Document:

Exhibit 10.1

WAIVER AND FIFTH AMENDMENT TO

LOAN AND SECURITY AGREEMENT

THIS
WAIVER AND FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Waiver and
Amendment”), dated as of February 12, 2007 (the “Effective Date”), is entered
into by and among Channell Commercial Corporation, a Delaware corporation (“Domestic
Borrower”), Channell Commercial Canada Inc., an Ontario corporation (“Canadian
Borrower”), Channell Limited, a limited liability company incorporated under
the laws of England and Wales (“CLU”), Channell Commercial Europe Limited, a
limited liability company incorporated under the laws of England and Wales (“CCEL”
and, together with CLU, “UK Borrowers”, and, together with Domestic Borrower,
Canadian Borrower and CLU, “Borrowers”), Bank of America, N.A., as assignee of
Banc of America Leasing and Capital, LLC, successor-in-interest to Fleet
Capital Corporation, as Administrative Agent under the Loan Agreement referred
to below (in such capacity, the “Administrative Agent”), BABC Global Finance
Inc., as assignee of Fleet Capital Global Finance, Inc., as assignee of Fleet
Capital Canada Corporation, as Canadian Agent under the Loan Agreement referred
to below (in such capacity, the “Canadian Agent”), Bank of America, N.A., as
successor-in-interest to Fleet National Bank, London U.K. Branch, as UK Agent
under the Loan Agreement referred to below (in such capacity, the “UK Agent”),
and the Lenders party to the Loan Agreement referred to below, with reference
to the following facts:

RECITALS

A.            The Borrowers are currently in
default under (i) Section 10.1.3 of the Loan and Security Agreement dated as of
September 25, 2002 (as heretofore amended, the “Loan Agreement”), with the
Administrative Agent, the Canadian Agent, the UK Agent and the Lenders party
thereto, due to their breach of Section 8.2.18 of the Loan Agreement by their
failure to maintain an Aggregate Availability of at least $1,500,000, and due
to the Domestic Borrower’s breach of Section 3.3.2(a) of the Loan Agreement by
its failure to have prepaid the outstanding principal amount of the Domestic
Revolving Credit Loans in the amount of the excess of the Domestic Revolving
Credit Exposure of all the Domestic Lenders over the Domestic Borrowing Base
(minus the outstanding principal amount of the Domestic Term Loan and the
Reserves applicable to Domestic Revolving Credit Loans) and (ii) Section 10.1.4
due to their breach of Section 8.1.7 by their failure to deliver the
Projections of the Domestic Borrower and its Subsidiaries for fiscal year 2007
(collectively, the “Existing Events of Default”).

B.            The Borrowers have requested that
the Lenders waive the Existing Events of Default and amend the Loan Agreement
in order to (i) decrease the Aggregate Availability required pursuant to
Section 8.2.18 of the Loan Agreement from $1,500,000 to $500,000, during the
period from the Effective Date through and including April 30, 2007;
(ii) extend the Term of the Loan Agreement from March 31, 2007 to June 30,
2007; (iii) decrease the amount of Reserves established under the Loan
Agreement from $600,000 to $300,000 during the period from the Effective Date
through and including

 1
 

April 30, 2007; (iv) increase the maximum amount
of the UK Borrowing Base to $600,000; and (v) make certain other modifications
set forth below.

                NOW, THEREFORE, the parties hereby agree as follows:

1.             Defined Terms.  Any and all
initially capitalized terms used in this Waiver and Amendment without
definition shall have the respective meanings specified in the Loan Agreement.

2.             Waiver of Existing Events of Default. 
The Lenders hereby waive the Existing Events of Default.  Such waiver by the Lenders shall constitute a
waiver of only the Existing Events of Default and shall not constitute a waiver
of any future breach of any provision of the Loan Agreement.  The Lenders hereby agree and acknowledge that
the Default Rate shall not apply to any period prior to the Effective Date and
hereby waive any right to impose or charge the Default Rate on any Obligations as
a result of the Existing Events of Default.

3.             Agreement Re Projections. 
The Domestic Borrower agrees that it shall deliver the Projections of
the Domestic Borrower and its Subsidiaries for fiscal year 2007 required under
Section 8.1.7 not later than February 28, 2007.

4.             Temporary Reduction of Reserve. 
Without limiting its right to impose additional discretionary Reserves
from time to time pursuant to Section 1.1.5 of the Loan Agreement, on the
Effective Date, the Reserves heretofore established by the Administrative Agent
under the Loan Agreement shall be reduced from $600,000 to $300,000 until April
30, 2007, after which date they shall increase again to $600,000.

5.             Section 1.1.1.  Section 1.1.1
of the Loan Agreement is hereby amended to read in full as follows:

“Domestic Revolving
Credit Loans. Each Lender having a Domestic Revolving Credit Commitment
(each, a “Domestic Lender”) agrees, severally and not jointly, for so long as
no Default or Event of Default exists, to make loans denominated in U.S.
Dollars (such loans relative to such Lender, its “Domestic Revolving Credit
Loans”) to Domestic Borrower from time to time during the period from the date
hereof to but not including the last day of the Term, as requested by Borrower
Representative in the manner set forth in Section 3.1.1(a) hereof, provided,
that no Domestic Revolving Credit Loan shall be made if, after giving effect to
the making of such Loan and the simultaneous application of the proceeds
thereof:

(a)   the principal amount of the Domestic
Revolving Credit Exposure of such Lender (which, for purposes of clarification,
includes the Domestic LC Amount and outstanding Domestic LC Obligations, as
further set forth in the definition of “Domestic Revolving Credit Exposure”)
would exceed such Lender’s Domestic Revolving Credit Commitment minus such
Lender’s Domestic Revolving Loan Percentage of Reserves, if any;

 2
 

(b)   the aggregate amount of the Domestic
Revolving Credit Exposure of all the Domestic Lenders plus the UK
Revolving Credit Exposure of the UK Lender and plus the Canadian
Revolving Credit Exposure of the Canadian Lender would exceed the Aggregate
Borrowing Base then in effect (minus Reserves, if any); or

(c)   the aggregate amount of the Domestic
Revolving Credit Exposure of all the Domestic Lenders (which, for purposes of
clarification, includes the Domestic LC Amount and outstanding Domestic LC
Obligations, as further set forth in the definition of “Domestic Revolving
Credit Exposure”) would exceed the Revolving Credit Maximum Amount minus the
Dollar Equivalent of the aggregate principal amount of the outstanding Canadian
Revolving Credit Loans minus the Dollar Equivalent of the aggregate principal
amount of the outstanding UK Revolving Credit Loans, minus the Dollar
Equivalent of the UK LC Amount minus Reserves, if any.

Domestic Revolving Credit Loans may be borrowed as
Domestic Base Rate Loans or Domestic LIBOR Loans.  Amounts borrowed under this Section 1.1.1 may
be repaid in whole or in part and, up to but excluding the last day of the
Term, reborrowed, all in accordance with the terms and conditions hereof.  The Domestic Revolving Credit Loans shall be
further evidenced by, and repayable in accordance with the terms of, the
applicable Revolving Notes and shall be secured by all of the Domestic
Collateral.”

6.             Section 1.1.2(a).  Section
1.1.2(a) of the Loan Agreement is hereby amended to read in full as follows:

“(a) Subject to
the terms and conditions hereof, the Canadian Lender agrees, for so long as no
Default or Event of Default exists, to make loans to Canadian Borrower
denominated in Canadian Dollars (each such loan or extension of credit, a “Canadian
Revolving Credit Loan”) from time to time during the period from the date
hereof to but not including the last day of the Term, as requested by the
Borrower Representative in the manner set forth in Section 3.1.1(b)
hereof; provided that no Canadian Revolving Credit Loan shall be made
if, after giving effect to the making of such Loan and the simultaneous
application of the proceeds thereof, (i) the aggregate amount of the
Canadian Revolving Credit Exposure of the Canadian Lender would exceed the
Canadian Borrowing Base then in effect minus Reserves applicable to
Canadian Revolving Credit Loans, if any, or (ii) the aggregate amount of
the Domestic Revolving Credit Exposure of all the Lenders would exceed the
Revolving Credit Maximum Amount minus the Dollar Equivalent of the
aggregate principal amount of the outstanding Canadian Revolving Credit Loans minus
the Dollar Equivalent of the aggregate principal amount of the outstanding UK
Revolving Credit Loans minus the Dollar Equivalent of the UK LC Amount minus
Reserves, if any.  The Canadian Revolving
Credit Loans shall be further evidenced by, and repayable in accordance with
the terms of, the applicable Revolving Note and shall be secured

 3
 

by all of the Canadian
Collateral.  Amounts borrowed under this
Section 1.1.2 may be repaid in whole or in part and, up to but excluding
the last day of the Term, reborrowed, all in accordance with the terms and
conditions hereof.  Upon the making of
each such Canadian Revolving Credit Loan and subject to Section 3.2.6,
each Canadian Participating Lender shall be deemed to have irrevocably and
unconditionally purchased from the Canadian Lender, without recourse or
warranty, an undivided interest and participation in each Canadian Revolving
Credit Loan to the extent of such Canadian Participating Lender’s Canadian
Percentage thereof.”

7.             Section 1.1.3(a).  Section
1.1.3(a) of the Loan Agreement is hereby amended to read in full as follows:

“(a)         Subject to the terms and conditions
hereof, the UK Lender agrees, for so long as no Default or Event of Default
exists, to make loans under an overdraft facility to either UK Borrower
denominated in Sterling (each such loan or extension of credit, a “UK
Revolving Credit Loan”) from time to time during the period from the date
hereof to but not including the last day of the Term, as requested by the
Borrower Representative or either UK Borrower in the manner set forth in
Section 3.1.1(c) hereof; provided that no UK Revolving Credit Loan
shall be made if, after giving effect to the making of such Loan and the
simultaneous application of the proceeds thereof, (i) the aggregate amount
of the UK Revolving Credit Exposure of the UK Lender (which, for purposes of
clarification, includes the UK LC Amount and outstanding UK LC Obligations, as
further set forth in the definition of “UK Revolving Credit Exposure”) would
exceed the UK Borrowing Base then in effect minus Reserves applicable to
UK Revolving Credit Loans, if any, or (ii) the aggregate amount of the
Domestic Revolving Credit Exposure of all the Lenders would exceed the
Revolving Credit Maximum Amount minus the Dollar Equivalent of the
aggregate principal amount of the outstanding Canadian Revolving Credit Loans minus
the Dollar Equivalent of the aggregate principal amount of the outstanding UK
Revolving Credit Loans minus the Dollar Equivalent of the UK LC Amount minus
Reserves, if any.  UK Revolving Credit
Loans may be borrowed as UK Base Rate Loans or UK LIBOR Loans. The UK Revolving
Credit Loans shall be further evidenced by, and repayable in accordance with
the terms of, the applicable Revolving Note and shall be secured by all of the
UK Collateral.  Amounts borrowed under
this Section 1.1.3 may be repaid in whole or in part and, up to but
excluding the last day of the Term, reborrowed, all in accordance with the
terms and conditions hereof.  Upon the
making of each such UK Revolving Credit Loan and subject to Section 3.2.7,
each UK Participating Lender shall be deemed to have irrevocably and
unconditionally purchased from the UK Lender, without recourse or warranty, an
undivided interest and participation in each UK Revolving Credit Loan to the
extent of such UK Participating Lender’s UK Percentage thereof.”

 4
 

8.             Section 3.3.2(a).  The first
sentence of Section 3.3.2(a) of the Loan Agreement is amended to read in full
as follows:

“Domestic
Revolving Credit Loans. Domestic Borrower shall prepay the outstanding
principal amount of the Domestic Revolving Credit Loans on any date on which
the aggregate amount of the Domestic Revolving Credit Exposure of all the
Domestic Lenders, the UK Revolving Credit Exposure of the UK Lender and the
Canadian Revolving Credit Exposure of the Canadian Lender exceeds the Aggregate
Borrowing Base then in effect (minus Reserves, if any) or the Revolving Credit
Maximum Amount (minus the Dollar Equivalent of the aggregate principal amount
of the outstanding UK Revolving Credit Loans minus the Dollar Equivalent of the
aggregate principal amount of the outstanding Canadian Revolving Credit Loans
minus Reserves, if any), in the amount of such excess.”

9.             Extension of Term of Loan
Agreement.  Section 4.1 of the Loan
Agreement is hereby amended to read in full as follows:

“4.1         Term of Agreement.

                                Subject to the right of Lenders to
cease making Loans to Borrowers during the continuance of any Default or Event
of Default, this Agreement shall be in effect from the Closing Date through and
including June 30, 2007 (the “Term”), unless terminated as provided in
Section 4.2 hereof.”

10.           Temporary Reduction in Aggregate Availability
Requirement.  Section 8.2.18 of the Loan Agreement is
amended to read in full as follows:

“8.2.18    Aggregate
Availability.

Permit Aggregate
Availability to be less than $500,000 during the period from the Effective Date
through and including April 30, 2007; and thereafter permit Aggregate
Availability to be less than $1,500,000.”

11.           Definitions.  The following
definitions set forth in Appendix A to the Loan Agreement are amended to read
in full as follows (or, in the case of the definition of “Aggregate Borrowing
Base” added thereto):

“Aggregate
Borrowing Base” means, as of each date of determination, the sum of the
Domestic Borrowing Base, the Canadian Borrowing Base and the UK Borrowing Base.

“Domestic Availability”
— the amount of additional money which Domestic Borrower is entitled to borrow
from time to time as Domestic Revolving Credit Loans, such amount being the
lesser of:

(i) the
aggregate Domestic Revolving Credit Commitments minus the principal amount of
Domestic Revolving Credit Loans outstanding and

 5
 

the Domestic LC Amount
and the outstanding Domestic LC Obligations; and

(ii)  the result of:

(A)  the Aggregate Borrowing Base; minus

(B)  the outstanding principal amount of Domestic
Revolving Credit Loans (including any amounts which Administrative Agent or any
Lender may have paid for the account of Domestic Borrower pursuant to any of
the Loan Documents and which have not been reimbursed by Domestic Borrower),
the Domestic LC Amount and the outstanding Domestic LC Obligations, and any
Reserves; minus

(C)  the Dollar Equivalent of the outstanding
principal amount of UK Revolving Credit Loans (including any amounts which
Administrative Agent, UK Agent or UK Lender may have paid for the account of UK
Borrowers pursuant to any of the Loan Documents and which have not been
reimbursed by UK Borrowers), the Dollar Equivalent of the UK LC Amount and the
Dollar Equivalent of the outstanding UK LC Obligations; minus

(D)  the Dollar Equivalent of the outstanding
principal amount of Canadian Revolving Credit Loans (including any amounts
which Administrative Agent, Canadian Agent or Canadian Lender may have paid for
the account of Canadian Borrower pursuant to any of the Loan Documents and
which have not been reimbursed by Canadian Borrowers).

If the amount outstanding
is equal to or greater than the aggregate Domestic Revolving Credit Commitments
or the Aggregate Borrowing Base, Domestic Availability is $0.

“UK Borrowing Base”
— “UK Borrowing Base” - as at any date of determination thereof, the Dollar
Equivalent of an amount equal to the lesser of the following:

(a)           $600,000;
and

(b)           an
amount equal to 75% of the net amount of Eligible Accounts of UK Borrowers
outstanding at such date.

The advance rate set forth above may be adjusted
downward by UK Agent as UK Agent shall deem necessary or appropriate in its
reasonable credit judgment, including, without limitation, adjustments with
respect to Prior Claims.  For purposes
hereof, the net amount of Eligible Accounts at any time shall be the face
amount of such Eligible Accounts less any and all returns, rebates, discounts
(which may, at UK Agent’s option, be calculated on shortest terms), credits,
allowances or excise taxes of any nature at any time issued, owing, claimed by Account
Debtors, granted, outstanding or payable in connection with such Accounts at
such time.”

 6
 

12.           Overadvance Definition.  The following
definition of “Overadvance” set forth in Section 10.1.1 of the Loan Agreement
is amended to read in full as follows:

“Overadvance”
means the occurrence of any of the following: (a) the Domestic Revolving Credit
Exposure of all the Domestic Lenders exceeds (i) the Aggregate Borrowing Base
then in effect (minus Reserves, if any) or (ii) the Revolving Credit
Maximum Amount (minus the Dollar Equivalent of the aggregate principal
amount of the outstanding Canadian Revolving Credit Loans minus the
Dollar Equivalent of the aggregate principal amount of the outstanding UK
Revolving Credit Loans minus Reserves, if any), (b) the aggregate amount
of the Canadian Revolving Credit Exposure of the Canadian Lender exceeds
(including, without limitation, as a result of fluctuation in exchange rates)
the Canadian Borrowing Base then in effect (minus Reserves applicable to
Canadian Revolving Credit Loans, if any), or (c) the aggregate amount of the UK
Revolving Credit Exposure of the UK Lender exceeds (including, without
limitation, solely as a result of fluctuation in exchange rates) the UK Borrowing
Base then in effect (minus Reserves applicable to UK Revolving Credit
Loans, if any).”

13.           Amendment Fee.  In
consideration of the Agreement of the Agents and the Lenders to enter into this
Waiver and Amendment, Domestic Borrower hereby agrees to pay to the
Administrative Agent on the Effective Date, for the sole account of the
Domestic Lender, an amendment fee in the amount of $25,000 (the “Amendment Fee”),
which fee shall be deemed fully-earned and non-refundable once paid.  Domestic Borrower hereby acknowledges and
agrees that the Administrative Agent may effect payment of the Amendment Fee by
charging the full amount thereof to the Domestic Loan Account.

14.           Conditions Precedent.  The
effectiveness of this Waiver and Amendment shall be subject to the prior
satisfaction of the following conditions:

(a)           This Waiver and Amendment. 
The Administrative Agent shall have received, in form and substance
satisfactory to the Administrative Agent, an original of this Waiver and
Amendment, duly executed by the Borrowers, the Administrative Agent, the
Canadian Agent, and the UK Agent;

(b)           No Defaults. 
The Borrowers and all other Loan Parties shall be in compliance with all
the terms and provisions of the Loan Documents applicable to such Person or its
Property and no Default or Event of Default (other than the Existing Events of
Default waived hereby) shall have occurred and be continuing;

(c)           Accuracy of Representations and
Warranties.  All of Borrowers’ representations and
warranties contained herein shall be true and correct on and as of the date of
execution hereof; and

 7
 

(d)           Payment of the Amendment Fee. 
The Administrative Agent shall have received the Amendment Fee.

15.           Representations and Warranties.

(a)           Reaffirmation of Prior Representations
and Warranties.  Each Borrower hereby reaffirms and restates
as of the date hereof all of the representations and warranties made by such
Borrower in the Loan Agreement and the other Loan Documents, which shall be
true and correct in all material respects, except to the extent such
representations and warranties specifically relate to an earlier date.

(b)           No Default.  Except for
the Existing Events of Default, no Default or Event of Default has occurred and
remains continuing under any of the Loan Documents.

16.           Miscellaneous.

(a)           Reference to Loan Agreement. 
The Loan Agreement, each of the other Loan Documents, and any and all
other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms hereof, or pursuant to the terms of the Loan
Agreement as amended hereby, are hereby amended so that any reference therein
to the Loan Agreement shall mean a reference to the Loan Agreement as amended
by this Waiver and Amendment.

(b)           Loan Agreement Remains in Effect. 
The Loan Agreement and the other Loan Documents remain in full force and
effect and the Borrowers ratify and confirm their agreements and covenants
contained therein.

(c)           APPLICABLE LAW. 
THIS WAIVER AND AMENDMENT SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

 8
 

(d)           Counterparts. 
This Waiver and Amendment may be executed in one or more counterparts,
each of which when so executed shall be deemed to be an original, but all of
which when taken together shall constitute one and the same instrument.

IN
WITNESS WHEREOF, the parties have entered into this Waiver and Amendment by
their respective duly authorized officers as of the date first above written.

	
   

  	
  Channell Commercial Corporation,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick E. McCready

  	
   

  
	
   

  	
  Name:

  	
  Patrick E. McCready

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Channell
  Commercial Canada Inc.,

  
	
   

  	
  an Ontario
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William H. Channell, Jr.

  	
   

  
	
   

  	
  Name: 

  	
  William H.
  Channell, Jr.

  
	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Channell
  Limited,

  
	
   

  	
  a limited
  liability company incorporated

  
	
   

  	
  under the laws
  of England and Wales

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William H. Channell, Jr.

  	
   

  
	
   

  	
  Name: 

  	
  William H.
  Channell, Jr.

  
	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Channell
  Commercial Europe Limited,

  
	
   

  	
  a limited
  liability company incorporated

  
	
   

  	
  under the laws
  of England and Wales

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William H. Channell, Jr.

  	
   

  
	
   

  	
  Name: 

  	
  William H.
  Channell, Jr.

  
	
   

  	
  Title:

  	
  President and CEO

  
					

 9
 

 

	
  

  	
  Bank of America, N.A.,

  
	
   

  	
  (as assignee of Banc of America

  
	
   

  	
  Leasing and Capital, LLC, successor-

  
	
   

  	
  in-interest to Fleet Capital Corporation),

  
	
   

  	
  as Administrative Agent and as sole

  
	
   

  	
  Domestic Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew R. Van Steenhuyse

  	
   

  
	
   

  	
  Matthew R. Van Steenhuyse

  
	
   

  	
  Senior Vice President & Portfolio Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BABC Global Finance Inc.,

  
	
   

  	
  (as assignee of Fleet Capital Global Finance, Inc.,

  
	
   

  	
  as assignee of Fleet Capital Canada Corporation),

  
	
   

  	
  as Canadian Agent and as Canadian Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ L. M. Junior Del Brocco

  	
   

  
	
   

  	
  Name:

  	
  L. M. Junior Del
  Brocco

  
	
   

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  (successor-in-interest to Fleet National Bank, 

  
	
   

  	
  London U.K.
  Branch), as UK Agent and as UK 

  
	
   

  	
  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew R. Van Steenhuyse

  	
   

  
	
   

  	
  Matthew R. Van Steenhuyse

  
	
   

  	
  Senior Vice President & Portfolio Manager

  
					

 

 10Exhibit 10.1

CAPITAL MARKETS CONSULTING
AGREEMENT

 

This
Agreement is made and entered into as of the 11th day of November 2005 by and
between Babington Microcap Management Ltd. (“Consultant”) and Callisto
Pharmaceuticals, Inc. (the “Company”).

In
consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

1.             Purpose:
The Company hereby engages Consultant for the term specified in Paragraph 2
hereof to render consulting advice to the Company relating to the capital
markets upon the terms and conditions set forth herein.

2.             Term:     Except as otherwise specified in paragraph
4 hereof, this Agreement shall be effective for the period of six (6) months
beginning on the date first written above.

3.             Duties of
Consultant:  During the
term of this Agreement, Consultant shall provide the Company with such regular
and customary capital markets and corporate finance consulting advice as is reasonably
requested by the Company, provided that Consultant shall not be required to
undertake duties not reasonably within the scope of this Agreement.  It is understood and acknowledged by the
parties that the value of Consultant’s advice is not readily quantifiable, and
that although Consultant shall be obligated to render the advice contemplated
by this Agreement upon the reasonable request of the Company, in good faith,
Consultant shall not be obligated to spend any specific amount of time in so doing.
Consultant’s duties may include but will not necessarily be limited to,
providing recommendations concerning the following matters:

a.            Rendering advice with regard to any
of the following capital markets and corporate finance matters:

(i)                                     Capitalization
of the Company;

(ii)                                  Offerings
of securities in public and private transactions;

(iii)                               Alternative
uses of corporate assets;

(iv)                              Structure
and use of debt;

(v)                                 Sales
of stock by insiders pursuant to Rule 144 or otherwise;

(vi)                              Strategic
plan of the Company; and

(vii)                           Meetings
with and presentations to institutional and professional individual investors
in the U.S. and Europe.

4.             Compensation:  In consideration for the services rendered by
Consultant to the Company pursuant to this Agreement, the Company agrees to pay
Consultant $24,000 upon execution of this Agreement.  In addition, the Company will issue to the
Consultant 140,000 

 1
 

warrants to purchase common stock of the Company at an
exercise price of $1.10 per share.  Such
warrants shall be immediately exercisable and shall expire five (5) years from
the date hereof.

5.             Liability
of Consultant:  The
Company acknowledges that all opinions and advice (written or oral) given by
Consultant to the Company in connection with Consultant’s engagement are intended
solely for the benefit and use of the Company in considering the transaction to
which they relate, and the Company agrees that no person or entity other than
the Company shall be entitled to make use of or rely upon the advice of
Consultant to be given hereunder, and no such opinion or advice shall be used
for any other purpose or reproduced, disseminated, quoted or referred to at any
time, in any manner or for any purpose, nor may the company make any public
references to Consultant, or use Consultant’s name in any annual reports or any
other reports or releases of the Company without Consultant’s prior written
consent.  Consultant’s maximum liability
shall not exceed the cash compensation received from the Company.

6.             Consultant’s
Services to Others:  The
Company acknowledges that Consultant or its affiliates are in the business of
providing financial services and consulting advice to others.  Nothing herein contained shall be construed
to limit or restrict Consultant in conducting such business with respect to
others, or in rendering such advice to others.

7.             Company
Information:

a.             The Company recognizes and confirms
that, in advising the Company and in fulfilling it engagement hereunder,
Consultant will use and rely on data, material and other information furnished
to Consultant by the Company.  The
Company acknowledges and agrees that in performing its services under this
engagement, Consultant may rely upon the data, material and other information
supplied by the Company without independently verifying the accuracy,
completeness or veracity of same.  The
Company agrees to notify Consultant in writing via overnight courier, facsimile
or e-mail of any material event and/or change with in twenty-four hours of its
occurrence.

b.             Except as contemplated by the terms
hereof or as required by applicable law, Consultant shall keep confidential all
material non-public information provided to it by the Company, and shall not
disclose such information to any third party, other than such of its employees
and advisors as Consultant determines to have a need to know.

8.             Consultant
an Independent Contractor: 
Consultant shall perform its services hereunder as an independent
contractor and not as an employee of the Company or an affiliate thereof.  It is expressly understood and agreed to by
the parties hereto that Consultant shall have no authority to act for,
represent or bind the Company or any affiliate thereof in any manner, except as
may be agreed to expressly by the Company in writing from time to time.

9.             Termination: Either party at anytime with thirty (30) days
prior written notice may terminate this Agreement.

 2
 

10.           Miscellaneous:

a.             This
Agreement between the Company and Consultant constitutes the entire agreement
and understanding of the parties hereto, and supersedes any and all previous
agreements and understandings, whether oral or written, between the parties
with respect to the matters set forth herein.

b.             Any
notice or communication permitted or required hereunder shall be in writing and
shall be deemed sufficiently given if hand-delivered or sent (i) postage
prepaid by registered mail, return receipt requested, or (ii) by facsimile, to
the respective parties as set forth below, or to such other address as either
party may notify the other in writing.

	
  

  	
  If to the
  Company, to:

  	
  Callisto Pharmaceuticals, Inc.

  
	
   

  	
  420 Lexington
  Avenue, Suite 1609

  
	
   

  	
  New York, New
  York 10170

  
	
   

  	
  Attention: Gary
  S. Jacob, CEO

  
	
   

  	
   

  
	
   

  	
  If to
  Consultant, to:

  	
  Babington Microcap Management Ltd.

  

 

c.             This
Agreement shall be binding upon and inure to the benefit of each of the parties
hereto and their respective successors, legal representatives and assigns.

d.             This
Agreement may be executed in any number of counterparts, each of whom together
shall constitute one and the same original document.

e.             No
provision of this Agreement may be amended, modified or waived, except in a
writing signed by all of the parties hereto.

f.              This
Agreement shall be construed in accordance with and governed by the laws of the
State of New York, without giving effect to conflict of law principles.  The parties hereby agree that any dispute
which may arise between them arising out of or in connection with this
Agreement shall be adjudicated before a court located in New York, and they
hereby submit to the exclusive jurisdiction of the courts of the State of New
York with respect to any action or legal proceeding commenced by any party, and
irrevocably waive any objection they now or hereafter may have respecting the
venue of any such action or proceeding brought in such a court or respecting
the fact that such court is an inconvenient forum, relating to or arising out
of this Agreement, and consent to the service of process in any such action or
legal proceeding by means of registered or certified mail, return receipt
requested, in care of the address set forth in Paragraph 10(b) hereof.

 

 3

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed, as of the date first
above written.

	
  

  	
  CONSULTANT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Gary S. Jacob

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
					

 

 

 4

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