after receipt of notice of the commencement of any action, the party against
whom an action is brought (the "Indemnified Party") shall, if a claim is also
being made against the other party (the "Indemnifying Party") for
indemnification pursuant to this Agreement, notify the Indemnifying Party in
writing of such action; provided that, the Indemnifying Party shall be relieved
from any obligation to indemnify the Indemnified Party pursuant to this
Agreement to the extent that any delay by the Indemnified Party to provide
notice to the Indemnifying Party pursuant to this Section impairs or prejudices
the Indemnifying Party's ability to assume and defend any such action. In case
any such action shall be brought against the Indemnified Party it shall notify
the Indemnifying Party of the commencement of such action, and the Indemnifying
Party shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel reasonably satisfactory to
the Indemnified Party, and, after notice from the Indemnifying Party to the
Indemnified Party of its election so to assume and undertake the defense of such
action, the Indemnifying Party shall not be liable to the Indemnified Party
under this paragraph 13 for any legal expenses subsequently incurred by the
Indemnified Party in connection with the defense of such action; if the
Indemnified Party retains its own counsel, then Indemnified Party shall pay all
fees, costs and expenses of such counsel, provided, however, that, if the
defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the Indemnifying Party or if the interests
of the Indemnified Party reasonably may be deemed to conflict with the interests
of the Indemnifying Party, the Indemnifying Party and the Indemnified Party
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the Indemnifying Party as
incurred.

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    14.                 The
Company acknowledges that Legend has made no guarantees that its performance
hereunder will achieve any particular result with respect to the Company's
business, stock price, trading volume, market capitalization or
otherwise.

    


    15.                 All
notices hereunder shall be in writing and shall be validly given, made or served
if in writing and delivered in person or when received by facsimile
transmission, or five days after being sent first class certified or registered
mail, postage prepaid, or one day after being sent by nationally recognized
overnight carrier to the party for whom intended at the address set forth after
each Parties signatures.

    


    16.                 If
any clause or provision of this Agreement is illegal, invalid or unenforceable
under applicable present or future Laws effective during the Term, the remainder
of this Agreement shall not be affected. In lieu of each clause or provision of
this Agreement that is illegal, invalid or unenforceable, there shall be added
as a part of this Agreement a clause or provision as nearly identical as may be
possible and as may be legal, valid and enforceable. In the event any clause or
provision of this Agreement is illegal, invalid or unenforceable as aforesaid
and the effect of such illegality, invalidity or unenforceability is that either
party no longer has the substantial benefit of its bargain under this Agreement
and a clause or provision as nearly identical as may be possible cannot be
added, then, in such event, such party may in its discretion cancel and
terminate this entire Agreement provided such party exercises such right within
a reasonable time after such occurrence.

    


    17.                 The
Parties agree and acknowledge that they have jointly participated in the
negotiation and drafting of this Agreement and that this Agreement has been
fully reviewed and negotiated by the Parties and their respective counsel. In
the event of an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties and no
presumptions or burdens of proof shall arise favoring any party by virtue of the
authorship of any of the provisions of this Agreement.

    


    18.                 This
Agreement may not be modified, amended, supplemented, canceled or discharged,
except by written instrument executed by all Parties. No failure to exercise,
and no delay in exercising, any right, power or privilege under this Agreement
shall operate as a waiver, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude the exercise of any other right,
power or privilege. No waiver of any breach of any provision shall be deemed to
be a waiver of any preceding or succeeding breach of the same or any other
provision, nor shall any waiver be implied from any course of dealing between
the Parties. To be effective, all waivers must be in writing, signed by both
Parties. The rights and remedies of the Parties under this Agreement are in
addition to all other rights and remedies, at law or equity, that they may have
against each other except as may be specifically limited herein.

    


    19.                 This
Agreement contains the entire understanding of the Parties in respect of its
subject matter and supersedes all prior agreements and understandings (oral or
written) between or among the Parties with respect to such subject matter. The
Parties agree that prior drafts of this Agreement shall not be deemed to provide
any evidence as to the meaning of any provision hereof or the intent of the
Parties with respect thereto. Any amendment or modification to the Agreement
shall be by written instrument only and must be executed by a representative,
with complete authority, from the Company and Legend.

    


    20.                      This
Agreement may be executed in any number of counterparts, each of which shall be
an original but all of which together shall constitute one and the same
instrument. A telecopy signature of any party shall be considered to have the
same binding legal effect as an original signature.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    21.                 In
the event that any dispute among the Parties to this Agreement should result in
litigation, the substantially prevailing party in such dispute shall be entitled
to recover from the losing party all fees, costs and expenses of enforcing any
right of such substantially prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals and collection.

    


    


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    If the
foregoing is in accordance with your understanding, kindly confirm your
acceptance and agreement by signing and returning the enclosed duplicate of this
Agreement that will thereupon constitute an agreement between us.

    


    Very
truly yours,

    


    /s/ SALVATORE C.
CARUSO

    


    Salvatore
C. Caruso

    President
& CCO

    


    


    Accepted
and approved this 29th day of January, 2009.

    


    


    By:          /s/ STEVEN A.
KRIEGSMAN

    Steven Kriegsman

    President and CEO

    CytRx Corporation