**Exhibit 10.2**

 

**AMENDEDAND RESTATED PROMISSORY NOTE**

 
| **Principal** | ** **    | **Loan Date** | ** ** | **Maturity** | ** ** | **Loan No.** | ** ** | **Call/Coll** | ** ** | **Account** | ** ** | **Officer** | ** ** | **Initials** |
|---------------|---------------|--------------------|------------|--------------|------------|-------------------|------------|---------------|------------|-------------|------------|-------------|------------|--------------|
| $             | 10,000,000.00 |               | 10-23-2008 |         | 01-01-2011 |              | 1001234    |          | 4A/415     |        |       |        | JJP        |         |   |
|               |               |                    |            |              |            |                   |            |               |            |             |            |             |            |              |  |

 

References in the boxes above are for Lender’s use only and do not limitthe applicability of this document to any particular loan or item.  Any item above containing “***” has beenomitted due to text length limitations.

 
| Borrower: |   | Advanced Life  Sciences, Inc. |   | Lender: |   | The Leaders Bank                |
|-----------|--------|------------------------------------|--------|---------|--------|---------------------------------|
|      |   | 1440 Davey Road                    |   |    |   | 2001 York Road,  Suite 150 |
|      |   | Woodridge, IL 60517                |   |    |   | Oak Brook, IL 60523             |

 
| Principal Amount:  $10,000,000.00 |   | Interest Rate: 8.50% |   | Date of Note:  October 23, 2008 |
|-----------------------------------|--------|----------------------|--------|--------------------------------------|

 

**RECITALS**

 

This Amended and RestatedPromissory Note amends and restates in its entirety that certain PromissoryNote, dated January 31, 2008, made by Advanced Life Sciences, Inc.(“Borrower”) in favor of The Leaders Bank (“Lender”), in the original principalamount of Four Million and 00/100 Dollars ($4,000,000.00) (“Original Note”),which Original Note was executed and delivered by Borrower to Lender pursuantto that that certain Business Loan Agreement, dated April 18, 2006, by andbetween Borrower and Lender (the “Original Loan Agreement”).  The Original Loan Agreement is being amendedand restated by that certain Amended and Restated Loan Agreement, dated as ofeven date herewith (the “Amended Loan Agreement”).  Capitalized words not otherwise definedherein shall have the meaning ascribed to them in the Amended Loan Agreement.

 

**AGREEMENT**

 

**PROMISE TO PAY.**  Borrower promises to pay Lender, or order, inlawful money of the United States of America, the principal amount of TenMillion & 00/100 Dollars ($10,000,000.00) or so much as may beoutstanding, together with interest on the unpaid outstanding principal balanceof each Advance.  Interest shall becalculated from the date of each Advance until repayment of each Advance.

 

**PAYMENT.** Borrower shall pay this loan in one payment ofall outstanding principal plus all accrued unpaid interest on January 1,2011.  Until an Event of Default,interest shall accrue on all amounts owned hereunder at the rate of 8.50% *per annum*.  Borrowerwill pay regular monthly payments of all accrued unpaid interest due as of eachpayment date, beginning December 1, 2008, with all subsequent interestpayments to be due on the same day of each month after that.  Unless otherwise agreed or required byapplicable law, payments will be applied first to any accrued unpaid interest,then to principal, then to any unpaid collection costs, and then to any latecharges.  The annual interest rate forthis Note is computed on a 365/360 basis, that is by applying the ratio of theannual interest rate over a year of 360 days, multiplied by the outstandingprincipal balance, multiplied by the actual number of days the principalbalance is outstanding.  Borrower willpay Lender at Lender’s address shown above or at such other place as Lender maydesignate in writing.

 

**CREDIT FACILITY.**  Lender has approved a Revolving Facility toBorrower in a principal amount not to exceed the face amount of this Note.  The credit facility is in the form ofadvances made from time to time to Borrower as more particularly described inthe Loan Agreement.  This Note evidencesthe Borrower’s obligation to repay those advances.  The aggregate principal amount of debtevidenced by this Note is the amount reflected from time to time in the recordsof the Bank but shall not exceed the face amount of this Note.  Until Maturity, the Borrower may borrow, paydown and reborrow under this Note.

 

**PREPAYMENT.**  Borrower may pay without penalty all or aportion of the amount owed earlier than it is due.  Early payments will not, unless agreed to byLender in writing, relieve Borrower of Borrower’s obligation to continue to makepayments of accrued unpaid interest; rather, early payments will reduce theprincipal balance due.  Borrower agreesnot to send Lender payments marked “paid in full”, “without recourse”, orsimilar language.  In the event Borrowersends such a payment, Lender may accept it without losing any of Lender’srights under this Note, and Borrower will remain obligated to pay any furtheramount owed to Lender.  All writtencommunications 

 

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concerning disputedamounts, including any check or other payment instrument that indicates thatthe payment constitutes “payment in full” of the amount owed or that istendered with other conditions or limitations or as full satisfaction of adisputed 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 ten (10) days or morelate, Borrower will be charged 5.000% of the regularly scheduled payment or$10.00, whichever is greater.

 

**INTEREST AFTER DEFAULT.**  Upon an Event of Default, including failureto pay upon final maturity, the interest rate on this Note shall be immediatelyincreased by adding a 4.000 percentage point margin to the stated interest rate(“Default Rate”).  Upon an Event ofDefault, interest shall accrue at the Default Rate on all amounts owedhereunder and shall be immediately due and payable.  In no event will the interest rate exceed themaximum interest rate limitations under applicable law.

 

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

 

**PaymentDefault.**  Borrowerfails to make any payment when due under this Note.

 

**LoanAgreement Default. **Theoccurrence of an Event of Default under the Loan Agreement or any LoanDocument.

 

**OtherDefaults.**  Borrowerfails to comply with or to perform any other term, obligation, covenant orcondition contained in this Note or in any of the related documents or tocomply with or to perform any term, obligation, covenant or condition containedin any other agreement between Lender and Borrower, and such failure shallcontinue for a period of fifteen (15) days.

 

**DefaultIn 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, infavor of any other creditor or person that may materially affect any ofBorrower’s property or Borrower’s ability to repay this Note or performBorrower’s obligations under this Note or any of the related documents.

 

**FalseStatements.**  Anywarranty, representation or statement made or furnished to Lender by Borroweror on Borrower’s behalf under this Note or the related documents is false ormisleading in any material respect, either now or at the time made or furnishedor becomes false or misleading at any time thereafter.

 

**Insolvency.**  The dissolution or termination of Borrower’sexistence as a going business, the insolvency of Borrower, the appointment of areceiver for any part of Borrower’s property, any assignment for the benefit ofcreditors, any type of creditor workout, or the commencement of any proceedingunder any bankruptcy or insolvency laws by or against Borrower.

 

**Creditoror Forfeiture Proceedings.** The commencement of foreclosure or forfeiture proceedings against anycollateral securing the loan, whether by judicial proceeding, self-help,repossession or any other method, by any creditor of Borrower or by anygovernmental agency.  This includes agarnishment of any of Borrower’s accounts, including deposit accounts, withLender; provided, however, this Event of Default shall not applyif there is a good faith dispute by Borrower as to the validity toreasonableness of the claim which is the basis of the creditor or forfeitureproceeding and if Borrower gives Lender written notice of the creditor orforfeiture proceeding and deposits with Lender monies or a surety bond for thecreditor or forfeiture proceeding in an amount determined by Lender, in itssale discretion, as being an adequate reserve or bond for the dispute.

 

**InsufficientMarket Value of Securities.** Failure to satisfy Lender’s requirement set forth in the InsufficientMarket Value of Securities section of the Amended and Restated CommercialPledge Agreement, dated as of even date herewith, by and among Borrower, Lenderand ALS Ventures, LLC.

 

**EventsAffecting Guarantor.** Any of the preceding events occurs with respect the Guarantor or anyother guarantor, endorser, surety, or accommodation party of any of theindebtedness or the Guarantor or any 

 

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other endorser, surety,or accommodation party dies or becomes incompetent, or revokes or disputes thevalidity of, or liability under, any guaranty of the indebtedness evidenced bythis Note.

 

**Change inOwnership.**  Any changein ownership of fifty one percent (51%) or more of the common stock ofBorrower.

 

**AdverseChange.**  A materialadverse change occurs in Borrower’s financial condition.

 

**LENDER’S RIGHTS.**  Upon an Event of Default, Lender may declarethe entire unpaid principal balance under this Note and all accrued unpaidinterest immediately due, and then Borrower will pay that amount.

 

**ATTORNEYS’ FEES; EXPENSES.**  Borrower agrees to pay upon demand all ofLender’s costs and expenses, including Lender’s reasonable attorneys’ fees andLender’s legal expenses, incurred in connection with the enforcement of thisNote upon any Event of Default.  Lendermay hire or pay someone else to help enforce this Agreement, and Borrower shallpay the costs and expenses of such enforcement. Costs and expenses include Lender’s reasonable attorneys’ fees and legalexpenses whether or not there is a lawsuit, including attorneys’ fees and legalexpenses for bankruptcy proceedings (including efforts to modify or vacate anyautomatic stay or injunction), appeals, and any anticipated post-judgmentcollection services.  Borrower also shallpay all court costs and such additional fees as may be directed by the court.

 

**REMEDIES.**  In addition to its rights and remediesprovided for herein, Lender shall have all the rights and remedies providedunder the Loan Agreement, the other Loan Documents and/or applicable law.  Except as may be prohibited by applicablelaw, all of Lender’s rights and remedies, whether evidenced by this Note, theLoan Agreement, any of the Loan Documents, or by any other writing, shall becumulative and may be exercised singularly or concurrently.  Election by Lender to pursue any remedy shallnot exclude pursuit of any other remedy, and an election to make expendituresor to take action to perform an obligation of Borrower, after Borrower’sfailure to perform, shall not affect Lender’s right to declare a default andexercise its remedies.

 

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

 

**GOVERNING LAW.**  This Note will be governed by federal lawapplicable to Lender and, to the extent not preempted by federal law, the lawsof the State of Illinois without regard to its conflicts of lawprovisions.  This Note has been acceptedby Lender in the State of Illinois.

 

**CHOICE OF VENUE.**  If there is a lawsuit, Borrower agrees uponLender’s request to submit to the jurisdiction of the courts of DuPage County,State of Illinois.

 

**CONFESSION OF JUDGMENT.**  Borrower hereby irrevocably authorizes andempowers any attorney-at-law to appear in any court of record and to confessJudgment against Borrower for the unpaid amount of this Note as evidenced by anaffidavit 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 allrights of appeal.  If a copy of thisNote, verified by an affidavit, shall have been filed in the proceeding, itwill not be necessary to file the original as a warrant of attorney.  Borrower waives the right to any stay ofexecution and the benefit of all exemption laws now or hereafter ineffect.  No single exercise of theforegoing warrant and power to confess judgment will be deemed to exhaust thepower, whether or not any such exercise shall be held by any court to beinvalid, voidable, or void, but the power will continue undiminished and may beexercised from time to time as Lender may elect until all amounts owing on thisNote have been paid in full.  Borrowerhereby waives and releases any and all claims or causes of action whichBorrower might have against any attorney acting under the terms of authoritywhich Borrower has granted herein arising out of or connected with the confessionof judgment 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 holdsjointly with someone else and all accounts Borrower may open in the future; provided,however, this does not include any IRA or Keogh accounts, or any trustaccounts for which setoff would be prohibited by law.  Borrower authorizes Lender, to the extentpermitted by applicable law, to charge or setoff all sums owing on theindebtedness 

 

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against any and all suchaccounts, and, at Lender’s option, to administratively freeze all such accountsto allow Lender to protect Lender’s charge and setoff rights provided in thisparagraph.

 

**COLLATERAL.**  Borrower acknowledges that this Note issecured by the Security Agreement as defined in the Loan Agreement, and anyother security, pledge or collateral agreement executed by Borrower or otherparty for the benefit of Lender.

 

**LINE OF CREDIT.**  This Note evidences a revolving line ofcredit.  Advances under this Note may berequested orally by Borrower or as provided in this paragraph.  All oral requests shall be confirmed inwriting on the day of the request.  Allcommunications, instructions, or directions by telephone or otherwise to Lenderare to be directed to Lender’s office shown above.  The following person or persons areauthorized to request Advances and authorize payments under the line of credituntil Lender receives from Borrower, at Lender’s address shown above, writtennotice of revocation of such authority: John L. Flavin, Michael T. Flavin, and Michael Cogan.  Borrower agrees to be liable for all sums either:  (1) advanced in accordance with theinstructions of an authorized person or (2) credited to any of Borrower’saccounts with Lender.  The unpaidprincipal balance owing on this Note at any time may be evidenced byendorsements on this Note or by Lender’s internal records, including dailycomputer print-outs.

 

**USA PATRIOT ACT NOTICE.**  Lender hereby notifies Borrower that pursuantto the requirements of the USA Patriot Act (Title III of Pub, L. 107-56 (signedinto law October 26, 2001) (the “Patriot Act”), it is required to obtain,verify and record information that identifies Borrower, which informationincludes the name and address of Borrower and other information that will allowLender to identify Borrower in accordance with the Patriot Act.

 

**RENEWAL AND EXTENSION.**  This Note amends and restates, but does notextinguish the indebtedness evidenced by, the Original Note.  The indebtedness evidenced by the OriginalNote is continuing indebtedness evidenced by this Note, and nothing containedherein shall be deemed to constitute a repayment, settlement or novation of theOriginal Note, or to release or otherwise adversely affect any lien, mortgageor security interest securing such indebtedness or any rights of the Lenderagainst any guarantor, surety or other party primarily or secondarily liablefor such indebtedness.

 

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

 

**NOTIFICATION OF INACCURATEINFORMATION REPORTED TO CONSUMER REPORTING AGENCIES**.  Borrower agrees to notify Lender if anyinformation reported by Lender to a consumer reporting agency regarding theaccount of Borrower is inaccurate. Borrower’s written notice describing the specific inaccuracy(ies) shouldbe sent to the Lender at the following address: The Leaders Bank P.O. Box3516 Oak Brook, IL 60522-3516.

 

**GENERAL PROVISIONS**.  If any part of this Note cannot be enforced,this fact will not affect the rest of the Note, and Lender may delay or forgoenforcing any of its rights or remedies under this Note without losingthem.  Borrower and any other person whosigns, guarantees or endorses this Note, to the extent allowed by law, waivepresentment, demand for payment, and notice of dishonor.  Upon any change in the terms of this Note,and unless otherwise expressly slated in writing, no party who signs this Note,whether as maker, guarantor, accommodation maker or endorser, shall be releasedfrom liability.  All such parties agreethat Lender may renew or extend (repeatedly and for any length of time) thisloan or release any party or guarantor or collateral, or impair, fail to realizeupon or perfect Lender’s security interest in the collateral, and take anyother action deemed necessary by Lender without the consent of or notice toanyone.  All such parties also agree thatLender may modify this loan without the consent of or notice to anyone otherthan the party with whom the modification is made.  The obligations under this Note are joint andseveral.

 

**ILLINOIS INSURANCE NOTICE.  Unless Borrower provides Lender with evidenceof the insurance coverage required by Borrower’s agreement with Lender, Lendermay purchase insurance at Borrower’s expense to protect Lender’s interests inthe collateral.  This insurance may, butneed not, protect Borrower’s interests. The coverage that Lender purchases may not pay any claim that Borrowermakes or any claim that is made against Borrower in connection with thecollateral.  Borrower may later cancelany insurance**

 

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**purchased by Lender, but onlyafter providing Lender with evidence that Borrower has obtained insurance asrequired by their agreement if Lender purchases insurance for thecollateral.  Borrower will be responsiblefor the costs of that insurance, including interest and any other chargesLender may impose in connection with the placement of the insurance, until theeffective date of the cancellation or expiration of the insurance. The costs ofthe insurance may be added to Borrower’s total outstanding balance orobligation. The costs of the insurance may be more than the cost of insuranceBorrower may be able to obtain on Borrower’s own.**

 

**PRIOR TO SIGNING THIS NOTE,BORROWER HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWERAGREES TO THE TERMS OF THE NOTE.**

 

**[SIGNATUREPAGE FOLLOWS]**

 

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BORROWER ACKNOWLEDGESRECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

 

BORROWER:

 

ADVANCED LIFE SCIENCES,INC.

 
| By:    | /s/  John L. Flavin                |   |
|--------|------------------------------------|--------|
|   | John  L. Flavin, President of      |   |
|   | Advanced  Life Sciences, Inc. |   |

 

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