Exhibit 10.2


 


AMENDED
AND 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 limit
the applicability of this document to any particular loan or item.  Any item above containing “***” has been
omitted 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 Restated
Promissory Note amends and restates in its entirety that certain Promissory
Note, dated January 31, 2008, made by Advanced Life Sciences, Inc.
(“Borrower”) in favor of The Leaders Bank (“Lender”), in the original principal
amount of Four Million and 00/100 Dollars ($4,000,000.00) (“Original Note”),
which Original Note was executed and delivered by Borrower to Lender pursuant
to that that certain Business Loan Agreement, dated April 18, 2006, by and
between Borrower and Lender (the “Original Loan Agreement”).  The Original Loan Agreement is being amended
and restated by that certain Amended and Restated Loan Agreement, dated as of
even date herewith (the “Amended Loan Agreement”).  Capitalized words not otherwise defined
herein shall have the meaning ascribed to them in the Amended Loan Agreement.


 


AGREEMENT


 


PROMISE TO PAY.  Borrower promises to pay Lender, or order, in
lawful money of the United States of America, the principal amount of Ten
Million & 00/100 Dollars ($10,000,000.00) 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 shall pay this loan in one payment of
all 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.  Borrower
will pay regular monthly payments of all accrued unpaid interest due as of each
payment date, beginning December 1, 2008, with all subsequent interest
payments to be due on the same 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.


 


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


 


PREPAYMENT.  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.  In the event 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 ten (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 an Event of Default, including failure
to pay upon final maturity, the interest rate on this Note shall be immediately
increased by adding a 4.000 percentage point margin to the stated interest rate
(“Default Rate”).  Upon an Event of
Default, interest shall accrue at the Default Rate on all amounts owed
hereunder and shall be immediately due and payable.  In no event will the interest rate exceed the
maximum interest rate limitations under 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.


 


Loan
Agreement Default.  The
occurrence of an Event of Default under the Loan Agreement or any Loan
Document.


 


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, and such failure shall
continue for a period of fifteen (15) days.


 


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. 
The commencement of foreclosure or forfeiture proceedings against any
collateral securing the loan, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency.  This includes a
garnishment of any of Borrower’s accounts, including deposit accounts, with
Lender; provided, however, this Event of Default shall not apply
if there is a good faith dispute by Borrower as to the validity to
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
sale discretion, as being an adequate reserve or bond for the dispute.


 


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


 


Events
Affecting Guarantor. 
Any of the preceding events occurs with respect the Guarantor or any
other guarantor, endorser, surety, or accommodation party of any of the
indebtedness or the Guarantor or any 


 


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other endorser, surety,
or accommodation party 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 fifty one percent (51%) or more of the common stock of
Borrower.


 


Adverse
Change.  A material
adverse change occurs in Borrower’s financial condition.


 


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


 


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


 


REMEDIES.  In addition to its rights and remedies
provided for herein, Lender shall have all the rights and remedies provided
under the Loan Agreement, the other Loan Documents and/or applicable law.  Except as may be prohibited by applicable
law, all of Lender’s rights and remedies, whether evidenced by this Note, the
Loan Agreement, any of the Loan Documents, or by any other writing, shall be
cumulative and may be exercised singularly or concurrently.  Election by Lender to pursue any remedy shall
not exclude pursuit of any other remedy, and an election to make expenditures
or to take action to perform an obligation of Borrower, after Borrower’s
failure to perform, shall not affect Lender’s right to declare a default and
exercise its remedies.


 


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 DuPage 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 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 holds
jointly 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 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 


 


3

















 


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 that this Note is
secured by the Security Agreement as defined in the Loan Agreement, and any
other security, pledge or collateral agreement executed by Borrower or other
party for the benefit of Lender.


 


LINE OF CREDIT.  This Note evidences a revolving line of
credit.  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 person or persons 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 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 the
instructions of an authorized person or (2) 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.


 


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


 


RENEWAL AND EXTENSION.  This Note amends and restates, but does not
extinguish the indebtedness evidenced by, the Original Note.  The indebtedness evidenced by the Original
Note is continuing indebtedness evidenced by this Note, and nothing contained
herein shall be deemed to constitute a repayment, settlement or novation of the
Original Note, or to release or otherwise adversely affect any lien, mortgage
or security interest securing such indebtedness or any rights of the Lender
against any guarantor, surety or other party primarily or secondarily liable
for such indebtedness.


 


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.


 


NOTIFICATION OF INACCURATE
INFORMATION REPORTED TO CONSUMER REPORTING AGENCIES.  Borrower agrees to notify Lender if any
information reported by Lender to a consumer reporting agency regarding the
account of Borrower is inaccurate. 
Borrower’s written notice describing the specific inaccuracy(ies) should
be sent to the Lender at the following address: The Leaders Bank P.O. Box
3516 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 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 slated 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 


 


4

















 


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.


 


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


 


[SIGNATURE
PAGE FOLLOWS]


 


5

















 


BORROWER ACKNOWLEDGES
RECEIPT 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.