Document:

Exhibit 10.1

 

FIRST
AMENDMENT TO EMPLOYMENT AGREEMENT

 

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
(this “Amendment”) is entered into as of this 6th day of January, 2006
by and between Advanced Life Sciences, Inc., an Illinois corporation (“ALS”),
and John L. Flavin (the “Executive”) to amend the terms of that certain Employment
Agreement dated April 11, 2005 between ALS and the Executive (the “Agreement”).

 

WHEREAS, ALS and the Executive entered into
the Agreement on April 11, 2005;

 

WHEREAS, the parties wish to amend the
Agreement as provided herein.

 

NOW, THEREFORE, in consideration of the
foregoing recitals, the parties hereto, intending to be legally bound, agree as
follows:

 

1.     Incorporation
of the Agreement.  All capitalized
terms which are not defined herein shall have the same meanings as set forth in
the Agreement, and the Agreement, to the extent not inconsistent with this
Amendment, is incorporated herein by this reference as though the same was set
forth in its entirety.  To the extent any
terms and provisions of the Agreement are inconsistent with the amendments set
forth in Paragraph 2 below, such terms and provisions shall be deemed
superseded hereby.  Except as
specifically set forth herein, the Agreement shall remain in full force and
effect and its provisions shall be binding on the parties hereto.

 

2.               Amendment of
the Agreement. 
The Agreement is hereby amended as follows:

 

a.               Section 4(a) of the
Agreement shall be deleted in its entirety and replaced with the following
language:

 

“Salary.  The Company shall pay to the Executive an
annual base salary of $220,000 (“Base Salary”), payable in substantially equal
installments no less frequently than monthly in accordance with the Company’s
applicable payroll practices.  The amount
of Base Salary shall be reviewed annually by the Chief Executive Officer to
determine whether to increase the Base Salary on a prospective basis and may be
increased by the Compensation Committee of the Board without amendment to the
Agreement.  The Executive’s Base Salary
shall not be reduced after any increase, without the Executive’s consent.”

 

b.              Section 4(b) of the
Agreement shall be deleted in its entirety and replaced with the following
language:

 

“Bonus.  The Executive shall be eligible to
participate throughout the Term in the Company’s annual bonus plan or any
similar or successor bonus plan (“Bonus Plan”) in accordance with the
Company’s compensation practices and the terms and provisions of the Bonus
Plan.  During the 2006 fiscal year of the
Company, the maximum bonus that the Executive may receive is $66,000. The
maximum bonus amount shall be reviewed annually by the Chief Executive Officer
to determine whether to increase the maximum bonus amount on a prospective
basis and may be increased by the Compensation Committee of the Board without
amendment to the Agreement.”

 

3.               Effectuation.  Except as amended by this Amendment, the
provisions of the Agreement shall continue for all purposes without
interruption and the Agreement shall remain in full force and

 

 

effect. The amendment to the Agreement
contemplated by this Amendment shall be deemed effective as of December 13,
2005.

 

4.               Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

 

[Signature
Page Follows]

 

 

[Signature
Page to First Amendment to Employment Agreement]

 

IN WITNESS WHEREOF, the parties hereto have
duly executed this Amendment as of the date first above written.

 

 

	
  EXECUTIVE

  	
  ADVANCED LIFE SCIENCES, INC.

  
	
   

  	
   

  
	
  By:

  	
      /s/ John Flavin

  	
   

  	
  By:

  	
      /s/ Michael Flavin

  	
   

  
	
  Name:

  	
  John L. Flavin

  	
  Name:

  	
  Michael T. Flavin

  
	
   

  	
  Title:

  	
  Chief Executive OfficerExhibit 10.2

 

FIRST
AMENDMENT TO EMPLOYMENT AGREEMENT

 

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
(this “Amendment”) is entered into as of this 6th day of January, 2006
by and between Advanced Life Sciences, Inc., an Illinois corporation (“ALS”),
and Suseelan Pookote (the “Executive”) to amend the terms of that
certain Employment Agreement dated April 11, 2005 between ALS and the Executive
(the “Agreement”).

 

WHEREAS, ALS and the Executive entered into
the Agreement on April 11, 2005;

 

WHEREAS, the parties wish to amend the
Agreement as provided herein.

 

NOW, THEREFORE, in consideration of the
foregoing recitals, the parties hereto, intending to be legally bound, agree as
follows:

 

1.     Incorporation
of the Agreement.  All capitalized
terms which are not defined herein shall have the same meanings as set forth in
the Agreement, and the Agreement, to the extent not inconsistent with this
Amendment, is incorporated herein by this reference as though the same was set
forth in its entirety.  To the extent any
terms and provisions of the Agreement are inconsistent with the amendments set
forth in Paragraph 2 below, such terms and provisions shall be deemed
superseded hereby.  Except as
specifically set forth herein, the Agreement shall remain in full force and
effect and its provisions shall be binding on the parties hereto.

 

2.               Amendment of
the Agreement. 
The Agreement is hereby amended as follows:

 

a.               Section 4(a) of the
Agreement shall be deleted in its entirety and replaced with the following
language:

 

“Salary.  The Company shall pay to the Executive an
annual base salary of $190,000 (“Base Salary”), payable in substantially equal
installments no less frequently than monthly in accordance with the Company’s
applicable payroll practices.  The amount
of Base Salary shall be reviewed annually by the Chief Executive Officer to
determine whether to increase the Base Salary on a prospective basis and may be
increased by the Compensation Committee of the Board without amendment to the
Agreement.  The Executive’s Base Salary
shall not be reduced after any increase, without the Executive’s consent.”

 

b.              Section 4(b) of the
Agreement shall be deleted in its entirety and replaced with the following
language:

 

“Bonus.  The Executive shall be eligible to
participate throughout the Term in the Company’s annual bonus plan or any
similar or successor bonus plan (“Bonus Plan”) in accordance with the
Company’s compensation practices and the terms and provisions of the Bonus
Plan.  During the 2006 fiscal year of the
Company, the maximum bonus that the Executive may receive is $48,000. The
maximum bonus amount shall be reviewed annually by the Chief Executive Officer
to determine whether to increase the maximum bonus amount on a prospective
basis and may be increased by the Compensation Committee of the Board without
amendment to the Agreement.”

 

3.               Effectuation.  Except as amended by this Amendment, the
provisions of the Agreement shall continue for all purposes without
interruption and the Agreement shall remain in full force and

 

 

effect. The amendment to the Agreement
contemplated by this Amendment shall be deemed effective as of December 13,
2005.

 

4.               Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

 

[Signature
Page Follows]

 

 

[Signature
Page to First Amendment to Employment Agreement]

 

IN WITNESS WHEREOF, the parties hereto have
duly executed this Amendment as of the date first above written.

 

 

	
  EXECUTIVE

  	
  ADVANCED LIFE SCIENCES, INC.

  
	
   

  	
   

  
	
  By:

  	
      /s/ Suseelan Pookote

  	
   

  	
  By:

  	
      /s/ Michael Flavin

  	
   

  
	
  Name:

  	
  Suseelan Pookote

  	
  Name:

  	
  Michael T. Flavin

  
	
   

  	
  Title:

  	
  Chief Executive OfficerExhibit 10.3

 

Employment Agreement

 

THIS EMPLOYMENT AGREEMENT
(this “Agreement”) made effective as of the 11th day of April, 2005 (the “Effective
Date”), by and between Advanced Life Sciences, Inc., an Illinois corporation
(the “Company”), and Patrick W. Flavin (the “Executive”).

 

WHEREAS,
the Company and the Executive previously entered into an employment contract
(the “Existing Employment Contract”); and

 

WHEREAS,
the Company and the Executive desire to enter into this Agreement, effective as
of the Effective Date, to replace the Existing Employment Contract; and

 

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

 

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

 

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

 

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

 

2.             Position and Duties.  The Executive shall serve as the Chief Legal
Counsel of the Company, and shall have such responsibilities, duties and
authority as are assigned by the Chief Executive Officer of the Company and are
customarily associated with such position, including but not limited to, those
he may have as of the Effective Date. 
The Executive shall report to the Chief Executive Officer of the
Company.  The Executive shall devote such
time to the performance of his duties as is necessary to satisfactorily perform
his responsibilities and duties.

 

3.             Place of Performance.  In connection with the Executive’s employment
by the Company, the Executive shall be based at the principal executive offices
of the Company currently in Woodridge, Illinois, except for required travel on
the 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 the Executive’s duties, responsibilities and covenants pursuant to
this Agreement, the Company shall pay the Executive and the Executive agrees to
accept in full payment for such performance the amounts and benefits set forth
below.

 

 

(a)           Salary.  The Company shall pay to the Executive an
annual base salary of $93,000 (“Base Salary”), payable in substantially equal
installments no less frequently than monthly in accordance with the Company’s
applicable payroll practices.  The amount
of Base Salary shall be reviewed annually by the Chief Executive Officer (with
the first review to occur prior to the first anniversary of the Effective Date)
to determine whether to increase the Base Salary on a prospective basis.  The Executive’s Base Salary shall not be
reduced after any increase, without the Executive’s consent.

 

(b)           Bonus.  The Executive shall be eligible to
participate throughout the Term in the Company’s annual bonus plan or any
similar or successor bonus plan (“Bonus Plan”) in accordance with the
Company’s compensation practices and the terms and provisions of the Bonus
Plan.  During the 2005 fiscal year of the
Company, the maximum bonus that the Executive may receive under the Bonus Plan
is $50,000.

 

(c)           Stock Incentive Plan.  As
of the Effective Date, the Executive shall be shall be eligible to receive
additional awards of the Company’s common stock under the Stock Incentive Plan
or under any other equity plan of the Company as determined by the Board of
Directors of the Company (the “Board”) in its discretion.

 

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

 

(i)            Benefit Plans.  The Executive shall be entitled to
participate in or receive benefits under any employee pension or welfare
benefit plan or arrangement made available by the Company at any time during
his employment hereunder to its employees (collectively the “Benefit Plans”),
including without limitation each qualified retirement plan, life insurance and
accident plan, medical, dental and vision insurance plans, and disability plan,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements, as they may be amended from time
to time.

 

(ii)           Vacation.  The Executive shall be entitled to not less
than 10 days of paid vacation in each calendar year, in accordance with the
Company’s vacation policy.

 

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

 

5.             Termination.

 

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

 

(i)            The death of the Executive;

 

 

(ii)           By the Company for “Cause”, which
shall mean any of the following:, as
determined by the Board in its discretion: 
(A) conviction of or plea of guilty or nolo
contendere to any criminal violation involving dishonesty or fraud;
(B) engagement in conduct that is injurious to the Company; (C) engagement in
any act of dishonesty or misconduct that results in damage to the Company or
its business or reputation or that the Board determines to adversely affect the
value, reliability or performance of the Executive to the Company; (D) refusal
or failure to substantially comply with the Company’s human resources rules,
policies, directions and/or restrictions relating to harassment and/or
discrimination, or with compliance or risk management rules, policies, directions
and/or restrictions; (E) unauthorized use or disclosure of Confidential
Information (as defined below) or other trade secrets of the Company; (F) loss
of any license or registration that is necessary for the Executive to perform
his duties to the Company, or commission of any act that could result in the
legal disqualification of the Executive from being employed by the Company or
any of its affiliates; (G) failure to cooperate with the Company or any of its
affiliates in any internal investigation or administrative, regulatory or
judicial proceeding; or (H) continuous failure by the Executive to perform his
duties to the Company (which may include any sustained and unexcused absence of
the Executive from the performance of such duties, which absence has not been
certified in writing as due to physical or mental illness or disability), after
a written demand for performance has been delivered to the Executive
identifying the manner in which the Executive has failed to substantially
perform such duties.  The application of
any part of the definition of Cause set forth in clauses (A) through (H) above
to the Executive shall not preclude or prevent the reliance by the Company or
the Board on any other part of the definition that also may be applicable.  In addition, the Executive’s employment shall
be deemed to have terminated for Cause if, after the Executive’s employment has
terminated, facts and circumstances are discovered that would have justified a
termination for Cause.

 

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

 

(iv)          By the Executive or the Company for
any reason other 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)).

 

(b)           Notice of Termination.  Any termination of the Executive’s employment
by 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 party hereto in accordance with Section 10.  For purposes of this Agreement, a “Notice of
Termination” shall mean a notice that shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of the Executive’s employment under the provision so indicated.

 

(c)           “Date of Termination” shall mean (i)
if the Executive’s employment is terminated pursuant to Section 5(a)(i) above,
the date of his death; (ii) if the Executive’s employment is terminated
pursuant to Section 5(a)(ii) or 5(a)(iv) above, the date such

 

 

Notice
of Termination is given (or such later date as provided therein); (iii) if the
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 this
Agreement expires, if either the Company or the Executive provides notice in
accordance with Section 1; or (v) if the Executive terminates his employment
and fails to provide written notice to the Company of such termination, the
date of such termination.

 

6.             Compensation Upon
Termination.

 

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

 

(b)           In the event the Executive’s
employment is terminated pursuant to Sections 5(a)(i) or 5(a)(ii), or by the
Executive for any reason pursuant
to Section 5(a)(iv), above, the Company shall have no further obligation to the
Executive under this Agreement, other than the payments in Section 6(a).

 

(c)           If the Executive’s employment is
terminated by the parties pursuant to Section 5(a)(iii) above, the Executive
shall be entitled to receive the compensation the parties specify in any
written agreement that the Company and the Executive execute regarding the
Executive’s termination.

 

(d)           The Executive shall not be required to mitigate
the amount of any payment provided for in this Section 6 by seeking other
employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Section 6 be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.

 

(e)           The obligations of the Company to
make payments and provide benefits under this Section 6 shall survive the
termination of this Agreement.

 

7.             Change in Control.

 

(a)           Payments
and Benefits Upon Employment Termination Upon a Change in Control.  If the Executive’s employment is terminated
other than for Cause within 24 months after a Change in Control (as defined
below), the Company shall provide the following payments and benefits to the
Executive, in lieu of any severance benefits, but in addition to the amounts
payable under Section 6(a):

 

(i)            The
Company shall pay the Executive a lump sum cash amount equal to two (2) times
the sum of (A) the Executive’s Base Salary as in effect on the date of the
Executive’s termination of employment and (B) the Executive’s target bonus
amount for the fiscal year in which the Executive’s employment is

 

 

terminated
OR an amount equal to the annual bonus paid to the Executive during the fiscal
year immediately preceding the Executive’s termination of employment.

 

(ii)           The
Company shall continue the Executive’s coverage under the Benefit Plans in
which the Executive participated immediately prior to the Executive’s
termination of employment for a period of 24 months, provided, however, that if
the Company cannot continue such coverage, the Company shall provide or arrange
to provide, at its expense, similar coverage to the Executive.

 

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

 

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

 

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

 

(A)          Any “person” (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as
used 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 Exchange Act), other than (I) the
Company, (II) any wholly-owned subsidiary of the Company, (III) any employee
benefit plan (or related trust) sponsored or maintained 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-3 under the Exchange Act), directly or
indirectly, of securities of the Company having fifty percent (50%) or more of
the combined voting power of the then-outstanding securities of the Company
that may be cast for the election of directors of the Company (other than as a
result of an issuance of securities initiated by the Company in the ordinary
course of business) (the “Company Voting Securities”); provided, however, that
the event described in this Section 7(c)(i) shall not be deemed to be a Change
in Control by virtue of any underwriter temporarily holding securities pursuant
to an offering of such securities;

 

(B)           During
any period of two consecutive years, individuals who at the beginning of any
such period constitute the Board (the “Incumbent Directors”) cease for any
reason to constitute at least a majority of the Board, unless the election, or
the nomination for election by the stockholders of the Company, of each new
director of the Company during such period was approved by a vote of at least
two-thirds of the Incumbent Directors then still in office;

 

(C)           As
the result of, or in connection with, any cash tender or exchange offer, merger
or other business combination, sale of all or substantially all of the Company’s
assets or contested election, or any

 

 

combination
of the foregoing transactions, less than a majority of the combined voting
power of the then-outstanding securities of the Company or any successor
corporation or entity entitled to vote generally in the election of the
directors of the Company or such other corporation or entity after such
transaction is held in the aggregate by the holders of the securities of the
Company entitled to vote generally in the election of directors of the Company
immediately prior to such transaction; or

 

(D)          The
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company.

 

Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because any person acquires beneficial
ownership of more than fifty percent (50%) of the Company Voting Securities as
a result of the acquisition of Company Voting Securities by the Company which
reduces the number of Company Voting Securities outstanding; provided, however,
that if after such acquisition by the Company such person becomes the
beneficial owner of additional Company Voting Securities that increases the
percentage of outstanding Company Voting Securities beneficially owned by such
person, a Change in Control transaction shall then occur.

 

Further notwithstanding the foregoing, unless a
majority of the Incumbent Directors determines otherwise, no Change in Control
shall be deemed to have occurred with respect to the Executive if the Change in
Control results from actions or events in which the Executive is a participant
in a capacity other than solely as an officer, employee or director of the
Company or any of its affiliates.

 

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

 

(d)           Treatment of
Parachute Payments.

 

(i)            Notwithstanding any
other provisions of this Agreement, and except as set forth below, in the event
that any payment or benefit received or to be received by the Executive in
connection with a Change in Control or the termination of the Executive’s
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any person whose actions result in a
Change in Control or any person affiliated with the Company or such person)
(all such payments and benefits, including payments under Section 7(a) above,
being hereinafter called “Total Payments”) is

 

 

determined to be an “excess parachute payment” pursuant to Section 280G
of the Internal Revenue Code of 1986, as amended (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 tax described in Code Section 4999 or any
successor or substitute provision of the Code (the “Excise Tax”), then, after
taking into account any reduction in the Total Payments provided by reason of
Code Section 280G in such other plan, arrangement or agreement, the cash
payments provided in Section 7(a)(i) of this Agreement shall first be reduced,
and the noncash payments and benefits shall thereafter be reduced, to the
extent necessary so that no portion of the Total Payments is subject to the
Excise Tax; provided, however, that the Executive may elect (at any time prior
to the payment of any Total Payment under this Agreement) to have the noncash
payments and benefits reduced (or eliminated) prior to any reduction of the
cash payments under this Agreement.

 

(b)           All determinations
required to be made under this Section 7(d), and the assumptions to be utilized
in arriving at such determination, shall be made by the certified public accounting
firm used for auditing purposes by the Company immediately prior to the date of
the Executive’s termination of employment or, if the parties determine that
such certified public accounting firm cannot make such determination because of
legal restrictions, the parties shall agree on a different certified public
accounting firm (such certified public accounting firm is hereinafter referred
to as the “Accounting Firm”), which shall provide detailed supporting
calculations both to the Company and the Executive not later than 5 days prior
to the date of the Executive’s termination of employment.  The Company shall pay all fees and expenses
of the Accounting Firm.  Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive, except as provided in paragraph (c) below.

 

(c)           As a result of the
uncertainty in the application of Code Sections 280G and 4999 at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
the Internal Revenue Service (the “IRS”) or other agency will claim that an
Excise Tax, or a greater Excise Tax, is due. 
If the Executive is required to make a payment of any such Excise Tax,
the Company will promptly pay the Executive an additional amount equal to the
amount, or greater amount, of Excise Tax the Executive is required to pay (plus
a gross up payment for any income taxes, interest, penalties or additional
Excise Tax payable by Executive with respect to 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
or other agency that, if successful, would require payment by the Company of
the additional payments under this paragraph. 
The Executive and the Company shall each reasonably cooperate with the
other in connection with any administrative or judicial proceedings concerning
the existence or amount of liability for Excise Tax with respect to the Total
Payments.  The Company shall pay all fees
and expenses of the Executive relating to a claim by the IRS or other agency.

 

 

8.             Restrictive Covenants.

 

(a)           Trade
Secrets.  The Executive acknowledges that
he 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 supplier information,
financial data, employee records, cost information, pricing information, sales
and marketing strategies, the identity of customers, information received by
the Company under an obligation of confidentiality to customers, and all
information generated by the Company for customers) relating to the past,
present or planned business, customers, clients, contacts, prospects and assets
of the Company that is unique, valuable and has not purposefully been made
generally known to the public by the Company (“Confidential Information”).  Confidential Information shall not include
any information that: (i) is now, or hereafter becomes, through no act or
failure to act on the part of the Executive that constitutes a breach of this
Section 8, generally known or available to the public; (ii) is hereafter
furnished without restriction on disclosure to the Executive by a third party,
other than an employee or agent of the Company, who is not under any obligation
of confidentiality to the Company; (iii) is disclosed with the written approval
of the Company; or (iv) is required to be disclosed or provided by law, court
order, or similar compulsion, including pursuant to or in connection with any
legal proceeding involving the parties hereto; provided, however, that such
disclosure shall be limited to the extent so required or compelled; and
provided further, however, that if the Executive is required to disclose such
Confidential Information, the Executive shall give the Company notice of such
disclosure and cooperate in seeking suitable protections.  The Executive 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 that incorporate, contain, refer to or
embody any Confidential Information (“Items”), acquired by the Executive in
connection with the Executive’s employment with the Company are the property of
the Company.  Other than in the course of
performing services for the Company or otherwise authorized in writing by the
Company, 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 absolutely
confidential.  The Executive shall
deliver promptly to the Company, at the termination of his employment or at any
other time at the request of the Company, without retaining any copies, all
Items and any other documents or materials in the Executive’s possession
relating, directly or indirectly, to any Confidential Information.

 

(b)           Non-competition.  Beginning on the Effective Date and for a
period of  twelve (12) months following
Executive’s Date of Termination (the “Restricted Period”), Executive shall not
directly or indirectly, 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, or entity in the United States that is engaged in “Competing Services”
(as defined herein).  Competing Services
shall mean chemistry and biology research and development relating to, arising
from, connected with, or competitive with or intended to be competitive with,
any product or research project as to which the Executive performed services
for the

 

 

Company,
or about which the Executive received access to Confidential Information while
employed by the Company.  If the
Executive obtains other employment during the twelve-month period after the
Executive’s Date of Termination, the Executive agrees to notify the Company in
writing of the name and address of such employer.  The Executive understands, and the Company
agrees, that the Company shall pay to the Executive a monthly amount equal to
one month of the Executive’s final Base Salary if the Executive is unable to
secure other employment as a direct result of this Section 8(b).  The Executive agrees and acknowledges that
(i) the Company shall be obligated to make such payment only upon a written
request by the Executive containing sufficient information for the Company to
make a determination that this Section 8(b) caused the Executive’s inability to
secure other employment, and (ii) the Company shall be released from the
obligation to make such payment if the Company provides the Executive a written
release from this Section 8(b).  The
Company’s obligation to make payments under this Section 8(b) shall be made
only for the period beginning with the Executive’s inability to secure other
employment as a result of this Section 8(b) and ending no later than the
expiration of the twelve-month period following the Executive’s Date of
Termination.

 

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

 

(d)           Non-Solicitation of Customers.  During the Restricted Period, the Executive
shall not, directly or indirectly, solicit or induce, or attempt to solicit or
induce, any customer, supplier, licensee, licensor or other business relation
of the Company to terminate its relationship or contract with the Company, to
cease doing business with the Company, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company (including making any negative statements or communications
concerning the Company or their employees).

 

(e)           Inventions.  The
Executive acknowledges all inventions 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 to practice, developed, made or produced) (“Inventions”)
that (i) relate to the present or planned business of the Company or the work
performed by the Company for its customers, and (ii) are conceived or reduced
to practice by the Executive, either alone or with others, during the Executive’s
employment with the Company or during a period of 120 days after the Executive’s
Date of Termination, whether or not done during the Executive’s regular working
hours, are the sole property of the Company, including, without limitation, all
domestic and foreign patent rights, rights of registration or other protection
under the copyright laws, or other rights pertaining to the Inventions.  For purposes of this Agreement, Inventions
shall include any improvements to an Invention and shall not be limited to the
definition of a patentable invention or copyrightable work of authorship as
contained in the United States patent or copyright laws.  The Executive shall disclose promptly and
fully in

 

 

writing to the Company each
Invention, whether or not reduced to practice, that the Executive conceives or
learns (either alone or jointly with others) during the Term of
Employment.  The Executive hereby assigns
to the Company, or its nominee, all of the Executive’s right, title and
interest, including international priority rights, in and to all Inventions
(other than any Invention that was developed entirely on the Executive’s own
time and for which no equipment, supplies, facilities or trade secret
information of the Company was used, unless such Invention relates directly to
the Company’s business or to the Company’s actual or demonstrably anticipated
research or development), and in and to all United States or foreign patents,
copyrights and other proprietary rights granted thereon or resulting therefrom,
and in and to all applications for United States or foreign copyrights, patents
and other proprietary rights.  The
Executive shall execute all papers, perform all lawful acts or assist the
Company in any way the Company deems necessary or advisable (at the Company’s
expense) for the preparation, filing, prosecution, issuance, procurement,
maintenance or enforcement of patents applications and patents of the United
States and foreign countries, and for obtaining and enforcing copyright
protection and registration, of any Invention. 
To that end, the Executive shall at the Company’s request and without
limitation, testify in any suit or other proceeding involving any of the
Inventions, execute all documents that the Company reasonably determines to be
necessary or convenient for use in applying for and obtaining patent or
copyright protection and registration on any of the Inventions and enforcement
of that protection and registration, and execute all necessary documents and
papers required to vest title in and assign to the Company (or its nominee)
patent or copyright protection and registration.  The Executive’s obligation to assist the
Company in obtaining and enforcing patent or copyright protection and
registration for the Inventions shall continue following termination of this
Agreement, but Company shall compensate the Executive following the expiration or
termination of this Agreement at a rate of $10 for the execution of each
document and $150 per day for each day or portion thereof spent at the Company’s
request in rendering assistance, plus reimbursement for the reasonable
out-of-pocket expenses incurred by the Executive for such assistance.  The Executive hereby irrevocably appoints the
Company and its duly authorized officers and agents as his agent and
attorney-in-fact to act for and on behalf of the Executive in filing all patent
applications, applications for copyright protection and registration
amendments, renewals and all other appropriate documents in any way related to
the Inventions.

 

(f)            Survival.  The
provisions set forth in this Section 8 shall survive termination of this
Agreement.

 

(g)           Scope Limitations. 
If the scope, period of time or area of restriction specified in this
Section 8 are or would be judged to be unreasonable in any court proceeding,
then the period of time, scope or area of restriction shall be reduced or
limited in the manner and to the extent necessary to make the restriction
reasonable, so that the restriction may be enforced in those areas, during the
period of time and in the scope that are or would be judged to be reasonable.

 

9.             Binding Agreement; Successors.  This Agreement and all rights of the
Executive hereunder shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

 

 

If
the Executive should die while any amounts would still be payable to him
hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance 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’s estate. 
This Agreement shall be binding upon, and inure to the benefit of, any
successors or assigns of the Company. 
This Agreement is not intended to confer upon any person other than the
parties hereto (and the Executives’ Spouse and dependents) any rights or
remedies, except as specifically provided in this Section 9.

 

10.           Notice.  Notices, demands and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered, if delivered personally, or (unless otherwise
specified) when received, if mailed by United States certified or registered
mail, return receipt requested, postage prepaid, by Federal Express or other
reputable overnight courier service or by facsimile, addressed as follows:

 

If
to the Executive:

 

Patrick
W. Flavin

20
North State Street #307

Chicago,
IL  60602

 

If
to the Company:

 

Advanced
Life Sciences, Inc.

1440 Davey Road

Woodridge, Illinois 60517

Attn:
Chief Executive Officer

 

or to such other address as
any party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.

 

11.           General Provisions.  No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and such officer of the Company as
may be specifically designated by the Company’s Board.  No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.  No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party that are
not set forth expressly in this Agreement.

 

12.           Validity.  The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.  If any provision
of this Agreement is found to be invalid or unenforceable, in whole or in part,
then it shall be deemed to be modified or restricted to the extent and in the
manner necessary to render it valid and enforceable, or shall be deemed excised
from this Agreement, as the case may require, and this Agreement shall be
construed and enforced to the maximum extent permitted by law, as if the
provision had been

 

 

originally
incorporated herein as so modified or restricted, or as if it had not
originally been incorporated herein, as the case may be.

 

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

 

14.           Entire Agreement.  This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior
agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated and canceled. For the avoidance of doubt, the
Company and the Executive hereby agree that this Agreement shall replace and
supercede the Existing Employment Contract and govern the relationship of the
parties.

 

15.           Irreparable Harm.  The Executive acknowledges that: (i) the
Executive’s compliance with this Agreement is necessary to preserve and protect
the proprietary rights, Confidential Information and the goodwill of the
Company and its subsidiaries as going concerns; (ii) any failure by the
Executive to comply with the provisions of this Agreement shall result in
irreparable and continuing injury for which there will be no adequate remedy at
law; and (iii) in the event that the Executive should fail to comply with the
terms and conditions of this Agreement, the Company shall be entitled, in
addition to such other relief as may be proper, to all types of equitable
relief (including, but not limited to, the issuance of an injunction and/or
temporary restraining order) as may be necessary to cause the Executive to
comply with this Agreement, to restore to the Company its property, and to make
the Company whole.

 

16.           Consent to Jurisdiction and Forum;
Legal Fees and Costs.  The Company
and the Executive hereby expressly and irrevocably agree that any action,
whether at law or in equity, arising out of or based upon this Agreement or the
Executive’s employment by the Company shall only be brought in a federal or
state court located in Cook County, Illinois. 
The Executive hereby irrevocably consents to personal jurisdiction in
such court and to accept service of process in accordance with the provisions of
such court.  In connection with any
dispute arising out of or based upon this Agreement or the Executive’s
employment by the Company, each party shall be responsible for its or his own
legal fees and expenses and all court costs shall be shared equally by the
Company and the Executive unless the court apportions such legal fees or court
costs in a different manner.

 

17.           Withholding.  All payments made to the Executive pursuant
to this Agreement shall be subject to applicable withholding taxes, if any, and
any amount so withheld shall be deemed to have been paid to the Executive for
purposes of amounts due to the Executive under this Agreement.

 

18.           Governing Law.  This Agreement is governed by and is to be
construed and enforced in accordance with the laws of the State of Illinois,
without regard to its conflict of law provisions.

 

 

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

 

	
  Executive

  	
  Advanced Life Sciences, Inc.

  
	
   

  	
   

  
	
  By:

  	
      /s/
  Patrick Flavin

  	
   

  	
  By:

  	
      /s/
  Michael Flavin

  	
   

  
	
  Name:

  	
  Patrick
  W. Flavin

  	
  Name:

  	
  Michael
  T. Flavin

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
								

 

 

FIRST
AMENDMENT TO EMPLOYMENT AGREEMENT

 

This FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT (this “Amendment”) is entered into as of this 6th
day of January, 2006 by and between Advanced Life Sciences, Inc., an Illinois
corporation (“ALS”), and Patrick W. Flavin (the “Executive”) to
amend the terms of that certain Employment Agreement dated April 11, 2005
between ALS and the Executive (the “Agreement”).

 

WHEREAS, ALS and the
Executive entered into the Agreement on April 11, 2005;

 

WHEREAS, the parties wish to
amend the Agreement as provided herein.

 

NOW, THEREFORE, in
consideration of the foregoing recitals, the parties hereto, intending to be
legally bound, agree as follows:

 

1.     Incorporation of the Agreement.  All capitalized terms which are not defined
herein shall have the same meanings as set forth in the Agreement, and the
Agreement, to the extent not inconsistent with this Amendment, is incorporated
herein by this reference as though the same was set forth in its entirety.  To the extent any terms and provisions of the
Agreement are inconsistent with the amendments set forth in Paragraph 2 below,
such terms and provisions shall be deemed superseded hereby.  Except as specifically set forth herein, the
Agreement shall remain in full force and effect and its provisions shall be
binding on the parties hereto.

 

2.               Amendment of the Agreement.  The
Agreement is hereby amended as follows:

 

a.               Section 4(a) of the Agreement shall be deleted in its
entirety and replaced with the following language:

 

“Salary.  The Company
shall pay to the Executive an annual base salary of $145,000 (“Base Salary”),
payable in substantially equal installments no less frequently than monthly in
accordance with the Company’s applicable payroll practices.  The amount of Base Salary shall be reviewed
annually by the Chief Executive Officer to determine whether to increase the
Base Salary on a prospective basis and may be increased by the Compensation
Committee of the Board without amendment to the Agreement.  The Executive’s Base Salary shall not be
reduced after any increase, without the Executive’s consent.”

 

b.              Section 4(b) of the Agreement shall be deleted in its
entirety and replaced with the following language:

 

“Bonus.  The Executive
shall be eligible to participate throughout the Term in the Company’s annual
bonus plan or any similar or successor bonus plan (“Bonus Plan”) in accordance
with the Company’s compensation practices and the terms and provisions of the
Bonus Plan.  During the 2006 fiscal year
of the Company, the maximum bonus that the Executive may receive is $30,000.
The maximum bonus amount shall be reviewed annually by the Chief Executive
Officer to determine whether to increase the maximum bonus amount on a
prospective basis and may be increased by the Compensation Committee of the
Board without amendment to the Agreement.”

 

3.               Effectuation. 
Except as amended by this Amendment, the provisions of the Agreement shall
continue for all purposes without interruption and the Agreement shall remain
in full force and

 

 

effect. The amendment to the Agreement contemplated by this Amendment
shall be deemed effective as of December 13, 2005.

 

4.               Counterparts.  This
Amendment may be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and
the same instrument.

 

[Signature Page Follows]

 

 

[Signature Page to First Amendment to
Employment Agreement]

 

IN WITNESS WHEREOF, the parties hereto have duly
executed this Amendment as of the date first above written.

 

 

	
  EXECUTIVE

  	
  ADVANCED LIFE SCIENCES, INC.

  
	
   

  	
   

  
	
  By:

  	
      /s/
  Patrick Flavin

  	
   

  	
  By:

  	
      /s/
  Michael Flavin

  	
   

  
	
  Name:

  	
  Patrick
  W. Flavin

  	
  Name:

  	
  Michael
  T. Flavin

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

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