**Exhibit 10.1**

 

**BINDING TERM SHEET**

 

Thisbinding term sheet is entered into as of this 30th day ofSeptember, 2009 by and between Advanced Life Sciences Holdings, Inc., aDelaware corporation (“ADLS”) and Abbott Laboratories, an Illinois corporation(“Abbott”).

 

ADLSand Abbott agree to the following binding terms:

 

1.                                       Section 6.2(a)(i)of the License Agreement, as amended by the Amended and Restated SecondAmendment to License Agreement (“Second Amendment”), shall be deleted in itsentirety and replaced with the following:

 

“seventeenpercent (17%) on Net Sales of up to $100,000,000; sixteen percent (16%) on NetSales of $100,000,000.01 to $200,000,000; and fifteen percent (15%) on NetSales of $200,000,000.01 and above, with respect to which, but for the licensegranted hereunder, the manufacture, use or sale of Product would infringe aValid Claim in such country, and”

 

2.                                       The $30,000,000 milestone payment due Abbott from ALS upon United States RegulatoryApproval of Compound A pursuant to Section 6.1 of the License Agreement shallbe paid to Abbott as follows: (i) $ 20,000,000 within twenty (20) business daysof Regulatory Approval; (ii) $ 5,000,000 six (6) months after receipt ofRegulatory Approval; and (iii) $ 5,000,000 twelve (12) months after receipt ofRegulatory Approval.

 

3.                                       Mutual Release 

 

a.                                       Inconsideration for the terms outlined above, ADLS for itself, and its parents,subsidiaries, affiliates, predecessors, successors, and assigns waives,releases, and forever discharges (i) Abbott; (ii) Abbott’s parents,subsidiaries, affiliates, predecessors, successors,

 

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andassigns; and (iii) Abbott’s past, present, and future officers, directors,partners, members, employees, agents, and servants from any and all claims,duties, obligations, demands, actions, causes of action, debts, sums of money,suits, contracts, agreements, promises, damages, and liabilities, of whateverkind, nature, character, or description, whether in law or equity, whetherarising in tort, contract, equity, or otherwise, whether presently known orunknown, and whether anticipated or unanticipated, which ADLS or its successorsand assigns ever had or now have arising out of, in connection with, orrelating in any way to the License Agreement, as amended, including all claimsADLS has or could have asserted in the arbitration currently pending before M.Scott Donahey captioned *In the Matter of theArbitration Between Advanced Life Sciences Holdings, Inc. and AbbottLaboratories*, Case No. CH 03624.

 

b.                                      Abbott foritself, and its parents, subsidiaries, affiliates, predecessors, successors,and assigns waives, releases, and forever discharges (i) ADLS; (ii) ADLS’sparents, subsidiaries, affiliates, predecessors, successors, and assigns; and (iii)ADLS’s past, present, and future officers, directors, partners, members,employees, agents, and servants from any and all claims, duties, obligations,demands, actions, causes of action, debts, sums of money, suits, contracts,agreements, promises, damages, and

 

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liabilities,of whatever kind, nature, character, or description, whether in law or equity,whether arising in tort, contract, equity, or otherwise, whether presentlyknown or unknown, and whether anticipated or unanticipated, which Abbott or itssuccessors and assigns ever had or now have arising out of, in connection with,or relating in any way to the License Agreement, as amended.

 

c.                                       Theconsequences of the foregoing waiver and release provisions have been explainedby each of the Parties’ respective counsel. Each of the Parties acknowledge itmay hereafter discover facts different from, or in addition to, those which itnow knows or believed to be true with respect to the matters released herein,and agrees that this Settlement Agreement and the release contained hereinshall be and remain effective in all respects notwithstanding such different oradditional facts or the discovery thereof.

 

4.                                       This term sheetis binding on the parties and specifically enforceable upon execution. Theterms of this document shall be incorporated in a formal amendment to theAgreement between ADLS and Abbott. To the extent the parties are unable toreach agreement with respect to the language of the amendment, any disagreementshall be resolved by M. Scott Donahey to the extent he is willing to do so.Should Mr. Donahey be unwilling to resolve any dispute between the parties,Abbott and ALS shall select a neutral to resolve their dispute according to theprocess described in Exhibit C to the Agreement.

 

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| Advanced  Life Sciences Holdings, Inc., |                     | Abbott  Laboratories |
|-----------------------------------------|--------------------------|----------------------|
| By:                                     | /s/  Michael T. Flavin   |                 | By: | /s/  Sean Murphy |
| Its                                     | Chief  Executive Officer |                 | Its | Vice  President of Business Development |

 

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