Exhibit 10.10

 

PROMISSORY NOTE

 

Borrower:

 

Advance Life Sciences, Inc.

 

Lender:

 

THE LEADERS BANK

 

 

1440 Davey Road

 

 

 

2001 YORK ROAD, SUITE 150

 

 

Woodridge, IL 60517

 

 

 

OAK BROOK, IL 60523

 

Principal Amount: $1,000,000.00

Initial Rate: 7.000%

Date of Note: May 31, 2005

 

 

PROMISE TO PAY.  Advance Life Sciences, Inc. (“Borrower”) promises to pay to THE
LEADERS BANK (“Lender”), or order, in lawful money of the United States of
America, the principal amount of One Million & 00/100 Dollars ($1,000,000.00) or
so much as may be outstanding, together with interest on the unpaid outstanding
principal balance of each advance.  Interest shall be calculated from the date
of each advance until repayment of each advance.

 

PAYMENT.  Borrower will pay this loan in full immediately upon Lender’s demand.
 If no demand is made, Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid interest on December 21, 2006.  In
addition, Borrower will pay regular monthly payments of all accrued unpaid
interest due as of each payment date, beginning June 30, 2005, with all
subsequent interest payments to be due on the last day of each month after that.
 Unless otherwise agreed or required by applicable law, payments will be applied
first to any accrued unpaid interest; then to principal; then to any unpaid
collection costs; and then to any late charges.  The annual interest rate for
this Note is computed on a 365/360 basis; that is, by applying the ratio of the
annual interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal balance
is outstanding.  Borrower will pay Lender at Lender’s address shown above or at
such other place as Lender may designate in writing.

 

VARIABLE INTEREST RATE.  The interest rate on this Note is subject to change
from time to time based on changes in an index which is the Leaders Bank Index
Rate as periodically announced by The Leaders Bank (the “Index”).  The Index is
not necessarily the lowest rate charged by Lender on its loans and is set by
Lender in its sole discretion.  If the Index becomes unavailable during the term
of this loan, Lender may designate a substitute index after notifying Borrower.
 Lender will tell Borrower the current Index rate upon Borrower’s request.  The
interest rate change will not occur more often than each day.  Borrower
understands that Lender may make loans based on other rates as well.  The Index
currently is 6.000% per annum.  The interest rate to be applied to the unpaid
principal balance of this Note will be at a rate of 1.000 percentage point over
the Index, resulting in an initial rate of 7.000% per annum.  NOTICE:  Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law.

 

PREPAYMENT.  Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law.  Except for the foregoing, Borrower may pay
without penalty all or a portion of the amount owed earlier than it is due.
 Early payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower’s obligation to continue to make payments of accrued unpaid
interest.  Rather, early payments will reduce the principal balance due.
 Borrower agrees not to send Lender payments marked “paid in full”, “without
recourse”, or similar language.  If Borrower sends such a payment, Lender may
accept it without losing any of Lender’s rights under this Note, and Borrower
will remain obligated to pay any further amount owed to Lender.  All written
communications concerning disputed amounts, including any check or other payment
instrument that indicates that the payment constitutes “payment in full” of the
amount owed or that is tendered with other conditions or limitations or as full
satisfaction of a disputed amount must be mailed or delivered to: The Leaders
Bank, Post Office Box 3516 Oak Brook, IL 60522-3516.

 

LATE CHARGE.  If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $10.00, whichever is greater.

 

INTEREST AFTER DEFAULT.  Upon default, including failure to pay upon final
maturity, Lender, at its option, may, if permitted under applicable law,
increase the variable interest rate on this Note to 5.000 percentage points over
the Index.  The interest rate will not exceed the maximum rate permitted by
applicable law.

 

DEFAULT.  Each of the following shall constitute an event of default (“Event of
Default”) under this Note:

 

Payment Default.  Borrower fails to make any payment when due under this Note.

 

Other Defaults.  Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower.

 

Default in Favor of Third Parties.  Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower’s property or Borrower’s ability to repay this
Note or perform Borrower’s obligations under this Note or any of the related
documents.

 

False Statements.  Any warranty, representation or statement made or furnished
to Lender by Borrower or on Borrower’s behalf under this Note or the related
documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time thereafter.

 

Insolvency.  The dissolution or termination of Borrower’s existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower’s property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.

 

Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan.  This includes a garnishment of any of
Borrower’s accounts, including deposit accounts, with Lender.  However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

 

Events Affecting Guarantor.  Any of the preceding events occurs with respect to
any Guarantor of any of indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any
guaranty of the indebtedness evidenced by this Note.

 

Change in Ownership.  Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower.

 

Adverse Change.  A material adverse change occurs in Borrower’s financial
condition, or Lender believes the prospect of payment or performance of this
Note is impaired.

 

Insecurity.  Lender in good faith believes itself insecure.

 

LENDER’S RIGHTS.  Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.

 

ATTORNEYS’ FEES; EXPENSES.  Lender may hire or pay someone else to help collect
this Note if Borrower does not pay.  Borrower will pay Lender

 

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that amount.  This includes, subject to any limits under applicable law,
Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there is a
lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), and
appeals.  If not prohibited by applicable law, Borrower also will pay any court
costs, in addition to all other sums provided by law.

 

JURY WAIVER.  Lender and Borrower hereby waive the right to any jury trial in
any action, proceeding, or counterclaim brought by either Lender or Borrower
against the other.

 

GOVERNING LAW.  This Note will be governed by federal law applicable to Lender
and, to the extent not preempted by federal law, the laws of the State of
Illinois without regard to its conflicts of law provisions.  This Note has been
accepted by Lender in the State of Illinois.

 

CHOICE OF VENUE.  If there is a lawsuit, Borrower agrees upon Lender’s request
to submit to the jurisdiction of the courts of DU PAGE County, State of
Illinois.

 

CONFESSION OF JUDGMENT.  Borrower hereby irrevocably authorizes and empowers any
attorney-at-law to appear in any court of record and to confess judgment against
Borrower for the unpaid amount of this Note as evidenced by an affidavit signed
by an officer of Lender setting forth the amount then due, attorneys’ fees plus
costs of suit, and to release all errors, and waive all rights of appeal.  If a
copy of this Note, verified by an affidavit, shall have been filed in the
proceeding, it will not be necessary to file the original as a warrant of
attorney.  Borrower waives the right to any stay of execution and the benefit of
all exemption laws now or hereafter in effect.  No single exercise of the
foregoing warrant and power to confess judgment will be deemed to exhaust the
power, whether or not any such exercise shall be held by any court to be
invalid, voidable, or void; but the power will continue undiminished and may be
exercised from time to time as Lender may elect until all amounts owing on this
Note have been paid in full.  Borrower hereby waives and releases any and all
claims or causes of action which Borrower might have against any attorney acting
under the terms of authority which Borrower has granted herein arising out of or
connected with the confession of judgement hereunder.

 

RIGHT OF SETOFF.  To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower’s accounts with Lender (whether checking,
savings, or some other account).  This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
 However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law.  Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at Lender’s option, to
administratively freeze all such accounts to allow Lender to protect Lender’s
charge and setoff rights provided in this paragraph.

 

COLLATERAL.  Borrower acknowledges this Note is secured by a Commercial Security
Agreement from Borrower to Lender dated December 21, 2004 pledging all corporate
assets; a Junior Mortgage dated December 21, 2004 on the property commonly known
as 1440 Davey Road, Woodridge, IL and held in the name of BioStart Property
Group, LLC; a Commercial Pledge Agreement dated December 21, 2004 pledging all
Advanced Life Sciences Holdings, Inc.  Common Stock held by Flavin Ventures,
LLC; a Sub-License of the Licensing Agreement between Abbott Laboratories and
Advanced Life Sciences Holdings, Inc.; a Commercial Pledge Agreement from ALS
Ventures, LLC to Lender dated May 31, 2005 pledging 1,800,000 shares of common
stock in Advanced Life Sciences Holdings, Inc..

 

LINE OF CREDIT.  This Note evidences a straight line of credit.  Once the total
amount of principal has been advanced, Borrower is not entitled to further loan
advances.  Advances under this Note may be requested orally by Borrower or as
provided in this paragraph.  All oral requests shall be confirmed in writing on
the day of the request.  All communications, Instructions, or directions by
telephone or otherwise to Lender are to be directed to Lender’s office shown
above.  The following persons currently are authorized to request advances and
authorize payments under the line of credit until Lender receives from Borrower,
at Lender’s address shown above, written notice of revocation of their
authority: John L. Flavin; and Michael T. Flavin. Borrower agrees to be liable
for all sums either: (A) advanced in accordance with the instructions of an
authorized person or (B) credited to any of Borrower’s accounts with Lender.
 The unpaid principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender’s internal records, including daily
computer print-outs.  Lender will have no obligation to advance funds under this
Note if: (A) Borrower or any guarantor is in default under the terms of this
Note or any agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (B) Borrower or
any guarantor ceases doing business or is insolvent; (C) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor’s
guarantee of this Note or any other loan with Lender; (D) Borrower has applied
funds provided pursuant to this Note for purposes other than those authorized by
Lender; or (E) Lender in good faith believes itself insecure.

 

LOAN FEES, CHARGES AND EXPENSES.  Borrower will pay Lender a $15,000.00 loan
Origination Fee due at loan funding

 

DEPOSIT REQUIREMENT.  Borrower will deposit 50% of the proceeds of the Public
Offering of Advance Life Sciences Holdings, Inc. with The Leaders Bank.

 

CROSS-COLLATERALIZAT1ON.  This loan is Cross-Collateralized and Cross-Defaulted
with all existing loans to this and/or other related entities.

 

SUCCESSOR INTERESTS.  The terms of this Note shall be binding upon Borrower, and
upon Borrower’s heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.

 

NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES.
 Please notify us if we report any inaccurate information about your account(s)
to a consumer reporting agency.  Your written notice describing the specific
inaccuracy(ies) should be sent to us at the following address: The Leaders Bank
P.O. Box 3516 Oak Brook, IL 60522-3516.

 

GENERAL PROVISIONS.  This Note is payable on demand.  The inclusion of specific
default provisions or rights of Lender shall not preclude Lender’s right to
declare payment of this Note on its demand.  Lender may delay or forgo enforcing
any of its rights or remedies under this Note without losing them.  Borrower and
any other person who signs, guarantees or endorses this Note, to the extent
allowed by law, waive presentment, demand for payment, and notice of dishonor.
 Upon any change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability.  All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or impair, fail
to realize upon or perfect Lender’s security interest in the collateral; and
take any other action deemed necessary by Lender without the consent of or
notice to anyone.  All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made.  The obligations under this Note are joint and several.

 

ILLINOIS INSURANCE NOTICE.  Unless Borrower provides Lender with evidence of the
insurance coverage required by Borrower’s agreement with Lender, Lender may
purchase insurance at Borrower’s expense to protect Lender’s interests in the
collateral.  This insurance may, but need not, protect Borrower’s interests.
 The coverage that Lender purchases may not pay any claim that Borrower makes or
any claim that is made against Borrower in connection with the collateral.
 Borrower may later cancel any insurance purchased by Lender, but only after
providing Lender with evidence that Borrower has obtained insurance as required
by their agreement.  If Lender purchases insurance for the collateral, Borrower
will be responsible for the costs of that insurance, including interest and any
other charges Lender may impose in connection with the placement of the
insurance, until the effective date of the cancellation or expiration of the
insurance.  The costs of the insurance may be added to Borrower’s total
outstanding balance or obligation.  The costs of the insurance may be more than
the cost of insurance Borrower may be able to obtain on Borrower’s own.

 

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PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.  BORROWER AGREES TO
THE TERMS OF THE NOTE.

 

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

 

BORROWER:

 

 

ADVANCE LIFE SCIENCES, INC.

 

By:

          /s/ John L. Flavin

 

 

John L. Flavin, President of Advance Life Sciences, Inc.

 

 

Secretary

 

 

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