Exhibit 10.1

 

SECOND AMENDED AND RESTATED

DEBT EXCHANGE AGREEMENT

 

THIS SECOND AMENDED AND RESTATED DEBT EXCHANGE AGREEMENT (this “Agreement”) is
entered into as of this 22nd day of July, 2010 by and between ADVANCED LIFE
SCIENCES HOLDINGS, INC., a Delaware corporation (the “Company”), and Michael T.
Flavin (the “Maker”).

 

RECITALS

 

WHEREAS, the Company and the Maker have entered into that certain Third
Amended & Restated Promissory Note dated as of January 4, 2010 (the “Note”)
relating to indebtedness of the Company to Maker in the outstanding principal
amount of $2.0 million (the “Indebtedness”);

 

WHEREAS, on July 7, 2010, the Company completed a registered public offering of
379,188 units at a public offering price of $4.20 per unit (the “Units”), with
each unit consisting of (i) 100 shares of the Company’s common stock, (ii) 100
stock warrants to purchase shares of common stock at an exercise price of $0.042
per share (the “Stock Warrants”) and (iii) one warrant to purchase an additional
unit, consisting of 100 shares of common stock and 100 Stock Warrants, at an
exercise price of $4.20 per additional unit (the “Unit Warrants”);

 

WHEREAS, pursuant to the Amended and Restated Debt Exchange Agreement dated as
of June 15, 2010 (the “Prior Agreement”) the Maker agreed with the Company
(acting through the independent audit committee of the Company’s board of
directors) to exchange the Note for Units on the terms and conditions described
therein; and

 

WHEREAS, the Maker and the Company (acting through the independent audit
committee of the Company’s board of directors) have agreed to amend and restate
the Prior Agreement in its entirety upon the terms and subject to the conditions
of this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
agreements and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Maker and the Company hereby agree as follows:

 

ARTICLE I

DEBT EXCHANGE

 

1.1           Debt Exchange.  The Maker shall deliver the Note to the Company
for cancellation and retirement in full of the Indebtedness and, in exchange,
receive from the Company 47,619,047 shares (the “Shares”) of the Company’s
common stock, par value $0.01 per share (the “Exchange”).

 

1.2           Accrued Interest.  The Company shall make a cash payment to the
Maker in satisfaction of accrued and unpaid interest on the Indebtedness to but
excluding the date of the Exchange.

 

1.3           Restricted Securities.  The Maker understands that the Shares are
characterized as “restricted securities” under the federal securities laws
inasmuch as they will be acquired in a transaction not involving a public
offering, and that under such laws and applicable regulations such securities
may be resold without registration under the federal securities laws only in
certain limited circumstances.  The certificates for the Shares shall be subject
to a legend or legends restricting transfer under the federal securities laws
and referring to restrictions on transfer herein, such legend to be
substantially as follows:

 

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE BEEN
ISSUED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND APPROPRIATE EXEMPTIONS
FROM REGISTRATION UNDER THE SECURITIES LAWS OF OTHER APPLICABLE JURISDICTIONS.
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED OTHER THAN
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE 1933 ACT AND THE APPLICABLE SECURITIES LAWS
OF ANY OTHER JURISDICTION.  THE ISSUER SHALL BE ENTITLED TO REQUIRE AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE OF THE
PROPOSED SALE OR TRANSFER WITH THE REGISTRATION REQUIREMENTS OF THE 1933 ACT OR
EXEMPTION THEREFROM.

 

ARTICLE II

MISCELLANEOUS

 

2.1           Changes.  This Agreement may be modified, amended or waived only
pursuant to a written instrument signed by the Company and the Maker.

 

2.2           Headings.  The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.

 

2.3           Governing Law.  This Agreement shall be interpreted and the rights
and liabilities of the parties hereto determined in accordance with the internal
laws and decisions of the State of Illinois, without giving affect to the
conflict of laws principals thereof.  Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or by the remaining provisions of this Agreement.

 

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2.4           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other party.

 

2.5           Entire Agreement.  This Agreement constitutes the entire agreement
between the parties hereto with respect to the Exchange and supersedes any prior
understandings or agreements with respect thereto.

 

[signature page follows]

 

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

 

 

ADVANCED LIFE SCIENCES HOLDINGS, INC.

 

 

 

 

 

By:

/s/ Mark Caputo

 

 

Name:

Mark Caputo

 

 

Title:

Vice President Accounting and Controller

 

 

 

 

 

MICHAEL T. FLAVIN

 

 

 

 

 

By:

/s/ Michael T. Flavin

 

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