Document:

Exhibit 4.2

 

FORM OF
WARRANT

 

NEITHER
THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.  THESE SECURITIES AND
THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER
OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS
DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY
SUCH SECURITIES.

 

ADVANCED LIFE SCIENCES HOLDINGS, INC.

 

WARRANT

 

Warrant
No. [  ]                                                                                                                                  Dated:  December      , 2007

 

Advanced Life Sciences
Holdings, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received, [Name of Holder] or its registered assigns (the “Holder”), is entitled to purchase from the
Company up to a total of [                  ]
shares of common stock, $0.01 par value per share (the “Common Stock”), of the Company (each such
share, a “Warrant Share” and all
such shares, the “Warrant Shares”)
at an exercise price equal to $2.15 per share (as adjusted from time to time as
provided in Section 9, the “Exercise
Price”), at any time and from on or after December     , 2007 (the “Initial
Exercise Date”) and through and including the date that is five
years  from the Initial Exercise Date (the “Expiration Date”), and subject to the
following terms and conditions.  This
Warrant (this “Warrant”) is one of
a series of similar warrants issued pursuant to that certain Securities
Purchase Agreement, dated as of the date hereof, by and among the Company and
the Purchasers identified therein (the “Purchase
Agreement”).  All such
warrants are referred to herein, collectively, as the “Warrants.”

 

1.             Definitions.  In addition to the terms defined elsewhere in
this Warrant, capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Purchase Agreement.

 

 

 

2.             Registration
of Warrant.  The Company shall
register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant
Register”), in the
name of the record Holder hereof from time to time.  The Company may deem and treat the registered
Holder of record of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.

 

3.             Registration
of Transfers.  The Company shall
register the transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment attached
hereto duly completed and signed, to the Company’s transfer agent or to the
Company at its address specified herein. 
Upon any such registration of transfer, a new warrant to purchase Common
Stock, in substantially the form of this Warrant (any such new warrant, a “New Warrant”),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder.  The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance by such transferee of all of
the rights and obligations of a holder of a Warrant.

 

4.             Exercise
and Duration of Warrants.

 

(a)           This
Warrant shall be exercisable by the registered Holder at any time and from time
to time on or after the Initial Exercise Date and including the Expiration
Date.  At 6:30 P.M., New York City
time on the Expiration Date, the portion of this Warrant not exercised prior
thereto shall be and become void and of no value; provided that, if  the average of the Closing Prices for the
five Trading Days (as defined below) immediately prior to (but not including)
the Expiration Date exceeds the Exercise Price on the Expiration Date, then
this Warrant shall be deemed to have been exercised in full (to the extent not
previously exercised) on a “cashless exercise” basis at 6:30 P.M. New York
City time on the Expiration Date.   A “Trading Day” shall be (a) any day on
which the Common Stock is listed or quoted and traded on its primary trading
market, (b) if the Common Stock is not then listed or quoted and traded on
any eligible market (meaning any of the NYSE, AMEX or NASDAQ), then a day on
which  trading occurs on the OTC Bulletin
Board (or any successor thereto), or (c) if trading does not occur on the
OTC Bulletin Board (or any successor thereto), any business day.

 

(b)           A
Holder may exercise this Warrant by delivering to the Company (i) an
exercise notice, in the form attached hereto (the “Exercise Notice”), appropriately completed and duly signed, and
(ii) payment of the Exercise Price for the number of Warrant Shares as to
which this Warrant is being exercised (which may take the form of payment in
immediately available funds or a “cashless exercise” as provided in subsection
(c) below), and the date such items are delivered to the Company (as
determined in accordance with the notice provisions hereof) is an “Exercise Date.”  The Holder shall not be required to deliver
the original Warrant in order to effect an exercise hereunder.  Execution and delivery of the Exercise Notice
shall have the same effect as cancellation of the original Warrant and issuance
of a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares.

 

(c)           A
Holder may elect to exercise net exercise rights under this Warrant by
delivering to the Company written notice at the time of exercise of this
Warrant.  The Company shall deliver to
such Holder (without payment by the Holder of any exercise price in cash) that 

 

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number
of fully paid and nonassessable shares of Common Stock equal to the quotient
obtained by dividing (y) the value of this Warrant (or the specified
portion thereof) on the date of exercise, which value shall be determined by
subtracting (1) the aggregate Exercise Price of the Warrant Shares (or the
specified portion thereof) immediately prior to the exercise of this Warrant
from (2) the Aggregate Fair Market Value (as defined below) of the Warrant
Shares (or the specified portion thereof) issuable upon exercise of this
Warrant (or specified portion thereof) on the date of exercise by (z) the
Fair Market Value (as defined below) of one share of Common Stock on the date
of exercise.  The “Fair Market Value” of one share of Common
Stock shall mean (i) the average of the closing prices for the shares of
Common Stock on the Nasdaq Capital Market or other trading market where such
security is listed or traded as reported by Bloomberg Financial Markets (or a
comparable reporting service of national reputation selected by the Company and
reasonably acceptable to the Holder if Bloomberg Financial Markets is not then
reporting sales prices of such security) (collectively, “Bloomberg”) for the ten (10) consecutive
Trading Days ending on the Trading Day prior to the exercise date, or
(ii) if sales have not been made on any or all of these Trading Days, the
average of the closing prices for such security as reported by Bloomberg for
the last ten (10) Trading Days where a sale was made, ending on the
Trading Day prior to the exercise date, or (iii) if fair market value
cannot be calculated as of such date on any of the foregoing bases, the fair
market value shall be as determined by the Board of Directors of the Company in
the exercise of its good faith judgment. 
The “Aggregate Fair Market Value”
of the Warrant Shares shall be determined by multiplying the number of shares
of Warrant Shares by the Fair Market Value of one share of Warrant Shares.  For purposes of Rule 144 promulgated
under the Securities Act, it is intended, understood and acknowledged that the
Warrant Shares issued in a cashless exercise transaction shall be deemed to
have been acquired by the Holder, and the holding period for the Warrant Shares
shall be deemed to have commenced, on the date this Warrant was originally
issued pursuant to the Purchase Agreement.

 

5.             Delivery
of Warrant Shares.

 

(a)           Upon
exercise of this Warrant, the Company shall as soon as practiable (but in no
event later than five Trading Days after the Exercise Date) issue or cause to
be issued and cause to be delivered to or upon the written order of the Holder
and in such name or names as the Holder may designate, a certificate for the
Warrant Shares issuable upon such exercise, free of restrictive legends unless
a registration statement covering the resale of the Warrant Shares and naming
the Holder as a selling stockholder thereunder is not then effective or the
Warrant Shares are not freely transferable without volume restrictions pursuant
to Rule 144 under the Securities Act. 
The Holder, or any Person so designated by the Holder to receive Warrant
Shares, shall be deemed to have become the holder of record of such Warrant
Shares as of the Exercise Date.  The
Company shall, upon request of the Holder, use its reasonable best efforts to
deliver Warrant Shares hereunder electronically through The Depository Trust
Company or another established clearing corporation performing similar
functions.

 

(b)           This
Warrant is exercisable, either in its entirety or, from time to time, for a
portion of the number of Warrant Shares. 
Upon surrender of this Warrant following one or more partial exercises,
the Company shall issue or cause to be issued, at its expense, a New Warrant
evidencing the right to purchase the remaining number of Warrant Shares.

 

 

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(c)           In
addition to any other rights available to a Holder, if the Company fails to
deliver to the Holder a certificate representing Warrant Shares by the fifth
Trading Day after the date on which delivery of such certificate is required by
this Warrant, and if after such fifth Trading Day the Holder purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares that the Holder
anticipated receiving from the Company (a “Buy-In”), then the
Company shall, within three Trading Days after the Holder’s request and in the
Holder’s discretion, either (i) pay cash to the Holder in an amount equal
to the Holder’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased (the “Buy-In Price”),
at which point the Company’s obligation to deliver such certificate (and to issue
such Common Stock) shall terminate, or (ii) promptly honor its obligation
to deliver to the Holder a certificate or certificates representing such Common
Stock and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of shares of Common
Stock, times (B) the Closing Price on the date of the event giving rise to
the Company’s obligation to deliver such certificate.

 

(d)           The
Company’s obligations to issue and deliver Warrant Shares in accordance with
the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Shares.  Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to deliver certificates
representing shares of Common Stock upon exercise of this Warrant as required
pursuant to the terms hereof.

 

6.             Charges,
Taxes and Expenses.   Issuance and
delivery of physical certificates for shares of Common Stock upon exercise of
this Warrant shall be made without charge to the Holder for any issue or
transfer tax, withholding tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such physical certificates, all of which
taxes and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant
Shares or Warrants in a name other than that of the Holder.  The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.

 

7.             Replacement
of Warrant.  If this Warrant is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation hereof, or in
lieu of and substitution for this Warrant, a New Warrant, but only upon receipt
of evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable bond or indemnity, if requested.  Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe.

 

 

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8.             Reservation
of Warrant Shares.  The Company
covenants that it will at all times reserve and keep available out of the
aggregate of its authorized but unissued and otherwise unreserved Common Stock,
solely for the purpose of enabling it to issue Warrant Shares upon exercise of
this Warrant as herein provided, the number of Warrant Shares which are then
issuable and deliverable upon the exercise of this entire Warrant, free from
preemptive rights or any other contingent purchase rights of persons other than
the Holder (after giving effect to the adjustments and restrictions of Section 9,
if any). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise Price
in accordance with the terms hereof, be duly and validly authorized, issued and
fully paid and nonassessable.  The Company will take all such action as may be reasonably
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation system upon
which the Common Stock may be listed.

 

9.             Certain
Adjustments.  The Exercise Price and
number of Warrant Shares issuable upon exercise of this Warrant are subject to
adjustment from time to time as set forth in this Section 9, but in
no event shall the Exercise Price be adjusted to an Exercise Price per share
below the par value per share of the Warrant Shares.

 

(a)           Stock
Dividends and Splits.  If the
Company, at any time while this Warrant is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class of
capital stock that is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, or
(iii) combines outstanding shares of Common Stock into a smaller number of
shares, then in each such case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such
event.  Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution, and any adjustment pursuant to clause (ii) or
(iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.

 

(b)           Pro
Rata Distributions. If the Company, at any time while this Warrant is
outstanding, distributes to holders of Common Stock (i) evidences of its
indebtedness, (ii) any security (other than a distribution of Common Stock
covered by the preceding paragraph), (iii) rights or warrants to subscribe
for or purchase any security, or (iv) any other asset (in each case, “Distributed Property”), then in each such case the Holder shall be entitled upon
exercise of this Warrant for the purchase of any or all of the Warrant Shares,
to receive the amount of Distributed Property which would have been payable to
the Holder had such Holder been the holder of such Warrant Shares on the record
date for the determination of stockholders entitled to such Distributed
Property.  The Company will at all times
set aside in escrow and keep available for distribution to such holder upon
exercise of this Warrant a portion of the Distributed Property to satisfy the
distribution to which such Holder is entitled pursuant to the preceding
sentence.

 

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(c)           Fundamental
Transactions.

 

(i)            If, at any time while this Warrant
is outstanding, (i) the Company effects any merger or consolidation of the
Company with or into another Person, (ii) the Company effects any sale of
all or substantially all of its assets in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common
Stock owning more than 50% of the outstanding shares of Common Stock (not
including  any shares of Common Stock
held by the Person or Persons making or affiliated with the Persons making the
tender or exchange offer) tender or exchange their shares for other securities,
cash or property, or (iv) the Company effects any reclassification of the
Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property (other than as a result of a subdivision or combination of shares of
Common Stock covered by Section 9(a) above) (in any such case,
a “Fundamental Transaction”), then
the Holder shall have the right thereafter to receive, upon exercise of this
Warrant, the same amount and kind of securities, cash or property as it would
have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full
of this Warrant (the “Alternate Consideration”).  The aggregate Exercise Price for this Warrant
will not be affected by any such Fundamental Transaction, but the Company shall
apportion such aggregate Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration.  If holders
of Common Stock are given any choice as to the securities, cash or property to
be received in a Fundamental Transaction, then the Holder shall be given the
same choice as to the Alternate Consideration it receives upon any exercise of
this Warrant following such Fundamental Transaction.  At the Holder’s request, any successor to the
Company or surviving entity in such Fundamental Transaction shall issue to the
Holder a new warrant consistent with the foregoing provisions and evidencing
the Holder’s right to purchase the Alternate Consideration for the aggregate
Exercise Price upon exercise thereof. 
The terms of any agreement pursuant to which a Fundamental Transaction
is effected shall include terms requiring any such successor or surviving
entity to comply with the provisions of this paragraph (c) and insuring
that the Warrant (or any such replacement security) will be similarly adjusted
upon any subsequent transaction analogous to a Fundamental Transaction.

 

(ii)           Notwithstanding anything to the
contrary, in the event of a reorganization or merger that is (1) an all
cash or property transaction, (2) a “Rule 13e-3 transaction” as
defined in Rule 13e-3 under the Exchange Act, or (3) a transaction
involving a person or entity not traded on a national securities exchange, the
Company or any successor entity shall pay at the Holder’s option, exercisable
at any time concurrently with or after the consummation of the transaction, an
amount of cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes option pricing formula using (i) an expected
volatility equal to the 180 day historical price volatility obtained from the
HVT function on Bloomberg L.P. as of the Trading Day immediately prior to the
public announcement of such transaction, (ii) a stock price equal to the
amount of cash consideration receivable in such transaction per share of Common
Stock, or in the case of property consideration receivable, the fair market
value of such property as determined by a mutually agreed upon independent
party, (iii) a risk free interest rate 

 

 

6

 

equal
to the 30 day LIBOR rate on the day immediately prior to the public
announcement of such transaction, and (iv) a remaining option time equal
to the time between the date of the public announcement of such transaction and
the Expiration Date.

 

(d)           Number
of Warrant Shares.  Simultaneously
with any adjustment to the Exercise Price pursuant to paragraph (a) of
this Section, the number of Warrant Shares that may be purchased upon exercise
of this Warrant shall be adjusted proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the increased
number of Warrant Shares shall be the same as the aggregate Exercise Price in
effect immediately prior to such adjustment.

 

(e)           Calculations.  All calculations under this Section 9
shall be made to the nearest cent or the nearest 1/100th of a share, as
applicable.  The number of shares of
Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such
shares shall be considered an issue or sale of Common Stock.

 

(f)            Notice
of Adjustments.  Upon the occurrence
of each adjustment pursuant to this Section 9, the Company at its
expense will promptly compute such adjustment in accordance with the terms of
this Warrant and prepare a certificate setting forth such adjustment, including
a statement of the adjusted Exercise Price and adjusted number or type of
Warrant Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based.  Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
transfer agent.

 

(g)           Notice
of Corporate Events.  If the Company
(i) declares a dividend or any other distribution of cash, securities or
other property in respect of its Common Stock, including without limitation any
granting of rights or warrants to subscribe for or purchase any capital stock
of the Company or any Subsidiary, (ii) authorizes or approves, enters into
any agreement contemplating or solicits stockholder approval for any
Fundamental Transaction or (iii) authorizes the voluntary dissolution,
liquidation or winding up of the affairs of the Company, then the Company shall
deliver to the Holder a notice describing the material terms and conditions of
such transaction, at least ten calendar days prior to the applicable record or
effective date on which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction; provided, however,
that the failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such notice.

 

10.           [Intentionally
Omitted.]

 

11.           Limitation on
Exercise.

 

(a)           Notwithstanding
anything to the contrary contained herein, the number of shares of Common Stock
that may be acquired by the Holder upon any exercise of this Warrant (or
otherwise in respect hereof) shall be limited to the extent necessary to insure
that, following such exercise (or other issuance), the total number of shares
of Common Stock then beneficially 

 

7

owned
by such Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act, does not exceed 4.999% (the “Maximum Percentage”) of the total number of
issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such exercise).  For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder.  Each delivery of an Exercise Notice hereunder
will constitute a representation by the Holder that it has evaluated the
limitation set forth in this paragraph and determined that issuance of the full
number of Warrant Shares requested in such Exercise Notice is permitted under
this paragraph.  The Company’s obligation
to issue shares of Common Stock in excess of the limitation referred to in this
Section shall be suspended (and shall not terminate or expire
notwithstanding any contrary provisions hereof) until such time, if any, as
such shares of Common Stock may be issued in compliance with such limitation,
but in no event later than the Expiration Date. 
By written notice to the Company, the Holder may waive the provisions of
this Section or increase or decrease the Maximum Percentage to any other
percentage specified in such notice, but (i) any such waiver or increase
will not be effective until the 61st day after such notice is delivered to the
Company, and (ii) any such waiver or increase or decrease will apply only
to the Holder and not to any other holder of Warrants.

 

12.           Fractional
Shares.  The Company shall not be
required to issue or cause to be issued fractional Warrant Shares on the
exercise of this Warrant.  If any
fraction of a Warrant Share would, except for the provisions of this Section,
be issuable upon exercise of this Warrant, the number of Warrant Shares to be
issued will be rounded up to the nearest whole share.

 

13.           Notices.  Any and all notices or other communications
or deliveries hereunder (including without limitation any Exercise Notice)
shall be in writing and shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in the Purchase Agreement prior
to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next
Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in the Purchase
Agreement on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (iii) the Trading Day following the
date of mailing, if sent by nationally recognized overnight courier service, or
(iv) upon actual receipt by the party to whom such notice is required to
be given.  The address for such notices
or communications shall be as set forth in the Purchase Agreement.

 

14.           Warrant
Agent.  The Company shall serve as
warrant agent under this Warrant.  Upon
30 days’ notice to the Holder, the Company may appoint a new warrant
agent.  Any corporation into which the
Company or any new warrant agent may be merged or any corporation resulting
from any consolidation to which the Company or any new warrant agent shall be a
party or any corporation to which the Company or any new warrant agent
transfers substantially all of its corporate trust or stockholder services
business shall be a successor warrant agent under this Warrant without any
further act.  Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder’s
last address as shown on the Warrant Register.

 

 

8

15.           Miscellaneous.

 

(a)           Subject
to the restrictions on transfer set forth on the first page hereof, this
Warrant may be assigned by the Holder. 
This Warrant may not be assigned by the Company except to a successor in
the event of a Fundamental Transaction. 
This Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective successors and assigns.  Subject to the preceding sentence, nothing in
this Warrant shall be construed to give to any Person other than the Company
and the Holder any legal or equitable right, remedy or cause of action under
this Warrant.  This Warrant may be
amended only in writing signed by the Company and the Holder and their
successors and assigns.

 

(b)           The
Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder against impairment.  Without limiting the generality of the
foregoing, the Company (i) will not increase the par value of any Warrant
Shares above the amount payable therefor on such exercise, (ii) will take
all such action as may be reasonably necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares on the exercise of this Warrant, and (iii) will not close its
stockholder books or records in any manner which interferes with the timely
exercise of this Warrant.

 

(C)           GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. 
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND
INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF
NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT
IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER.  EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.  THE COMPANY HEREBY WAIVES ALL RIGHTS TO A
TRIAL BY JURY.

 

(d)           The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

 

(e)           In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties 

 

9

will
attempt in good faith to agree upon a valid and enforceable provision which
shall be a commercially reasonable substitute therefor, and upon so agreeing,
shall incorporate such substitute provision in this Warrant.

 

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SIGNATURE PAGE FOLLOWS]

 

10

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed by its authorized officer
as of the date first indicated above.

 

 

	
   

  	
  ADVANCED LIFE SCIENCES
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

11Exhibit 10.1

Lease Agreement Between

Catalyst
Semiconductor (Thailand) Co., Ltd. and

Stars
Microelectronics (Thailand) Public Company Limited

1.                                       Parties

This Lease is made and
entered into this 01st day of March, 2007 by Stars Microelectronics (Thailand) Public
Company Limited, hereinafter referred to as “Landlord” and the Catalyst
Semiconductor (Thailand) Co., Ltd. hereinafter referred to as “Tenant.”

2.                                       Premises

Landlord hereby leases to
Tenant and Tenant hereby leases from Landlord, on the terms and conditions
hereinafter set forth, that certain real property commonly known as Stars
Microelectronics factory II, Bangpa-in, with approximately 73 square meters at
initial phase and expanding to 836 square meter at full phase as per following
schedule, hereinafter called the “premises.”

 

	
   

  	
   

  	
  Total

  	
   

  	
  Store

  	
   

  	
  Office

  	
   

  	
  10K
  Class Operation

  	
   

  	
  100K
  Class Operation

  	
   

  	
  General
  Support

  	
   

  	
   

  
	
  Phase I

  	
   

  	
  73

  	
   

  	
  —

  	
   

  	
  20

  	
   

  	
  53

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  1 March 2007

  
	
  Phase II

  	
   

  	
  789

  	
   

  	
  100

  	
   

  	
  152

  	
   

  	
  53

  	
   

  	
  368

  	
   

  	
  116

  	
   

  	
  1 Sept 2007

  
	
  Phase III

  	
   

  	
  836

  	
   

  	
  100

  	
   

  	
  152

  	
   

  	
  100

  	
   

  	
  368

  	
   

  	
  116

  	
   

  	
  1 April 2008

  

3.                                       Term

The term of this Lease
shall be for 5 years commencing on March 1st, 2007, and ending on March
1st 2012 unless sooner terminated pursuant to any provisions hereof by mutual
agreement in written form.

4.                                       Rent

Tenant shall pay to
Landlord as rent for the premises, monthly payments in advance on the fifteenth
day of each month as follows:

374,775 Baht/month for
initial phase or 475 Baht/month x actual space arranged for Tenant.

Rent shall be payable in
lawful money of Thai Baht to Landlord at:

Stars Microelectronics
(Thailand) Public company limited, Bangpa-in industrial estate (EPZ) 586 moo2,
Tambol Klongjig, Amphur Bangpa-in, Avudthaya 13160, Thailand.

or at such other places
as Landlord may designate in writing

 

 

5.                                       Security Deposit

Tenant shall deposit with
Landlord upon execution hereof, one months rent of 374,775 Baht/month for
initial phase or 475 Baht/month x actual space arranged for Tenant as security
for Tenant’s faithful performance of Tenant’s obligations hereunder.  If Tenant fails to pay rent or other charges
due hereunder, or otherwise defaults with respect to any provision of this
Lease.

Landlord may use, apply
or retain all or any portion of said deposit for the payment of any rent or
other charge in default or for the payment of any other sum to which landlord
may become obligated by reason of Tenant’s default, or to compensate Landlord
for any loss or damage which Landlord may suffer thereby.

If Tenant performs all of
Tenant’s obligations hereunder, said deposit, or so much thereof as has not
theretofore been applied by Landlord, shall be returned, without payment of
interest or other increment for its use, to Tenant at the expiration of the
term hereof, and after Tenant has vacated the premises.

No trust relationship is
created herein between Landlord and Tenant with respect to said security
deposit.

6.                                       Use

The premises shall be
used and occupied for Tenant’s office, storage and operation and related
purposes.

7.                                       Insurance

Tenant at its sole cost
and expense shall maintain public liability and property damage insurance in
the amount of 5,000,000 Baht insuring against all liability of Tenant and its
authorized representatives arising out of and in connection with Tenant’s use
or occupancy of the premises.

Both Landlord and Tenant
shall be named as additional insured.

Upon execution of this
Lease, Tenant is responsible for providing to the Landlord a copy of the
Certificate of lnsurance specifying the above condition.

8.                                       Water, Utilities, and Trash
Collection

Landlord shall provide
water, VAC (ventilation & air conditioning), lighting, Trash collection,
pest control, and other utility services supplied to the Premises, together
with any taxes thereon and for all connection charges.  These costs are included as part of the
Tenants monthly rental cost.

Tenant shall pay for the
monthly electricity, N2, used for machine utilization.

Tenant shall pay the
monthly cost for all telephone and other services as per Tenant requirements.

 

 

2

 

9.                                       Maintenance and Repairs

(a)           Landlord’s Responsibility

Except for damages caused
by any negligent or intentional act or omission of Tenant, Tenant’s agents,
employees, or invitees, Landlord at its sole expense shall keep in good
condition and repair the foundations, exterior walls, and exterior roof of the
premises.  Landlord shall also deliver in
working condition and shall maintain the VAC (ventilation & air
conditioning) systems, the internal and external plumbing, electrical &
sewage systems, the outside of the premises, window frames, gutters and down
spouts on the building, all sidewalks, landscaping and other improvements that
are a part of the premises or of which the premises are a part thereof,
Landlord shall also keep in good condition and repair the following inside
areas : windows, doors, walls, ceiling, lighting fixtures, and toilet
facilities.

Landlord shall have
thirty (30) days after notice from Tenant to commence to perform its
obligations under this Article, except that Landlord shall perform its
obligations immediately if the nature of the problem presents a hazard or
emergency situation.  If the Landlord
does not perform its obligations within the time limit set forth in this
paragraph Tenant can perform said obligations and shall have the right to be
reimbursed for the amount that Tenant actually expends in the performance of
Landlord’s obligations by submitting invoices to Landlord.  Landlord shall deduct amount of invoices from
Tenant’s rent.

(b)           Tenants Responsibility

Tenant shall keep in good
order and condition, baring normal wear and tear, Tenant’s personal property
and usage of the premise and common areas.

10.                                 Alterations and Additions

Tenant shall not, without
the Landlord’s prior written consent, make any alterations, improvements or
additions in or about the premises except for nonstructural work that does not
exceed 100,000.00 Baht (per Project) in cost. 
As a condition to giving any such consent, the Landlord may require the
Tenant to remove any such alterations, improvements, or additions at the
expiration of the term and to restore the premises to their prior condition by
giving Tenant thirty (30) days written notice prior to the expiration of the
term. Unless the Landlord requires their removal as set forth above, all alterations,
improvements or additions which are made on the premises by the Tenant shall
become the property of the Landlord and remain upon and be surrendered with the
premises at the expiration of the term. 
Any damage to the premises caused by said removal shall be repaired at
Tenant’s sole cost.

Notwithstanding the
provisions of this paragraph, Tenant’s trade fixtures, furniture, equipment and
other machinery, other than that which is affixed to the premises so that it
cannot be removed without material or structural damage to the premises, shall
remain the property of the Tenant and be removed by Tenant at the expiration of
the term of this Lease.

 

 

3

 

11.                                 Assignment

Tenant shall not
voluntarily or by operation of law assign, transfer, sublet, mortgage, or
otherwise encumber all or any part of Tenant’s interest in this Lease or in the
premises without Landlord’s prior written consent.

12.                                 Option to Extend/Terminate

Provided that Tenant
shall not then be in default hereunder, Tenant shall have the option to extend
the term of this Lease for 3 year(s) period upon the same terms and conditions
herein contained, except for fixed minimum monthly rentals, upon delivery by
Tenant to Landlord of written notice of its election to exercise such option(s)
at least sixty (60) days prior to the expiration of the original (or extended)
term hereof.

The parties hereto shall
have thirty (30) days after the Landlord receives the option notice in which to
agree on the minimum monthly rental during the extended term(s).  If the parties agree on the minimum monthly
rent for the extended term(s) during the period, they shall immediately execute
an amendment to this Lease stating the minimum monthly rent.  If the parties hereto are unable to agree on
the minimum monthly rent for the extended term(s) within said thirty (30) day
period, the option notice shall be of no effect and this Lease shall extended
for up to (but not more than) 6 months.

13.                                 Indemnification

Landlord agrees to defend,
indemnify, and save free and harmless the Tenant, its officers, agents, and
employees against any and all losses, injuries, claims, actions, causes of
action, judgment, and liens arisen from or alleged to have arisen from Landlord’s
performance or lack thereof, under this Lease.

14.                                 Hold Harmless

Tenant shall indemnify
and hold Landlord harmless from all damages arising out of any damage to any
person or property occurring in, on, or about the premises, or Tenant’s use of
the premises.

15.                                 Tobacco and Drug-Free Facility

Tenants Premises are a
tobacco-free facility.  Use of tobacco
(smoked or smokeless) or drugs is prohibited at all times on all areas of
Tenant’s property.

 

 

4

 

16.                                 Governing Law/Venue Thailand

This Lease shall be
governed by the laws of Thailand.  If any
action is brought to interpret or enforce any term of this Lease, the action
shall be brought in a state or federal court situated in the County of Thailand.

17.                                 Entire Agreement

This agreement represents
the entire agreement and understandings of the parties hereto and no prior
writings, conversations or representations of any nature shall be deemed to
vary the provisions hereof.  This
agreement may not be amended in any way except by a writing duly executed by
both parties hereto.

IN
WlTNESS WHEREOF,
the parties hereto have caused this agreement to be duly executed, such parties
acting by their representatives being thereunto duly authorized.

 

	
  Catalyst Semiconductor (Thailand)

  	
   

  	
  Stars Microelectronics (Thailand)

  
	
  Co., Ltd.

  	
   

  	
  Public Company Limited.

  
	
  Bangpa-in industrial estate (EPZ)

  	
   

  	
  Bangpa-in industrial estate (EPZ)

  
	
  605-606 Moo 2,

  	
   

  	
  586 Moo 2,

  
	
  Tambol Klongjig, Amphur

  	
   

  	
  Tambol Klongjig, Amphur

  
	
  Bangpa-in, Ayudthaya 13160,

  	
   

  	
  Bangpa-in, Ayudthaya 13160,

  
	
  Thailand

  	
   

  	
  Thailand

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By (Authorized
  Signature)

  	
   

  	
  By (Authorized
  Signature)

  
	
   

  	
   

  	
   

  
	
  Mr. Pichest
  Bonnchanya

  	
   

  	
  Mr. Polsak
  Lertputipinvo

  
	
  Name (Type or
  Print)

  	
   

  	
  Name (Type or
  Print)

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  Director

  
	
  Title

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By (Authorized
  Signature)

  	
   

  	
  By (Authorized
  Signature)

  
	
   

  	
   

  	
   

  
	
  Mr. Gelu Voicu

  	
   

  	
  Mr. Chong Kwen
  Sam

  
	
  Name (Type or
  Print)

  	
   

  	
  Name (Type or
  Print)

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  Director

  
	
  Title

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Date

  

 

 

5

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