**EXHIBIT 10.8**

** **

**Amendedand Restated**

**EmploymentAgreement**

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”)made effective as of the 13th day of November 2007 (the “Effective Date”),by and between Advanced Life Sciences, Inc., an Illinois corporation (the “Company”),and Michael J. Cogan (the “Executive”).

 

WHEREAS, the Company and the Executive previously entered into anemployment contract effective May 7, 2007 (the “Original EmploymentContract”); and

 

WHEREAS, the Company and the Executive desire to enter into this Amendedand Restated Agreement, effective as of the Effective Date, to amend andrestate the Original Employment Contract; and

 

WHEREAS, theCompany desires to employ the Executive in accordance with the terms andconditions hereinafter set forth and the Executive desires to be so employed;and

 

WHEREAS, the Company has agreed with theExecutive that this Agreement shall set forth the terms and conditions of theExecutive’s employment with the Company;

 

NOW, THEREFORE, in consideration of the mutualcovenants contained herein, the Company and the Executive agree as follows:

 

1.                                       Term. The employment of the Executive by the Company pursuant to thisAgreement shall begin as of the Effective Date and shall expire on the thirdanniversary of the Effective Date (the “Term”), unless extended, as set forthbelow, or otherwise terminated pursuant to the provisions of this Agreement; provided,however, that commencing on the third anniversary of the Effective Dateand on each anniversary thereafter, the Term of this Agreement shallautomatically be extended for one additional year unless, not later than 90days prior to such anniversary, the Executive or the Company shall have givennotice in writing that he or it does not wish to extend this Agreement.

 

2.                                       Position and Duties. The Executive shall serve as the VicePresident of Finance and Controller of the Company, and shall have suchresponsibilities, duties and authority as are assigned by the Chief ExecutiveOfficer and are customarily associated with such position, including but notlimited to, those he may have as of the Effective Date. The Executiveshall devote such time to the performance of his duties as is necessary tosatisfactorily perform his responsibilities and duties.

 

3.                                       Place of Performance. In connection with the Executive’s employmentby the Company, the Executive shall be based at the principal executive officesof the Company currently in Woodridge, Illinois, except for required travel onthe Company’s business.

 

4.                                       Compensation and Related Matters. During the Term of the Executive’s employment,as compensation and consideration for the performance by the Executive of theExecutive’s duties, responsibilities and covenants pursuant to this Agreement,the Company shall pay the Executive and the Executive agrees to accept in fullpayment for such performance the amounts and benefits set forth below.

 

(a)                                  Salary. The Company shall pay to the Executive an annual base salary of$180,000 (“Base Salary”), payable in substantially equal installments no lessfrequently than monthly in accordance with the Company’s applicable payrollpractices. The Compensation Committee of the Board of Directors of the Company(the “Compensation Committee”) shall review the Base Salary annually, at aminimum, or at such other time as it deems a review necessary and may increasethe Base Salary on a prospective basis. Any such salary adjustment shall thenbe considered Base Salary for the purposes of this Agreement. The Executive’sBase Salary shall not be reduced after any increase, without the Executive’sconsent.

 

(b)                                 Bonus. The Executive shall be eligible to participate throughout the Term inthe Company’s annual bonus plan or any similar or successor bonus plan (“BonusPlan”) in accordance with the Company’s compensation practices and the termsand provisions of the Bonus Plan. Each year, the Executive may be eligibleto

 

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receive a target performance bonus of twentyfive percent (25%) of Base Salary. The amount of the Executive’s targetperformance bonus shall be reviewed annually and may be increased by theCompensation Committee.

 

(c)                                  Stock Incentive Plan. The Executive shall be eligible to receiveadditional awards of the Company’s common stock under the Company’s StockIncentive Plan or under any other equity plan of the Company as determined bythe Compensation Committee in its discretion.

 

(d)                                 Other Benefits and Perquisites. During the Term of the Executive’s employmenthereunder:

 

(i)     Benefit Plans. The Executiveshall be entitled to participate in or receive benefits under any employeepension or welfare benefit plan or arrangement made available by the Company atany time during his employment hereunder to its employees (collectively the “BenefitPlans”), including without limitation each qualified retirement plan, lifeinsurance and accident plan, medical, dental insurance plans, and disabilityplan, subject to and on a basis consistent with the terms, conditions andoverall administration of such plans and arrangements, as they may beamended from time to time.

 

(ii)  Vacation. The Executiveshall be entitled to not less than 20****days of paidvacation in each calendar year, in accordance with the Company’s vacationpolicy.

 

(iii)                               Expense Reimbursement. The Executive shall be entitled to receivereimbursement for all reasonable business, travel or other out-of-pocketexpenses incurred by the Executive in fulfilling the Executive’s duties andresponsibilities hereunder, provided that such expenses are incurred and accountedfor in accordance with the policies and procedures established by the Company.

 

5.                                       Termination.

 

(a)                                  The Executive’s employment hereunder may beterminated under the following circumstances:

 

(i)                                     The death of the Executive;

 

(ii)                                  By the Company for “Cause”, which shall mean anyof the following:, as determined by the Board in its discretion:  (A) conviction of or plea of guilty or *nolo contendere* to any criminal violationinvolving dishonesty or fraud; (B) engagement in conduct that is injuriousto the Company; (C) engagement in any act of dishonesty or misconduct thatresults in damage to the Company or its business or reputation or that theBoard determines to adversely affect the value, reliability or performance ofthe Executive to the Company; (D) refusal or failure to substantiallycomply with the Company’s human resources rules, policies, directions and/orrestrictions relating to harassment and/or discrimination, or with complianceor risk management rules, policies, directions and/or restrictions; (E) unauthorizeduse or disclosure of Confidential Information (as defined below) or other tradesecrets of the Company; (F) loss of any license or registration that isnecessary for the Executive to perform his duties to the Company, orcommission of any act that could result in the legal disqualification of theExecutive from being employed by the Company or any of its affiliates; (G) failureto cooperate with the Company or any of its affiliates in any internalinvestigation or administrative, regulatory or judicial proceeding; or (H) continuousfailure by the Executive to perform his duties to the Company (which may includeany sustained and unexcused absence of the Executive from the performance ofsuch duties, which absence has not been certified in writing as due to physicalor mental illness or disability), after a written demand for performance hasbeen delivered to the Executive identifying the manner in which the Executivehas failed to substantially perform such duties. The application of any part ofthe definition of Cause set forth in clauses (A) through (H) above tothe Executive shall not preclude or prevent the reliance by the Company or theBoard on any other part of the definition that also may be applicable.In addition, the Executive’s employment shall be deemed to have terminated forCause if, after the Executive’s employment has terminated, facts andcircumstances are discovered that would have justified a termination for Cause.

 

(iii)                               By mutual agreement between the Company and theExecutive; or

 

(iv)                              By the Executive or the Company for any reasonother than as stated in Sections 5(a)(i) through 5(a)(iii) above,upon providing a Notice of Termination (as defined in Section 5(b)).

 

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(b)                                 Notice of Termination. Any termination of the Executive’s employmentby the Company or by the Executive (other than a termination pursuant to Section 5(a)(i) above)shall be communicated by written Notice of Termination to the other partyhereto in accordance with Section 10. For purposes of this Agreement, a “Noticeof Termination” shall mean a notice that shall indicate the specifictermination provision in this Agreement relied upon and shall set forth inreasonable detail the facts and circumstances claimed to provide a basis fortermination of the Executive’s employment under the provision so indicated.

 

(c)                                  “Date of Termination” shall mean (i) if theExecutive’s employment is terminated pursuant to Section 5(a)(i) above,the date of his death; (ii) if the Executive’s employment is terminatedpursuant to Section 5(a)(ii) or 5(a)(iv) above, the date suchNotice of Termination is given (or such later date as provided therein); (iii) ifthe Executive’s employment is terminated pursuant to Section 5(a)(iii) above,the date mutually agreed to by the parties; (iv) the date the Term of thisAgreement expires, if either the Company or the Executive provides notice inaccordance with Section 1; or (v) if the Executive terminates hisemployment and fails to provide written notice to the Company of suchtermination, the date of such termination.

 

6.                                       Compensation Upon Termination.

 

(a)                                  The following payments shall be made upon theExecutive’s termination of employment for any reason:  (i) earned but unpaid Base Salarythrough the Executive’s Date of Termination; (ii) any accrued but unpaidvacation; (iii) unreimbursed business expenses owed pursuant to Section 4(d)(iii);(iv) any outstanding notes payable to the Executive along with theinterest due; and (v) any amounts payable under any of the Company’s BonusPlan and Benefit Plans in accordance with the terms of those plans. All amountsunder clauses (i) through (v) shall be paid in a lump sum on theExecutive’s Date of Termination or as soon as administratively practicablethereafter.

 

(b)                                 In the event that the Executive’s employment isterminated pursuant to Sections 5(a)(i) or 5(a)(ii), or by the Executivefor any reason****pursuant to Section 5(a)(iv),above, the Company shall have no further obligation to the Executive under thisAgreement, other than the payments in Section 6(a).

 

(c)                                  If the Executive’s employment is terminated bythe parties pursuant to Section 5(a)(iii) above, the Executive shallbe entitled to receive the compensation the parties specify in any writtenagreement that the Company and the Executive execute regarding the Executive’stermination.

 

(d)                                 In addition to the payments made under Section 6(a),if the Executive’s employment is terminated by the Company without Causepursuant to Section 5(a)(iv) above, and conditioned upon theExecutive’s execution of a valid and legally enforceable release of claimsagainst the Company, the Company shall, for a period of twelve (12) monthsfollowing the Date of Termination (the “Severance Period”):  (i) provide to the Executive salarycontinuation paid in accordance with the Company’s applicable payrollpractices, at the Executive’s Base Salary rate in effect as of the Date ofTermination and (ii) continue the Executive’s coverage under the Company’shealth medical, dental, vision, disability, and life and accident benefitplans, in which the Executive participated immediately prior to the Date ofTermination, provided, however, that if the Company cannot continue suchcoverage, the Company shall provide or arrange to provide, at its expense,similar coverage to the Executive and if such coverage cannot be arranged, the****Company will provide a cash equivalent payment to theExecutive. In addition, no later than two and one-half (21⁄2) months followingthe end of the year in which the Executive’s employment is terminated, theCompany shall pay the Executive in a lump sum an amount equal to the Executive’starget performance bonus multiplied by a fraction, the numerator of which isthe number of days in the calendar year in which the Executive’s employment isterminated through the Date of Termination and the denominator of which is 365.Notwithstanding the forgoing, vacation days shall not accrue during theSeverance Period.

 

(e)                                  The Executive shall not be required to mitigatethe amount of any payment provided for in this Section 6 by seeking otheremployment or otherwise, nor shall the amount of any payment or benefitprovided for in this Section 6 be reduced by any compensation earned bythe Executive as the result of employment by another employer, by retirementbenefits, by offset against any amount claimed to be owed by the Executive tothe Company, or otherwise.

 

(f)                                    The obligations of the Company to make paymentsand provide benefits under this Section 6 shall survive the termination ofthis Agreement.

 

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7.                                       Change in Control. Upon a Change in Control (as defined below), alloutstanding stock options and other equity awards under the Company’s StockIncentive Plan or other similar or successor plan held by the Executive willimmediately become fully vested and exercisable.

 

(a)                                  Payments and Benefits Upon EmploymentTermination Upon a Change in Control. If, within twenty four (24) months aftera Change in Control, the Executive’s employment is terminated by the Companyother than for Cause or if the Executive terminates employment for Good Reason(as defined below), the Company shall provide the following payments andbenefits to the Executive, in lieu of those payments and benefits providedunder Sections 6(d), but in addition to the amounts payable under Section 6(a):

 

(i)                                     The Company shall pay the Executive a lump sumcash amount equal to (2) times the sum of (A) the Executive’s annualBase Salary as in effect on the date of the Executive’s termination ofemployment and (B) the Executive’s target performance bonus amount as ineffect as in effect for the fiscal year in which the Executive’s employment isterminated:

 

(Base Salary + Target Performance Bonus)   x   2   =   lumpsum cash amount

 

(ii)                                  The Company shall continue the Executive’scoverage under the Company’s health medical, dental, vision, disability, andlife and accident insurance benefit plans in which the Executive participatedimmediately prior to the Executive’s termination of employment for a period oftwenty four (24) months, provided, however, that if the Company cannot continuesuch coverage, the Company shall provide or arrange to provide, at its expense,similar coverage to the Executive and if such coverage cannot be arranged, the****Company will provide a cash equivalent payment to theExecutive.

 

(b)                                 Timing of Payment. All payments under Section 7(a)(i) shallbe made in a lump sum cash payment as soon as practicable, but in no event morethan 10 days after the Executive’s termination of employment.

 

(c)                                  Definitions. For purposes of this Agreement, thefollowing terms shall have the following definitions:

 

(i)     “Change in Control” means theoccurrence of any one or more of the following:

 

(A)                              any “person” (as such term is defined in Section 3(a)(9) ofthe Securities Exchange Act of 1934, as amended (the “Exchange Act”) and asused in Sections 13(d)(3) and 14(d)(2) of the Exchange Act),including a “group” (as defined in Section 13(d)(3) of the ExchangeAct), other than (I) the Company, (II) any wholly-owned subsidiary of theCompany, (III) any employee benefit plan (or related trust) sponsored ormaintained by the Company or any of its affiliates, or (IV) a “Permitted Holder”(as defined below), becomes a “beneficial owner” (as defined in Rule 13d-3under the Exchange Act), directly or indirectly, of securities of the Companyhaving fifty percent (50%) or more of the combined voting power of thethen-outstanding securities of the Company that may be cast for theelection of directors of the Company (other than as a result of an issuance ofsecurities initiated by the Company in the ordinary course of business) (the “CompanyVoting Securities”); provided, however, that the event described in this Section 7(c)(i) shallnot be deemed to be a Change in Control by virtue of any underwritertemporarily holding securities pursuant to an offering of such securities;

 

(B)                                individuals who, as of the date of this Agreement, constitute the Board(the “Incumbent Directors”), together with any new director(s) whose electionor nomination for election by the Company’s stockholders subsequent to the datehereof was approved by a vote of at least two-thirds (2/3) of the directorsthen still in office who either were Incumbent Directors or whose election ornomination for election was previously so approved, cease for any reason toconstitute a majority thereof;

 

(C)                                the consummation by the Company of a reorganization, merger orconsolidation, or sale or other disposition of all or substantially all of theassets of the Company (a “Business Combination”), in each case, unlessimmediately following such Business Combination:  (A) holders of the securities of theCompany entitled to vote generally in the election of directors of the Companyimmediately prior to such Business Combination own or hold, in substantiallythe

 

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sameproportions as their ownership immediately prior to such Business Combination,more than 50% of the combined voting power of then outstanding votingsecurities entitled to vote generally in the election of directors of (x) theentity resulting from such Business Combination, or (y) if applicable, theentity that as a result of such Business Combination owns the Company or all orsubstantially all of the Company’s assets either directly or through one ormore subsidiaries; or

 

(D)                               the stockholders of the Company approve a plan of complete liquidationor dissolution of the Company.

 

Notwithstanding the foregoing, a Change in Control shall not be deemedto occur solely because any person acquires beneficial ownership of more thanfifty percent (50%) of the Company Voting Securities as a result of theacquisition of Company Voting Securities by the Company which reduces thenumber of Company Voting Securities outstanding; provided, however, that ifafter such acquisition by the Company such person becomes the beneficial ownerof additional Company Voting Securities that increases the percentage ofoutstanding Company Voting Securities beneficially owned by such person, aChange in Control transaction shall then occur.

 

Further notwithstanding the foregoing, unless a majority of theIncumbent Directors determines otherwise, no Change in Control shall be deemedto have occurred with respect to the Executive if the Change in Control resultsfrom actions or events in which the Executive is a participant in a capacityother than solely as an officer, employee or director of the Company or any ofits affiliates.

 

(ii)                                  “Permitted Holders” means (A) Michael T.Flavin (the “Principal”), (B) the spouse or any immediate family member ofthe Principal and any child or spouse of any spouse or immediate family memberof the Principal, (C) a trust, corporation, partnership or other entity,the beneficiaries, stockholders, partners, owners or persons beneficiallyholding, directly or indirectly, a controlling interest of which consists ofthe Principal and/or such other persons referred to in the immediatelypreceding clause (B), or (D) the trustees of any trust referred to inclause (D).

 

(iii)                               “Good Reason” means any of the following conditions, without theExecutive’s consent, (A) a material diminution in the Executive’s BaseSalary, (B) a material diminution in the Executive’s authority, duties, orresponsibilities, (C) a material diminution in the authority, duties, orresponsibilities of the supervisor to whom the Executive is required to report,including a requirement that the Executive report to a corporate officer oremployee instead of reporting directly to the Board (or other similar governingbody), (D) a material diminution in the budget over which the Executiveretains authority, (E) a material change in the geographic location atwhich the Executive must perform services, and (F) any other actionor inaction that constitutes a material breach by the Company of this Agreement.If one or more of the above conditions exists, the Executive must providenotice to the Company within ninety (90) days of the initial existence of thecondition. Upon such notice, the Company shall have a period of thirty (30)days during which it may remedy the condition.

 

(d)                                 Treatment of Parachute Payments.

 

(i)                                     Notwithstanding any other provisions of thisAgreement, and except as set forth below, in the event that any payment orbenefit received or to be received by the Executive in connection with a Changein Control or the termination of the Executive’s employment (whether pursuantto the terms of this Agreement or any other plan, arrangement or agreement withthe Company, any person whose actions result in a Change in Control or anyperson affiliated with the Company or such person) (all such payments andbenefits, including payments under Section 7(a) above, beinghereinafter called “Total Payments”) is determined to be an “excess parachutepayment” pursuant to Section 280G of the Internal Revenue Code of 1986, asamended (the “Code”), or any successor or substitute provision of the Code,with the effect that the Executive is liable for the payment of the excise taxdescribed in Code Section 4999 or any successor or substitute provision ofthe Code (the “Excise Tax”), then, after taking into account any reduction inthe Total Payments provided by reason of Code Section 280G in such otherplan, arrangement or agreement, the cash payments provided in Section 7(a)(i) ofthis Agreement shall first be reduced, and the noncash payments and benefitsshall thereafter be reduced, to the extent necessary so that no portion of theTotal Payments is subject to the Excise Tax.

 

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(ii)                                  All determinations required to be made underthis Section 7(d), and the assumptions to be utilized in arriving at suchdetermination, shall be made by the certified public accounting firm used forauditing purposes by the Company immediately prior to the date of the Executive’stermination of employment or, if the parties determine that such certifiedpublic accounting firm cannot make such determination because of legalrestrictions, the parties shall agree on a different certified publicaccounting firm (such certified public accounting firm is hereinafter referredto as the “Accounting Firm”), which shall provide detailed supportingcalculations both to the Company and the Executive not later than 5 days priorto the date of the Executive’s termination of employment. The Company shall payall fees and expenses of the Accounting Firm. Any determination by theAccounting Firm shall be binding upon the Company and the Executive, except asprovided in paragraph (ii) below.

 

(iii)                               As a result of the uncertainty in theapplication of Code Sections 280G and 4999 at the time of the initialdetermination by the Accounting Firm hereunder, it is possible that theInternal Revenue Service (the “IRS”) or other agency will claim that an ExciseTax, or a greater Excise Tax, is due. If the Executive is required to make apayment of any such Excise Tax, the Company will promptly pay the Executive anadditional amount equal to the amount, or greater amount, of Excise Tax theExecutive is required to pay (plus a gross up payment for any income taxes,interest, penalties or additional Excise Tax payable by Executive with respectto such Excise Tax or additional payment), as determined by the Accounting Firm.The Executive will notify the Company in writing of any claim by the IRS orother agency that, if successful, would require payment by the Company of theadditional payments under this paragraph. The Executive and the Company shalleach reasonably cooperate with the other in connection with any administrativeor judicial proceedings concerning the existence or amount of liability forExcise Tax with respect to the Total Payments. The Company shall pay all feesand expenses of the Executive relating to a claim by the IRS or other agency. Paymentsunder this Section 7(d)(iii) will be made by the end of the Executive’staxable year next following the Executive’s taxable year in which the Executiveremits the related taxes, in accordance with Code Section 409A and Treas.Reg. §1.409A-3(i)(1)(v) (or any similar or successor provisions).

 

8.                                       Code Section 409A.

 

(a)                                  This Agreement is intended to comply with Code Section 409Aand the interpretative guidance thereunder, including the exceptions forshort-term deferrals, separation pay arrangements, reimbursements, and in-kinddistributions, and shall be administered accordingly. The Agreement shall beconstrued and interpreted with such intent.

 

(b)                                 To the extent payments under Section 6(d) aresubject to Code Section 409A and the Executive is a Specified Employee (asdefined below) as of the Date of Termination, distributions to the Executive may notbe made before the date that is six months after the date of the Date ofTermination or, if earlier, the date of the Executive’s death (the “Six MonthDelay Rule”). The term “Specified Employee” has the meaning given to that termin Code Section 409A and Treas. Reg. §1.409A-1(c)(i) (or othersimilar or successor provisions). Payments to which the Executive wouldotherwise be entitled during the first six months following the Date ofTermination (the “Six Month Delay”) will be accumulated and paid on the firstday of the seventh month following the Date of Termination. Notwithstanding theSix Month Delay Rule set forth in this Section 8(b), to the maximumextent permitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(iii) (orany similar or successor provision), during the Six Month Delay, the Companywill provide the payments set forth in Section 6(d)(i) above, but inno event will the amount of such payments exceed during the Six Month Delay anamount equal to two times the lesser of (i) the maximum amount that may betaken into account under a qualified plan pursuant to Code Section 401(a)(17)for the year in which the Date of Termination occurs and (ii) the sum ofthe Executive’s annualized compensation based upon the annual rate of pay forservices provided to the Company for the taxable year of the Executivepreceding the taxable year of the Executive in which the Executive’s Date ofTermination occurs (adjusted for any increase during that year that wasexpected to continue indefinitely if the Executive had not had a Date ofTermination), provided that amounts paid under this sentence will count toward,and will not be in addition to, the total payment amount required to be made tothe Executive by the Company under Section 6(d)(i) above. Notwithstandingthe Six Month Delay Rule set forth in this Section 8(b), to themaximum extent permitted under Code Section 409A and Treas. Reg.§1.409A-1(b)(9)(v) (or any similar or successor provision), the Companywill provide the payments set forth in Section 6(d)(ii), if not otherwiseexcepted from Code Section 409A, to the extent such payments do not exceedthe applicable dollar amount under Code Section 402(g)(1)(B) for theyear in which the Date of Termination occurs; provided that amounts paid underthis sentence will count toward, and will not be in

 

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addition to, the total paymentamount required to be made to the Executive by the Company under Section 6(d)(ii) above.

 

(c)                                  Payments under Section 7(a)(i) areintended to qualify as short-term deferrals. However, if the Company reasonablydetermines that a payment under Section 7(a)(i) above does notqualify as a short-term deferral under Code Section 409A and Treas. Reg.§1.409A-1(b)(4) (or any similar or successor provisions), or that otherbenefits under Section 7(a) do not qualify for an exception from CodeSection 409A and the Executive is a Specified Employee as of the Date ofTermination, distributions to the Executive are subject to the Six Month DelayRule. Payments to which the Executive would otherwise be entitled during theSix Month Delay will be accumulated and paid on the first day of the seventhmonth following the Date of Termination. Notwithstanding the Six-Month Delay Rule setforth in this Section 8(c):

 

(i)                                     To the maximum extent permitted under Code Section 409Aand Treas. Reg. §1.409A-1(b)(9)(iii) (or any similar or successorprovision), during the first month of the Six-Month Delay, the Company will paythe Executive an amount equal to the lesser of: (i) the total lump sum severance provided under Section 7(a)(i) or(ii) two times the lesser of (A) the maximum amount that may betaken into account under a qualified plan pursuant to Code Section 401(a)(17)for the year in which the Date of Termination occurs, and (B) the sum ofthe Executive’s annualized compensation based upon the annual rate of pay for servicesprovided to the Company for the taxable year of the Executive preceding thetaxable year of the Executive in which the Executive’s Date of Terminationoccurs (adjusted for any increase during that year that was expected tocontinue indefinitely if the Executive had not had a Date of Termination);provided that amounts paid under this sentence will count toward, and will notbe in addition to, the total payment amount required to be made to theExecutive by the Company under Section 7(a)(i) above.

 

(ii)                                  To the maximum extent permitted under Code Section 409Aand Treas. Reg. §1.409A-1(b)(9)(v) (or any similar or successorprovision), the Company will provide the payments set forth in Section 7(a)(ii),if not otherwise excepted from Code Section 409A, to the extent suchpayments do not exceed the applicable dollar amount under Code Section 402(g)(1)(B) forthe year in which the Date of Termination occurs; provided that amounts paidunder this sentence will count toward, and will not be in addition to, thetotal payment amount required to be made to the Executive by the Company under Section 7(a)(ii) above.

 

9.                                       RestrictiveCovenants.

 

(a)                                  Trade Secrets. The Executive acknowledges thathe has had and shall have access to confidential information of the Company,whether or not reduced to writing and whether in paper, electronic, digital,analog or other format (including, but not limited to, trade secrets, know-how,Inventions (as defined below), new product and product development information,research results, marketing and sales programs, customer and supplierinformation, financial data, employee records, cost information, pricinginformation, sales and marketing strategies, the identity of customers,information received by the Company under an obligation of confidentiality tocustomers, and all information generated by the Company for customers) relatingto the past, present or planned business, customers, clients, contacts,prospects and assets of the Company that is unique, valuable and has not purposefullybeen made generally known to the public by the Company (“ConfidentialInformation”). Confidential Information shall not include any information that:(i) is now, or hereafter becomes, through no act or failure to act on the part ofthe Executive that constitutes a breach of this Section 9, generally knownor available to the public; (ii) is hereafter furnished withoutrestriction on disclosure to the Executive by a third party, other than anemployee or agent of the Company, who is not under any obligation ofconfidentiality to the Company; (iii) is disclosed with the writtenapproval of the Company; or (iv) is required to be disclosed or providedby law, court order, or similar compulsion, including pursuant to or inconnection with any legal proceeding involving the parties hereto; provided,however, that such disclosure shall be limited to the extent so required orcompelled; and provided further, however, that if the Executive is required todisclose such Confidential Information, the Executive shall give the Companynotice of such disclosure and cooperate in seeking suitable protections. TheExecutive acknowledges that all Confidential Information, and all documents,files, reports, drawings, designs, specifications, formulae, samples, data,writings, tools, equipment, memory devices or any other tangible objects thatincorporate, contain, refer to or embody any Confidential Information (“Items”),acquired by the Executive in connection with the Executive’s employment withthe Company are the property of the Company. Other than in the course ofperforming services for the Company or otherwise authorized in writing by theCompany, the Executive shall not, at any time, directly or indirectly use,divulge, furnish or make accessible to any person any Confidential Information,but instead shall keep all Confidential Information strictly and absolutelyconfidential. The Executive shall deliver promptly to the Company,

 

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at the termination of his employment or at any other time at therequest of the Company, without retaining any copies, all Items and any otherdocuments or materials in the Executive’s possession relating, directly orindirectly, to any Confidential Information.

 

(b)                                 Non-competition. Beginning on the Effective Dateand for a period of twelve (12) months following Executive’s Date ofTermination (the “Restricted Period”), Executive shall not directly orindirectly, alone or in conjunction with any other party, own any interest in,operate, control, engage in or participate as a partner, director, principal,officer, employee, independent contractor or agent of, act as a consultant to,perform any services for, or assist in any way any company, person, orentity in the United States that is engaged in “Competing Services” (as definedherein). Competing Services shall mean chemistry and biology research anddevelopment relating to, arising from, connected with, or competitive with orintended to be competitive with, any product or research project as to whichthe Executive performed services for the Company, or about which the Executivereceived access to Confidential Information while employed by the Company. Ifthe Executive obtains other employment during the twelve-month period after theExecutive’s Date of Termination, the Executive agrees to notify the Company inwriting of the name and address of such employer.

 

(c)                                  Non-Solicitation of Employees. During theRestricted Period, the Executive shall not, directly or indirectly solicit orinduce, or attempt to solicit or induce, any current employee of the Company,or any individual who becomes an employee during the Restricted Period, toleave his or her employment with the Company or join or become affiliated withany other business or entity, hire any employee of the Company or in any wayinterfere with the relationship between any employee and the Company.

 

(d)                                 Non-Solicitation of Customers. During theRestricted Period, the Executive shall not, directly or indirectly, solicit orinduce, or attempt to solicit or induce, any customer, supplier, licensee,licensor or other business relation of the Company to terminate itsrelationship or contract with the Company, to cease doing business with theCompany, or in any way interfere with the relationship between any suchcustomer, supplier, licensee or business relation and the Company (includingmaking any negative statements or communications concerning the Company ortheir employees).

 

(e)                                  Inventions. The Executive acknowledges allinventions of the Company (including, but not limited to, procedures, systems,machines, methods, processes, uses, apparatuses, compositions of matter,designs, or configurations of any kind, discovered, conceived, reduced topractice, developed, made or produced) (“Inventions”) that (i) relate tothe present or planned business of the Company or the work performed by theCompany for its customers, and (ii) are conceived or reduced to practiceby the Executive, either alone or with others, during the Executive’semployment with the Company or during a period of 120 days after the Executive’sDate of Termination, whether or not done during the Executive’s regular workinghours, are the sole property of the Company, including, without limitation, alldomestic and foreign patent rights, rights of registration or other protectionunder the copyright laws, or other rights pertaining to the Inventions. Forpurposes of this Agreement, Inventions shall include any improvements to anInvention and shall not be limited to the definition of a patentable inventionor copyrightable work of authorship as contained in the United States patent orcopyright laws. The Executive shall disclose promptly and fully in writing tothe Company each Invention, whether or not reduced to practice, that the Executiveconceives or learns (either alone or jointly with others) during the Term ofEmployment. The Executive hereby assigns to the Company, or its nominee, all ofthe Executive’s right, title and interest, including international priorityrights, in and to all Inventions (other than any Invention that was developedentirely on the Executive’s own time and for which no equipment, supplies,facilities or trade secret information of the Company was used, unless suchInvention relates directly to the Company’s business or to the Company’s actualor demonstrably anticipated research or development), and in and to all UnitedStates or foreign patents, copyrights and other proprietary rights grantedthereon or resulting therefrom, and in and to all applications for UnitedStates or foreign copyrights, patents and other proprietary rights. TheExecutive shall execute all papers, perform all lawful acts or assist theCompany in any way the Company deems necessary or advisable (at the Company’sexpense) for the preparation, filing, prosecution, issuance, procurement,maintenance or enforcement of patents applications and patents of the UnitedStates and foreign countries, and for obtaining and enforcing copyrightprotection and registration, of any Invention. To that end, the Executive shallat the Company’s request and without limitation, testify in any suit or otherproceeding involving any of the Inventions, execute all documents that theCompany reasonably determines to be necessary or convenient for use in applyingfor and obtaining patent or copyright protection and registration on any of theInventions and enforcement of that protection and registration, and execute allnecessary documents and papers required to vest title in and assign to theCompany (or its nominee) patent or copyright protection and registration. TheExecutive’s obligation to assist the Company in obtaining and enforcing

 

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patentor copyright protection and registration for the Inventions shall continuefollowing termination of this Agreement, but Company shall compensate theExecutive following the expiration or termination of this Agreement at a rateof $10 for the execution of each document and $150 per day for each day orportion thereof spent at the Company’s request in rendering assistance, plusreimbursement for the reasonable out-of-pocket expenses incurred by theExecutive for such assistance. The Executive hereby irrevocably appoints theCompany and its duly authorized officers and agents as his agent andattorney-in-fact to act for and on behalf of the Executive in filing all patentapplications, applications for copyright protection and registrationamendments, renewals and all other appropriate documents in any way related tothe Inventions.

 

(f)                                    Survival. The provisions set forth in this Section 9shall survive termination of this Agreement.

 

(g)                                 Scope Limitations. If the scope, period of timeor area of restriction specified in this Section 9 are or would be judgedto be unreasonable in any court proceeding, then the period of time, scope orarea of restriction shall be reduced or limited in the manner and to the extentnecessary to make the restriction reasonable, so that the restriction may beenforced in those areas, during the period of time and in the scope that are orwould be judged to be reasonable.

 

10.                                 Binding Agreement; Successors. This Agreement and all rights of the Executivehereunder shall inure to the benefit of and be enforceable by the Executive’spersonal or legal representatives, executors, administrators, successors,heirs, distributees, devisees and legatees. If the Executive should die whileany amounts would still be payable to him hereunder if he had continued tolive, all such amounts, unless otherwise provided herein, shall be paid inaccordance with the terms of this Agreement to the Executive’s devisee,legatee, or other designee or, if there be no such designee, to the Executive’sestate. This Agreement shall be binding upon, and inure to the benefit of, anysuccessors or assigns of the Company. This Agreement is not intended to conferupon any person other than the parties hereto (and the Executives’ Spouse anddependents) any rights or remedies, except as specifically provided in this Section 10.

 

11.                                 Notice. Notices, demands and all other communications provided for in thisAgreement shall be in writing and shall be deemed to have been duly given whendelivered, if delivered personally, or (unless otherwise specified) whenreceived, if mailed by United States certified or registered mail, returnreceipt requested, postage prepaid, by Federal Express or other reputableovernight courier service or by facsimile, addressed as follows:

 

If to theExecutive:

 

Michael J.Cogan

1440 Davey Road

Woodridge, Illinois 60517

 

If to theCompany:

 

Advanced LifeSciences, Inc.

1440 Davey Road

Woodridge, Illinois 60517

Attn: ChiefExecutive Officer

 

orto such other address as any party may have furnished to the other inwriting in accordance herewith, except that notices of change of address shallbe effective only upon receipt.

 

12.                                 General Provisions. No provision of this Agreement may bemodified, waived or discharged unless such waiver, modification or discharge isagreed to in writing signed by the Executive and such officer of the Company asmay be specifically designated by the Company’s Board. No waiver by eitherparty hereto at any time of any breach by the other party hereto of, orcompliance with, any condition or provision of this Agreement to be performedby such other party shall be deemed a waiver of similar or dissimilarprovisions or conditions at the same or at any prior or subsequent time. Noagreements or representations, oral or otherwise, express or implied, withrespect to the subject matter hereof have been made by either party that arenot set forth expressly in this Agreement.

 

13.                                 Validity. The invalidity or unenforceability of any provision or provisions ofthis Agreement shall not affect the validity or enforceability of any otherprovision of this Agreement, which shall remain in full force and effect. Ifany provision of this Agreement is found to be invalid or unenforceable, inwhole or in part, then it shall be deemed to be modified or restricted to theextent and in the manner necessary to render it valid and enforceable, or shallbe deemed excised

 

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fromthis Agreement, as the case may require, and this Agreement shall beconstrued and enforced to the maximum extent permitted by law, as if the provisionhad been originally incorporated herein as so modified or restricted, or as ifit had not originally been incorporated herein, as the case may be.

 

14.                                 Counterparts. This Agreement may be executed in one or more counterparts, eachof which shall be deemed to be an original but all of which together shallconstitute one and the same instrument.

 

15.                                 Entire Agreement. This Agreement sets forth the entire agreementof the parties hereto in respect of the subject matter contained herein andsupersedes all prior agreements, promises, covenants, arrangements,communications, representations or warranties, whether oral or written, by anyofficer, employee or representative of any party hereto; and any prioragreement of the parties hereto in respect of the subject matter containedherein is hereby terminated and canceled. For the avoidance of doubt, theCompany and the Executive hereby agree that this Agreement shall replace andsupersede the Original Employment Contract and govern the relationship of the parties.

 

16.                                 Irreparable Harm. The Executive acknowledges that: (i) theExecutive’s compliance with this Agreement is necessary to preserve and protectthe proprietary rights, Confidential Information and the goodwill of theCompany and its subsidiaries as going concerns; (ii) any failure by theExecutive to comply with the provisions of this Agreement shall result inirreparable and continuing injury for which there will be no adequate remedy atlaw; and (iii) in the event that the Executive should fail to comply withthe terms and conditions of this Agreement, the Company shall be entitled, inaddition to such other relief as may be proper, to all types of equitablerelief (including, but not limited to, the issuance of an injunction and/ortemporary restraining order) as may be necessary to cause the Executive tocomply with this Agreement, to restore to the Company its property, and to makethe Company whole.

 

17.                                 Consent to Jurisdiction and Forum; Legal Feesand Costs. The Company and theExecutive hereby expressly and irrevocably agree that any action, whether atlaw or in equity, arising out of or based upon this Agreement or the Executive’semployment by the Company shall only be brought in a federal or state courtlocated in Cook County, Illinois. The Executive hereby irrevocably consents topersonal jurisdiction in such court and to accept service of process inaccordance with the provisions of such court. In connection with any disputearising out of or based upon this Agreement or the Executive’s employment bythe Company, each party shall be responsible for its or his own legal fees andexpenses and all court costs shall be shared equally by the Company and theExecutive unless the court apportions such legal fees or court costs in adifferent manner.

 

18.                                 Withholding. All payments made to the Executive pursuant to this Agreement shall besubject to applicable withholding taxes, if any, and any amount so withheldshall be deemed to have been paid to the Executive for purposes of amounts dueto the Executive under this Agreement.

 

19.                                 Governing Law. This Agreement is governed by and is to be construed and enforced inaccordance with the laws of the State of Illinois, without regard to itsconflict of law provisions.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the dateand year first above written.

 
| **EXECUTIVE**               |                       | **ADVANCED LIFE  SCIENCES, INC.** |
|-----------------------------|----------------------------|----------------------------------------|
|                        |
| By:                         |  /s/ Michael J. Cogan |                                   | By: | /s/ Michael T. Flavin |   |
| Name: Michael J. Cogan |                       |                                   | Name: | Michael T. Flavin, Ph.D. |
|                        |                       |                                   | Title: | Chief Executive Officer |
|                             |                            |                                        |  |  |  |  |  |

 

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