Exhibit 10.23


EXTENSION
AND AMENDMENT AGREEMENT


AGREEMENT dated as of January
25, 2007 between Callisto Pharmaceuticals, Inc., a  Delaware corporation (the “Company”) and
Gabriele M. Cerrone (the “Consultant”).


The
Company’s Board of Directors has determined, in light of the importance of the
Consultant’s services to the stability and interests of the Company and its
stockholders, to extend the term of the Consulting Agreement dated as of
December 27, 2004 (the “Consulting Agremeent”).


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


1.             EXTENSION AND AMENDMENT OF CONSULTING AGREEMENT.


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


(b)           Compensation.   The
Company agrees to increase Consultant’s “Base Compensation” (as defined in the
Consulting Agreement) from $205,000 per year to $275,000 per year commencing
January 1, 2007, payable monthly in approximate equal installments in
advance.  In addition, the Consultant
shall be granted an aggregate of 225,000 ten-year non-qualified stock options
pursuant to the Company’s Stock Option Plan (the “Plan”) at an exercise
price  per share equal to the fair market
value 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 Consulting
Agreement, one third of such options shall vest on December 31, 2007, 2008 and
2009.  Once vested, the options may be
exercised until their expiration, notwithstanding any provision of the Plan which
requires exercise following termination of services in a shorter period.  The Company will include the shares of equity
securities of the Company which may be issued upon the exercise of the options
in any registration statement under the Securities Act of 1933 which includes
securities issuable to any other executive officer of the Company.  In recognition of the services beyond that
required 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.  The
Consultant shall be eligible to earn a cash bonus of up to 22.5% of Base
Compensation for each twelve-month period during the Term based on meeting
performance objectives and bonus criteria to be mutually identified by
Consultant and the Company’s Board of Directors and any additonal bonuses and
option grants as may be determined by the Compensation Committee of the Company’s
Board in its sole discretion.  In the
event no performance criteria has been set, the Consultant shall receive a
bonus of not less than 10% if bonuses are paid to any other of the Company’s
executive officers during or for the year of this agreement.  For purposes of Section 3 and 4 of the
Agreement, the Consultant’s advisory services in connection with the planning,
financing and execution of one or more plans of corporate reorganization shall
not be covered within the scope of services provided under this Agreement, nor
will the compensation under this Agreement be deemed to cover such services.



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(c)           Amendment to Section 5 of the
Consulting Agreement.


(i)            Section 5.1 of the Consulting
Agreement is hereby amended, effective immediately to include in reasonable
expenses, the cost associatied with accessing office facilities and
administrative assistance outside of the Company’s principal executive offices
at such times that the Consultant is attending to matters within the scope of
this Agreement.


(ii)           Section 5.2 of the Consulting
Agreement is hereby amended, effective immediately to delete the Section in its
entirety and replace it with the following:


“During
the Term, the Company, at its sole expense, shall provide Consultant with one
fully furnished and equipped executive office, one full-time qualified and experienced
administrative assistant, and such legal and accounting support services as is
deemed appropriate by the Consultant and approved by the Company’s Chief
Executive Officer.  Such services and
facilities will not be diminished without the Consultant’s prior consent.”


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


 “(iv)                   The severance compensation provided
for in subsection (9)(i) above shall be paid not later than the tenth day
following the Date of Termination; provided, however, that if the amount
of such compensation cannot be finally determined on or before such day, the
Company shall pay to the Consultant on such day an estimate, as determined in
good 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 such
compensation (together with interest at the Federal short-term rate
provided in Section 1274(d)(7)(C)(1) of the Code) as soon as the amount thereof
can be determined but in no event later than the thirtieth day after the Date
of Termination. In the event the amount of the estimated payment exceeds the
amount subsequently determined to have been due, such excess shall constitute a
loan by the Company to the Consultant payable on the fifth day after demand by
the Company (together with interest at the Federal short-term rate
provided in Section 1274(d)(7)(C)(1) of the Code).


(v)                                 If
the 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 pay
the Consultant on or before the tenth day following the Date of Termination, an
additional amount (the “Gross-Up Payment”) such that the net amount
retained by the Consultant, after deduction of any Excise Tax on Total Payments
and any federal and state and local income tax and Excise Tax upon the payment
provided for by this paragraph, shall be equal to the Total Payments. For
purposes of determining whether any of the payments will be subject to the
Excise Tax and the amount of such Excise Tax, (i) any payments or benefits
received or to be received by the Consultant in connection with a Change in
Control 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 the
Company, its successors, any person whose actions result in a Change in Control
of the Company or any corporation affiliated (or which, as a result of the
completion of transaction causing such a Change in control, will become
affiliated) with the Company within the meaning of Section 1504 of Code (the “Total
Payments”) shall be treated as “parachute payments” within the meaning of
Section 28OG(b)(2) of the Code, and all “excess parachute payments” within the
meaning 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 independent
auditors and acceptable to the Consultant, the Total Payments (in whole or in
part) do not constitute parachute payments, or such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered within the meaning of Section 28OG(b)(4) of the Code either in their
entirety or in excess of the base amount within the meaning of Section
28OG(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 Excise
Tax shall be equal to the lesser of (A) the total amount of the Total Payments
or (B) the amount of excess parachute payments or benefit shall be determined
by the Company’s independent auditors in accordance with the principles of
Section 28OG(d)(3) and (4) of the Code. For purposes of determining the amount
of the Gross-Up Payment, the Consultant shall be deemed to pay federal
income taxes at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of the Consultant’s residence an the Date of Termination, net of the maximum
reduction in federal income taxes which could be obtained from deduction of
such state and local taxes. In the event the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the time
of termination of the Consultant’s employment, the Consultant shall repay to
the Company at the time the amount of such reduction in Excise Tax is finally
determined the portion of the Gross-Up Payment that can be repaid such
that the Consultant remains whole on an after-tax basis following such
repayment (taking into account any reduction in income or excise taxes to the
Consultant from such repayment) plus interest on the amount of such repayment
at the Federal short-term rate provided in Section 1274(d)(1)(C)(i) of
the Code. In the event the Excise Tax is determined to exceed the amount taken
into account hereunder at the time of the termination of the Consultant’s
employment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company
shall make an additional gross-up payment in respect of such excess (plus
any interest payable with respect to such excess) at the time that the amount
of such excess is finally determined.”


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



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(f)            Effect on Consulting Agreement.   Except
as modified by this Agreement, all of the terms of the Consulting Agreement
shall continue in full force and effect. In the event of a discrepancy between
the Consulting Agreement and this Agreement, the terms of this Agreement shall
be controlling.


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


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


(b)           The provisions of this Agreement, and
any payment provided for hereunder, shall not reduce any amounts otherwise
payable, or in any  way diminish
the Consultant’s existing rights, or rights which would accrue solely as a
result of the passage of time, under any Benefit Plan, Consulting Agreement or
other contract, plan or arrangement of the Company or any of its subsidiaries
of which the Consultant shall be a beneficiary.


3.                                       SUCCESSOR
TO THE COMPANY.


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


(b)           This Agreement shall inure to the
benefit of and be enforceable by the Consultant’s personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Consultant should die while any amounts are still
payable to the Consultant hereunder, all such amounts, unless otherwise
provided herein, shall be paid in accordance with  the
terms of this Agreement to the Consultant’s devisee, legatee, or other designee
or, if there be no such designee, to the Consultant’s estate.



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4.                                     NOTICE.


For
purposes of this Agreement, notices and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, as follows:


if to the Company:


	
   

  	
  Callisto Pharmaceuticals,
  Inc.

  
	
   

  	
  420 Lexington
  Avenue, Suite 1609

  
	
   

  	
  New York, New
  York 10070

  



 


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


5.                                       MISCELLANEOUS.


No
provisions of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in a writing signed by the
Consultant and the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior to subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by  either party which are not set
forth expressly in this Agreement. This Agreement shall be governed by and
construed in accordance with the laws of Delaware.


6.                                       VALIDITY.


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


7.                                       COUNTERPARTS.


This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and same
instrument.



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8.                                       LEGAL
FEES AND EXPENSES.


The
Company or one of its subsidiaries shall pay all legal fees and expenses which
the Consultant may incur as a result of the Company’s contesting the  validity, enforceability or the Consultant’s interpretation
of, 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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